American International Group (AIG) has reported a significant drop in net income attributable to common shareholders, with figures standing at $86m for the fourth quarter (Q4) of 2023.  

This marks an 84.2% slump from the $545m reported in the corresponding quarter of 2022. 

The sharp fall was said to be primarily the result of “higher net realised losses on Fortitude Re funds withheld embedded derivative”. 

In the general insurance segment, AIG saw an increase in net premiums written, up 3% year-on-year to $5.75bn. 

The adjusted pre-tax income (APTI) for this segment rose by 19% to $1.43bn, compared with $1.21bn in Q4 2022. 

AIG said the growth was fuelled by a combination of higher net investment income, improved accident year losses and lower catastrophe-related charges, although it was partially offset by less favourable prior year development and increased general operating expenses. 

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The life and retirement segment also recorded growth, with APTI climbing 12% to $957m from $852m.  

Premiums and fees within this business unit saw a 14% increase, reaching $3.24bn.  

Total net investment income for the quarter was up by 21% to $3.9bn, largely due to higher income from fixed maturity securities and loans, benefitting from higher reinvestment rates. 

During the three months under review, AIG repurchased $1bn of common stock, which equates to nearly 16 million shares, and paid out $256m in common and preferred dividends.  

The company’s board of directors also announced a quarterly cash dividend of $0.36 a share on AIG common stock, which is set to be paid on 28 March 2024. 

For the full year of 2023, AIG’s net income attributable to common shareholders totalled $3.61bn, down from $10.19bn in 2022. 

AIG chairman and CEO Peter Zaffino said: “In 2023, AIG delivered outstanding financial results, highlighted by excellent underwriting performance and the successful execution of multiple complex initiatives, while delivering exceptional value for our clients and stakeholders.  

“We have significant momentum as we enter 2024, and excellent underwriting, operations, claims service and talent are what will drive AIG’s continued growth.”