AIG Europe turns a profit in 2018

How’s this for a turnaround? After reporting a loss of £431.5 million for 2017, AIG Europe Limited (AEL), which restructured in December 2018 in preparation for Brexit, has now reported a pretax profit of £59.5 million for the twelve months to November 30, 2018. Net premium written fell to £3,787.0 million from £3,919.7 million for 2017, as the company decided to focus on key areas of growth. And while financial lines saw a 7% rise in net premiums written, this was offset by a decline in property, where premiums declined by 17%. The good news? AEL’s loss ratio improved to 73.1% from 82.5% the previous year, which according to a press release, was driven by a reassessment of risk selection and reinsurance cover. The underwriting result improved to a loss of £131.3 million from a loss of £569.9 million only 12 months before. Operating expenses were lower, while a combination of positive underwriting performance, strategic risk selection, and lower catastrophic losses resulted in a combined ratio of 103.4%.