AIG posts lower profit, blames volatility for unit IPO delay

Insurer American International Group Inc (AIG) reported a 26% fall in quarterly profit on lower investment income and blamed market volatility for a delay in the initial public offering (IPO) of its life and retirement unit.

The move underscores how the wild market gyrations sparked by runaway inflation, rising interest rates and the Russia-ukraine war are forcing companies to rethink their IPO plans.

AIG’S unit – set to be renamed Corebridge Financial Inc when it goes public – had filed for its offering in March and planned to complete its listing by the end of June.

“Completing the IPO is a significant priority for us and we remain ready to execute,” chief executive officer Peter Zaffino said without giving a new deadline for the offering.

AIG – one of the world’s biggest commercial insurers – had first announced the move in 2020 and it sold a 9.9% stake in the unit to private equity firm Blackstone Group Inc for Us$2.2bil (Rm9.8bil) last year.

The uncertain economic outlook has also put an end to the boom in investment income insurers enjoyed last year when the rapid recovery from the Covid-19 crisis boosted market returns.

AIG’S total consolidated net investment income fell 29% in the second quarter ended June to Us$2.6bil (Rm11.6bil), hurt in part by weakness in alternative investments such as private equity.

Adjusted after-tax income attributable to the company’s common shareholders fell to Us$979mil (Rm4.36bil), or US$1.19 (RM5.30) per share, from Us$1.3bil (Rm5.8bil), or US$1.52 (RM6.77) a year earlier.

AIG said net premiums written in its general insurance business rose 5% on a constant currency basis to Us$6.9bil (Rm30.8bil), while

underwriting income climbed 73%.