During AIG’s Q3 2023 earnings call, Chairman & Chief Executive Officer, Peter Zaffino, explained how building long-term strategic relationships with the company’s reinsurance partners has “been key” for repositioning the firm.
Zaffino noted how conflicting views have emerged in the market on the combination of gross portfolio underwriting with the strategic use of reinsurance.
He said: “There have been comments particularly recently about how the use of reinsurance is not required if you’re comfortable with the growth portfolio.
“We disagree and simply don’t support that as a viable strategy for AIG.
“We prefer to balance our approach and have developed a strong underwriting culture, which we have dramatically improved over the last five years, executing on the fundamental of discipline and consistent underwriting being very focused on preempting the evolving changes in the market, and using reinsurance strategically to mitigate unpredictable outcomes.”
Adding: “Building long-term strategic relationships with our reinsurance partners for all of our reinsurance needs has been key to repositioning AIG.”
“Insurers cannot reverse social and economic inflation. However, we are in control of how we predict and respond to the impact of these changes, to the forward looking landscape, including how we manage our underwriting through coverage provided, limits deployed, attachment points, and prices,” he continued.
In their Q323 results, AIG reported a 6.8 points improvement in the General Insurance (GI) combined ratio to 90.5%.
The company noted that this was driven by a 7.9 point decrease in the loss ratio to 59.6%.
