Net income during the quarter included after-tax net realized capital losses of USD 526 million, or USD 0.48 per diluted share, which largely reflected higher foreign exchange losses related to the British pound weakening following the Brexit vote. The impact to reported book value was immaterial as these losses were largely offset by a corresponding impact on other comprehensive income.
After-tax operating income was USD 1.1 billion, or USD 1.00 per diluted share, for the third quarter of 2016, up from USD 691 million, or USD 0.52 per diluted share, in the prior-year quarter. Operating income for the third quarter of 2016 included a USD 622 million (USD 404 million after-tax or USD 0.37 per diluted share) loss recognition expense in Institutional Markets related to updated mortality assumptions for legacy structured settlements. The assets and liabilities associated with these structured settlements will be reported as part of our Legacy portfolio as presented in our January 26th Strategy Update. The loss recognition expense was partially offset by a pre-tax benefit associated with the third quarter review of actuarial assumptions for the Consumer Life and Retirement businesses of USD 238 million (USD 154 million after-tax or USD 0.14 per diluted share).
"We continue to execute on the strategic initiatives announced in January," said Peter D. Hancock, AIG President and Chief Executive Officer. "The strategic divestitures that we announced this quarter, our portfolio management decisions, actions to run-off the legacy portfolio and capital allocation all exemplify our guiding principle of building economic value. We are successfully shaping and sculpting our company to be a leaner and more focused insurer. We remain committed to our 2017 financial targets, are ahead of plan in expense management, and continue to target a 6 point reduction in our Commercial accident year loss ratio, as adjusted, despite volatile quarterly results." Read the full story
AIG Reports Third Quarter 2016 Results
2392 views
