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%.
“I’m proud of the work the team has done to stand up AIG UK as a separate business which has ensured our readiness for Brexit,” said Anthony Baldwin, chief executive officer, AIG UK. “During 2018, we made good progress in reducing our expenses, growing our profitable lines of business and remediating those areas that are less profitable. Thanks to these efforts we enter 2019 with a clear ambition and renewed focus.”