UPDATE 2-U.S. insurer AIG’s third-quarter profit misses estimates

(Reuters) – American International Group Inc (AIG.N) missed analysts’ estimates for third-quarter profit on Friday due to weakness in the insurer’s life and retirement unit and a difficult period for catastrophe losses.

Pre-tax income from AIG’s life and retirement business fell 9% to $646 million as it booked a $143 million charge related to a review of its actuarial assumptions.

The unit, and many other life insurers, typically conduct reviews every third quarter of assumptions they made when writing policies many years ago. The process often ends with insurers having to set aside extra cash to cover future claims.

Excluding the impact from AIG’s actuarial review, adjusted pre-tax income at the unit fell 3% due to an increase in the number of insured who died and lower alternative investment returns, the company said.

AIG shares were down 1.8% on Friday.

AIG, one of the largest U.S. insurers, is in the midst of a turnaround effort, launched by Chief Executive Officer Brian Duperreault, who took charge of the company in 2018.

The insurer posted a profit of 56 cents per share, on an adjusted basis, well below analysts’ expectations for a profit of $1 per share, according to IBES data from Refinitiv.

AIG’s net income attributable to common shareholders was $648 million, or 72 cents per share, in the third quarter ended Sept. 30, compared with a loss $1.26 billion, or $1.41 per share, a year earlier. reut.rs/36r6qzt

AIG’s net pretax catastrophe loss narrowed to $511 million in the quarter from $1.6 billion a year earlier.

The company also reported a narrower underwriting loss in its general insurance business – $249 million from $1.73 billion last year.

The insurer’s general insurance accident year combined ratio, excluding changes from losses incurred in past years, was 95.9, compared with 99.4 a year earlier.

Reporting by Bharath Manjesh in Bengaluru; Editing by Anil D’Silva and Paul Simao