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Net Investment Income Rises for AIG’s Group Retirement Division

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Net investment income and premiums

American International Group’s (AIG) group retirement division saw its premiums fall marginally to $8 million in 3Q17 from $9 million in 3Q16.

The division’s net investment income fell 5% from $554 million in 3Q16 to $524 million in 3Q17. This fall was mainly due to lower income from alternative investments. Whereas AIG has a dividend yield of 2.1%, peers (XLF) National General Holdings (NGHC), Allstate (ALL), and Chubb Limited (CB) have dividend yields of 0.78%, 1.5%, and 1.9%, respectively.

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Net flows

In 3Q17, AIG’s group retirement division reported assets under administration of $101.3 billion, mainly due to strong equity markets. Its net flow stood at -$15 million, compared with -$97 million in 3Q16. The net flow improvement was mainly due to strong retention and significant sales. The division reported policy fees of $113 million in 3Q17, compared with $99 million in 3Q16, reflecting a 14% rise—also due to strong equity markets.

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