American International Group Inc, the largest commercial insurer in the United States and Canada, reported a net income versus a loss last year, when tumultuous markets gutted returns from its investments.
AIG, which reported higher profits at all but one of its businesses, also said on Wednesday that its board had authorized an additional share buyback program of $3 billion.
The company, which has been under pressure from shareholders, including billionaire Carl Icahn, to cut expenses and divest businesses, slashed total adjusted costs by 8.6 percent to $2.44 billion.
AIG reported net income of $462 million, or 42 cents per share, for the third quarter ended Sept. 30, compared with a net loss of $231 million, or 18 cents per share, a year earlier.
Net investment income rose across AIG’s units.
Net income in the latest quarter included losses of $526 million, or 48 cents per share, mainly due to the weakening of the British pound following the Brexit vote in June.
On an operating basis, AIG’s earnings jumped 58.8 percent to $1.1 billion, or $1 per share.
The company’s operating income included a $622 million loss expense as it padded reserves at a non-core legacy business.
Analysts on average had estimated AIG would earn $1.21 per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the figures reported were comparable.
Catastrophe-related losses in AIG’s commercial business more than doubled during the quarter to $253 million from $88 million. The combined ratio at the business inched up to 105.3 percent from 102.3 percent as a result, indicating the insurer paid out more in claims than it earned in premiums.
Catastrophe modeling firm Kinetic Analysis estimated last month that the insurance industry would sustain about $4 billion in losses from Hurricane Matthew. AIG did not disclose any exposure to Hurricane Matthew in its release.