American International Group saw its 2020 third quarter net income plunge by more than half compared to a year ago, a result that was shaped partly by higher natural catastrophe losses.

Net income for the quarter reached $281 million, or $0.32 per diluted common share, versus $648 million, or $0.72 per diluted share, during the 2019 third quarter.

One bright spot: Consolidated net investment income was $3.8 billion, compared to $34.4 billion in the same, year-ago quarter.

AIG said its property/casualty, or General Insurance business produced a 93.3 combined ratio with outside catastrophe hits removed from the equation. But natural catastrophe losses did some damage. General Insurance booked a $423 million underwriting loss, driven in part by $790 million of natural catastrophe losses, net of reinsurance. Broken down, that $790 million figure included $605 million of non-COVID-19 related losses relating to windstorms and tropical cyclones in North America and Japan, and wildfires on the U.S. west coast. The rest came from $185 million of estimated COVID-19 losses, mostly from Travel, Contingency and Validus Re.

Last year, the equivalent catastrophe loss number was $497 million, net of reinsurance.

AIG insisted that its underling property/casualty fundamentals for its General Insurance division remained solid.

“In General Insurance, the accident year combined ratio, as adjusted, improved for the ninth consecutive quarter, and the high frequency of natural catastrophes and COVID-19 had a limited impact on financial results,” AIG CEO Brian Duperreault said in prepared remarks. “Life and Retirement’s results continue to demonstrate that it is a market-leading franchise, with a strong improvement in adjusted pre-tax income from last year.”

He also said that the company’s recent announcement that AIG President and Chief Operating Officer Peter Zaffino would become CEO on March 1, 2021, and that the company would separate its Life & Retirement business into an independent company were positive developments “made possible by the significant foundational work our colleagues have successfully executed on over the last three years.”

Duperreault will become Executive Chairman on March 1, 2021 as part of the transition.

AIG’s General Insurance combined ratio was 107.2, including 13.5 points of CATs and reinstatement premiums, of which 3.1 points related to COVID-19 losses.

General Insurance gross premiums written came in at $8.3 billion, compared to about $8.6 billion in the 2019 third quarter. Net premiums written were nearly $6 billion during the quarter, down from $6.6 billion in Q3 2019.

General Insurance produced a $249 million underwriting loss in the 2019 third quarter, compared to the $423 million underwriting loss in Q3 2020.

Source: AIG