AIG Fights Soft Property Pricing with Underwriting Discipline

American International Group's (AIG) property business is facing increasing competition in North America, where capacity pressures are driving down rates. Rather than chasing premium growth, AIG is taking a disciplined approach by reducing exposure to business that no longer supports adequate risk-adjusted returns.

This strategy is evident in the company's Lexington property business, where premium retention declined 9 percentage points in the second quarter due to reduced targeted exposures and stricter underwriting standards. As a result, growth in North America Property was reduced by more than 3 percentage points.

AIG continues to pursue selective opportunities in North America Retail Property, while International Property remains relatively more favorable with moderate rate declines. The insurer's General Insurance segment saw net premiums written increase 9% year over year, excluding North America Property, and underwriting performance remained solid with a 10% rise in underwriting income.

The company's peers, such as Travelers Companies (TRV) and Chubb Limited (CB), are also emphasizing underwriting discipline amid soft property pricing conditions. Both companies have reported reduced growth in their respective property businesses to maintain underwriting standards.