US-based global insurer AIG’s net income grew 1% to $US2.19 billion ($2.53 billion) in the third quarter as investment earnings offset an underwriting loss in the property and casualty division.

Operating income gained 23% to $US1.7 billion ($1.96 billion), with an improved insurance performance mostly driven by the mortgage guaranty and life and retirements businesses.

President and CEO Peter Hancock, who took over from Robert Benmosche in September, says the results are solid and driven by consistent performance across the business.

“While no one quarter is a trend, our risk-adjusted return focus could be seen in various metrics, including improved accident-year loss ratios, modest net spread compression and continued capital management,” he said.

Property and casualty income increased to $US1.1 billion ($1.27 billion) from $US1.08 billion ($1.25 billion) in the corresponding period last year.

The division’s net written premium grew 3% to $US8.95 billion ($10.33 billion), while catastrophe losses increased to $US284 million ($328 million) from $US222 million ($256 million) and net investment income gained 4% to $US1.27 billion ($1.47 billion).

The combined operating ratio deteriorated slightly to 102% from 101.6%.

AIG says global commercial property and casualty rates were up slightly in the quarter, while US rates gained 1.8%.

Life and retirement earnings increased to $US1.35 billion ($1.56 billion) from $US1.14 billion ($1.32 billion), while mortgage guaranty earnings more than tripled to $US135 million ($156 million).