American International Group (AIG) reported a decline in revenues and adjusted pre-tax income for Q3 2024 compared to Q3 2023. Adjusted revenues for the three months ended September 30, 2024, were $6,843 million, down from $7,327 million in the same period of 2023. Adjusted pre-tax income also fell significantly to $649 million from $1,100 million in Q3 2023, reflecting a challenging operating environment.

Key drivers of the revenue decline included lower premiums and investment income. Premiums decreased by 9% year-over-year to $5,945 million in Q3 2024, compared to $6,543 million in Q3 2023. Total net investment income, however, increased by 14% to $973 million, driven by higher returns on fixed maturity securities and equity securities, partially offset by lower alternative investment returns.

AIG faced significant non-recurring and restructuring costs during the quarter. These included $137 million in restructuring and other costs, $126 million in unfavorable prior-year development ceded under retroactive reinsurance agreements, and $22 million in integration and transaction costs related to business acquisitions or divestitures. These factors contributed to the decline in adjusted pre-tax income.

Net realized losses and currency volatility also impacted financial performance. AIG reported net realized losses of $167 million in Q3 2024, compared to $135 million in Q3 2023. Currency fluctuations, particularly the strengthening of the U.S. dollar against major currencies like the Euro and British Pound, negatively affected international operations, although the impact was mitigated by corresponding expense reductions.

The effective tax rate for Q3 2024 was lower than the prior year. The effective tax rate on income from continuing operations was 25.9% in Q3 2024, compared to 36.3% in Q3 2023. This reduction reflects changes in the composition of taxable income and other tax-related adjustments.

AIG's investment strategy and market conditions influenced its financial results. The company benefited from higher dividends from Corebridge and increased fair values of equity securities, which contributed to a $405 million increase in net investment income. However, lower returns on alternative investments partially offset these gains. Additionally, fluctuations in interest rates and credit spreads affected the reinvestment of cash flows and asset-liability management strategies.

Adjusted revenues for the nine months ended September 30, 2024, also declined year-over-year. For the nine-month period, adjusted revenues were $20,191 million, down from $21,834 million in the same period of 2023. This reflects ongoing challenges in premium growth and investment income generation.

AIG's operating expenses showed some improvement. General operating expenses decreased by 16% year-over-year to $150 million in Q3 2024, compared to $179 million in Q3 2023. This reduction was driven by cost-saving initiatives and lower acquisition expenses.