(Reuters) -American International Group ( AIG ) reported a higher second-quarter profit on Wednesday, powered by strong underwriting gains and higher returns on investments.

Insurers like AIG and Travelers Cos ( TRV ) are benefiting as businesses and individuals have maintained spending on insurance against the backdrop of economic uncertainty.

"We continued to make significant progress on our long-term strategic, operational and financial objectives while navigating a dynamic macroeconomic environment," CEO Peter Zaffino said in a statement.

General insurance net premiums written, on a comparable basis, rose to $6.88 billion in the three months ended June 30. General insurance underwriting income soared 46% to $626 million.

AIG's general insurance combined ratio came in at 89.3% on an adjusted basis, compared with 92.5% a year earlier. A ratio below 100 signifies that the insurer earned more from premiums than it paid out in claims.

A rebound in the stock markets following tariffs-related volatility has also helped insurers boost their investment income.

Net investment income jumped 48% to $1.47 billion in the second quarter, driven by a change in the fair value of AIG's equity in Corebridge and higher income on available for sale fixed maturity securities.

The company retains a stake in Corebridge, the life and retirement insurer it spun off in 2022.

AIG posted catastrophe-related charges of $170 million in the quarter, down from $330 million in the year-ago period.

The company - one of the world's largest commercial insurers - reported adjusted after-tax income attributable to common shareholders of $1.04 billion, or $1.81 per share, compared with $771 million, or $1.16 per share, a year earlier.

Shares of the company have gained nearly 8% in 2025, outperforming the broader Dow Jones U.S. Select Insurance Index.

(Reporting by Pritam Biswas in Bengaluru; Editing by Sriraj Kalluvila)