Insurer AIG reports $4.1bn loss after fall in Asian group AIA’s market value

US INSURANCE giant American International Group fell to a bigger-than-expected net $4.1bn (£2.6bn) third-quarter loss yesterday, after the value of its stake in its former Asian subsidiary dropped and it took charges in its aircraft leasing unit.

AIG’s core insurance businesses were profitable on an operating basis, and its mortgage insurance unit both raised prices and gained market share amid difficulties in that industry.

But those results were not enough to overcome the charges, which it said were driven by declining equity and debt markets during the quarter, as well as low interest rates.

AIG said it lost $2.3bn after a fall in the fair value of its stake in Asian group AIA during the quarter. AIG took AIA public late last year in Hong Kong. It recently became eligible to start selling AIA shares after the IPO lockup expired.

“AIG continues to navigate a challenging global economic environment,” said chief executive Bob Benmosche. “Despite the difficult external environment, we are encouraged by the progress we’ve made and the underlying strength of our core insurance businesses.”

The results are the tenth time in the last 15 quarters, dating back to 2008, that AIG has lost at least $1bn.

Last February, Benmosche said he did not expect any further large charges for the business this year, after it took roughly $1bn in writedowns in the last six months of 2010.