AIG pays $960m to settle legal battle with angry shareholders
INSURANCE giant AIG last night announced it will pay shareholders $960m (£569m) to settle the lawsuit they launched in the wake of the firm’s collapse in the financial crisis.
The group, led by the state of Michigan’s pension fund, had argued the insurer misled the market over its financial health in the run up to the credit crunch.
The deal was struck last month but still needs court approval.
It was disclosed in the insurer’s second quarter financial results filing with regulators, which showed a strong increase in profits in the three-month period.
Net income came in at $3.1bn, a rise of 12.5 per cent on the year.
Insurance claims fell three per cent on the year to $5.5bn, while net premiums earned rose 2.2 per cent to $8.5bn.
Those factors helped push its combined ratio down from 102.6 to 98.8 – a significant moment as a ratio of below 100 indicates premiums coming in outweighing payouts on claims.
The insurer’s shares rose 1.17 per cent on the day.