Bailed-out AIG trumps forecasts as its profits more than double
BAILED-OUT insurer American International Group (AIG) said quarterly profit more than doubled from a year earlier, exceeding expectations with the help of investment gains.
The company yesterday reported first-quarter earnings of $1.65 a share on an operating basis, beating the $1.12 estimated on average by analysts.
AIG’s net income for the quarter was $3.2bn, or $1.71 per share. That compared with year-earlier net income of $1.3bn, or 31 cents per share. In the corresponding quarter last year, AIG racked up substantial catastrophe losses arising from the earthquake in Japan. The year-earlier earnings also included a charge for the termination of AIG’s credit facility with the US Federal Reserve.
AIG’s global property insurance unit, Chartis, earned $1bn, compared with a loss of $424m a year earlier when the Japanese earthquake affected results. The company said its loss ratio improved due to a shift to higher value businesses, pricing improvements and risk selection.
SunAmerica, AIG’s US life insurer, reported a profit of $1.3bn in the quarter, up from $1.2bn, helped by reinvestment of cash during 2011.