New York: American International Group Inc posted a first-quarter profit as the bailed-out insurer got a boost from its investments, but core insurance operations were weak.
AIG, nearly 80% owned by the US government, reported a profit to the company of $1.5 billion, or $2.16 per share, compared with a loss to the company of $4.4 billion, or $39.67 a share, a year earlier.
AIG shares rose 3.2% in premarket trading.
Profit at the company’s general insurance business, Chartis, increased 24% to $879 million as its investment performance improved. The profit came despite $481 million of catastrophe losses, including due to an earthquake in Chile.
But Chartis’ net premiums written fell 1.1% to $7.6 billion. AIG said the decline was a significant improvement over the prior four quarters, but net premium writings continue to be affected by challenging economic conditions.
Profit at SunAmerica Financial Group, AIG’s US life insurance and retirement services business, also improved, largely due to increased net investment income. But premiums, deposits and other considerations fell 6.5% on a decline in individual fixed annuities and lower life insurance sales.
AIG reported $16.3 billion in revenue for the quarter.
“I am pleased with their progress, but there is still more work to be done,” chief executive Robert Benmosche said in a statement.
AIG is trying to repay the government after a $182.3 billion taxpayer-funded rescue at the height of the financial crisis in September 2008.
Earlier this year it agreed to sell two major foreign life insurance businesses for a total of about $51 billion.
But one of the deal — the sale of American International Assurance to Prudential Plc for $35.5 billion — has hit a rough patch, with the British insurer delaying a massive rights issue to fund the deal.
AIG shares have risen more than 22% this year as Benmosche tries to sell assets and focus on core operations — Chartis and SunAmerica.
Last month, Fairholme Capital Management, a respected investment manager, reported an 11.1% stake in AIG.