AIG Quarterly Results Set Records
NU Online News Service, Oct. 24, 1:12 p.m. EST?American International Group Inc.'s net income soared 463.5 percent to $1.84 billion, or 70 cents a share, an increase management attributed to new business and rate increases, trends it expects to continue.
AIG Chairman Maurice "Hank" Greenberg, in a statement released with earnings today, said that rates are rising and "there are no signs that the market will soften in the foreseeable future. If anything, rates in many classes of business will continue to rise for some time."
The company reported that third quarter income increased $1.54 billion compared with the period last year--a gain of 58 cents per share.
AIG's performance set a number of records. Among those listed by the company were: record income as adjusted, excluding realized capital gains, of $2.23 billion; record assets of approximately $547 billion; and record quarter general insurance net premiums written of $7.08 billion--an increase of 42.2 percent for the quarter.
On the downside, the company's retirement savings and asset management operating income declined to $228.2 million, from $247 million for the quarter. This was attributed to the impact of weak equity markets on AIG SunAmerica variable annuity business.
AIG said it experienced $595.6 million in realized capital losses for the quarter from the fixed income securities market.
Mr. Greenberg said property-casualty insurance markets were tight because of stock market conditions and floods impacting European insurers. As a consequence, "the flight to quality, which is benefiting AIG, has become more pronounced," he said.
AIG said that income before taxes for the life insurance sector during the quarter was almost $1.52 billion--a rise of $221 million, or 17 percent. Income before taxes for the financial services sector grew 13.3 percent to $552.5 million, an increase of $65 million.
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