The grand jury probe led by federal prosecutors in Indiana concerns AIG's dealings with mobile phone distributor Brightpoint in Plainfield, Ind. In 2003 the insurer paid a $10 million settlement to the Securities and Exchange Commission for a transaction that helped Brightpoint create a misleading balance sheet.

Besides the federal grand jury inquiry, the insurer is under investigation by the New York Attorney General's Office for its alleged involvement in price fixing and bid rigging with brokers from Marsh. Two AIG executives have entered guilty pleas and are cooperating with the probe.

The feisty and outspoken Mr. Greenberg, when asked if he was antagonizing

regulators, replied: "We're not looking for a fight. We've never done that. We've tried to be as reasonable as possible."

But he followed that comment by questioning the point at which the Justice Department chose to notify the company of the grand jury investigation. "The timing of this last letter was not by accident, given we were putting out earnings today," he said.

The company, he said, has "a very good legal team. I have confidence in what we're doing. We will not be distracted." He added that the company maintains "the highest ethical standards."

Mr. Greenberg said none of the investigations had dealt with his relationship with his sons--Jeffrey, the CEO of Marsh's parent Marsh & McLennan, and Evan, CEO of ACE, which is also under investigation by Mr. Spitzer.

"The gossip of that is just outrageous," he declared angrily. "I've never discussed business with Jeff or with Evan. They are busy with their own lives. We get together on rare occasions and play tennis occasionally."

Overall, the third-quarter net income for the New York-based insurance giant came at $2.51 billion, or 95 cents a share, compared with $2.34 billion, or 89 cents, one year ago.

The insurer, like many other companies this past quarter, suffered significant losses from the hurricanes that landed on the Southeastern United States?those losses, however, were somewhat mitigated by fewer investment losses for the quarter, the company said.

AIG reported that its third-quarter, after-tax net catastrophe losses from hurricanes and typhoons were $512.2 million, much higher than the after-tax net catastrophe losses of $46.2 million during the 2003 third quarter.

Management said over the last 15 years that average catastrophe losses have been $50 million.

For the third quarter, net income excluding realized capital gains and losses was $2.54 billion, slightly lower than $2.58 billion posted during the same period last year. The 2004 third-quarter net income excluding both realized capital gains and losses as well as catastrophe losses rose 16.5 percent to $3.06 billion compared to one year ago, AIG reported.

More specifically, AIG reported $10.73 billion for net premiums written in its general insurance lines, up 19.7 percent from one year ago when the insurer reported $8.97 billion. Operating income for general insurance?excluding realized capital gains and losses?however, was $894.3 million, down 32 percent from $1.32 billion posted one year ago.

The combined ratio for general insurance also deteriorated because of the quarter's catastrophe losses, up to 99.89 from 93.05 recorded for the same period last year. The company's net investment income for general insurance rose to $869 million, up from $741.9 million one year ago.

AIG Chairman Maurice Greenberg commended his company's performance even as it suffered heavily from a storm season that he described as "the most costly in history."

"AIG had third-quarter net income of $2.51 billion, up 7.5 percent, even after accounting for the unprecedented succession of storms, which included four hurricanes and three typhoons," Mr. Greenberg said.

He said this storm season was "the most costly in history, and it resulted in a tragic loss of life," he said.

AIG's 2004 third-quarter after-tax catastrophe losses of $512.2 million were significantly higher than even the average annual after-tax catastrophe losses over the prior 15 years of $50 million, said Mr. Greenberg.

"The importance of AIG's claims handling expertise, strong financial position and diverse business mix is evident in this quarter's results," Mr. Greenberg said.