AIG Posts First-Quarter Profit

Investment income boosts insurance giant's fortunes. Its Chartis unit reports $7.6 billion in net premiums written.

By CYRIL TUOHY, managing editor of Risk & Insurance®

AIG reported first-quarter net income of $1.45 billion, compared with a loss of $4.35 billion in the year-ago period, the company announced on Friday, May 7.

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Write-downs on securities narrowed to $309 million from about $3.7 billion a year earlier, the news service Bloomberg reported, citing company filings, and investment income jumped to $384 million compared with a loss of about $1 billion in the year-ago period.

"We remain focused on further stabilizing and strengthening our businesses while continuing our restructuring activities, closing the pending transactions and developing plans to address our highly leveraged capital structure," said CEO Robert H. Benmosche, in a statement.

Chartis, AIG's general commercial property/casualty insurance unit, reported first-quarter operating income of $879 million, up 24 percent from the year-ago quarter.

The improvement was due mainly to an increase in investment income, the company said.

A spate of earthquakes took a toll on the property/casualty subsidiary, which reported catastrophe losses of about $481 million compared with no comparable losses in the year-ago period, Chartis reported.

Chartis' net premiums written of $7.6 billion in the first quarter represented a drop of 1.1 percent from the year-ago period. Despite the dip, the company said it was an improvement over the prior quarters.

"While Chartis continues to see increased business retention, new business submissions and a continued stable rate environment, net premium writings continue to be affected by challenging economic conditions," AIG said in a statement.

May 7, 2010

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