AIG Profit Rises

(RTTNews) - American International Group Inc. (AIG) Thursday reported a better-than-expected increase in third-quarter profit, on growth at property and casualty as well as life and retirement segments.

Results for the quarter had a motley of items, including a decline in market valuation gain, offset by an income tax benefit. Earned premiums for the quarter declined from last year and fell short of expectations.

AIG said it will pay a quarterly dividend of $0.10 per share. In August, the company reinstated dividend payment after a gap of five years and announced a $1 billion share buyback - indicative of the significant strides it has made since the 2008 crises.

But investors were none too impressed with the performance, with AIG shares dropping about 3 percent in after-hours trade on the New York Stock Exchange.

AIG Chief Executive Robert Benmosche is striving to improve profits from its key property and casualty unit as well as life and retirement business. The company has been expanding its global operations including in countries such as China and Turkey.

During the quarter, operating income at the property and casualty unit climbed 33 percent on better underwriting results and life and retirement business jumped 38 percent. Nonetheless, both segments saw declines in net investment income.

In some aspects the quarter was a mixed bag, with AIG's other operations posting an operating loss of $583 million due mainly to lower market valuation gains.

The prior-year quarter meanwhile included operating income of $851 million, mostly on fair value gains from its interests in Maiden Lane III LLC and AIA Group Ltd.

Overall, the New York-based insurer posted quarterly net earnings of $2.17 billion or $1.46 per share, compared with $1.86 billion or $1.13 per share last year.

Excluding items, operating earnings for the quarter were $1.4 billion or $0.96 per share, compared with $1.6 billion or $0.99 per share a year ago.

On average, 23 analysts polled by Thomson Reuters expected earnings of $0.95 per share for the quarter. Analysts' estimates typically exclude special items

Net premiums earned at property and casualty segment fell 4 percent to $8.43 billion from $8.75 billion a year ago. Eleven analysts had consensus revenue estimate of $8.63 billion for the quarter.

Income tax benefit for the quarter was $993 million, compared with a provision of $734 million last year.

AIG last week named XL Group executive Seraina Maag as CEO of Europe, Middle East, and Africa region.

Earlier, in August, AIG named Kevin Hogan as CEO of AIG Global Consumer Insurance. Hogan, who previously had a 24-year career at AIG, had served as CEO of Global Life, Zurich Insurance Group.

AIG stock is trading at $51.65, down $0.32 or 0.62%, on a volume of 11.6 million shares. In after hours, the stock dropped $1.40 or 2.71%, trading at $50.25. In the past year, the share trended in the range of $30.64 - $53.33, on a three-month average volume of 9.31 million shares.