Posted on 05 Nov 2010
While American International Group Inc.'s main insurance businesses has improved since last year, the insurer posted a $2.4 billion net loss for the third quarter due to various restructuring-related charges.
AIG's pretax income from its continuing insurance businesses rose 6.4% to $2.1 billion in the third quarter. Those operations, which will form the core of AIG when its restructuring is complete, consist of a large global property and casualty insurer and a U.S. life insurance and retirement services business.
The company recorded $4.5 billion in restructuring charges, including a previously disclosed $1.9 billion loss on the sale of its consumer-finance unit and a $1.3 billion goodwill impairment charge for the pending sale of two Japanese units. AIG's overall net loss of $17.62 per share compared with net earnings per share of $0.68 in the third quarter of 2009.
AIG recently completed the sale of a large overseas life insurance company, American Life Insurance Co., and sold a majority stake in a pan-Asian life insurer called AIA Group Ltd in an initial public offering in Hong Kong. Those two divestments raised a total of $37 billion that AIG will use to repay U.S. taxpayers for its 2008 bailout. The U.S. government has provided more than $120 billion to supporting AIG, of which the company has to repay about $90 billion. The remaining amount is being recouped from mortgage securities now on the balance sheet of the Federal Reserve Bank of New York.
Chief Executive Officer Robert Benmosche said the company hopes to complete the exit with the government before the end of this year, ahead of an early 2011 schedule.
"We're pushing for that," he said in an interview after AIG released its results.