Net income of $269 million compares to a profit of $1.78 billion in last year's first quarter. The result included a previously announced $2.4 billion after-tax charge tied to wiping out its debt with the Federal Reserve Bank of New York.
Results also suffered from devastating earthquakes in Japan and New Zealand, which contributed to $1.7 billion in catastrophe losses in the quarter.
The company's property-casualty arm had an operating loss of $463 million, compared to a profit of $879 million in the same period a year earlier.
Still, the company said the value of policies sold in the quarter rose 6.2%.
The quarterly earnings are the last financial results the insurer will release before senior executives begin a pitch of AIG to potential investors in coming weeks. The U.S. Treasury owns more than 90% of AIG, and the process of selling off that stake will commence with investor meetings in Asia and will likely include stops in Europe before concluding in the U.S.
AIG had warned investors in March about the cost of the natural disasters, which have caused insurers and reinsurers around the world to report first quarter losses. The company is making an effort to avoid surprising investors with unwelcome news in the months leading up to the "re-IPO" of its shares.
AIG's life-insurance arm, SunAmerica, had operating income of $1.1 billion, unchanged from a year earlier, and AIG's financial services operation swung to a $319 million profit from a $171 million loss a year earlier because aircraft-leasing and capital-markets operations were operating in the black. So too was AIG's asset management operation.
AIG said its capital-markets operation was on track to complete the unwinding of the remaining assets of AIG Financial Products, the unit whose troubles caused the insurer to seek a U.S. bailout.
Overall operating profit more than tripled to $2 billion.
On a per-share basis, the company recorded a 35 cent net loss, compared to a profit of $2.66 a share a year earlier. The per-share loss was from a $427 million charge tied to the conversion of the U.S. government's preferred shares in AIG to common stock and the expected $385 million cost to dispose of its AIG stake through share sales.
AIG noted that its long-term goal is to achieve annual earnings-per-share growth in the midteens on a percentage basis through 201