American International Group Inc. (NYSE:AIG) reported a profit of $455 million in the third quarter, but it didn't hold a
conference call.
The
insurer's turnaround is a big reversal from a net loss of
$24.5 billion, or $181.02 per diluted share, in the third quarter of 2008, and, ironically, a good deal of the profit during the third quarter was due to $1.95 billion in special gains from the improvement in the value of securities held by AIG Financial Products, the unit that led to AIG's losses and bailout in 2008.
However, the insurer's general insurance and asset management businesses, although improving, still
remain weak. According to the
press release:
- General Insurance reported operating income of $722 million in the third quarter, which was up from $105 million in the third quarter of 2008. However, General Insurance recorded net premiums written of $8.1 billion in the third quarter, a 13% decline in sales compared to last year's third quarter. Premiums paid out also increased.
- AIG's asset management business reported a third-quarter operating loss of $1.1 billion, compared to an operating loss of $28 million in the third quarter of 2008.
AIG president and chief executive officer
Robert Benmosche said in a press release, "AIG also took several important steps in its
restructuring program." Some of those included: .
- Trimming down the outstanding balance of AIG's government bailout to $120.6 billion at the beginning of
September.
- $5.6 billion was raised during the first nine months of 2009 through asset sales.
- AIGFP reduced the notional amount of its derivative portfolio from $1.3 trillion on June 30 to approximately $1.1 trillion on
Sept. 30.
- The AIA and Alico IPOs will happen in the fourth quarter of 2009, resulting in a $25 billion reduction in the balance and amount available under
the FRBNY Facility. However, there will be a $5 billion fee related to the transaction.
- Maria Woehr
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