AIG's net loss was of $4 billion, or $2.68 a share, compared with a profit of $21.5 billion, or $11.31 a share, a year earlier.
That reflects a $4.4 billion net loss from the sale of its aircraft leasing business, International Lease Finance Corporation, the company said.
In December 2012, AIG entered an agreement to sell a 90-percent stake in ILFC to an investor group. The deal is expected to close in the second quarter of 2013. The transaction is a subject to regulatory approvals in the U.S. and China.
The company also said its results were affected by Hurricane Sandy.
"Hurricane Sandy was clearly a big hit in the quarter," AIG CEO Robert Benmosche said on CNBC's "Closing Bell" after the earnings report. "If you look at the underlying results, you've seen gradual improvement. The top line is holding steady. Our casualty line is coming down. We're making it up with better margin product. Our loss ratios for eight quarters are coming down," he said.