AIG Surpasses Forecasts, Driven by Strong Insurance Business
American International Group
Adjusted net income rose 30% to $4.39 billion, or $1.68 a share. A consensus estimate compiled by Thomson Financial put earnings for the quarter at $1.54 a share
Net income for New York-based AIG rose to $4.13 billion, or $1.58 a share, from about $3.2 billion, or $1.22, a year earlier.
Revenue was $30.65 billion, up 12 percent from $27.28 billion.
AIG's president and chief executive, Martin J. Sullivan, said in a statement accompanying the results that "AIG had a very good quarter," with strong performance in general insurance businesses worldwide and foreign life insurance. "Asset management results increased compared to the first quarter of 2006," he added.
Sullivan said the company continued to seek growth opportunities overseas, saying, "We believe these businesses complement our existing operations ... and offer future growth potential."
Operating income from general insurance operations rose to $3.1 billion in the first quarter from $2.33 billion a year earlier, with both underwriting profit and net investment income rising.
But operating income was down to $2.3 billion in the first quarter from $2.6 billion a year earlier in life insurance and retirement services, mainly because of a decline in deposits and increased surrender activity in domestic retirement services, AIG said.
Financial services operations turned a profit of $292 million, while operating income in asset management operations nearly doubled to $994 million.
Sullivan was selected by AIG's board in March 2005 to replace longtime Chief Executive Officer Maurice "Hank" Greenberg amid investigations into the company's record-keeping.
AIG in February 2006 agreed to pay $1.64 billion to resolve allegations that it used deceptive accounting practices to mislead investors and regulatory agencies.
AIG is a multi-line carrier that provides life insurance, property casualty, asset management and services such as aircraft leasing.