Bailed-out insurer American International Group said first-quarter profit more than doubled from a year earlier, when the company racked up substantial catastrophe losses related to the March 11 earthquake in Japan.
The company reported net income of $3.2-billion (U.S.), or $1.71 per share, Thursday. That compares with year-earlier net income of $1.3-billion, or 31 cents per share.
The year-earlier earnings included a charge for the termination of AIG’s credit facility with the U.S. Federal Reserve.
On an operating basis, the company earned $1.65 per share.
Analysts polled by Thomson Reuters I/B/E/S on average expected $1.12 per share.
AIG’s global property insurance unit, Chartis, earned $1-billion, compared with a loss of $424-million a year earlier when the Japanese earthquake affected results. The company said its loss ratio improved due to a shift to higher value businesses, pricing improvements and risk selection.
“At Chartis, where we had very low natural disaster claims, we’re already seeing the benefits of the realigned consumer and commercial geographic structure and emphasis on growth economies,” AIG chief executive Robert Benmosche said in a release.
SunAmerica, AIG’s U.S. life insurer, reported a profit of $1.3-billion in the quarter, up from $1.2-billion, helped by reinvestment of cash during 2011 and rising stock markets in the quarter.
Assets under management were $265-billion at the end of the quarter, up from $253.9-billion a year earlier.
AIG sold 1.72 billion shares of AIA Group Ltd. in the quarter, and used the $5.6-billion of proceeds to pay down a portion of the U.S. Treasury’s preferred interest in the AIA SPV, the special purpose entity that holds AIG’s remaining interest in AIA.
AIG spun off AIA in a Hong Kong IPO in late 2010, but still has a stake in the company.
ILFC, the airplane leasing business AIG is planning to take public, earned $119-million in the quarter, up from $117-million.
United Guaranty Corp., AIG’s mortgage insurer, posted a gain of $8-million, down from $14-million. UGC said delinquency rates were lower, but that results continued to be affected by general weakness in the housing market.
In after-hours trading, AIG were down about 1 per cent from their $33.14 closing price.