AIG posts 34 percent jump in 2Q profit 42 minutes ago

AIG posts 34 percent jump in 2Q profit 42 minutes ago



NEW YORK - American International Group Inc., one of the world's largest insurers, on Wednesday said its second-quarter profit jumped 34 percent on growth in its general and life insurance businesses and its asset management group.

ADVERTISEMENT

AIG President and Chief Executive Martin J. Sullivan took steps to defuse investor concern over its exposure to the troubled subprime mortgage lending market, saying in a statement that the company continues "to be very comfortable with our exposure to the U.S. residential mortgage market, both in our operations and our investment activities."

Defaults on subprime loans, or those made to people with poor credit, have climbed sharply in recent months and have triggered concern about the impact on credit markets worldwide. AIG has potential exposure to that industry as an investor, lender and mortgage insurer.

Sullivan said AIG would provide more detail about its exposure to subprime loans in a conference call on Thursday.

The company reported net income rose to $4.28 billion, or $1.64 per share, from $3.19 billion, or $1.21 per share, a year earlier.

Adjusted to exclude certain items, earnings totaled $4.63 billion, or $1.77 per share, versus $4.16 billion, or $1.58 per share, in the same period last year.

The results topped Wall Street's consensus forecast, and the company's shares rose $1.32, or 2 percent, to $67.80 in aftermarket electronic trading.

Analysts had expected AIG to post a profit of $1.61 per share, according to Thomson Financial. Analyst estimates typically exclude one-time items.

Net premiums written increased 4 percent in AIG's general insurance business to $12.14 billion from $11.63 billion a year ago. Premiums written in its life insurance and retirement services segment increased 7 percent to $8.17 billion from $7.65 billion.

AIG said its consolidated assets stood at $1.034 trillion as of June 30.