AIG Reports 12.5% Increase in Second-Quarter Net Income
August 5, 2014 by Michael Buck
NEW YORK – American International Group Inc. saw its second-quarter net income rise 12.5% over the prior-year period to $3.1 billion as the company benefited from a $1.4 billion after-tax gain on the sale of its aircraft leasing business and higher underwriting income in its property/casualty businesses.
AIG President and Chief Executive Officer Robert Benmosche said the company’s solid results were the product of continued discipline and resilience and underscore its focus on its core insurance businesses. The second quarter is Benmosche’s last full quarter as head of the company, as he will step down Sept. 1 when Peter D. Hancock takes over as president and CEO (Best’s News Service, June 10, 2014).“As we look towards the future, I have every confidence that Peter will lead AIG to even more sustainable prosperity in the days and years ahead,” Benmosche said in a statement. “Under Peter’s leadership, I have no doubt that we will continue advancing our core strategies and priorities with integrity and a profound sense of the responsibility that AIG exceed the expectations – financial, regulatory, and community – of all of our stakeholders.”
AIG saw higher pretax operating income in the second quarter from all three of its business units. AIG Property Casualty reported pretax operating income of $1.4 billion as its commercial and consumer segments both returned to underwriting profitability from underwriting losses in the prior-year period. The property/casualty unit reported total underwriting income of $101 million, compared to an underwriting loss of $223 million a year ago.
The company also benefited significantly from the completion of the sale of International Lease Finance Corp. to Dutch company AerCap Holdings N.V. in a deal valued at $7.6 billion. The deal included $3 billion of cash and about 97.6 million newly issued shares of AerCap common shares.
Rated AIG companies currently have a Best’s Financial Strength Rating of A (Excellent). Shares of American International Group Inc. (NYSE: AIG) closed trading Aug. 4 at $52.66, up 1.17% from the previous close.
(By Michael Buck, senior associate editor, BestWeek: Michael.Buck@ambest.com)
