AIG posts ongoing loss on debt, quake charges
NEW YORK (Reuters) - Bailed-out insurer American International Group lost more than $1 billion from its ongoing operations in the first quarter, as the company took a huge charge for the termination of its credit facility with the Federal Reserve.
AIG's Chartis unit also racked up $864 million in catastrophe losses related to the March 11 earthquake in Japan. The company, one of the top foreign insurers in Japan, had previously warned of substantial quake charges.
AIG shares, which have lost more than 30 percent of their value since late January, fell about 1 percent in after-hours trade to $30.50.
AIG reported a loss from continuing operations of $1.18 billion, or $1.41 per share, compared with a profit on the same basis a year earlier of $2.09 billion, or $2.16 per share.
AIG, in a statement, focused on the net income figure attributable to AIG, which it said came in at $269 million, down from $1.8 billion last year.
The Fed charge came to some $3.3 billion, and was related to the recapitalization deal that closed in January. That arrangement paid off the Fed and left the U.S. Treasury with a 92 percent stake in the company.
The Treasury is expected to start selling down that position later this month, though it is unclear at what price. AIG shares have fallen since the recapitalization closed, and they are closing in on the government's $28.72-a-share break-even point.
On an operating basis, AIG said its Chartis property and casualty business increased net written premiums nearly 20 percent in the quarter, representing a pickup in its U.S. operations and the consolidation of Japan's Fuji Fire & Marine.
AIG's domestic life insurer, SunAmerica, reported flat operating income, though its crucial annuity business continued to rebound after running into difficulties during the financial crisis, when the company took a $182 billion bailout.
During the quarter, AIG also closed the sale of its AIG Star and AIG Edison businesses to Prudential Financial. The proceeds led to a $1.65 billion profit from discontinued operations in the period.
(Reporting by Ben Berkowitz; Editing by Matthew Lewis and Steve Orlofsky)
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