AIG shares jump on hopes of lower loss

The logo of American International Group (AIG) is seen at their offices in New York September 22, 2008. REUTERS/Eric Thayer

NEW YORK (Reuters) - Shares of American International Group rose 15 percent on Tuesday, a day after a source familiar with the matter said the insurer’s first quarter loss is expected to narrow from its record $61.7 billion net loss in the fourth quarter.

AIG, which already has been given up to $180 billion in federal aid, is also not expected to be in immediate need of more taxpayer cash.

Shares rose 19 cents to $1.68 in morning trade on the New York Stock Exchange.

AIG, once the world’s largest insurer, was rescued with a taxpayer lifeline last year after severe mortgage losses left it unable to meet collateral postings with counterparties. It currently needs to pay back about $80 billion in borrowings from the U.S. Treasury and Federal Reserve.

Reporting by Lilla Zuill; Editing by Derek Caney