May 8, 2008 / 8:25 PM / 10 years ago

Insurer AIG posts 1st-quarter loss on write-downs

NEW YORK (Reuters) - American International Group Inc (AIG.N), the world’s largest insurer, posted its largest ever quarterly loss on Thursday and said it would raise $12.5 billion to fortify its balance sheet.

A sign on an office building for AIG, American International Group, is pictured in Los Angeles, California May 8, 2008. REUTERS/Fred Prouser

The result marked the second consecutive quarter that AIG had posted record losses, hurt by a write-down of derivatives exposed to bad mortgage investments.

Separately, the company said it was looking for a new CFO after naming Steven Bensinger vice-chairman of financial services, effective immediately.

A sign advertises an open house for sale in Virginia, April 6, 2008. American International Group, the world's largest insurer, posted a second consecutive quarterly loss, hurt by the write-down of derivatives exposed to bad mortgage investments. REUTERS/Jonathan Ernst

AIG said the first-quarter net loss was $7.81 billion, or $3.09 a share, compared with net income of $4.13 billion, or $1.58 a share, a year earlier.

Included in the results was a $9.11 billion charge for unrealized market valuation losses on credit swaps, a portfolio that also proved a thorn in the fourth-quarter.

AIG also recorded capital losses of $6.09 billion, primarily from impairment charges in its investment portfolio.

AIG said it expected to raise $7.5 billion of the total capital through a common stock and equity-lined offering.

On an adjusted basis. AIG said its net loss was $3.56 billion, or $1.41 a share, AIG said.

Reporting by Lilla Zuill; Editing by Andre Grenon

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