NEW YORK CITY (dpa-AFX) - American International Group Inc. (AIG), Thursday reported an increase in profit for the second-quarter, driven mainly by strong performance at its Chartis and SunAmerica business.
Chief Executive Robert Benmosche said, 'At Chartis, second quarter results demonstrated the continued progress in strategic initiatives to improve the mix of business, loss ratio, and risk selection, all of which ultimately increases the intrinsic value of our global franchise. SunAmerica Financial Group continues to benefit from disciplined pricing of innovative products that are attractive to both consumers and our distribution partners.'
At its core operations, AIG's property insurance division Chartis' second-quarter operating income rose to $936 million from $783 million last year. Chartis combined ratio improved to 102.4 percent from 104 percent last year. Combined ratio is a measure of profitability used by insurance companies. Net premiums earned dropped 2.4 percent to $8.82 billion for the quarter.
At its life insurance unit SunAmerica Financial Group, operating income for the quarter rose to $933 million from $723 million last year. Premiums for the quarter dropped to $622 million from $662 million last year.
New York-based AIG's profit for the quarter surged to $2.33 billion or $1.33 per share from $1.84 billion or $1.00 per share last year.
Operating income, which excludes few items, improved to $1.06 per share from $0.68 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.57 per share for the quarter. Analysts' estimates typically exclude special items.
AIG's operating profit also benefited from an increase in fair value of Maiden Lane III of $1.31 billion, while it had a negative impact of about $667 million last year.
AIG said it has already received $6.1 billion through July and expects to receive $1.9 billion in mid-August from auctions of assets of Maiden Lane III. Maiden Lane III was created to alleviate capital pressures on AIG stemming from credit default swap contracts.
Deferred income tax valuation allowance release for the quarter was $1.28 billion compared to $588 million last year.
Book value, calculated by total assets minus intangible assets and liabilities, at June 30 was up 5 percent to $60.58 per share from $57.68 per share three months earlier.
AIG closed Thursday's trading at $30.84, on a volume of about 11.9 million shares on the NYSE. In after-hours, the stock dropped $0.09 or 0.29%.
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