AIG Posts Third-Quarter Loss on Investments, Restructuring
November 3, 2015 by David Pilla, international editor, BestWeek: David.Pilla@ambest.com
NEW YORK – American International Group Inc. reported a net loss of $231 million for the third quarter, compared with net income of $2.2 billion for the prior-year quarter.
The group said the net loss was due mainly to lower income on hedge fund investments and assets marked to fair value through earnings, lower realized investment gains, and lower income from settlements of non-operating litigation.
“This quarter’s results, while falling short of expectations due to market volatility, show signs that we are making progress to transform AIG for long-term competitiveness,” said Peter D. Hancock, AIG president and chief executive officer, in a statement. “Our strategy focuses on four major objectives: to narrow our focus on businesses where we can grow profitably, drive for efficiency, grow through innovation and optimizing our data assets, and return excess capital.”
Billionaire investor Carl Icahn recently said AIG is “too big to succeed” and urged the company to split into three units, allowing it to shed the systemically important financial institution designation that is blunting AIG’s competitive edge (Best’s News Service, Oct. 28, 2015). In an open letter to Hancock, Icahn revealed he had accumulated a “large stake” in AIG and called for the company to separate life and mortgage insurance units from its core property/casualty business activities.
Underwriting entities of American International Group Inc. currently have Best’s Financial Strength Ratings of A (Excellent).
Shares of American International Group Inc. (NYSE: AIG) closed at $63.74 on Nov. 2, up 1.08% from the previous close.