AIG Reports Higher Net Income

NU Online News Service, July 26, 1:35 p.m. – American International Group Inc., New York, is reporting $1.6 billion in net income for the second quarter on $12.6 billion in revenue, up from $1.4 billion in net income on $11.4 billion in revenue for the second quarter of 2000.

Another measure of income, which excludes costs related to minority interests and the cost of an accounting change, increased 14%, to $1.7 billion.

Overall, economic weakness in many countries may have helped AIG more than it has hurt, according to AIG Chairman Maurice Greenberg.

“The flight to quality under way in many markets benefits AIG, with our strong ratings and financial condition,” Greenberg said in a statement.

AIG gives separate sets of results for its SunAmerica financial services unit and its other life insurance operations.

SunAmerica eked out some growth, to $351 million in operating income on $3.9 billion in sales, from $345 million in operating income on $3.8 billion in sales, in spite of the weakness of the North American economy.

The AIG life insurance unit is reporting $1.1 billion in net income on $5 billion in revenue, compared with $894 million on $5.2 billion for the second quarter of 2000.

Revenue from domestic annuities, pension products and investment products increased 51%, to $4 billion, and revenue from foreign life sales increased 20%, to $3.9 billion. But total unit revenue fell because revenue from foreign sales of annuities, pension products and investment products fell 44%, to $1.1 billion.

AIG results do not yet include results for American General Corp., Houston, because AIG has not yet completed its proposed acquisition of the company. But third-quarter results will probably include a charge for the cost of restructuring the American General operations, AIG says.