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November 09, 2007 at 01:55 PM
American International Group Inc. turned a profit in the third quarter despite the problems in the mortgage securities market.
AIG, New York, is reporting $3.1 billion in net income for the latest quarter on $30 billion in revenue, compared with $4.2 billion in net income on $29 billion in revenue for the third quarter of 2006.
The company said it had about $2.5 billion in after-tax unrealized losses on investments on its books, but it confounded the predictions of pundits who had suggested that problems with mortgage-backed securities might force it to post a $10 billion loss.
Life insurance and retirement services operating income fell as a result of investment market volatility, but sales of life insurance were strong in Asia, and sales of universal life and variable life were strong on the United States and Canada, AIG says.
- Protective Life Corp., Birmingham, Ala., is reporting $73 million in net income for the third quarter on $794 million in revenue, up from $57 million in net income on $762 million in revenue for the third quarter of 2006.
Sales of life insurance and annuity products were strong, and sales of stable-value products increased to $572 million, from $162 million, Protective Life says.
- National Western Life Insurance Company, Austin, Texas, is reporting $16 million in net income for the third quarter on $112 million in revenue, compared with $16 million in net income on $130 million in revenue for the third quarter of 2006.
Life insurance sales were strong, and the company has little exposure to investments in subprime mortgages or other housing-related investments, the company says.
- Kansas City Life Insurance Company, Kansas City, Mo., is reporting $9.1 million in net income for the third quarter on $109 million in revenue, compared with $9.5 million in net income on $111 million in revenue for the third quarter of 2006.
Immediate annuity premiums were up and operating expenses were down, but net investment income was down, the company says.
- Scottish Re Group Ltd., Hamilton, Bermuda, is reporting a $107 million net loss for the third quarter on $500 million in revenue, compared with a $27 million net loss on $611 million in revenue for the third quarter of 2006.
Operating income, which excludes the effect of investment losses, increased to $1.6 million, from $157,000.
Scottish Re realized $102 million in losses on investments, with about $15 million resulting from a net change in the value of embedded derivatives and $95 million resulting from impairment charges for subprime and Alt-A residential mortgage securities, the company says.
