American International Group Inc. lost less money in the first quarter than it did in the first quarter of 2008 despite a steep drop in life and retirement unit deposits.

AIG, New York, is reporting a $5.1 billion total net loss for the latest quarter on $20 billion in revenue, compared with a $7.7 billion net loss on $14 billion in revenue for the first quarter of 2008.

Total revenue from premiums and other considerations fell to $19 billion, from $21 billion, but unrealized losses on “super senior” credit default swaps held by the AIG Financial Products unit dropped to $452 million, from $9.1 billion, and net realized capital losses dropped to $3.1 billion, from $6.1 billion.

The net loss amounted to $1.98 per share. Some securities analysts originally had predicted that AIG would report a net loss of less than 10 cents per share, but Reuters and other news organizations have been reporting this week that the loss would be about $1.80 per share.

Life And Retirement

The AIG life and retirement operations are reporting a $1.9 billion operating loss on $8.3 billion in revenue from premiums and other considerations, compared with a $1.8 billion operating loss on $9.3 billion in premiums and other considerations for the first quarter of 2008.

But life and retirement deposits, which are not included in revenue figures prepared according to Generally Accepted Accounting Principles, plummeted to $15 billion, from $26 billion, AIG says.

“Sales of investment-oriented life and retirement services products remained challenged due to the general decline in global equity markets during most of the first quarter and negative AIG publicity,” AIG says.

In the domestic retirement operations, “new business has slowed principally due to several distribution partners and plan sponsors suspending or de-emphasizing sales of AIG products pending clarification of the future ownership of these businesses,” AIG says. “Similarly, the sales outlook in Domestic Life Insurance continues to remain challenging due to the current economic environment, current ratings and the negative press surrounding AIG.”

Domestic individual life premium revenue fell 12%, to $706 million, and domestic individual life premium revenue from new sales fell to $77 million, from $173 million.

The decline was much smaller in the domestic group life and health operations. There, sales and deposits fell to $34 million, from $37 million, and group life premiums and deposits fell just 2.4%, to $203 million.