American International Group Inc., the company repaying a $182.3 billion government rescue, led the U.S. insurance industry to its best year since 2003 as investments strengthened.
Businessweekreports 19 of the 22 companies in the Standard & Poor’s 500 Insurance Index are beating returns for the benchmark S&P 500 this year. AIG, based in New York, has nearly doubled and is the insurance index’s best performer, according to the story. Warren Buffett’s Berkshire Hathaway Inc. has risen 22% this year. The index, which also includes MetLife Inc., the biggest U.S. life insurer, and brokers like Aon Corp., has advanced 15%, its biggest annual jump since 19% in 2003. The S&P 500 has risen about 13% so far in 2010.
As the article notes, the industry is building on a recovery that started last year when the insurance index rose 11%. AIG, once the world’s largest insurer, is shedding assets as it seeks to repay the U.S. government rescue and has reported improved investment results. Realized losses on investments cost the company $661 million in the third quarter, compared with $1.86 billion a year earlier.