American International Group earned profits in both its fourth quarter and for the entire year, and showed strong growth in its group retirement products and individual variable annuities.
However, most of the profit growth for the entire company was due to a tax-related accounting gain, and its key SunAmerica life operating company showed an 10.7 percent decline in pre-tax operating income in the fourth quarter.
At SunAmerica, premium and policy fee income was $1.32 billion in the fourth quarter, down 0.9 percent from $1.332 billion in the fourth quarter of 2010.
Net investment income in the fourth quarter of 2011 was $2.372 billion, down 14.6 percent from $2.777 in 2010.
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Pre-tax operating income was $931 million, down 10.7 percent from $1.043 billion in 2010.
Overall, AIG reported a $19.8 billion profit in the fourth quarter of last year, nearly all of it due to a tax-related accounting gain. Specifically, the deferred tax asset valuation allowance for the quarter was $17.7 billion, reducing actual net profit to $1.6 billion.
In the same period a year earlier, AIG had an operating loss $2.2 billion.
For the full year, AIG earned $17.8 billion for 2011, its second straight year of operating profits.
Specifically, after-tax operating income in the 2011 fourth quarter was $1.6 billion, or $0.82 per diluted share compared to a loss of $2.2 billion, or $15.99 per diluted share in the corresponding prior year quarter.
After-tax operating income for the full year of 2011 was $1.8 billion, or $1.02 per diluted share compared to a loss of $898 million, or $6.57 per diluted share in 2010.
In a statement, AIG CEO Robert Benmosche said that, was something that AIG’s skeptics would have thought “inconceivable” a couple of years ago.
He said that AIG anticipates that, “we’ll continue to be competitive in all areas of our core insurance businesses.