CHIEF Executive Officer, American International Group Incorporated Mr. Robert Benmosche, who promised to rebuild the bailed-out insurer, told investors for the first time that the firm made â€real moneyâ€ after a $1.45bn profit.
According to Bloomberg News on Saturday, Benmosche cited the first-quarter results as evidence that the New York-based firm was stabilising after housing-market losses forced it into a 2008 government rescue. Investment income surged on gains in private equity and hedge-fund holdings, and writedowns on securities narrowed to $309m from about $3.7bn a year earlier, AIG said on Friday.
â€œWhen you look at the pluses and minuses, they netted out to a quarter in which we made real money and we made real progress in positioning this company for the future,â€ Benmosche said in an audio statement on AIGâ€˜s website. â€We are taking the right steps to ensure that we earn the confidence of the marketplace.â€
Benmosche, 65, took charge in August of a company reeling from almost $100bn in 2008 net losses and a government rescue that swelled to $182.3bn. He told employees that month that he would rebuild AIG businesses before divesting them to repay taxpayers and then announced in March that he had struck deals to sell two non-United States life insurance divisions for about $51bn.
AIG advanced $1.95, or 5.3 per cent, to $38.70 in New York Stock Exchange composite trading on Friday, the second-biggest winner on the Standard & Poorâ€˜s 500 Index. The firm has climbed by 45 per cent since Benmosche started on August 10. Profit excluding some investments was $1.21 a share, beating the average 48-cent estimate of two analysts surveyed by Bloomberg. In the year- earlier period AIG had a net loss of $4.35bn.
AIGâ€˜s remaining businesses after the sales will include a global property-casualty insurer, two Japan units and a US life insurer and retirement services operation. Those businesses produced $2.2bn in pretax operating earnings in the first quarter, the company said. Benmosche used variations of the word â€œstableâ€ at least six times in his audio address and a company statement.
â€œOver and over again, we hear the same thing: AIG is back,â€ Benmosche said, based on comments he said were made at an industry conference. â€We will continue to work hard on our goal to be the preeminent global property insurer,â€ he added.
Benmosche said AIG expected the sales of AIA Group Limited and American Life Insurance Company, the non-US life divisions, to be completed by the end of this year. â€œOur transactions are on track,â€ he said.
Prudential Plc, the British insurer that agreed to pay about $35.5bn for AIA, this week delayed a $21bn rights offering needed for the acquisition as United Kingdom regulators weighed the combined companyâ€˜s capital adequacy.
Britainâ€˜s Financial Services Authority is concerned that the London-based insurerâ€˜s capital could get tied up in different countries, limiting Prudentialâ€˜s ability to move money in the event of an emergency, a person with knowledge of the matter.
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