AIG earnings beat forecasts despite catastrophe losses

NEW YORK: Insurance giant American International Group (AIG) has reported an 11.5% increase in fourth-quarter earnings as strong premium growth offset heavy storm losses and a settlement with federal regulators. 

The results were above analysts’ projections, and profits for the full year set a record, AIG said. 

For the October–December 2004 quarter, the company’s net income totalled US$3.02bil, up from US$2.7bil a year earlier. 

The results included losses from hurricanes, typhoons, earthquakes and tsunamis of US$170.5mil.  

They also included an after-tax charge of US$53mil for AIG’s previously announced settlement with the US Securities and Exchange Commission, the Department of Justice and other regulators for insurance contracts sold to PNC Financial Services Group Inc and mobile phone distributor Brightpoint Inc that were used to manipulate earnings. 

Revenue for the fourth quarter totalled US$25.76bil, a 16% increase from US$22.18bil in the equivalent period a year earlier. Net premium written during the quarter was US$10.58bil, up from US$9.16bil previously. 

For the full year, AIG posted record net income of US$11.05bil, compared with US$9.27bil in 2003. Excluding catastrophe losses and regulatory costs, net income was US$12.19bil, up from US$10.26bil the prior year. – AP  

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