AP Business Writer
American International Group Inc. said Thursday that its profit grew 17 percent in the second quarter as the insurer benefited from higher net premiums, prices and income from investments.
The New York-based company also declared a 10-cent quarterly dividend -- its first since it nearly collapsed in 2008 during the financial crisis before being bailed out by the federal government. And it announced board approval of a share buyback plan of up to $1 billion.
AIG nearly imploded after making huge bets on mortgage investments that later went wrong. Regulators were concerned that if it were allowed to fail it would send shock waves through the financial system, which was already reeling as Lehman Brothers collapsed in the fall of 2008. So the government stepped in with a $182 billion bailout.
Since the financial meltdown, AIG has undergone a restructuring that has halved the size of the company, with the twin aims of focusing on its core insurance operations and repaying the government's bailout cash.
The company paid all the money back last December, removing the last shred of government ownership.
"AIG is a fundamentally different, simpler company than it was three years ago," AIG President and CEO Robert H. Benmosche said in a statement noting the return of a shareholder dividend and company share buybacks.
In the April-June quarter, the company's property casualty, life and retirement, and mortgage insurance operations each generated higher income than in the same period last year.
Operating income for the insurance operations increased nearly 21 percent to $2.3 billion versus the same period last year.
Net premiums written at AIG's property casualty business grew 1.8 percent to $9.3 billion, aided by price increases. Premiums and deposits at the company's life and retirement segment jumped 24 percent to $6.8 billion. Net premiums written at AIG's mortgage business increased nearly 30 percent to $275 million, with about half of the premiums earned in the quarter coming from business written after 2008.
All told, AIG reported that net income rose to $2.7 billion, or $1.84 per share, in the three months ended June 30. That compares with net income of $2.33 billion, or $1.33 per share, a year earlier.
Analysts polled by FactSet expected, on average, adjusted earnings of 86 cents per share.
The company said it plans to pay the 10-cent dividend on Sept. 26 to shareholders of record on Sept. 12.
AIG shares ended regular trading up $1.56, or 3.4 percent, at $47.07. The stock added $2.11, or 4.5 percent, to $49.18 in after-hours trading. Shares are up 33 percent this year.
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