AIG: Adjusted Net Up 10 Percent

By Mark E. Ruquet

NU Online News Service, July 25, 2:30 p.m.EST?New York City-based AIG reported adjusted net incomeincreased 10 percent for the second quarter ending June 30 comparedto the period last year.

Adjusted income increased $197.2 million, rising from $2.02billion for the second quarter of 2001 to $2.21 billion for thesame period of 2002.

Income was adjusted to exclude realized capital gains or losses,the cumulative effect of accounting changes, acquisitions,restructuring and related changes.

The company reported net unadjusted income for the quarterincreased 37 percent to $459.3 million, rising from $1.31 billionin 2001 to $1.8 billion for the same period in 2002.

Per share net income increased 36 percent, or 18 cents a share,rising from 50 cents a share for the second quarter of 2001 to 68cents a share.

Results were based on net premiums written for general insuranceoperations increasing 34 percent, or $1.73 billion, going from $5.1billion for the second quarter of 2001 to $6.78 billion for 2002.Life insurance premium income was up 10 percent, or $1.2 billion,going from $12.09 billion for the second quarter of 2001 to $13.3billion in 2002.

Maurice R. Greenberg, the company's chairman, stressed during aninvestor's conference call that reserves related to the 9/11 terrorattack are adequate.

Mr. Greenberg said he felt the re-insurance market would remain"firm for some time to come," and that it will take some time forthem to get over the years of a soft market and the losses from9/11.

He added that he felt rates would continue to firm in manyclasses of business and that reinsurers "will be loath to opentheir doors to a lot of business at rates that they feel are notadequate; they feel that would be going back to the same oldway."

In response to a question on the subject of corporate governanceand credibility, Mr. Greenberg said corporations need to build thatover time by showing responsibility and growth to itsshareholders.