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 income increased 10 percent for the second quarter ending June 30 compared to the period last year.

Adjusted income increased $197.2 million, rising from $2.02 billion for the second quarter of 2001 to $2.21 billion for the same 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 quarter increased 37 percent to $459.3 million, rising from $1.31 billion in 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 68 cents a share.

Results were based on net premiums written for general insurance operations increasing 34 percent, or $1.73 billion, going from $5.1 billion 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 $13.3 billion in 2002.

Maurice R. Greenberg, the company's chairman, stressed during an investor's conference call that reserves related to the 9/11 terror attack 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 for them to get over the years of a soft market and the losses from 9/11.

He added that he felt rates would continue to firm in many classes of business and that reinsurers "will be loath to open their doors to a lot of business at rates that they feel are not adequate; they feel that would be going back to the same old way."

In response to a question on the subject of corporate governance and credibility, Mr. Greenberg said corporations need to build that over time by showing responsibility and growth to its shareholders.

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AIG: Adjusted Net Up 10 Percent

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