AIG Returns to Profit In 2003 Fourth Quarter

AIG Returns to Profit In 2003 Fourth Quarter

However, AIG's 2003 fourth-quarter results included losses of $76 million related to its investment in Parmalat, the collapsed Italian food conglomerate.

The New York-based AIG noted that its general insurance unit swung to an operating profit of $1.47 billion for the 2003 fourth quarter, in contrast to a loss of $2.04 billion one year ago, as premiums rose 27 percent to $9.16 billion.

AIG, during its conference call today, called its outlook for the year ahead "very positive," forecasting that its global customers will seek out AIG based on the firm's financial strength and risk expertise.

"AIG's general insurance business had an excellent year and quarter. Net premiums written were a record $9.16 billion in the fourth quarter of 2003, up 27.0 percent over a year ago," said AIG Chief Executive Officer Maurice Greenberg. He added that in 2004, he would expect general insurance business in the United States to have "another solid year."

"While there is more competition for certain 'short tail' lines, the market for 'long tail' and specialty lines, where AIG has significant competitive strengths, should continue to be strong," he said.

"Our top ratings and financial strength have never been more valuable to customers and set us apart from the competition in the U.S. and around the world," Mr. Greenberg said.

He added, "Corporate leaders recognize that buying specialty casualty and liability lines?known as 'long tail' lines?from other than the most financially strong carriers is taking a credit risk they can ill afford in today's environment."

Mr. Greenberg said that AIG's continued investment in China and Japan will further fuel growth for the current year. He said AIG's non-U.S. general insurance operations are poised for growth following the October 2003 agreement with the People's Insurance Company of China.

For the full-year 2003, AIG earned a record $9.27 billion, up 68 percent from $5.52 billion. ""In addition to record net income of $9.27 billion, AIG had record results in 2003 in all four of our core businesses?general insurance, life insurance, financial services and retirement services & asset management," Mr. Greenberg said.

Net premiums written in its general property-casualty insurance operations were up 28 percent for the year to $35.2 billion, while earned premiums rose 31 percent on a year-over-year basis to $31.7 billion. AIG earned a $551 million underwriting profit in the 2003 fourth quarter. For the full-year 2003, the unit earned a record $5.1 billion from $667 million during 2002.