Insurance major AIG reports fourth quarter profits
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American International Group (AIG) has reported a net income of $19.8 billion in the fourth quarter of 2011, gaining about 77 per cent year-on-year thanks to a big tax benefit.
For the year 2011, the bailed-out insurer also managed a profit of $17.8 billion, more than double compared with $7.8 billion it earned in the previous year, reported Xinhua.
According to its financial report Thursday, the huge profits in the fourth quarter include a tax benefit of $17.7 billion, which came as the company released some of its so-called deferred tax assets accumulated as AIG's losses mounted amid the financial crisis.
The tax assets means the insurer can avoid paying as much as $45 billion in income tax in the years ahead.
AIG also benefited from a $1 billion increase in the market value of Asian life insurer AIA Group as its shares were one-third owned by AIG.
"Two years ago, sceptics and even some supporters thought it inconceivable that we would be in a position to post our second consecutive annual profit," said Chief Executive Robert Benmosche.
Not only did the insurer turn a profit in 2011, AIG also repurchased $70 million of its own shares in the quarter from the US Treasury, which was the company's first repurchase since its 2008 rescue.
Shares of AIG gained nearly 7 per cent in after-hour trading on Thursday after the company released its earnings, beating Wall Street expectations.
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