AIG Reports $2.7B Loss in Second Quarter

By Phil Gusman

August 05, 2010 at 08:00 PM

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American International Group (AIG) reported a second quarter net loss of $2.7 billion, compared to 2009 second quarter net income of $1.8 billion.

The company said the loss was due primarily to a $3.3 billion goodwill impairment charge from the sale of its overseas life insurance company ALICO, which it is selling to MetLife Inc., New York, for $15.5 billion. That deal is expected to close later this year, said Robert Benmosche, the company's CEO.

The $3.3 billion impairment was part of $3.4 billion in net losses from discontinued operations.

Adjusted net income for the quarter–which excludes the impairment and other gains and losses on sales of businesses as well as excluding the $564 million net realized capital losses–was $1.3 billion, the company reported, compared to adjusted net income in the second quarter of 2009 of $1.1 billion.

AIG, New York, reported second quarter operating income on its domestic life insurance and retirement services of $1.1 billion, compared to operating income of $254 million in the second quarter of 2009.

AIG's financial products unit, which the company is winding down, reported a second quarter operating loss of $132 million, which was flat compared to a year ago.

The unit's dealings in credit default swaps was at the center of the company's near collapse–which led to the federal government making $182.3 billion available via the Troubled Asset Relief Program to bail out the company.

For the first six months of 2010, AIG reported a net loss of $799 million, compared to a 2009 first half loss of $2.5 billion.

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