The American International Group, the insurance giant, said on Friday that it lost $8.87 billion in the fourth quarter as it paid down some of the billions of dollars in bailout loans it received from the government.þþThe troubled insurer also said in an annual regulatory filing that it might need additional support from the government. However, A.I.G. has included such warnings in past filings with the Securities and Exchange Commission.þþThe fourth-quarter results were an improvement from the $61.7 billion that A.I.G. lost in the period a year ago, but they were worse than analysts expected. They also followed two consecutive profitable quarters.þþThe company reported a 2.2 percent drop in new premiums in its Chartis general insurance business, compared with a year earlier, and attributed the slide in part to the weak economy. It also had lower sales of life insurance products.þþA.I.G. also reported $6.2 billion in expenses from repaying government loans.þþInvestors were not happy with the news, and bid its stock down nearly 6 percent in preopening trading. The concern in the market is that A.I.G.’s insurance business, which was not the cause of its near collapse in 2008, needs to be stronger for the company to keep repaying the government and become independent again.þþA.I.G. said it lost $65.51 a share in the fourth quarter, which compares to a loss of $458.99 a share in the same period in 2008. On average, analysts surveyed by Thomson Reuters had forecast a quarterly loss of $3.94 a share.þþThe company was bailed out in September 2008 by the government as the financial crisis spiraled out of control. The insurer has received aid packages with a total value of $182.5 billion. In return for that financial support, the government received an 80 percent stake. The company was undermined by underwriting risky credit derivatives contracts. A plunge in the value of those contracts was the primary driver of A.I.G.’s near collapse.þþA.I.G. has been working for the last 18 months to sell assets and streamline operations in an effort to repay government debt. Since receiving government bailout funds, A.I.G. has completed 19 unit sales or asset transactions.þþIt reported Friday that it continued to unwind its Financial Products Group, the unit blamed for A.I.G.’s downfall.þþEarlier this month, MetLife confirmed that it was in talks with A.I.G. to buy one of A.I.G.’s insurance units. Media reports price the deal at as much as $15 billion. The two companies have been in discussions for months about a potential deal for A.I.G.’s American Life Insurance Company, known as Alico.þþAlico is an international life and health insurance business that operates in more than 50 countries.þþOn Friday, A.I.G. said it was continuing to address financing needs and explore options for restructuring its aircraft leasing unit, International Lease Finance Corporation, and its American General Finance division.þ
Source: NY Times
