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AIG Boosts Buyback

It promises more dividends, too.

American International Group (AIG) - Get American International Group, Inc. Report adopted a plan to boost its dividend 20% annually and said it would buy back $5 billion in stock this year.

The New York-based insurer also posted a sharp rise in fourth-quarter earnings and said it would continue to explore additional share-repurchase opportunities.

For its fourth quarter ended Dec. 31, AIG made $3.44 billion, or $1.31 a share, up from the year-ago $444 million, or 17 cents a share. On an adjusted basis, excluding realized capital gains and losses, earnings rose to $1.47 a share from 14 cents a year earlier.

Analysts surveyed by Thomson Financial were looking for $1.49.

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Shares rose $1.34 to $68.75.