American International Group
swung to a $2.71 billion profit in the fourth quarter, thanks to big improvements in its general and life insurance segments.
The company's earnings came out to $1.03 a share in the latest quarter, compared with a loss of $103.8 million, or 3 cents a share, last year.
Excluding capital losses and the effect of accounting changes, AIG earned $2.75 billion, or $1.05 a share, in the latest quarter, compared with earnings of $537.5 million, or 20 cents a share, last year. The year-ago results were weighed down by a $1.8 billion increase in the company's general insurance reserve.
Analysts, who try to predict the company's results before investment items, had been forecasting earnings of $1.04 a share. The shares were recently up 75 cents, or 1%, to $74.25.
General insurance underwriting has been an increasingly profitable business, particularly for well-capitalized firms like AIG. The company said net written premiums were a record $9.16 billion in the quarter, up 27% from a year ago.
"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," AIG said. "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."
AIG said its worldwide life insurance pretax operating income was $1.80 billion in the fourth quarter of 2003, including $50.1 million in realized capital losses, compared with $1.13 billion a year ago, which included $451.8 million in realized capital losses.