American International Group (AIG) posted a solid set of results in the second quarter of 2014 – the last set of results it will deliver with Robert Benmosche as chief executive – as it continued to focus its efforts on its core business.
The company made a net profit of $3.1 billion in the second quarter of 2014 compared with $2.7 billion in the second quarter of 2013. Within this, its insurance operations contributed a pre-tax operating profit of $2.7 billion compared with $2.3 billion in the same period a year earlier.
The quarter was also marked by its sale of International Lease Finance Corporation (ILFC) to AerCap for $7.6 billion – a deal which probably marks its last big disposal of parts of its business it regards as non-core. The transaction also meant a $1.4 billion after-tax gain on the sale of the unit.
AIG’s property/casualty division, its biggest division, posted an operating income of $1.36 billion, up 25 percent. Catastrophe losses shrunk to $139 million from $316 million in 2013. The unit’s combined ratio fell to 98.8.
“AIG’s results in the second quarter were solid. Overall, our businesses demonstrated our continued discipline and resilience, underscoring our focus on improving the results of our core insurance businesses,” said Benmosche. “In many ways, this quarter, my last as president and CEO of AIG, was punctuated by two significant milestones: the completion of our sale of ILFC to AerCap, which marks the last disposition of AIG’s non-core businesses, and the appointment of Peter Hancock to succeed me as AIG’s next president and CEO.
“We are pleased with the strong performance across all of our property casualty, life and retirement and mortgage guaranty businesses. Our operating results demonstrate our continued progress, and it was another very active quarter for capital management activities.
“As we look towards the future, I have every confidence that Peter will lead AIG to even more sustainable prosperity in the days and years ahead. Under Peter’s leadership, I have no doubt that we will continue advancing our core strategies and priorities with integrity and a profound sense of the responsibility that AIG exceed the expectations – financial, regulatory, and community – of all of our stakeholders.”
AIG, Robert Benmosche, Second Quarter 2014 Results, North America