AIG profits rise on strong insurance sales, sale of aircraft leasing business
The numbers: American International Group said second-quarter profits rose 13% year-over-year to $3.1 billion, or $2.10 per share. AIG also reported after-tax profits of $1.25 per share for the most recent quarter, which beat analyst estimates of $1.05 per share. Following the positive report, the insurer’s shares jumped 2.7% in after-hours trading after closing up 1.2% on Monday.
The takeaway: CEO Robert Benmosche, who plans to step down next month, called the company’s quarterly earnings “solid” and pointed out increased profits across all of AIG’s insurance businesses. The company’s property and casualty insurance unit along with the life insurance and mortgage guaranty units all combined for an 19% gain in second-quarter profits to $2.7 billion. Benmosche also boasted about the completion of AIG’s $7.6 billion sale of aircraft lessor International Lease Finance Corporation (ILFC) to AerCap in May – a deal that reaped a $1.4 billion post-tax gain for AIG in the second quarter.
What’s interesting: The sale of IFLC was the last major divestment for AIG following the insurance giant’s 2008 government bailout, which the company has since paid off. Benmosche described both the sale and his pending replacement by AIG property and casualty insurance head Peter Hancock as “significant milestones” for a company whose restructuring he oversaw after being appointed to the CEO position by the U.S. government in 2009. Under the watch of Benmosche, AIG sold off major non-core assets before it could pay off what grew to become a $182 billion bailout tab last year.