In the unveiling of its second-quarter numbers on Friday, New York-based The company's general insurance net premiums, reported Friday at $7.9 billion, were down 19.2 percent from the second quarter of 2008. The company's commercial insurance unit reported net premiums written of $5 billion in the second quarter, an 18.2 percent reduction from the second quarter of 2008. In an unusual move, AIG executives declined to host a conference call with analysts and investors on Friday. Had they been on the call, analysts might have wanted to discuss AIG's retention rates in commercial insurance. But in its discussion of those rates in its news release, the company was vague. "General Insurance continues to retain the vast majority of its customers. Business retention was down moderately in the second quarter of 2009 compared to the prior year period," the release stated. FOREIGN OPS HIT HARD The company's operations were particularly hard hit in its Foreign General Insurance division, which reported $3 billion in net premiums written in the second quarter of 2009, a reduction of more than 20 percent compared to the second quarter of 2008. The company attributed 14 percent of that to the impact of foreign exchange rates and the 2008 sale of its Brazilian operations. As AIG works its way through a government-supported restructuring, it is continuing to work on rebranding its commercial insurance operations. Those operations, which were renamed HOORAY, HOWEVER The good news for the company was that it recorded a $1.8 billion profit, compared with a loss of $5.35 billion in the second quarter of 2008. It was the first profit the company reported after six straight losing quarters and helped to cap off a stirring run in the company's stock price for the week of Aug. 3. AIG's stock started the week trading at $13.22 per share on the New York Stock Exchange. By mid-afternoon on Friday, August 7, the company's stock stood close to $29 per share, a rise of much better than 100 percent. In a press release, outgoing AIG Chairman and CEO Edward Liddy characterized the company's second-quarter gains as resulting from reductions in net realized capital losses, improved market conditions, an improved profile for its Federal Bank of New York credit facility and reductions in the exposures of its AIG Financial Products portfolio. The company kept its name in headlines all week with other good news as well. At the beginning of the week, it announced that Robert Benmosche would be named the new president and CEO of AIG and would replace the retiring Liddy on Monday, Aug. 10. AIG ended the week by making three more major announcements. The company announced that Robert Gifford, a 22-year veteran of Boston-based AEW Capital Management, will become the president and CEO of AIG Global Real Estate. The company also announced that William Glasgow, former chief operating officer of the real estate private-equity firm Scanlan, Kemper, Bard Co's. LLC will become the chief restructuring officer for AIG Global Real Estate. Harvey Golub was announced as its new nonexecutive chairman, also succeeding Liddy on Monday, Aug. 10. By DAN REYNOLDS
Tuesday, August 11, 2009
AIG Swings to Profit But Bleeds Premium