AIG Sets Record for Profit in 2004

American International Group’s reported fourth quarter earnings exceeded Wall Street expectations and its 2004 profits set a record for the year.

The giant insurer said net income for fourth quarter totaled $3.02 billion, or $1.15 a share. That was up 12 percent from profits of $2.7 billion, or $1.03 a share, a year earlier.

Analysts had expected earnings of $1.12.

The impressive results were earned despite losses from hurricanes that battered the Southeast, claims related to the tsunami that devastated Asia and a multi-million dollar settlement with the Securities and Exchange Commission regarding dealings with PNC Financial Services.

Maurice Greenberg, chairman, said the ability of the company to report record annual income despite the catastrophe and regulatory hurdles “is a testament to the diversity and strength of our franchise.”

Greenberg added that the company is cooperating with investigations related to the suit brought by New York Attorney General Eliot Spitzer last October against Marsh & McLennan Companies Inc. for bid rigging and price fixing. Marsh and Spitzer announced a $850 million settlement of that action last week. AIG was named but not charged in that suit.

Greenberg said that the company’s own internal investigation has not uncovered any widespread problems. “Based on all of the information we have today, we continue to believe that the issue that has been the primary focus of the New York attorney general’s investigation of AIG is confined to one broker relationship in one unit,” he said.

Net income for the fourth quarter was $3.29 billion, or $1.26 a share, compared to $2.75 billion a year earlier.

For the year, AIG reported record net income of $11.05 billion, or $4.19 a share, compared to $9.27 billion, or $3.52 a share, in 2003.