American International Group Inc. (AIG) has filed its Quarterly Report on Form 10-Q for the period ended Sept. 30, 2005 with the Securities and Exchange Commission. Third quarter 2005 net income was $1.72 billion or $0.65 per diluted share, compared to $2.69 billion or $1.02 per diluted share in the third quarter of 2004. These results include after tax net catastrophe related losses of $1.57 billion or $0.60 per diluted share in third quarter 2005 compared to $512 million or $0.19 per diluted share last year.
Net income for the first nine months of 2005 was $10.02 billion or $3.82 per diluted share, compared to $8.29 billion or $3.14 per diluted share in the first nine months of 2004. These results include after tax net catastrophe related losses per diluted share in 2005 and 2004 of $0.60 and $0.19, respectively.
Commenting on third quarter results, AIG President and CEO Martin Sullivan said “AIG has achieved profitable results even as we sustained $1.57 billion in after tax net catastrophe related losses during the third quarter, which is the most costly quarter for catastrophes ever recorded to date by the property/casualty industry. AIG’s net income of $1.72 billion for the third quarter and $10.02 billion for the first nine months is a true reflection of the size, scope, diversity and financial strength of our business. At September 30, 2005, consolidated assets were $843.40 billion and shareholders’ equity was $89.28 billion.
“I am very proud of AIG’s employees throughout the world who have been assisting customers, colleagues and others who are in need in the aftermath of hurricanes Katrina, Rita and Wilma as well as the tragic earthquake in India and Pakistan last month.
“Catastrophes reduced AIG’s General Insurance results domestically as well as in our foreign operations. Overall, General Insurance had a pretax operating loss in the third quarter of $232 million before realized gains (losses), compared to pretax operating income of $622 million last year. Excluding catastrophe losses, the General Insurance combined ratio in third quarter 2005 improved to 91.61 compared to 93.87 in third quarter 2004. Foreign General had a very strong quarter, with a combined ratio of 92.21, inclusive of 10.41 points for catastrophe related losses. General Insurance cash flow, although somewhat lower than last year, was still strong at $3.17 billion in the quarter and $9.38 billion for the first nine months of 2005. Fourth quarter 2005 after tax net losses arising from Hurricane Wilma, including net reinstatement premium costs, are estimated to be approximately $400 million.”
According to Sullivan, “In addition to the progress we are making in our businesses, we have taken further steps to enhance our financial controls, disclosure and corporate governance processes. The AIG Board of Directors has adopted majority voting and mandatory retirement age guidelines and Michael H. Sutton, former chief accountant of the United States Securities and Exchange Commission, was elected a Director and is now serving on the Audit Committee of the Board. These recent actions are a continuation of our commitment to implement best practices in these areas.”
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