AIG CEO: Insurer rebuilding 'legacy of excellence'
Robert Benmosche, CEO of American International Group (AIG) touted the accomplishments of his organization during the announcement the insurer profited in the first quarter.
AIG reported net income of $3.2 billion compared to $1.3 billion one year earlier.
Diluted earnings per share and after-tax operating income per share were $1.65, for the first quarter of 2012, compared with $1.34 for the first quarter of 2011.
"The people of AIG feel empowered and are accountable for the decisions they make that directly benefit our customers and the communities they serve," said Benmosche. "We are rebuilding AIG’s legacy of excellence."
"We also continue to make good on our promise to help the U.S. government profit from its investment in AIG," he added. "During the quarter, we retired the preferred interests of AIA Aurora one year ahead of schedule and achieved the milestone of reducing total outstanding or authorized U.S. government assistance by 75%."
All of the core businesses at AIG posted profits in the quarter.
United Guaranty Corporation, AIG’s residential mortgage guaranty operations, reported operating income of $8 million for the first quarter of 2012, compared to operating income of $14 million in the first quarter of 2011.
During the quarter, UGC contacted mortgage lenders regarding over 20,000 aged delinquent accounts and received responses for over 14,000. Some of those responses lead to cures, others to rescinded coverage, both positive for AIG's bottom line.
First lien mortgage insurance written totaled $6.5 billion for the quarter compared to $2.5 billion for the same period in 2011. Quality remained high, with an average FICO score of 760 and an average loan to value of 91 percent on new business.
On March 7, AIG sold 1.72 billion ordinary shares of AIA Group and applied approximately $5.6 billion of the proceeds to repay the Treasury. Further, $1.6 billion of proceeds from the sale of the securities held by Maiden Lane II by the Federal Reserve Bank of New York were also used to pay down another portion of the Treasury Department preferred interests.
In March 2, the Treasury completed a registered public offering of AIG common stock in which it sold approximately 207 million shares for aggregate proceeds of approximately $6 billion. As a result, government ownership in AIG reduced to approximately 70%.