AIG returns to profit thanks to investment arm

Image caption,
AIG is trying to sell parts of its business but has hit some difficulties

AIG has returned to profit in the first quarter of 2010, thanks to an improved income from its investments.

The firm, which is nearly 80% owned by the US government, made $1.5bn (£1bn) in the period, compared with a loss of $4.4bn a year earlier.

But it said tough economic conditions meant its insurance business continued to struggle.

AIG shares rose by 3.2% in pre-market trading on Friday.

"I am pleased with their progress, but there is still more work to be done," said chief executive Robert Benmosche.


The firm has agreed to sell two major foreign businesses to bolster its finances and put it in a position to repay some of the $183bn in government loans it received in its taxpayer-funded bailout.

But AIG's plans to sell its Asian business AIA to UK group Prudential for $35.5bn hit a snag after the Pru delayed a rights issue to fund the purchase.

In the other deal, MetLife is paying $6.8bn in cash and $8.7bn in shares for American Life Insurance Company (Alico), which operates in more than 50 countries.

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