The financial results of this year's first quarter were likely not what
The insurer reported a net income of $269 million, and an after-tax operating income of $2 billion for the quarter ended March 31, 2011, compared to a net income of $1.8 billion and an after-tax operating income of $637 million for the first quarter of 2010—a drop of about 85%, according to a company release. Heavy losses from the Japanese earthquake and tsunami, as well as exposure to the New Zealand earthquake and Australian floods did nothing to help the insurer’s books during this stretch.
But for a company that is becoming accustomed to not looking in the rearview mirror, AIG announced in the regulatory disclosures accompanying its results a list of long-term goals. Among them is its desire to keep its one-third stake in Asian insurer AIA Group Ltd. rather than sell it off starting later this year, Reuters reports.
AIG raised almost $37 billion last year by selling American Life Insurance Co. to MetLife Inc., and by divesting a majority stake in AIA Group Ltd. in a public offering.
When AIG took AIA public last year in an offering that raised $17.9 billion, it retained a 33% stake. Reuters reports that that stake is housed in a separate entity in which the U.S. Treasury holds a preferred interest, and most observers assumed AIG would sell the AIA shares to buy out the Treasury.
Benmosche reportedly alluded to selling other assets so AIG could keep some of its stake, or at least delay selling it off for a few years.
"We can monetize that later this year, but part of the issue we are thinking about is strategically how we want to handle that asset," he said on a conference call. "We are looking potentially at monetizing other assets that we have so that AIA might be sold much later on, if at all."
The Wall Street Journal reported other “aspirations” shared on the AIG conference call:
• Raise its return on equity of 10% or more by 2015, up from 6.2%
• Grow its per-share profits in mid-teens percentage terms yearly on average
• Cut expenses and generate $25 billion to $30 billion in capital that the company can use to buy back shares, pay dividends or make acquisitions
Reuters reports that AIG also plans to generate about $4 billion to $5 billion more in annual pretax operating income in five years, mainly by growing and diversifying its global property/casualty insurance and domestic life insurance businesses.
