AIG profits fall but operating gains smash forecasts

US insurance giant American International Group's profits fell 31 percent in the first quarter but its core business continued to grow fast, with the results handily outpacing forecasts. The fall in profits in the quarter to March 31 to $2.21 billion ($1.49 a share) was mainly due to the one-off benefits of asset sales accrued in the year-earlier quarter, including selling off Asian subsidiary AIA Group Ltd. Those set aside, the company, still rebounding from near-collapse during the financial crisis, scored a 52 percent rise in operating income in its property casualty business, to $1.59 billion, and a 6.2 percent gain in its life insurance and retirement business, to $1.39 billion. Net operating profits were $1.98 billion, or $1.34 a share, sharply higher than the 87 cents a share figure expected by analysts. "AIG's results this quarter reflect the depth of our global operations, the market's demand for the products and services we offer, and the strong performance of our investment portfolio," said Robert Benmosche, AIG president and chief executive. "Our priority this year is to improve operating fundamentals and reduce costs," he said in a statement. "We have already narrowed our core businesses to insurance and retirement services, and see the potential for further cost savings as we work to transform the corporate structure to support this leaner business."