American International Group has reported that it achieved record net income in 2004 due to growth in general insurance despite the significant burden created by the North and Central American storm season and the devastating Asian tsunami.
Net income for the full year 2004 increased 19.1% to a record $11.05 billion or $4.19 per share, compared to $9.27 billion or $3.52 per share in 2003.
Net income for the fourth quarter of 2004 rose 11.5% to $3.02 billion or $1.15 per share, compared to $2.71 billion or $1.03 per share in the fourth quarter of 2003.
Full year 2004 after-tax net catastrophe losses from hurricanes, typhoons, earthquake and tsunamis were $682.7 million or $0.26 per share, compared to after-tax net catastrophe losses of $46.2 million or $0.02 per share in 2003. The company attributed the significant increases to the heavy storm activity that affected the Caribbean and southern US in August and September and the Asia tsunami at the end of the year.
The figures also include a $53 million charge to settle with US government offices over questionable practices relating to certain transactions entered into with Brightpoint, Inc. and The PNC Financial Services Group, Inc.
Commenting on these results, AIG chairman M. R. Greenberg said, AIG earned record net income in 2004, even after accounting for the unprecedented devastation from the hurricanes, typhoons, earthquake and tsunamis in the second half of the year, which affected the entire industry.
The diversification of AIG – with its four principal business segments, multiple profit centers and broad geographic presence throughout the world – was an especially valuable strength for AIG in 2004. Our ability to absorb $682.7 million in catastrophe losses, tackle challenging regulatory issues and navigate through a volatile global economic and political environment and still achieve record net income is a testament to the diversity and strength of our franchise.