AIG Post $5 Billion Q4 Loss

LOSSES & LAWSUITS

NEW YORK - Insurer American International Group (AIG) has posted a fourth quarter loss of $5.3 billion (EUR3.4 billion), after unexpectedly large writedowns on subprime-linked derivatives investments, a capital loss of $2.63 billion amid changes to its investment portfolio, and $643 million of losses to other investments within its financial products division. It is the firm's worst quarterly result since its creation in 1919.

In the same quarter a year before AIG posted a $3.44 billion profit. Although 2007 still saw overall profits of $6.2 billion, the Q4 loss saw annual profits 56% down from $14.05 billion in 2006. AIG has blamed its recent misfortunes on declines in market values.

The firm has announced its internal auditor located the weaknesses in its accounts, with a $4.88 billion writedown on the value of credit default swap derivatives investments for October and November, indicating a December decline in the value on those investments by a further $6.24 billion.

  • LinkedIn  
  • Save this article
  • Print this page  

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: