NEW YORK — AIG, the insurance giant bailed out by Uncle Sam, reported net income of $1.45 billion for the first quarter as its struggling insurance business showed signs of improvement.
The company also said Friday that recovering credit markets and ongoing efforts to streamline its operations contributed to improved performance. Shares of AIG surged $1.95, or 5.3 percent, to $38.70.
American International Group Inc., which received more than $180 billion in aid from the government during the financial crisis, said premiums in its primary insurance division fell just 1.1 percent in the first quarter. That was the smallest decline over the past four quarters.
The $7.64 billion in new premiums written during the quarter was up 10 percent from the fourth quarter.
Despite the improvement, AIG remained cautious about generating new business in its Chartis insurance unit, saying it continues to be affected by “challenging economic conditions.”
Chartis earned $879 million in the first quarter, but a big chunk of that profit came from investment income.
Investors want to see a rebound in AIG’s ability to generate new business because once it has sold non-core assets, the insurer will have to rely on traditional insurance underwriting to repay the rest of its federal loan.
