NEW YORK — Robert Benmosche, chief executive of bailed-out insurance company AIG, isn’t known to be shy.
During Friday’s conference call to discuss earnings, a Goldman Sachs analyst baited him with a question: “If pre-crisis you were the 800-pound gorilla, how much do you think you weigh now, 200, 400, 700?”
Benmosche fired back: “I would say we are about 780 pounds and on our way back.”
Despite his bravado at the company’s first earnings call in two years, American International Group Inc. is hardly the giant it used to be. Its $69 billion market value is far below the $147 billion it commanded prior to the financial crisis. AIG’s reputation took a beating after the company teetered on the edge of bankruptcy in 2008 and had to be bailed out by the U.S. government.
AIG has recovered from that nadir. Last month it laid the groundwork to start repaying the American taxpayer, and the company has raised a stockpile of cash from selling assets. Since 2008, AIG has sold 33 businesses and raised more than $57 billion in cash and securities.
A portion of those sales lifted AIG’s net income to $11.2 billion in the fourth quarter. The company doesn’t have much to sell anymore and will have to rely on its core insurance businesses in the future. AIG consists predominantly of two businesses: property and casualty insurer Chartis and life insurer SunAmerican Financial Group.
The signs so far aren’t particularly encouraging. Chartis just reported an operating loss of $4 billion in the fourth quarter, while SunAmerica’s income of $1 billion was $43 million lower than the previous year. Investors were especially surprised when the company announced an addition of $4.2 billion to loss reserves at Chartis.
