AIG hoping Yellen will help with profits

AIG hoping Yellen will help with profits | Insurance Business

AIG hoping Yellen will help with profits
American International Group, Inc. (AIG) is forecasted to benefit from an interest rate hike in Q3 2016 as economic indicators stabilize. The New York City-based multinational insurance corporation is expected to post operating income per share of $1.17 in Q3 2016, which is more than double the prior year’s quarter. For the full year, the corporation is expected to post $4.04 compared to $2.19 in 2015.

Other major highlights from the Q2 2016 results include a net income of $1.9 billion, or $1.68 per diluted share, compared to $1.8 billion, or $1.32 per diluted share, in the prior-year quarter.

AIG’s stock has risen 15% over the past six months, riding on a better-than-expected performance. AIG also posted an adjusted operating income per share of $0.98, which surpasses analysts’ income per share estimates of $0.91. According to Carl Icahn, shareholders were still interested in an option of the split.

“AIG’s second quarter results show strong improvement towards all the goals the Board and I announced in January,” stated Peter D. Hancock, AIG president and chief executive officer. “We have executed more quickly and smoothly than expected and our confidence in reaching our 2017 financial targets is high as our earnings become more sustainable.”   

YoY comparisons of net income and after-tax operating income were impacted by an unfavorable change in net loss reserve discount on workers’ compensation reserves of $455 million after tax, or $0.36 per diluted share.

Moreover, YoY comparisons of net income and after-tax operating income were impacted by a marked decline in earnings from market sensitive assets of $631 million after tax, or $0.44 per diluted share.