A year earlier, the company earned $2.19 billion, or $1.52 per share. The insurer also incurred a $274 million pretax restructuring charge.
Advertisement
Mr. Hancock in a Monday news release said the third-quarter results fell short of expectations “due to market volatility” but showed “signs that we are making progress to transform AIG for long-term competitiveness”.
The move would return more cash to shareholders, Icahn had said, and help AIG rid itself of the regulatory burden of being a systemically important financial institution (SIFI), which require higher capital cushions.
Net written premiums also decreased by 6 percent in the quarter to $5.2 million, compared with $5.5 million in the third quarter of previous year.
Roughly 300 to 400 senior-management positions are expected to be eliminated as part of a series of planned cuts at AIG, said a person familiar with the matter. AIG had to be rescued during the 2008 financial crisis in one of the biggest bailouts by the United States government. It finished paying taxpayers in late 2012 and has been struggling since to boost critical measures of profitability as it battles pricing pressures.
At the end of the quarter, the company had a book value per share, excluding AOCI and DTA, of $61.91 which increased 7% from previous year. There will also be a US$200 million spend on modernization of information technology platforms. AIG has set a goal of getting that ratio to 10% over the next several years. AIG president and CEO, Peter Hancock, has already knocked Icahn’s proposal back, saying he is “simplifying and de-risking the company, and realizing attractive valuations from non-core asset sales”. In a letter sent to AIG and posted on his website, Icahn said that AIG should separate the company’s life and mortgage insurance businesses and create three separate, publicly traded companies. In the third quarter, the company monetized its stake in AerCap, and in October announced an agreement to sell operations in four Central American countries and further consolidated policy offerings in Japan. Catastrophe-related losses were down.
Advertisement
The New York-based company said it had a loss of 18 cents per share.
