AIG (NYSE: AIG) Swings To Q1 Profit On Investment Income

American International Group (NYSE: AIG) announced Friday that it returned to a profit in the first quarter as business improved at its life insurance and retirement units.   The insurer, majority owned by the U.S. government said it earned $1.5 billion or $2.16 a share, compared to a loss of $4.4 billion or $39.67 a share in the same period a year earlier.

Revenue rose in the quarter to $16.3 billion, despite lower life insurance sales.  However, the company’s life insurance unit, SunAmerica Financial group posted increased profits on larger investment income.  The unit posted profits of $1.1 billion for the period.

AIG made significant progress in raising capital to repay the government’s $182.3 billion taxpayer bailout, reaching agreements to sell its American International Assurance Company (AIA) and American Life Insurance Company (ALICO).

“During the quarter, AIG announced more than $51.0 billion in sale transactions, led by the announced sales of AIA and ALICO,” said President and CEO Robert H. Benmosche. “These transactions are expected to close by the end of 2010 and allow the company to substantially reduce its obligations to the Federal Reserve Bank of New York (FRBNY) and take a significant step toward a sustainable capital structure.”

AIG said its insurance and retirement units had total assets under management of $235.5 billion at the end of the first quarter, up 15.5 percent from the same period a year earlier.

“We remain focused on further stabilizing and strengthening our businesses while continuing our restructuring activities, closing the pending transactions, and developing plans to address our highly leveraged capital structure,” added Benmosche.