AIG Reports $5.3B 4Q Loss

American International Group Inc., the New York-based parent company of mortgage insurer United Guaranty Corp., has reported a net loss of $5.29 billion ($2.08 per share) for the fourth quarter, compared with net income of $3.44 billion ($1.31 per share) a year earlier. The company took a pretax charge for the quarter of $11.12 billion for a net unrealized market valuation loss related to AIG Financial Products Corp.'s super-senior credit default swap portfolio. AIG also took a $2.63 pretax loss for other-than-temporary impairment charges to its investment portfolio and a $643 million pretax other-than-temporary impairment charge to AIGFP's available-for-sale investment securities portfolio. "Continuing market deterioration would cause AIG to report additional unrealized market valuation losses and impairment charges," said AIG president and chief executive Martin J. Sullivan. "However, with a diverse portfolio of global businesses, a strong capital base, and outstanding talent, AIG has the ability to absorb the current volatility while committing the resources to grow and take advantage of opportunities." AIG's mortgage insurance subsidiary, United Guaranty, took an operating loss of $348 million for the quarter, compared with operating income of $27 million for the same period last year.