AIG Reports MI Operating Loss

American International Group Inc., New York, has reported an operating loss in its mortgage insurance business for the second quarter, though the company's net income of $4.28 billion ($1.64 per share) was up considerably from $3.19 billion ($1.21 per share) a year earlier.AIG's Mortgage Guaranty operations incurred an operating loss of $78 million for the quarter, compared with net income of $110 million in the second quarter of 2006, the company said. "The continuing weakness in the U.S. housing market resulted in a significant increase in losses for the domestic mortgage insurance business," AIG said. "The domestic second-lien business was the primary contributor to the decline in operating income; however, the domestic first-lien business also experienced an increase in incidence and severity of losses incurred." The company said net premiums written grew 40.9% in the quarter, citing "strong growth in international markets" and higher renewal premiums in its domestic first-lien business.