AIG Takes $5.86B Hit in 2Q

American International Group, New York, has reported a net loss of $5.86 billion ($2.06 per share) for the second quarter, compared with net income of $4.28 billion (1.64 per share) a year earlier. The effect of capital markets unrealized market losses on AIG's super-senior credit default swaps totaled $3.6 billion. Operating losses at its United Guaranty Corp. mortgage insurance subsidiary were $440 million. "Our second-quarter results were adversely affected by the severe conditions in the housing and credit markets and a very difficult investment environment," said AIG chairman and chief executive Robert B. Willumstad. ".... We are conducting a comprehensive review of all AIG's businesses with the objectives of improving results, reducing AIG's risk profile, and protecting our capital base. We are examining every business, as well as the assumptions underlying how we do business in the markets where we have a presence. We are considering all options." The company can be found online at http://www.aig.com.