AIG shows signs of turnaround with $1.5bn return to profits

AIG turned a $4.4bn (£2.97bn) loss last year into profit after write downs narrowed and investments rallied.

The firm, which is nearly 80% owned by the US government, made $1.5bn in the first quarter of this year compared with the $4.4bn loss in the same period last year.

AIG’s shares rose by 3.2% in the pre-market trading on Friday.

“Our people continue to make great progress in not only stabilising our business but in restoring the strength of AIG's operating performance,” the insurer’s chief executive Robert Benmosche said. “2010 will continue to be a transition year ... and earnings could be volatile. I am pleased with their progress, but there is still more work to be done.”

AIG will cut its debts in half if it can sell its, Asian business AIA. Furthermoe, MetLife is paying $6.8bn in cash and $8.7bn in shares for American Life Insurance Company (Alico), which operates in more than 50 countries.

It is in advanced talks with Prudential about the structure of the AIA deal.

MetLife is paying $6.8bn in cash and $8.7bn in shares for American Life Insurance Company (Alico).