What a difference four years can make. In the bad old days of the 2008 fiscal crisis, AIG (NYSE:AIG) was probably the most maligned company in the world after its unwise investments in derivatives resulted in a government bailout that would ultimately cost taxpayers $182 billion. Fast-forward to 2012, and the Feds have not only been repaid, but are netting a profit on the bailout, AIG's regularly trouncing expectations for earnings, and the company's quickly assuming its former place at the top of the insurance heap. A lot of things have gone right for the firm, and the winning streak looks like it'll continue. Here's a trio of reasons why.

1. Results, results, results
You can't argue with profit, and AIG's delivered plenty of it lately. Its past four quarters have all been well in the black, and all have overshot estimates. 3Q 2012's net came in at $1.6 billion, a vast improvement over the nearly $3 billion in red ink the company shed in the same period the previous year. The former number equated to EPS of $1.00, a nice distance ahead of the $0.85 expected by the market.

The improvement is not a fluke. All three of AIG's key insurance divisions are considerably more profitable than they were a year ago. The top two, property casualty (once branded as Chartis) and life and retirement (formerly SunAmerica) saw big spikes in operating income. The former leaped ahead by 60% thanks to a sharp reduction in its underwriting loss, while the latter was in the black across the board and grew that nice profit figure by more than 75%.

The company's other big division, the somewhat ill-fitting aircraft leasing unit, has also floated into the black on a habitual basis over the past year. In 3Q it posted an operating income of $39 million, quite a turnaround from the $1.3 billion it lost in the same quarter of 2011.

2. The government goes away
We like it when it builds roads, inspects our food, and catches criminals, but we really don't want it as a partner in our businesses. That's right, we're talking about the federal government, which after that massive bailout, became far and away the company's majority shareholder with 92% of shares.

That was then, this is now: Following a series of open-market sell-offs, the Feds now hold less than 16% of the company. Not only that, but thanks in particular to the latest round in its sell-off, the government ended up turning a profit on its rescue. How many times in the history of government bailouts has that happened? Rarely, if at all. 

This is great for AIG in many ways. To state only two of the most obvious: 1) it frees the company to spend capital on improving its operations, as opposed to paying back Uncle Sam (much of that recent share offer was soaked up by the company as a means of reimbursement); 2) it takes the firm off the Most Wanted list of corporate bad guys.

And any enterprise that isn't having rotten fruit tossed at it on a regular basis is much better able to do what it should be doing best -- servicing its customer base and operating with a good degree of efficiency. Speaking of which...

3. It's leaner and smarter
One of the big reasons AIG required a bailout the size of Romania's economy is that it had $1.8 trillion (yes, that's trillion) in derivatives on its books when the financial disaster struck in 2008. Since then, as profitability has become more consistent, the company's derivatives exposure has drastically shrunk, by over 90%. So there's little chance it could get caught so short again if the market moves in an unfavorable direction.

Meanwhile, it's been selling off divisions it can live without. In 2010, for example, it sold a pair of Japanese subsidiaries to Prudential (NYSE:PRU) for a cool $4.8 billion, and closer to home, it unloaded ALICO to MetLife (NYSE:MET) in the same year for around $15.5 billion in cash and stock.

Generally speaking, the more focused and efficient a company is, the better chance it has of turning a profit. These days, AIG essentially consists of its three main insurance divisions, an aircraft leasing unit, and a relatively small collection of other operations that bring in revenue. The sprawl that once typified the firm has been greatly reduced.

Strong winds
AIG certainly isn't out of the woods yet. The financial crisis remains fresh in the minds of many people, and -- good results aside -- the company will have to continue to labor in order to fully regain the market's trust.

Also, Hurricane Sandy and the devastation it caused will drag down the firm's 4Q results. Even though rival insurers are more heavily exposed in the Northeast, AIG still had just under 4% of the market, ahead of competitors such as Allstate (NYSE:ALL), with 3.4%. No one's yet sure how extensive the damage is, but estimates place total insured losses from the storm at anywhere from $7 billion to $20 billion.

Sill, AIG's been managing its business smartly in recent times, and if it can get through a $180 billion-plus bailout, it'll cope with Sandy and the many claims she'll produce. The company's got several good quarters behind it; even if 4Q ends up being weak, look for AIG to mount a fast comeback in the new year. It's recovered from much worse.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.