Please ensure Javascript is enabled for purposes of website accessibility

American International Group Inc. Raises Its Dividend 25% Following $1.7 Billion In Fourth-Quarter Income

By Patrick Morris – Feb 13, 2014 at 5:14PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

AIG announced its earnings were more than five times higher in the fourth quarter of 2013 versus 2012, thanks to no underwriting losses from Superstorm Sandy, and increased insurance revenues.

After the market closed, AIG (AIG -2.73%) announced operating income of $1.7 billion in the fourth quarter of 2013, well ahead of the $290 million seen in the fourth quarter of 2012. The fourth quarter of 2012 included a loss of $1.3 billion after taxes as a result of Superstorm Sandy.

For the full year, pre-tax net income from continuing operations was up markedly, from $2.9 billion in 2012 to $9.4 billion in 2013. This increase was attributable to both the losses realized from Sandy in 2012, and the sale of divested businesses ($6.7 billion of losses). In total, net income attributable to AIG rose from $2.04 per share in 2012 to $6.13 in 2013. For the full year, AIG also grew its book value per share excluding accumulated other comprehensive income (AOCI) by 11%, from $57.87 to $64.28.

"AIG's strong performance in both the fourth quarter and the full year of 2013 represents another successful milestone in our journey to further build on AIG's core insurance operations," said the CEO and president of AIG, Robert Benmosche. "Global demand for our products and services, combined with our reputation for innovation, has helped to reestablish AIG as one of the world's preeminent insurance companies."

The premiums at AIG increased in the fourth quarter in its commercial insurance business from $4.4 billion to $4.8 billion, and in its property casualty business from $7.8 billion to $8.0 billion. However, it did see its premiums written fall by 6% in its consumer insurance business, from $3.4 billion in the fourth quarter of 2012 to $3.2 billion in the fourth quarter of 2013.

In addition, AIG announced it would be increasing its dividend by 25%, to $0.125 per share. The company also disclosed its Board of Directors had authorized an additional $1.0 billion for share repurchases, bringing its total authorization to $1.4 billion.

Benmosche concluded by noting: "With another year of solid performance under our belts, I am confident that we have positioned ourselves for strong growth and profitability in all of our operating businesses. Most importantly, this foundation will enable us to focus our energy on our customers."

Patrick Morris owns shares of American International Group. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group and has the following options: long January 2016 $30 calls on American International Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

American International Group, Inc. Stock Quote
American International Group, Inc.
AIG
$48.41 (-2.73%) $-1.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.