Insurance giant American International Group (AIG 1.50%) released its first-quarter earnings after the market closed Monday. The megainsurer announced net income of $1.6 billion and diluted EPS of $1.09 -- both figures in decline from the first quarter 2013.

Though the year over year comparisons are unfavorable to AIG, the company had a solid first quarter, with its insurance operations contributing $2.6 billion in pre-tax operating income.

Property and Casualty operations were the top detractor to revenue comparisons, with net premiums written of $8.3 billion and $8.2 billion in net premiums earned down 1% and 4%, respectively. P&C also reported a 5% decline in investment income, which continues to fight against the low interest rate environment. Catastrophic and severe losses also highlighted a disparity between the operations year over year, with claims reaching $448 million versus $101 million in 2013.

Life & Retirement is really boosted insurance operations during the first quarter. New premiums and deposits grew to $7.1 billion, a 28% jump from the first three months of 2013. Higher interest rates have driven more business to the segment's fixed annuities products, while the company's retirement solutions and mutual fund lines have also seen significant growth.

The growth of AIG's L&R operations has been huge over the past 12 months, with net flows rising by $5.8 billion during that time -- $1.3 billion in the last quarter alone. Assets under management have likewise grown, with the quarter seeing AUM rise another 9%.

Mortgage guaranty had a big drop in new insurance written, totaling $7.7 billion -- a far cry from Q1 2013's $10.6 billion. Though the quarter marked huge drop in new mortgage origination and refinancing activity, the company reported an 85% gain in operating income over the same time period, thanks to better underwriting, investment income, and continued declines in old business.

The company repurchased 17.4 million shares during the quarter for $867 million, with another $537 million remaining in its buyback authorization. Along with its earnings announcement, AIG declared a $0.125 quarterly dividend for shareholders, which is consistent with its recent capital distributions.

CEO Robert Benmosche stated in the company's press release that he was happy with the quarter's solid results, but went on to say that "...we must continue to develop and grow our company so that it is more sustainable. We have made great strides in this transformation and in showing what we are capable of as a company, but we still have work to do."