The firm’s Q2 results show a pre-tax loss of £2.68bn, compared to profits of £2.19bn for the same period in 2007.
Its general insurance portfolio also took a hammering with a 54.3 per cent decline in operating income from £1.56bn in Q2 2007 to £700m in Q2 2008.
AIG’s life insurance and retirement services saw a 10 per cent decline from £1.49bn in Q2 2007 to £1.34bn in 2008.
AIG chairman and chief executive Robert B Willumstad says the dramatic fall in profits is a result of severe conditions in the housing and credit markets and a very difficult investment environment.
He says: “These results do not reflect the earnings power and potential of AIG’s businesses and it is clear that we have a lot of work to do to restore AIG’s profitability to where it should be.
“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.”
AIG is now examining every business and considering every option to determine the optimal portfolio of businesses for AIG, says Willumstad.