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AIG's Q2 operating income rises YOY as net income falls

American International Group Inc. reported second-quarter after-tax operating income of $1.45 billion, or $1.53 per share, compared with $1.31 billion, or $1.15 per share, in the prior-year period.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was $1.20.

Net income for the quarter was $1.13 billion, or $1.19 per share, compared with $1.91 billion, or $1.68 per share, a year earlier. The company said its net income for the quarter reflected net realized capital losses of $69 million compared to net realized capital gains of $1.0 billion a year earlier.

In commercial insurance, AIG reported net premiums written of $3.83 billion, down from $4.50 billion in the year-ago quarter. The combined ratio was 102.7% compared with 98.3% in the same period of 2016. The company attributed the decline in net premiums to challenging market conditions and to strategic portfolio actions during the second quarter.

Pretax operating income for the consumer insurance segment totaled $1.26 billion, which increased from $948 million a year ago, largely thanks to improved underwriting results, expense reductions and the performance of its retirement business.

The life insurance segment recorded pretax operating income of $106 million, compared with $26 million a year earlier. Net investment income for the life insurance business fell slightly to $261 million from $271 million.

For the personal insurance segment, the company reported pretax operating income of $330 million for the quarter, compared with $152 million in the year-ago quarter. Net premiums written were $2.85 billion, which fell from $2.92 billion in the second quarter of 2016.

During the second quarter, the company bought back about 39.1 million common shares for a total of $2.4 billion. As of Aug. 2, there was about $2.5 billion remaining under the company's share purchase authorization.

Book value per common share for AIG was $81.62 as of June 30, compared with $83.08 as of June 30, 2016.