Insurer AIG expected to post 4th-quarter loss, investors seek bailout fund update

Earnings Preview: AIG to report 4Q results

CHARLOTTE, N.C. — Insurer American International Group Inc. reports its fourth-quarter results before the market opens Friday.

WHAT TO WATCH FOR: An update on the amount of government assistance the company has received.

AIG was one of the hardest hit financial firms during the credit crisis. It received an aid package worth more than $180 billion from the government. The insurer, based in New York, has been selling assets and streamlining operations to repay the government.

Earlier this month, MetLife Inc. confirmed that it is in talks with AIG to buy one of AIG’s insurance units. Media reports price the deal at as much as $15 billion. The two companies have been in discussions for months about a potential deal for AIG’s American Life Insurance Co., known as Alico.

Alico is an international life and health insurance business that operates in more than 50 countries.

“They have to pay off the taxpayer, but it also depends on what price they can get,” said Morningstar analyst Bill Bergman. “They also have to keep cash coming in, and their insurance units can do that.”

Bergman said investors will also want to know if AIG is bringing in new business.

WHY IT MATTERS: AIG’s reputation has been impaired.

U.S. brokers have become more reluctant to sell AIG’s insurance policies and “this reluctance may not prove temporary,” Bergman said.

While the company was not undermined by its traditional insurance business, a recovery in its core insurance operations is considered vital to AIG repaying the government.

In the third quarter, AIG’s new insurance business stabilized compared with the second quarter.

AIG, like other insurers, continues to seek customers at a time when employers have fewer workers and less valuable property to insure.

WHAT’S EXPECTED: Analysts polled by Thomson Reuters expect AIG to post a fourth-quarter loss of $3.94 per share.

LAST YEAR’S QUARTER: AIG lost $61.7 billion, or $22.95 per share, amid continued financial market turmoil. It was the biggest quarterly loss in U.S. corporate history,