Stricken AIG reveals fourth quarter loss of $62bn
US insurance company AIG has today announced a fourth quarter loss of $61.7 billion – the largest corporate loss in US history. The second largest quarterly loss of $54 billion was announced by Time Warner in 2002 following its merger with AOL.
AIG’s loss is the equivalent of $678 million per day in the October to December period – or $28 million per hour.
The insurance giant, which is one of the biggest casualties of the credit crunch, has received a fresh loan today of $30 billion from the US Government in return for preferred stock – this is in addition to the $150 billion bailout received in November.
Furthermore, the world’s largest insurer received an $85 billion rescue package in September to prevent it from collapse after bad debts linked to the US sub-prime mortgage market brought it to its near demise.
The fresh loan means taxpayers will hold 78% of AIG, however under the terms, public ownership will not go beyond 80%.
The news of AIG’s losses sent the Dow Jones below the 7,000 mark for the first time since 1997 in early trading today. Stock in the insurer is currently trading at around 49 cents – a steep decline from the $46 a year ago.
Edward Liddy, AIG’s chief executive, said the company is a “systemically important financial institution and should it fail, would have a major impact on an already unsettled global financial system.”
The company operates in 130 countries and has 74 million customers and policy holders.
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