AIG set to buy back $3bn in shares as it resists breakup calls
US insurance giant under pressure from investors to split to boost profitability
- Firm reports better-than-expected income for Q2
Updated : 09:14
American International Group has annnounced plans to repurchase $3bn worth of shares amid growing calls from investors to split up the company.
The US insurance corporation reported its earnings for the second quarter on Tuesday, posting better income results than were initially expected by analysts. The firm ended three consecutive quarter losses by posting $1.9bn in profit compared to $1.8bn in last year's corresponding period.
AIG has been under pressure to break up to improve profitability. Earlier this year, the company bowed to activist investor Carl Icahn by agreeing to put hedge fund manager John Paulson on its board.
"Although there are a few outside voices urging us to move faster, I want to assure you that the AIG board is fully aligned with our strategy," chief executive Peter Hancock said.
Like several insurance companies currently, the firm has struggled to make profit due to low interest rates as it invests heavily in bonds to fund the money it may need to pay out in claims.
AIG's shares, which have fallen 12% so far this year, rose 2.5% in after-hours trading.