AIG 2005 Annual Report Download - page 5
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AIG is financially
very strong and well positioned
for the future.
AIG ■2005 Annual Report 3
Martin J. Sullivan
President and
Chief Executive Officer
2005 Results
AIG’s net income totaled
$10.48 billion in 2005, an
increase of 6.5 percent over
net income for 2004. On a per share basis,
AIG earned $3.99 in 2005, up 7.0 percent
from the $3.73 per share earned in
the preceding year. This performance was
achieved after a $1.15 billion after-tax
charge resulting from settlements with our
regulators and a $1.19 billion after-tax
charge in the fourth quarter related to an
increase in the General Insurance net
reserve for losses and loss expenses.
AIG also reported a record $2.11 bil-
lion in after-tax catastrophe losses, net
of reinsurance recoverables, primarily from
Hurricanes Katrina, Rita and Wilma in
the Southeast United States. In 2004,
AIG incurred $729 million in after-tax
catastrophe losses. Taken together, the
years 2004 and 2005 were the two worst
years for catastrophes in the insurance
industry’s history.
Hurricane Katrina was the most costly
natural disaster the insurance industry has
ever experienced. In its aftermath, and
under the most difficult of conditions, our
top priorities were to respond to our
customers who had sustained devastating
loss of life and property, and to ensure
the well-being of our employees in the
region. Katrina’s wake of destruction was
unprecedented, but AIG’s financial