AIG losses record $62 billion in quarter

WASHINGTON, March 2 (UPI) -- U.S. insurance giant AIG said it lost $61.65 billion in the fourth quarter, a sharp about-face from fourth quarter 2007, when the company gained $5.2 billion.

AIG Chief Executive Officer Edward Liddy said AIG, already granted $150 billion in federal bailout funds, "made meaningful progress in addressing liquidity issues."

"However, the economy and capital markets remain in turmoil," he said.

The U.S. government Sunday provided an additional $30 billion to the firm from the Troubled Asset Relief Program and said it could convert government equity from preferred stock to common shares.

Switching $40 billion's worth of bailout funds to common stock would save AIG $4 billion annually in dividend payments, The New York Times reported Monday.

In Sunday's deal, the government would take control of two Asian AIG subsidiaries, the American Life Insurance Co. and American International Assurance, which had been for sale recently but didn't attract a buyer, the Times said.

In the quarter, AIG lost $60 billion in balance sheet write downs on devalued assets. About $2 billion represents a cash loss, the Times said.