AIG hit by debt payments and prior year claims

Peter Hancock, chief executive of AIG Property Casualty, and Richie McCaw, captain of the All Blacks, with new AIG All Blacks jersey.

AIG’s fourth quarter net income in 2014 fell to $655m from $1.98bn a year earlier.

The insurer was hit by debt payments and a 6.1% slump in investment income to $3.97bn.

AIG has been issuing new bonds at lower interest rates to repay higher-cost debt. It took a $824 million associated charge in the fourth quarter.

AIG also set aside an additional $227m for prior year claims related to environmental and business lines.

Full-year profit fell to $7.53 billion, 17 percent lower than in 2013, AIG said.

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