AIG overstates net income for past five years by €3.1bn

AMERICAN International Group (AIG) the insurer under fire from regulators for improper accounting, said yesterday that it overstated net income for the past five years by $3.9 billion (€3.1bn), or 10%.

Following an extensive internal review, the world's largest insurer by market value also said it cut its net worth through the end of 2004 by $2.26bn, or 2.7%, less than it previously warned.

The $3.9bn reduction in net income for the five years through 2004 included an increase in AIG's asbestos reserve of $850 million for the fourth-quarter of 2004, AIG said in its annual report, which was filed with the US Securities and Exchange Commission.