One of the biggest insurance providers in the US, AIG Inc incurred huge losses in the second quarter of 2008 with as much as $11 billion being sunk in investments and write downs. The news of its second quarterly performance led to sharp fall in its shares which came down by 7.5% in after hours trading.

The second quarter losses of American Insurance Group Inc were primarily due to heavy losses in capital investments which amounted to $6.08 billion. Another $5.56 billion were sunk in massive writes down related to its credit default swap portfolio. The company posted a net loss of $5.36 billion or $2.06 a share in the second quarter of 2008. This was a sharp comedown from a net income of $4.28 billion or $1.64 a share for the same period in 2007.

For AIG, this quarterly loss was the third in a row. In the last two quarters it has incurred total losses of $13 billion due to difficult write downs related to sub prime mortgages. The new AIG CEO Robert Willumstadt blamed harsh investment conditions as well as the crisis in the housing and credit markets for the poor performance of the company.

-Kalyani Mookherji