AIG posts $8.9 billion loss (AIG may need more government support)

By Paritosh Bansal

NEW YORK (Reuters) - American International Group Inc (NYSE:AIG - News) reported a quarterly loss of $8.9 billion, hurt by loss reserves and efforts to repay the U.S. government, as it struggles to find its feet more than a year after its $182.3 billion rescue.

AIG's general insurance unit, Chartis, and domestic life insurance and retirement services, SunAmerica Financial Group, showed improvement. But the market remained skeptical, and AIG shares fell 7.9 percent to $25.33 in Friday midday trading on the New York Stock Exchange.

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The loss shows the U.S. government, which owns nearly 80 percent of the insurer, still has a long wait before it gets back its direct investment in AIG, which includes about $25 billion outstanding under a Federal Reserve Bank of New York credit facility and roughly $45 billion in equity.

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In a regulatory filing AIG warned, as it has done in previous filings, that it may need additional U.S. government support. But it also said it will have adequate liquidity to "finance and operate AIG's businesses and continue as a going concern for at least the next twelve months."

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