Devoted to Managers and those that seek to improve their management skills

If the news that American International Group Inc. (NYSE:AIG) had to write-down $11.12 billion, and ended the quarter with a loss of $5.29 billion isn't bad enough, the company said they expect to "report more unrealized market-valuation losses and impairment charges in 2008."

Chief Executive Martin Sullivan said: "During 2008, we expect the U.S. housing market to remain weak and credit market uncertainty will likely persist. Continuing market deterioration would cause AIG to report additional unrealized market valuation losses and impairment charges."

With competitive forces making it almost impossible to raise premiums this year, it doesn't look like there'll many revenue-generating avenues available to the company this year; not a good sign over the next 12 months.

Measured by assets, AIG is the largest insurer in the world.

Last year during the same period, the company enjoyed a profit of $3.44 billion.

Related Stories around the Web

Sub-prime lands AIG with $11bn write-down

The news comes just weeks after AIG said in a regulatory filing that it thought it would have to take a $4.88bn write-down for October and November, after PricewaterhouseCoopers found a "material weakness" in its financial reporting.

=====

AIG Posts Largest Loss Ever

Analysts, on average, expected a loss of 15 cents, according to Thomson Financial. In the year-ago quarter, New York-based AIG earned $3.85 billion, or $1.47 a share, from operations.

=====

Fitch says AIG ratings remain on watch negative
 
Fitch Ratings said late Thursday American International Group Inc.'s issuer default rating, along with all holding company ratings and subsidiary debt ratings, will remain on rating watch negative following AIG's announced fourth quarter results.

=====

AIG must admit exposure to the U.S. residential housing market is no longer “manageable.”

A portfolio of risky credit contracts lost $11.12 billion in value, and AIG also incurred more than $3 billion in investment losses. The company cited "significant, rapid declines" in the value of investments tied to home loans.

=====

AIG joins list of the biggest subprime losers

Almost $11.5bn of the writedowns relate to insurance it wrote for investors in collateralised debt obligations, complex instruments sometimes backed by subprime mortgage bonds.

=====

Writedowns Hammer AIG

This stands out "in stark contrast to the company's assurances in December that it had 'little to no exposure' to asset-backed commercial paper, structured investment vehicles or collateralized debt obligations tied to residential mortgage-backed securities. It reported a $4.88 billion writedown in gross market value for its credit default swap portfolio in October and November - more than four times the $1.15 billion executives reported earlier."