(Bloomberg News) American International Group Inc., the bailed-out insurer, invested $7.4 billion in the first quarter at a yield of 5.3 percent at its life unit as the company seeks to boost investment returns.
The purchases include a 15 percent allocation to non-agency residential mortgage-backed securities, said Jay Wintrob, the chief executive officer of New York-based AIG's SunAmerica life operation, in a conference call today.
"We continue to be opportunistic with our investments in structured securities in order to improve yields, increase net investment income and offset the impact of a lower interest rate environment," Wintrob said.
AIG has been reshaping the portfolios at SunAmerica and the Chartis property-casualty unit as Federal Reserve policy makers plan to hold borrowing costs low through late 2014, pressuring fixed-income returns on funds backing insurance policies. AIG's main bond portfolio is valued at more than $250 billion and includes corporate debt, mortgage-backed assets and municipal securities.
First-quarter net investment income at Chartis advanced to $1.22 billion from $1 billion in the last three months of 2011. The figure at SunAmerica jumped 22 percent to $2.89 billion, the insurer said in a supplement on its website.
Chartis benefited from "the redeployment of excess cash in 2011 into higher yielding securities," the insurer said in slide presentation today.