American International Group has reported a net loss of $7.81 billion for the first quarter of 2008, compared with a net income of $4.13 billion for the same quarter of 2007.

AIG said that the continuation of the weak US housing market, the disruption in the credit markets, as well as equity market volatility, had a substantial adverse effect on its results for the first quarter.

For the quarter, adjusted net loss was $3.56 billion or $1.41 per diluted share, compared to adjusted net income of $4.39 billion or $1.68 per diluted share for the same quarter of 2007.

At March 31, 2008, AIG’s consolidated assets were $1.051 trillion and shareholders’ equity was $79.70 billion. AIG has announced a plan to raise approximately $12.5 billion in capital to fortify its balance sheet and provide increased financial flexibility.

AIG has emphasized that despite the difficult environment and its resulting effect on AIG’s overall financial performance for the first quarter, core insurance businesses continue to perform satisfactorily.

Martin Sullivan, president and CEO of AIG, said: AIG’s results do not reflect the underlying strengths and potential of AIG; rather they reflect the extremely adverse external conditions affecting the spectrum of companies exposed to the US residential housing, credit and capital markets.