American International Group (AIG) has reported that its net income for the first quarter 2006 was $3.20 billion, compared to $3.80 billion in the first quarter of 2005. The company says that a strong performance in general insurance was tempered by troubles at its Asia Pacific cards arm and some significant one-off charges.

At March 31, 2006, consolidated assets were $879.80 billion and shareholders’ equity was $88.39 billion, AIG said in a statement.

Commenting on the first quarter 2006 results, AIG president and CEO Martin Sullivan said: AIG’s first quarter 2006 adjusted net income was $3.38 billion or $1.29 per share, an increase of 4.6% from first quarter 2005. The quarter was adversely affected by one-time after tax charges of $115 million relating to expenses from the SICO compensation plans and the Starr tender offer.

Results were also negatively affected by an additional allowance for losses in credit card operations in Taiwan of $88 million before tax or $57 million after tax, and an adjustment relating to deferred advertising costs in general insurance of $59 million before tax or $38 million after tax, Mr Sullivan added.

The firm says it enjoyed record results in the general insurance space, with strong gains in operating income and an improved combined ratio. Both domestic and foreign general insurance operations had outstanding results, while its life insurance and retirement services arm had reasonably strong underlying performance, with good life insurance reserve growth and wider annuity spreads in the domestic market. The overseas business was adversely affected by foreign exchange.