Bloomberg News

NEW YORK - American International Group Inc. said Thursday that second-quarter profits rose 16% as the biggest insurer raised prices on business policies and increased sales of life insurance and annuities.

Earnings from operations rose to $1.7 billion, or 70 cents a share, from $1.4 billion, or 61 cents, a year earlier. Revenue rose 10.1%, to $12.6 billion. Results met the average estimate of analysts polled by First Call/Thomson Financial.

AIG has increased earnings in all but two quarters since 1990, helped by a range of interests including aircraft leasing and currency trading that supplement its property-casualty and life insurance businesses. Earnings in the latest period benefited from fatter profits from underwriting liability and other commercial insurance, as well as 20%-plus earnings gains at AIG's life insurance and financial services operations.

"It was another good quarter from a consistent performer," said Ania Aldrich, an analyst at Cambiar Investors, which owns AIG shares. Chairman and chief executive Maurice "Hank" Greenberg keeps broadening AIG's base of businesses, most recently making a $23 billion offer for American General Corp. The purchase would make AIG the biggest writer of annuities in the United States and the fifth-largest life insurer, while gaining a U.S. consumer-finance business for the company.

Mr. Greenberg, 76, received $29.7 million in compensation last year including salary, bonus, and an award to be paid on retirement - which he says is not imminent. The AIG chairman, who has led the company for 34 years, "is not going to let this company disappoint on his watch," Ms. Aldrich said.

The 30% return on AIG's shares in the five years that ended in June outpaced 13% gains from the Standard & Poor's property-casualty index and a 6% return for the S&P life index. The shares, down almost 14% year to date, fell 0.47%, to $82.28, in trading Thursday.

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