Giant US insurance group AIG has beaten analysts’ expectations in lodging fourth-quarter operating income of $US1.558 billion ($1.45 billion).

Four years after AIG was forced to accept an $US85 billion ($79.2 billion) loan facility from the US Federal Reserve at the peak of the global financial crisis, AIG’s 2011 fourth-quarter operating income now represents a $US3.7 billion ($3.44 billion) turnaround from the previous corresponding quarter, when the company lost $US2.24 billion ($2.08 billion).

Full-year operating income increased from an $US898 million ($836.6 million) loss in 2010 to a $US1.826 billion ($1.7 billion) profit last year.

AIG says it has now paid its debts following a fire sale of assets last year and is looking for private equity to replace the US Government’s holdings, believed to be worth around $US50 billion ($46.58 billion).

Subsidiaries Chartis and SunAmerica both performed strongly in the quarter, lodging operating incomes of $US348 million ($324 million) and $US931 million ($867 million) respectively.

The results included $US3.3 billion ($3.07 billion) in catastrophe losses, $US1.7 billion ($1.58 billion) in investment adjustments and $US2.9 billion ($2.7 billion) in debt repayment to the US Federal Reserve.

AIG results continue a trend of fluctuating fortunes as it winds down some assets while selling off others. The group posted a $US4.11 billion ($3.83 billion) loss in the third quarter.

President and CEO Robert Benmosche says the results show the company has “turned a corner”.

“Two years ago sceptics – and even some supporters – thought it inconceivable that we would be in a position to post our second consecutive annual profit,” he said.

“In 2011, we began to prosper again. As we look to 2012 and beyond, we anticipate we’ll continue to be competitive in all areas of our core insurance business.”