AIG has achieved “tangible progress” in its restructuring and is on track to pay back its massive US Government rescue package, according to Moody’s Investors Service.

Continued stabilisation of AIG operations and global financial markets should generate enough funds to repay the government, the ratings agency said last week.

AIG reported net income for the third quarter of $US455 million ($487 million) this month, its second straight quarterly profit.

CEO Robert Benmosche has meanwhile reportedly backed down from a threat to quit the group.

The Wall Street Journal had reported that Mr Benmosche had told other AIG board members he was “done” after restrictive pay constraints were placed on the company.

But AIG later released a copy of a note sent to staff, in which Mr Benmosche said he and the board “remain totally committed to leading AIG through its challenges and to continuing to fight on your behalf”.