American International Group (AIG) posted a net loss of $US5.36 billion ($5.87 billion) for the second quarter of 2008, compared to 2007 second-quarter net income of $US4.28 billion ($4.69 billion).

The New York-based insurance giant attributes the decline in profit to the continuation of the weak US housing market and disruption in credit markets, as well as global equity market volatility.

The disappointing result follows the dismal $US7.8 billion ($8.7 billion) loss in the first quarter.

AIG’s results for the first six months show a net loss of $US13.16 billion ($14.43 billion), compared to net income of $US8.41 billion ($9.22 billion) in the first six months of last year.

General insurance operating income fell 54% to $US1.39 billion ($1.52 billion) while life insurance and retirement services fell 10% to $US2.6 billion ($2.85 billion), reflecting a 28% drop in investment income.

New Chairman and CEO Robert Willumstad says he plans to disclose a comprehensive plan for the group in late September.