AIG has reported a first-quarter profit of $US269 million ($250 million), down 85%, after catastrophe losses and a $US3.3 billion ($3 billion) pre-tax charge relating to the US Government rescue.

The group says catastrophe losses of $US1.7 billion ($1.6 billion) are made up of $US1.3 billion ($1.2 billion) from the Japan tsunami and $US400 million ($372 million) for the Christchurch earthquake and Australian floods.

AIG had been considered a seller of its 33% stake in AIA, but President and CEO Robert Benmosche says the company wants to keep the shareholding, which has appreciated in value since AIA listed last year.

General insurance subsidiary Chartis made a pre-tax loss of $US416 million ($387 million), compared with a $US879 million ($818 million) profit in the first quarter of 2010. The blowout in catastrophe losses has seen its combined operating ratio dip to 119 from 102.5 in the corresponding period last year.

Mr Benmosche says Chartis’ net premium income increased, pricing was stable and customer retention has remained strong.