Insurance giant AIG has posted its second straight quarterly profit, helped by a recovery in the value of its investments.

Net income for the third quarter was $US455 million ($492 million), compared with a loss of $US24.47 billion ($26.5 billion) in the corresponding period last year.

New CEO Robert Benmosche says the results show “continued stabilisation in performance and market trends”.

The company was bailed out by the US Government through a massive aid package, and is now nearly 80% owned by US taxpayers.

AIG ended seven straight quarterly losses when it posted a second-quarter profit of $US1.8 billion ($1.94 billion).

Mr Benmosche says the global group started to show signs of stabilisation in the third quarter but its general insurance businesses experienced a 13% drop in revenue.

“We continue to focus on stabilising and strengthening our businesses but expect continued volatility in reported results in coming quarters,” he said.