AIG, the world's largest insurer, has posted its biggest ever quarterly loss due to its continuing exposure to bad US mortgage debt.
Reporting its results for the first three months of 2008, AIG made a net loss of $7.81bn (£4bn), compared with a profit of $4.13bn a year earlier.
The loss was caused by a $9.11bn charge for the decline in value of US mortgage products that it had insured.
It is the second consecutive quarter that AIG has posted record losses.
The company said it was now replacing its chief financial officer.
'Difficult quarter'
"It was clearly a difficult quarter for them and the difficulties were fairly widespread, they weren't just in the investment portfolio," said analyst Bill Fitzpatrick of Optique Capital.
AIG is just the latest company to reveal continuing exposure to bad US mortgage debt as the global credit crisis continues.
Centred on the so-called sub-prime sector, which specialises in loans to people with poor credit histories, the bad debt was first revealed last summer.
The crisis quickly spread around the global banking sector, as much of the bad US mortgage debt had been repackaged into new debt-backed assets and then resold around the world.
This sparked the continuing credit crunch as banks became much less willing and less able to lend.
Some analysts estimate that the worldwide losses caused by the bad US mortgage debt now total more than $300bn.
Sources: http://news.bbc.co.uk/2/hi/business/7391651.stm