AIG reports second consecutive profitable quarter on tax break, increasing insurance revenue

American International Group

, the bailed out insurer, reported its second consecutive quarter of profits as the groups Chartis insurance group, AIA and Metlife, and aircraft leasing businesses increased income. Fourth quarter income for the New York-based insurer rose to $1.56 billion after reporting a $2.21 billion loss in the fourth quarter of 2010. Diluted earnings per share were $10.43, compared to $16.60 a year earlier. Diluted earnings per share for the year were $9.44, compared to $11.60 in 2010. Income attributable to Chartis rose from a loss of $3.97 billion to an income $348 million for the quarter. “We're seeing markets hardening at Chartis,” said CEO Robert Benmosche in the earnings statement press release issued yesterday. Other large gains from the fourth quarter of 2010 to the fourth quarter of 2011 are the aircraft leasing business, which increased net income to $119 million from a $606 million loss last year, and the AIA and MetLife

insurance businesses, which increased income from $27 million to $1.02 billion. AIG also posted a tax benefit of $17.7 billion in deferred tax asset valuations for the quarter. . “Aside from an outsized effect on reported net income, the release of the DTA allowance is a positive statement about future profitability of AIG, a credit positive,” said R. Scott Frost, an analyst at Bank of America

, in a note yesterday. Full year 2011 net income was $1.83 billion, after the insurer reported $898 million in losses for 2010. Income attributable to Chartis was $1.12 billion for the year, from a loss of $1.07 billion the year before.