Lower Investment Income Pressures AIG's Earnings

During the quarter, the company recorded a loss on extinguishment of debt of $824 million on an after-tax basis. Reductions in workers' compensation discount as well as adverse prior year reserve development led the company's operating income for the quarter to drop to $1.4 billion from $1.7 billion a year ago. The company's quarterly earnings also took a hit from a decline in returns on investments due to the low interest rate environment.