American International Group made a $4.13 billion profit for the first quarter of 2007, a 29.3 percent increase that is almost a billion dollars more than the same quarter a year ago.

It now has consolidated assets just shy of a mind-boggling one trillion dollars.

The first quarter profit equals $1.58 per diluted share compared to $1.22 per diluted share year-on-year. It has a combined ratio of 87.52.

The reported net income includes the effect of economically effective hedging activities that did not qualify for hedge accounting treatment under FAS 133 or for which hedge accounting was not applied, including the related foreign exchange gains and losses.

Adjusted first quarter profit, as defined below, was $4.39 billion or $1.68 per diluted share, compared to $3.38 billion or $1.29 per diluted share for the first quarter of 2006.

As of the end of March AIG's consolidated assets were $999.75 billion and shareholders' equity was $103.06 billion.

AIG has a large office presence in Bermuda. President and CEO Martin Sullivan said: "AIG had a very good quarter, with strong performance in our worldwide General Insurance businesses, continued improvement in Foreign Life Insurance, and solid results at ILFC and Asset Management.

"In General Insurance, the Domestic Brokerage Group and Foreign General reported strong growth in operating income on excellent underwriting results and increased net investment income. United Guaranty's results were adversely affected by the continued slowdown in the US residential real estate market.

"Domestic Personal Lines reflects strong underwriting results in the direct auto business and continued profitable growth from the Private Client Group. Domestic Life Insurance results were driven by in-force growth and increased net investment income in the life insurance and pay-out annuity businesses, while Domestic Retirement Services experienced a decline in deposits and increased surrender activity."

AIG owns Los Angeles-based International Lease Finance Corporation (ILFC), the world's biggest commercial aircraft owner with a fleet of 824 Boeings and Airbuses and 254 more on order.

Mr Sullivan said: "In Financial Services, aircraft lease rates remained strong as did demand for ILFC's modern fuel-efficient fleet. AIG Financial Products experienced slower transaction flow compared to a strong first quarter of 2006. While the slowdown in the US residential real estate market affected American General Finance's results, prior action taken to limit certain geographic and product exposures has helped AGF avoid some of the significant credit deterioration currently facing the real estate lending industry."