NEW YORK (Bloomberg) ? Shares of American International Group Inc., the world's largest insurer, had their biggest gain in three months after the company's profit rose more than analysts expected, soothing concerns about its growth prospects.

The stock climbed $1.59, or 2.3 percent, to $69.63 in New York Stock Exchange composite trading at the close of trading on Friday. Third-quarter earnings at the New York-based company beat analysts' estimates by 11 cents a share.

The results help AIG chief executive officer Martin Sullivan distance the company from accounting probes that ended the 38-year reign of his predecessor, Maurice Greenberg, in 2005. Profit from overseas sales of life insurance rose at the fastest quarterly pace in a year and the company's property and casualty units benefited from lower claims and higher premiums.

"The world's largest insurer is emerging from the difficulties of the past year with its franchise intact," said John Hall, an analyst at Wachovia Corp. in New York, in a research note. He has an "outperform" rating on the stock.

Third-quarter net income more than doubled to $4.22 billion, or $1.61 a share as calm weather lowered claims a year after Hurricane Katrina devastated the US Gulf Coast. Profit before investment losses and changes in the value of derivatives was $1.53 a share, higher than the $1.42 estimated by 20 analysts surveyed by Thomson Financial.

"While conditions in certain of our markets remain challenging, our strong third-quarter performance again underscored the strength of AIG's widely diversified business portfolio," Sullivan, 52, said at the weeekend during a conference call for analysts and investors.

AIG gets about a third of its profit from sales of life insurance and retirement savings products in Asia and other regions outside the US.

Pre-tax earnings from those businesses rose 18 percent to $1.69 billion before investment losses, the fastest pace in four quarters, after AIG introduced more investment-linked products in Southeast Asia. The company said markets in Japan were still challenging as competition increased.

"This quarter marks some signs of improvement," said Gary Ransom, an analyst at Fox-Pitt Kelton Inc. in Hartford, Connecticut, who had expected 12 percent growth. "Foreign life has been viewed as one of the engines of long-term growth."

Some analysts discounted certain accounting adjustments and other factors they said may not be repeated. Andrew Kligerman of UBS AG, estimated the growth in foreign life units would have been nine percent otherwise.

Profit also beat estimates because of higher-than-anticipated premium revenue and investment income in the company's property and casualty units.

Interest and dividend income from investments climbed 39 percent to $1.37 billion, beating Hall's estimate of 16 percent growth. Premium revenue rose 11 percent to $11.2 billion, exceeding his 6.9 percent projection.

Standard & Poor's changed its outlook on AIG to stable from negative, joining Moody's Investors Service and Fitch Inc.

The revision reflects "the stabilisation of AIG's earnings and competitive position following regulatory investigations and other challenges of 2005," Rodney Clark, an analyst at the credit rating company, wrote in a report.

AIG's shares are down 4.8 percent since February 14, 2005, when the company announced it had received subpoenas about its accounting from the US Securities and Exchange Commission and New York Attorney General Eliot Spitzer.

Under Sullivan, AIG has restated earnings twice and paid $1.64 billion to settle federal and state probes of accounting and sales practices.