American International Group, Inc., (NYSE: AIG) UP 2.88 percent or $1.51 to $53.96 the big insurer that received—and repaid—one of the biggest bailout packages of the financial crisis, posted a sharply lower fourth-quarter profit, weighed down by its big workers’ compensation business and a charge to retire some high-cost debt.

The global insurer reported quarterly net income of $655 million, a decline from $2 billion in the year-earlier period, while its closely watched operating profit declined to $1.37 billion from $1.67 billion a year earlier. Operating income excludes realized capital gains and losses in insurers’ big investment portfolios and some other items.

The quarterly operating profit tallied 97 cents a share, down from $1.13 a share in the year-earlier period, and fell short of $1.05 a share projected by analysts polled by Thomson Reuters.

Much of the miss came as AIG adjusted the reserves for its workers’ compensation business to reflect a steep drop in interest rates last year. In addition, the company took a charge to reflect additions to reserves for other lines of business. Those two moves totaled $562 million, or 40 cents a share.

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