American International Group Inc. AIG -3.84% said its first-quarter profit more than doubled to $3.21 billion, driven by improved results at the bailed-out company's main insurance businesses and market-price gains in the value of two major assets.

AIG's operating income of $3.1 billion, or $1.65 a share, was up 23% from a year ago on a per-share basis, and beat analysts' consensus estimate of a $1.12 per-share profit. Operating profit excludes some investment results.

The government-controlled insurer's shares fell 62 cents, or 1.8%, to $34.14 in 4 p.m. New York Stock Exchange trading on Thursday before the results were released.

AIG shares have gained 47% year to date as the company has made further progress repaying its $182 billion bailout. They now trade well above the $28.73 level at which the U.S. Treasury says it would break even on its majority stake in the company.

The government last sold a chunk of its shares in March and now owns 70% of AIG. It could sell more shares in the coming days now that AIG has released first-quarter earnings and the current share price suggests it could reap a profit for taxpayers.

Operating results at AIG's domestic life-insurance and retirement-services business rose 12% to $1.31 billion on a pretax basis. The company's global property and casualty insurance unit, which had low claims from natural catastrophes in the first quarter, swung to a $1.04 billion profit from a loss of $424 million in the same period a year earlier.

Chief Executive Officer Robert Benmosche has said improving results at both operations are critical for AIG to meet the "aspirational goals" the company laid out last year and prove to investors that AIG can generate consistent profits.

The goals include boosting AIG's return on equity to over 10% by 2015, cutting costs and deploying up to $30 billion in capital on share buybacks, dividends or acquisitions.

"Our profits this quarter illustrate, ultimately, the health of our business," Mr. Benmosche said.

First-quarter results were also helped by an increase of more than $1.8 billion in the value of the company's minority stake in Asian life insurer AIA Group Ltd., 1299.HK -3.37% whose Hong Kong-listed shares rose during the quarter. AIG sold a portion of its AIA ownership to help repay its 2008 federal bailout.

AIG's interest in Maiden Lane III, a bailout-era vehicle that removed some mortgage-linked exposures from the insurer's books, added $1.25 billion to operating profit before taxes because the assets rose in value during the quarter. It had added $744 million in the same period a year earlier.

The company's plane-leasing unit International Lease Finance Corp. reported operating profit of $119 million, while its mortgage insurance operation saw profit fall 43% to $8 million. AIG's book value per share was $57.68 at the end of March, up 7.8% from the end of 2011.

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