Five years after it nearly collapsed, AIG announced plans Thursday to share excess capital with shareholders by reinstating a dividend and buying back shares.
The insurance company said it will pay investors a quarterly dividend of 10 cents per share and will repurchase $1 billion worth of its own common stock.
AIG(AIG) shares rose 6% in premarket trading. The stock gained more than 5% in after hours trading Thursday.
"The successful turnaround of AIG has been remarkable," said Robert Miller, chairman of AIG's board."We are pleased that we have gained sufficient capital adequacy that we can return a portion of our success directly to our shareholders through these actions."
Once the largest insurance company in the world, AIG was brought to its knees by massive losses on insurance contracts it wrote against mortgage-backed securities that soured when the housing bubble burst. The company was ultimately rescued by the government in 2008, and received more than $180 billion in bailout money.