American International Group, the largest business insurer in the U.S., reporteda $7.8 billion loss for the first quarter of 2008. The loss is attributed to the weakening housing market and a "disruption in the credit markets." The loss equates to a $3.09 per diluted share loss.

The insurer states it will raise $12.5 billion is capital to "fortify its balance sheet" and improve flexibility. It reports that its core business remains solid and that stricter accounting rules are, in part, a reason for the extent of the reported loss. The insurer will hold a conference call on Friday, May 9, 2008, at 9:30 a.m., to discuss the first quarter report.