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Earnings Preview: AIG reports 2Q results

LOS ANGELES (AP) -- AIG is expected to post a smaller profit for the second quarter when it releases financial results Thursday after the market closes.

WHAT TO WATCH FOR: Whether American International Group Inc. posted a decline in catastrophe-related losses.

Outside of the monster tornado that struck Oklahoma in May, the insurer likely benefited from fewer major weather-related catastrophes in the U.S. this year.

Wall Street believes AIG reaped higher returns on its investments in bonds, which have seen yields increase in recent months with many investors anticipating a retreat by the Federal Reserve from its bond-buying program, perhaps as early as this year.

Insurers like AIG collect premiums from customers and invest that money into bonds or stocks. Higher interest rates boost their earnings.

WHY IT MATTERS: AIG, based in New York, is among the nation's largest insurance companies. It became a household name after receiving the biggest government bailout of the 2008 financial crisis, $182 billion. That made it a lightning rod for critics who perceived that the government was propping up banks at the expense of the public.

AIG sold off assets to pay back the government, and in December, freed itself from the last of its Treasury ownership.

WHAT'S EXPECTED: Analysts, on average, expect adjusted earnings of 86 cents per share, and $9.21 billion in net premiums written, according to FactSet.

LAST YEAR'S QUARTER: AIG reported net income of $2.33 billion, or $1.33 per share.