Insurance conglomerate American International Group Inc.’s net income swung to a loss on mark-to-market adjustments in hedging programs primarily for certain products sold by its life-insurance unit.

The company’s closely watched adjusted income fell 10% in the fourth quarter, hurt by additional Covid-19 costs.

Across the life-insurance industry, Wall Street analysts treat such mark-to-market movements as a less important measure of performance than adjusted earnings, which exclude items considered non recurring. The value of the hedges jump around based on changes in interest rates, equity markets, corporate credit spreads and other factors.

Including those hedges, AIG posted a net loss of $60 million for the fourth quarter, down from $922 million in the year-earlier period. Its “adjusted after-tax income” declined 10% to $827 million from $923 million.

AIG’s core General Insurance unit sells a range of property and casualty coverages to businesses and wealthy households and is one of the nation’s biggest sellers of travel insurance by premium volume.

This post first appeared on wsj.com

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