AIG expects second year of mortgage-insurance losses

Delinquencies at UGC nearly doubled from 2006

Billions in write-downs on derivates and other losses related to mortgages put insurer American International Group Inc. deeply in the red during the fourth quarter, and the company expects another “significant operating loss” at its mortgage insurance division in 2008.

AIG said a $5.3 billion fourth-quarter loss was largely driven by $11.2 billion in write-downs of credit default swaps that cover investments with exposure mortgages.