Global insurer American International Group, Inc. (AIG) is expecting to suffer a loss in a range from $2.9 billion to $3.1 billion from third-quarter catastrophes, pre-tax but after taking into account its reinsurance arrangements.
The insurer estimates losses in ranges from $1.1 billion to $1.2 billion for Hurricane Harvey, $1.0 billion to $1.1 billion for Hurricane Irma, $600 million to $700 million for Hurricane Maria, and around $150 million from the Mexico earthquakes and other Q3 catastrophe events.
Brian Duperreault, President and Chief Executive Officer, commented; “During this period of unprecedented catastrophes, our thoughts are with all who are affected by these storms. We are actively ensuring the safety and support of AIG employees, who acted selflessly to serve their colleagues, clients, and communities.
“Through AIG’s financial strength and long experience with natural catastrophes, our teams across the company have reacted quickly to provide our clients with the claim funds, resources, and expertise they need to recover and rebuild with greater resilience. We are proud of our response as a member of the industry and as a corporate citizen during this time of need.”
Equity analysts tracking the insurer said that the loss is higher than anticipated, which some put down to AIG having less reinsurance than they had a few years ago.
As our sister site Artemis reported this morning, AIG has already purchased a back-up reinsurance cover in wake of recent events, suggesting that the firm knew it would erode most if not all the way through its current reinsurance program.
Despite losses being higher than anticipated, AIG’s loss compared to its market share is relatively small, compared to how some other P&C insurers and reinsurers have been affected by recent losses, and the analysts all agreed that AIG’s loss would be manageable given the insurers capitalisation.
