AIG Expects Up to $1.7B Q3 Catastrophe Losses

by Ike Obudulu Posted on October 19th, 2018

New York City, USA : Insurer American International Group Inc (AIG) said on Thursday it expects third-quarter pre-tax catastrophe losses, net of reinsurance, of between $1.5 billion and $1.7 billion. These losses are from natural disasters including Hurricane Florence and typhoons Jebi and Trami. The shares fell in extended trading.

Additionally, initial estimates for losses tied to Hurricane Michael are about $300 million to $500 million, which are set to be included in fourth-quarter results, the New York-based company said Thursday in a statement. Those forecasts are calculated before taxes and net of reinsurance. AIG’s third-quarter earnings call is scheduled for Nov. 1.

Florence and typhoons in Asia are estimated to have caused billions of insured losses during the third quarter. Travelers Cos., which reported third-quarter results Thursday, said that catastrophe costs were $264 million in the quarter and that it expects to continue its share repurchase program despite the impact of Michael, which slammed the U.S. in October.

AIG estimated it has exhausted about $700 million of the $750 million retention under its North American aggregate catastrophe reinsurance program.

The company reports third-quarter results on Nov. 1.

AIG shares traded at $46.50 at 4:37 p.m. in extended trading in New York, down 4.3 percent after closing at $48.61.

Leave a Reply