AIG has estimated that its losses from catastrophic events in the third quarter will be $1.1 billion, with Hurricane Katrina mostly responsible.
The US insurer said that its total after-tax insurance-related losses, net of reinsurance recoverables, will be approximately $900 million. In addition, it expects to record an after-tax charge of approximately $170 million relating to reinstatement premiums.
In addition to insurance related losses, AIG estimates that it will incur approximately $60 million after tax in non-insurance losses, primarily from consumer finance operations and investment portfolio impairments.
AIG president and CEO Martin Sullivan said: Our top priorities continue to be to respond to our customers who have sustained a devastating loss of life and property caused by Hurricane Katrina and its aftermath… Katrina’s wake of destruction is unprecedented, but AIG’s financial strength and claims management expertise enable us to respond to a catastrophe of this magnitude.