AIG expects up to $1.7bn cat loss for Q3
American International Group (AIG) expects to report third quarter 2018 pre-tax catastrophe losses, net of reinsurance, of approximately $1.5 to $1.7 billion.
These losses are largely associated with multiple events in Japan, including Typhoons Jebi and Trami, as well as Hurricane Florence and revisions to AIG's loss estimates on the California mudslides.
AIG expects pre-tax catastrophe losses, net of reinsurance, resulting from multiple events in Japan and Asia to be approximately $900 million to $1 billion. Pre-tax catastrophe losses, net of reinsurance, resulting from events in North America are set to reach approximately $600 to $700 million.
In addition, initial pre-tax loss estimates for Hurricane Michael, net of reinsurance, are approximately $300 to $500 million, which will be included in fourth quarter 2018 operating results.
Catastrophe loss estimates include expected losses for Validus Holdings and its affiliates.
AIG estimates that it has exhausted approximately $700 million of the $750 million retention under its North America aggregate catastrophe reinsurance programme following the California mudslides, Hurricane Florence and assuming the high end of the loss estimate range for Hurricane Michael.
“Across AIG we are committed to supporting our customers, wherever they are around the world, by acting quickly to help them recover and rebuild,” said CEO Brian Duperreault. “We are pleased that our efforts to restructure our North American reinsurance portfolio are yielding the desired result to mitigate our exposure to catastrophe losses. We continue to look for ways to further evolve our global protection measures while remaining diligently focused on executing against our plan to position AIG for long-term sustainable, profitable growth,” Duperreault added.
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