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AIG Estimates $1 Billion in Losses for 1Q from Catastrophes

Source: AIG

Posted on 21 Mar 2011

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American International Group, Inc. (AIG) on Friday released a preliminary pre-tax insurance loss estimate for Chartis, its property casualty insurance unit, of $1 billion for the first quarter of 2011, related to various catastrophes, including a pre-tax insurance loss of $700 million related to the recent earthquake in Japan, consequent tsunami, and related exposures. This preliminary estimate excludes losses arising from AIG's general insurance operations in Japan that participate in the Japanese Earthquake Reinsurance Company (JERC).

AIG's preliminary estimate also includes catastrophe losses related to the New Zealand earthquake, U.S. winter storms, northeast Australian floods, Cyclone Yasi, and the Brazil floods that have occurred in the first quarter to date.

"Our priority is supporting all of our customers and employees who have borne the impact of these many catastrophes," said Robert H. Benmosche, President and Chief Executive Officer of AIG. "In Japan, where the people in the affected areas continue to bear many hardships, including aftershocks, lack of electricity, and fuel shortages, we are working closely with our customers and continue to monitor events in the country as they unfold. We have been able to make substantial progress due to the remarkable efforts of our claims department and our customer service department, which have been working non-stop since the event. We have also been actively engaged in bringing relief supplies to the hardest hit areas.

"The catastrophe in Japan has affected people, their homes, infrastructure, and businesses both in and outside of Japan, and our industry is working hard to quantify the complex impact of the devastation, a process that will take some time.

"As a result, our preliminary loss estimate will change as the industry losses from JERC for earthquake damage to personal dwellings become known and other information becomes available as the situation in the quarter evolves. Our preliminary estimate is based on our current assessment of what our policies cover and the provisions of reinsurance purchased by AIG and its affiliates," Mr. Benmosche concluded.