Thursday, October 19, 2017

AIG sees third-quarter cat losses of US$3bn

AIG said it was expecting to log pre-tax catastrophe losses of about US$3 billion in the third quarter of this year.

Company estimates pegged pre-tax losses of about US$1 billion each from hurricanes Harvey and Irma, and up to US$700 million from Maria, as well as additional catastrophe losses, including earthquakes in Mexico, of about US$150 million.

Analysts at Morgan Stanley said the losses were slightly higher than their estimate of US$2.5 billion, but were still manageable as it equated to about 2.6% of book value.

The analysts also emphasised the company’s more than US$3.5 billion in cash and short-term investments, saying it should help tackle capital concerns from losses in the third quarter.

Insurers as well as reinsurers have been assessing the costs of hurricanes that stormed through the US and ravaged Caribbean islands last month.

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Victor Kuk, Swiss Re

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