American International Group (AIG) has revealed it expects to see third-quarter (Q3) pre-tax catastrophe losses, net of reinsurance, of approximately US$1.5 to US$1.7 billion (about NZ$2.3 billion to NZ$2.57 billion).
Almost US$1 billion of AIG’s projected losses can be attributed to multiple events in Japan and Asia, including Typhoons Jebi and Trami. In North America, catastrophes events including Hurricane Florence and the California mudslides, are expected to rack up between US$600 and US$700 million in pre-tax losses for the insurer.
Furthermore, AIG’s initial pre-tax loss estimates for Hurricane Michael, net of reinsurance, are approximately US$300 to US$500 million. This projection will be confirmed and included in the insurer’s fourth quarter 2018 operating results. The catastrophe loss estimates released today include expected losses for the recently-acquired Validus Holdings, Ltd. and its affiliates.
“Our thoughts are with those who have been affected by the recent extreme events,” said Brian Duperreault, AIG president and chief executive officer. “Across AIG we’re committed to supporting our customers, wherever they are around the world, by acting quickly to help them recover and rebuild.”
According to a company release, AIG has exhausted about US$700 million of the US$750 million retention under its North America aggregate catastrophe reinsurance program responding to the California mudslides, Hurricane Florence and Hurricane Michael – assuming the high end of the loss estimates for the latter.
“We’re pleased that our efforts to restructure our North American reinsurance portfolio are yielding the desired result to mitigate our exposure to catastrophe losses,” Duperreault added. “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.”
These preliminary estimates involve the exercise of considerable judgment and may differ to AIG’s ultimate losses.