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AIG Sees $1.1 Billion Hurricane Hit

The company cites third-quarter estimates.
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put third-quarter Hurricane Katrina losses at $1.1 billion.

The New York insurer said third-quarter after-tax insurance related losses, net of reinsurance recoverables, should be about $900 million. In addition, AIG expects to record an after-tax charge of about $170 million relating to reinstatement premiums. In addition to insurance-related losses, AIG estimates that it will incur $60 million after-tax in noninsurance losses, primarily from consumer finance operations, investment portfolio impairments and AIG owned and leased facilities.

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"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 and ensure the well-being of our employees," said CEO Martin Sullivan. "Our employees in the region, including many who themselves suffered as a result of Katrina, are working diligently to provide immediate financial assistance to customers who have experienced losses. 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. Our hearts go out to all who have suffered from this tragic event."

On Tuesday, AIG rose 16 cents to $60.51.