AIG Sees $1.1 Billion Hurricane Hit

The company cites third-quarter estimates.
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AIG

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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.

"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.