AIG Surprises With Loss Tied to Costs From Storms in U.S., Japan
(Bloomberg) -- American International Group Inc. reported a surprise third-quarter loss as natural disasters, old and new, hurt results.
- It was the fifth straight quarter that AIG’s results have fallen short of analysts’ expectations. The adjusted loss was 34 cents a share, while analysts had been expecting a profit of nearly 6 cents.
- Both Hurricane Florence and the typhoons in Japan hit AIG harder than its rivals. The insurer reported $1.6 billion in catastrophe costs for the period, the midpoint of the range AIG had announced earlier this month. The loss is about three times larger than initial forecasts from Morgan Stanley analysts.
- Old disasters also came back to haunt AIG. The insurer added $170 million to reserves in the third quarter, as costs from last year’s wildfires in California climbed higher than the insurer anticipated.
- Even with the setbacks, Chief Executive Officer Brian Duperreault said the insurer remains on track for a key metric in his turnaround effort: an underwriting profit by year-end.
- AIG shares climbed 0.4 percent in the third quarter and had plunged 31 percent this year through Wednesday’s close.