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AIG expects cat losses of up to $1.7B in Q3

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AIG expects cat losses of up to $1.7B in Q3

American International Group Inc. anticipates recording pretax catastrophe losses, net of reinsurance, in the range of $1.5 billion to $1.7 billion in the third quarter.

The losses were attributed to multiple events in Japan, including typhoons Jebi and Trami, as well as Hurricane Florence. AIG also revised its loss estimates on the California mudslides.

The company expects to incur pretax catastrophe losses, net of reinsurance, of between $900 million and $1 billion due to disasters in Japan and Asia. AIG anticipates pretax catastrophe losses, net of reinsurance, in the range of $600 million to $700 million from events in North America. Pretax catastrophe losses, net of reinsurance, from Hurricane Michael, which is estimated to be between $300 million and $500 million, will be included in the company's fourth-quarter operating results.

Expected losses for Validus Holdings Ltd. and its affiliates were included in the catastrophe loss estimates. AIG said it has likely used up approximately $700 million of the $750 million retention under its North America aggregate catastrophe reinsurance program because of the California mudslides, Hurricane Florence and the assumption that it will hit the high end of its loss estimate range for Michael.