Filed Under:Claims, Catastrophe & Restoration

AIG Says Sandy Will Cost It $2B

American International Group, Inc., says its total insured losses from Superstorm Sandy will come to approximately $2 billion.

The announcement, made after the markets close today, says the preliminary figure is pre-tax and net of reinsurance. After tax and net of reinsurance, AIG is putting the approximate total of loss at $1.3 billion.

AIG says in a statement that it expects to make a capital contribution to its U.S. property and casualty insurance subsidiaries of $1 billion from existing, readily available funds.

In 2012, AIG Property Casualty has paid dividends to AIG Inc. totaling $2.4 billion. As of Sept. 30, AIG Property Casualty’s equity totaled $49.6 billion, and AIG Inc.’s equity totaled $102.4 billion.

AIG explains that, “This preliminary estimate involves the exercise of considerable judgment. Due to the complexity of factors contributing to the losses, there can be no assurance that AIG’s ultimate losses associated with this storm will not differ from this estimate, perhaps materially."

AIG says losses related to Storm Sandy will be reflected in AIG’s fourth quarter 2012 results, and any subsequent changes will be recorded in the period in which they occur.

Sandy, which struck New Jersey and New York the hardest, made landfall on Oct. 29, and catastrophe modelers say insured losses could go as high as $25 billion. However, Joe Plumeri, the chief executive of Willis Group Holdings says the figure could be closer to $30 billion.

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