American International Group's profit growth for next year maybe less than investors expect because technology investments aimedat reducing costs of handling claims could come in higher thanprojected, Sterne Agee & Leach analysts say in a newreport.
|Specifically, the report says that while AIG's property andcasualty unit's investments in claims and underwriting technologyare benefiting the company's loss-ratio numbers, "we feel continuedinvestments could lead to 2014 expense improvement falling short ofsome expectations."
|In consolidated trading at midday Tuesday, AIG was at $38.97.Its high at mid-day was $39.02, near its 52-week high of $39.90.AIG's 52-week low is $27.10.
|The concerns by Sterne Agee analyst John Nadel were voiced afterhe and other analysts from the firm met with Peter Hancock, CEO AIGP&C and John Doyle, CEO Global Commercial.
|Nadel says Hancock and Doyle did not provide a lot of specifics"on the long-term path of expenses."
|He adds, "Management reiterated previous comments that someinvestments being made should begin to level off by year-end 2013,with 2014 showing some improvement," he said.
|However, Nadel continues, "The company would not go into detailon where normalized expense base currently stands following mixchanges and need for further investments."
|Nadel says that while the pace of investments may moderate, "weexpect some ongoing investment into the business in the area oftechnology and analytics, and management indicated they would liketo ultimately build their own internal cat-modelingcapability."
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