Analysts expressed surprise at the size of the adverse reserve development taken by American International Group yesterday.
Overall, Bank of America property-casualty analyst Brian Meredith said the $1.1 billion after-tax negative reserve development along with the $1.64 billion settlement with state and federal authorities “are positives for the stock since they remove significant shareholder concerns and together they are less than one quarter's earnings.”
At a conference call with analysts last night, AIG chief executive officer Martin Sullivan refused to elaborate on the tenor of the discussions that led to the settlement other than to “say it was a very open and constructive dialogue.”
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