One recent development that would not seem to paint a rosy loss picture for the Pollution insurance market: The $700 million addition to Environmental reserves that AIG made over seven quarters between 2011 and 2012.
But even that much negative loss development has to be put in context, according to Robert P. Hartwig, president of the Insurance Information Institute.
It is "a large amount, but AIG was the largest commercial insurer in the United States for many, many years," Hartwig observes. "These are very long-tail liabilities that may date back many years or even decades."
Additionally, AIG was one of only very few insurers covering the risk for many years, notes Rich Sheldon, the Philadelphia-based Environmental practice leader at Willis North America.
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