AIG among first to show heavy impact of WTC losses on 3-quarter results

American International Group Inc.’s property and casualty insurance business produced a massive 80% drop in pretax earnings to US$201.5 million for the third-quarter of 2001 compared with US$868.3 million for the same period a year prior. The decline in pretax earnings was attributed to an estimated US$820 million in claims the group expects to incur as a result of the September 11 terrorist attacks. "While it is impossible for any company to forecast these losses with precision, this is our best estimate," says group chairman Maurice Greenberg.
Excluding the cost of the terrorist attacks, AIG’s general insurance operations would have achieved almost a 12% increase in before tax profit, observes Greenberg. For the nine month period to end September this year, the p&c company made US$2.12 billion in operating income against the US$2.63 billion reported for the same period in 2000.