On Friday, American International Group Inc. (NYSE: AIG) announced shares dropping 4.5% after a $836 million boost to last year’s accident claims. The company reported a bigger than expected quarterly loss as they suffered huge losses after Hurricanes Harvey, Irma, and Maria struck. Over the past couple of years, the insurance giant has been dealing with hefty losses from claims which increased reserves by $5.6 billion in February and $3.6 billion two years prior. AIG has been working to improve ever since their 2016 accident year, but forecasted a greater than expected claim emergence this quarter. As a result, the firm aims to reduce the volatility of their performance by also looking to increase the double digit race and boost reinsurance. Specialized units have also been established for some businesses that are now spread throughout the company.
“In the third quarter, the insurance industry witnessed unprecedented catastrophic events. AIG’s resilience in the wake of these events reflects the strength of our balance sheet and capital position. I am extremely proud of our response and commitment to our customers, as well as the assistance our colleagues provided to the communities most affected by these events,” said Brian Duperreault, President and Chief Executive Officer. “We also strengthened reserves based on additional information that became available in the third quarter through our quarterly reserve review, which primarily related to the 2016 accident year. We are laser focused on commercial underwriting and taking actions to enhance underwriting tools and, more importantly, our talent base – so much so that I have declared 2018 the ‘Year of the Underwriter.’ With this increased focus on underwriting, and our recently announced changes to AIG’s operating structure and executive leadership, we will continue to execute on our strategy to better position AIG for long term profitable growth.”