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American International Group Inc. pegged 2018 fourth-quarter catastrophe losses at between $750 million and $800 million to date on a pretax basis, according to CEO Brian Duperreault, speaking Wednesday at the Goldman Sachs U.S. Financial Services Conference in New York.
“These estimates don’t include, of course, December events, whatever they may be,” Mr. Duperreault said, noting that the pretax loss for wildfire for Validus Holdings Ltd., which AIG bought earlier this year, is expected to be around $60 million.
Mr. Duperreault said the insurer expects to meet prior-year guidance of $13 billion for net investment income in 2018 and was running above guidance for the first six month of the year, but “we expect below the second half due to lower returns on alternatives and fair value options,” he said.
The company’s general insurance business “is progressing according to plan and is on track to enter 2019 at a slight underwriting profit,” Mr. Duperreault said, while life and retirement income is expected to be roughly flat in 2019 from compared with 2018.
With general insurance, the “priority will have to be the people we brought in and then making sure that they’re working as a team and executing good strategies,” he said.
The property/casualty business is “basic blocking and tackling in the underwriting side,” Mr. Duperreault said, “improving the volatility, mix of business, underwriting processes, risk selection, pricing — it’s all the basics.”
The company, he said, is not satisfied with an 8% return on equity and intends to return to double-digit figures. “This is going to take some time, up to three years, to get to double digits, but we will get there,” Mr. Duperreault said.
The AIG CEO was candid about the company’s problems but adamant about reversing them.
He admitted the insurer had “underperformed” but said “our problems are our own making, and we’ll fix them.”
“The problems that AIG had when I arrived were the result of over a decade of firefighting, and we are moving beyond that here. We’re now on the right path,” Mr. Duperreault said.
Chubb Ltd. expects to report $225 million in fourth-quarter pretax losses related to California wildfires, the insurer said on Monday.