AIG sees third-quarter catastrophe losses of about $3 billion

AIG to take US$3bn hit from recent natural disasters

AIG Says the Hurricane Season Will Cost It $3 Billion

The company, which has niche products including casualty and property reinsurance, said it expects to report pretax underwriting losses of $503 million, net of reinstatement premiums, in its third quarter results scheduled to be reported on October 25.

Preliminarily estimated third-quarter catastrophe losses including smaller loss events totaled about $1.48 billion, XL Group said in a statement.

XL Group Ltd. announced its preliminary estimate of net losses of approximately $1.48 billion from third quarter natural catastrophes.

On an after-tax basis, it said Q3 cat losses totalled around $1.35bn.

Hurricane season in the Atlantic is still in full swing and Morgan Stanley said it expects overall insured losses from this year's catastrophes to approach $100 billion.

XL sees the private insurance and reinsurance market loss for Hurricanes Harvey, Irma and Maria as being in the range of $75 billion to $90 billion, with each storm contributing roughly 25%, 40% and 25%, respectively, to its loss estimates.

Losses are evenly split between XL's insurance and reinsurance businesses, the company said and it believes that it has ample catastrophe reinsurance protection in place for 2017 and 2018, and beyond due to its in-force catastrophe bonds, some of which provide coverage through 2019.

The company also expects to take a hit of between US$1.1bn and US$1.2bn from the damage caused by Hurricane Irma, while other recent disasters, including the quake in Mexico, will cost it about US$150mln in additional catastrophe losses.

The firm states that the estimate is net of reinstatement premiums, and is based on claims received to date, and industry loss estimates, from both the industry and proprietary models.

"These significant losses fell within our expectations", Richard R. Whitt III, the company's co-CEO, said in a statement.

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