American International Group Inc. (AIG) said superstorm Sandy will cost the company about $1.3 billion after taxes and reinsurance, the highest sum disclosed by a U.S. insurer.
AIG will make a capital contribution of $1 billion to its U.S. property-casualty subsidiaries, the New York-based insurer said in a statement today. Sandy’s cost was about $2 billion before tax, AIG said.
Sandy made landfall in New Jersey in October and damaged homes, vehicles and commercial property while interrupting business in states including New York. Travelers Cos. (TRV), the lone insurer in the Dow Jones Industrial Average, said this week that its cost before tax and reinsurance was about $1.14 billion. Allstate Corp., the largest publicly traded U.S. home and auto insurer, said Sandy led catastrophes in October costing the company $1.28 billion by that measure.
“Due to the complexity of factors contributing to the losses, there can be no assurance that AIG’s ultimate losses associated with this storm will not differ from this estimate,” AIG said.
The insurer declined 1.6 percent to $33.60 at 4:19 p.m. in extended trading in New York.
The loss exceeds expenses from Hurricane Irene which struck in last year’s third quarter, when the company had $574 million in catastrophe costs at its Chartis property-casualty unit. AIG Chief Executive Officer Robert Benmosche projected on Oct. 29, the day Sandy made landfall, that costs from the storm would be more similar to Irene than to the Japan tsunami.
The insurer previously said the earthquake and tsunami in Japan fueled about $1.7 billion in catastrophe costs in the first quarter of 2011.
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