American International Group Inc., the insurer bailed out by U.S. taxpayers, said first-quarter catastrophes including the earthquake in Japan will cost the company about $1 billion.
The Japan quake is responsible for about $700 million of the sum, the New York-based insurer said yesterday in a statement. The total also includes claims from a temblor in New Zealand, floods in Australia and winter storms in the U.S. It excludes losses from participation in the Japanese Earthquake Reinsurance Co. which handles policies on residential dwellings.
AIG is increasingly reliant on property-casualty operations after selling its biggest non-U.S. life businesses to help repay a $182.3 billion bailout. The company is adding to investments in Japan with the planned purchase of the 45 percent of Fuji Fire & Marine Insurance Co. that it doesn’t already own.
“Our preliminary loss estimate will change as the industry losses from JERC for earthquake damage to personal dwellings become known,” Chief Executive Officer Robert Benmosche said in the statement.
The maximum pretax loss that AIG can take on residential coverage in Japan is about $575 million under U.S. generally accepted accounting principles, including costs from Fuji Fire, the company said.