AMERICAN INTERNATIONAL GROUP, INC. 
NEW YORK (Reuters) - American International Group Inc (>> American International Group) posted a bigger-than-expected quarterly loss on Thursday as the insurer booked huge catastrophe losses, and said it had set aside $836 million to meet losses related to prior-year accident claims.
Hefty losses from claims occurring in prior years have been an ongoing issue for AIG, and its shares were down 2.3 percent at $63.51 in extended trading after it reported third-quarter results.
The New York-based company is one of the largest U.S. commercial insurers.
In February, AIG also posted a bigger-than-expected fourth-quarter loss, largely due to a $5.6 billion reserve charge to cover possible future claims related to long-term risks on U.S. commercial insurance policies it had already written.
AIG agreed in January to pay about $10 billion to a unit of Warren Buffett's Berkshire Hathaway Inc (>> Berkshire Hathaway) to take on the bulk of the risk associated with those policies. The Berkshire deal followed a $3.6 billion increase to reserves chalked up by AIG in the last quarter of 2015.
Chief Executive Officer Brian Duperreault, widely hailed in the industry as a turnaround expert, took charge of AIG in May. He replaced Peter Hancock, who said in March that he would step down after the insurer's financial performance frustrated shareholders and the insurer's board of directors.
AIG conducts quarterly reviews of reserves for its various lines.
In August, AIG Chief Financial Officer Sid Sankaran said the insurer had boosted the number of reviews it conducted during the second quarter, compared to the previous year. The insurer reviewed about $16 billion in total reserves, in challenging areas such as medical malpractice and environmental, Sankaran said at the time.
In the third quarter ended Sept. 30, the insurer recorded pre-tax catastrophe losses of $3 billion related to hurricanes Harvey, Irma and Maria, in line with previously disclosed estimates.
Insurers and reinsurers across United States had issued profit warnings after the storms tore into parts of the country and ravaged several Caribbean islands.
AIG swung to a net loss of $1.74 billion, or $1.91 per share, in the quarter, compared with a profit of $462 million, or 42 cents per share, a year earlier.
Operating loss was $1.22 per share compared with an operating profit of $1.01 per share in the year-ago period.
Analysts had expected a loss of 79 cents per share, according to Thomson Reuters I/B/E/S.
Operating expenses fell 15.3 percent to $2.15 billion, partly cushioning the blow from catastrophe losses.
S&P Global Ratings said AIG’s “weak results” did not immediately affect the insurer’s ratings.
S&P analysts cautioned that underwriting performance had declined in the quarter, however. They also said an earlier decision by Duperrealt to halt guidance to shareholders about possible future earnings “may imply a longer timeframe to meaningfully turn around the commercial insurance business.”
(Reporting by Nikhil Subba in Bengaluru and Suzanne Barlyn in; New York; Editing by Shounak Dasgupta and Tom Brown)
