AIG set to be hit by exceptional claims

Numerous disasters look set to effect AIG’s quarterly figures.

AIG logo
Source: Bloomberg

On Monday after market-close, American International Group is due to report its second-quarter figures. Expectations are for AIG’s quarterly adjusted earnings per share to drop from the $1.21 level down to $1.055. However, the company’s pre-tax profit should remain relatively stable at $2.25 billion, only down a fraction from the first-quarter figure of $2.27 billion.

This will have been a difficult quarter for the company, as it has been exposed to a number of significant public incidents. Unlike a couple of years ago, these are not natural disasters and the remuneration required will be considerably less, but this will no doubt be a turning point where premiums will be revised and airlines will take cautionary measures of their own.

Although no longer part of the management of the company, it is interesting to note that a number of days prior to AIG releasing its latest quarterly-figures, the New York attorney general announced that former chairman Maurice Greenberg will finally go on trial in January, accused of fraud. The fact that the trial has taken nine years to happen will have diluted the negative effects on the company's share performance, despite causing some unwelcome press coverage.

The last quarter has seen a slow rise in the share price, most of which was achieved in the first month while the last two have seen a predominantly lateral move. On the chart the shares have continued to edge closer to oversold territory, while the 100-day moving average looks like it will offer some support around the $53 level.

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