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Insurance Giants AIG, Berkshire Assess Katrina Impact By Alistair Barr SAN FRANCISCO (Dow Jones) - Two giants of the property and casualty insurance industry estimated their share of the cost of Hurricane Katrina on Tuesday, three weeks after the storm ravaged the Gulf coast. American International Group (AIG), the largest commercial and industrial insurer in the U.S., said Katrina and other third-quarter catastrophes will cost it $1.1 billion, after tax and reinsurance. Berkshire Hathaway (BRKA)(BRKB), the insurance-focused conglomerate run by billionaire investor Warren Buffett, said it expects to pay between 3% and 5% of total industry losses from Katrina. Katrina, a 140 mph hurricane that hit Louisiana, Alabama and Mississippi on Aug. 29, could end up being the most expensive catastrophe in U.S. history. Catastrophe modeling firm Risk Management Solutions expects the hurricane to cost insurers between $40 billion and $60 billion, which would eclipse industry losses from the Sept. 11 terrorist attacks in 2001 and Hurricane Andrew in 1992. If RMS`s forecast turns out to be accurate, Berkshire could end up losing between $1.2 billion and $2 billion from Katrina. Both companies said that the unprecedented nature of the storm has made loss estimates difficult. AIG warned that its losses from Katrina could end up being higher than its preliminary $1.1 billion estimate. About $170 million of AIG`s loss will come from reinstatement premiums. These premiums are paid by insurers to refresh chunks of catastrophe reinsurance coverage used up by big claims. AIG also expects about $60 million in Katrina losses from other parts of its business that aren`t directly related to insurance, including its consumer finance operations and investment portfolios. AIG shares climbed 16 cents to $60.51 on Tuesday. Berkshire`s class A shares were unchanged at $81,600 and the company`s class-B stock slid $3 to $2,713. (END) Dow Jones Newswires 09-20-051832ET Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved. |
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| aus der Diskussion: | Berkshire Hathaway |
| Autor (Datum des Eintrages): | Carret (24.09.05 09:13:19) |
| Beitrag: | 8 von 1,250 (ID:18016817) |
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