Bailed-out insurer American International Group is unlikely to add to reserves in the current quarter, though investors may not be convinced the reserves are adequate, Barclays Capital said Tuesday.
Barclays analyst Jay Gelb, in a note to clients, said he met with AIG Chief Financial Officer David Herzog on Monday.
Gelb said that while AIG historically took charges in the fourth quarter to add to reserves in its Chartis property insurance unit, it has changed its process and “probably” will not take a charge this quarter.
But even so, he cautioned that shareholders might not be immediately comforted by the lack of charges.
“Our sense is it will take time for investors to be convinced of Chartis’ reserve adequacy,” Gelb said.
Earlier this year, AIG surprised investors by adding billions of dollars to its reserves for asbestos exposure and other liabilities.
AIG shares were up 0.6 percent to $21.13 in afternoon New York Stock Exchange trading. A spokesman for the company declined to comment on the Barclays report.
(Reporting by Ben Berkowitz, editing by Gerald E. McCormick)
Was this article valuable?
Here are more articles you may enjoy.