Today’s issue of WorkCompRecap features more financial news, as AIG announces that it expects to record $4.1 billion net charge in Q4 2010 to strengthen loss reserves in its Chartis subsidiaries. Of note is the fact that two of the four main classes of business where the strengthening was applied were related to Workers’ Compensation.
In their release, AIG indicated that claims in their Excess and Primary (Specialty) Workers’ Compensation classes continue to develop “more adversely than expected”. For both classes AIG cited continuing medical inflation, new and often additional treatment specialties such as “pain management,” (their quotes) and longer claim payment periods as their causes for action.
AIG also took special care to note that since 2007 it has reduced its net written premiums for guaranteed cost primary (specialty) workers’ compensation business by almost 70 percent. This seems to fit with comments made last month by Chartis’ President and CEO regarding their exit of nearly $2 billion, and their intention to keep doing so…
Find out more by clicking here.
Also, find out how A.M. Best weighed in after the announcement by clicking here.