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Non-Tech : Berkshire Hathaway Class B -- Ignore unavailable to you. Want to Upgrade?

To: Duker who wrote (1333)	2/10/2000 3:29:00 PM
From: Duker	Read Replies (1) \| Respond to of 1652

Comments from M.R. Greenberg (AIG): At December 31, 1999, AIG's consolidated assets approximated $267 billion, an increase of 14 percent, compared to $234 billion at the prior year-end. In 1999, shareholders' equity increased to approximately $33 billion, a 10 percent increase over the $30 billion reported at December 31, 1998. [BRK's book at the end of Sept was $55.3 Billion ... AIG has a market cap of $145Bn versus ... not making a qualitative statement here.] Commenting on the fourth quarter and full year results, AIG Chairman M.R. Greenberg said, "AIG had a good fourth quarter and a strong year overall. Our net income for 1999 rose 18.1 percent to a record $5.06 billion. Catastrophe losses in the fourth quarter were a more significant factor for the industry and for AIG than in previous quarters. In particular, the European storms, which are expected to produce insured losses of approximately $6 billion for the industry, were especially severe. AIG's net catastrophe losses in the fourth quarter of $83.0 million impacted adjusted net income by $38 million or $0.03 a share, principally reflecting the net catastrophe losses ($60 million) of AIG's majority-owned reinsurance subsidiary Transatlantic Holdings, Inc. Excluding these losses and realized capital losses, AIG's income as adjusted for the fourth quarter increased 17.4 percent to $1.36 billion, or $0.87 per share. "Worldwide general insurance net premiums written rose 4.7 percent in the fourth quarter and 11.2 percent for the full year 1999. All of these results include the consolidation of Transatlantic Holdings, Inc. and 21st Century Insurance Group in 1999 and in the third and fourth quarters of 1998. We achieved an underwriting profit of $122.2 million in the quarter, and a record $669.2 million for 1999. Excluding catastrophe losses, our combined ratio for the fourth quarter was 96.96, compared to 95.97 in last year's quarter. "In the domestic commercial property-casualty market, we are continuing to see price increases on a broader scale. While commercial rates have increased, they still have a considerable distance to go, given the levels to which many classes had fallen. In AIG's case, our specialty lines continued to post good underwriting results, and we have introduced a wide array of new specialty products in the Domestic Brokerage Group during the past few months. The upswing in global catastrophe losses for the industry, which intensified in the fourth quarter, should result in firmer pricing for both the primary and reinsurance markets worldwide. AIG continues our disciplined underwriting approach, canceling or non-renewing $80 million of inadequately priced business in the quarter and $450 million for the full year 1999. "Our Domestic Personal Lines business had a reasonable quarter. For the year, domestic personal lines produced $2.16 billion in net premiums written, a 52.0 percent increase over the prior year, and a combined ratio of 96.29. The combined ratio deteriorated somewhat in the fourth quarter due to an increase in claims frequency and severity. [Most would complain more about severity versus frequency] (Results for 21st Century Insurance Group, our majority-owned personal lines direct marketing company in the Western United States, are included for the second half of 1998 and the full year in 1999.) 21st Century had a difficult fourth quarter in view of the continued rate pressures in the personal auto market in California. Our Mass Marketing operation continued its strong growth, and new auto insurance business resulting from our joint venture with MBNA is developing well. There are signs that price weakness in personal auto is bottoming out, and we anticipate price increases will be required in 2000 to maintain acceptable underwriting results. --Duker