Feb 14 (Reuters) - American International Group Inc, the largest commercial insurer in the United States and Canada, reported a bigger quarterly loss, as company recorded a $5.6 billion charge related to measures to reduce reserve additions.
The company also raised its share buyback program by up to $3.5 billion on Tuesday.
AIG’s net loss widened to $3.04 billion, or $2.96 per share, in the fourth quarter ended Dec. 31, from $1.84 billion, or $1.50 per share, a year earlier.
The fourth quarter included a $5.6 billion, or $3.56 per share, impact from prior year adverse reserve development.
AIG Chief Executive Peter Hancock said that the adverse reserve development cover reduces the risk of further reserve additions in some of the most volatile lines.
“... we responded definitively to emerging severity trends that we believe are materially impacting the overall U.S. casualty market,” he said in a statement.
AIG agreed last month to pay about $10.2 billion to Warren Buffett’s Berkshire Hathaway Inc to take on many long-term risks on U.S. commercial insurance policies it has already written.
The New York-based insurer had then said it would take a charge related to the deal in the fourth quarter.
On an operating basis, the company reported a loss of $2.72 per share.
Total general operating expenses fell 9.6 percent to $2.48 billion.
The insurer is looking to cut its gross general operating expenses by $1.6 billion by the end of 2017. (Reporting by Nikhil Subba in Bengaluru; Editing by Sriraj Kalluvila)