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Business Environment Article

Business Environment Article - Brockmiller 1 AIG's Chartis...

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Brockmiller 1 AIG's Chartis Unit Faces Questions After Latest Loss NEW YORK -(Dow Jones)- American International Group Inc. (AIG), looking to prove to potential investors that it's nearly completed its turnaround, may face questions about its property-casualty business after the unit posted another loss in 2010. The unit, called Chartis, had already warned investors it would be taking a $4.2 billion charge in the fourth quarter as it added to reserves. But even without that expense, Chartis would have had an underwriting loss last year. And AIG warned that global economic conditions and a glut of insurance industry capital will mean "a challenging year" in 2011 as well. Chartis sells coverage on everything from satellites and airplanes to factories in far-flung corners of the world. It protects clients against lawsuits and sells disaster coverage, workers' compensation and product-liability protection. It is a critical component of a scaled-back AIG that is working with the U.S. to sell a 92.1% stake held by the Treasury Department over the next two years. Going forward, Chartis is expected to produce roughly half of AIG's annual operating earnings, with the other half mostly coming from SunAmerica Financial Group, the company's domestic life insurance and retirement services business. The value of policies Chartis sold in the U.S. was off 8% in 2010, after falling 16% in 2009. The company
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