After a shocker last week – announcing a $3.6 million charge for boosting claims reserves – AIG said this week it still expects to record a 2003 profit of around $16.6 billion, excluding realised investment gains and losses. That’s good news for the struggling giant, whose stocks last year fell to a four-year low.

Chairman Maurice Greenberg said in New York that no actuarial calculation could have predicted the explosion of litigation in the US that has resulted in an enormous increase in the frequency and severity of liability claims and judgments, and which he said was responsible for the company’s massive losses for 2002.