|AIG RISK FINANCE INTRODUCES RISK FINANCING PROGRAM FOR EARNINGS IMPACT OF ADVERSE WEATHER EVENTS|
NEW YORK, April 27, 1998 – American International Group, Inc. (AIG) has announced that AIG Risk Finance, a division of the American International Companies, has introduced Snow, Temperature or Rain Management (STORM), a new risk financing program that helps companies minimize the negative earnings per share (EPS) impact of weather-related events.*|
“Adverse weather events, such as excess rainfall from the current El Niño season, may result in lost revenues or increase the cost of doing business, significantly impacting a company's earnings” said Tobey J. Russ, President, AIG Risk Finance. “By transferring the weather-related risks that are inherent in certain industries, STORM programs can enhance balance sheet strength by protecting revenues and capping expenses in the event of severe and unexpected weather conditions.”
STORM is a risk financing program that combines measurable adverse weather results with economic losses. Adverse weather events covered can include an excess of or shortfall in historical levels of precipitation (rain and/or snow), temperature (degree days), barometric pressure, or any other weather event quantified and measured by an independent source (e.g., National Weather Service, U.S. Meteorological Agency). The economic loss should be company specific and may include exposure triggers which have no correlation to the adverse weather event.
STORM programs are targeted to companies with seasonal earnings/revenues or fixed or seasonal expenditures subject to weather related events; companies with an attendance-driven revenue base affected by adverse weather; or companies with fixed seasonal budgets and expenditures. Potential users of STORM programs would include energy or power companies, airlines, sporting facilities, entertainment and recreational theme parks, and municipalities.
The programs can be designed as a multi-year program or for time periods as short as three months. STORM programs can be written on a first dollar or deduction/retention basis.
For more information on STORM, contact 212/770-5814.
AIG is the leading U.S.-based international insurance organization and among the largest underwriters of commercial and industrial insurance in the United States. Its member companies write property, casualty, marine, life and financial services insurance in approximately 130 countries and jurisdictions, and are engaged in a range of financial services businesses. American International Group, Inc.'s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.
*Snow, Temperature of Rain Management (STORM) is subject to statutory limitations and may not be available in all states. Issuance of coverage is subject to underwriting. Certain exclusions and limitations apply. See terms and conditions for a full description of coverage. Insurance is underwritten by member companies of American International Group, Inc.