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AIGshares slide 15pc on fears over loss reserves

City A.M. Reporter
SHARES in insurance monolith American International?Group (AIG) tumbled nearly 15 per cent yesterday after an analyst raised concerns over its loss reserves.<br /><br />Todd Bault at Sanford Bernstein cut his price target for the stock by 40 per cent over worries that an estimated $11bn (&pound;6.7bn) shortfall in the insurer&rsquo;s loss reserves could have &ldquo;major ramifications&rdquo; in the near future.<br /><br />Most of the deficiency fell in three casualty lines -- workers&rsquo; compensation, general liability and professional liability. Bault said the deficiency, which equates to around $10 per share, came &ldquo;much sooner than we would have expected two years ago&rdquo;.<br /><br />AIG shares fell 14.7 per cent to close at $28.40 after a session low of $28.04. They finished almost 50 per cent down from their 52-week high of $55.90.