20th Century Industries Announces New Earthquake Claims Estimates and Partnership with American International Group

20th Century Industries, a leading provider of insurance services, has announced a significant update on its earthquake claims and expenses related to the January 17 Northridge earthquake. The company now expects earthquake claims to total $900 million, up from its previous estimate of $815 million. This increase is due to the company's assessment of additional damage and expenses. To address this financial burden, 20th Century Industries has partnered with American International Group (AIG) to access additional capital.

Key Takeaways:

• 20th Century Industries expects earthquake claims to total $900 million, a $85 million increase from its previous estimate.
• The company has paid $722 million to customers for earthquake damages and related expenses as of December 7.
• 20th Century Industries has paid $46 million for claim adjustment expenses, primarily for independent adjuster services.
• The company plans to hold a special shareholder's meeting on December 15 to approve a capitalization plan with AIG.
• The capitalization plan with AIG includes the issuance of convertible preferred stock and warrants, with 20th Century receiving $216 million.
• An additional $70 million is available to cover claims development in excess of $850 million.
• The agreement includes a strategic alliance for the development of joint ventures for the sale of insurance outside California.
• Regulatory authorities have approved the capitalization proposal, with closure expected on December 16 following shareholder approval.

Statistics:

• Earthquake claims are expected to total $900 million.
• 20th Century Industries has paid $722 million to customers for earthquake damages and related expenses.
• Claim adjustment expenses total $46 million.
• 20th Century Industries will receive $216 million from AIG.
• An additional $70 million is available to cover claims development in excess of $850 million.
• The capitalization proposal had been approved by regulatory authorities as of December 7.

Sources:

• "20th Century Industries Announces New Information Concerning Claims and Expenses, Relating to the Jan. 17 Northridge Earthquake." Business Wire, December 8, 1994.
• 20th Century Industries press release on the capitalization plan with AIG.
• American International Group (AIG) press release on the partnership with 20th Century Industries.