In the following video, Motley Fool financial analyst Matt Koppenheffer discusses AIG's (AIG +0.11%) fourth quarter earnings, and what the company meant when it reported that it had "prior year adverse development." He tells investors that the company has a trend when it sets aside money to deal with losses from previous years, to not set enough aside. Matt tells us why he doesn't like to see this, and points to two much more conservative insurers that he prefers, who always have more set aside than they need.
1 Thing That Worries Me About AIG
By Matt Koppenheffer – Feb 22, 2013 at 4:45PM
NYSE: AIG
American International Group
Market Cap
$44B
Today's Change
(0.11%) $0.09
Current Price
$78.94
Price as of October 24, 2025 at 3:27 PM ET
What's behind the phrase, "prior year adverse development?"
About the Author
Matt is the head of the Coverage Team for The Motely Fool's premium products. Previously, he's been . Matt is a heavy user of AI tools and is working on harnessing them to help Fool members. Previously, Matt was GM of Motley Fool Ascent, led The Motley Fool Deutschland, has been an investor on various Fool services, and co-hosted the podcast "Where the Money Is". He also co-authored the book The Astonishing Collapse of MF Global. Matt started his career in San Francisco as a technology-focused investment banker and also worked at a $15 billion private equity company. When he's thinking about how to make Fools smarter, happier, and richer, you can usually find Matt running trails or making a mess in the kitchen. He's a graduate of the University of Pennsylvania, but is a lifelong fan of Penn State football.