In the following video, Motley Fool financial analyst Matt Koppenheffer discusses AIG's (NYSE:AIG) 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.
Matt Koppenheffer owns shares of Berkshire Hathaway, American International Group, and Markel. The Motley Fool recommends American International Group, Berkshire Hathaway, and Markel. The Motley Fool owns shares of American International Group, Berkshire Hathaway, and Markel and has the following options: Long Jan 2014 $25 Calls on American International Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.