BLOOMBERG — Brian Duperreault picked a tough year to shore up AIG's underwriting.

Losses from wildfires in California drove American International Group Inc.'s fourth-quarter catastrophe costs higher than rivals' and beyond what some analysts estimated. The company's results were also dragged down by a nearly $7 billion charge tied to the U.S. tax overhaul that AIG had previously warned investors to expect.

Duperreault, who took over as chief executive officer in May, made progress on commercial underwriting while contending with high costs in one of the worst years for natural disasters on record. He has signaled that the firm is moving back to acquisitions with the January agreement to buy Validus Holdings Ltd.

“2017 represents a starting point from which we expect to build,” Duperreault said Tuesday in the statement announcing fourth-quarter earnings.

AIG's loss in the quarter widened to $6.66 billion, or $7.33 a share, from $3.04 billion or $2.96 a year earlier. Still, the CEO's efforts are paying off, with the underwriting loss at the North American business narrowing 94 percent to $316 million.

AIG had $762 million of catastrophe losses in the fourth quarter, with $572 million related to the California fires. That exceeded the $680 million estimate from Morgan Stanley analysts, who had said the fires might bring costs of about $500 million. The combined ratio for general insurance in the period was 113.3, meaning AIG lost 13.3 cents for every premium dollar after claims and expenses.

The catastrophe costs at AIG surged to a record $4.2 billion for the full year. Economic losses from weather and climate disasters including hurricanes Harvey, Irma and Maria and the California wildfires reached a $306 billion in 2017, the federal government said last month.

AIG's biggest rivals in property & casualty coverage reported lighter costs tied to disasters. Allstate Corp. said this week that 2017 catastrophe losses were $3.23 billion, while Chubb Ltd.'s total was $2.2 billion.

Duperreault, 70, said the $5.56 billion deal to buy Bermuda-based reinsurer Validus is an opportunity for AIG to expand abroad and into new business lines. The CEO said in an interview last month that he also has increased his appetite for reinsurance, which provides backstop coverage for primary insurers.

“Validus has been very, very good at matching risk with capital,” Duperreault said last month. “We're a bigger buyer of reinsurance today than we were before my arrival.” AIG expects to complete the Validus deal in June.

AIG said it added $76 million to its reserves in the fourth quarter.

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