Insurer American International Group sent fresh tremors through financial markets after raising its estimate of losses during October and November from insuring mortgage-related instruments from $1bn to nearly $5bn, sending its shares 11 per cent lower in New York. AIG produced the revised figures after its auditors, PwC, concluded that there was a “material weakness” in the way it valued its exposure - a worrisome development when a string of financial firms are about to release audited accounts for 2007.
