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1. Company Snapshot

1.a. Company Description

American International Group, Inc.offers insurance products for commercial, institutional, and individual customers in North America and internationally.The company's General Insurance segment provides general liability, environmental, commercial automobile liability, workers' compensation, casualty, and crisis management insurance products; commercial, industrial, and energy-related property insurance; and aerospace, political risk, trade credit, portfolio solutions, crop, and marine insurance.


It also provides professional liability insurance products for a range of businesses and risks, including directors and officers, mergers and acquisitions, fidelity, employment practices, fiduciary liability, cyber risk, kidnap and ransom, and errors and omissions insurance.In addition, this segment offers personal auto and property insurance, such as auto, homeowners, umbrella, yacht, fine art, and collections; voluntary and sponsor-paid personal accident; supplemental health products; extended warranty insurance products; and travel insurance products.Its Life and Retirement segment offers variable annuities, index and fixed annuities, and retail mutual funds; and financial planning and advisory services; record-keeping, plan administrative, and compliance services; and term life and universal life insurance.


It also provides stable value wrap products, and structured settlement and pension risk transfer annuities; and corporate- and bank-owned life insurance and guaranteed investment contracts.This segment sells its products through independent marketing organizations, independent insurance agents, financial advisors, direct marketing, banks, and broker-dealers.The company was founded in 1919 and is headquartered in New York, New York.

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1.b. Last Insights on AIG

American International Group, Inc.'s recent performance was driven by a 51% EPS surge in Q4, beating estimates due to underwriting strength. The company's underwriting improvements are seen as structural, with stable to slightly narrower margins expected. AIG's robust balance sheet, low leverage, and high credit rating support financial resilience. The company also offers a 2.4% dividend yield and ongoing share buybacks, which enhance shareholder value. Its Q4 2025 adjusted after-tax income per diluted share reached $1.96, a 51% year-over-year increase. (Source: American International Group Inc (AIG) Q4 2025 Earnings Call Highlights)

1.c. Company Highlights

2. AIG's Strong Q4 and Full-Year 2025 Results

AIG reported a robust fourth quarter and full-year 2025 financial performance, with adjusted after-tax income per diluted share reaching $1.96, a 51% increase year over year, surpassing analyst estimates of $1.9. The company's underwriting income was $670 million, a 48% increase year over year. For the full year 2025, AIG's adjusted after-tax income per diluted share was $7.09, a 43% increase year over year, with adjusted after-tax income of $4 billion, a 24% increase year over year.

Publication Date: Feb -12

📋 Highlights
  • Adjusted EPS Growth: Q4 2025 adjusted after-tax income per diluted share rose 51% YoY to $1.96, with full-year adjusted EPS up 43% to $7.09.
  • Underwriting Income Milestone: Full-year underwriting income reached $2.3 billion (22% YoY), exceeding $2 billion for the first time since 2008.
  • Expense Ratio Progress: 2025 expense ratio fell to 31.1% (90 bps improvement YoY), nearing the 2027 target of sub-30%.
  • Capital Returns: AIG returned $6.8 billion to shareholders in 2025, including $5.8 billion in buybacks and a 12.5% dividend increase.
  • Reinsurance Savings: Property catastrophe rate decreases exceeded 15% in January 1 renewals, driving significant year-over-year cost savings.

Underwriting Profitability

AIG's underwriting income of $2.3 billion for the full year 2025 represented a 22% increase year over year, exceeding $2 billion for the first time since 2008, excluding divested businesses. The accident year combined ratio was 88.3%, and the calendar year combined ratio was 90.1%, both outstanding results. The company's expense ratio ended 2025 at 31.1%, down 90 basis points from the prior year, and remains focused on achieving its Investor Day target of a sub-30% expense ratio by 2027.

Growth Initiatives

AIG's global commercial net premiums written grew 3% year over year, driven by targeted areas, including programs, which increased 17%, Western World, which was up 14%, and excess casualty, which grew 11%. The company expects low to mid-teens growth in general insurance for the full year 2026, driven by organic growth initiatives, savings from excess of loss reinsurance, and the continued successful conversion of the Everest portfolio.

Valuation and Dividend Yield

With a Price-to-Book Ratio not available, we can consider the P/E Ratio of 13.71 and Dividend Yield of 2.23% to understand what's priced in. AIG's strong financial performance and growth initiatives support its current valuation. The company's Dividend Yield is attractive, and the recent 12.5% increase in the quarterly dividend is a positive sign.

Strategic Transactions and AI Initiatives

AIG achieved enhanced terms and favorable pricing in the January 1 renewal outcomes, with a weighted average risk-adjusted rate decrease for AIG on property catastrophe in excess of 15%. The company also announced several strategic transactions, including a renewal rights deal for Everest's global retail insurance portfolio, and made significant progress in its Gen AI initiatives, deploying Gen AI across its core underwriting and claims processes.

Outlook and Leadership Transition

AIG is confident in its future, with CEO Peter Zaffino handing over the reins to Eric Anderson on February 16. The company remains focused on achieving its financial objectives outlined at its Investor Day, with a strong track record of execution and a solid balance sheet. Analysts estimate next year's revenue growth at 7.1%, indicating a positive outlook for the company.

3. NewsRoom

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17,160 Shares in American International Group, Inc. $AIG Acquired by Coastline Trust Co

08:28

Source: defenseworld.net

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AIG Expands Specialty Reach With McGill Tie-Up, Targets $1.6B Book

Mar -17

Source: zacks.com

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Banco Bilbao Vizcaya Argentaria S.A. Boosts Stock Holdings in American International Group, Inc. $AIG

Mar -17

Source: defenseworld.net

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McGill and Partners and AIG Launch Long-Term Strategic Collaboration in a Major Development for the Subscription Market

Mar -16

Source: businesswire.com

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Ameriprise Financial Inc. Increases Stock Holdings in American International Group, Inc. $AIG

Mar -16

Source: defenseworld.net

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American International Group, Inc. (NYSE:AIG) Receives Consensus Recommendation of “Hold” from Analysts

Mar -13

Source: defenseworld.net

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American International Shows Strong Underwriting Growth: Buy or Hold?

Mar -12

Source: zacks.com

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American International Group, Inc. $AIG Shares Sold by Barclays PLC

Mar -08

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.66%)

6. Segments

General Insurance - North America

Expected Growth: 4.3%

American International Group’s General Insurance - North America operations will benefit from a strong brand presence, increasing demand for commercial insurance, and expansion into emerging markets.

General Insurance - International

Expected Growth: 4.5%

AIG’s international general insurance operations are expected to grow driven by increasing demand for insurance products, expansion into emerging economies, and a focus on digitalization and innovation.

General Insurance - Global Personal

Expected Growth: 4.5%

Increasing demand for personal insurance products, driven by growing consumer awareness and rising disposable incomes, will fuel growth in AIG's global personal general insurance segment.

General Insurance - Net Investment Income

Expected Growth: 5.5%

AIG's General Insurance net investment income is driven by a strong investment portfolio and a disciplined underwriting approach, resulting in stable returns and growth. The segment is expected to benefit from a favorable interest rate environment and a diversified investment portfolio.

Unallocated Changes In The Fair Values of Equity Securities and Aig's Investment In Corebridge

Expected Growth: 5.2%

AIG's unallocated equity securities and Corebridge investment changes are expected to drive growth, fueled by improving market conditions, increased investment yields, and effective capital management strategies.

Unallocated Net Investment Income on Fortitude Re Funds Withheld Assets

Expected Growth: 5.5%

AIG's income from withheld assets of Fortitude Re funds, driven by strategic partnerships, effective risk management, and a strong capital position, is expected to drive growth. The company's efforts to simplify its operating structure and focus on core businesses will also contribute to growth.

Unallocated Net Realized Losses on Fortitude Re Funds Withheld Assets

Expected Growth: 4.5%

American International Group's unallocated losses on withheld assets are expected to decline, driven by the company's efforts to improve underwriting discipline, enhance risk selection, and strengthen reserves.

Unallocated Net Realized Gains on Fortitude Re Funds Withheld Embedded Derivative

Expected Growth: 5.3%

AIG's unrealized gains on withheld embedded derivative funds are driven by increasing investment returns, improved risk management, and a gradual shift towards higher-margin businesses, such as life insurance and retirement services.

Other Operations

Expected Growth: 10.3%

American International Group’s other operations, including asset management and financial services, are poised to grow driven by increasing demand for asset management, diversification strategies, and expanding presence in emerging markets.

7. Detailed Products

General Insurance

AIG's general insurance products provide coverage for individuals and businesses against various risks such as accidents, natural disasters, and liability.

Life Insurance

AIG's life insurance products provide financial protection to individuals and families in the event of death or terminal illness.

Retirement and Savings

AIG's retirement and savings products help individuals plan and save for their retirement goals.

Mortgage Insurance

AIG's mortgage insurance products provide protection to lenders and borrowers against default risks.

Reinsurance

AIG's reinsurance products provide risk management solutions to insurance companies.

Specialty Insurance

AIG's specialty insurance products provide coverage for unique risks such as aviation, energy, and marine.

Employee Benefits

AIG's employee benefits products provide insurance coverage to employees of corporate clients.

8. American International Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for American International Group, Inc. is medium due to the presence of alternative insurance providers and financial institutions that offer similar products and services.

Bargaining Power Of Customers

The bargaining power of customers for American International Group, Inc. is low due to the company's strong brand reputation and diversified product offerings, which reduce the customers' ability to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers for American International Group, Inc. is medium due to the company's dependence on a few large reinsurers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants for American International Group, Inc. is low due to the high barriers to entry in the insurance industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry for American International Group, Inc. is high due to the competitive nature of the insurance industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.05%
Debt Cost 5.05%
Equity Weight 66.95%
Equity Cost 9.08%
WACC 7.75%
Leverage 49.36%

11. Quality Control: American International Group, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Hartford Financial Services

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Growth: 7.3

Quality: 6.6

Yield: 4.0

Momentum: 7.5

Volatility: 10.0

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Yield: 7.0

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A-Score: 6.0/10

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Growth: 3.4

Quality: 5.3

Yield: 8.0

Momentum: 3.0

Volatility: 9.0

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A-Score: 5.7/10

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Growth: 2.8

Quality: 5.7

Yield: 8.0

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A-Score: 5.3/10

Value: 3.9

Growth: 2.6

Quality: 6.3

Yield: 4.0

Momentum: 6.0

Volatility: 9.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

74.51$

Current Price

74.52$

Potential

-0.00%

Expected Cash-Flows