Keefe Bruyette's analyst, Meyer Shields, has adjusted the price target for American International Group, Inc. (AIG, Financial), boosting it from $94 to $97. The analyst maintains an Outperform rating on AIG, highlighting the company's ongoing improvements in underwriting margins as a key factor that is expected to significantly enhance earnings growth.
AIG Key Business Developments
Release Date: May 02, 2025
- Adjusted After-Tax Income: $702 million or $1.17 per diluted share.
- Net Premiums Written: $4.5 billion, an increase of 8% year over year.
- North America Commercial Insurance Net Premiums Written: Grew 14% year over year.
- General Insurance Expense Ratio: Decreased to 30.5% from 31.8% in the prior-year quarter.
- Accident Year Combined Ratio (as adjusted): 87.8%.
- Calendar Year Combined Ratio: 95.8%, including $520 million in catastrophe losses.
- Capital Returned to Shareholders: $2.5 billion, including $2.2 billion of share repurchases and $234 million of dividends.
- Debt-to-Total Capital Ratio: 17.1%.
- Parent Liquidity: $4.9 billion.
- Share Repurchase Authorization: Increased to $7.5 billion, with approximately $7.1 billion remaining available.
- Quarterly Dividend Increase: 12.5% increase to $0.45 per share.
- Adjusted Pre-Tax Income (APTI): $979 million, a decrease of $379 million from the prior-year quarter.
- General Insurance Gross Premiums Written: $9 billion, an increase of 3% from the prior year.
- Net Investment Income: $845 million, an increase of $4 million year over year.
- Book Value Per Share: $71.38, up 10% from March 31, 2024.
- Adjusted Tangible Book Value Per Share: $67.96, down 8% from March 31, 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- American International Group Inc (AIG, Financial) reported an 8% year-over-year increase in net premiums written, driven by strong growth in global commercial insurance.
- The company achieved a significant improvement in its general insurance expense ratio, decreasing to 30.5% from 31.8% in the prior-year quarter.
- AIG's North America commercial insurance net premiums written grew 14% year over year, with Lexington Casualty experiencing a 27% increase.
- The company demonstrated strong capital management by returning $2.5 billion to shareholders in the first quarter, including $2.2 billion in share repurchases.
- AIG's strategic partnership with TATA Group in India is expected to continue its high growth trajectory, with a compound annual growth rate of 20% projected through 2030.
Negative Points
- AIG faced higher catastrophe losses in the first quarter, primarily due to the California wildfires, which impacted underwriting income.
- The company's financial lines experienced a mid-single-digit rate decrease, indicating pricing pressure in this segment.
- AIG's international commercial insurance segment saw a 130-basis-point increase in the expense ratio due to lean parent allocations.
- The company reported a calendar year combined ratio of 95.8%, which included significant catastrophe losses, highlighting ongoing volatility management challenges.
- AIG's adjusted tangible book value per share decreased by 8% from the previous year, primarily due to the impact of the Corebridge deconsolidation.
