Morgan Stanley has revised its price target for AIG (AIG, Financial), increasing it from $81 to $85, while maintaining an Equal Weight rating on the stock. The adjustment is part of a broader update on the price targets for stocks within the Property and Casualty (P&C) Insurance sector under the firm's coverage. Analysts noted mixed results across different segments but are optimistic about continued growth and margin expansion in AIG's personal lines sector, which is expected to sustain its performance into 2025.
The outlook for the P&C industry remains stable as we move towards 2025, with personal lines and brokers projected to spearhead earnings growth. This anticipation aligns with Morgan Stanley's forward-looking strategy for AIG and similar companies in the insurance sector.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for American International Group Inc (AIG, Financial) is $89.21 with a high estimate of $97.00 and a low estimate of $76.22. The average target implies an upside of 6.22% from the current price of $83.99. More detailed estimate data can be found on the American International Group Inc (AIG) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, American International Group Inc's (AIG, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for American International Group Inc (AIG, Financial) in one year is $84.79, suggesting a upside of 0.95% from the current price of $83.99. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the American International Group Inc (AIG) Summary page.
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.
