AIG Q2 Earnings Beat on Higher North America Commercial Premiums

American International Group, Inc. AIG reported second-quarter 2025 adjusted earnings per share of $1.81, which outpaced the Zacks Consensus Estimate by 14.6%. The bottom line surged 56% year over year.  

Adjusted operating revenues advanced 3% year over year to $6.8 billion. The top line beat the consensus mark by 0.3%.

The quarterly results benefited on the back of strong investment income and segmental strength in the form of improved underwriting results across North America Commercial and International Commercial segments. A declining expense level also contributed to the upside. However, the upside was partly offset by weak Global Personal segment premiums and lower dividends received from Corebridge Financial, Inc. CRBG.

American International Group, Inc. Price, Consensus and EPS Surprise

American International Group, Inc. price-consensus-eps-surprise-chart | American International Group, Inc. Quote

AIG’s Quarterly Operational Update

Premiums came in at $5.9 billion, which grew 2.2% year over year in the quarter under review. Total net investment income climbed 48.1% year over year to $1.5 billion on the back of a favorable change in the fair value of AIG's equity stake in Corebridge and increased income from the sale of fixed maturity securities. The metric outpaced the Zacks Consensus Estimate of $946 million. The company now has a 21% ownership interest in Corebridge. 

Total benefits, losses and expenses of $5.5 billion declined 6.7% year over year on the back of lower general operating and other expenses.

Adjusted return on equity of AIG improved 360 basis points year over year to 9.7%.

Segmental Performances of AIG

General Insurance – North America Commercial

The segment’s net premiums written grew 4% year over year to $2.9 billion in the second quarter, attributable to strength in Retail Casualty, Lexington Casualty, Western World, Glatfelter and Programs. 

Underwriting income of $301 million soared 58% year over year on the back of a decline in catastrophe losses and more favorable prior-year development. Catastrophe-related losses, net of reinsurance, came in at $101 million. The combined ratio improved 430 bps year over year to 85.9%.

General Insurance – International Commercial

The segment recorded net premiums written of $2.3 billion, which inched up 2% year over year on a reported basis and 1% on a comparable basis. The metric benefited from expansion in Casualty and Global Specialty. 

Underwriting income advanced 30% year over year to $300 million in the quarter under review. Catastrophe-related charges were $29 million. The combined ratio of 85.9% improved 270 bps year over year as a result of lower catastrophe losses and more favorable prior-year development.

General Insurance – Global Personal

Net premiums written totaled $1.7 billion, which tumbled 11% on a reported basis and 3% on a comparable basis. The metric was hit by an adverse impact from High Net Worth quota share. 

Underwriting income increased nearly threefold year over year to $25 million. Catastrophe-related charges were $40 million in the second quarter. The combined ratio of 98.5% improved 90 bps year over year on the back of a declining acquisition ratio.

Other Operations

Net investment income and other dropped 35% year over year to $92 million in the quarter under review due to a lower dividend income received from Corebridge. 

Interest expenses of $101 million decreased 9% year over year on the back of a declining debt level. Adjusted pre-tax loss narrowed from $163 million in the prior-year quarter to $106 million.

Financial Position of AIG (As of June 30, 2025)

AIG exited the second quarter with a cash balance of $1.8 billion, which climbed 40.2% from the 2024-end level. Total assets of $166 billion increased 2.9% from the figure at 2024-end. 

Long-term debt amounted to $9.1 billion, up 3.8% from the figure as of Dec. 31, 2024. 

Total shareholders’ equity slipped 2.4% from the 2024-end level to $41.5 billion. Total debt to total capital was 17.9% at the second-quarter end, which improved 20 bps year over year.

Adjusted book value per share improved 5.3% year over year to $76.62.

AIG’s Capital Deployment Update

AIG rewarded its shareholders to the tune of share repurchases of $1.8 billion and dividends of $254 million in the second quarter.

AIG’s Zacks Rank

AIG currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported second-quarter 2025 results so far, the bottom-line results of The Hartford Insurance Group, Inc. HIG and AXIS Capital Holdings Limited AXS beat the respective Zacks Consensus Estimate.

Hartford Insurance reported second-quarter 2025 adjusted operating earnings of $3.41 per share, which surpassed the Zacks Consensus Estimate by 23.1%. The bottom line climbed 36% year over year. HIG's operating revenues rose 9.9% year over year to $4.9 billion. The top line beat the consensus mark by 0.2%. Earned premiums of Hartford amounted to $5.96 billion, which advanced 6.9% year over year. Pre-tax net investment income improved 10.3% year over year to $664 million. 

Pretax income climbed 36.6% year over year to $1.2 billion. Revenues in the Business Insurance segment grew 10.9% year over year to $3.87 billion in the second quarter. Core earnings of $697 million improved 26% year over year. The underlying combined ratio deteriorated 60 bps year over year to 88%. The Personal Insurance segment’s revenues of $1 billion advanced 10.1% year over year. Core earnings were $94 million against the prior-year quarter’s core loss of $4 million 

AXIS Capital’s second-quarter 2025 operating income of $3.29 per share beat the Zacks Consensus Estimate by 14.2%. The bottom line increased 12.2% year over year. Total operating revenues of $1.6 billion missed the Zacks Consensus Estimate by 3.2%. The top line, however, rose 5.6% year over year. Net premiums written increased 4% to $1.6 billion. Net investment income decreased 2% year over year to $187 million. 

Pre-tax catastrophe and weather-related losses and net of reinsurance, were $86 million, wider than the year-ago loss of $47 million, primarily attributable to California Wildfires. AXIS Capital’s underwriting income of $189.2 million increased 17.4% year over year. The combined ratio improved 150 bps to 88.9%. In the Insurance segment, net premiums written increased 8.1% year over year to $1.3 billion. Underwriting income of $151.6 million increased 31.1% year over year. The Reinsurance segment’s net premiums written decreased 9.1% year over year to $344.9 million.

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