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American International Group, Inc. AIG reported third-quarter 2025 adjusted earnings per share of $2.20, which topped the Zacks Consensus Estimate by 31%. The bottom line surged 77% year over year.
Adjusted operating revenues advanced 3.2% year over year to $7.1 billion. The top line beat the consensus mark by 3%.
The strong quarterly results benefited on the back of strong segmental strength in the form of improved underwriting results across the 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.
American International Group, Inc. price-consensus-eps-surprise-chart | American International Group, Inc. Quote
Premiums came in at $6.1 billion, which grew 2.2% year over year in the quarter under review. Total net investment income declined 20.7% year over year to $772 million on the back of a favorable change in the fair value of AIG's equity stake in Corebridge. The metric missed the Zacks Consensus Estimate of $990 million. The company now has a 15.5% ownership interest in Corebridge.
Total benefits, losses and expenses of $5.6 billion declined 7.6% year over year on the back of lower general operating and other expenses.
Adjusted return on equity of AIG improved 470 basis points year over year to 11.6%.
The segment’s net premiums written were in line year over year at $2.4 billion in the third quarter, attributable to strength in Lexington and Retail Casualty, Western World and Programs.
Underwriting income of $384 million soared 300% 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 $68 million. The combined ratio improved to 82.6% from a year-ago ratio of 95.5%.
The segment recorded net premiums written of $2.1 billion, which increased 3% year over year on a reported basis and 1% on a comparable basis. The metric benefited from expansion in Global Specialty and Property.
Underwriting income advanced 3% year over year to $330 million in the quarter under review. Catastrophe-related charges were $19 million. The combined ratio of 84.9% deteriorated 60 bps year over year as a result of lower catastrophe losses.
Net premiums written totaled $1.7 billion, which tumbled 11% on a reported basis and 4% on a comparable basis. The metric was hit by an adverse impact from the U.S. High Net Worth business.
Underwriting income increased nearly fourfold year over year to $79 million. Catastrophe-related charges were $13 million in the third quarter. The combined ratio of 95.2% improved 360 bps year over year on the back of lower catastrophe-related charges and an improved expense ratio.
Net investment income and other dropped 40% year over year to $72 million in the quarter under review due to a lower dividend income received from Corebridge.
Interest expenses of $100 million decreased 9% year over year on the back of a declining debt level. Adjusted pre-tax loss narrowed from $135 million in the prior-year quarter to $116 million.
AIG exited the third quarter with a cash balance of $1.6 billion, which climbed 22% from the 2024-end level. Total assets of $163.4 billion increased 1.3% from the figure at 2024-end.
Long-term debt amounted to $9.1 billion, up 3.7% from the figure as of Dec. 31, 2024.
Total shareholders’ equity slipped 3.4% from the 2024-end level to $41.1 billion. Total debt to total capital was 18% at the third-quarter end, which deteriorated 10 bps year over year.
Adjusted book value per share improved 4.2% year over year to $77.04.
AIG rewarded its shareholders to the tune of share repurchases of around $1.3 billion and dividends of $250 million in the third quarter.
AIG currently carries a Zacks Rank #3 (Hold).
Here are three companies from the Finance space that are likely to report their respective quarterly earnings soon.
HCI Group, Inc. HCI has a Zacks Rank of 2 (Buy) at present. The Zacks Consensus Estimate for HCI’s bottom line for the to-be-reported quarter is pegged at $2.35 per share, indicating 400% year-over-year growth. HCI Group’s earnings beat estimates in each of the past four quarters, with an average surprise of 41.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Palomar Holdings, Inc. PLMR has a Zacks Rank of 3 at present. The Zacks Consensus Estimate for PLMR’s bottom line for the to-be-reported quarter is pegged at $1.60 per share, indicating 30.1% year-over-year growth. Palomar Holdings’ earnings beat estimates in each of the past four quarters, with an average surprise of 14.7%.
Essent Group Ltd. ESNT currently has a Zacks Rank #3. The Zacks Consensus Estimate for ESNT’s bottom line for the to-be-reported quarter of $1.75 per share indicates 6.1% year-over-year growth. It remained stable over the past week. Essent Group’s earnings beat estimates in two of the last four quarters and missed twice, with an average surprise of 2.1%.
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This article originally published on Zacks Investment Research (zacks.com).
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