AIG Q4 Earnings Beat Estimates, Up Y/Y on Solid Underwriting

American International Group, Inc. AIG reported fourth-quarter 2025 adjusted earnings per share of $1.96, which topped the Zacks Consensus Estimate by 3.5%. The bottom line surged 51% year over year.

Adjusted operating revenues advanced 1.5% year over year to $6.9 billion. The top line missed the consensus mark by 2.2%.

The quarterly results benefited from improved underwriting results in the North America Commercial and Global Personal segments. However, the upside was partially offset by weaker premiums in the Global Personal segment and lower investment income.

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 Q4 Operational Update

Net premiums written totaled $6 billion, reflecting a 1% year-over-year decline. Growth in Global Commercial was offset by a decline in Global Personal.

Total net investment income declined 34% year over year to $872 million, missing consensus estimates by 12.9%, mainly due to lower fair value gains, reduced Corebridge share-sale gains and weaker alternative investment income, partially offset by higher fixed maturity income. AIG retains a 10.1% stake in Corebridge.

Total benefits, losses and expenses amounted to $5.9 billion, increasing 4.6% year over year, mainly due to higher general operating and other expenses, along with lower gains on divestitures.

Adjusted return on equity improved 300 basis points year over year to 10.2%, reflecting enhanced profitability and capital efficiency.

General Insurance underwriting income rose to $670 million, marking a 48% year-over-year increase and beating the Zacks Consensus Estimate by 11.1%.

The segment’s combined ratio improved by 370 basis points to 88.8, reflecting significantly stronger underwriting performance compared with the prior-year quarter.

Segmental Performances of AIG

General Insurance – North America Commercial

The segment’s net premiums written increased 3% year over year to $2.3 billion in the fourth quarter, primarily driven by growth in Programs, Western World and Excess Casualty, partly offset by a fall in Property.

Underwriting income surged to $330 million compared with $25 million in the prior-year quarter, driven mainly by lower catastrophe-related losses and favorable prior-year development, net of reinsurance. The combined ratio improved by 1,410 basis points to 84.7%, reflecting significantly stronger underwriting performance year over year.

General Insurance – International Commercial

The segment reported net premiums written of $2.2 billion, up 5% year over year on a reported basis and 4% on a comparable basis, supported by growth in Global Specialty and Casualty lines.

Underwriting income declined 29% year over year to $248 million in the quarter and missed the Zacks Consensus Estimate by 15.1%. The combined ratio deteriorated 570 basis points to 88.8%, primarily due to higher catastrophe-related losses and an elevated expense ratio.

General Insurance – Global Personal

Net premiums written totaled $1.6 billion, declining 12% on a reported basis and 6% on a comparable basis. The decrease was primarily attributable to changes in reinsurance structures within the U.S. High Net Worth business, as well as lower warranty costs.

Underwriting income rose nearly 12% year over year to $92 million. The combined ratio improved 110 basis points to 94.3%, driven by a lower accident year combined ratio and reduced catastrophe-related losses.

Other Operations

Net investment income and other declined 24% year over year to $75 million in the quarter under review, primarily due to lower dividend income received from Corebridge and decreased yields. Interest expense increased 8% year over year to $100 million, reflecting the impact of debt interest savings, partly offset by new issuance. Adjusted pre-tax loss narrowed 14% year over year to $129 million.

Financial Position of AIG (As of Dec. 31, 2025)

AIG ended the fourth quarter with a cash balance of $1.27 billion, compared with $1.30 billion at year-end 2024. Total assets stood at $161.25 billion, slightly lower than $161.32 billion at the end of 2024.

Long-term debt increased to $9 billion, up from $8.8 billion at year-end 2024. Total shareholders’ equity declined to $41.1 billion, compared with $42.5 billion at year-end 2024.

Adjusted book value per share improved to $78.02, up from $73.79 in the prior-year quarter.

AIG’s Capital Deployment Update

AIG returned capital to its shareholders through approximately $567 million in share repurchases and $242 million in dividends during the fourth quarter of 2025.

Full-Year 2025 Update

American International reported total revenues of $26.8 billion in 2025, representing a 1.8% decline from 2024. However, adjusted earnings increased 43.2% year over year to $7.09 per share, driven by higher underwriting income and stronger net investment income within the general insurance segment. Total benefits, losses and expenses declined 2.1% to $22.9 billion in 2025 compared with the 2024 year-end level.

The combined ratio improved by 170 basis points to 90.1.

American International’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

Companies belonging to the broader Finance space, like Chubb Limited (CB, Arch Capital Group Ltd. ACGL and The Progressive Corporation PGR, have also reported results for the December quarter. Here’s how they have performed:

Chubb reported fourth-quarter 2025 core operating income of $7.52 per share, which beat the Zacks Consensus Estimate by 13.9%. The bottom line improved 24.9% year over year. CB’s operating revenues improved 7.4% year over year to $15.3 billion. The top line beat the Zacks Consensus Estimate by 1.7%. Chubb’s strong performance was driven by solid underwriting profit, robust premium growth and record investment income.

Arch Capital reported fourth-quarter 2025 operating income of $2.98 per share, which beat the Zacks Consensus Estimate by 19.7%. The bottom line increased 31.9% year over year. ACGL’s operating revenues of $4.7 billion increased 4.4% year over year, driven by higher net premiums earned and net investment income. Revenues surpassed the Zacks Consensus Estimate by 2% on higher premiums in its Insurance segment and improved net investment income. These positives were partially offset by higher taxes.

The Progressive’s fourth-quarter 2025 earnings per share of $4.67 beat the Zacks Consensus Estimate by 5.2%. The bottom line increased 14.4% year over year. PGR’s operating revenues increased 10.6% year over year to $22.49 billion and beat the consensus estimate by 2.5%. Net premiums earned grew 10% to $21 billion. The reported figure surpassed the Zacks Consensus Estimate of $20.9 billion.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research