Will Lower General Insurance Profit Affect AIG's Q1 Earnings?

Insurance provider American International Group, Inc. AIG is set to report its first-quarter 2025 results on May 1, 2025, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $1.05 per share on revenues of $6.79 billion. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The first-quarter earnings estimate declined by 6 cents over the past 60 days. The bottom-line projection indicates a year-over-year decline of 40.7%. Also, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year decrease of 45.5%.

For 2025, the Zacks Consensus Estimate for American International’s revenues is pegged at $27.84 billion, implying a fall of 15.1% year over year. Also, the consensus mark for 2025 EPS is pegged at $6.15, implying a 24.2% year-over-year decline.

American International beat earnings estimates in three of the past four quarters and missed once, with the average surprise being 0.5%. This is depicted in the figure below.

American International Group, Inc. Price and EPS Surprise

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

Q1 Earnings Whispers for AIG

Our proven model does not conclusively predict an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s not the case here.

AIG has an Earnings ESP of -1.70% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

What’s Shaping AIG’s Q1 Results?

The Zacks Consensus Estimate for first-quarter General Insurance net premiums earned indicates 1.3% year-over-year growth. However, North America and International units are expected to have witnessed year-over-year declines.

The consensus estimate for adjusted pre-tax income from General Insurance indicates around a 27% decline from the year-ago quarter. The same from the Other Operations indicates a lower level of loss in the first quarter of 2025 from the year-ago period.

The Zacks Consensus Estimate for first-quarter combined ratio from the General Insurance segment is pegged at 96.69%, deteriorating from year-ago level of 89.8%. Nevertheless, combined ratio from its international operations indicates an improvement to 84.55% from 88.70% a year ago.

Also, the consensus mark for net investment income suggests a 76.1% decline from the year-ago period. The negatives from divestments are expected to have been partially offset by new business production and robust retention. Lower general operating and other expenses are likely to have provided some impetus.

Stocks That Warrant a Look

While an earnings beat looks uncertain for AIG, here are some companies from the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:

Lemonade, Inc. LMND has an Earnings ESP of +3.40% and is a Zacks #3 Ranked player.

The Zacks Consensus Estimate for Lemonade’s bottom line for the to-be-reported quarter has witnessed one upward revision over the past 60 days against no movement in the opposite direction. The consensus estimate for Lemonade’s revenues for the to be reported quarter indicates 20.9% increase from a year ago.

Trupanion, Inc. TRUP has an Earnings ESP of +220.00% and a Zacks Rank of 3.

The Zacks Consensus Estimate for Trupanion’s bottom line for the to-be-reported quarter indicates a 68.8% year-over-year improvement. The company beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 37.5%.

Arthur J. Gallagher & Co. AJG has an Earnings ESP of +0.53% and a Zacks Rank of 3.

The Zacks Consensus Estimate for Arthur J. Gallagher’s bottom line for the to-be-reported quarter signals a 2.3% increase from a year ago. Arthur J. Gallagher beat earnings estimates in three of the past four quarters and met once, with an average surprise of 2.3%.

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

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