American International Group, Inc. (AIG) Q2 2025 Financial Overview
In the second quarter of 2025, American International Group, Inc. (AIG) revealed substantial growth, with adjusted earnings per share reaching $1.81, exceeding the expectations set by the Zacks Consensus Estimate by 14.6%. This figure represents an impressive year-on-year increase of 56%.
Financial Highlights
Adjusted operating revenues climbed to $6.8 billion, marking a 3% increase from last year. This revenue surpassed the consensus estimate by 0.3%, driven by robust investment income and strong performance in various commercial segments.
Despite the positive financial developments, the Global Personal segment saw underwhelming premium levels, which, along with reduced dividends from Corebridge Financial, impacted overall performance.
Detailed Financial Analysis
Premiums and Investment Income
AIG reported $5.9 billion in premiums, which reflected a growth of 2.2% compared to the previous year. The company’s total net investment income soared by 48.1% year-on-year, reaching $1.5 billion. This increase was attributed to favorable changes in the value of AIG’s equity in Corebridge and enhanced income from the sale of fixed maturity securities. The reported investment income also exceeded the Zacks Consensus Estimate of $946 million as AIG maintained a 21% stake in Corebridge.
Costs and Expenses
The total benefits, losses, and expenses dropped by 6.7% year-on-year to $5.5 billion, as a result of reduced general operating costs. AIG’s adjusted return on equity saw a substantial improvement, rising 360 basis points to reach 9.7%.
Segment Performance Overview
General Insurance – North America Commercial
In North America Commercial, net premiums written amounted to $2.9 billion, representing a 4% increase year-over-year. This growth was driven by strengths across various areas such as Retail Casualty and Programs. The segment’s underwriting income surged to $301 million, a remarkable 58% increase due to decreased catastrophe losses. The combined ratio improved by 430 basis points to 85.9%.
General Insurance – International Commercial
The International Commercial segment recorded net premiums written of $2.3 billion, a 2% rise year-over-year. Underwriting income in this segment experienced a 30% increase, reaching $300 million, benefiting from growth in Casualty and Global Specialty areas. The combined ratio stood at 85.9%, reflecting a 270 basis point improvement from the previous year.
General Insurance – Global Personal
In contrast, the Global Personal segment faced challenges, with net premiums written falling to $1.7 billion, an 11% decrease on a reported basis. The adverse impact stemmed from High Net Worth quota share. However, underwriting income increased significantly, nearly tripling to $25 million.
Other Operations Insights
AIG also saw a decline in net investment income from other sources, which dropped by 35% to $92 million, primarily due to reduced dividend income from Corebridge. Interest expenses decreased by 9% to $101 million, attributed to the reduction in debt levels. The adjusted pre-tax loss narrowed significantly, from $163 million in the previous year to $106 million.
Financial Position as of June 30, 2025
At the end of the second quarter, AIG reported cash reserves of $1.8 billion, marking a 40.2% increase since the end of 2024. Total assets rose to $166 billion, a 2.9% growth since last year. The long-term debt stood at $9.1 billion, a 3.8% increase since December 31, 2024.
Shareholder equity slightly decreased by 2.4% to $41.5 billion, while the total debt to total capital ratio improved to 17.9%, an enhancement of 20 basis points from the previous year. The adjusted book value per share also saw a 5.3% increase, reaching $76.62.
Capital Deployment
AIG actively returned capital to its shareholders in Q2 2025, initiating share repurchases totaling $1.8 billion alongside dividends of $254 million.
AIG’s Current Market Position
As of now, AIG holds a Zacks Rank of #3 (Hold). This ranking indicates a neutral stance on the potential for growth in the immediate future.
Performance Comparisons with Other Insurers
In the insurance sector, other companies have also showcased strong performances, with Hartford Insurance Group and AXIS Capital Holdings reporting better-than-expected results.
Hartford Insurance posted adjusted operating earnings of $3.41 per share, exceeding estimates by 23.1%, while operating revenues grew by 9.9% to $4.9 billion. Net investment income for Hartford rose by 10.3%, contributing to overall robust financial health.
Similarly, AXIS Capital recorded an operating income of $3.29 per share, which surpassed expectations by 14.2%. Although total operating revenues of $1.6 billion did not meet the consensus estimate, they still increased by 5.6% year-over-year.
Overall, AIG’s results reflect a resilient performance amid challenges, showcasing substantial growth in critical financial metrics and a proactive approach to shareholder value.
