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American International Group, Inc. (AIG)
:AIG
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American International Group
(NYSE:AIG)
70Outperform
Positive Factors
Expense Ratios
AIG's investor day presentation points to better expense ratios than consensus.
Growth and Earnings
Management focused on how technology will enable the next leg of growth and earnings.
Negative Factors
Pricing Power
Pricing-power within the large employer marketplace where AIG primarily operates continues to be 'soft,' possibly resulting in margin pressure.
Return on Equity
Analyst's forecasted return on equity for AIG is reduced to approximately 11.6% from an earlier estimate of around 13%.
American International Group (AIG) vs. S&P 500 (SPY)
Market Cap
$51.15B
Dividend Yield1.86%
Average Volume (3M)6.18M
Price to Earnings (P/E)17.0
Beta (1Y)0.57
Revenue Growth-28.56%
EPS Growth1.14%
CountryUS
Employees22,200
SectorFinancial
Sector Strength85
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)5.05
Shares Outstanding593,332,950
10 Day Avg. Volume6,947,419
30 Day Avg. Volume6,178,695
Financial Highlights & Ratios
PEG Ratio14.98
Price to Book (P/B)N/A
Price to Sales (P/S)1.49
Price to Cash Flow (P/CF)6.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$88.33Price Target Upside11.88% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
American International Group Business Overview & Revenue Model
Company DescriptionAmerican International Group, Inc. offers insurance products for commercial, institutional, and individual customers in North America and internationally. The company's General Insurance segment provides general liability, environmental, commercial automobile liability, workers' compensation, casualty, and crisis management insurance products; commercial, industrial, and energy-related property insurance; and aerospace, political risk, trade credit, portfolio solutions, crop, and marine insurance. It also provides professional liability insurance products for a range of businesses and risks, including directors and officers, mergers and acquisitions, fidelity, employment practices, fiduciary liability, cyber risk, kidnap and ransom, and errors and omissions insurance. In addition, this segment offers personal auto and property insurance, such as auto, homeowners, umbrella, yacht, fine art, and collections; voluntary and sponsor-paid personal accident; supplemental health products; extended warranty insurance products; and travel insurance products. Its Life and Retirement segment offers variable annuities, index and fixed annuities, and retail mutual funds; and financial planning and advisory services; record-keeping, plan administrative, and compliance services; and term life and universal life insurance. It also provides stable value wrap products, and structured settlement and pension risk transfer annuities; and corporate- and bank-owned life insurance and guaranteed investment contracts. This segment sells its products through independent marketing organizations, independent insurance agents, financial advisors, direct marketing, banks, and broker-dealers. The company was founded in 1919 and is headquartered in New York, New York.
How the Company Makes MoneyAIG makes money primarily through underwriting insurance policies and investing the premiums collected from policyholders. The company offers a diverse portfolio of insurance products, including commercial and personal insurance, life insurance, and retirement products. Key revenue streams include premiums from its general insurance segment, which covers property, casualty, and specialty insurance, as well as income from its life and retirement segment, offering products like annuities, life insurance, and pension risk transfer. Additionally, AIG generates investment income by investing reserves from collected premiums in bonds, equities, and other financial instruments. Strategic partnerships and reinsurance agreements also play a role in managing risk and enhancing revenue potential.
American International Group Financial Statement Overview
Summary
AIG's financial performance reflects a mixed picture, characterized by robust cost management and a strong equity position but challenged by declining revenues and inconsistent free cash flow. The company's ability to manage leverage is commendable, yet the recent downturn in profitability and cash flow growth warrants caution. Future stability hinges on reversing revenue decline and enhancing cash flow generation.Income Statement
AIG exhibits fluctuating revenue trends with a notable decline in recent years. Despite this, the company maintains a strong gross profit margin of 100% due to total revenue equating to gross profit, indicating effective cost management. However, the recent EBIT and net profit margins have decreased, indicating pressure on operational efficiency and profitability.63
Positive
Balance Sheet
AIG's balance sheet shows a strong equity base with a debt-to-equity ratio of 0.21, signaling leverage control. The equity ratio stands at 26.3%, reflecting solid asset financing through equity. However, fluctuating equity levels and a decrease in total assets raise concerns about growth sustainability.70
Positive
Cash Flow
AIG's cash flow analysis reveals variability in free cash flow, with a significant decline in recent periods. The operating cash flow to net income ratio is healthy at 1.25, indicating good conversion of accounting profits to cash. However, the negative free cash flow growth rate poses risks to liquidity and financial flexibility.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 27.27B | 47.25B | 54.77B | 51.96B | 43.84B | Gross Profit |
| 27.27B | 47.25B | 54.77B | 51.96B | 43.84B | EBIT |
| 3.87B | 3.86B | 14.30B | 13.35B | -7.29B | EBITDA |
| 7.47B | 8.07B | 18.71B | 17.89B | -3.17B | Net Income Common Stockholders |
| -1.40B | 3.64B | 10.23B | 10.37B | -5.94B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 15.76B | 2.15B | 240.57B | 292.76B | 292.53B | Total Assets |
| 161.32B | 539.31B | 526.63B | 596.11B | 586.48B | Total Debt |
| 8.76B | 22.39B | 27.18B | 30.16B | 37.53B | Net Debt |
| 7.46B | 20.23B | 25.14B | 27.96B | 34.71B | Total Liabilities |
| 118.77B | 488.00B | 484.40B | 30.16B | 37.53B | Stockholders Equity |
| 42.52B | 45.35B | 40.00B | 65.96B | 66.36B |
| Cash Flow | Free Cash Flow | |||
| 3.27B | 6.24B | 4.21B | 5.53B | 2.85B | Operating Cash Flow |
| 3.27B | 6.24B | 4.21B | 6.28B | 1.04B | Investing Cash Flow |
| 1.67B | -7.02B | -3.63B | -3.28B | -6.20B | Financing Cash Flow |
| -5.06B | 782.00M | -676.00M | -3.73B | 5.06B |
American International Group Technical Analysis
Negative
78.95
Price Trends
79.32
Negative
76.39
Positive
75.20
Positive
Market Momentum
2.00
Negative
70.87
Negative
71.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIG, the sentiment is Negative. The current price of 78.95 is below the 20-day moving average (MA) of 83.61, below the 50-day MA of 79.32, and above the 200-day MA of 75.20, indicating a neutral trend. The MACD of 2.00 indicates Negative momentum. The RSI at 70.87 is Negative, neither overbought nor oversold. The STOCH value of 71.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AIG.
American International Group Risk Analysis
American International Group disclosed 36 risk factors in its most recent earnings report. American International Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
American International Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $36.17B | 7.85 | 22.02% | ― | 26.24% | -3.87% | |
79 Outperform | $35.23B | 11.93 | 19.58% | 1.60% | 8.19% | 29.77% | |
70 Outperform | $51.15B | 17.02 | 7.10% | 1.86% | -28.56% | 1.14% | |
68 Neutral | $9.66B | 13.84 | 9.36% | 4.72% | -5.03% | ― | |
66 Neutral | $17.89B | 11.88 | 14.28% | 3.67% | 18.02% | 171.70% | |
66 Neutral | $15.41B | 13.29 | 61.74% | 1.91% | 16.81% | 14.00% | |
63 Neutral | $14.39B | 9.81 | 8.95% | 4.37% | 16.38% | -11.64% |
* Financial Sector Average
Performance Comparison
AIG
American International Group
78.95
2.74
3.60%
AEG
Aegon
5.75
-0.25
-4.17%
ACGL
Arch Capital Group
87.83
-2.08
-2.31%
HIG
Hartford Financial
113.57
12.57
12.45%
PFG
Principal Financial
72.94
-8.76
-10.72%
EQH
Equitable Holdings
45.10
8.10
21.89%
American International Group Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: 4.49% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance in terms of underwriting and strategic initiatives, with significant capital management achievements. However, increased catastrophe losses and expense management challenges slightly tempered the overall positive outlook.Highlights
Strong Fourth Quarter Performance
General Insurance reported strong net premiums written of $6.1 billion, an increase of 7% year-over-year. Adjusted after-tax income per share grew 5% year-over-year to $1.30 per share.
Disciplined Capital Management
AIG reduced shares outstanding by 12% and increased the quarterly dividend per share by 11%, resulting in the return of $8.1 billion of capital to shareholders.
Significant Strategic Initiatives
AIG deconsolidated Corebridge Financial, achieving a four-year journey milestone, and closed on multiple business divestitures to simplify operations.
Generative AI Implementation
AIG launched its first generative AI solution, AIG Underwriter Assist, to support business growth and improve underwriting efficiency.
Positive Reinsurance Outcomes
AIG successfully maintained its reinsurance purchasing strategy with strong renewals and launched a new reinsurance syndicate at Lloyd's in partnership with Blackstone.
Lowlights
Higher Catastrophe Losses
Fourth quarter underwriting income decreased by $156 million due to higher catastrophe losses, including $224 million from Hurricane Milton.
Impact of California Wildfires
The California wildfires resulted in a significant loss event with expected impacts of approximately $500 million for AIG, before reinstatement premiums.
Expense Ratio Concerns
The expense ratio remained flat despite absorbing more AIG parent expenses. Efforts to manage expenses continue, but challenges remain.
Company Guidance
During the fourth quarter of fiscal year 2024, AIG demonstrated strong financial performance with significant growth metrics. The company reported net premiums written of $6.1 billion, marking a 7% increase year-over-year, driven by an 8% growth in Global Commercial lines. Global Commercial generated $1.1 billion in new business, a 16% rise year-over-year, with a retention rate of 86% across its portfolio. Net premiums earned grew by 6% year-over-year to $6 billion. Additionally, AIG's adjusted after-tax income per share increased by 5% year-over-year, reaching $1.30 per share. The company achieved a calendar year combined ratio of 92.5% and an accident year combined ratio, excluding catastrophes, of 88.6%. These results were achieved alongside rigorous expense discipline and strategic divestitures, including the sale of Crop Risk Services, Validus Re, and the global personal travel and assistance business.American International Group Corporate Events
Stock BuybackBusiness Operations and Strategy
AIG Announces $7.5 Billion Share Repurchase Plan
Positive
Mar 31, 2025
On March 31, 2025, American International Group hosted its 2025 Investor Day, where it announced a new share repurchase authorization of up to $7.5 billion, effective April 1, 2025. This move reflects AIG’s strategic focus on enhancing shareholder value and signifies its confidence in its financial position and future growth prospects.
Executive/Board ChangesBusiness Operations and Strategy
AIG Appoints Juan Perez to Board of Directors
Positive
Feb 20, 2025
On February 19, 2025, American International Group, Inc. (AIG) appointed Juan Perez, a prominent technology executive with extensive experience in artificial intelligence and digital transformation, to its Board of Directors. This strategic move aims to enhance AIG’s data and digital strategy, aligning with its focus on delivering exceptional value to clients and stakeholders and positioning the company for long-term success.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.