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American International Group (AIG)
NYSE:AIG

American International Group (AIG) AI Stock Analysis

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American International Group

(NYSE:AIG)

Rating:68Neutral
Price Target:
$92.00
▲(8.01%Upside)
AIG's overall stock score is primarily driven by its significant financial challenges, including declining revenue and net losses. However, positive technical analysis and strategic advancements, such as a robust share repurchase plan, bolster the score. A reasonable valuation and strong earnings call performance further support the stock's appeal.
Positive Factors
Expense Management
AIG's investor day presentation points to better expense ratios than consensus.
Financial Flexibility
Low leverage and excess capital provide flexibility for potential M&A deals and shareholder returns.
Growth and Innovation
Management is particularly optimistic about tech enabled growth in the specialty segment, such as Lexington Insurance.
Negative Factors
Capital Returns
The forecast for AIG's stock repurchase levels has been adjusted downward, indicating a reduction in capital returns.
Guidance Risk
There is greater risk at AIG due to the risk of it missing guidance.
Margin Pressure
Pricing-power within the large employer marketplace where AIG primarily operates continues to be 'soft,' possibly resulting in margin pressure.

American International Group (AIG) vs. SPDR S&P 500 ETF (SPY)

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 the underwriting and sale of insurance and financial products. Its revenue streams include premiums from property and casualty insurance, which cover a variety of risks, including property damage, liability, commercial and personal insurance. In addition to this, AIG generates income from its life insurance and retirement products, which include annuities and investment products. The company also earns investment income from its portfolio of invested assets, which includes fixed income securities, equities, and alternative investments. Significant partnerships with brokers, agents, and financial institutions contribute to its distribution network and revenue generation. Furthermore, AIG's focus on risk management and claims services plays a crucial role in maintaining profitability by minimizing losses and optimizing claim outcomes.

American International Group Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 5.37%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
AIG demonstrated strong financial performance in the first quarter with notable growth and strategic advancements, despite challenges from catastrophe losses and tariff-related uncertainties. The company made significant progress in expense management and AI adoption, supporting a strong overall outlook.
Q1-2025 Updates
Positive Updates
Exceptional First Quarter Financial Performance
AIG reported an adjusted after-tax income of $702 million or $1.17 per diluted share. Net premiums written were $4.5 billion, an increase of 8% year-over-year, led by 10% growth in Global Commercial.
Strong Growth in North America Commercial Insurance
North America Commercial Insurance net premiums written grew 14% year-over-year. Lexington grew 23%, led by Lexington Casualty, which grew 27%.
Significant Improvement in Expense Ratios
The general insurance expense ratio decreased to 30.5% in the first quarter from 31.8% in the prior year quarter, with AIG Next initiatives contributing to a 20 basis point improvement.
Continued Progress on Strategic Initiatives
AIG is effectively managing volatility and has made substantial progress on strategic and financial objectives, including strong underwriting results and disciplined expense management.
Advancements in AI Strategy
AIG highlighted its strategy to deploy GenAI end-to-end, showcasing partnerships with Palantir and Anthropic to drive future growth.
Successful Capital Management
AIG returned $2.5 billion of capital to shareholders in the first quarter, including $2.2 billion in share repurchases and a 12.5% dividend increase.
Strong Performance in International Commercial
International Commercial Insurance net premiums written grew 8% year-over-year on an FX-adjusted basis, with Property growing 35% and Marine 17%.
Negative Updates
Impact of Catastrophe Losses
The first quarter included $520 million in catastrophe losses, driven by the California wildfires at $460 million, resulting in a combined ratio of 95.8%.
Uncertainty from Tariffs and Inflation
There is significant uncertainty around the impact of tariffs and inflation on future loss costs, which may affect transactional activity and create further challenges.
Pressure on Financial Lines
Financial Lines experienced a decrease in pricing, with public D&O rates showing signs of improvement but still facing challenges.
Challenges in Property Pricing
Property pricing faced headwinds with decreases noted in Financial Lines, Retail Property, and Lexington Property.
Company Guidance
During AIG's Q1 2025 Financial Results Conference Call, substantial guidance was provided on the company's financial performance and strategic direction. AIG reported an adjusted after-tax income of $702 million or $1.17 per diluted share, with net premiums written at $4.5 billion, marking an 8% increase year-over-year, largely driven by a 10% growth in Global Commercial. The General Insurance expense ratio improved to 30.5% from 31.8% in the prior year, attributed mainly to the divestiture of the travel business. The accident year combined ratio, as adjusted, was 87.8%, the best first quarter result since the financial crisis, while the calendar year combined ratio was 95.8%, including $520 million in catastrophe losses. Additionally, AIG returned $2.5 billion of capital to shareholders, including $2.2 billion in share repurchases, and ended the quarter with a debt-to-total capital ratio of 17.1%. The call highlighted AIG's strategic initiatives, such as the integration of GenAI to drive growth, with endorsements from partners at Palantir and Anthropic. The company also emphasized its disciplined capital management strategy, including a share repurchase authorization of $7.5 billion and a 12.5% increase in quarterly dividends. AIG's strategic focus extends internationally, particularly in the rapidly growing Indian market through its joint venture with Tata Group. Despite challenges such as tariffs and geopolitical uncertainties, AIG remains committed to its long-term financial targets, including achieving a 10%-plus core operating ROE by 2025 and a 20%-plus EPS compound annual growth rate over the next three years.

American International Group Financial Statement Overview

Summary
AIG's financial performance is challenged by declining revenue, net losses, and increased leverage. Positive cash flow is a mitigating factor, but overall financial instability and negative growth trends are concerning.
Income Statement
45
Neutral
The income statement shows a concerning trend with declining revenue over the years, particularly noticeable in the TTM (Trailing-Twelve-Months) period. The gross profit margin has been stable, but the company reported a net loss in both the TTM and 2024, indicating challenges in controlling costs or generating sufficient revenue. EBIT and EBITDA margins have also seen fluctuations, reflecting operational inefficiencies.
Balance Sheet
55
Neutral
The balance sheet indicates moderate financial health with a stable equity ratio, suggesting some level of stability. However, the debt-to-equity ratio has increased, indicating rising leverage that could pose risk if not managed cautiously. Return on Equity (ROE) is negative in the TTM period due to net losses, which is a concern for shareholders.
Cash Flow
60
Neutral
Cash flow analysis shows positive operating cash flow in the TTM period, although lower than previous years. The company has managed to maintain free cash flow despite challenges, but the free cash flow growth rate is negative, and the operating cash flow to net income ratio reflects the impact of net losses on cash generation.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
27.27B27.27B47.25B54.77B51.96B43.84B
Gross Profit
27.27B27.27B47.25B47.24B43.27B35.34B
EBIT
3.63B3.87B3.88B16.38B13.35B-5.83B
EBITDA
7.54B7.47B8.07B18.71B17.89B-3.17B
Net Income Common Stockholders
-1.92B-1.40B3.64B10.23B10.37B-5.94B
Balance SheetCash, Cash Equivalents and Short-Term Investments
267.17B15.76B2.15B240.57B292.76B292.53B
Total Assets
525.06B161.32B539.31B522.23B596.11B586.48B
Total Debt
35.35B8.92B22.39B27.18B30.16B37.53B
Net Debt
32.49B7.62B20.23B25.14B27.96B34.71B
Total Liabilities
457.64B118.77B488.00B478.77B527.20B519.28B
Stockholders Equity
65.67B42.52B45.35B40.97B65.96B66.36B
Cash FlowFree Cash Flow
2.70B3.27B6.24B4.13B6.22B1.04B
Operating Cash Flow
2.70B3.27B6.24B4.13B6.22B1.04B
Investing Cash Flow
4.12B1.67B-7.02B-3.63B-3.28B-6.20B
Financing Cash Flow
-6.60B-5.06B782.00M-602.00M-3.68B5.06B

American International Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price85.18
Price Trends
50DMA
82.89
Positive
100DMA
80.46
Positive
200DMA
77.15
Positive
Market Momentum
MACD
0.92
Negative
RSI
55.29
Neutral
STOCH
80.42
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIG, the sentiment is Positive. The current price of 85.18 is above the 20-day moving average (MA) of 83.98, above the 50-day MA of 82.89, and above the 200-day MA of 77.15, indicating a bullish trend. The MACD of 0.92 indicates Negative momentum. The RSI at 55.29 is Neutral, neither overbought nor oversold. The STOCH value of 80.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 1 New Risks
1.
We are subject to risks from our continuing equity market exposure to Corebridge. There can be no assurances that the anticipated benefits of our sales of Corebridge stock will be achieved. Q4, 2024

American International Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
HIHIG
83
Outperform
$36.74B12.8918.49%1.53%7.55%14.16%
PFPFG
73
Outperform
$17.26B16.509.70%3.78%5.84%-10.64%
73
Outperform
$35.80B9.8018.42%25.29%-23.19%
EQEQH
71
Outperform
$16.66B14.9056.67%1.75%12.41%14.76%
AEAEG
70
Neutral
$11.25B15.979.36%4.09%-5.03%
AIAIG
68
Neutral
$50.34B19.516.13%1.83%-44.30%-33.09%
64
Neutral
$12.86B9.797.78%16985.65%12.28%-7.82%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AIG
American International Group
85.18
10.76
14.46%
AEG
Aegon
7.26
1.25
20.80%
ACGL
Arch Capital Group
92.35
-3.29
-3.44%
HIG
Hartford Financial
126.87
27.67
27.89%
PFG
Principal Financial
76.84
0.44
0.58%
EQH
Equitable Holdings
54.58
14.79
37.17%

American International Group Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
AIG Initiates Cash Tender Offers for Notes
Positive
Jun 2, 2025

On June 2, 2025, American International Group, Inc. announced the initiation of cash tender offers for ten series of its outstanding notes, aiming to purchase up to $300 million in total consideration. This move is part of AIG’s strategic financial management, potentially impacting its debt structure and providing liquidity to noteholders, while also reflecting its ongoing efforts to optimize its capital allocation and strengthen its financial position.

The most recent analyst rating on (AIG) stock is a Buy with a $87.00 price target. To see the full list of analyst forecasts on American International Group stock, see the AIG Stock Forecast page.

Executive/Board ChangesShareholder Meetings
AIG Shareholders Approve Key Proposals at Annual Meeting
Neutral
May 16, 2025

On May 14, 2025, AIG held its Annual Meeting of Shareholders where several key proposals were voted on. The election of directors resulted in the appointment of various individuals to the Board until the 2026 Annual Meeting. Additionally, shareholders approved the continuation of annual Say-on-Pay Votes, aligning with the Board’s recommendation, and ratified the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2025.

The most recent analyst rating on (AIG) stock is a Buy with a $90.00 price target. To see the full list of analyst forecasts on American International Group stock, see the AIG Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
AIG Announces Redemption of 3.900% Notes Due 2026
Neutral
May 15, 2025

On May 15, 2025, American International Group, Inc. announced its decision to redeem all outstanding 3.900% Notes due 2026 on June 26, 2025. The redemption will involve paying the registered holders the principal amount, accrued interest, and a ‘make-whole’ premium. As of the announcement date, $236,160,000 of these notes were outstanding. This move is part of AIG’s financial strategy, potentially impacting its debt structure and stakeholder interests.

The most recent analyst rating on (AIG) stock is a Buy with a $90.00 price target. To see the full list of analyst forecasts on American International Group stock, see the AIG Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
AIG Completes $1.25 Billion Notes Sale
Positive
May 7, 2025

On May 7, 2025, AIG successfully completed the sale of $1.25 billion in aggregate principal amount of notes, consisting of $625 million of 4.850% Notes due 2030 and $625 million of 5.450% Notes due 2035. This strategic financial move is expected to bolster AIG’s financial position and potentially enhance its market competitiveness, offering implications for stakeholders regarding the company’s financial strategy and future growth prospects.

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.

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.