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American International (AIG) Opts for AWS to Boost Efficiency

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American International Group, Inc. (AIG - Free Report) recently selected Amazon.com, Inc.‘s (AMZN - Free Report) cloud computing platform, Amazon Web Services ("AWS") as its preferred public cloud provider. The move is in line with American International’s strategy of large-scale digital transformation.

American International’s move of selecting AWS is expected to support its AIG 200 strategy. It undertook the program, which is a global, multi-year initiative to achieve transformational changes. This initiative, which is costing the company $1.3 billion, provided a $400 million cost saving in 2020 alone. AIG expects to achieve run-rate savings worth $1 billion by 2022-end. These initiatives will lead to operational efficiency and provide an extra boost to its operating margins.

Choosing Amazon’s AWS is expected to help American International to optimize its product portfolio and elevate client experience. It is likely to enable the company in streamlining its operations worldwide and boosting efficiency. Also, the move will help the leading global insurance firm to move most of its workloads off the legacy platforms, thereby enhancing security and market opportunities. This is likely to stimulate its long-term growth process and business expansion.

The latest move is expected to strengthen American International’s relationship with Amazon. Notably, its journey of digital transformation started in 2017 with AWS. The latest move will enable it to further leverage the global infrastructure and financial services expertise of AWS, which recently introduced a managed service named AWS Private 5G.

Zacks Rank & Key Picks

American International currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the finance space includes Aflac Incorporated (AFL - Free Report) and ProAssurance Corporation (PRA - Free Report) , each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Based in Columbus, GA, Aflac provides health and life insurance products in the United States and Japan. AFL’s U.S. segment has been recovering at a faster pace from the pandemic-induced volatilities than the Japanese business. The rebound can be attributed to a gradual recovery of the U.S. economy that led to increased face-to-face meetings and enrolments, which in turn, resulted in higher sales activity. Aflac’s bottom line for 2021 is expected to grow 18.8% year over year. It beat earnings estimates in each of the past four quarters, the average surprise being 18.3%.

Headquartered in Birmingham, AL, ProAssurance is a property and casualty insurance provider. PRA has implemented numerous operational and structural changes in the organization since last year in an effort to boost operational efficiency. This has been reducing its overall costs, which in turn, is bolstering its operating margins and improving expense ratio. ProAssurance’s total expenses declined 12.1% in the first nine months of 2021 from the prior-year comparable period. Its earnings for 2021 is expected to witness a 286.5% surge year over year. It beat earnings estimates in each of the past four quarters, the average surprise being 233.3%.

Price Performances

American International shares jumped 29.8% in the past year against 0.8% decline of the industry.

Zacks Investment ResearchImage Source: Zacks Investment Research

Shares of Aflac and ProAssurance appreciated 17.5% and 43.6% in the past year.