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AIG Q1 Earnings Top on New Business Despite High Catastrophe Loss
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American International Group, Inc. (AIG - Free Report) reported first-quarter 2025 adjusted earnings per share of $1.17, which beat the Zacks Consensus Estimate by 11.4%. However, the bottom line declined from the year-ago quarter’s $1.25. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Adjusted operating revenues amounted to $6.6 billion, which declined significantly year over year. Also, the top line missed the consensus mark by 2.6%.
The better-than-expected first-quarter earnings were supported by new business production and robust retention. Lower premiums and high catastrophe charges due to California wildfires partially offset the positives.
American International Group, Inc. Price, Consensus and EPS Surprise
Premiums of $5.8 billion declined 1.7% year over year in the quarter and also missed the Zacks Consensus Estimate by 1.5%. Total net investment income increased 13% year over year to $1.1 billion, attributable to increased income from the sale of fixed maturity securities, lower investment expenses and dividends received from Corebridge Financial. The metric beat the consensus mark by 18.4%. The company now has a 23% ownership interest in Corebridge.
Total benefits, losses and expenses rose 2.1% year over year to $5.8 billion. The year-over-year increase was due to higher losses and loss adjustment expenses.
Adjusted return on equity of AIG was 6.4%, which was in line with the year-ago quarter.
Segmental Performances of AIG
General Insurance – North America Commercial
The segment recorded net premiums written of $1.2 billion, which rose 14% year over year. The metric benefited from new business production in Lexington Insurance, robust retention, and Glatfelter and Retail Property in the first quarter.
Underwriting income of $129 million declined 45% on a reported basis. The metric was affected by increased catastrophe charges, which jumped to $258 million from $72 million a year ago due to the January California wildfires. The combined ratio of 93.9% deteriorated 580 bps year over year.
General Insurance – International Commercial
The segment recorded net premiums written of $2.0 billion, which rose 5% year over year on a reported basis and 8% on a comparable basis. The metric benefited from robust growth in the first quarter in the Global Specialty and Property business.
Underwriting income of $240 million decreased 27% on a reported basis. Catastrophe-related charges were $70 million in the first quarter. The combined ratio of 88.2% deteriorated 460 bps year over year.
General Insurance – Global Personal
The segment recorded net premiums written of $1.3 billion, which decreased 14% year over year on a reported basis but rose 3% on a comparable basis. The metric benefited from Personal Auto and new production.
Underwriting loss of $126 million was recorded against an income of $30 million in the prior year. Catastrophe-related charges were $197 million in the first quarter. The combined ratio of 107.9% deteriorated 960 bps year over year due to the California wildfires.
Other Operations
Total net investment income rose 51% year over year to $11 million in the first quarter due to a dividend income from Corebridge.
Interest expenses declined 21% year over year due to a debt reduction. Adjusted pre-tax loss narrowed from $205 million to $70 million.
Financial Position of AIG (As of March 31, 2025)
AIG exited the fourth quarter with a cash balance of $1.4 billion, which rose from $1.3 billion at 2024-end. Total assets of $161.9 billion increased from $161.3 billion at 2024-end.
Long-term debt amounted to $8.6 billion, which declined from $8.8 billion at 2024-end.
Total equity of $41.5 billion fell from $42.6 billion at 2024-end. Total debt to total capital was 17.1% at the first-quarter end, up from the 2024-end level of 17%.
Adjusted book value per share declined 6.2% year over year to $74.45.
AIG’s Capital Deployment Update
AIG rewarded its shareholders by repurchasing shares worth $2.2 billion and distributing dividends of $234 million.
Management announced a cash dividend of 45 cents per share for the second quarter, marking a 12.5% increase.
The Zacks Consensus Estimate for Root’s current-year earnings of 18 cents per share has witnessed one upward revision in the past month against none in the opposite direction. Root beat earnings estimates in each of the trailing four quarters, with the average surprise being 195.3%. The consensus estimate for current-year revenues is pegged at $1.3 billion, implying 9.2% year-over-year growth.
The Zacks Consensus Estimate for Kingstone Companies’ current-year earnings is pegged at $1.90 per share. It has remained stable over the past week. The consensus estimate for Kingstone Companies’ current-year revenues is pegged at $214 million, suggesting 37.9% year-over-year growth.
The Zacks Consensus Estimate for Heritage Insurance’s current-year earnings of $2.43 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. Heritage Insurance beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 328.6%. The consensus estimate for current-year revenues is pegged at $870.2 million, calling for 6.5% year-over-year growth.
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AIG Q1 Earnings Top on New Business Despite High Catastrophe Loss
American International Group, Inc. (AIG - Free Report) reported first-quarter 2025 adjusted earnings per share of $1.17, which beat the Zacks Consensus Estimate by 11.4%. However, the bottom line declined from the year-ago quarter’s $1.25. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Adjusted operating revenues amounted to $6.6 billion, which declined significantly year over year. Also, the top line missed the consensus mark by 2.6%.
The better-than-expected first-quarter earnings were supported by new business production and robust retention. Lower premiums and high catastrophe charges due to California wildfires partially offset the positives.
American International Group, Inc. Price, Consensus and EPS Surprise
American International Group, Inc. price-consensus-eps-surprise-chart | American International Group, Inc. Quote
AIG’s Quarterly Operational Update
Premiums of $5.8 billion declined 1.7% year over year in the quarter and also missed the Zacks Consensus Estimate by 1.5%. Total net investment income increased 13% year over year to $1.1 billion, attributable to increased income from the sale of fixed maturity securities, lower investment expenses and dividends received from Corebridge Financial. The metric beat the consensus mark by 18.4%. The company now has a 23% ownership interest in Corebridge.
Total benefits, losses and expenses rose 2.1% year over year to $5.8 billion. The year-over-year increase was due to higher losses and loss adjustment expenses.
Adjusted return on equity of AIG was 6.4%, which was in line with the year-ago quarter.
Segmental Performances of AIG
General Insurance – North America Commercial
The segment recorded net premiums written of $1.2 billion, which rose 14% year over year. The metric benefited from new business production in Lexington Insurance, robust retention, and Glatfelter and Retail Property in the first quarter.
Underwriting income of $129 million declined 45% on a reported basis. The metric was affected by increased catastrophe charges, which jumped to $258 million from $72 million a year ago due to the January California wildfires. The combined ratio of 93.9% deteriorated 580 bps year over year.
General Insurance – International Commercial
The segment recorded net premiums written of $2.0 billion, which rose 5% year over year on a reported basis and 8% on a comparable basis. The metric benefited from robust growth in the first quarter in the Global Specialty and Property business.
Underwriting income of $240 million decreased 27% on a reported basis. Catastrophe-related charges were $70 million in the first quarter. The combined ratio of 88.2% deteriorated 460 bps year over year.
General Insurance – Global Personal
The segment recorded net premiums written of $1.3 billion, which decreased 14% year over year on a reported basis but rose 3% on a comparable basis. The metric benefited from Personal Auto and new production.
Underwriting loss of $126 million was recorded against an income of $30 million in the prior year. Catastrophe-related charges were $197 million in the first quarter. The combined ratio of 107.9% deteriorated 960 bps year over year due to the California wildfires.
Other Operations
Total net investment income rose 51% year over year to $11 million in the first quarter due to a dividend income from Corebridge.
Interest expenses declined 21% year over year due to a debt reduction. Adjusted pre-tax loss narrowed from $205 million to $70 million.
Financial Position of AIG (As of March 31, 2025)
AIG exited the fourth quarter with a cash balance of $1.4 billion, which rose from $1.3 billion at 2024-end. Total assets of $161.9 billion increased from $161.3 billion at 2024-end.
Long-term debt amounted to $8.6 billion, which declined from $8.8 billion at 2024-end.
Total equity of $41.5 billion fell from $42.6 billion at 2024-end. Total debt to total capital was 17.1% at the first-quarter end, up from the 2024-end level of 17%.
Adjusted book value per share declined 6.2% year over year to $74.45.
AIG’s Capital Deployment Update
AIG rewarded its shareholders by repurchasing shares worth $2.2 billion and distributing dividends of $234 million.
Management announced a cash dividend of 45 cents per share for the second quarter, marking a 12.5% increase.
AIG’s Zacks Rank & Key Picks
AIG currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Finance space are Root Inc. (ROOT - Free Report) , Kingstone Companies Inc. (KINS - Free Report) and Heritage Insurance Holdings Inc. (HRTG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Root’s current-year earnings of 18 cents per share has witnessed one upward revision in the past month against none in the opposite direction. Root beat earnings estimates in each of the trailing four quarters, with the average surprise being 195.3%. The consensus estimate for current-year revenues is pegged at $1.3 billion, implying 9.2% year-over-year growth.
The Zacks Consensus Estimate for Kingstone Companies’ current-year earnings is pegged at $1.90 per share. It has remained stable over the past week. The consensus estimate for Kingstone Companies’ current-year revenues is pegged at $214 million, suggesting 37.9% year-over-year growth.
The Zacks Consensus Estimate for Heritage Insurance’s current-year earnings of $2.43 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. Heritage Insurance beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 328.6%. The consensus estimate for current-year revenues is pegged at $870.2 million, calling for 6.5% year-over-year growth.