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AIG Q2 Earnings Beat on Higher North America Commercial Premiums
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Key Takeaways
AIG's Q2 EPS rose 56% year over year to $1.81, beating estimates on strong commercial underwriting results.
Net investment income surged 48.1% to $1.5B, aided by equity gains and fixed income sales.
North America Commercial premiums grew 4% with a 430-bps combined ratio improvement to 85.9%.
American International Group, Inc. (AIG - Free Report) reported second-quarter 2025 adjusted earnings per share of $1.81, which outpaced the Zacks Consensus Estimate by 14.6%. The bottom line surged 56% year over year.
Adjusted operating revenues advanced 3% year over year to $6.8 billion. The top line beat the consensus mark by 0.3%.
The quarterly results benefited on the back of strong investment income and segmental strength in the form of improved underwriting results across North America Commercial and International Commercial segments. A declining expense level also contributed to the upside. However, the upside was partly offset by weak Global Personal segment premiums and lower dividends received from Corebridge Financial, Inc. (CRBG - Free Report) .
American International Group, Inc. Price, Consensus and EPS Surprise
Premiums came in at $5.9 billion, which grew 2.2% year over year in the quarter under review. Total net investment income climbed 48.1% year over year to $1.5 billion on the back of a favorable change in the fair value of AIG's equity stake in Corebridge and increased income from the sale of fixed maturity securities. The metric outpaced the Zacks Consensus Estimate of $946 million. The company now has a 21% ownership interest in Corebridge.
Total benefits, losses and expenses of $5.5 billion declined 6.7% year over year on the back of lower general operating and other expenses.
Adjusted return on equity of AIG improved 360 basis points year over year to 9.7%.
Segmental Performances of AIG
General Insurance – North America Commercial
The segment’s net premiums written grew 4% year over year to $2.9 billion in the second quarter, attributable to strength in Retail Casualty, Lexington Casualty, Western World, Glatfelter and Programs.
Underwriting income of $301 million soared 58% year over year on the back of a decline in catastrophe losses and more favorable prior-year development. Catastrophe-related losses, net of reinsurance, came in at $101 million. The combined ratio improved 430 bps year over year to 85.9%.
General Insurance – International Commercial
The segment recorded net premiums written of $2.3 billion, which inched up 2% year over year on a reported basis and 1% on a comparable basis. The metric benefited from expansion in Casualty and Global Specialty.
Underwriting income advanced 30% year over year to $300 million in the quarter under review. Catastrophe-related charges were $29 million. The combined ratio of 85.9% improved 270 bps year over year as a result of lower catastrophe losses and more favorable prior-year development.
General Insurance – Global Personal
Net premiums written totaled $1.7 billion, which tumbled 11% on a reported basis and 3% on a comparable basis. The metric was hit by an adverse impact from High Net Worth quota share.
Underwriting income increased nearly threefold year over year to $25 million. Catastrophe-related charges were $40 million in the second quarter. The combined ratio of 98.5% improved 90 bps year over year on the back of a declining acquisition ratio.
Other Operations
Net investment income and other dropped 35% year over year to $92 million in the quarter under review due to a lower dividend income received from Corebridge.
Interest expenses of $101 million decreased 9% year over year on the back of a declining debt level. Adjusted pre-tax loss narrowed from $163 million in the prior-year quarter to $106 million.
Financial Position of AIG (As of June 30, 2025)
AIG exited the second quarter with a cash balance of $1.8 billion, which climbed 40.2% from the 2024-end level. Total assets of $166 billion increased 2.9% from the figure at 2024-end.
Long-term debt amounted to $9.1 billion, up 3.8% from the figure as of Dec. 31, 2024.
Total shareholders’ equity slipped 2.4% from the 2024-end level to $41.5 billion. Total debt to total capital was 17.9% at the second-quarter end, which improved 20 bps year over year.
Adjusted book value per share improved 5.3% year over year to $76.62.
AIG’s Capital Deployment Update
AIG rewarded its shareholders to the tune of share repurchases of $1.8 billion and dividends of $254 million in the second quarter.
Of the insurance industry players that have reported second-quarter 2025 results so far, the bottom-line results of The Hartford Insurance Group, Inc. (HIG - Free Report) and AXIS Capital Holdings Limited (AXS - Free Report) beat the respective Zacks Consensus Estimate.
Hartford Insurance reported second-quarter 2025 adjusted operating earnings of $3.41 per share, which surpassed the Zacks Consensus Estimate by 23.1%. The bottom line climbed 36% year over year. HIG's operating revenues rose 9.9% year over year to $4.9 billion. The top line beat the consensus mark by 0.2%. Earned premiums of Hartford amounted to $5.96 billion, which advanced 6.9% year over year. Pre-tax net investment income improved 10.3% year over year to $664 million.
Pretax income climbed 36.6% year over year to $1.2 billion. Revenues in the Business Insurance segment grew 10.9% year over year to $3.87 billion in the second quarter. Core earnings of $697 million improved 26% year over year. The underlying combined ratio deteriorated 60 bps year over year to 88%. The Personal Insurance segment’s revenues of $1 billion advanced 10.1% year over year. Core earnings were $94 million against the prior-year quarter’s core loss of $4 million
AXIS Capital’s second-quarter 2025 operating income of $3.29 per share beat the Zacks Consensus Estimate by 14.2%. The bottom line increased 12.2% year over year. Total operating revenues of $1.6 billion missed the Zacks Consensus Estimate by 3.2%. The top line, however, rose 5.6% year over year. Net premiums written increased 4% to $1.6 billion. Net investment income decreased 2% year over year to $187 million.
Pre-tax catastrophe and weather-related losses and net of reinsurance, were $86 million, wider than the year-ago loss of $47 million, primarily attributable to California Wildfires. AXIS Capital’s underwriting income of $189.2 million increased 17.4% year over year. The combined ratio improved 150 bps to 88.9%. In the Insurance segment, net premiums written increased 8.1% year over year to $1.3 billion. Underwriting income of $151.6 million increased 31.1% year over year. The Reinsurance segment’s net premiums written decreased 9.1% year over year to $344.9 million.
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AIG Q2 Earnings Beat on Higher North America Commercial Premiums
Key Takeaways
American International Group, Inc. (AIG - Free Report) reported second-quarter 2025 adjusted earnings per share of $1.81, which outpaced the Zacks Consensus Estimate by 14.6%. The bottom line surged 56% year over year.
Adjusted operating revenues advanced 3% year over year to $6.8 billion. The top line beat the consensus mark by 0.3%.
The quarterly results benefited on the back of strong investment income and segmental strength in the form of improved underwriting results across North America Commercial and International Commercial segments. A declining expense level also contributed to the upside. However, the upside was partly offset by weak Global Personal segment premiums and lower dividends received from Corebridge Financial, Inc. (CRBG - Free Report) .
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 came in at $5.9 billion, which grew 2.2% year over year in the quarter under review. Total net investment income climbed 48.1% year over year to $1.5 billion on the back of a favorable change in the fair value of AIG's equity stake in Corebridge and increased income from the sale of fixed maturity securities. The metric outpaced the Zacks Consensus Estimate of $946 million. The company now has a 21% ownership interest in Corebridge.
Total benefits, losses and expenses of $5.5 billion declined 6.7% year over year on the back of lower general operating and other expenses.
Adjusted return on equity of AIG improved 360 basis points year over year to 9.7%.
Segmental Performances of AIG
General Insurance – North America Commercial
The segment’s net premiums written grew 4% year over year to $2.9 billion in the second quarter, attributable to strength in Retail Casualty, Lexington Casualty, Western World, Glatfelter and Programs.
Underwriting income of $301 million soared 58% year over year on the back of a decline in catastrophe losses and more favorable prior-year development. Catastrophe-related losses, net of reinsurance, came in at $101 million. The combined ratio improved 430 bps year over year to 85.9%.
General Insurance – International Commercial
The segment recorded net premiums written of $2.3 billion, which inched up 2% year over year on a reported basis and 1% on a comparable basis. The metric benefited from expansion in Casualty and Global Specialty.
Underwriting income advanced 30% year over year to $300 million in the quarter under review. Catastrophe-related charges were $29 million. The combined ratio of 85.9% improved 270 bps year over year as a result of lower catastrophe losses and more favorable prior-year development.
General Insurance – Global Personal
Net premiums written totaled $1.7 billion, which tumbled 11% on a reported basis and 3% on a comparable basis. The metric was hit by an adverse impact from High Net Worth quota share.
Underwriting income increased nearly threefold year over year to $25 million. Catastrophe-related charges were $40 million in the second quarter. The combined ratio of 98.5% improved 90 bps year over year on the back of a declining acquisition ratio.
Other Operations
Net investment income and other dropped 35% year over year to $92 million in the quarter under review due to a lower dividend income received from Corebridge.
Interest expenses of $101 million decreased 9% year over year on the back of a declining debt level. Adjusted pre-tax loss narrowed from $163 million in the prior-year quarter to $106 million.
Financial Position of AIG (As of June 30, 2025)
AIG exited the second quarter with a cash balance of $1.8 billion, which climbed 40.2% from the 2024-end level. Total assets of $166 billion increased 2.9% from the figure at 2024-end.
Long-term debt amounted to $9.1 billion, up 3.8% from the figure as of Dec. 31, 2024.
Total shareholders’ equity slipped 2.4% from the 2024-end level to $41.5 billion. Total debt to total capital was 17.9% at the second-quarter end, which improved 20 bps year over year.
Adjusted book value per share improved 5.3% year over year to $76.62.
AIG’s Capital Deployment Update
AIG rewarded its shareholders to the tune of share repurchases of $1.8 billion and dividends of $254 million in the second quarter.
AIG’s Zacks Rank
AIG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported second-quarter 2025 results so far, the bottom-line results of The Hartford Insurance Group, Inc. (HIG - Free Report) and AXIS Capital Holdings Limited (AXS - Free Report) beat the respective Zacks Consensus Estimate.
Hartford Insurance reported second-quarter 2025 adjusted operating earnings of $3.41 per share, which surpassed the Zacks Consensus Estimate by 23.1%. The bottom line climbed 36% year over year. HIG's operating revenues rose 9.9% year over year to $4.9 billion. The top line beat the consensus mark by 0.2%. Earned premiums of Hartford amounted to $5.96 billion, which advanced 6.9% year over year. Pre-tax net investment income improved 10.3% year over year to $664 million.
Pretax income climbed 36.6% year over year to $1.2 billion. Revenues in the Business Insurance segment grew 10.9% year over year to $3.87 billion in the second quarter. Core earnings of $697 million improved 26% year over year. The underlying combined ratio deteriorated 60 bps year over year to 88%. The Personal Insurance segment’s revenues of $1 billion advanced 10.1% year over year. Core earnings were $94 million against the prior-year quarter’s core loss of $4 million
AXIS Capital’s second-quarter 2025 operating income of $3.29 per share beat the Zacks Consensus Estimate by 14.2%. The bottom line increased 12.2% year over year. Total operating revenues of $1.6 billion missed the Zacks Consensus Estimate by 3.2%. The top line, however, rose 5.6% year over year. Net premiums written increased 4% to $1.6 billion. Net investment income decreased 2% year over year to $187 million.
Pre-tax catastrophe and weather-related losses and net of reinsurance, were $86 million, wider than the year-ago loss of $47 million, primarily attributable to California Wildfires. AXIS Capital’s underwriting income of $189.2 million increased 17.4% year over year. The combined ratio improved 150 bps to 88.9%. In the Insurance segment, net premiums written increased 8.1% year over year to $1.3 billion. Underwriting income of $151.6 million increased 31.1% year over year. The Reinsurance segment’s net premiums written decreased 9.1% year over year to $344.9 million.