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AIG's Turnaround Continues Despite Stock Weakness: Time to Buy?
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Key Takeaways
AIG's Q1 2026 underwriting income more than tripled to $774M as the combined ratio improved.
AIG exited non-core businesses and completed its Corebridge stake sale to sharpen focus.
AIG returned about $760M to shareholders and raised its dividend 11% in April 2026.
American International Group, Inc. (AIG - Free Report) is a leading global property and casualty insurer that provides insurance and risk-management solutions to businesses and individuals in more than 200 countries and jurisdictions.
The company is well positioned for growth, supported by strategic portfolio optimization, expense-reduction initiatives, technology investments and a strong capital position. Despite these strengths, AIG shares have lost 12.7% over the past six months, underperforming the industry's 5.9% decline.
From a valuation standpoint, AIG is trading below its own historical levels. The stock currently carries a forward 12-month P/E of 9.02X, which is below its five-year median of 10.16X. However, it remains above the industry average of 8.8X, indicating that investors still have confidence in the company's long-term growth prospects despite the recent share price decline.
Courtesy of solid prospects, AIG currently carries a Zacks Rank #2 (Buy).
Where Do Estimates for AIG Stand?
The Zacks Consensus Estimate for American International’s 2026 earnings is pegged at $7.99 per share, indicating a 12.7% year-over-year rise. In the past 60 days, it has witnessed eight upward estimate revisions against none in the opposite direction.
The consensus mark for 2026 revenues is pegged at $29.16 billion, indicating a 6.2% year-over-year increase. It beat earnings estimates in each of the past four quarters, with an average surprise of 15.1%. AIG carries a Value Score of A.
American International Group, Inc. Price, Consensus and EPS Surprise
Despite the recent decline in its share price, AIG has continued to deliver improvements across its core business. Below are the key factors supporting its ongoing turnaround.
The turnaround is being fueled by stronger underwriting results. In the first quarter of 2026, General Insurance underwriting income more than tripled year over year to $774 million, while the combined ratio improved 850 basis points to 87.3%. Net premiums written increased 24%, driven by growth across commercial and personal insurance businesses. Lower catastrophe losses and disciplined underwriting continue to support profitability.
Over the past few years, management has simplified the business and sharpened its focus on property and casualty insurance. The insurer exited several non-core operations, including Crop Risk Services. Validus Re and its travel insurance business. It also completed its exit from the life and retirement business through the sale of its remaining stake in Corebridge. These moves are reducing complexity, improving liquidity and freeing up capital for higher-return opportunities.
Ongoing cost-control efforts are helping improve operating efficiency. The General Insurance expense ratio improved 120 basis points year over year to 29.3% in the first quarter of 2026, keeping the insurer on track to achieve its target of reducing the ratio below 30% by 2027. The AIG Next program has generated annual run-rate savings of $500 million, supporting margin expansion.
Solid cash generation continues to support both growth initiatives and shareholder returns. During the first quarter of 2026, approximately $760 million was returned to shareholders through dividends and share repurchases. In April 2026, the quarterly dividend was raised by 11%, marking the fourth consecutive year of double-digit dividend growth and reinforcing management's commitment to disciplined capital allocation.
Risks for AIG Stock
While the company's fundamentals are improving, investors should keep an eye on a few risks.
AIG remains exposed to large catastrophe events that could pressure future earnings. Significant weather-related claims may increase earnings volatility and weigh on underwriting profitability. The company also ended the first quarter of 2026 with $9 billion in long-term debt, significantly higher than its cash balance of $1.5 billion. Adjusted ROE of 10.9% remained below the industry average of 16.2%, suggesting there is still room for improvement in capital efficiency.
The Zacks Consensus Estimate for First American’s 2026 earnings is pegged at $6.81 per share, indicating 12.6% year-over-year growth. FAF beat earnings estimates in each of the trailing four quarters, with the average surprise being 22%. The consensus estimate for 2026 revenues is pinned at $8.03 billion, implying 7.8% year-over-year growth.
The Zacks Consensus Estimate for The Hanover Insurance’s 2026 earnings is pegged at $18.36 per share, which has witnessed one upward revision in the past 30 days, with no movement in the opposite direction. THG beat earnings estimates in each of the trailing four quarters, with the average surprise being 28.5%. The consensus estimate for 2026 revenues is pinned at $6.95 billion, implying 4.7% year-over-year growth.
The Zacks Consensus Estimate for United Fire’s 2026 earnings is pegged at $4.69 per share, indicating 2% year-over-year growth. UFCS beat earnings estimates in each of the trailing four quarters, with the average surprise being 68.8%. The consensus estimate for 2026 revenues is pinned at $1.53 billion, implying 10.5% year-over-year growth.
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AIG's Turnaround Continues Despite Stock Weakness: Time to Buy?
Key Takeaways
American International Group, Inc. (AIG - Free Report) is a leading global property and casualty insurer that provides insurance and risk-management solutions to businesses and individuals in more than 200 countries and jurisdictions.
The company is well positioned for growth, supported by strategic portfolio optimization, expense-reduction initiatives, technology investments and a strong capital position. Despite these strengths, AIG shares have lost 12.7% over the past six months, underperforming the industry's 5.9% decline.
From a valuation standpoint, AIG is trading below its own historical levels. The stock currently carries a forward 12-month P/E of 9.02X, which is below its five-year median of 10.16X. However, it remains above the industry average of 8.8X, indicating that investors still have confidence in the company's long-term growth prospects despite the recent share price decline.
Courtesy of solid prospects, AIG currently carries a Zacks Rank #2 (Buy).
Where Do Estimates for AIG Stand?
The Zacks Consensus Estimate for American International’s 2026 earnings is pegged at $7.99 per share, indicating a 12.7% year-over-year rise. In the past 60 days, it has witnessed eight upward estimate revisions against none in the opposite direction.
The consensus mark for 2026 revenues is pegged at $29.16 billion, indicating a 6.2% year-over-year increase. It beat earnings estimates in each of the past four quarters, with an average surprise of 15.1%. AIG carries a Value Score of A.
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 Growth Drivers
Despite the recent decline in its share price, AIG has continued to deliver improvements across its core business. Below are the key factors supporting its ongoing turnaround.
The turnaround is being fueled by stronger underwriting results. In the first quarter of 2026, General Insurance underwriting income more than tripled year over year to $774 million, while the combined ratio improved 850 basis points to 87.3%. Net premiums written increased 24%, driven by growth across commercial and personal insurance businesses. Lower catastrophe losses and disciplined underwriting continue to support profitability.
Over the past few years, management has simplified the business and sharpened its focus on property and casualty insurance. The insurer exited several non-core operations, including Crop Risk Services. Validus Re and its travel insurance business. It also completed its exit from the life and retirement business through the sale of its remaining stake in Corebridge. These moves are reducing complexity, improving liquidity and freeing up capital for higher-return opportunities.
Ongoing cost-control efforts are helping improve operating efficiency. The General Insurance expense ratio improved 120 basis points year over year to 29.3% in the first quarter of 2026, keeping the insurer on track to achieve its target of reducing the ratio below 30% by 2027. The AIG Next program has generated annual run-rate savings of $500 million, supporting margin expansion.
Solid cash generation continues to support both growth initiatives and shareholder returns. During the first quarter of 2026, approximately $760 million was returned to shareholders through dividends and share repurchases. In April 2026, the quarterly dividend was raised by 11%, marking the fourth consecutive year of double-digit dividend growth and reinforcing management's commitment to disciplined capital allocation.
Risks for AIG Stock
While the company's fundamentals are improving, investors should keep an eye on a few risks.
AIG remains exposed to large catastrophe events that could pressure future earnings. Significant weather-related claims may increase earnings volatility and weigh on underwriting profitability. The company also ended the first quarter of 2026 with $9 billion in long-term debt, significantly higher than its cash balance of $1.5 billion. Adjusted ROE of 10.9% remained below the industry average of 16.2%, suggesting there is still room for improvement in capital efficiency.
Other Key Picks
Some other top-ranked stocks in the broader Finance space are First American Financial Corporation (FAF - Free Report) , The Hanover Insurance Group, Inc. (THG - Free Report) and United Fire Group, Inc. (UFCS - 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 First American’s 2026 earnings is pegged at $6.81 per share, indicating 12.6% year-over-year growth. FAF beat earnings estimates in each of the trailing four quarters, with the average surprise being 22%. The consensus estimate for 2026 revenues is pinned at $8.03 billion, implying 7.8% year-over-year growth.
The Zacks Consensus Estimate for The Hanover Insurance’s 2026 earnings is pegged at $18.36 per share, which has witnessed one upward revision in the past 30 days, with no movement in the opposite direction. THG beat earnings estimates in each of the trailing four quarters, with the average surprise being 28.5%. The consensus estimate for 2026 revenues is pinned at $6.95 billion, implying 4.7% year-over-year growth.
The Zacks Consensus Estimate for United Fire’s 2026 earnings is pegged at $4.69 per share, indicating 2% year-over-year growth. UFCS beat earnings estimates in each of the trailing four quarters, with the average surprise being 68.8%. The consensus estimate for 2026 revenues is pinned at $1.53 billion, implying 10.5% year-over-year growth.