American International Group, Inc.

Second-quarter adjusted after-tax income per diluted share was $2, up 10% year over year, and adjusted after-tax income was $1.1 billion. General Insurance adjusted pretax income was $1.5 billion, up 4%; net premiums earned were $6.2 billion, up 5%; and underwriting income was $686 million, up 10%. The accident year combined ratio as adjusted improved 30 basis points to 88.1%, and the calendar year combined ratio improved 30 basis points to 89.0%. Net premiums written rose 9% year over year, or 11% excluding North American Property. For the first half, General Insurance underwriting income increased 68% to $1.5 billion, and net premiums written grew 13%. Total catastrophe charges were $210 million, including $75 million of net losses related to the Middle East conflict, and prior year development was $145 million favorable. Book value per share was $77.39, up 4% year over year, and adjusted tangible book value per share was $72.18, up 3%. AIG did not provide explicit quarterly or full-year earnings guidance on the call, but reiterated that it remains on track to achieve its Investor Day goals and said it expects the first-half premium growth to support earnings in 2026 and 2027.

Eric Andersen framed the quarter as evidence that AIG is executing well and converting strategic changes into growth and profitability. He emphasized that the company is selectively deploying capital, leaning into markets where pricing and terms are attractive, and pulling back where returns are inadequate, especially in property. His tone was confident and upbeat, repeatedly saying AIG is on track for its Investor Day commitments and is well positioned to drive long-term value.

Keith Walsh focused on the financial drivers behind the quarter: higher underwriting income, flat General Insurance net investment income at $871 million, and a core fixed income annualized yield of 4.72%, up 30 basis points year over year. He highlighted the 30.8% expense ratio for the quarter, the 30.7% trailing 12-month expense ratio, and reiterated the path to below 30% for full year 2027. On capital, he noted $9 billion of debt outstanding, a 17.6% debt-to-adjusted-capital ratio, the sale of the remaining Corebridge shares for $710 million, and book value growth to $77.39 per share.

Analysts focused on leverage, growth in a softer pricing environment, reserve adequacy, social inflation, and whether AIG might change its leverage target. Management said it prefers to grow into its capital base but will keep returning capital when returns are unattractive, and reiterated that share repurchases are attractive at a modest premium to tangible book value. On reserves, management said it saw no material deterioration in accident year 2023 excess casualty and that its reserving process remains robust. On social inflation, AIG said it is seeing some positive legislative 'green shoots' but is not yet assuming moderation in pricing. On growth, management said it will not chase volume blindly and remains selective, while AI tools are already improving quote speed, submission volume, and broker-level insights, though still early in rollout.