American International Group Inc. (AIG) has reported robust financial results for the first quarter of 2025, exceeding market expectations. The company’s earnings per share (EPS) stood at $1.17, surpassing the analyst consensus of $0.99 by $0.18. This strong performance was primarily driven by lower-than-anticipated catastrophe-related costs and steady underwriting results.
Financial Highlights
AIG’s net premiums written (NPW) totaled $4.5 billion for the quarter ending March 31, 2025. On a reported basis, NPW was flat, but when adjusted for currency movements and the 2024 sale of AIG’s travel business, it showed an 8% increase. The growth was most notable in the global commercial segment, where NPW reached $3.2 billion. North America commercial NPW was up 14%, while international commercial NPW rose 8% on a comparable basis.
The company’s catastrophe losses amounted to $525 million, equivalent to 9.1 percentage points on the loss ratio. Although significant, this outcome compared favorably to industry trends. AIG reported a general insurance combined ratio of 95.8%, while the accident year combined ratio, adjusted to exclude catastrophe events, stood at 87.8% – its lowest for a first quarter since the global financial crisis.
Strategic Developments
As part of its capital deployment and income strategy, AIG announced plans to increase its exposure to private assets to grow net investment income. The company intends to raise the allocation of its general insurance investment portfolio to private credit from 8% to between 12% and 15%. Additionally, the allocation to private equity is expected to increase from 5% to a target range of 6% to 8%.
Investment income totaled $1.1 billion, up 13% from the prior year, supported by gains in equity positions and available-for-sale fixed income securities. On an adjusted pre-tax income basis, investment income was stable at $845 million.
Shareholder Returns and Capital Position
AIG returned $2.5 billion to shareholders during the quarter, comprising $2.2 billion in share repurchases and $234 million in dividends. The Board approved a 12.5% rise in the quarterly dividend to $0.45 per share, marking the third consecutive year with double-digit increases. Book value per share reached $71.38, and parent company liquidity ended the quarter at $4.9 billion.
Outlook and Guidance
According to CEO Peter Zaffino, AIG remains on track to deliver its 2025 targets. “As we look ahead, we have significant strategic and financial flexibility, exceptional momentum, and we continue to expect to achieve 10%+ Core Operating ROE for full year 2025 along with the three-year financial targets we provided at our Investor Day,” Zaffino stated. The company also reported that its projected full-year EPS compound annual growth rate remains above 20%, significantly higher than most sector estimates.
AIG has revised several key performance targets under a new three-year strategic plan. The company aims to lift its core operating return on equity to as high as 13% by 2027, up from 9.1% in 2024 and above the current-year target of 10%.
