American International Group Inc. (AIG) has reported first-quarter 2025 results that exceeded market expectations, with an earnings per share (EPS) of $1.17, surpassing analyst consensus by $0.18. The strong performance was driven by lower-than-anticipated catastrophe-related costs and steady underwriting results.
Financial Highlights
The company’s net premiums written (NPW) totaled $4.5 billion for the quarter ending March 31, remaining flat on a reported basis but increasing 8% when adjusted for currency movements and the 2024 sale of AIG’s travel business. Growth was particularly notable in the global commercial segment, where NPW reached $3.2 billion. North America commercial NPW rose 14%, while international commercial NPW grew 8% on a comparable basis.
AIG’s catastrophe losses amounted to $525 million, equivalent to 9.1 percentage points on the loss ratio, but compared favorably to industry trends. The general insurance combined ratio was 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 boost net investment income. The company intends to raise its general insurance investment portfolio allocation to private credit from 8% to between 12% and 15%, and increase its allocation to private equity from 5% to a target range of 6% to 8%.
Investment income totaled $1.1 billion, a 13% increase from the prior year, supported by gains in equity positions and available-for-sale fixed income securities. AIG returned $2.5 billion to shareholders during the quarter, including $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.
Outlook
According to CEO Peter Zaffino, AIG remains on track to achieve 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,” Zaffino stated. The company has also revised several key performance targets under a new three-year strategic plan, aiming to lift its core operating return on equity to as high as 13% by 2027.
