American International Group Inc. (AIG) has reported robust first-quarter 2025 results, surpassing market expectations with an earnings per share (EPS) of $1.17. This figure exceeded the analyst consensus of $0.99 by $0.18, driven primarily 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, 2025. On a reported basis, NPW remained flat, but when adjusted for currency movements and the 2024 sale of AIG’s travel business, it showed an 8% increase. AIG uses a ‘comparable basis’ to provide more consistent year-on-year comparisons.
Growth in Commercial Segment
Growth was particularly notable in the global commercial segment, where NPW reached $3.2 billion. North America commercial NPW was up 14%, while international commercial NPW increased by 8% on a comparable basis. Catastrophe losses amounted to $525 million, equivalent to 9.1 percentage points on the loss ratio, but compared favorably to industry trends.
Key Financial Metrics
- General insurance combined ratio: 95.8%
- Accident year combined ratio (adjusted, excluding catastrophe events): 87.8% – its lowest for a first quarter since the global financial crisis
- Net income attributable to AIG common shareholders: $698 million, or $1.16 per diluted share, down from $1.2 billion, or $1.74 per diluted share, in Q1 2024
- Adjusted after-tax income (AATI): $702 million, or $1.17 per diluted share, compared to $862 million, or $1.25, in the previous year
Strategic Developments
AIG has 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%, and increase the allocation to private equity 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.
Shareholder Returns
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.
Outlook
According to CEO Peter Zaffino, AIG remains on track to deliver its 2025 targets. The company continues to expect to achieve a 10%+ Core Operating ROE for full-year 2025, along with its three-year financial targets announced at Investor Day. AIG’s projected full-year EPS compound annual growth rate remains above 20%, significantly higher than most sector estimates.
