[Part I – Financial Information](index=4&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents AIG's unaudited Condensed Consolidated Financial Statements for Q2 2025, including balance sheets, income, comprehensive income, equity, and cash flow statements, with detailed notes on accounting policies and segment data Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Investments | $93,966 | $93,613 | | **Total Assets** | **$165,971** | **$161,322** | | Total Liabilities | $124,442 | $118,772 | | **Total AIG Shareholders' Equity** | **$41,501** | **$42,521** | | **Total Liabilities and Equity** | **$165,971** | **$161,322** | Condensed Consolidated Statements of Income Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $7,091 | $6,560 | $13,874 | $13,323 | | Income from Continuing Operations | $1,144 | $475 | $1,842 | $1,272 | | Net Income (Loss) Attributable to AIG | $1,144 | $(3,977) | $1,842 | $(2,761) | | Diluted EPS from Continuing Operations | $1.98 | $0.71 | $3.13 | $1.85 | | Diluted Net EPS Attributable to AIG | $1.98 | $(5.96) | $3.13 | $(4.11) | Condensed Consolidated Statements of Cash Flows Highlights (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $1,335 | $1,449 | | Net Cash Provided by (Used in) Investing Activities | $3,315 | $(1,296) | | Net Cash Used in Financing Activities | $(4,212) | $(148) | | **Net Increase (Decrease) in Cash** | **$469** | **$(61)** | [Note 1. Basis of Presentation](index=12&type=section&id=Note%201.%20Basis%20of%20Presentation) The unaudited financial statements are prepared under U.S. GAAP, requiring significant judgment for estimates like loss reserves, reinsurance assets, and fair value measurements - Critical accounting estimates requiring significant judgment include loss reserves, reinsurance assets, allowance for credit losses on investments, fair value measurements, and income taxes[23](index=23&type=chunk)[25](index=25&type=chunk) - In May 2025, AIG issued **$1.25 billion** in notes and in June 2025, redeemed and repurchased **$693 million** of debt through cash tender offers[24](index=24&type=chunk) [Note 3. Segment Information](index=13&type=section&id=Note%203.%20Segment%20Information) AIG realigned its structure into North America Commercial, International Commercial, and Global Personal segments, with performance evaluated by underwriting income - AIG realigned its organizational structure in Q4 2024 into three new reportable segments: North America Commercial, International Commercial, and Global Personal. Prior year presentations have been recast to conform[28](index=28&type=chunk)[29](index=29&type=chunk) Underwriting Income by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | North America Commercial | $301 | $191 | $430 | $427 | | International Commercial | $300 | $230 | $540 | $560 | | Global Personal | $25 | $9 | $(101) | $39 | | **Total General Insurance** | **$626** | **$430** | **$869** | **$1,026** | Net Premiums Written by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | North America Commercial | $2,863 | $2,750 | $4,037 | $3,783 | | International Commercial | $2,325 | $2,284 | $4,352 | $4,223 | | Global Personal | $1,692 | $1,899 | $3,017 | $3,439 | | **Total General Insurance** | **$6,880** | **$6,933** | **$11,406** | **$11,445** | [Note 4. Discontinued Operations Presentation](index=17&type=section&id=Note%204.%20Discontinued%20Operations%20Presentation) AIG deconsolidated Corebridge on June 9, 2024, resulting in a **$4.8 billion** loss in Q2 2024, with its retained interest now an equity method investment - AIG deconsolidated Corebridge on June 9, 2024, resulting in a **$4.8 billion** loss in Q2 2024, primarily due to the recognition of a **$7.2 billion** accumulated comprehensive loss. The historical results of Corebridge are now presented as discontinued operations[47](index=47&type=chunk)[48](index=48&type=chunk) - Post-deconsolidation, AIG's ownership in Corebridge was **21.0%** as of June 30, 2025. AIG launched a secondary offering on August 6, 2025, to sell an additional **30 million** shares for approximately **$1.0 billion** in gross proceeds[50](index=50&type=chunk)[51](index=51&type=chunk) [Note 5. Fair Value Measurements](index=19&type=section&id=Note%205.%20Fair%20Value%20Measurements) This note details recurring fair value measurements of assets and liabilities, categorized by a three-level hierarchy, with **$80.2 billion** in total assets measured at fair value as of June 30, 2025 Assets Measured at Fair Value on a Recurring Basis (in millions) | Level | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Level 1 | $8,352 | $12,638 | | Level 2 | $68,725 | $63,919 | | Level 3 | $3,497 | $3,532 | | **Total (after netting)** | **$80,168** | **$79,515** | - The company holds investments in private equity and hedge funds measured at fair value using Net Asset Value (NAV), totaling **$3.5 billion** as of June 30, 2025, with unfunded commitments of **$1.1 billion**[59](index=59&type=chunk)[88](index=88&type=chunk) - AIG's retained investment in Corebridge is accounted for under the fair value option, with a value of **$4.0 billion** at June 30, 2025. Changes in its stock price are recognized in Net Investment Income[59](index=59&type=chunk)[91](index=91&type=chunk) [Note 6. Investments](index=31&type=section&id=Note%206.%20Investments) This note details AIG's investment portfolio, with **$68.9 billion** in available-for-sale bonds as of June 30, 2025, and discusses unrealized losses and net investment income Securities Available for Sale (Fair Value, in millions) | Security Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Corporate debt | $36,485 | $31,826 | | RMBS | $9,717 | $8,604 | | Non-U.S. governments | $6,913 | $8,107 | | CLO/ABS | $6,070 | $5,133 | | CMBS | $3,743 | $3,926 | | Other | $5,932 | $6,410 | | **Total** | **$68,860** | **$64,006** | Net Investment Income (in millions) | Period | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Net Investment Income** | **$1,466** | **$990** | **$2,571** | **$1,969** | - As of June 30, 2025, AIG held **8,797** individual fixed maturity securities in an unrealized loss position totaling **$2.3 billion**, for which no allowance for credit loss was recorded as the losses were deemed due to non-credit factors[95](index=95&type=chunk)[97](index=97&type=chunk) [Note 7. Lending Activities](index=37&type=section&id=Note%207.%20Lending%20Activities) This note details AIG's **$3.5 billion** net mortgage and other loan receivables as of June 30, 2025, primarily commercial mortgages, and provides credit quality indicators Mortgage and Other Loans Receivable, Net (in millions) | Loan Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commercial mortgages | $3,029 | $3,305 | | Commercial loans, other loans | $592 | $721 | | Life insurance policy loans | $5 | $6 | | **Total Loans Receivable** | **$3,626** | **$4,032** | | Allowance for credit losses | $(106) | $(164) | | **Net Loans Receivable** | **$3,520** | **$3,868** | - As of June 30, 2025, commercial mortgage loans on nonaccrual status amounted to **$152 million**, a decrease from **$252 million** at year-end 2024[126](index=126&type=chunk) - The weighted average loan-to-value ratio for the commercial mortgage portfolio was **69%** at June 30, 2025, up from **65%** at December 31, 2024[132](index=132&type=chunk) [Note 8. Reinsurance](index=40&type=section&id=Note%208.%20Reinsurance) This note details AIG's reinsurance activities, including the Fortitude Re funds withheld arrangement, with **$3.3 billion** in ceded reserves and **83%** of **$41.9 billion** total recoverables rated investment grade - AIG's reinsurance transactions with Fortitude Re for run-off operations are structured as modified coinsurance and funds withheld arrangements. As of June 30, 2025, **$3.3 billion** of reserves were ceded to Fortitude Re[146](index=146&type=chunk)[147](index=147&type=chunk) Financial Impact of Fortitude Re Funds Withheld Arrangements (in millions) | Item | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Investment Income | $39 | $33 | $79 | $72 | | Net Realized Gains (Losses) | $(66) | $7 | $(109) | $(21) | | **Pre-tax Income (Loss)** | **$(27)** | **$40** | **$(30)** | **$51** | - As of June 30, 2025, total reinsurance recoverables were **$41.9 billion**, of which approximately **83%** were from reinsurers rated as investment grade[156](index=156&type=chunk) [Note 12. Insurance Liabilities](index=46&type=section&id=Note%2012.%20Insurance%20Liabilities) This note details AIG's insurance liabilities, with **$69.8 billion** in gross loss reserves as of June 30, 2025, and discusses prior year development and the NICO reinsurance agreement Loss Reserves Rollforward Highlights (Net, in millions) | Item | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Beginning Net Liability | $41,097 | $39,891 | $40,142 | $40,104 | | Total Losses Incurred | $3,493 | $3,467 | $7,287 | $6,906 | | Total Losses Paid | $(3,592) | $(3,452) | $(6,982) | $(6,595) | | **Ending Net Liability** | **$41,888** | **$39,934** | **$41,888** | **$39,934** | - For Q2 2025, AIG recognized **$25 million** of unfavorable prior year loss reserve development, primarily from adverse development in U.S. Excess Casualty, partially offset by favorable experience in U.S. Workers' Compensation and other lines[190](index=190&type=chunk) - The adverse development reinsurance agreement with NICO covers **80%** of reserve risk on U.S. commercial long-tail exposures for accident years 2015 and prior, above a **$25 billion** threshold[189](index=189&type=chunk) [Note 14. Equity](index=50&type=section&id=Note%2014.%20Equity) This note details changes in shareholders' equity, including a **$7.5 billion** share repurchase program, **$4.0 billion** in repurchases, and a **$0.45** per share quarterly dividend - Effective April 1, 2025, the Board authorized a **$7.5 billion** share repurchase program. During the first six months of 2025, AIG repurchased **50.4 million** shares for an aggregate price of approximately **$4.0 billion**[212](index=212&type=chunk)[215](index=215&type=chunk) - On August 6, 2025, the Board of Directors declared a quarterly cash dividend of **$0.45** per share, an increase from the prior quarter's **$0.40** per share[218](index=218&type=chunk)[405](index=405&type=chunk) Accumulated Other Comprehensive Income (Loss) Rollforward (in millions) | Period | Beginning Balance (net of tax) | Total Other Comprehensive Income (Loss) | Ending Balance (net of tax) | | :--- | :--- | :--- | :--- | | **Q2 2025** | $(6,464) | $916 | $(5,548) | | **YTD 2025** | $(7,099) | $1,552 | $(5,548) | [Note 15. Earnings Per Common Share (EPS)](index=54&type=section&id=Note%2015.%20Earnings%20Per%20Common%20Share%20(EPS)) This note details the calculation of basic and diluted Earnings Per Common Share (EPS), with Q2 2025 diluted EPS from continuing operations at **$1.98** Diluted Earnings Per Share (EPS) Calculation | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Income from Continuing Operations | $1.98 | $0.71 | $3.13 | $1.85 | | Loss from Discontinued Operations | $— | $(6.67) | $— | $(5.96) | | **Net Income (Loss) Attributable to AIG** | **$1.98** | **$(5.96)** | **$3.13** | **$(4.11)** | [Note 16. Income Taxes](index=55&type=section&id=Note%2016.%20Income%20Taxes) The effective tax rate on continuing operations was **25.9%** for Q2 2025, higher than the **21%** statutory rate due to foreign operations and non-deductible expenses - The effective tax rate on income from continuing operations was **25.9%** for Q2 2025 and **26.4%** for the six months ended June 30, 2025, differing from the **21%** statutory rate mainly due to foreign operations, state taxes, and non-deductible expenses[233](index=233&type=chunk)[234](index=234&type=chunk) - AIG is currently under IRS examination for tax years 2011 through 2019 and is in the IRS Appeals process for issues from 2007 through 2010[242](index=242&type=chunk) - As of June 30, 2025, AIG maintained a valuation allowance of **$300 million** on U.S. federal tax attribute carryforwards that are not more likely than not to be realized[239](index=239&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=57&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of AIG's financial condition and results for Q2 and H1 2025, covering operating structure, economic factors, segment performance, investments, reserves, liquidity, and capital [Executive Summary](index=62&type=section&id=Executive%20Summary) This summary outlines AIG's new three-segment operating structure, highlights the Corebridge deconsolidation, and notes key economic factors influencing the business - AIG's operating structure now comprises three segments: North America Commercial, International Commercial, and Global Personal. The General Insurance business consists of these three segments plus related net investment income[269](index=269&type=chunk) - AIG deconsolidated Corebridge on June 9, 2024. Consequently, Corebridge's historical financial results are presented as discontinued operations in this report[270](index=270&type=chunk) [Consolidated Results of Operations](index=64&type=section&id=Consolidated%20Results%20of%20Operations) Q2 2025 net income attributable to AIG common shareholders was **$1.1 billion**, a significant improvement from Q2 2024, driven by the absence of Corebridge deconsolidation loss and improved underwriting - The **$5.1 billion** increase in Q2 2025 net income compared to Q2 2024 was primarily driven by a **$4.4 billion** swing in discontinued operations related to the Corebridge deconsolidation, a **$476 million** increase in Net Investment Income, and a **$348 million** decrease in General Operating Expenses[284](index=284&type=chunk)[286](index=286&type=chunk) Key Financial Metrics per Share | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Book value per share | $74.14 | $70.16 | | Adjusted book value per share | $76.62 | $73.79 | | Core operating book value per share | $63.71 | $61.75 | Return on Equity | Metric | Q2 2025 (Annualized) | Q2 2024 (Annualized) | | :--- | :--- | :--- | | Return on equity | 11.0% | NM | | Adjusted return on equity | 9.7% | 6.1% | | Core operating return on equity | 11.7% | 8.8% | [Business Segment Operations](index=69&type=section&id=Business%20Segment%20Operations) This section details AIG's business segment performance, with General Insurance Q2 2025 underwriting income at **$626 million** and a combined ratio of **89.3%**, reflecting improvements across commercial and personal lines General Insurance Underwriting Results (in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Premiums Written | $6,880 | $6,933 | $11,406 | $11,445 | | Underwriting Income | $626 | $430 | $869 | $1,026 | | Combined Ratio | 89.3% | 92.5% | 92.6% | 91.1% | | Accident Year Combined Ratio, ex-CAT | 88.4% | 87.6% | 88.2% | 87.9% | - North America Commercial net premiums written grew **4%** in Q2 2025, driven by new business and strong retention in Casualty[323](index=323&type=chunk) - International Commercial underwriting income increased by **$70 million** in Q2 2025, primarily due to lower catastrophe losses of **$108 million**[329](index=329&type=chunk) - Global Personal net premiums written decreased **11%** in Q2 2025, mainly due to the sale of the global individual personal travel insurance business in December 2024[332](index=332&type=chunk) [Investments](index=77&type=section&id=Investments) AIG's investment strategy focuses on income generation and capital preservation, with the majority of assets in fixed maturity securities, and new investment yields exceeding maturing asset rates in H1 2025 - The primary investment objectives are generating investment income, preserving capital, managing liquidity, and growing surplus. The majority of assets backing insurance liabilities consist of fixed maturity securities[340](index=340&type=chunk) - For the six months ended June 30, 2025, blended investment yields on new investments were higher than rates on investments that were sold, matured, or called[344](index=344&type=chunk) Fixed Maturity Securities by Composite AIG Credit Rating (Fair Value, in millions) | Rating | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | AAA/AA/A | $49,203 | $45,756 | | BBB | $14,644 | $13,542 | | **Total Investment Grade** | **$63,847** | **$59,298** | | Below Investment Grade | $5,657 | $5,393 | | Non-rated | $78 | $60 | | **Total** | **$69,582** | **$64,751** | [Insurance Reserves](index=86&type=section&id=Insurance%20Reserves) This section details AIG's insurance liabilities, with **$41.9 billion** in net loss reserves as of June 30, 2025, and discusses **$128 million** of net favorable prior year development in Q2 2025 Net Loss Reserves by Segment (in millions) | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | North America Commercial | $23,470 | $23,354 | | International Commercial | $13,018 | $11,265 | | Global Personal | $3,316 | $3,088 | | Other | $2,084 | $2,435 | | **Total General Insurance & Other** | **$41,888** | **$40,142** | - In Q2 2025, AIG recognized net favorable prior year development of **$128 million**, primarily from U.S. Workers' Compensation and U.S. Property and Special Risks, offset by adverse development in U.S. Excess Casualty[385](index=385&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk) [Liquidity and Capital Resources](index=89&type=section&id=Liquidity%20and%20Capital%20Resources) AIG maintains strong liquidity and capital, with **$7.8 billion** in AIG Parent liquidity sources as of June 30, 2025, and recent credit rating upgrades - As of June 30, 2025, AIG Parent held approximately **$7.8 billion** in liquidity sources, including cash, short-term investments, and a **$3.0 billion** revolving credit facility[413](index=413&type=chunk) - During the first six months of 2025, AIG repurchased approximately **50 million** shares of common stock for **$4.0 billion** and paid **$488 million** in common stock dividends[405](index=405&type=chunk)[406](index=406&type=chunk) - In May 2025, S&P upgraded AIG Parent's senior debt rating to **A-** from **BBB+**. In June 2025, Moody's upgraded the senior debt rating to **Baa1** from **Baa2**[438](index=438&type=chunk)[439](index=439&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=98&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section confirms no material changes in AIG's market risk exposures as of June 30, 2025, compared to the 2024 Annual Report disclosures - There have been no material changes in AIG's market risk exposures as of June 30, 2025, compared to the disclosures in the 2024 Annual Report[450](index=450&type=chunk) [Controls and Procedures](index=98&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded AIG's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - AIG's CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[478](index=478&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[479](index=479&type=chunk) [Part II – Other Information](index=99&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Legal Proceedings](index=99&type=section&id=ITEM%201.%20Legal%20Proceedings) This section incorporates legal proceedings information by reference from Note 13 of the Condensed Consolidated Financial Statements - Information regarding legal proceedings is detailed in Note 13 of the financial statements[481](index=481&type=chunk) [Risk Factors](index=99&type=section&id=ITEM%201A.%20Risk%20Factors) This section directs readers to the comprehensive risk factors detailed in Part I, Item 1A of the company's 2024 Annual Report - Investors are advised to review the risk factors detailed in the 2024 Annual Report on Form 10-K[482](index=482&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=99&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, AIG repurchased **21.4 million** shares for **$1.8 billion**, with **$5.7 billion** remaining under the **$7.5 billion** repurchase program Share Repurchases for Q2 2025 | Period | Total Shares Repurchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 5,324,955 | $81.89 | | May 2025 | 6,573,007 | $83.04 | | June 2025 | 9,467,591 | $85.08 | | **Total Q2** | **21,365,553** | **$83.66** | - Effective April 1, 2025, the Board authorized a new **$7.5 billion** share repurchase plan. As of June 30, 2025, **$5.7 billion** remained available for future repurchases[483](index=483&type=chunk)[484](index=484&type=chunk)

Financial Data and Key Metrics Changes - AIG reported adjusted after-tax income per diluted share of $1.81, a 56% increase year over year [7] - Adjusted after-tax income for the quarter was $1 billion, up 35% from the prior year, driven by the general insurance business [7] - Net investment income on an adjusted pretax basis was $955 million, an increase of 9% year over year [7] - The accident year combined ratio as adjusted was 88.4%, while the calendar year combined ratio improved to 89.3%, a 320 basis point improvement from the prior year quarter [8][37] - AIG returned $2 billion of capital to shareholders, bringing the year-to-date total to $4.5 billion [8] Business Line Data and Key Metrics Changes - Net premiums written were $6.9 billion, a 1% increase year over year, with 3% growth in global commercial [10] - North America commercial insurance net premiums written increased 4% year over year, with a notable 11% increase excluding property [11] - Retail casualty and Lexington casualty each increased by 19%, while retail property and Lexington property saw an 8% decline [11] - International commercial insurance net premiums written increased by 1%, driven by modest growth in casualty and global specialty [12] Market Data and Key Metrics Changes - Global commercial produced strong new business of nearly $1.4 billion, a 7% increase from the prior year quarter [12] - The submission count in the Lexington business increased by 28% year over year, indicating strong demand [13] - Global personal net premiums written decreased by 3%, impacted by a high net worth quota share reinsurance treaty [14] Company Strategy and Development Direction - AIG is focused on maintaining its US property portfolio while managing risk-adjusted returns and being cautious in growth due to market conditions [24] - The company aims to reduce its general insurance expense ratio below 30% by 2027 [37] - AIG NEXT initiative has delivered $500 million in savings and operational improvements, with a total of $530 million in annual run rate expense savings achieved [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 10% plus core operating ROE target in 2025, despite a dynamic macro and insurance market [52] - The company is well-positioned for growth, with significant opportunities in casualty and specialty lines, despite some rate pressure [66][72] - Management noted that social inflation is a long-term issue, but AIG's strong brand and financial strength make it an attractive partner for clients [84] Other Important Information - AIG's major insurance subsidiaries received financial strength upgrades from S&P to AA- and Moody's to A1 during the quarter [51] - The company sold $430 million worth of Corbridge Financial shares, reducing its stake to approximately 21% [8] - Book value per share increased to $74.14, up 8% from the previous year [52] Q&A Session Summary Question: Property pricing implications and combined ratio targets - Management clarified that reinsurance benefits the original pricing, and they do not expect significant headwinds in underwriting despite potential combined ratio increases [56][60] Question: Capital situation if growth outlook is not as expected - Management indicated that if capital cannot be deployed for growth, it would be returned to shareholders, but they believe there are opportunities for growth in the current environment [62][64] Question: Reapportionment of reserves to accident years '21 and '22 - Management explained that the reapportionment is a prudent measure and does not indicate deterioration in the underlying portfolio [80][81] Question: Demand for liability coverage due to social inflation - Management noted a strong demand for underwriting companies with expertise in casualty lines, indicating a flight to quality among buyers [84]

Financial Performance - AATI per diluted common share was $181, a 56% increase year-over-year[4, 5] - Outstanding underwriting income reached $626 million, a 46% increase from the prior year quarter[4] - Net Investment Income (NII) on an APTI basis was $955 million, up 9% year-over-year[4] - The calendar year combined ratio improved by 320 bps to 893%[4, 6, 14] Capital Management - $20 billion of capital was returned to shareholders in the second quarter, including $18 billion in stock repurchases and $254 million in dividends[4] - Aggregate share repurchases totaled $90 billion, representing 17% of shares outstanding on March 31, 2024[47, 49] - The company maintained a leverage guidance between 15-20%, with a 179% total debt to total capital leverage ratio[48] Segment Performance - General Insurance TTM NPW reached $239 billion[11] - North America Commercial Lines NPW increased 4% on a comparable basis[19] - International Commercial Lines NPW increased 1% from 2Q24, driven by Casualty and Global Specialty[21, 22] - Global Personal Insurance NPW declined 3% from 2Q24, primarily due to changes in reinsurance structures in the High Net Worth business[23, 24]

Core Insights - American International Group (AIG) reported Q2 2025 earnings per share (non-GAAP) of $1.81, exceeding analyst expectations of $1.60 and reflecting a 56% year-over-year growth [1][2] - Revenue (GAAP) reached $6.9 billion, slightly above the anticipated $6.78 billion, with net income swinging to $1.1 billion from a loss in the prior year [1][2] - The company demonstrated strong operational progress, improved underwriting, and significant capital returns to shareholders [1] Financial Performance - Adjusted after-tax income (non-GAAP) was $1.0 billion, up 35% year-over-year [7] - General Insurance underwriting income increased to $626 million, a 46% rise compared to the previous year [5] - The General Insurance combined ratio improved to 89.3%, down from 92.5% a year ago, indicating underwriting profitability [5] Segment Analysis - Global Commercial net premiums written increased by 3% year-over-year, with North America Commercial net premiums up 4% [6] - International Commercial net premiums written advanced 2% year-over-year, while Global Personal Insurance net premiums decreased by 11% [6] Investment and Capital Management - Net investment income (GAAP) rose 48% from the prior year to $1.5 billion, partly due to the rising value of the company's stake in Corebridge Financial [7] - The company distributed $2.0 billion to shareholders through share repurchases and dividends, reducing shares outstanding by approximately 13.8% from Q2 2024 [8] Strategic Focus - AIG is concentrating on underwriting excellence, financial strength, and restructuring to enhance profitability [4] - The company achieved over $500 million in savings ahead of schedule through its "AIG Next" initiative [9] - Management emphasized disciplined risk selection and robust capital management as key success factors [4] Future Outlook - Management did not provide specific forward guidance but expressed confidence in achieving over 10% core operating return on equity for the full year 2025 [13] - Investors are advised to monitor the sustainability of underwriting gains and the performance of personal lines [14]

Core Insights - American International Group (AIG) reported a revenue of $6.84 billion for the quarter ended June 2025, marking a year-over-year increase of 3% and a surprise of +0.29% over the Zacks Consensus Estimate of $6.82 billion [1] - The earnings per share (EPS) for the same period was $1.81, compared to $1.16 a year ago, resulting in an EPS surprise of +14.56% against the consensus estimate of $1.58 [1] Financial Performance Metrics - General Insurance combined ratio was reported at 89.3%, better than the four-analyst average estimate of 90.4% [4] - General Insurance expense ratio was 31%, slightly above the four-analyst average estimate of 30.8% [4] - General Insurance loss ratio stood at 58.3%, outperforming the four-analyst average estimate of 59.6% [4] - Net premiums earned in General Insurance were $5.88 billion, below the $5.96 billion average estimate, but represented a year-over-year change of +2.2% [4] - Net investment income for General Insurance was $871 million, exceeding the average estimate of $784.38 million, with a year-over-year increase of +16.8% [4] - Total net investment income was reported at $1.47 billion, significantly higher than the three-analyst average estimate of $946.23 million, reflecting a year-over-year change of +48.1% [4] Stock Performance - AIG shares have returned -5.7% over the past month, contrasting with the Zacks S&P 500 composite's +0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - American International Group (AIG) reported quarterly earnings of $1.81 per share, exceeding the Zacks Consensus Estimate of $1.58 per share, and up from $1.16 per share a year ago, representing an earnings surprise of +14.56% [1][2] - The company posted revenues of $6.84 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.29%, and compared to revenues of $6.64 billion in the same quarter last year [2] - AIG has outperformed the market with a share price increase of about 7.8% since the beginning of the year, compared to the S&P 500's gain of 7.1% [3] Group 2 - The earnings outlook for AIG is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend of estimate revisions for AIG was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - The current consensus EPS estimate for the upcoming quarter is $1.53 on revenues of $6.91 billion, and for the current fiscal year, it is $6.15 on revenues of $27.29 billion [7] Group 3 - The Zacks Industry Rank indicates that the Insurance - Multi line sector is currently in the top 39% of over 250 Zacks industries, suggesting that companies in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

[Overall Financial Performance](index=1&type=section&id=Overall%20Financial%20Performance) AIG reported strong Q2 2025 results, driven by improved profitability and disciplined capital returns to shareholders [Financial Highlights](index=1&type=section&id=Financial%20Highlights) AIG reported strong Q2 2025 results, with adjusted after-tax income per diluted share up 56% and $2.0 billion returned to shareholders Key Financial Highlights | Financial Metric | Q2 2025 ($) | Q2 2024 ($) | % Change YoY (%) | | :--- | :--- | :--- | :--- | | Net Income per Diluted Share | $1.98 | ($5.96) | NM | | Adjusted After-Tax Income (AATI) per Diluted Share | $1.81 | $1.16 | 56% | | Net Income | $1.1 billion | ($4.0 billion) | NM | | Adjusted After-Tax Income (AATI) | $1.0 billion | $771 million | 35% | | General Insurance Underwriting Income | $626 million | $430 million | 46% | | Net Investment Income (APTI basis) | $955 million | $879 million | 9% | - Strategic and Operational Progress - **Profitability:** General Insurance achieved a strong calendar year combined ratio of **89.3%**[4](index=4&type=chunk)[7](index=7&type=chunk) - **Volatility Management:** Catastrophe-related charges were contained at **$170 million**, representing **2.9 loss ratio points**[4](index=4&type=chunk)[7](index=7&type=chunk) - **Operational Efficiency:** The AIG Next initiative has delivered over **$500 million** in savings ahead of schedule[4](index=4&type=chunk)[7](index=7&type=chunk) - Net Premiums Written (NPW) grew **1%** year-over-year on a comparable basis, driven by **4%** growth in North America Commercial[5](index=5&type=chunk) - This was partially offset by a **3%** contraction in Global Personal NPW, mainly due to reinsurance structure changes in the High Net Worth business[5](index=5&type=chunk) [Financial Summary](index=3&type=section&id=Financial%20Summary) AIG reported Q2 2025 net income of $1.1 billion, a significant turnaround, with adjusted after-tax income up 35% to $1.0 billion Q2 2025 Financial Summary Metrics | Metric | Q2 2025 ($) | Q2 2024 ($) | | :--- | :--- | :--- | | Net income per diluted share | $1.98 | ($5.96) | | Adjusted after-tax income per diluted share | $1.81 | $1.16 | | Adjusted pre-tax income | $1.391 billion | $1.013 billion | | Return on equity (ROE) | 11.0% | NM | | Core operating return on equity | 11.7% | 8.8% | | Book value per share | $74.14 | $68.40 | - The year-over-year increase in net income was primarily due to a net loss of **$6.67 per diluted share** from the deconsolidation of Corebridge Financial in June 2024, which did not recur[10](index=10&type=chunk) - Total net investment income increased by **48%** to **$1.5 billion**, mainly due to fair value changes in AIG's equity in Corebridge and higher income from fixed maturity securities[12](index=12&type=chunk) - On an APTI basis, which excludes the Corebridge impact, net investment income grew **9%** to **$955 million**[12](index=12&type=chunk) [Capital Management and Shareholder Returns](index=2&type=section&id=Capital%20Management%20and%20Shareholder%20Returns) AIG maintained strong capital, returning $2.0 billion to shareholders and retaining $4.8 billion in parent liquidity - Capital Returned to Shareholders in Q2 2025 - **Share Repurchases:** **$1.8 billion** (approx. **21 million shares**)[7](index=7&type=chunk)[14](index=14&type=chunk) - **Dividends:** **$254 million**[7](index=7&type=chunk)[14](index=14&type=chunk) - **Total:** **$2.0 billion**[7](index=7&type=chunk)[14](index=14&type=chunk) - The company ended the quarter with significant financial flexibility, evidenced by **$4.8 billion** in parent liquidity and a total debt to total capital ratio of **17.9%**[7](index=7&type=chunk)[14](index=14&type=chunk) - AIG's financial strength was affirmed by credit rating upgrades from Moody's (to **A1**) and S&P Global (to **AA-**) for its insurance subsidiaries during the quarter[7](index=7&type=chunk)[9](index=9&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.45 per share**, payable on September 30, 2025[16](index=16&type=chunk) [Segment Performance](index=5&type=section&id=Segment%20Performance) AIG's General Insurance segment delivered strong underwriting results, while Other Operations significantly reduced its pre-tax loss [General Insurance](index=5&type=section&id=General%20Insurance) The General Insurance segment delivered excellent results, with underwriting income up 46% and combined ratio improving 3.2 points to 89.3% General Insurance Performance Overview | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net premiums written | $6,880 | $6,933 | (1)% | | Underwriting income | $626 | $430 | 46% | | Adjusted pre-tax income | $1,497 | $1,176 | 27% | | Combined Ratio (CR) | 89.3% | 92.5% | (3.2) pts | | Accident Year CR, as adjusted | 88.4% | 87.6% | 0.8 pts | - The improvement in underwriting income was driven by lower catastrophe charges, higher favorable prior year development (**$112 million** vs. **$20 million**), and lower acquisition expenses[17](index=17&type=chunk) - The Accident Year Combined Ratio (AYCR), as adjusted, increased slightly to **88.4%** from **87.6%**, due to a higher accident year loss ratio, partially offset by a lower expense ratio[17](index=17&type=chunk) [North America Commercial](index=6&type=section&id=North%20America%20Commercial) North America Commercial NPW grew 4% to $2.9 billion, with underwriting income surging 58% and combined ratio improving 4.3 points North America Commercial Performance | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net premiums written | $2,863 | $2,750 | 4% | | Underwriting income | $301 | $191 | 58% | | Combined Ratio (CR) | 85.9% | 90.2% | (4.3) pts | - The improvement in the combined ratio was largely driven by lower catastrophe charges and more favorable prior year development[19](index=19&type=chunk) [International Commercial](index=6&type=section&id=International%20Commercial) International Commercial NPW grew 2% to $2.3 billion, with underwriting income up 30% and combined ratio improving 2.7 points International Commercial Performance | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net premiums written | $2,325 | $2,284 | 2% | | Underwriting income | $300 | $230 | 30% | | Combined Ratio (CR) | 85.9% | 88.6% | (2.7) pts | - The combined ratio improved primarily due to lower catastrophe charges and more favorable prior year development, which was partially offset by a higher expense ratio[20](index=20&type=chunk) [Global Personal](index=7&type=section&id=Global%20Personal) Global Personal NPW declined 11% due to reinsurance changes, yet underwriting income grew 178% with combined ratio improving to 98.5% Global Personal Performance | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net premiums written | $1,692 | $1,899 | (11)% | | Underwriting income | $25 | $9 | 178% | | Combined Ratio (CR) | 98.5% | 99.4% | (0.9) pts | - The decline in NPW was mainly driven by a High Net Worth quota share, which had a **6-point** negative impact on growth[21](index=21&type=chunk) - The combined ratio improved due to a lower acquisition ratio, partially offset by a higher loss ratio[21](index=21&type=chunk) [Other Operations](index=8&type=section&id=Other%20Operations) The adjusted pre-tax loss from Other Operations improved 35% to $106 million, driven by reduced corporate expenses and lower interest Other Operations Financial Summary | ($ millions) | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net investment income and other | $92 | $142 | (35)% | | Corporate and other GOE | ($90) | ($184) | 51% | | Interest expense | ($101) | ($111) | 9% | | **Adjusted pre-tax loss** | **($106)** | **($163)** | **35%** | - Key drivers of the improved results include - **Lower Corporate Expenses:** GOE improved by **$94 million** due to AIG Next savings and expense reapportionment[25](index=25&type=chunk) - **Lower Interest Expense:** Interest costs decreased by **$10 million** due to debt reduction[25](index=25&type=chunk) - **Lower Investment Income:** Net investment income decreased by **$50 million**, mainly from lower dividend income from a reduced ownership stake in Corebridge[25](index=25&type=chunk) [Supplementary Information](index=8&type=section&id=Supplementary%20Information) This section provides details on the conference call and comprehensive definitions and reconciliations for non-GAAP financial measures [Conference Call](index=8&type=section&id=Conference%20Call) AIG will host a conference call on August 7, 2025, at 8:30 a.m. ET to discuss Q2 results, with webcast and replay available online - A conference call to review Q2 2025 results is scheduled for **August 7, 2025, at 8:30 a.m. ET**[23](index=23&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section defines non-GAAP financial measures and provides detailed reconciliation tables to comparable GAAP measures for transparency - The report uses several non-GAAP financial measures to enhance the understanding of underlying profitability and for comparison with competitors[30](index=30&type=chunk)[32](index=32&type=chunk) - Adjusted book value per share - Adjusted tangible book value per share - Core operating book value per share - Adjusted return on equity - Core operating return on equity - Adjusted Pre-tax Income (APTI) - Adjusted After-tax Income (AATI) - Detailed reconciliations for non-GAAP measures to their closest GAAP equivalents are provided, starting on **page 16**, to comply with SEC Regulation G[30](index=30&type=chunk)[48](index=48&type=chunk)

Core Viewpoint - American International Group, Inc. (AIG) is expected to report second-quarter 2025 results on August 6, with earnings estimated at $1.58 per share, reflecting a 36.2% increase from the same quarter last year [1][7]. Earnings Estimates - The earnings estimate for the second quarter has seen five downward revisions in the past 30 days, with no upward revisions [2]. - The Zacks Consensus Estimate for revenues is projected at $6.8 billion, indicating a 2.7% growth compared to the previous year [2]. Earnings Surprise History - AIG has surpassed earnings estimates in three of the last four quarters, with an average surprise of 1.73% [3]. Earnings Prediction Model - AIG is predicted to beat earnings expectations due to a positive Earnings ESP of +1.40%, with the most accurate estimate at $1.61 per share [4][5]. Revenue and Income Projections - General Insurance revenues are anticipated to rise by 4% to $6 billion, driven by strong performance in commercial and personal lines [7]. - Net investment income is expected to decline by 4.4% to $946 million due to weaker returns from alternative assets [7][11]. General Insurance Performance - The General Insurance segment is projected to benefit from strong performances in North America Commercial, International Commercial, and Global Personal segments [9]. - The consensus for General Insurance's adjusted pretax income stands at $1.3 billion, reflecting a 13.9% year-over-year growth [11]. Cost and Margin Considerations - Despite cost-cutting measures, AIG's margins are likely to be impacted by a high expense base due to increased losses and loss adjustment expenses [12].

Group 1 - AIG is expected to report earnings of approximately $1.60 per share and revenues of around $6.85 billion, reflecting a 4.5% increase [2] - The company has shifted focus towards property and casualty insurance following the spinoff of its life insurance and retirement segment, with anticipated recovery in underwriting results in the second quarter [2] - AIG's current market capitalization stands at $46 billion, with total revenue over the past twelve months reported at $27 billion and net losses of $-1.9 billion [3] Group 2 - Historical data indicates that AIG has had 19 earnings data points over the last five years, with 14 positive and 5 negative one-day post-earnings returns, resulting in a 74% occurrence of positive returns [5] - The median of the 14 positive returns is 2.6%, while the median of the 5 negative returns is -1.3% [5] - Analyzing the correlation between short-term and medium-term returns post-earnings can provide a less risky trading strategy, particularly if a strong correlation exists [6]

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