Group 1 - NVIDIA Corporation continues to show strong performance driven by demand in AI and gaming sectors, with significant revenue growth reported [1] - Progressive Corp has demonstrated resilience in the insurance market, with a focus on expanding its digital capabilities and customer service [1] - American International Group Inc is undergoing restructuring efforts to improve profitability and streamline operations, aiming for a more focused business model [1] Group 2 - Travelers Companies reported solid earnings, benefiting from rate increases and improved underwriting results, indicating a positive outlook for the insurance industry [1]

Core Insights - American International Group, Inc. (AIG) is a global insurance company providing various financial services and has outperformed the industry average with an 8.4% increase year-to-date compared to 7.1% [1] Company Overview - AIG is headquartered in New York with a market capitalization of $43.4 billion and operates in three segments: North America Commercial, International Commercial, and Global Personal [2] - The company's forward P/E ratio stands at 10.73X, higher than the industry average of 9X, indicating growing investor confidence [2] - AIG currently holds a Zacks Rank 2 (Buy) due to solid growth prospects [2] Earnings Estimates - The Zacks Consensus Estimate for AIG's 2025 earnings is $6.34 per share, reflecting a 28.1% year-over-year increase [3] - Revenue estimates for 2025 are pegged at $27.6 billion, with AIG beating earnings estimates in the past four quarters, averaging a surprise of 9.5% [3] Growth Drivers - AIG's revenue growth is driven by increased net premium written (NPW), high retention rates, and new business generation [4] - NPW in the North America Commercial segment rose by 6.7% year-over-year, while the International Commercial segment saw a 3.1% increase in the first half of 2025 [4] - Tata AIG, a high-growth business, recorded a compounded annual growth rate of 20% from 2020 to 2025, with expectations to maintain this growth through 2030 [5] Strategic Initiatives - AIG plans to launch underwriter assistance for Lexington Middle Market and Property & Casualty businesses in Q3 2025, with a broader rollout in 2026 [6] - The company is scaling Gen AI across underwriting and developing AIG claims assistance [6] Financial Performance - AIG's expense ratio is improving due to changes in business mix, expense discipline, and an enhanced premium base, leading to operational efficiency [7] - Total benefits, losses, and expenses decreased by 2.4% year-over-year in the first half of 2025, attributed to lower general operating and other expenses [7] Shareholder Value - AIG has demonstrated robust cash generation, rewarding shareholders with $4 billion in share buybacks and $488 million in dividends in the first half of 2025 [8] - The company repurchased shares worth $467 million from July 1 to August 1, 2025, with a total debt to capital ratio of 18.2%, below the industry average of 34.2% [8] Challenges - AIG faces a deteriorating combined ratio across its business lines, with year-over-year deterioration of 70 bps, 100 bps, and 430 bps in North America Commercial, International Commercial, and Global Personal segments, respectively [11] - Catastrophe losses have impacted underwriting margins, with losses of $1.1 billion in 2023, increasing by 9.4% in 2024 and 59.4% in the first half of 2025 [12] - AIG's return on equity (ROE) stands at 7.9%, lower than the industry average of 14.8%, indicating relative inefficiency in utilizing shareholder funds [12]

Core Viewpoint - American International Group Inc (AIG) stock is experiencing a pullback from its late August peak, facing resistance at the $84 level, which previously served as support in June. However, there are indications that the stock may rebound towards this level soon [1]. Group 1 - AIG is currently within 0.75 of the 260-day trendline's 20-day average true range (ATR), having spent over 80% of the last 10 days and the last two months above this level. Historically, similar conditions have led to an increase in stock price 86% of the time, with an average gain of 4.5% one month later [2]. - A move from the current price of $78.52 to a similar magnitude would position AIG just above $82 [2]. Group 2 - Options trading for AIG indicates low volatility expectations, as reflected by the Schaeffer's Volatility Index (SVI) of 21%, which is in the low 8th percentile of its annual range [4].

Core Insights - AIG is focusing on redefining its identity and moving past its historical challenges, with 2025 being a pivotal year for the company [3] - The company aims to enhance its underwriting culture, operational excellence, and disciplined capital management strategy to achieve financial and strategic flexibility [4] Group 1 - AIG's leadership emphasizes the importance of Investor Day in March as a defining moment for the company's future direction [3] - The company is committed to digitizing workflows and integrating advanced technologies like Gen AI to improve operational processes [4] - AIG's strategic initiatives are designed to reposition the company and demonstrate the positive impact of its colleagues' efforts [3][4]

Summary of American International Group (AIG) 2025 Conference Call Company Overview - **Company**: American International Group (AIG) - **Event**: 2025 Conference Call - **Date**: September 03, 2025 Key Points Financial Performance - Adjusted after-tax income per share increased by **56% year-over-year** driven by a **46% increase in underwriting income** [5] - Core operating Return on Equity (ROE) rose to **11.7%** for the quarter, with a calendar year combined ratio of **89.3%** [5] - Year-to-date, AIG returned **$4.5 billion** of capital to shareholders and achieved a third consecutive year of double-digit dividend growth [6] - S&P and Moody's upgraded the financial strength of AIG's insurance subsidiaries, marking the first upgrade from Moody's since **1990** [6] Strategic Initiatives - AIG is focused on enhancing its **underwriting culture** and operational excellence through digitization and the use of **GenAI** [3][4] - The company aims to achieve ambitious long-term financial targets and is on track to meet a **20% EPS growth** objective over three years [5] - AIG has retired **$830 million** of debt, resulting in a debt-to-total capital ratio of **17.9%**, one of the best in the industry [6] Market Conditions - The property insurance sector faced headwinds in **2025**, while casualty lines, particularly excess casualty, showed strength [8] - Financial lines have stabilized after a period of rate reductions, with AIG emphasizing the importance of transparency in property pricing and reinsurance costs [8] Technology and Innovation - AIG is embedding **GenAI** into core business processes to support underwriting and claims, with promising early results from pilot programs [9][10] - The company plans to roll out GenAI capabilities across various business lines, including its **E&S business** and **Lexington** [11] - Major tech companies are investing heavily in AI, with a combined **$400 billion** in CapEx announced for AI in 2025, which AIG expects to leverage for growth [12] Leadership and Talent - John Neal has been appointed as President of AIG, bringing extensive global experience and a strong track record in underwriting strategy [15][17] - AIG is focused on attracting and retaining talent, with a strong emphasis on training and developing underwriters to adapt to changing market conditions [73][75] Mergers and Acquisitions - AIG is open to M&A opportunities that align with its strategic goals, emphasizing the importance of cultural fit and financial accretion [63][64] - The company aims to enhance its capabilities in areas such as **A&H** and expand into new geographies through potential acquisitions [63] Underwriting and Claims Management - AIG is managing its underwriting portfolio with a focus on operational efficiency and reducing cycle times for submissions [24][28] - The company is cautious about the use of delegated underwriting authority, preferring to maintain control over underwriting outcomes [78] Future Outlook - AIG anticipates that larger companies will benefit from scale and investment in technology, positioning them for faster growth in the insurance market [56][57] - The company is prepared to adapt its strategies based on market conditions, particularly in property and casualty lines, to capitalize on growth opportunities [52][53] Risk Management - AIG maintains a conservative approach to reserves, focusing on strengthening its balance sheet and ensuring adequate pricing for long-tail claims [84][86] - The company is exploring the potential for shifting longer-tail casualty policies to a claims-made basis, although it recognizes challenges in client acceptance [88][89] Conclusion AIG is demonstrating strong financial performance and strategic repositioning in 2025, with a focus on technology integration, talent development, and operational efficiency. The company is well-positioned to navigate market challenges and capitalize on growth opportunities in the insurance sector.

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1][2]. Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the short term [2][3]. - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3]. Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3]. Growth Score - The Growth Style Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4]. Momentum Score - The Momentum Style Score is designed for traders looking to capitalize on price trends, utilizing factors like recent price changes and earnings estimate shifts [5]. VGM Score - The VGM Score combines Value, Growth, and Momentum scores, providing a comprehensive rating to identify stocks with the best overall potential [6]. Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [7][8]. - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9]. Company Spotlight: American International Group (AIG) - AIG is a prominent global insurance organization offering a range of services, including property casualty insurance and retirement solutions, operating in over 80 countries [11]. - Currently rated 3 (Hold) by Zacks, AIG has a VGM Score of B and a Momentum Style Score of B, with shares increasing by 4.2% in the past month [11][12]. - Recent upward revisions in earnings estimates for fiscal 2025 have led to a consensus estimate increase of $0.07 to $6.33 per share, with an average earnings surprise of +9.5% [12].

Core Insights - American International Group, Inc. (AIG) reported second-quarter 2025 adjusted earnings per share of $1.81, exceeding the Zacks Consensus Estimate by 14.6% and reflecting a 56% year-over-year increase [1][10] - Adjusted operating revenues rose 3% year over year to $6.8 billion, slightly surpassing the consensus mark by 0.3% [1][2] Financial Performance - The quarterly results were bolstered by strong investment income, which increased 48.1% year over year to $1.5 billion, driven by favorable changes in the fair value of AIG's equity stake in Corebridge and higher income from fixed maturity securities [2][3] - Total benefits, losses, and expenses decreased by 6.7% year over year to $5.5 billion, attributed to lower general operating and other expenses [4] - Adjusted return on equity improved by 360 basis points year over year to 9.7% [4][10] Segmental Performance - General Insurance – North America Commercial: Net premiums written grew 4% year over year to $2.9 billion, with underwriting income soaring 58% year over year to $301 million [5][6] - General Insurance – International Commercial: Net premiums written increased by 2% year over year to $2.3 billion, with underwriting income advancing 30% year over year to $300 million [7][8] - General Insurance – Global Personal: Net premiums written fell 11% year over year to $1.7 billion, impacted by adverse effects from High Net Worth quota share [9] Operational Updates - AIG's cash balance reached $1.8 billion, a 40.2% increase from the end of 2024, while total assets rose by 2.9% to $166 billion [13] - Long-term debt increased by 3.8% to $9.1 billion, and total shareholders' equity decreased by 2.4% to $41.5 billion [13] - Adjusted book value per share improved by 5.3% year over year to $76.62 [14] Capital Deployment - AIG returned $1.8 billion to shareholders through share repurchases and paid $254 million in dividends during the second quarter [15]

Core Viewpoint - The Zacks Multiline Insurance industry is experiencing growth driven by product diversification, digitalization, and increased demand for embedded insurance, with projected global premiums from embedded insurance expected to exceed $722 billion by 2030 [1]. Industry Overview - The Zacks Multiline Insurance industry includes companies that provide bundled insurance coverage for various needs, improving customer retention and offering lower premium payments compared to individual policies [3]. - The industry is characterized by diversified product and service portfolios, which help lower concentration risk and enhance sales and premiums, particularly in life insurance [4]. Trends Shaping the Industry - The transition to green energy and related insurance products, along with the rise of cyber insurance due to increased AI adoption, presents growth opportunities [4]. - The industry is expected to see continued consolidation as companies seek to diversify operations and gain market share, with a rise in technology-driven deals anticipated by 2025 [5]. - Digitalization is significantly impacting the industry, with the adoption of technologies like AI and blockchain to enhance operations and reduce costs [6]. Financial Performance - The Multiline Insurance industry has underperformed compared to the Finance sector and the S&P 500 year to date, with a collective gain of 1.7% against the sector's 8.4% and the S&P 500's 6.9% [9]. - The industry is currently trading at a price-to-book (P/B) ratio of 2.37X, significantly lower than the S&P 500's 7.37X and the sector's 4.23X [12]. Company Highlights - **American International Group (AIG)**: Expected earnings growth of 24.2% and 25.9% for 2025 and 2026, respectively, with a long-term growth rate of 14.8% [19]. - **Prudential Financial (PRU)**: Anticipates 5% to 8% core adjusted operating EPS growth through 2027, with earnings growth estimates of 8% and 8.5% for 2025 and 2026 [23]. - **Principal Financial Group (PFG)**: Projected earnings growth of 17.6% and 11.5% for 2025 and 2026, respectively, with a long-term growth rate of 12.7% [27]. - **Everest Group (EG)**: Expected to see earnings growth of 52% and 35.7% for 2025 and 2026, with a long-term growth rate of 29.7% [31]. - **Assurant (AIZ)**: Forecasted earnings decrease of 17.6% for 2025, but growth in connected living and global automotive sectors is expected to support overall performance [35].

[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]