AIG(AIG) - 2025 Q2 - Quarterly Results

Overall Financial Performance AIG reported strong Q2 2025 results, driven by improved profitability and disciplined capital returns to shareholders Financial Highlights 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][7] - Volatility Management: Catastrophe-related charges were contained at $170 million, representing 2.9 loss ratio points[4][7] - Operational Efficiency: The AIG Next initiative has delivered over $500 million in savings ahead of schedule[4][7] - Net Premiums Written (NPW) grew 1% year-over-year on a comparable basis, driven by 4% growth in North America Commercial[5] - 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] Financial Summary 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] - 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] - On an APTI basis, which excludes the Corebridge impact, net investment income grew 9% to $955 million[12] Capital Management and Shareholder Returns 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][14] - Dividends: $254 million[7][14] - Total: $2.0 billion[7][14] - 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][14] - 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][9] - The Board of Directors declared a quarterly cash dividend of $0.45 per share, payable on September 30, 2025[16] Segment Performance AIG's General Insurance segment delivered strong underwriting results, while Other Operations significantly reduced its pre-tax loss General Insurance The General Insurance segment delivered excellent results, with underwriting income up 46% and combined ratio improving 3.2 points to 89.3% General Insurance Performance Overview | Metric | Q2 2025 ($ 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] - 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] North America Commercial 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] International Commercial 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 | $230 | 30% | | Combined Ratio (CR) | 85.9% | 88.6% | (2.7) pts | - The combined ratio improved primarily due to lower catastrophe charges and more favorable prior year development, which was partially offset by a higher expense ratio[20] Global Personal Global Personal NPW declined 11% due to reinsurance changes, yet underwriting income grew 178% with combined ratio improving to 98.5% Global Personal Performance | Metric | Q2 2025 ($ 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] - The combined ratio improved due to a lower acquisition ratio, partially offset by a higher loss ratio[21] Other Operations 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] - Lower Interest Expense: Interest costs decreased by $10 million due to debt reduction[25] - Lower Investment Income: Net investment income decreased by $50 million, mainly from lower dividend income from a reduced ownership stake in Corebridge[25] Supplementary Information This section provides details on the conference call and comprehensive definitions and reconciliations for non-GAAP financial measures Conference Call 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] Non-GAAP Financial Measures and Reconciliations 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][32] - 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][48]