AIG(US:AIG) Zacks Investment Researchยท2024-03-21 15:16Core Insights - American International Group, Inc. (AIG) is positioned for growth due to strong performance in its Global Commercial business, rising net investment income, and new business growth [1] - The company benefits from strong results in its General Insurance business and improved insurance rates, while divestitures are streamlining operations and enhancing capital allocation [1] Financial Performance - AIG has a Zacks Rank of 3 (Hold) and its stock has increased by 24.6% over the past six months, outperforming the industry growth of 15.9% [2] - The Zacks Consensus Estimate for AIG's 2024 earnings per share is $7.11, reflecting a 4.7% increase from the previous year's $6.79, with 2024 revenue estimates at $49.2 billion [3] Revenue Drivers - A significant portion of AIG's revenue comes from premiums, expected to grow due to strong performance in commercial lines and rate increases [4] - Total revenues are projected to grow by 9.9% year-over-year in 2024, with the General Insurance segment contributing 56.2% of adjusted revenues in 2023 [5] Investment Income - Total net investment income rose by 24% year-over-year in 2023, with expectations for an 8% increase in 2024 due to a high-interest rate environment [6] - AIG aims for a 10% plus adjusted return on capital employed, achieving a 2023 adjusted ROCE of 9%, up from 7.1% in 2022 [6] Capital Management - The company returned $3 billion to shareholders through repurchases and $1 billion in dividends in 2023, indicating a balanced capital management strategy [7] - AIG's total debt stands at $19.8 billion against a cash balance of $2.2 billion, with an anticipated 11% rise in interest expenses for 2024 [7] Competitive Landscape - Other notable stocks in the insurance sector include CNO Financial Group, Erie Indemnity Company, and Assurant, with varying Zacks Ranks and earnings performance [8][9]