Can AIG Navigate Through Lower Premiums in Q1 Earnings?

Core Viewpoint - American International Group, Inc. (AIG) is expected to report its first-quarter 2024 results on May 1, with earnings per share estimated at $1.66, reflecting a 1.8% increase from the previous year, while revenues are projected to decline by 2.7% to around $12 billion [1][2]. Earnings Estimates - The Zacks Consensus Estimate for AIG's first-quarter earnings per share is $1.66, down by 2 cents from the previous week, indicating a 1.8% increase from $1.63 reported in the same quarter last year [2]. - Revenue estimates for the first quarter are around $12 billion, suggesting a decline of 2.7% from the prior year's figure [2]. Previous Quarter Performance - In the last reported quarter, AIG's adjusted operating earnings were $1.79 per share, exceeding estimates by 12.6%, driven by strong underwriting results and higher net investment income, although offset by increased expenses and reduced sales in certain segments [3]. Factors Influencing Q1 Performance - The General Insurance business is expected to benefit from improved retention, new business, and growth in premium rates, with adjusted pre-tax income estimated at $1.3 billion, a rise of over 4% from the previous year [4]. - The combined ratio for total General Insurance is projected at 90.7%, down from 91.9% in the prior year [4]. Life and Retirement Business - AIG remains the majority shareholder in Corebridge, with adjusted pre-tax income for the Life and Retirement business estimated at $996.2 million, indicating a nearly 12% increase year-over-year [5]. - Net investment income is expected to rise by 7.1% from the previous year, supported by improved reinvestment rates [5]. Expense Considerations - General operating and other expenses are projected to increase by over 17% year-over-year, with interest expenses expected to exceed $310 million, which may impact profit growth [6]. Earnings Prediction Insights - AIG's Earnings ESP is -0.49%, indicating a lower Most Accurate Estimate of $1.65 per share compared to the Zacks Consensus Estimate of $1.66, suggesting uncertainty regarding an earnings beat [7].