AIG Beats on Q1 Earnings on Lower Costs, Approves Dividend Hike

Core Insights - American International Group, Inc. (AIG) reported first-quarter 2024 adjusted earnings per share of $1.77, exceeding the Zacks Consensus Estimate by 6.6% and improving 8.6% year over year [1] - Operating revenues reached $12.5 billion, a 0.8% year-over-year increase, surpassing the consensus mark by 3.6% [1] Quarterly Operational Update - Premiums totaled $8.2 billion, down 3.7% year over year, but exceeded the Zacks Consensus Estimate of $7.8 billion [2] - Total net investment income rose 11% year over year to $3.9 billion, driven by increased income from fixed maturity securities and loans [2] - Total benefits, losses, and expenses decreased 6.1% year over year to $10.5 billion, lower than estimates [2] - Adjusted return on common equity improved to 9.3%, up 60 basis points year over year [2] Segmental Performances General Insurance - Net premiums written fell to $4.5 billion, a 35% year-over-year decline, primarily due to softness in Financial Lines [3] - Underwriting income increased 19% year over year to $596 million, supported by strong contributions from North America Personal Insurance [3] - Catastrophe losses decreased significantly by 59.8% year over year to $106 million [3] Life & Retirement - Premiums and fees grew 6% year over year to $3.1 billion, with premiums and deposits increasing 2% to $10.7 billion [5] - Adjusted revenues rose 10.2% year over year to $5.9 billion, surpassing the Zacks Consensus Estimate [5] - Adjusted pre-tax income improved 12% year over year to $991 million, although it missed the consensus estimate [5] Financial Position (As of Mar 31, 2024) - Cash balance stood at $1.8 billion, down 15.7% from the end of 2023 [6] - Total assets increased by 0.9% to $544.1 billion [6] - Total equity decreased by 4.3% to $49.1 billion, while total debt to total capital improved to 28.1% [6] - Adjusted book value per share grew 3% year over year to $77.79 [6] Capital Deployment Update - AIG repurchased shares worth $1.7 billion and distributed $250 million in dividends [7] - Management authorized an increase of up to $10 billion in share buyback authorization effective from May 2024 [7] - A quarterly dividend hike of 11% was announced, raising the dividend to 40 cents per common share [7] Performances of Other Insurers - Arch Capital Group Ltd. reported operating income of $2.45 per share, beating estimates by 18.9% and showing a 41.6% year-over-year increase [9] - Cincinnati Financial Corporation's operating income surged 93.2% year over year to $1.72 per share, although total operating revenues missed estimates [10] - Kinsale Capital's net operating earnings reached $3.50 per share, exceeding estimates by 5.1% and increasing 43.4% year over year [11]