Core Insights - American International Group (AIG) reported a revenue of $6.84 billion for the quarter ended June 2025, marking a year-over-year increase of 3% and a surprise of +0.29% over the Zacks Consensus Estimate of $6.82 billion [1] - The earnings per share (EPS) for the same period was $1.81, compared to $1.16 a year ago, resulting in an EPS surprise of +14.56% against the consensus estimate of $1.58 [1] Financial Performance Metrics - General Insurance combined ratio was reported at 89.3%, better than the four-analyst average estimate of 90.4% [4] - General Insurance expense ratio was 31%, slightly above the four-analyst average estimate of 30.8% [4] - General Insurance loss ratio stood at 58.3%, outperforming the four-analyst average estimate of 59.6% [4] - Net premiums earned in General Insurance were $5.88 billion, below the $5.96 billion average estimate, but represented a year-over-year change of +2.2% [4] - Net investment income for General Insurance was $871 million, exceeding the average estimate of $784.38 million, with a year-over-year increase of +16.8% [4] - Total net investment income was reported at $1.47 billion, significantly higher than the three-analyst average estimate of $946.23 million, reflecting a year-over-year change of +48.1% [4] Stock Performance - AIG shares have returned -5.7% over the past month, contrasting with the Zacks S&P 500 composite's +0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - American International Group, Inc. (AIG) is expected to report second-quarter 2025 results on August 6, with earnings estimated at $1.58 per share, reflecting a 36.2% increase from the same quarter last year [1][7]. Earnings Estimates - The earnings estimate for the second quarter has seen five downward revisions in the past 30 days, with no upward revisions [2]. - The Zacks Consensus Estimate for revenues is projected at $6.8 billion, indicating a 2.7% growth compared to the previous year [2]. Earnings Surprise History - AIG has surpassed earnings estimates in three of the last four quarters, with an average surprise of 1.73% [3]. Earnings Prediction Model - AIG is predicted to beat earnings expectations due to a positive Earnings ESP of +1.40%, with the most accurate estimate at $1.61 per share [4][5]. Revenue and Income Projections - General Insurance revenues are anticipated to rise by 4% to $6 billion, driven by strong performance in commercial and personal lines [7]. - Net investment income is expected to decline by 4.4% to $946 million due to weaker returns from alternative assets [7][11]. General Insurance Performance - The General Insurance segment is projected to benefit from strong performances in North America Commercial, International Commercial, and Global Personal segments [9]. - The consensus for General Insurance's adjusted pretax income stands at $1.3 billion, reflecting a 13.9% year-over-year growth [11]. Cost and Margin Considerations - Despite cost-cutting measures, AIG's margins are likely to be impacted by a high expense base due to increased losses and loss adjustment expenses [12].

Core Viewpoint - Analysts forecast that American International Group (AIG) will report quarterly earnings of $1.58 per share, reflecting a year-over-year increase of 36.2%, with revenues expected to reach $6.82 billion, a 2.7% increase compared to the previous year [1]. Earnings Projections - The consensus EPS estimate has been adjusted downward by 2% over the past 30 days, indicating a reassessment by covering analysts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are linked to short-term stock price performance [3]. Key Metrics Estimates - General Insurance - Net premiums earned are expected to be $5.96 billion, a 3.7% increase year-over-year [5]. - General Insurance - Net investment income is projected at $784.38 million, reflecting a 5.2% year-over-year increase [5]. - Other Operations - Net investment income and other is estimated at $88.75 million, indicating a significant decline of 37.1% year-over-year [5]. Revenue and Ratios - Total net investment income is expected to be $946.23 million, showing a decrease of 4.4% year-over-year [6]. - General Insurance - Combined ratio is projected to be 90.4%, improving from 92.5% in the same quarter last year [6]. - General Insurance - Expense ratio is expected to be 30.8%, down from 31.5% in the previous year [7]. - General Insurance - Loss ratio is anticipated to be 59.6%, compared to 61.0% a year ago [7]. Income Forecast - General Insurance - Adjusted pre-tax income is forecasted to reach $1.34 billion, up from $1.18 billion reported in the same quarter last year [8]. Stock Performance - AIG shares have decreased by 6.7% over the past month, contrasting with the S&P 500 composite's increase of 2.3% [8].

Core Viewpoint - Chubb (CB) is expected to report quarterly earnings of $5.85 per share, an increase of 8.7% year-over-year, with revenues projected at $14.83 billion, reflecting a 7.1% increase compared to the previous year [1]. Earnings Projections - The consensus EPS estimate has been revised downward by 0.1% over the past 30 days, indicating a collective reassessment by analysts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are strongly correlated with short-term stock price performance [3]. Key Metrics Estimates - Analysts estimate 'Net premiums written - North American Personal P&C Insurance' at $1.90 billion, a year-over-year increase of 6.7% [5]. - 'Net investment income - Overseas General Insurance' is projected at $306.90 million, suggesting an 8.4% increase year-over-year [5]. - 'Net investment income - Global Reinsurance' is expected to reach $65.20 million, indicating a 12.4% increase from the prior year [6]. - 'Net premiums written - Total P&C' is forecasted at $12.58 billion, reflecting a 6.8% year-over-year change [6]. - The 'Combined ratio' is anticipated to be 85.2%, down from 86.8% in the same quarter last year [6]. Loss and Expense Ratios - The 'Loss and loss expense ratio' is expected to be 58.8%, a decrease from 60.6% reported in the same quarter last year [7]. - The 'Total P&C - Expense Ratio' is projected at 26.3%, slightly up from 26.2% in the previous year [7]. - 'North America Agricultural Insurance - Loss and loss expense ratio' is estimated at 84.1%, down from 86.8% year-over-year [8]. - 'North America Commercial P&C Insurance - Combined ratio' is expected to be 80.8%, compared to 82.9% last year [8]. - 'North America Commercial P&C Insurance - Loss and loss expense ratio' is projected at 60.9%, down from 62.7% in the same quarter last year [9]. - 'Overseas General Insurance - Combined ratio' is estimated at 86.0%, down from 88.2% year-over-year [9]. - 'Overseas General Insurance - Loss and loss expense ratio' is expected to be 50.0%, a decrease from 52.7% reported last year [10]. Stock Performance - Chubb shares have decreased by 1.6% over the past month, contrasting with the S&P 500 composite's increase of 4.2% [10].

Financial Data and Key Metrics Changes - AIG reported adjusted after-tax income of $702 million, or $1.17 per diluted share, for Q1 2025, reflecting strong performance despite a challenging environment [9][10] - Net premiums written increased to $4.5 billion, an 8% year-over-year growth on a comparable basis, driven by a 10% growth in global commercial [10][34] - The general insurance expense ratio improved to 30.5% from 31.8% in the prior year quarter, primarily due to the divestiture of the travel business [11][12] Business Line Data and Key Metrics Changes - North America commercial insurance net premiums written grew 14% year-over-year, with Lexington growing 23%, led by a 27% increase in Lexington casualty [10][34] - International commercial insurance net premiums written grew 8% year-over-year on an FX adjusted basis, with property growing 35% and marine growing 17% [11][12] - The accident year combined ratio as adjusted was 87.8%, the best first quarter result for AIG since the financial crisis, compared to 88.4% in the prior year quarter [12][34] Market Data and Key Metrics Changes - The market remained favorable in Q1, particularly in segments with strong underlying fundamentals, with North America seeing rate increases led by excess casualty at 16% [14][15] - In international markets, casualty rates increased by 7% while property rates increased by 2%, offset by declines in global specialty and financial lines [17][18] - AIG returned $2.5 billion of capital to shareholders in Q1, including $2.2 billion in share repurchases and $234 million in dividends [17][18] Company Strategy and Development Direction - AIG aims to leverage its underwriting culture, reduce volatility, and enhance its capital management strategy to maximize strategic and financial flexibility [7][8] - The company is focused on deploying Gen AI across its operations to improve underwriting processes and risk assessment [7][8] - AIG is strategically positioned in the growing Indian insurance market through its joint venture with Tata Group, expecting significant growth driven by India's economic expansion [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term strategic and financial goals despite geopolitical and macroeconomic challenges [9][10] - The company anticipates a 20% plus earnings per share compound annual growth rate over the next three years and aims for a core operating ROE of 10% to 13% [30][31] - Management highlighted the importance of monitoring tariff impacts and inflation on underwriting pricing and loss costs [27][29] Other Important Information - AIG's book value per share increased by 10% year-over-year to $71.38, while adjusted tangible book value per share decreased by 8% to $67.96 due to the impact of CorBridge deconsolidation [45][46] - The company has a debt to total capital ratio of 17.1% and parent liquidity of $4.9 billion, indicating strong financial flexibility [18][46] Q&A Session Summary Question: Inquiry on the transformation to using GenAI - Management explained that the transformation began with digitizing workflows and improving data quality, enabling the adoption of GenAI to enhance underwriting processes [52][53] Question: North America commercial pricing metrics - Management acknowledged headwinds in property pricing but emphasized strong technical pricing and positive trends in casualty rates [55][56] Question: Underwriting pricing policy in light of tariff uncertainty - Management indicated that they are cautious and building risk margins into pricing to account for potential impacts from tariffs and inflation [75][76] Question: Impact of expenses moving from other operations to general insurance segments - Management clarified that while expenses are expected to remain stable, the integration of costs from other operations into general insurance segments has been managed effectively [78][80] Question: M&A environment and capital deployment - Management stated that the uncertainty does not change their disciplined approach to acquisitions, focusing on long-term value and strategic fit [84][85]

Financial Data and Key Metrics Changes - AIG reported adjusted after-tax income of $702 million, or $1.17 per diluted share, for Q1 2025, reflecting strong performance despite a challenging environment [11][12] - Net premiums written increased to $4.5 billion, an 8% year-over-year growth on a comparable basis, driven by a 10% growth in global commercial [12][36] - The general insurance expense ratio decreased to 30.5% from 31.8% in the prior year quarter, primarily due to the divestiture of the travel business [13][14] Business Line Data and Key Metrics Changes - North America commercial insurance net premiums written grew 14% year-over-year, with Lexington growing 23%, led by a 27% increase in Lexington casualty [12][36] - International commercial insurance net premiums written grew 8% year-over-year on an FX adjusted basis, with property growing 35% and marine growing 17% [12][13] - The accident year combined ratio as adjusted was 87.8%, the best first quarter result for AIG since the financial crisis, compared to 88.4% in the prior year quarter [14][36] Market Data and Key Metrics Changes - In North America, rate increases were led by excess casualty at 16%, while financial lines decreased by 5% and retail property decreased by 7% [16][17] - Internationally, casualty had a 7% rate increase, while property had a 2% increase, offset by a 14% decrease in global specialty and a 3% decrease in financial lines [19][20] - The overall market remained favorable, particularly in segments with strong underlying fundamentals [15][16] Company Strategy and Development Direction - AIG aims to leverage its diverse geographic footprint and strong product offerings to meet clients' risk needs, with a focus on deploying Gen AI across its operations [9][10] - The company is committed to maintaining a disciplined capital management strategy, with plans to repurchase $5 billion to $6 billion of shares in 2025 [20][35] - AIG is focusing on its joint venture in India, Tata AIG, which is expected to grow at a compound annual growth rate of 20% through 2030, driven by India's accelerating economy and rising insurance adoption [21][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term strategic and financial goals despite geopolitical and macroeconomic challenges [11][12] - The company anticipates that net retained catastrophe losses will remain within expectations for 2025, largely due to its reinsurance structures [15][19] - AIG expects to achieve a core operating ROE of over 10% in 2025, with a focus on maintaining an expense structure aligned with the company's size [34][49] Other Important Information - AIG returned $2.5 billion of capital to shareholders in Q1 2025, including $2.2 billion in share repurchases and $234 million in dividends [20][35] - The adjusted effective tax rate for Q1 was 22.8%, with expectations for the full year to align with 2024 levels [47][48] - Book value per share increased by 10% year-over-year to $71.38, while adjusted tangible book value per share decreased by 8% to $67.96 due to the impact of the CorBridge deconsolidation [48][49] Q&A Session Summary Question: Can you elaborate on the transformation to using GenAI? - Management indicated that the transformation began with digitizing workflows and improving data quality, enabling the adoption of GenAI to enhance underwriting processes [54][55] Question: What is the current pricing environment in North America? - Management acknowledged some headwinds in property pricing but emphasized strong technical pricing for good returns, with casualty rates remaining robust [57][60] Question: How does uncertainty around tariffs affect underwriting pricing? - Management stated that they are cautious and are building risk margins into pricing to account for potential impacts from tariffs and inflation [78][82] Question: Will the expense impact from other operations continue throughout 2025? - Management expects the expense levels seen in Q1 to be reflective of the overall year, with a focus on maintaining a lean operating model [83][85] Question: How does the current environment affect M&A strategy? - Management remains disciplined in pursuing acquisitions, focusing on long-term value and opportunities that align with AIG's strategic goals [89][90]