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American International Group (AIG)
NYSE:AIG
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American International Group
(NYSE:AIG)71Outperform
Positive Factors
Earnings
AIG reported EPS of $1.30, above consensus $1.23/BMO $1.28, with the beat driven by stronger underwriting income and investment income.
Underwriting Income
Global Personal segment's underwriting income increased significantly, beating consensus expectations, due to lower than expected catastrophe-related charges.
Negative Factors
Natural Disasters
The company expects loss of $500mn to the LA wildfires.
American International Group (AIG) vs. S&P 500 (SPY)
Market Cap
$47.38B
Dividend Yield1.89%
Average Volume (3M)4.46M
Price to Earnings (P/E)15.8
Beta (1Y)0.71
Revenue Growth-28.56%
EPS Growth1.14%
CountryUS
Employees22,200
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)5.05
Shares Outstanding593,332,950
10 Day Avg. Volume5,924,466
30 Day Avg. Volume4,461,551
Financial Highlights & Ratios
PEG Ratio13.88
Price to Book (P/B)N/A
Price to Sales (P/S)1.89
Price to Cash Flow (P/CF)6.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$85.19Price Target Upside6.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
American International Group Business Overview & Revenue Model
Company DescriptionAmerican International Group, Inc. (AIG) is a global insurance organization providing a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services to customers in more than 80 countries and jurisdictions. Founded in 1919 and headquartered in New York City, AIG serves individuals and businesses with products and services designed to manage risk and provide for a secure future.
How the Company Makes MoneyAIG makes money primarily through underwriting insurance policies and investing the premiums collected from policyholders. The company offers a diverse portfolio of insurance products, including commercial and personal insurance, life insurance, and retirement products. Key revenue streams include premiums from its general insurance segment, which covers property, casualty, and specialty insurance, as well as income from its life and retirement segment, offering products like annuities, life insurance, and pension risk transfer. Additionally, AIG generates investment income by investing reserves from collected premiums in bonds, equities, and other financial instruments. Strategic partnerships and reinsurance agreements also play a role in managing risk and enhancing revenue potential.
American International Group Financial Statement Overview
Summary
AIG's financial performance reflects a mixed picture, characterized by robust cost management and a strong equity position but challenged by declining revenues and inconsistent free cash flow. The company's ability to manage leverage is commendable, yet the recent downturn in profitability and cash flow growth warrants caution. Future stability hinges on reversing revenue decline and enhancing cash flow generation.Income Statement
AIG exhibits fluctuating revenue trends with a notable decline in recent years. Despite this, the company maintains a strong gross profit margin of 100% due to total revenue equating to gross profit, indicating effective cost management. However, the recent EBIT and net profit margins have decreased, indicating pressure on operational efficiency and profitability.63
Positive
Balance Sheet
AIG's balance sheet shows a strong equity base with a debt-to-equity ratio of 0.21, signaling leverage control. The equity ratio stands at 26.3%, reflecting solid asset financing through equity. However, fluctuating equity levels and a decrease in total assets raise concerns about growth sustainability.70
Positive
Cash Flow
AIG's cash flow analysis reveals variability in free cash flow, with a significant decline in recent periods. The operating cash flow to net income ratio is healthy at 1.25, indicating good conversion of accounting profits to cash. However, the negative free cash flow growth rate poses risks to liquidity and financial flexibility.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 27.25B | 47.25B | 56.54B | 51.88B | 43.84B | Gross Profit |
| 27.25B | 38.26B | 47.34B | 43.09B | 35.44B | EBIT |
| 2.70B | 4.87B | 14.38B | 11.56B | -8.31B | EBITDA |
| 2.70B | 9.21B | 19.83B | 18.04B | -1.72B | Net Income Common Stockholders |
| -1.40B | 3.64B | 10.23B | 10.37B | -5.83B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 15.76B | 2.15B | 240.57B | 292.76B | 292.53B | Total Assets |
| 161.32B | 539.31B | 526.63B | 596.11B | 586.48B | Total Debt |
| 8.76B | 22.39B | 27.18B | 30.16B | 37.53B | Net Debt |
| 7.46B | 20.23B | 25.14B | 27.96B | 34.71B | Total Liabilities |
| 118.77B | 488.00B | 484.40B | 30.16B | 37.53B | Stockholders Equity |
| 42.52B | 45.35B | 40.00B | 65.96B | 66.36B |
| Cash Flow | Free Cash Flow | |||
| 3.27B | 6.24B | 4.21B | 5.53B | 2.85B | Operating Cash Flow |
| 3.27B | 6.24B | 4.21B | 6.28B | 1.04B | Investing Cash Flow |
| 1.67B | -7.02B | -3.63B | -3.28B | -6.20B | Financing Cash Flow |
| -5.06B | 782.00M | -676.00M | -3.73B | 5.06B |
American International Group Technical Analysis
Positive
79.85
Price Trends
74.71
Positive
75.09
Positive
74.66
Positive
Market Momentum
1.79
Negative
59.75
Neutral
81.31
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIG, the sentiment is Positive. The current price of 79.85 is above the 20-day moving average (MA) of 76.92, above the 50-day MA of 74.71, and above the 200-day MA of 74.66, indicating a bullish trend. The MACD of 1.79 indicates Negative momentum. The RSI at 59.75 is Neutral, neither overbought nor oversold. The STOCH value of 81.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIG.
American International Group Risk Analysis
American International Group disclosed 36 risk factors in its most recent earnings report. American International Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
American International Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $33.38B | 11.30 | 18.92% | 1.61% | 8.19% | 29.77% | |
75 Outperform | $57.97B | 11.91 | 17.94% | 1.59% | 12.23% | 68.50% | |
72 Outperform | $53.55B | 11.89 | 21.77% | 1.82% | 12.28% | ― | |
71 Outperform | $47.38B | 15.77 | -3.30% | 1.89% | -28.56% | 1.14% | |
65 Neutral | $55.56B | 13.72 | 16.13% | 2.54% | 6.10% | 225.22% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
61 Neutral | $38.79B | 14.61 | 9.78% | 4.63% | 34.25% | 11.22% |
* Financial Sector Average
Performance Comparison
AIG
American International Group
79.85
6.57
8.97%
ALL
Allstate
199.03
44.32
28.65%
HIG
Hartford Financial
116.98
21.18
22.11%
MET
Metlife
81.56
12.56
18.20%
PRU
Prudential Financial
109.59
4.75
4.53%
TRV
Travelers Companies
255.70
39.02
18.01%
American International Group Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: 5.16% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance in terms of underwriting and strategic initiatives, with significant capital management achievements. However, increased catastrophe losses and expense management challenges slightly tempered the overall positive outlook.Highlights
Strong Fourth Quarter Performance
General Insurance reported strong net premiums written of $6.1 billion, an increase of 7% year-over-year. Adjusted after-tax income per share grew 5% year-over-year to $1.30 per share.
Disciplined Capital Management
AIG reduced shares outstanding by 12% and increased the quarterly dividend per share by 11%, resulting in the return of $8.1 billion of capital to shareholders.
Significant Strategic Initiatives
AIG deconsolidated Corebridge Financial, achieving a four-year journey milestone, and closed on multiple business divestitures to simplify operations.
Generative AI Implementation
AIG launched its first generative AI solution, AIG Underwriter Assist, to support business growth and improve underwriting efficiency.
Positive Reinsurance Outcomes
AIG successfully maintained its reinsurance purchasing strategy with strong renewals and launched a new reinsurance syndicate at Lloyd's in partnership with Blackstone.
Lowlights
Higher Catastrophe Losses
Fourth quarter underwriting income decreased by $156 million due to higher catastrophe losses, including $224 million from Hurricane Milton.
Impact of California Wildfires
The California wildfires resulted in a significant loss event with expected impacts of approximately $500 million for AIG, before reinstatement premiums.
Expense Ratio Concerns
The expense ratio remained flat despite absorbing more AIG parent expenses. Efforts to manage expenses continue, but challenges remain.
Company Guidance
During the fourth quarter of fiscal year 2024, AIG demonstrated strong financial performance with significant growth metrics. The company reported net premiums written of $6.1 billion, marking a 7% increase year-over-year, driven by an 8% growth in Global Commercial lines. Global Commercial generated $1.1 billion in new business, a 16% rise year-over-year, with a retention rate of 86% across its portfolio. Net premiums earned grew by 6% year-over-year to $6 billion. Additionally, AIG's adjusted after-tax income per share increased by 5% year-over-year, reaching $1.30 per share. The company achieved a calendar year combined ratio of 92.5% and an accident year combined ratio, excluding catastrophes, of 88.6%. These results were achieved alongside rigorous expense discipline and strategic divestitures, including the sale of Crop Risk Services, Validus Re, and the global personal travel and assistance business.American International Group Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
AIG Appoints Juan Perez to Board of Directors
Positive
Feb 20, 2025
On February 19, 2025, American International Group, Inc. (AIG) appointed Juan Perez, a prominent technology executive with extensive experience in artificial intelligence and digital transformation, to its Board of Directors. This strategic move aims to enhance AIG’s data and digital strategy, aligning with its focus on delivering exceptional value to clients and stakeholders and positioning the company for long-term success.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.