American International Group, Inc. (NYSE:AIG) Quarterly Earnings Preview

American International Group (NYSE:AIG) posted stronger-than-expected first-quarter earnings, supported by robust growth in its commercial insurance segment, which helped counter heavy catastrophe losses from California wildfires.

The insurer reported adjusted earnings of $1.17 per share, exceeding analyst expectations of $0.99. However, net income dropped to $698 million, or $1.16 per share, from $1.19 billion, or $1.74 per share, a year ago—reflecting the financial impact of recent natural disasters.

Total net premiums written remained flat year-over-year at $4.5 billion, but rose 8% on a comparable basis. AIG’s Global Commercial segment saw notable strength, with premiums up 10% to $3.2 billion, driven by 14% growth in North America and 8% internationally.

The General Insurance segment posted a combined ratio of 95.8%, up from 89.8% a year earlier. The deterioration was largely attributed to $525 million in catastrophe-related losses, including $460 million tied to January’s wildfires in California.

American International Group (NYSE:AIG) posted stronger-than-expected first-quarter earnings, supported by robust growth in its commercial insurance segment, which helped counter heavy catastrophe losses from California wildfires.

The insurer reported adjusted earnings of $1.17 per share, exceeding analyst expectations of $0.99. However, net income dropped to $698 million, or $1.16 per share, from $1.19 billion, or $1.74 per share, a year ago—reflecting the financial impact of recent natural disasters.

Total net premiums written remained flat year-over-year at $4.5 billion, but rose 8% on a comparable basis. AIG’s Global Commercial segment saw notable strength, with premiums up 10% to $3.2 billion, driven by 14% growth in North America and 8% internationally.

The General Insurance segment posted a combined ratio of 95.8%, up from 89.8% a year earlier. The deterioration was largely attributed to $525 million in catastrophe-related losses, including $460 million tied to January’s wildfires in California.

American International Group, Inc. (NYSE:AIG) is a global insurance company offering a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services. AIG competes with other major insurers like Allianz and Zurich Insurance Group. The company has been focusing on strategic initiatives to enhance its financial performance and operational efficiency.

On February 11, 2025, AIG reported earnings per share (EPS) of $1.30, slightly below the estimated $1.33. However, this EPS surpassed the Zacks Consensus Estimate of $1.26, showcasing a better-than-expected performance. Despite this, the EPS decreased from $1.79 in the previous year, indicating a decline in profitability.

AIG's revenue for the quarter was approximately $6.76 billion, in line with the estimated $6.76 billion. This revenue performance reflects the company's ability to generate sales despite challenges like the California wildfires. AIG's local teams have been actively supporting affected families and businesses, demonstrating the company's commitment to its community.

The company's financial metrics provide insight into its valuation and financial health. AIG's price-to-earnings (P/E) ratio is approximately 19.68, indicating the price investors are willing to pay for each dollar of earnings. The price-to-sales ratio is about 2.21, suggesting investors pay $2.21 for every dollar of sales. These ratios help investors assess the company's market value relative to its earnings and sales.

AIG's enterprise value to sales ratio is around 2.61, reflecting its total valuation compared to sales. The enterprise value to operating cash flow ratio is notably high at approximately 46.97, indicating a high valuation relative to cash flow from operations. The company's debt-to-equity ratio is relatively low at 0.22, suggesting a conservative use of debt. Additionally, AIG maintains a current ratio of approximately 1.50, indicating its ability to cover short-term liabilities with short-term assets.

American International Group, Inc. (NYSE:AIG) is a global insurance company offering a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services. AIG competes with other major insurers like Allianz and Zurich Insurance Group. The company has been focusing on strategic initiatives to enhance its financial performance and operational efficiency.

On February 11, 2025, AIG reported earnings per share (EPS) of $1.30, slightly below the estimated $1.33. However, this EPS surpassed the Zacks Consensus Estimate of $1.26, showcasing a better-than-expected performance. Despite this, the EPS decreased from $1.79 in the previous year, indicating a decline in profitability.

AIG's revenue for the quarter was approximately $6.76 billion, in line with the estimated $6.76 billion. This revenue performance reflects the company's ability to generate sales despite challenges like the California wildfires. AIG's local teams have been actively supporting affected families and businesses, demonstrating the company's commitment to its community.

The company's financial metrics provide insight into its valuation and financial health. AIG's price-to-earnings (P/E) ratio is approximately 19.68, indicating the price investors are willing to pay for each dollar of earnings. The price-to-sales ratio is about 2.21, suggesting investors pay $2.21 for every dollar of sales. These ratios help investors assess the company's market value relative to its earnings and sales.

AIG's enterprise value to sales ratio is around 2.61, reflecting its total valuation compared to sales. The enterprise value to operating cash flow ratio is notably high at approximately 46.97, indicating a high valuation relative to cash flow from operations. The company's debt-to-equity ratio is relatively low at 0.22, suggesting a conservative use of debt. Additionally, AIG maintains a current ratio of approximately 1.50, indicating its ability to cover short-term liabilities with short-term assets.

American International Group, Inc. (NYSE:AIG) is a global insurance company offering a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services. As a major player in the insurance industry, AIG competes with companies like MetLife and Prudential Financial. AIG is set to release its quarterly earnings on February 11, 2025, after market close. Analysts estimate the earnings per share (EPS) to be $1.33, with projected revenue of approximately $6.74 billion.

Zacks Investment Research analysts have a slightly different outlook, estimating AIG's EPS at $1.26 and revenues at $6.8 billion for the fourth quarter of 2024. Despite a downward revision in earnings estimates over the past 60 days, the consensus suggests a year-over-year growth of 46.8% in revenues and 27.9% in earnings. This indicates that AIG's financial performance may still show improvement compared to the previous year.

Looking ahead to 2025, the Zacks Consensus Estimate projects AIG's revenues at $27 billion, a slight decline of 0.3% from the previous year. However, the EPS for the current year is expected to be $6.45, reflecting a significant increase of approximately 30.3% year over year. AIG has surpassed consensus earnings estimates in three of the last four quarters, which may boost investor confidence.

Despite expectations of a year-over-year decline in earnings and lower revenues for the quarter ending December 2024, the market remains optimistic about AIG's potential to deliver a positive earnings surprise. If AIG exceeds expectations, the stock may see an upward movement. Conversely, a miss on these estimates could lead to a decline in stock value. The sustainability of any immediate price changes will depend on management's discussion of business conditions during the earnings call.

AIG's financial metrics provide insight into its market valuation. The company's price-to-earnings (P/E) ratio is approximately 19.47, indicating the price investors are willing to pay for each dollar of earnings. AIG's price-to-sales ratio stands at about 2.19, and its enterprise value to sales ratio is around 2.59. The debt-to-equity ratio is relatively low at 0.22, suggesting a conservative use of debt. Additionally, AIG maintains a current ratio of about 1.50, indicating its ability to cover short-term liabilities with short-term assets.

BofA Securities analysts increased their price target for American International Group (NYSE:AIG) to $84 from $82, maintaining a Neutral rating on the stock. The analysts explained that the previous valuation of AIG was based on a sum-of-the-parts approach, considering the General Insurance and Life businesses separately along with the value of the deferred tax asset (DTA). Following consolidation, AIG will now be valued similarly to its large-cap P&C peers, using a forward P/E multiple of 10.6x for 2025 earnings to determine a 12-month price target of $84. This valuation approach assumes the DTA will be exhausted by the end of 2026.

The analysts acknowledged that AIG might traditionally trade at a discount compared to peers due to its trading history, shrinking reserve base, and slower premium growth. However, they believe that AIG's ongoing share repurchase efforts provide unique price support that is not observed in peer stocks, which should positively influence its near-term valuation.