American International Group (NYSE:AIG) Delivers Strong Q2 2025 Earnings, Surpassing Analyst Expectations

American International Group (NYSE:AIG) Reports Strong Q2 2025 Earnings, Beating Estimates

American International Group (AIG) delivered a solid second-quarter performance, surpassing analyst expectations on both earnings and revenue. The insurer reported adjusted after-tax income per diluted share of $1.81, a 56% increase from the prior year quarter and comfortably above the consensus estimate of $1.61. Revenue for the quarter came in at $6.84 billion, slightly below the expected $6.85 billion but still demonstrating resilience in a challenging macroeconomic environment.

Key Financial Highlights

• Earnings Beat: AIG’s adjusted EPS of $1.81 outperformed estimates by nearly 12%, driven by strong underwriting income ($626 million, up 46% YoY) and higher net investment income ($955 million, up 9% YoY).
• Underwriting Strength: The General Insurance segment posted a combined ratio of 89.3%, an improvement from 92.5% in Q2 2024, reflecting lower catastrophe losses ($170 million vs. $330 million in the prior year).
• Capital Returns: The company returned $2.0 billion to shareholders through $1.8 billion in share buybacks and $254 million in dividends.
• Investment Income Growth: Total net investment income rose 48% YoY to $1.5 billion, supported by improved fixed maturity securities performance.
• Balance Sheet Strength: AIG ended the quarter with a debt-to-capital ratio of 17.9% and parent liquidity of $4.8 billion, reinforcing financial flexibility.

Market Reaction

Despite the earnings beat, AIG shares dipped 1.34% in after-hours trading. This muted reaction could reflect broader market sentiment, profit-taking after recent gains, or investor caution around macroeconomic risks. Over the past month, the stock has declined 4.8%, though it remains relatively flat on a weekly basis.

Outlook vs. Analyst Estimates

While AIG did not provide explicit forward guidance in its earnings release, analysts currently expect:

• Q3 2025 EPS: $1.60
• Q3 2025 Revenue: $6.97 billion
• Full-Year 2025 EPS: $6.36
• Full-Year 2025 Revenue: $27.89 billion

The company’s strong underwriting discipline, improved investment income, and capital return strategy suggest it is well-positioned to meet or exceed these projections.

Press Release Takeaways

• General Insurance Profitability: North America Commercial and International Commercial segments saw combined ratios improve to 85.9%, while Global Personal remained stable at 98.5%.
• Strategic Initiatives: AIG’s cost-saving program, AIG Next, delivered over $500 million in savings ahead of schedule.
• Credit Rating Upgrades: Moody’s and S&P upgraded AIG’s insurance subsidiaries, reflecting confidence in its financial stability.

For a deeper dive into AIG’s earnings and future estimates, visit the AIG earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial advisor before making decisions.