American International Group (NYSE:AIG) reported its fourth-quarter and full-year 2025 results, delivering a solid earnings beat that was met with a muted, slightly negative reaction in after-hours trading. The insurance giant's performance was driven by robust underwriting results and disciplined capital management, though the market's focus appeared to shift to broader concerns or the nuances within the report.
Earnings and Revenue Versus Estimates
For the fourth quarter, AIG posted adjusted after-tax income per diluted share (AATI) of $1.96. This figure comfortably exceeded the analyst consensus estimate of $1.92. The company's top-line performance was more mixed. Reported revenue for the quarter came in at $6.95 billion, which was slightly below the estimated $6.98 billion.
The full-year results were notably strong, with AATI per share reaching $7.09, a 43% increase over the prior year. This performance underscores the significant progress in the company's ongoing transformation.
- Q4 2025 Non-GAAP EPS: $1.96 (Reported) vs. $1.92 (Estimated) – Beat
- Q4 2025 Revenue: $6.95B (Reported) vs. $6.98B (Estimated) – Slight Miss
Market Reaction and Price Action
Following the earnings release, AIG's stock traded down approximately 1.3% in after-hours activity. This reaction suggests that while the earnings beat was positive, investors may have been anticipating an even stronger performance or are weighing other factors. The stock had been relatively flat in the weeks leading up to the report, with a gain of about 1.2% over the past month. The immediate negative drift indicates the market is parsing details beyond the headline EPS number, potentially related to investment income dynamics or premium growth rates.
Key Highlights from the Quarterly Report
The earnings release painted a picture of a company executing effectively on its strategic goals. The most critical takeaways include:
- Strong Underlying Profitability: The core General Insurance business delivered a full-year combined ratio of 90.1%, an improvement of 1.7 percentage points from 2024. A combined ratio below 100% indicates an underwriting profit. Underwriting income grew 22% for the full year to $2.3 billion.
- Capital Returns to Shareholders: AIG returned a substantial $6.8 billion to shareholders in 2025, comprising $5.8 billion in share repurchases and $1.0 billion in dividends. This aggressive buyback program reduced diluted shares outstanding by over 13% year-over-year, providing a significant boost to per-share metrics.
- Strategic Positioning for Growth: CEO Peter Zaffino highlighted several new strategic partnerships formed in recent months, including ventures with Blackstone, Amwins, and CVC. Management stated these "capital-efficient transactions should enable us to grow, deliver earnings and improve ROE without adding complexity."
- Positive Outlook Commentary: While no specific quantitative guidance was provided, the company struck an optimistic tone for 2026. Management noted they are "off to a great start on our Investor Day guidance and are on track to achieve or even exceed our financial objectives."
Looking Ahead
Analyst estimates project continued growth for AIG in the coming year. For the full year 2026, the consensus sales estimate stands at approximately $29.3 billion. For the upcoming first quarter of 2026, analysts are forecasting revenue of about $7.08 billion. The company's own commentary about favorable January 1 reinsurance renewals and strong momentum entering the new year aligns with this growth trajectory.
For a detailed breakdown of future earnings estimates and historical performance, you can view more on AIG's earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
