AIG's Legal Drama and 369th Volume Rank Spark Insurance Sector Reckoning

On July 31, 2025, American (AIG) closed with a 0.28% gain, trading at a volume of $390 million, ranking 369th in market activity. The stock’s modest movement follows a legal development that could reshape liability settlement practices across the insurance sector.

A federal appeals court has mandated a retrial in a high-profile case involving AIG and National Union Fire Insurance. The dispute centers on a $7.465 million jury award for injuries sustained in a 2015 car accident. The First Circuit ruled that AIG’s delayed settlement offers—despite internal and external damage estimates exceeding $7.5 million—may have violated Massachusetts law requiring prompt, equitable settlements once liability is clear. While the court upheld the insurers’ investigation as reasonable, it emphasized that failure to adjust offers promptly could breach statutory obligations.

The ruling carries broader implications for AIG’s claims management framework. Legal experts highlight that the decision underscores the need for insurers to align settlement strategies with predictive modeling and legal standards. AIG’s current reserves of $7.5 million for this claim, established in 2018, were not matched by proportional offer adjustments until shortly before trial. The retrial will focus on whether these practices met legal expectations for transparency and fairness.

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