AIG Reports Q2 2025 Earnings: $1.81 Adj. EPS, $1B Adj. After-Tax Income, $500M Annual Cost Savings

AIG reported Q2 2025 earnings with adjusted after-tax income per diluted share at $1.81, a 56% YoY increase, and total adjusted after-tax income of $1 billion, up 35%. CEO Peter Zaffino highlighted strong property profitability and $500 million in annual cost savings amid strategic reinsurance moves.

American International Group (AIG) reported robust financial results for the second quarter of 2025, with adjusted after-tax income per diluted share reaching $1.81, a 56% year-over-year (YoY) increase, and total adjusted after-tax income of $1 billion, up 35%. CEO Peter Zaffino highlighted the insurer’s strong property profitability and significant cost savings.

The insurer's earnings per diluted share for common shareholders were $1.98, compared to a net loss of $5.96 per share in the same period last year. The improvement is largely attributed to the deconsolidation of Corebridge Financial, which resulted in a net loss of $6.67 per diluted common share in June 2024. Additionally, increased underwriting income and net investment income in the General Insurance sector, along with better performance in other operations, contributed to the quarter’s success.

AIG's total net investment income for the quarter reached $1.5 billion, a 48% increase, primarily due to changes in the valuation of AIG's equity in Corebridge and an uptick in income from fixed maturity securities available for sale. The company returned $2 billion to its shareholders through the repurchase of $1.8 billion worth of common stock and the payment of $254 million in common stock dividends.

In the General Insurance segment, net premiums written were marginally lower on a reported basis, at $6.9 billion, with a 3% growth in Global Commercial. General Insurance underwriting income climbed by 46% to $626 million, bolstered by reduced catastrophe-related charges and a decrease in acquisition expenses. The company's corporate and other general operating expenses saw a $94 million improvement compared to the previous year's quarter, attributed to cost savings from the AIG Next initiative and the reallocation of expenses to General Insurance operations.

Zaffino emphasized the company’s progress on strategic, operational, and financial objectives, stating, "We returned $2 billion of capital to shareholders, bringing the year-to-date total to $4.5 billion." He also announced the appointment of John Neal as President of the General Insurance division, effective December 1, 2025.

The insurer reported net income attributable to its common shareholders of $1.84 billion for the six-month period, as against a net loss of $2.78 billion recorded in the corresponding period in the prior year. The company remains on track to achieve its 10% plus core operating return on equity (ROE) target in 2025 and aims to reduce its expense ratio below 30% by 2027.

Zaffino noted that the company's adjusted after-tax income per diluted share was $1.81, representing a 56% growth from the prior-year quarter. He also highlighted the completion of AIG Next, which delivered $500 million in savings and significant operational improvements. Both S&P Global and Moody's upgraded their financial strength ratings of AIG's insurance subsidiaries during the quarter.

The General Insurance accident year combined ratio as adjusted was 88.4%, and the calendar year combined ratio was 89.3%, an improvement of 320 basis points from the prior year quarter. Capital return included $2 billion to shareholders in Q2 and $4.5 billion year-to-date. The quarterly dividend increased by 12.5% to $0.45 per share. Book value per share at June 30 was $74.14, up 8% from June 30, 2024. Adjusted tangible book value per share was $69.81, up 4% from a year earlier.

Management discussed industry-wide uncertainty in property markets, noting potential volatility from catastrophe frequency and pricing pressures. Zaffino described the company’s property underwriting approach as "conservative." Expense management remains a focus, as lean parent implementation and shifting of costs to business segments may create short-term fluctuations in reported ratios.

Overall, AIG's Q2 2025 earnings reflect a significant turnaround in financial performance, driven by strategic cost savings and improved operational efficiency.

References:
[1] https://finance.yahoo.com/news/aig-swings-profit-q2-2025-095040264.html
[2] https://seekingalpha.com/news/4481617-aig-signals-500m-annual-cost-savings-and-projects-strong-property-profitability-amid