AIG Shares Rally 1.24% on Strong Earnings and $500M Cost Cuts

American International Group (AIG) shares rose 1.24% on October 7, 2025, marking the sixth consecutive day of gains and pushing the stock to its highest level since October 2025. The intraday surge of 1.32% reflected renewed investor confidence amid a strong earnings performance and strategic cost-cutting measures.

AIG’s Q2 2025 results highlighted a $1.1 billion profit, driven by improved underwriting margins in its property and casualty division and reduced claims expenses. The company announced $500 million in annual cost savings through automation and operational streamlining, boosting net income and shareholder returns. A quarterly dividend of $0.45 per share further reinforced its commitment to rewarding investors, despite mixed analyst outlooks. While some firms upgraded the stock citing undervaluation, others warned of potential underwriting headwinds in 2026 due to softening commercial insurance markets.

Institutional activity underscored divergent market sentiment. Nuveen LLC and Swiss National Bank increased stakes, signaling long-term confidence, while Vanguard Group and others trimmed holdings. AIG’s strategic moves, including reinsurance partnerships to mitigate risk and a secondary offering of Corebridge Financial shares, were seen as steps to unlock value. However, macroeconomic factors such as inflationary pressures and interest rate fluctuations added complexity to its growth trajectory.

Despite these challenges, AIG’s proactive approach to cost discipline, technological investments, and capital efficiency positioned it as a resilient player in the insurance sector. The stock’s recent rally reflects a balance between near-term stability and long-term strategic alignment, though investors remain cautious about macroeconomic and regulatory uncertainties ahead.