AIG's Q1 2025: Unpacking Contradictions on AI Integration, Property Pricing, and Financial Flexibility
Earnings DecryptTuesday, May 13, 2025 4:40 am ET
2min read
AI integration and impact on underwriting, property pricing in North America Commercial, M&A opportunities and financial flexibility, property market conditions and ratios, and expenses and operating efficiency are the key contradictions discussed in AIG's latest 2025Q1 earnings call.
First Quarter Financial Performance:
- American International Group (AIG) reported adjusted after-tax income of $702 million or $1.17 per diluted share in Q1 2025.
- Building on strong premium growth, net premiums written were $4.5 billion, reflecting an 8% increase year-over-year on a comparable basis.
- The growth was supported by excellent underwriting results and effective management of volatility.
North America Commercial Insurance Segment:
- North America Commercial Insurance net premiums written grew 14% year-over-year, with Lexington seeing 23% growth, led by Lexington Casualty's 27% increase.
- Submission activity increased by 30% year-over-year, driven by strong growth in middle market casualty and property lines.
- This growth was driven by enhanced reinsurance structures and strong retention rates.
International Commercial Insurance Segment:
- International Commercial Insurance net premiums written grew 8% year-over-year on an FX-adjusted basis, with property at 35% and Marine at 17%.
- Marine growth was notable due to improved reinsurance structures, and property growth was largely influenced by regional enhancements.
- The growth was supported by the company's diversified geographic footprint and strong product offerings.
Investment Income and Capital Management:
- Investment income on an APTI basis was $845 million, with General Insurance net investment income at $736 million.
- The company returned $2.5 billion to shareholders, including $2.2 billion of share repurchases and $234 million in dividends.
- This was part of a strategic capital management strategy focusing on shareholder returns and maintaining financial flexibility.
AIG Total Revenue YoY, Total Revenue
First Quarter Financial Performance:
- American International Group (AIG) reported adjusted after-tax income of $702 million or $1.17 per diluted share in Q1 2025.
- Building on strong premium growth, net premiums written were $4.5 billion, reflecting an 8% increase year-over-year on a comparable basis.
- The growth was supported by excellent underwriting results and effective management of volatility.
North America Commercial Insurance Segment:
- North America Commercial Insurance net premiums written grew 14% year-over-year, with Lexington seeing 23% growth, led by Lexington Casualty's 27% increase.
- Submission activity increased by 30% year-over-year, driven by strong growth in middle market casualty and property lines.
- This growth was driven by enhanced reinsurance structures and strong retention rates.
International Commercial Insurance Segment:
- International Commercial Insurance net premiums written grew 8% year-over-year on an FX-adjusted basis, with property at 35% and Marine at 17%.
- Marine growth was notable due to improved reinsurance structures, and property growth was largely influenced by regional enhancements.
- The growth was supported by the company's diversified geographic footprint and strong product offerings.
Investment Income and Capital Management:
- Investment income on an APTI basis was $845 million, with General Insurance net investment income at $736 million.
- The company returned $2.5 billion to shareholders, including $2.2 billion of share repurchases and $234 million in dividends.
- This was part of a strategic capital management strategy focusing on shareholder returns and maintaining financial flexibility.
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