AIG Stock Maintains Hold Rating Amid Mixed Earnings and Growth Worries.

AIG's Q2 earnings exceeded expectations due to lower catastrophe losses and increased net investment income. However, higher losses in other operations and concerns over underlying loss ratios and declining net premiums written offset the positive aspects. Analyst Joshua Shanker has reiterated a Hold rating with a price target of $83.00, citing risks associated with meeting guidance. AIG's stock price has increased 6.01% over the past six months.

American International Group (AIG) reported its Q2 earnings for the year 2025, beating analysts' expectations. The company's adjusted earnings per share (EPS) of $1.81 surpassed the Zacks Consensus Estimate of $1.58 [1]. This marks a significant improvement from the year-ago quarter's EPS of $1.16, representing a 14.56% earnings surprise [1]. Over the past four quarters, AIG has consistently exceeded consensus EPS estimates, a positive sign for the company's financial health.

Revenue for the quarter ended June 2025 was $6.84 billion, surpassing the Zacks Consensus Estimate by 0.29% and topping year-ago revenues of $6.64 billion [1]. The company has maintained strong revenue growth, outperforming market expectations three times over the last four quarters.

A key driver of AIG's strong performance was its General Insurance (GI) segment, which reported gross written premiums (GWP) of $10 billion, a 2% increase from the previous year [2]. The GI underwriting income grew by 46% year-over-year, reaching $626 million [2]. This was primarily driven by lower catastrophe charges, higher favorable prior year development, and lower acquisition expenses.

However, AIG faced challenges in other operations, including higher losses and a decline in net premiums written. The company's net premiums written (NPW) decreased by 1% year-over-year on a reported basis, although it increased by 1% on a comparable basis, driven by a 3% year-over-year increase in global commercial NPW [2]. The combined ratio for the quarter was 89.3%, significantly lower than the 92.5% recorded in the previous year quarter [2].

Despite these challenges, AIG's net investment income increased by 48% year-over-year to $1.5 billion, contributing to the company's overall net income of $1.1 billion for the quarter [2]. The company's Chairman and CEO, Peter Zaffino, commented on the quarter's performance, highlighting the growth in underwriting income and net investment income, as well as the company's disciplined capital management strategy.

Analyst Joshua Shanker has reiterated a Hold rating with a price target of $83.00, citing risks associated with meeting guidance and concerns over the company's loss ratios and declining net premiums written [3]. AIG's stock price has increased by 6.01% over the past six months, reflecting investors' optimism despite the challenges.

References:
[1] https://www.nasdaq.com/articles/american-international-group-aig-q2-earnings-and-revenues-beat-estimates
[2] https://www.reinsurancene.ws/aig-reports-gwp-of-10bn-for-q225-as-gi-underwriting-income-increases-46-yoy/
[3] https://seekingalpha.com/news/4480454-aig-q2-earnings-beat-bolstered-by-improved-underwriting-investment-income