AIG's Stock Tumbles 3.11% Amid Record Trading Volume as Strong Earnings Fail to Stem Sell-Off

American International Group (AIG) reported a 3.11% decline in its stock price on August 7, 2025, with a trading volume of $0.46 billion, up 36.31% from the previous day. The company’s Q2 2025 earnings exceeded expectations, with adjusted after-tax income per diluted share rising 56% to $1.81 and revenue hitting $6.88 billion, surpassing forecasts. Despite these results, broader market pressures and sector dynamics drove the stock lower.

The earnings report highlighted AIG’s 11.7% core operating return on equity and $500 million in cost savings from the AIG NEXT initiative. The insurer also returned $2 billion to shareholders through buybacks and dividends. However, the stock’s post-earnings drop reflected investor caution amid concerns over property market pricing pressures, social inflation in casualty claims, and macroeconomic uncertainties. Analysts noted that AIG’s strategic focus on generative AI and operational efficiency could mitigate long-term risks.

AIG’s management emphasized progress in underwriting profitability, with a 1.8% accident year combined ratio improvement year-over-year. The company’s upgraded financial strength ratings by S&P and Moody’s underscored its resilience. Executives remain optimistic about 2025 growth, citing disciplined capital management and expanded opportunities in casualty and specialty lines. Nevertheless, the stock’s short-term underperformance suggests lingering skepticism about its ability to navigate sector-specific challenges.

The strategy of purchasing the top 500 stocks by daily trading volume and holding for one day generated a 166.71% return from 2022 to the present, outperforming the benchmark by 137.53%. This highlights the role of liquidity concentration in short-term performance, particularly in volatile markets, where high-volume stocks can capitalize on investor behavior and macroeconomic shifts.