AIG’s second quarter results were shaped by cautious underwriting in its U.S. property business and targeted growth in casualty and specialty lines. Management highlighted a deliberate pullback from property segments facing rate pressure, while focusing on areas with more favorable risk-adjusted returns. CEO Peter Zaffino described the property portfolio’s repositioning as “one of the best stories for AIG,” noting that extensive use of reinsurance and a conservative approach to catastrophe risk have stabilized results. The company also credited improved expense discipline and operational streamlining from the AIG Next initiative for helping offset headwinds in select business lines.
Is now the time to buy AIG? Find out in our full research report (it’s free).
AIG (AIG) Q2 CY2025 Highlights:
- Revenue: $6.84 billion vs analyst estimates of $6.83 billion (4.3% year-on-year growth, in line)
- Adjusted EPS: $1.81 vs analyst estimates of $1.60 (13.2% beat)
- Adjusted Operating Income: $1.39 billion vs analyst estimates of $1.37 billion (20.3% margin, 1.9% beat)
- Market Capitalization: $43.48 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From AIG’s Q2 Earnings Call
- Taylor Alexander Scott (Barclays) asked whether softening property reinsurance pricing would pressure combined ratios. CEO Peter Zaffino explained that AIG’s use of low-attachment reinsurance mitigates this risk, and any increase in the combined ratio should remain manageable.
- Scott (Barclays) followed up on capital deployment if growth lags. Zaffino reiterated that excess capital would be returned to shareholders if not deployed for growth, but currently sees multiple avenues for expansion in casualty and specialty.
- Mayer Shields (KBW) questioned the reapportionment of reserves to recent accident years. Zaffino clarified that reserve reallocations were prudent, reflecting updated views on inflation and social inflation, but not due to adverse developments in the underlying portfolio.
- Shields (KBW) also asked about demand for liability coverage amid social inflation. Donald John Bailey, Head of North America Insurance, noted a “flight-to-quality” as clients seek established underwriters with deep expertise in casualty lines.
- Michael David Zaremski (BMO) inquired about the sustainability of expense ratio improvements. CFO Keith Francis Walsh said the improvements are expected to accelerate in the second half of the year as one-time transition costs subside and technology benefits scale.
Catalysts in Upcoming Quarters
Looking ahead, our analysts are focused on (1) the pace of generative AI adoption and its measurable impact on underwriting and claims efficiency, (2) continued progress on expense ratio reductions stemming from AIG Next, and (3) any shifts in U.S. property market dynamics, particularly catastrophe exposure and pricing trends. Execution against these milestones will be critical in assessing whether AIG can sustain profitability improvements while navigating industry uncertainty.
AIG currently trades at $78.48, in line with $79.03 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
