Following the near-complete deconsolidation of Corebridge Financial in late 2025, how is American International Group (AIG) management prioritizing the deployment of the remaining proceeds between its $10 billion+ share repurchase authorization and strategic bolt-on acquisitions for its General Insurance business in 2026?

Following the near-complete deconsolidation of Corebridge Financial (CRBG) in late 2025—which reduced AIG’s ownership to 10.1% —management has pivoted toward a "pure-play" General Insurance (GI) strategy. With nearly $20 billion in total proceeds realized from the Corebridge divestiture since 2021, AIG is entering 2026 with a dual-track capital allocation priority: maintaining aggressive share repurchases while increasingly favoring "more accretive" strategic investments in specialty lines. 💰 Capital Allocation & Share Repurchase Strategy AIG management is balancing a massive buyback program with the need to replace earnings lost from the divestiture of Corebridge and Validus Re. Authorization Status: As of early 2026, AIG is operating under a significant repurchase framework. While a $7.5 billion authorization was established in early 2025, cumulative authorizations and remaining proceeds from the final Corebridge sell-downs have pushed the total capital return capacity toward the $10 billion+ range. 2026 Execution Plan: CFO Keith Walsh has confirmed a baseline repurchase target of $1 billion for 2026. However, management has explicitly stated that additional buybacks will be funded dynamically by the remaining proceeds from the final 10.1% stake in Corebridge, which Nippon Life’s waiver now allows AIG to sell throughout 2026. Historical Context: In 2025, AIG returned $6.8 billion to shareholders, including $5.8 billion in common stock repurchases (approx. 73 million shares). 🏗️ Strategic Prioritization: M&A vs. Buybacks A critical shift in management's rhetoric occurred in late 2025. CEO Peter Zaffino stated that strategic transactions are expected to be "more accretive in 2026 and 2027 than share repurchases," signaling a preference for high-quality "bolt-on" acquisitions over simple capital return if the right opportunities arise. Specialty Investments: In early 2026, AIG completed two major strategic moves: Acquired a 35% stake in Convex Group for $2.1 billion , gaining access to a high-performing global specialty re/insurer. Acquired a 9.9% stake in Onex Corporation for $642 million to align with their asset management platform. Operational Expansion: AIG is prioritizing the integration of the Everest Global Retail Insurance renewal rights (acquired in late 2025) and the launch of Syndicate 2479 at Lloyd’s (with Amwins and Blackstone), which began operations in January 2026 with a $300 million premium capacity. ⚠️ Risks and Forward-Looking Considerations Leadership Transition: The retirement of Peter Zaffino as CEO in mid-2026 (transitioning to Executive Chair) and the appointment of Eric Andersen as CEO-elect introduces execution risk. Investors are monitoring whether Andersen will maintain Zaffino’s strict underwriting discipline. Market Conditions: While AIG expects low to mid-teens premium growth in GI for 2026, signs of softening in certain commercial lines and "social inflation" (rising litigation costs) in U.S. casualty could pressure margins. Expense Discipline: AIG remains committed to a sub- 30% expense ratio by 2027, relying on its "AIG Next" transformation and AI-first claims processing to offset the loss of scale following the Corebridge deconsolidation.

In light of the Q4 2025 earnings results, what specific underwriting actions is American International Group (AIG) implementing to offset persistent social inflation and recent catastrophe loss trends to maintain its targeted sub-90% accident year combined ratio throughout the 2026 fiscal year?

Following the Q4 2025 earnings results, American International Group (AIG) has detailed a multi-pronged underwriting strategy to sustain its sub-90% accident year combined ratio (AYCR) through the 2026 fiscal year. Management’s approach focuses on aggressive casualty pricing, a pivot toward specialty lines, and the enterprise-scale deployment of generative AI to enhance risk selection. 1. Countering Social Inflation in Casualty Lines AIG is implementing specific underwriting and actuarial adjustments to mitigate the impact of "nuclear verdicts" and rising litigation costs: Aggressive Rate Actions: In Q4 2025, AIG achieved price increases of 15% in retail excess casualty and 12% in wholesale excess casualty. For the full year 2026, management expects casualty pricing to remain in the "mid-teens" to stay ahead of loss cost trends. Conservative Accident Year Picks: The company is intentionally embedding "extra margin" into its accident year loss picks for long-tail lines. This conservative posture is designed to provide a buffer against the volatility of social inflation and ensure reserve adequacy. Limit and Attachment Point Discipline: Utilizing its "Everest ontology" (a digital twin of the acquired Everest retail portfolio), AIG is re-evaluating account limits and attachment points to reduce exposure to high-severity legal outcomes. 2. Mitigating Catastrophe Loss Trends To maintain a sub-90% AYCR despite increasing climate volatility, AIG is shifting its property appetite and optimizing its reinsurance structure: Reduced Property Appetite: AIG has actively contracted its North America Retail Property business, citing a "reduced appetite" for volatile, primary property risks in the current market environment. Enhanced Reinsurance Terms: During the January 1, 2026 renewals, AIG achieved a risk-adjusted rate decrease in property catastrophe reinsurance exceeding -15% . The company also secured lower attachment point return periods and broader coverage efficiency to minimize portfolio volatility. Strategic Partnerships: The launch of Syndicate 2479 (an SPV with Blackstone and Amwins) and a 7.5% whole-account quota share with Convex Group allow AIG to access high-quality premiums with reduced balance sheet complexity and lower direct catastrophe exposure. 3. Technological & Operational Efficiency Drivers AIG is leveraging its "AIG Next" program and generative AI to drive the expense ratio toward a sub-30% target by 2027, which supports the overall combined ratio: Underwriting by AIG Assist: This GenAI tool has been expanded to seven additional lines, including Lexington Insurance, which saw a 26% increase in submission counts in 2025 without adding human capital. Broader deployment across North America, the UK, and EMEA is scheduled for 2026. AI Orchestration Layer: For 2026, AIG is developing an "orchestration layer" to coordinate specialized AI agents (Knowledge, Adviser, and Critic agents). This system is designed to challenge underwriting decisions in real-time, improving the "submit-to-bind" ratio, which improved by 35% in its middle-market property business. Financial Performance Summary (FY 2025) General Insurance Underwriting Income: $2.3B (up 22% YoY) Accident Year Combined Ratio (Adjusted): 88.3% Expense Ratio: 31.1% (down -90 bps YoY) Net Premiums Written (NPW) Growth Guidance (2026): Low to mid-teens

Given the current interest rate environment in early 2026, how will the recent shifts in the yield curve impact American International Group's (AIG) net investment income (NII) projections, and what does this imply for the company's return on equity (ROE) targets as it transitions to a pure-play property and casualty insurer?

The transition of American International Group (AIG) into a pure-play property and casualty (P&C) insurer coincides with a pivotal shift in the U.S. Treasury yield curve. As of early 2026, the curve has moved from a prolonged inversion to a bear steepening phase, characterized by rising long-term yields and a normalizing spread. This environment provides a significant tailwind for AIG’s Net Investment Income (NII) and supports its ambitious Return on Equity (ROE) targets. 1. Yield Curve Dynamics & Reinvestment Tailwinds The 10Y-2Y Treasury spread turned positive in early 2026, reaching approximately +65 bps . For a P&C insurer like AIG, which maintains a shorter-duration investment portfolio compared to life insurers, this shift is fundamentally accretive: Reinvestment Rates: AIG is currently benefiting from a "higher-for-longer" rate environment. As older, lower-yielding fixed-income securities mature, AIG is reinvesting proceeds into new instruments at significantly higher yields. New money rates for investment-grade corporates are hovering near 5.0% , well above the embedded yield of the legacy portfolio. Portfolio Duration: AIG’s General Insurance portfolio is strategically positioned to capture these higher yields. Unlike the life insurance segment (Corebridge), which required long-duration matching, the P&C-focused portfolio can more nimbly rotate into intermediate-term maturities (5–10 years) where the yield curve has steepened most aggressively. NII Projections: For the full year 2025, AIG reported NII (on an APTI basis) of $3.8B , an 8% year-over-year increase. Projections for 2026 suggest continued growth in the high-single to low-double digits , driven by the compounding effect of higher reinvestment rates and a growing asset base from strong premium inflows. 2. Transition to Pure-Play P&C: The NII Composition Shift AIG has effectively completed the deconsolidation of Corebridge Financial, reducing its ownership stake to approximately 10.1% . This structural change fundamentally alters the NII profile: Reduced Dividend Dependency: Previously, a significant portion of AIG’s NII was derived from Corebridge dividends. In 2026, NII is almost entirely driven by the General Insurance investment portfolio. This reduces "Other Operations" volatility and aligns investment income more closely with P&C underwriting cycles. Capital Liquidity: The proceeds from the Corebridge sell-down have been funneled into a massive capital return program. While AIG projected a baseline of $1B in share repurchases for 2026, the company’s high liquidity levels—bolstered by investment income—provide flexibility to increase buybacks if market conditions remain favorable. 3. Implications for ROE Targets AIG has set a Core Operating ROE target of 10% to 13% for 2026. The current interest rate environment is a critical component in achieving the upper end of this range: Underwriting vs. Investment Balance: While AIG’s turnaround has been led by underwriting discipline (achieving a 90.1% combined ratio in 2025), the "investment tailwind" acts as a buffer against potential margin compression. As the P&C "hard market" shows signs of softening in 2026, the rising NII compensates for any deceleration in premium rate increases. Expense Efficiency: AIG is on track to achieve a sub- 30% expense ratio by 2027. The combination of lower operating costs and higher investment yields creates a "double lever" for ROE expansion. Strategic Accretion: Recent partnerships, such as the launch of Syndicate 2479 with Blackstone and Amwins, are expected to be more accretive to ROE in 2026 than share repurchases alone, as they leverage AIG’s capital in high-yielding specialty lines. 4. Risks and Sensitivities Despite the positive outlook, several factors could temper NII and ROE performance: Social Inflation: Rising litigation costs in U.S. casualty lines (the "nuclear verdict" trend) may require AIG to maintain higher loss reserves, potentially offsetting investment gains. CEO Transition: The retirement of Peter Zaffino in mid-2026 and the transition to Eric Andersen introduces execution risk. Any shift in underwriting appetite could impact the volume of investable premiums. Credit Spreads: While Treasury yields are favorable, a significant widening of corporate credit spreads (due to economic cooling) could lead to unrealized losses on the mark-to-market value of the bond portfolio, though AIG typically holds these to maturity.

American International Group, Inc. (AIG) Stock Price & AI Analysis

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Valuation

50Fair Value

Sentiment

61Bullish

Risk

96Low Risk

Momentum

54Neutral

Institutional-Grade Intelligence

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Actionable Intelligence

AI-driven stance, execution logic & risk thresholds

Catalyst Roadmap

Event timeline with expected impact & market context

Deep Insights

Fact-checked analysis & score logic breakdown

Financial Statements

Margin Trends

Gross

34.5%▲0.5pp

Revenue after COGS

Operating

14.5%▲0.3pp

After operating expenses

Net

11.6%▲16.7pp

Bottom-line profitability

Gross Margin

Operating Margin

Net Margin

Valuation Snapshot

P/E Ratio

15.6

Price vs earnings

EV/EBITDA

7.3

Enterprise value

FCF Yield

6.9%

Cash generation

Earnings Yield

6.4%

Inverse of P/E

Capital Efficiency

10

GoAI Quality ScoreFair

ROEReturn on Equity

7.5%Fair

ROAReturn on Assets

1.9%Fair

ROICReturn on Invested Capital

13.8%Strong

Financial Health

Current RatioHealthy

9.83

Short-term solvency (>1.5)

Net Debt / EBITDAManageable

1.02x

Debt repayment capacity (<3x)

Income QualityStrong

1.07

Cash backs earnings (>1)

Revenue & Profitability

Revenue

Net Income

Net Loss

Income Statement

Metric	FY2025	FY2024	FY2023	FY2022	FY2021
Revenue	$26.77B	$27.27B	$27.96B	$29.98B	$51.98B
Gross Profit	$9.24B	$9.28B	$4.37B	$7.26B	$20.11B
Gross Margin	34.5%	34.0%	15.6%	24.2%	38.7%
Operating Income	$3.88B	$3.87B	$2.86B	$3.77B	$13.35B
Net Income	$3.10B	-$1.40B	$3.64B	$10.23B	$10.37B
Net Margin	11.6%	-5.1%	13.0%	34.1%	19.9%
EPS	$5.48	$3.38	$5.02	$13.10	$12.10

Average Price Target

$85.88▲ 6.8% Upside

Past 12 Months

12 Month Forecast

Based on 50 Wall Street analysts offering 12 month price targets for American International Group, Inc., the average price target is $85.88, with a high forecast of $95.00 and a low forecast of $81.00. The average price target represents a 6.8% increase from the current price of $80.44.

Highest

$95.00

Average

$85.88

Lowest

$81.00

Rating Distribution

Strong Buy

0

0%

Buy

16

39%

Hold

24

59%

Sell

1

2%

Strong Sell

0

0%

Recent Analyst Ratings

FirmActionRatingDate

Cantor Fitzgerald● Maintain

Neutral

2026-02-17

Mizuho● Maintain

Neutral

2026-02-17

UBS● Maintain

Buy

2026-02-17

Wells Fargo● Maintain

Equal Weight

2026-02-13

Keefe, Bruyette & Woods● Maintain

Outperform

2026-02-12

Piper Sandler● Maintain

Overweight

2026-02-12

Cantor Fitzgerald● Maintain

Neutral

2026-01-14

Wells Fargo● Maintain

Equal Weight

2026-01-13

Barclays● Maintain

Equal Weight

2026-01-08

Keefe, Bruyette & Woods● Maintain

Outperform

2026-01-06

Earnings History & Surprises

BEAT RATE

83%

Last 18 quarters

AVG SURPRISE

+9.6%

EPS vs Estimate

BEATS / MISSES

15/3

Last 18 quarters

LATEST EPS

$1.96

Q1 '26

QUARTERLY EPS TREND

Estimated

Beat

Miss

QUARTERLY DETAIL

Q1 '26

+3.2%

$1.96 vs $1.90

Q4 '25

+27.9%

$2.20 vs $1.72

Q3 '25

+13.1%

$1.81 vs $1.60

Q2 '25

+17.0%

$1.17 vs $1.00

Q1 '25

-2.3%

$1.30 vs $1.33

Q4 '24

+11.8%

$1.23 vs $1.10

Q3 '24

-12.1%

$1.16 vs $1.32

Q2 '24

+7.3%

$1.77 vs $1.65

Q1 '24

+9.1%

$1.79 vs $1.64

Q4 '23

+3.9%

$1.61 vs $1.55

Q3 '23

+10.1%

$1.75 vs $1.59

Q2 '23

+14.0%

$1.63 vs $1.43

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