Why did AIG's earnings per share fall so sharply year over year?

Diluted EPS fell to $1.16 from $1.74 mainly because the prior-year quarter included $0.61 per diluted share of net income from Corebridge Financial, which AIG no longer consolidates after its deconsolidation. Adjusted after-tax income per diluted share declined more modestly, to $1.17 from $1.25, reflecting higher catastrophe losses in General Insurance.

How much did the California wildfires affect AIG's results?

The January 2025 California wildfires produced about $460 million of losses before reinstatement premiums. They were the largest driver of the General Insurance combined ratio rising to 95.8%, and they pushed Global Personal's combined ratio to 107.9%. Total catastrophe charges across General Insurance were $525 million.

Is the 12.5% dividend increase sustainable, and what does it signal?

The increase raises the quarterly dividend to $0.45 per share. Management framed it as reflecting confidence in future earnings power and as the third straight year of double-digit percentage increases, consistent with guidance given at the March 31 Investor Day. Sustainability depends on maintaining the 10%+ core operating ROE target, and the dividend is covered by the company's reported earnings and parent liquidity of $4.9 billion.

What do the underlying underwriting trends suggest beyond the catastrophe impact?

Excluding catastrophes and prior-year development, the accident year combined ratio improved to 87.8% from 88.4% in General Insurance, and North America Commercial improved to 84.3%. This suggests the core underwriting book is performing well, while the reported deterioration was concentrated in catastrophe losses. International Commercial's accident year combined ratio did worsen, to 85.4% from 83.0%.

What do the book value metrics show, given the drop in equity from Corebridge?

Reported book value per share rose 2% from year-end to $71.38, but adjusted tangible book value per share was flat at $67.96. Core operating book value per share rose to $61.72 from $52.59 a year earlier, excluding AIG's Corebridge stake and deferred tax assets. These measures differ because they strip out investment fair-value swings and the Corebridge holding, so investors should weigh them together.

AIG 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 1, 2025. Cited figures are marked; the original filing is the authoritative source.

AIG reported first quarter 2025 results on May 1, 2025, with a mixed picture: strong top-line growth and capital returns offset by a sharp rise in catastrophe losses.

Net premiums written (NPW) were $4.5 billion^a, flat on a reported basis but up 8% on a comparable basis (adjusting for the 2024 sale of the Travel business and FX). Global Commercial NPW grew 10% on a comparable basis, with North America Commercial up 14% and International Commercial up 8%. General Insurance's accident year combined ratio, as adjusted, improved to 87.8%, described as the best first-quarter result since the financial crisis, but the reported General Insurance combined ratio rose to 95.8% from 89.8%, driven by $525 million of catastrophe-related charges including $460 million from the January California wildfires.

Earnings declined year over year. Net income attributable to AIG common shareholders was $698 million^b, or $1.16 per diluted share, versus $1.74 a year earlier, which included Corebridge-related income that is no longer recognized after deconsolidation. Adjusted after-tax income per diluted share fell to $1.17 from $1.25.

Return on equity was 6.7%, and core operating ROE was 7.7%. Book value per share rose to $71.38^c, while adjusted tangible book value per share was flat at $67.96. Capital management was a clear focus.

AIG returned about $2.5 billion^d to shareholders in the quarter, including $2.2 billion of buybacks (about 29 million shares) and $234 million of dividends. The Board raised the quarterly dividend 12.5% to $0.45 per share, payable June 27, 2025.

Management reiterated its expectation of 10%+ full-year 2025 core operating ROE and its three-year targets from the March 31 Investor Day. Debt-to-total-capital was 17.1% and parent liquidity was $4.9 billion.

02—Key points

Key Highlights

Net premiums written of $4.5 billion, flat reported and up 8% on a comparable basis; Global Commercial NPW up 10% comparable, with North America Commercial up 14%.
General Insurance combined ratio rose to 95.8% from 89.8%, driven by $525 million of catastrophe charges (9.1 loss ratio points), including $460 million from the January California wildfires; underwriting income fell 59% to $243 million.
Accident year combined ratio, as adjusted, improved to 87.8% from 88.4%, described by management as the best first-quarter result since the financial crisis.
Net income per diluted share was $1.16 versus $1.74 a year earlier, which included Corebridge-related income; adjusted after-tax income per diluted share was $1.17 versus $1.25.
Returned approximately $2.5 billion to shareholders in Q1 ($2.2 billion buybacks, about 29 million shares; $234 million dividends); parent liquidity of $4.9 billion.
Quarterly dividend increased 12.5% to $0.45 per share, the third consecutive year of double-digit percentage increases, payable June 27, 2025 to holders of record on June 13, 2025.
Management reaffirmed expectations for 10%+ full-year 2025 core operating ROE and the three-year targets from its March 31, 2025 Investor Day; debt-to-total-capital ratio of 17.1%.

03—Questions

Frequently Asked Questions

Why did AIG's earnings per share fall so sharply year over year?
Diluted EPS fell to $1.16 from $1.74 mainly because the prior-year quarter included $0.61 per diluted share of net income from Corebridge Financial, which AIG no longer consolidates after its deconsolidation. Adjusted after-tax income per diluted share declined more modestly, to $1.17 from $1.25, reflecting higher catastrophe losses in General Insurance.
How much did the California wildfires affect AIG's results?
The January 2025 California wildfires produced about $460 million of losses before reinstatement premiums. They were the largest driver of the General Insurance combined ratio rising to 95.8%, and they pushed Global Personal's combined ratio to 107.9%. Total catastrophe charges across General Insurance were $525 million.
Is the 12.5% dividend increase sustainable, and what does it signal?
The increase raises the quarterly dividend to $0.45 per share. Management framed it as reflecting confidence in future earnings power and as the third straight year of double-digit percentage increases, consistent with guidance given at the March 31 Investor Day. Sustainability depends on maintaining the 10%+ core operating ROE target, and the dividend is covered by the company's reported earnings and parent liquidity of $4.9 billion.
What do the underlying underwriting trends suggest beyond the catastrophe impact?
Excluding catastrophes and prior-year development, the accident year combined ratio improved to 87.8% from 88.4% in General Insurance, and North America Commercial improved to 84.3%. This suggests the core underwriting book is performing well, while the reported deterioration was concentrated in catastrophe losses. International Commercial's accident year combined ratio did worsen, to 85.4% from 83.0%.
What do the book value metrics show, given the drop in equity from Corebridge?
Reported book value per share rose 2% from year-end to $71.38, but adjusted tangible book value per share was flat at $67.96. Core operating book value per share rose to $61.72 from $52.59 a year earlier, excluding AIG's Corebridge stake and deferred tax assets. These measures differ because they strip out investment fair-value swings and the Corebridge holding, so investors should weigh them together.

04—Continue

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