AIG beats Q3 forecasts with lower catastrophe losses, strong underwriting

AIG’s Q3 earnings exceeded Wall Street analyst forecasts, driven by net income of $519 million, up 13%, year over year.

AIG also saw an 81% increase in underwriting income and a 76% drop in catastrophe losses.

Underwriting income from general insurance soared 81% to $793 million and the combined ratio decreased to 86.8% from 92.6% last year, reflecting the insurer’s improved efficiency and risk management. 

Net investment income, however, fell by $772 million, as a result of a change in fair value of AIG’s equity interest in Corebridge Financial. 

The significant reduction in catastrophe losses— a drop to $100 million from $417 million in the same quarter of 2024 — paired with improved underwriting, paved the way for AIG’s strong Q3 performance. 

In Other News

• Acquisition of most of Everest Group’s retail insurance portfolio: AIG has agreed to acquire the renewal rights of Everest Group Ltd.’s retail commercial insurance business, which equates to about $2 billion of aggregate gross premiums written.

• Strategic investments in Convex Group and Onex Corporation: AIG will acquire 35% equity interest in Convex Group, a global specialty insurer. The company will also invest $2 billion over three years in a diversified set of investment funds with preferred access from asset manager, Onex Corporation.

• Gen AI strategy: AIG is deploying generative AI solutions in its underwriting and claims processes. In Q3, the insurer implemented underwriting by AIG Assist in the Lexington market, improving the speed of data digestion and driving growth. AIG plans to roll this out to the rest of the organization. 
• Leadership changes: AIG announced Don Bailey, executive vice president and CEO of North America Commercial Insurance, will retire for health reasons at the end of the year. As of January 1, 2026, Allison Cooper and Barbara Luck will be appointed co-presidents of retail and Lou Levinson will be deemed president of wholesale, all reporting to John Neal, who will become AIG’s president. 

Quarterly Snapshot

• Adjusted after-tax income per diluted share of $2.20, a 77% increase from the previous year and higher than Wall Street expectations of $1.68 per share
• Net premiums written totaled $6.2 billion (down 1% on a comparable basis)
• General Insurance underwriting income jumped 81% to $793 million
• Combined ratio of 88.3% (flat year over year)
• Net investment income fell by 21% to $772 million, primarily due to changes in fair value of AIG's equity stake in Corebridge 
• AIG returned $1.5 billion to shareholders, including $1.25 billion in repurchases and $250 million in dividends

Earnings supplement 

• • General insurance combined ratio of 86.8%, up 5.8% percent year-over-year and a 1% hike in gross premiums of $8.69 billion.
  • AIG returned $1.5 billion to shareholders in Q3, reflecting its continuous commitment to shareholders.
  • A favorable accident year combined ratio (AYCR) of 88.3%, demonstrating sound underwriting and risk management.

Management Perspective

Peter Zaffino emphasized the fact that Convex, Onex, and Everest are unique opportunities that came to AIG first because of its strong brand and performance, as well as the personal relationships the company has developed over time.

“As a result of these transactions, we are enhancing our earning potential and putting our capital to work to drive long-term, sustainable, and profitable growth,” said Zaffino.

By The Numbers

• Total Revenue: Adjusted pre-tax income of $1.622 billion
• Net Income: $519 million (up 13% year-over-year)
• EPS: Adjusted after-tax income per diluted share of $0.93, short of the estimated $1.78.
• Share Repurchases: $1.5 billion in Q3 2025
• Dividend Declared: $250 million in Q3 2025 ($0.45 per share)
• Stock Price Movement: AIG’s shares were trading around $80.71 on Tuesday evening, an increase of about 6% in the last 12 months

© Entire contents copyright 2025 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

Anna Baluch is a finance reporter and writer with more than a decade of experience. Contact her at anna.baluch@innfeedback.com