AIG Rises Amid Strong Q4 Earnings and Investor Confidence

American International Group, Inc. (AIG), with a market capitalization of $48.6 billion, stands as a leading global insurance firm. AIG provides a wide array of services, including property casualty insurance, life insurance, retirement solutions, and financial services. The company’s operations span North America and various international markets, offering products that assist businesses and individuals in asset protection, risk management, and financial security.

Market Position and Business Segments

Recognized as a “large-cap” stock, AIG meets the threshold of companies valued over $10 billion. It operates in three main segments: General Insurance, Life and Retirement, and Other Operations, leveraging a multichannel distribution network to reach its customers. In line with sustainability objectives, AIG actively invests in renewable energy projects, contributing to the global shift towards greener energy solutions.

Stock Performance Overview

Despite experiencing a 2.2% decline from its 52-week high of $83.77 reached on March 3, shares of AIG have increased by 12.2% in the past three months. This performance stands in contrast to the Financial Select Sector SPDR Fund (XLF), which saw a 3.4% drop during the same period. Over the longer term, AIG’s stock is up 12.5% year-to-date (YTD), outperforming XLF, which has experienced a slight decline.

Over the last 52 weeks, AIG shares have risen 10.2%, though they lag behind XLF’s 18.2% return for the same timeframe. Fluctuations aside, AIG has generally traded above its 50-day and 200-day moving averages since last year.

Strong Financial Results

The momentum continued following AIG’s Q4 2024 earnings release on February 11, which was met with a 1.2% increase in stock price. The company reported an adjusted earnings per share (EPS) of $1.30 and total revenue of $6.9 billion, both exceeding market expectations. Net investment income soared 44.4% year-over-year to $1.3 billion, driven by alternative investments and reduced expenses, in addition to Corebridge Financial dividends that beat forecasts by 50%. Strong underwriting income was evident in the International Commercial and Global Personal segments, further complemented by improved combined ratios.

AIG’s commitment to returning capital to shareholders has reinforced investor confidence, with a total of $1.8 billion in share repurchases and $244 million in dividends announced.

Competitive Landscape and Analyst Outlook

In comparison, AIG has outperformed rival Arch Capital Group Ltd. (ACGL), which recorded a 1.8% year-to-date decrease and a 3.6% gain over the past 52 weeks. While AIG has shown stronger performance relative to the broader sector, analysts remain cautiously optimistic about its future prospects. AIG holds a consensus rating of “Moderate Buy” among 19 analysts and is currently trading below the mean price target of $84.53.

On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy
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