AIG · Q4 2025 Earnings

Bullish

American International Group

Reported February 10, 2026

30-second summary

30-second take: AIG closed 2025 with a Q4 General Insurance combined ratio of 88.8% (AY CR as adjusted 88.9%), underwriting income of $670M, and Global Commercial new business growth of 11% on $4.5B of NPW — the casualty-and-specialty pivot is converting while property compression is absorbed without breaking the thesis. The bigger tells are forward: management upgraded the Investor Day framing from "on track to achieve" to "achieve or even exceed", confirmed a $1B minimum 2026 buyback with CorBridge proceeds on top, issued new quantitative 2026 GI NPW growth guidance of low-to-mid teens, and pulled the AI orchestration timeline to "achievable in 6-12 months". FY2025 core operating ROE of 11.1% sits in the upper half of the 10-13% Investor Day band (Q4: 11.7%); full-year non-GAAP EPS of $7.09 against total GI NPW of $23.68B (-1% reported, +2% comparable), with full-year Global Commercial NPW of $17.4B.

Headline numbers

EPS

Q4 FY2025

$1.96

Revenue

Q4 FY2025

$6.04B

-1.0% YoY

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$6.04B	-1.0%	—	—
EPS	$1.96	—	$2.20	-10.9%

Guidance

No quantitative guidance provided in either prior or current quarter; qualitative statements emphasize momentum heading into 2026 with strategic partnerships and favorable reinsurance renewals.

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
General Insurance - North America Commercial	$2.29B	+3.0%
General Insurance - International Commercial	$2.2B	+5.0%
General Insurance - Global Personal	$1.56B	-12.0%

Capital & returns

Q4 FY2025

Segment	Q4 FY2025
Return on Equity (ROE)	7.2%
Core Operating Return on Equity	11.7%
Debt to Total Capital Ratio	18.0%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
General Insurance Combined Ratio	88.8%
General Insurance Accident Year Combined Ratio, as adjusted	88.9%
General Insurance Underwriting Income	$670 million
Global Commercial Net Premiums Written	$4.5 billion
Global Commercial New Business Growth	11%

Management tone

Q2 anchor: Property book defense → Q3 anchor: Platform capital deployment → Q4 anchor: Operational confidence and AI orchestration

Investor Day language moved from "achieve" to "achieve or even exceed". Three quarters ago the 10-13% ROE and sub-30% expense ratio were targets requiring execution; in Q3 management said they were "on track to achieve"; this quarter Zaffino dropped the explicit upgrade: "We are off to a great start on our Investor Day guidance and are on track to achieve or even exceed our financial objectives." The "exceed" is new. Combined with FY2025 core operating ROE of 11.1% running inside the upper half of the band and management's stated lack of nervousness on the sub-30% expense target in Q&A, this is the most direct upward revision to the multi-year framework AIG has signaled.

AI moved from "deployment" to "orchestration". In Q2 it was a financial-lines pilot with 4x ingestion and +20% submit-to-bind. In Q3 Zaffino said "in my career I've never seen anything progress at the pace and scale" and pulled the rollout forward by six months. This quarter management put a horizon on the next ambition: "orchestration layer is 2026 priority...has moved from aspirational to achievable in 6-12 months", coordinating multiple AI agents across front, mid, and back office. The progression — pilot → scaled deployment → cross-organizational orchestration — is unusually rapid for a large insurer and gives the 2027 expense-ratio target a concrete operational engine.

Buyback narrative moved from "step-down" to "floor with upside". The Q3 framing of $1B 2026 buybacks read to some investors as a cut from the $5-6B 2025 pace. This quarter Keith was explicit in Q&A: $1B is the minimum commitment, with CorBridge proceeds deployed as additional repurchases on top. This is a meaningful reframe — the platform-stake redirection narrative from Q3 (Convex, Onex, Everest) is now bracketed by a hard floor on capital returns.

Casualty reserve discussion shifted from defensive to proactive. When asked about additional margin in casualty loss picks, Keith walked through AIG's history of raising lost cost trend assumptions to double digits in 2019 and getting all excess casualty segments to 10%+ by 2022. The framing: extra margin is for macro uncertainties (social inflation, litigation), not portfolio deterioration. This implies an embedded option — if those macro risks don't fully materialize, the loss-pick cushion converts to favorable development over time.

Disclosure mechanics remained heavy on adjustments. Tone analysis flagged the same constant-dollar / comparable-basis / discontinued-ops framing that's been a feature of every quarter post-CorBridge deconsolidation. This isn't new — it's the permanent reporting reality post-divestiture — but it continues to require investors to translate reported into underlying.

Recurring themes management leaned on this quarter:

Portfolio restructuring and divestituresAdjusted comparability metricsDiscontinued operations impactConstant dollar basis reportingNon-GAAP reconciliations

Risks management surfaced:

Risks and uncertainties affecting forward-looking statementsMaterial differences between actual results and expectationsChanges in management estimates or opinionsImpact of Corbridge Financial deconsolidationCurrency and portfolio adjustment impacts

Q&A highlights

Alex Scott · Barclays

Asked about the expense ratio trajectory over the next few years, given parent expense absorption and AI initiatives moving forward.

Keith explained that Q4 is seasonally high and not a good anchor. Full year 2025 showed exceptional expense absorption despite 250+ million in parent expenses. Going forward, no additional parent expense allocations will occur in 2026, so expense ratio should improve on a run-rate basis. The company is focused on achieving the sub-30% expense ratio target by 2027.

Full year 2025 expense ratio: 31.1%Target expense ratio: below 30% by 2027~250 million in parent expenses absorbed in 2025Q4 included ~20 million in one-time PCS cleanup

Bob Huang · Morgan Stanley

Asked about the orchestration layer for AI agents in 2026 - whether it would be enterprise-wide or localized, and what are the low-hanging fruits versus longer-term opportunities.

Peter and Keith explained that orchestration layer will coordinate multiple AI agents across the organization in an organized manner across front, mid, and back office functions. Near-term opportunity is reducing cycle time and improving data quality to underwriters without additional headcount. Long-term opportunity is orchestrating agents across entire digital workflow to analyze information without bias and at scale.

Orchestration layer is 2026 priorityHas moved from aspirational to achievable in 6-12 monthsLexington submission counts up 30% in some areasInfrastructure investment ongoing with Accenture partnership

Meyer Shields · KBW

Asked for detail on the additional margin in casualty loss picks mentioned in the earnings commentary.

Keith explained that AIG has been conservative on casualty for several years, raising lost cost trend assumptions to double digits in 2019 and implementing extra margin for longer-tail lines. The additional margin is intended to cover macro uncertainties like social inflation and rising litigation costs, not deterioration in the underlying portfolio.

Lost cost trend assumptions raised to double digits in 2019All excess casualty segments at 10%+ lost cost trend by 2022Additional margin put in place for longer-tail casualty linesExtra margin is for macro uncertainties, not portfolio deterioration

Elise Greenspan · Wells Fargo

Asked whether the path to sub-30% expense ratio by 2027 represents linear improvement and clarified capital allocation timing for CorBridge proceeds.

Keith indicated expense improvement will not be linear but expects meaningful improvement in 2026 and greater predictability thereafter, with strong premium growth providing additional leverage. Confirmed that $1 billion is the baseline share repurchase commitment with CorBridge proceeds coming on top of that minimum.

Minimum share repurchase commitment: $1 billion in 2026CorBridge proceeds (majority) will be deployed to additional share repurchasesNo additional parent expense headwind in 2026Not nervous about achieving sub-30% expense ratio by 2027

Paul Newsome · Piper Sandler

Asked about the nature of the current soft market, whether it's extended or may shorten, and perspectives on portfolio management in soft market environments.

Peter, John, and Keith emphasized that there is no single 'market' - rather multiple markets at different cycle stages. They noted property rates are down but combined ratios remain strong; casualty remains favorable; specialty is well-positioned. Management stressed they focus on risk-adjusted returns, not index matching. They emphasized preparation through strong balance sheet, loss picks, leverage, liquidity, and GenAI investments.

Property retail pricing down 10%, ENS down 13% for full year 2025Property combined ratio remains strong despite rate pressureLexington submission counts up 30% in some segmentsCasualty pricing in mid-teens for wholesale/excess

Answers to last quarter's watch list

NA Commercial reported NPW returning to growth. Resolved positively. Q4 NA Commercial NPW grew +3% reported on $2.29B as the prior-year closeout-transaction drag faded. International Commercial added +5%. Global Commercial new business growth of +11% confirms casualty/specialty volume is converting despite property compression.

Resolved positively

Convex and Everest regulatory closure timing. Convex investments closed February 6th; Everest portfolio conversion is in progress with January retention of 75% on approximately $180M of GPW. Management referenced "several strategic partnerships announced over the last two months" expected to contribute to 2026 earnings, EPS, and ROE.

Resolved positively

2026 buyback delivery vs. ~$1B guide. Resolved positively for shareholder-return investors. Keith confirmed in Q&A that $1B is the minimum 2026 commitment, with CorBridge monetization proceeds deployed as additional repurchases on top. This reframes the Q3 step-down as a floor rather than a ceiling.

Resolved positively

International Commercial reserve development. Not called out as a discrete adverse-development line on the Q4 print. International Commercial NPW grew +5% reported and combined ratio metrics remain on plan. The pre-2018 GL/auto issue flagged in Q3 was not repeated as a recurring item.

Resolved positively

Expense ratio trajectory toward sub-30%. Continue monitoring. FY2025 GI expense ratio of 31.1% reflected roughly $250-300M of absorbed parent expenses plus a Q4 ~$20M one-time PCS cleanup. Keith said 2026 has no additional parent-expense headwind and reiterated he's not nervous about the 2027 sub-30% target, but the path will not be linear.

Continue monitoring

GenAI productivity metrics from expanded deployment. Resolved positively. Management cited Lexington submission counts up 26% YoY and Lexington middle market property submit-to-bind ratio up 35%, and framed orchestration as "achievable in 6-12 months" — a tangible 2026 milestone. The progression from pilot → scaled deployment → orchestration is intact.

Resolved positively

What to watch into next quarter

Q1 2026 expense ratio inflection. With parent expense allocation fully absorbed and no further push-downs in 2026, Q1 should print a visible step-down from the 31.1% FY2025 ratio. Anything north of 30.5% would call into question the path to sub-30% by 2027.

GI NPW growth tracking against low-to-mid-teens 2026 guide. Management put a quantitative number on the table. Q1 print materially below low-teens would force a recut of the 2026 setup.

CorBridge monetization pace and incremental buyback. Keith said CorBridge proceeds deploy on top of the $1B floor. Track Q1 share count reduction and CorBridge share sales — slow disposition would push the 2026 EPS accretion story to the right.

NA Commercial NPW sustaining +3% or better. Q4 reaccelerated to +3% reported. A relapse to flat would suggest the casualty-led volume thesis is faltering against property compression.

AI orchestration go-live evidence. Management said orchestration is "achievable in 6-12 months". The Q2 2026 call should have either a live deployment milestone or a slipped timeline — either is material.

Strategic partnership closures (Everest conversion, Convex earn-in, SPVs). Track Everest renewal rate progression beyond the 75% January print, Convex quota-share contribution as the 7.5% earns in, and Syndicate 2479 ramp.

Casualty loss-pick favorable development. If macro inflation/litigation does not materialize as feared, the embedded margin Keith described becomes favorable PYD over time. Watch for any reserve releases in casualty lines.

Sources

AIG Q4 2025 Earnings Release, filed with SEC — https://www.sec.gov/Archives/edgar/data/5272/000000527226000014/q42025earningsrelease.htm
AIG Q4 2025 earnings call (management prepared remarks and Q&A).
AIG Q3 2025 and Q2 2025 Tapebriefs (prior-quarter context).

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