American International Group, Inc. AIG is well poised to grow on the back of improving underwriting results in the North America Commercial and Global Personal segments, supported by lower catastrophe losses. Healthy premium growth and strong capital returns are major tailwinds.
American International — with a market cap of $29.8 billion — is a leading global insurance organization offering products for commercial, institutional, as well as individual customers.
Courtesy of solid prospects, this presently Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Key Drivers
AIG's underwriting performance has strengthened considerably in recent quarters. General Insurance's combined ratio improved to 87.3% in the first quarter of 2026 and remained favorable at 89% in the second quarter. Continued underwriting discipline, expense management and selective risk-taking could help the company sustain healthy insurance margins and support earnings growth.
The insurer continues to expand its premium base despite becoming more selective in areas where pricing has weakened. Growth across several commercial and personal insurance lines highlights AIG's ability to attract business while maintaining underwriting discipline. This balanced approach should help the company preserve profitability without chasing unprofitable volume.
AIG continues to reward shareholders through a combination of sizable share repurchases and a growing dividend. During the first half of 2026, the insurer returned approximately $1.7 billion to shareholders, including $1.2 billion through buybacks and $504 million in dividends. It repurchased roughly 15 million shares over the period. AIG also increased its quarterly dividend 11% to 50 cents per share. It had $2.6 billion available under its repurchase authorization as of July 31.
AIG shares continue to trade at a relatively modest earnings multiple despite the company's improved underwriting profitability. Shares of the company declined 11% year to date, which lowered its forward price-to-earnings to 8.96X. This is lower than AIG’s five-year median of 10.11X and the industry average of 9.40X, indicating there’s more room to grow.
Estimates for AIG
The Zacks Consensus Estimate for American International’s 2026 earnings is pegged at $8.02 per share, which remained stable over the past week and indicates 13.1% year-over-year growth. AIG beat on earnings in each of the last four quarters, the average being 12.9%. Further, the consensus estimate for 2026 revenues stands at $28.97 billion, signaling an increase of 5.5% from a year ago.
American International Group, Inc. Price, Consensus and EPS Surprise
American International Group, Inc. price-consensus-eps-surprise-chart | American International Group, Inc. Quote
Risks
There are a few factors that investors should keep an eye on.
AIG is operating in a less favorable pricing environment after several years of broad rate increases. In the second quarter of 2026, renewal pricing in International Commercial declined 6%, while Global Energy and Financial Lines pricing fell 15% and 4%, respectively. Pricing pressure is also evident in North America Property, where AIG has deliberately reduced business rather than accept inadequate rates.
AIG absorbed $210 million of catastrophe-related charges in the second quarter of 2026, up from $170 million a year earlier. The total included $75 million of losses associated with the Middle East conflict. Catastrophe losses represented 3.4 percentage points of the quarterly loss ratio. A period of elevated natural disasters or geopolitical events could quickly erode underwriting gains and introduce greater volatility into AIG's results.
Key Picks
Some better-ranked stocks in the broader Finance space are Horace Mann Educators Corporation HMN, CNO Financial Group, Inc. CNO and Assurant, Inc. AIZ. While HMN currently sports a Zacks Rank #1 (Strong Buy), CNO and AIZ carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Horace Mann Educators’ current-year earnings is pegged at $4.78 per share, which has witnessed one upward revision over the past 30 days and no movement in the opposite direction. Furthermore, the consensus estimate for HMN’s 2026 revenues indicates a 3.9% year-over-year increase.
The consensus mark for CNO Financial’s current-year earnings is pegged at $4.74 per share, which indicates 16.2% year-over-year growth. It has witnessed two upward estimate revisions against none in the opposite direction in the past 60 days. CNO beat earnings estimates in each of the last four quarters, with an average surprise of 23.2%.
The Zacks Consensus Estimate for Assurant’s current-year earnings is pegged at $22.05 per share, which indicates 11.5% year-over-year growth. It has witnessed two upward estimate revisions against none in the opposite direction in the past month. AIZ beat earnings estimates in each of the last four quarters, with an average surprise of 17.7%.
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American International Group, Inc. (AIG): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).