On February 11, 2025, American International Group Inc (AIG, Financial) released its 8-K filing detailing its financial performance for the fourth quarter and full year of 2024. As one of the largest insurance and financial services firms globally, AIG operates through various subsidiaries offering property, casualty, and life insurance. The company recently spun off its life insurance operations, Corebridge, while retaining a majority stake.
Performance Overview and Challenges
American International Group Inc (AIG, Financial) reported a net income per diluted share of $1.43 for the fourth quarter of 2024, a significant increase from $0.12 in the prior year quarter. However, this figure fell short of the analyst estimate of $1.56. The company's adjusted after-tax income per diluted share was $1.30, slightly above the previous year's $1.28, but still below expectations. The challenges faced by AIG include higher catastrophe charges, notably from Hurricane Milton and adjustments from prior events, which impacted the underwriting income.
Financial Achievements
Despite the challenges, AIG achieved a 6% increase in General Insurance net premiums written (NPW) to $6.1 billion in the fourth quarter, reflecting strong growth in Global Commercial and Global Personal Insurance. The combined ratio stood at 92.5%, with an accident year combined ratio, as adjusted, of 88.6%. These metrics are crucial as they indicate the company's underwriting profitability, a key performance indicator in the insurance industry.
Key Financial Metrics
For the full year 2024, AIG reported a net loss per diluted share of $2.17, compared to a net income of $4.98 in the prior year. This loss was primarily due to the accounting impact of the Corebridge deconsolidation. The adjusted after-tax income per diluted share was $4.95, marking a 12% increase year-over-year. AIG's capital management actions included $9.7 billion in share repurchases, dividends, and debt reduction, highlighting its focus on returning value to shareholders.
“2024 was an outstanding year of accomplishments for AIG in which we successfully executed multiple complex strategic and operational priorities, delivered outstanding financial results and created exceptional value for our clients and stakeholders,” said Peter Zaffino, AIG Chairman & Chief Executive Officer.
Income Statement Highlights
| Metric | Q4 2023 | Q4 2024 | Change |
|---|---|---|---|
| Net Income (Loss) per Diluted Share | $0.12 | $1.43 | +1091.7% |
| Adjusted After-Tax Income per Diluted Share | $1.28 | $1.30 | +1.6% |
| Net Investment Income | $909 million | $1.313 billion | +44.5% |
Analysis and Outlook
American International Group Inc (AIG, Financial) demonstrated resilience in the face of significant challenges, including natural catastrophes and strategic realignments. The company's ability to increase net premiums written and maintain a strong combined ratio underscores its robust underwriting capabilities. However, the shortfall in EPS compared to analyst estimates highlights the need for continued focus on managing catastrophe risks and optimizing operational efficiencies. As AIG moves forward, its strategic initiatives, including the launch of reinsurance Syndicate 2478 at Lloyd's, are expected to bolster its reinsurance strategy and enhance its market position.
Explore the complete 8-K earnings release (here) from American International Group Inc for further details.
