Global insurer American International Group (AIG), Inc. has reported strong top-line growth with net premiums written (NPW) for the first quarter of 2025 hitting $4.5 billion, flat year-over-year on a reported basis, although the general insurance (GI) combined ratio deteriorated to 95.8% amid higher catastrophe losses.
On a comparable basis, NPW rose 8%, driven by 10% growth in Global Commercial to $3.2 billion. Group-wide, gross premiums written fell 2% on a reported basis to $9 billion.
As mentioned, the insurer’s GI combined ratio deteriorated to 95.8% in Q1 2025 from 89.8% in Q1 2024, as the loss ratio increased by 7.3 points to 65.3%.
During the quarter, total catastrophe-related charges totalled $525 million, up on the prior year’s $106 million, and which includes $460 million of losses, before reinstatement premiums, from the January California wildfires.
Q1 2025 also included $64 million of favorable prior year development, net of reinsurance and prior year premiums, compared with $22 million in the prior year quarter. This was mostly driven by favorable development on U.S. Property and Global Specialty along with the amortization benefit related to adverse development cover, explains the firm.
Given the higher cat losses, AIG’s GI underwriting income decreased by 59% year on year to $243 million, compared with $596 million a year earlier.
GI net investment income fell slightly to $736 million in Q1 2025 compared with $762 million in Q1 2024.
GI adjusted pre-tax income (APTI) totalled $979 million in Q1 2025, a decrease of 28% from the last year’s $1.4 billion, primarily driven by lower underwriting income.
Group-wide, net investment income increased to $1.1 billion from $979 million last year, primarily due to change in fair value and dividend income from AIG’s equity in Corebridge, higher income on available for sale fixed maturity securities and lower investment expenses.
Net income for the first quarter of 2025 amounted to $698 million, so came in lower than Q1 2024’s $1.2 billion.
Approximately $2.5 billion of capital was returned to shareholders, including $2.2 billion of share repurchases and $234 million of dividends in the first quarter. The Board of Directors declared a quarterly common stock dividend increase of 12.5%.
Peter Zaffino, Chairman and Chief Executive Officer, AIG, commented, “We are off to an excellent start in 2025. Despite a challenging catastrophe quarter that produced elevated losses for the industry, AIG delivered very strong results. This outcome underscores the effectiveness of our technical underwriting expertise and strategic use of reinsurance, positioning us within our expectations for the remainder of the year. In addition, we reported AIG’s best first-quarter accident year combined ratio, as adjusted, since the financial crisis, reflecting the exceptional quality of our underlying portfolio.
“We produced impressive top-line growth with net premiums written increasing 8% year-over-year on a comparable basis. Global Commercial grew 10%, maintaining high retention of 88% and very strong and balanced new business of $1.1 billion. North America Commercial grew 14% and International Commercial grew 8%.
“We continued to deliver against our disciplined capital management strategy and in many ways accelerated progress in the first quarter, returning $2.5 billion of capital to shareholders, including $2.2 billion of share repurchases and $234 million of dividends. We ended the quarter with a debt-to-total capital ratio of 17.1% and parent liquidity of $4.9 billion.”
Zaffino, added, “As we had signaled at our Investor Day, the AIG Board of Directors has approved a 12.5% increase in our quarterly dividend to $0.45 per share starting in the second quarter of 2025, the third consecutive year of double-digit percentage increases, reflecting confidence in the future earnings power of AIG.
“While the broader macroeconomic and geopolitical environment remains uncertain, AIG is navigating these challenges from a position of strength given our global diversified portfolio, disciplined underwriting, and resilient balance sheet. Our dedicated colleagues around the world remain committed to delivering on our objectives with the highest quality.
“At our Investor Day on March 31, we set out to demonstrate that, by every measure, we have executed an unprecedented turnaround, and today AIG is a different company with unparalleled opportunities. As we look ahead, we have significant strategic and financial flexibility, exceptional momentum, and we continue to expect to achieve 10%+ Core Operating ROE for full year 2025 along with the three-year financial targets we provided at our Investor Day.”
