AIG (AIG) Q3 2026 earnings review
AIG international premiums grow 13%, but North America slows
AIG's international and personal insurance units carried the quarter while falling property prices slowed its North American commercial business. Net premiums written at the global property and casualty insurer rose 7% from a year ago, or 10% in constant currency when stripping out North America Property. Profit per share excluding one-offs fell 6% because storm claims returned to normal after a quiet period last year, though chief executive Eric Andersen kept the multi-year targets in place.
| General Insurance net premiums written | $6.65B +7% from a year ago (+10% constant currency ex-North America Property) |
|---|---|
| Profit per share, excluding one-offs | $2.06 -6% from a year ago (GAAP net income: $1.60, +72%) |
| General Insurance combined ratio | 91.3% 86.8% a year ago (88.4% excluding storms and prior-year reserves) |
| 2025–2027 Investor Day financial targets | Unchanged 11.1% core operating return on equity vs 10–13% target |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because international and personal lines offset softer North American commercial property, leaving core profitability flat. One caution: premium growth slowed from 9% last quarter to 7%, so hitting the middle of the initial full-year growth plan now requires a 16% jump in the fourth quarter by our math. In addition, shifting away from property into casualty coverage nudged the underlying commercial claims ratio higher.
The question now is whether the first-half surge in written policies from the Everest and Convex deals will turn into earned revenue fast enough to push the expense ratio below 30% next year, or if a shrinking property book will stall top-line growth first. If earned premiums accelerate, overhead drops below the target; if property cuts outweigh the deals, growth slows sharply in 2027. The third-quarter filing's earned premium and reserve tables will provide the next reading.
🐂 Bull Case
Global Personal Turnaround Lifts Underwriting Profit
Global Personal, the division covering individual consumers and wealthy households, used to drag down AIG's profits. Now it is driving earnings growth. Net premiums written — the policy sales AIG keeps after paying for reinsurance — rose 6.1% from a year ago to $1.78 billion, or 9% in constant currency. The insurer credited "growth in the high net worth business and Accident & Health".
Underwriting profit jumped 44% to $114 million because claims fell faster than expenses rose. The division's accident year combined ratio excluding catastrophes — the share of premiums spent on current-year claims and overhead, stripping out big storms and past reserve changes — improved by 1.9 percentage points to 93.6%. Lower claims and general overhead outweighed higher broker commissions.
What to watch: Global Personal's combined ratio in the fourth quarter. Staying below 94% would show that the shift toward wealthy households and health coverage gives AIG a lasting profit source while commercial property prices soften.
International Commercial Carries Premium Growth
While North American growth stalled, International Commercial carried the top line. Net premiums written in the international business climbed 12.9% from a year ago to $2.39 billion. That made it AIG's fastest-growing division and provided more than half of the entire company's dollar increase in premiums this quarter.
Last quarter, Middle East conflict losses pushed the unit's combined ratio — total claims and expenses as a percentage of earned premiums — up to 91.3%. This quarter, the combined ratio settled at 88.3%, generating $283 million in underwriting profit. Excluding catastrophes and prior-year reserve changes, the underlying combined ratio improved by 0.2 percentage points from a year ago to 85.8% because lower general overhead offset higher claims from business mix.
What to watch: International Commercial's underlying loss ratio in the third-quarter filing. A steady reading would show that international expansion is not bringing in lower-margin policies.
Early Eurobond Sale Removes Refinancing Risk
Management had promised to refinance nearly $1 billion of European bonds maturing in early 2027 before the end of this year. On September 24, AIG completed that plan ahead of schedule by issuing €625 million of notes due in 2031 and €500 million of notes due in 2036, raising about $1.3 billion in total.
Executing the bond sale removes any refinancing risk before next year's maturity wall, though holding the cash temporarily lifted total debt by 13.2% from a year ago to $10.25 billion. That pushed debt to 20.8% of total capital, or 19.6% excluding unrealized investment losses, up from 18.1% in June.
What to watch: total debt in the first half of 2027. Once AIG uses the proceeds to pay off the maturing European bonds, leverage should drop back toward the middle of its 15% to 20% target range.
🐻 Bear Case
Property Pullback Slows North America Growth to 2%
Acquiring renewal rights from Everest Group and a quota share — an agreement to take a fixed slice of another insurer's policies — with Convex Group drove a 23.7% premium jump in the first quarter. Bulls saw those deals as a lasting growth engine, while bears warned that underlying growth was low. Chief executive Eric Andersen said that "we maintained strong underwriting performance" in "a more challenging market environment", and noted premiums rose 10% in constant currency excluding North America Property.
Including that property book, total General Insurance net premiums written grew 6.8% from a year ago to $6.65 billion, slowing from 9.2% in the second quarter. North America Commercial premiums rose only 1.9% to $2.48 billion because AIG cut back on "lower production in certain Property lines", where competition has pushed prices down.
This slowdown tests AIG's earlier full-year outlook for 11% to 15% premium growth. By our math, hitting the 13% middle of that range requires fourth-quarter premiums to grow 15.7% from a year ago, more than double the third-quarter pace. Even reaching the 11% bottom of the range requires 7.8% growth next quarter.
What to watch: fourth-quarter net premiums written and any update on the conference call. A fourth-quarter reading below 8% would leave full-year growth short of the 11% floor as the acquisition boost fades.
Casualty Mix Shift Pushes Underlying Loss Ratios Up
Because commercial property prices are softening, AIG is writing fewer property policies and leaning on casualty lines such as liability insurance. Property policies normally carry lower routine claims than casualty policies, so this shift changes the company's margin structure.
- General Insurance underlying loss ratio: 57.8%, up 0.4 percentage points from a year ago
- General Insurance expense ratio: 30.6%, down 0.3 percentage points from a year ago
- North America Commercial underlying combined ratio: 87.2%, up 1.8 percentage points from a year ago
- Catastrophe charges: $283 million from "severe convective storms in North America", up from $100 million a year ago
AIG said the higher underlying loss ratio was "primarily due to changes in business mix". In North America Commercial, both the claims ratio and broker commissions rose for the same reason, while general operating overhead fell. Cost cuts across the company nearly offset the claims rise this quarter, leaving the overall underlying combined ratio up 0.1 percentage points at 88.4%.
What to watch: North America Commercial's underlying loss ratio in the quarterly filing. If casualty claims keep pushing the ratio higher faster than overhead falls, underwriting margins will shrink.
Risks this quarter didn't answer
Three standing concerns from prior quarters cannot be checked from the earnings release alone because the detailed tables live in the quarterly filing or conference call.
- U.S. Excess Casualty reserves: total prior-year reserve releases fell by half to $91 million from $180 million a year ago, but the release does not show whether U.S. Excess Casualty needed more money after adding $74 million in the second quarter; the filing's reserve footnote will show the line-by-line breakdown.
- Net premiums earned growth: the release gives ratios and dollar underwriting income, but omits the exact net premiums earned table needed to check how fast first-half written premiums are turning into recognized revenue; the filing's segment table will provide the dollar figure.
- Underlying vs deal-driven premium growth: AIG again gave no split showing how much of the 6.8% premium growth came from Everest renewal rights and the Convex quota share versus existing business; only management commentary on the call can clarify this.
👓 Other Themes
Restructuring and Deal Charges Persist After Overhaul
Although AIG finished its multi-year cost overhaul program in 2025, it continues to record one-off charges outside its core operating profit. In the third quarter, the insurer excluded $100 million of pre-tax restructuring costs and $20 million of transaction and integration costs from adjusted pre-tax income. Over the first nine months of 2026, those two lines totaled $315 million before tax, narrowing the share of operating profit that reaches bottom-line net income.
💲 Other KPIs
Investment income in the property and casualty division rose 9.2% from a year ago to $1.03 billion, driven by higher yields on its bond portfolio. Meanwhile, investment income in Other Operations fell 37.5% to $45 million because AIG finished selling its stake in Corebridge Financial in May 2026 and no longer receives its $20 million quarterly dividend.
Diluted shares fell 5.6% from a year ago as AIG bought back $527 million of stock, or about 7 million shares, during the quarter. Including $260 million in dividends, the insurer returned $787 million to shareholders, down from $904 million in the second quarter and $1.50 billion a year ago as capital shifted toward acquisitions.
Net worth per share excluding unrealized bond losses rose 5.5% from a year ago to $81.25, up from $79.98 in June. Standard book value per share slipped 0.6% from a year ago to $74.96 because interest rate swings increased unrealized bond losses in accumulated other comprehensive income to $3.26 billion.
🔮 Guidance
Unchanged. Chief executive Eric Andersen said that "We continue to make excellent progress toward achieving our 2025 Investor Day financial objectives". Core operating return on equity — annualized operating profit divided by equity excluding unrealized bond losses and tax credits — was 11.1% in the third quarter and 11.4% over the first nine months, down from 13.6% a year ago on higher storm losses but inside the target band.
Unchanged. Management's multi-year plan calls for bringing the General Insurance expense ratio below 30% by full-year 2027. The ratio improved by 0.3 percentage points from a year ago to 30.6% in the third quarter, after hitting 29.3% in the first quarter and 30.8% in the second quarter, leaving another 0.6 points of reduction needed to reach the goal.
Unchanged. The three-year plan targets at least 20% compound annual growth in profit per share excluding one-offs through 2027. Third-quarter profit per share excluding one-offs fell 6.4% from a year ago to $2.06 against a tough prior-year comparison with few storms, but nine-month profit per share is up 20.2% to $6.18, keeping the full year on pace.
Unchanged. The board declared a $0.50 quarterly dividend payable in December, matching the rate set in the first quarter and fulfilling the two-year plan for at least 10% annual dividend growth over 2025 and 2026.
❓ Key Questions
Does AIG still expect 11% to 15% premium growth?
General Insurance net premiums written grew 6.8% in the third quarter. By our math, reaching even the 11% low end of the original 2026 plan requires 7.8% growth in the fourth quarter, and the 13% middle requires 15.7%.
How much did U.S. Excess Casualty reserves change?
Favorable prior-year reserve releases dropped to $91 million from $180 million a year ago. Investors need the quarterly filing's breakdown to see if U.S. Excess Casualty required more reserves after taking a $74 million charge in the second quarter.
What was premium growth excluding the Everest and Convex deals?
North America Commercial premiums grew just 1.9% even with the Everest renewal rights and Convex quota share contributing. Management has not disclosed how much those deals added in dollars or whether the existing book shrank.
How fast did earned premiums grow in the third quarter?
First-half written premiums jumped 15%, which should turn into earned revenue over four quarters and lower the expense ratio. The earnings release did not include the earned premium dollar table needed to check that conversion.