American International Group, Inc. Q2 FY2025 earnings call

• Financial Results: AIG had an outstanding second quarter with adjusted after-tax income per diluted share of $1.81, adjusted after-tax income of $1 billion. Returned $2 billion of capital to shareholders. S&P Global and Moody's upgraded AIG's insurance subsidiaries.
• Property Market: U.S. property portfolio has improved; analyzed components like catastrophe, AAL, vertical single losses, and attritional loss selections.
• AIG Next: Achieved over $530 million of annual run rate expense savings ahead of schedule, streamlined processes, restructured into 3 business segments, and advanced technology.
• Russia Aviation Claims: Prudently reserved for net loss exposure, settlements in line with estimates.
• Gen AI: Deploying Gen AI end-to-end, underwriter assistance deployed in some areas, claims assistance in development, and building AIG Ontology.

General Insurance: Adjusted after-tax income per diluted share was $1.81, up 56% year-over-year. Adjusted after-tax income for the quarter was $1 billion, up 35% from prior year. Net premiums written were $6.9 billion, up 1%. Accident year combined ratio as adjusted was 88.4%, calendar year combined ratio 89.3%. North America Commercial: Accident year combined ratio as adjusted was 86.2%, calendar year combined ratio 85.9%. Loss ratio 63.1% (up 120 basis points), expense ratio 23.1% (up 30 basis points). International Commercial: Accident year combined ratio as adjusted was 85.0%, calendar year combined ratio 85.9%. Loss ratio 54.2% (up 160 basis points), expense ratio 30.8% (up 130 basis points). Global Personal: Accident year combined ratio as adjusted was 96.1%, calendar year combined ratio 98.5%. Loss ratio 54.2% (down 160 basis points), expense ratio 41.9% (up 40 basis points).

• Anticipate being at the high end of 2025 share repurchase guidance ($5 billion to $6 billion) subject to market conditions.
• Increased quarterly dividend by 12.5% to $0.45 per share.
• No material debt maturities in 2025 and 2026; ended the quarter with $9 billion of debt outstanding and a low debt to total capital ratio.

• Property market dynamics and CAT risks.
• Uncertainties in Russia aviation operator claims.
• Social inflation impact on the casualty market.

Q: On property pricing implications and combined ratio targets.

A: Peter explains reinsurance benefits and that while combined ratio could rise slightly, it remains strong and they are cautious but retain business.

Q: Growth outlook and capital deployment.

A: Don and Jon discuss strong growth in casualty and specialty segments, with robust submissions and distribution alignment.

Q: Reserve reapportionment and social inflation.

A: Peter and Don talk about reserve reapportionment to appropriate accident years and flight-to-quality in casualty due to social inflation.

Q: Pricing in North America Commercial and Q3 trends.

A: Peter and Keith discuss pricing alignment with loss trends and operating leverage from expense management.

Q: E&S marketplace dynamics.

A: Peter talks about strong submissions in E&S markets and ongoing robust dynamics despite potential market transitions