American International Group, Inc. Q1 FY2026 earnings call

Peter Zaffino mentioned AIG had a very strong start to 2026, with exceptional first quarter results. Discussed progress towards Investor Day objectives, property market, and AI/digital strategies. Mentioned ongoing conflict in Middle East and its impact. Eric Anderson shared perspectives on AIG, reaffirmed commitment to strategy and investor day financial guidance. Keith Walsh provided detailed financial results, including adjusted pre-tax income, underwriting income, gross and net premiums written, underwriting ratios, pricing, and other operations details.

General insurance net premiums written increased 18% year over year on a constant dollar basis. Global commercial insurance business increased 21% year over year, global personal insurance business increased 11% year over year. General insurance expense ratio was 29.3%, improvement of 120 basis points year over year. Accident year combined ratio, as adjusted, was 86.6%, improvement of 120 basis points year over year. Calendar year combined ratio was 87.3%, improvement of 850 basis points year over year. Global personal insurance business grew net premiums written 11% in the first quarter, expense ratio decreased 410 basis points, accident year combined ratio, as adjusted, improved 570 basis points to 89.9%, calendar year combined ratio was 89.4%. International property portfolio's calendar year combined ratio was on average in the low 70s across 2024 and 2025. U.S. retail property portfolio had calendar year combined ratios in the 70s in 2024 and 2025. Lexington middle market portfolio in excess and surplus lines performed exceptionally well. Lexington large account portfolio in excess and surplus lines was under significant pricing pressure, decreased 19% year over year.

For full year 2026, expect low to mid-teens net premium written growth in general insurance. Anticipate second quarter other operations net investment income and other line to be in the range of $30 to $40 million, subject to market conditions. Board approved an 11 percent increase in quarterly dividend to 50 cents per share starting in the second quarter of 2026. Eric reaffirmed commitment to delivering operating EPS compound annual growth of over 20% over the three years ending 2027, driving core operating ROE of 10 to 13% through 2027, improving general insurance's expense ratio to less than 30% by 2027, supporting the increase in dividends by 10% in 2026, and achieving improvement in global personal insurance combined ratio to 94% by 2027.

Ongoing conflict in the Middle East with evolving impact on the industry. Potential deterioration in property attritional loss ratios. Complexity in Europe with GDPR and data use for AI implementation. Market conditions affecting pricing and portfolio performance in certain segments.

Q: How does AI impact what carriers pay to brokers and interaction?

A: More efficient data exchange, collaboration will get stronger as enterprise becomes bigger.

Q: Impact of pricing on Everest business?

A: Conversion has been outstanding, retention and conversion desired by broker partners and clients, expectations in line with AIG's business performance.

Q: Perspective on Lexington and E&S markets?

A: Shared and layered in E&S property facing rate decreases, need to shrink portfolio; middle market in property performed well, AI can help with submission flow.

Q: AI integration and future state?

A: Great opportunities to learn from different regions, global capabilities in AI orchestration across organization will be profound, but differences in regions like Europe and Asia exist.

Q: Loss ratio and soft market impact?

A: Shift in business mix, accident year loss ratio increased slightly, organic growth in casualty, conversion of Everest changing mix, property market hard to predict but E&S expected to decrease.