AIG Q2 2026 Earnings: Premium Growth Supports Underwriting Profit

AIG (NYSE: AIG) reported Q2 2026 General Insurance net premiums written of $7.516 billion, up 9% year over year, while GAAP diluted EPS declined 10% to $1.78 from $1.98. Underwriting income increased 10% to $686 million and the combined ratio improved, but investment valuation changes reduced GAAP net income even as adjusted diluted EPS rose 10%.

Core earnings data

Premium growth across all three General Insurance segments supported higher underwriting income. The combined ratio improved 30 basis points to 89.0%, as greater favorable prior-year reserve development and a lower expense ratio more than offset higher catastrophe charges.

GAAP and adjusted earnings moved in different directions. Net income attributable to common shareholders fell approximately 17% because of fair-value changes related to AIG’s Corebridge investment and equity securities, while adjusted after-tax income increased approximately 2%.

Adjusted pre-tax income, adjusted after-tax income and adjusted diluted EPS are non-GAAP measures. AIG also recast historical General Insurance results after moving amortization of intangible assets from Other Operations into General Insurance beginning in Q1 2026.

Business and segment performance

All three General Insurance segments increased net premiums written, but their underwriting results diverged significantly. North America Commercial and Global Personal generated higher underwriting income, while International Commercial’s growth came with weaker loss and expense ratios.

North America Commercial

Net premiums written rose 9%, led by Retail Casualty and Financial Lines, partly offset by lower Lexington business driven by Property. Underwriting income increased 24%, and the combined ratio improved 190 basis points to 84.0% because of greater favorable prior-year development, lower catastrophe charges and a lower general operating expense ratio.

The underlying trend was less favorable: the adjusted accident-year combined ratio increased 50 basis points to 86.7%. AIG attributed this deterioration to a higher acquisition ratio, business-mix changes and rate pressure, particularly in Property.

International Commercial

Net premiums written increased 11% as reported and 10% on a constant-dollar basis, primarily due to Property and Marine growth. Financial Lines was a partial offset because of continued rate pressure.

Underwriting income fell 33% to $200 million, while the combined ratio deteriorated 540 basis points to 91.3%. Higher catastrophe charges—including losses related to the Middle East conflict—combined with rate pressure, a higher accident-year loss ratio and increased acquisition costs associated with new business growth and mix changes.

Global Personal

Net premiums written increased 7% as reported and 8% on a constant-dollar basis, supported by Accident & Health and continued organic growth in High Net Worth products. Underwriting income rose to $114 million from $25 million.

The combined ratio improved 560 basis points to 92.9%, while the adjusted accident-year combined ratio improved 490 basis points to 91.2%. The improvement reflected better High Net Worth commission terms earning into results, lower operating expenses and reduced catastrophe charges.

Profitability, capital and the balance sheet

General Insurance catastrophe-related charges increased to $210 million from $170 million, adding 3.4 percentage points to the loss ratio compared with 2.9 points a year earlier. The current quarter included $75 million of net losses related to the Middle East conflict.

That pressure was offset by $145 million of favorable prior-year reserve development, up from $112 million. Favorable development in U.S. Workers’ Compensation and U.S. Property and Special Risks outweighed slight reserve strengthening in U.S. Excess Casualty. The General Insurance expense ratio also improved 20 basis points to 30.8%.

AIG returned $904 million to shareholders during the quarter, consisting of $641 million of repurchases covering approximately 8 million shares and $263 million of dividends. At June 30, total debt represented 18.1% of total capital and 17.6% of adjusted total capital.

The company sold its remaining approximately 25 million Corebridge shares on May 7 for aggregate proceeds of about $710 million. Book value per share increased 4% year over year to $77.39, while adjusted tangible book value per share rose 3% to $72.18. On August 6, the board declared a quarterly dividend of $0.50 per share.

Investment marks pulled GAAP EPS below adjusted earnings

The central earnings distinction was the gap between GAAP and adjusted results. Total net investment income declined approximately 23% to $1.127 billion, primarily because of fair-value changes in AIG’s Corebridge investment and equity securities. Those movements contributed to the decline in GAAP net income and diluted EPS.

On an adjusted pre-tax income basis, net investment income declined more modestly to $908 million from $955 million. General Insurance investment income was unchanged, while Other Operations was affected by lower short-term investment income and the absence of $27 million of Corebridge dividends recorded in the prior-year quarter.

Adjusted after-tax income increased only about 2%, but adjusted diluted EPS rose 10%. The difference was supported by a lower diluted weighted-average share count, which declined approximately 8% to 533.5 million following share repurchases. The same reduction also moderated the decline in GAAP EPS relative to the larger percentage decline in GAAP net income.

Management perspective

President and CEO Eric Andersen said the insurance market has shifted from broadly positive pricing to a more selective environment in which performance increasingly depends on individual product-line conditions. That assessment is consistent with the quarter’s segment results: premium growth remained broad, but rate pressure and business mix weakened underlying underwriting ratios in parts of Commercial Insurance.

Management intends to focus growth on segments offering more attractive risk-adjusted returns. Andersen also reiterated confidence in AIG’s ability to meet the financial objectives presented at its 2025 Investor Day, although the earnings release did not provide new quantitative guidance.

Recent insider transactions

The supplied six-month summary showed no insider purchases or sales and listed total insider holdings of 3.03 million shares. The latest records containing a disclosed transaction type and value were four direct stock awards dated February 17, 2026.

These entries were stock awards rather than reported open-market purchases or sales and therefore do not, by themselves, indicate an insider view on the company’s outlook.

Risks investors need to watch

• Commercial pricing and business-mix pressure: North America Commercial’s adjusted accident-year combined ratio worsened despite a better reported combined ratio. International Commercial experienced an even larger deterioration as rate pressure and acquisition costs offset premium growth.
• Catastrophe and geopolitical losses: Catastrophe charges increased by $40 million and included $75 million related to the Middle East conflict. Additional events could pressure loss ratios and underwriting income.
• Dependence on favorable reserve development: The 89.0% combined ratio benefited from $145 million of favorable prior-year development. A lower reserve benefit would provide less support to reported underwriting profitability.
• Investment and Other Operations volatility: Fair-value movements reduced GAAP earnings, while the adjusted pre-tax loss in Other Operations widened to $142 million from $101 million because of lower investment income.

Summary

AIG’s Q2 2026 operating performance was supported by 9% premium growth, higher underwriting income and improved aggregate insurance ratios. Global Personal delivered the clearest underwriting improvement, while International Commercial showed that premium growth did not necessarily translate into better profitability. Investors’ main follow-up points are commercial pricing pressure, catastrophe costs, reserve-development support and whether adjusted earnings can continue growing after accounting for the benefit of a lower share count.