AIG Q3 2026 Premiums Rise as Catastrophe Losses Weigh on Underwriting Profit

American International Group (NYSE: AIG) reported higher third-quarter 2026 premiums and net income, while increased catastrophe losses and a smaller benefit from prior-year reserve development reduced General Insurance underwriting profit. Net premiums written rose 7% to $6.65 billion, or 8% on a constant-dollar basis, but underwriting income declined 29% to $564 million.

Net income attributable to AIG common shareholders increased to $844 million from $519 million a year earlier. Diluted earnings per share rose 72% to $1.60, partly reflecting a lower diluted share count following repurchases. Adjusted after-tax income fell to $1.09 billion from $1.23 billion, while adjusted earnings per diluted share decreased 6% to $2.06 from $2.20.

AIG’s return on equity increased to 8.5% from 5.0%. Core operating return on equity, a non-GAAP measure, was 11.1%, compared with 13.6% in the prior-year quarter.

Premium growth outpaces underwriting profit

General Insurance net premiums earned increased 7% to $6.44 billion. The calendar-year combined ratio rose 450 basis points to 91.3%, indicating that underwriting remained profitable but generated a narrower margin than a year earlier. The accident-year combined ratio excluding catastrophes and other adjustments was broadly stable at 88.4%, compared with 88.3% in the third quarter of 2025.

Catastrophe-related losses, net of reinsurance, increased to $283 million from $100 million. Favorable prior-year loss development was $111 million, down from a $205 million benefit a year earlier. Excluding catastrophes and prior-year development, accident-year underwriting income increased to $756 million from $713 million.

The General Insurance expense ratio improved by 30 basis points to 30.6%, as the general operating expense ratio declined to 12.4% from 12.9%. AIG said it remains on track to reduce the General Insurance expense ratio below 30% for full-year 2027.

General Insurance net investment income increased 9% to $1.03 billion. The annualized yield on the core fixed-income portfolio reached 4.86%, up from 4.58% a year earlier, while alternative investment income was $91 million, compared with $137 million in the prior-year period. General Insurance adjusted pre-tax income declined 9% to $1.59 billion.

International Commercial and Personal drive premium growth

North America Commercial net premiums written increased 2% to $2.48 billion. Net premiums earned rose 7%, outpacing the 5% increase in general operating expenses, but underwriting income fell 57% to $167 million. Catastrophe losses increased to $167 million from $68 million, and the calendar-year combined ratio rose to 92.9% from 82.6%. The adjusted accident-year combined ratio increased 180 basis points to 87.2%.

International Commercial produced the strongest reported premium growth, with net premiums written increasing 13% to $2.39 billion. Underwriting income declined 14% to $283 million as catastrophe losses rose, but the adjusted accident-year combined ratio improved by 20 basis points to 85.8%. Its expense ratio declined by 100 basis points to 30.6%, supported by a lower general operating expense ratio.

Global Personal net premiums written increased 6% as reported and 9% on a constant-dollar basis to $1.78 billion. Underwriting income rose 44% to $114 million, while the adjusted accident-year combined ratio improved by 190 basis points to 93.6%. The segment’s adjusted accident-year loss ratio declined to 52.9% from 55.3%, offsetting a higher acquisition ratio.

Capital returns and financial targets

AIG returned $787 million to shareholders during the quarter, comprising $527 million of share repurchases and $260 million of dividends. The company repurchased an aggregate $3.5 billion of shares over the five quarters through September 2026, reducing shares outstanding to 518.7 million at quarter-end.

Book value per share decreased 1% year over year to $74.96. Adjusted book value per share increased 5% to $81.25, while adjusted tangible book value per share also rose 5% to $73.37.

The total debt-to-total adjusted capital ratio was 19.6%, compared with 17.6% in the second quarter. In September, AIG issued €625 million of 4.25% notes due in 2031 and €500 million of 4.75% notes due in 2036, equivalent to approximately $1.3 billion in aggregate.

Management said the company continues to make progress toward the objectives set at its March 2025 Investor Day. Those targets include operating earnings-per-share compound annual growth of more than 20% over 2025 through 2027, core operating ROE of 10% to 13%, a General Insurance expense ratio below 30%, and dividend-per-share compound annual growth above 10% for 2025 through 2026. The forecasts depend on management assumptions and market conditions.

AIG identified catastrophe events, inflation and social inflation, interest-rate and foreign-exchange movements, geopolitical developments, investment-market volatility, reserve estimation, reinsurance availability, counterparty exposure, cybersecurity incidents and regulatory changes among the factors that could cause actual results to differ from its targets.