American International Group, Inc. (NYSE:AIG) posted its financial results for the fourth quarter and year ending December 31, 2024, highlighting substantial growth. Despite a challenging market environment, AIG has successfully executed strategic initiatives that resulted in remarkable improvements across several key financial metrics.
Financial Summary (Fourth Quarter 2024)
AIG's strategic realignment efforts and improved operational strategies distinguished Q4 2024, evident in the notable year-over-year rise in net income per diluted share, aided by elevated net investment income.
| Financial Metric | Q4 2024 | Q4 2023 | Year-over-Year Comparison |
|---|---|---|---|
| Total Revenue | $898 million | $86 million | +944% |
| Net Income per Diluted Share | $1.43 | $0.12 | +1092% |
| Adjusted After-Tax Income per Share | $1.30 | $1.28 | +2% |
| Combined Ratio | 92.5% | 89.1% | +3.4 percentage points |
| AYCR (Adjusted) | 88.6% | 87.9% | +0.7 percentage points |
American International Group Results
The boost from AIG’s strategic adjustments is evident in the year's strong financial performance. The 944% increase in total revenue compared to Q4 2023, alongside a staggering 1092% rise in net income per diluted share, underscores AIG’s effective response to enhancing its operational structure. Despite a slight rise in combined ratio and adjusted AYCR, the overall health of AIG's financials hints at future potential.
Revenue Breakdown
Within Q4 2024, AIG's core earning segments showcased formidable strength, particularly in its General Insurance arm. Enhanced new business and high retention rates propelled International Commercial sub-segment performance.
| Segment | Q4 2024 | Q4 2023 | Comparison |
|---|---|---|---|
| General Insurance | $6.1 billion | +6% | +7% on comparable basis |
| - North America Commercial | $2.2 billion | +5% | +9% on comparable basis |
| - International Commercial | $2.1 billion | +9% | +7% on comparable basis |
| - Global Personal | $1.8 billion | +2% | +5% on comparable basis |
The General Insurance segment’s growth is indicative of AIG’s strategic maneuvering and adaptability to market demands, accurately seizing positive rate opportunities which fueled overall business vigor.
Key Developments
- Effective capital management, executing strategies worth $9.7 billion in 2024, inclusive of $6.6 billion in share repurchases.
- Partnership with Blackstone led to the initiation of reinsurance Syndicate 2478 at Lloyd's, marking a strategic operational expansion effective January 1, 2025.
- AIG's agile risk management framework adeptly navigated $325 million in Q4 catastrophe-related charges, reinforcing their resilience amid environmental challenges.
Comments from Company Officers
Peter Zaffino, AIG Chairman & CEO, predicated 2024 as a pivotal year characterized by significant corporate restructuring, facilitating a narrowed focus on pivotal operating segments. He emphasized AIG's successful navigation through adversities like the California wildfires, culminating in robust financial and operational metrics.
Dividends and Share Repurchases
AIG continued its tradition of returning value to shareholders, announcing a quarterly cash dividend of $0.40 per share. Shareholders of record on March 17, 2025, can anticipate this payment on March 31, 2025.
American International Group Stock Forecast
The release of AIG’s robust financial outcomes contributed to a 1.70% increase in its stock price post-announcement, signaling an optimistic market outlook. Given the recent financial performance and strategic direction, projections for AIG's stock price could range from a high of approximately $90, presenting strong investor confidence, to a low around $72, acknowledging potential external economic pressures. This evaluation integrates AIG's strategic initiatives, current market trends, and a market capitalization of approximately $49.76 billion.
As AIG sets its sights on delivering a core operating return on equity exceeding 10% for the next fiscal year, stakeholders are poised to anticipate further developments supporting sustained growth and value creation.
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