American International Group (NYSE: $AIG) is a leading American finance and insurance company with over 25,000 employees and operations in over 80 countries. It provides border life insurance, property, consultancy solutions, and other financial services.
On May 2, 2024, it reported strong first-quarter fiscal 2024 results to a positive market reaction.
AIG Reports Earnings Beat in Q1
The company reported a net income of $1.2 billion, a significant rise from $23 million from the prior year, and overtook analyst expectations of $1.154 billion net income. The EPS also beat estimates by 5.45%, totaling $1.74 compared to the $1.65 estimate by analysts.
Moreover, the NPW (General Insurance net premiums written) slumped by 33%, impacted by 2023 divestitures totaling $4.3 billion. However, the company gained 4% growth in North America commercial on a comparable basis.
Operating revenues reached $12.5 billion, marking a slight 0.8% increase compared to the previous year. This exceeded the consensus estimate by 3.6%. Furthermore, the total investment income rose by 11%, amounting to $3.5 billion in the first quarter. This was fueled by revenue from fixed-maturity securities and loans, primarily due to higher reinvestment rates.
AIG returned up to $2.4 billion to shareholders via various means, including $1.7 billion in share buybacks. For this quarter, the board has approved a dividend of $0.40 per common share.
CEO Comments on Q124 Results
AIG CEO Peter Zaffino said, “AIG began 2024 with very strong momentum in delivering on our strategic and operational progress while achieving exceptional financial results, reflecting the foundational capabilities we have cultivated over the last several years. In addition to outstanding profitability, this quarter was highlighted by the significant capital management actions we completed, placing AIG in a position of strength ahead of Corebridge Financial’s deconsolidation from AIG.”
He added, “As a result of the 2023 divested businesses and changes in reinsurance structures, General Insurance net premiums written decreased 35% year-over-year but increased on a comparable basis.”
AIG Stock Performance
AIG closed trading on Thursday, May 2, at $78.10, an increase of 3.02% from the previous closing. Following the positive results, the stock rose 0.23% in premarket trading to $78.28, continuing a trend of positive gains, rising 13.45% since the start of the year.
Over the past 52 weeks, the stock has outperformed the market, rising 45.19% compared to the 22.43% gain of the SPX. The company’s current market cap is 52.642 billion, with a 24-hour trading volume of 6,416,412.
Should You Invest in AIG?
AIG shareholders got exceptional returns on their investments in the first quarter, driven by a rise in net income and earnings. AIG would make a great addition to your portfolio as its financial performance improves and the stock price rises.
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