AMERICAN INTL GROUP INC earnings calls

What to do with excess capital

Q (Taylor Scott · Barclays): Analyst asked how AIG thinks about its excess capital, whether anything prevents higher premium leverage, and how they manage capital in a soft market.

A: Management said they prefer to grow into the capital base but will return capital via buybacks and dividends. They highlighted they have strong capital, liquidity and debt capacity and will focus on underwriting, expense discipline, investment income and capital management.

"But at the same time, I think we've demonstrated that we're big believers in returning capital through buybacks and dividends, which is a focus for us as well." — Eric Andersen (CEO)

Is social inflation easing?

Q (Meyer Shields · KBW): Analyst asked what AIG is monitoring for social inflation and whether its pace is moderating, and also asked about potential IBNR in older accident years.

A: Management said they have not seen evidence that social inflation is moderating and are not assuming moderation in pricing. On reserves, they noted the main impacts were in accident years '16 and '23, and that 2023 was moved up into the current range to align with 2024 and 2025.

"Ultimately, we haven't seen anything that says that it's moderating at this point, and we're certainly not building that into our pricing at this stage." — Eric Andersen (CEO)

Mix shift and loss ratios

Q (Brian Meredith · UBS): Analyst asked how rising acquisition ratio from mix shift is affecting core loss ratios and whether that trend will continue as AIG shifts from property into casualty.

A: Management said mix shift toward casualty and away from property has ticked loss ratios up a bit, especially in a large quarter. They added that accident year combined ratio adjusted margins have largely held, helped by personal insurance work and expense progress.

"Our accident year combined ratio adjusted margins have largely held." — Keith Walsh

How much growth needed for ROE goals

Q (Michael Zaremski): Analyst asked how important mid to high single-digit or low double-digit premium growth is to reach the Investor Day ROE goals and operating leverage.

A: Management said they had strong growth so far (13% year-to-date) but will use cycle management to stay disciplined. They see attractive organic opportunities and will be selective across all segments while converting strategic transactions that support growth.

"We do think there's attractive organic opportunities in the market, and we're going to continue to be selective to be able to position ourselves across all 3 of our segments." — Eric Andersen (CEO)

Specific growth examples

Q (Jon Hancock): Analyst asked for concrete examples where AIG sees growth opportunities across the portfolio and how they manage market differences.

A: Management gave micro examples: Global Specialty where they are market leaders and can pick the business they want, and accident & health where they see high-volume growth and a building pipeline. They said the diversified portfolio lets them play offense and defense while keeping profitability the priority.

Technology and underwriting speed

Q (Michael Zaremski): Analyst asked whether AIG's technology and AI initiatives are already improving how much business gets through and the speed of responses.

A: Management said they are rolling out AIG Assist for underwriting and claims and are already seeing benefits: more submissions, more quotes, better consistency and speed in underwriting. They said AI also gives broker-level insights to focus resources on the best opportunities, though it's early days.

"We're seeing more business. We're quoting more business, and we're able to actually get a better line of sight on consistency in the underwriting, speed in the process." — Eric Andersen (CEO)

Convex quota share and AI debt exposure

Q (Rowland Mayor · RBC): Analyst asked how much premium came from the Convex quota share this quarter and whether AIG has material allocations to AI-related corporate debt in its fixed income portfolio.

A: Management said they did not break out the Convex contribution and that organic growth was low to mid-single digits with other transactions filling the rest; the reinsurance tailwind largely dissipated in Q2. They also said they do not have significant allocations to AI-specific debt and that private software exposure is immaterial.

"We don't have significant allocations to AI-specific related debt." — Keith Walsh

Drivers of personal lines results and expenses

Q (Pablo Singzon · JPMorgan): Analyst asked what drove Global Personal Lines' strong combined ratio and how much was favorable market vs company actions; also asked about expense ratio outlook and AI's role.

A: Management said Global Personal improvement came from premium growth, underwriting actions, reinsurance savings, lower acquisition costs and expense control, with some cat benefit. On expenses they remain on track for sub-30% in full year 2027, see strong premium leverage, and expect AI to make colleagues more efficient rather than reducing headcount.

"On a rolling 4 quarters, which I think is the best way to look at it to see the trend, we're at 30.7%." — Keith Walsh

Premium guide and leverage target

Q (Elyse Greenspan · Wells Fargo): Analyst asked whether AIG expects to hit the low-to-mid teens premium growth guide given pressure in property, and whether AIG will consider raising its leverage target to free up capital.

A: Management said they are comfortable with 13% year-to-date and will not chase growth blindly; they will react to the market and prioritize underwriting discipline. On leverage, management said they are within the old 15%–20% range at 17.6%, run conservatively, have dry powder, and are comfortable with the current leverage.

"We haven't given -- we haven't reiterated that 15% to 20% in quite some time. Obviously, we're at 17.6%." — Keith Walsh