How is AIG's current pricing affecting the gross premium volumes brought over from Everest?

Zaffino said AIG evaluated the full portfolio, brought over Everest employees who know the book, and used the Palantir ontology to see upcoming submission and pricing activity a week ahead each month, letting underwriters get ahead of restructuring. He expects loss- and combined-ratio outcomes in line with AIG's own business. Hancock added the renewal-rights deal is performing to expectation, retention and conversion are strong, and demand from brokers and clients is high, allowing AIG to combine layers, take lead positions and reprice where needed. “The biggest compliment I can give this book is that everyone else is chasing for it.”

Are there cracks in E&S casualty pricing and business moving back to the middle market, and what does that mean for AIG growth and margins over the next 12-18 months?

Zaffino differentiated large-account shared-and-layered E&S property (rate decreases cutting into margin, portfolio to shrink) from middle-market E&S (performing exceptionally well, strong submission flow, AI enabling capacity to service it). He acknowledged casualty is coming under a bit more rate pressure but said returns remain very good and AIG will watch it into the back half. On terms and conditions he saw nothing concerning or trending across the portfolio. “we see in the shared and layered in E&S and property, rate decreases far away cutting into margin and we're going to need to shrink the portfolio in the current environment”

How does incoming CEO Eric Andersen think about deploying excess capital, M&A, and increasing operating leverage?

Andersen pointed to the existing Investor Day plan — organic growth, executing on completed transactions, and evolving offerings — as an ample 12-24 month agenda, emphasizing execution over new M&A. Zaffino added AIG deliberately built its capital position to create option value (enabling Everest and Convex), that market complexity brings opportunity, and that the team will evaluate opportunities while having capital to 'grow into.' “we have really worked hard on ROE. We know we have capital that we can grow into and we wanted just to provide AIG with as much option value as possible”

AIG

American International Group (AIG) Q1 FY26 earnings call: guidance and Q&A

Q: As both carriers and brokers adopt AI, how does that change what carriers pay brokers?

Zaffino framed AI as primarily improving efficiency in exchanging submission data and augmenting underwriting decisions, while stressing brokers do far more than data gathering — they provide substantial advisory. He argued scale will matter and that as large language models get trained by experts, both the model and the underwriter/claims professional benefit, strengthening carrier–broker collaboration rather than displacing it. “I think we will be able to augment information that we get in submissions to be able to make better underwriting decisions.”

Earnings call· Mar 2026 (Q1 FY26)· Financials· May 1, 2026

Source: earnings call transcript

Executive summary

AIG Q1 FY26 — strongest first quarter of the Zaffino era with 18% NPW growth and 87.3% combined ratio

AIG opened FY26 with what management called its strongest-ever first quarter, as the Everest renewal-rights conversion, the Convex quota share and a favorable January 1 reinsurance renewal drove 18% net-premiums-written growth while margins expanded across all three segments. The quarter's quality was underwriting-led — underwriting income more than tripled and the calendar-year combined ratio improved 850 bps — supplemented by higher core fixed-income yields, though weak alternative returns and a wider other-operations loss were partial offsets. The forward stance is disciplined growth: management is leaning into casualty where rate exceeds loss-cost trend while deliberately shrinking the pressured Lexington large-account property book, and reaffirmed its 2025 Investor Day targets (>20% operating EPS CAGR to 2027, 10-13% ROE, sub-30% GI expense ratio). With incoming CEO Eric Andersen taking over June 1, a heavy emphasis on an agentic-AI underwriting/claims build with Palantir and Anthropic, and a planned full Corebridge exit funding buybacks, the story is execution on an already-improved platform rather than a strategic pivot.

Highlights

General Insurance net premiums written rose 18% YoY on a constant-dollar basis to $5.6B, with Global Commercial +21% (North America Commercial +36%, International Commercial +12%) and Global Personal +11%
Adjusted after-tax income per diluted share of $2.11, up 80% YoY; core operating ROE of 12.2%; adjusted pretax income $1.5B, +65% YoY, with underwriting income more than tripling to $774M
General Insurance calendar-year combined ratio improved 850 bps YoY to 87.3% (accident-year combined ratio as adjusted 86.6%, -120 bps; expense ratio 29.3%, -120 bps)
Global Personal Insurance calendar-year combined ratio improved over 18 pts YoY to 89.4% (accident-year adjusted 89.9%, -570 bps; expense ratio -410 bps)
Returned $760M to shareholders ($519M buybacks, $241M dividends) and raised the quarterly dividend 11% to $0.50 — a fourth consecutive year of double-digit increases; GI net investment income $864M, +17%

Concerns

U.S. property market remains highly competitive: North America property pricing down 11%, and the Lexington large-account shared-and-layered E&S book (<10% of global property) is contracting with new business down 19% YoY
Alternative investment income fell to $6M from $43M a year ago as private-equity returns yielded just 1.6%, below long-term expectations; management expects Q2 alternatives to remain below expectations
Other operations adjusted pretax loss widened to $125M from $66M, driven by lower net investment income and other ($54M vs $110M) on lower parent liquidity and reduced Corebridge dividends
Catastrophe losses of ~$180M (largely winter storms); North America Commercial accident-year loss ratio as adjusted rose 90 bps on a mix shift toward casualty
U.S. financial lines pricing was flat and international financial lines pricing was down 4%, continuing softening trends

Guidance & targets

Category	Target	Timeline	Confidence
Net premiums written growth	Low to mid-teens net premiums written growth in General Insurance high materiality	FY2026 · FY26	High
Operating EPS growth	Operating EPS compound annual growth of over 20% over the 3 years ending 2027 high materiality	3 years ending FY2027 · FY27	High
Return on equity	Core operating ROE of 10% to 13% through 2027 high materiality	through FY2027 · FY27	High
Expense ratio	Improve General Insurance expense ratio to less than 30% by 2027 high materiality	by FY2027 · FY27	High
Combined ratio	Improve Global Personal Insurance combined ratio to 94% by 2027 high materiality	by FY2027 · FY27	High
Dividend	11% increase in quarterly dividend to $0.50 per share starting Q2 2026 high materiality	Q2 FY26	High
Corebridge divestiture / capital deployment	Fully exit remaining ~5.6% Corebridge stake in 2026, with proceeds primarily for additional share repurchases high materiality	FY2026 · FY26	Medium
Net premiums earned	Net premiums earned growth expected to benefit AIG in the back half of 2026 and into 2027 medium materiality	H2 FY2026 into FY2027 · FY26	Medium
Net investment income (other operations)	Q2 other operations net investment income and other line of $30M to $40M low materiality	Q2 FY26	Medium
Alternative investment income	Q2 alternative returns expected to remain below expectations low materiality	Q2 FY26	Medium
Portfolio / underwriting mix	Continue contracting the Lexington large-account shared-and-layered E&S property portfolio throughout the year if the current market environment persists medium materiality	FY2026 · FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
General Insurance (total) Growth spanned all three segments, supported by strategic transactions (Everest, Convex), the differentiated reinsurance strategy and profitable organic growth; margin gains driven by lower expense ratio, lower cat losses and favorable prior-year development. Expense ratio: 29.3% (-120 bps YoY)Accident-year loss ratio as adjusted: 57.3% (flat YoY)Underwriting income: $774M (more than tripled YoY)Accident-year underwriting income adjusted for catastrophes: +17% YoYNet investment income: $864M (+17% YoY)	NPW $5.6B; GPW $10B; NPE $6.1B	NPW +18% (constant dollar); GPW +7% (constant dollar); NPE +5%	—	Accident-year combined ratio as adjusted 86.6% (-120 bps YoY); calendar-year combined ratio 87.3% (-850 bps YoY)
North America Commercial Growth largely driven by reinsurance changes and Everest renewals in retail; continued double-digit retail casualty growth in a disciplined liability market; property remains very competitive with disciplined line-size deployment. Accident-year loss ratio as adjusted: +90 bps YoY (business mix shift, reduced property / more casualty earned)Retention: 88%Renewal pricing ex-property: +7% (largely in line with loss-cost trend)Retail excess casualty pricing: +14%Lexington casualty pricing: +8%U.S. financial lines pricing: flatNorth America property pricing: -11%	—	NPW +36%	—	Accident-year combined ratio as adjusted 85.5% (+120 bps worse YoY); calendar-year combined ratio 85.5% (-840 bps YoY)
International Commercial Majority of growth from the Convex whole-account quota share, Everest renewals and reinsurance changes; team prioritized organic growth discipline in a generally challenging rate environment. Expense ratio improvement: -50 bps YoY (drove the AY combined-ratio improvement)Retention: 89%Overall pricing: -1% (slightly positive ex-financial lines)Casualty pricing: +5% (aided by positive auto rate)Property pricing: -4% (modest regional variation; Japan positive rate and pricing)Global Specialty pricing: -1%Financial lines pricing: -4%	—	NPW +12%	—	Accident-year combined ratio as adjusted 85.1% (-30 bps YoY); calendar-year combined ratio 87.3% (-90 bps YoY, 12th consecutive quarter sub-90%)
Global Commercial (Commercial roll-up) Aggregate of North America and International Commercial; strong new business and retention reflect broker and client support for the Everest conversion in a competitive market. Western World, Glatfelter and Programs each grew, with Programs aided by a new special-purpose vehicle with Amwins. New business: $1.6B including Everest renewals (+42% YoY)Global commercial retention: 88%	—	NPW +21%	—	—
Global Personal Insurance Deliberate multi-year repositioning — restructured related reinsurance treaties plus organic growth — driving significant, sustained profitability and growth improvement; already ahead of the 94%-by-2027 target. Expense ratio: -410 bps YoY	—	NPW +11%	—	Accident-year combined ratio as adjusted 89.9% (-570 bps YoY); calendar-year combined ratio 89.4% (improved over 18 pts from 107.9% prior year)
Other Operations Wider loss driven by lower net investment income and other on lower parent liquidity and reduced Corebridge dividends. Q2 NII and other guidance: $30M-$40M	Net investment income and other: $54M (vs $110M prior year)	—	—	Adjusted pretax loss $125M (vs $66M loss prior year)
International Property (within property portfolio) Balanced and profitable; a materially different, more predictable rate environment than the U.S. large-account market. International property pricing: -4% (only second quarter of rate reductions in last 5 years)	~40% of AIG's $6.5B gross-written property portfolio	—	—	Calendar-year combined ratio averaged low 70s across 2024-2025

AIG operating KPIs by quarter

AIG operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Policy retention rate Global Commercial	88% Global commercial retention remained very strong at 88%. Source: earnings call transcript	88% In Global Commercial, retention was 88% and new business, including our strategic transactions, was $1.9 billion, a year-over-year increase of 37%. Source: earnings call transcript	0 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
Underwriting by AIG Assist	expansion	launched 2025; now deployed across 8 lines of business
Multi-agentic underwriting solution (with Palantir Foundry and Anthropic)	roadmap	next phase begun this quarter; beta testing underway; broader efficiencies expected 2027-2028

Deals & partnerships

Everest renewal rights transaction (portfolio conversion) Global Commercial new business of $1.6B including Everest renewals (+42% YoY)

Renewal-rights deal on business that complements AIG's portfolio; AIG hired Everest employees to run the book, used the Palantir ontology to anticipate submission and pricing activity, and is repricing/restructuring and taking lead positions where appropriate. Management said broker and client demand for the converting portfolio is strong.

Convex whole-account quota share (reinsurance assumption)

AIG's assumption of risk via the Convex whole-account quota share was cited as a key driver of international commercial premium growth and an example of deploying built-up capital option value.

Amwins joint venture / special purpose vehicle (Programs)

AIG's Programs business benefited from a new special-purpose vehicle established with Amwins.

Palantir Technologies technology partnership (AI / Foundry ontology)

Using Palantir's Foundry platform, AIG expanded its ontology and orchestration layer to coordinate AI agent teams integrated with core underwriting systems.

Anthropic technology partnership (AI / large language models)

AIG is partnering with Anthropic on agentic AI; management cited progression from Claude 2.0 (agents autonomous under an hour) to current models (up to 30 hours) and an Anthropic claims-assessment beta.

CVC and Onex investment-management partnerships (private credit / direct lending)

AIG named CVC and Onex as new key managers with whom it will continue deploying funds across a wide variety of assets.

Corebridge Financial divestiture (equity stake sell-down) remaining ~5.6% equity interest

AIG continued reducing its Corebridge ownership to ~5.6% at quarter end and plans to fully exit its remaining stake in 2026.

U.S. International Development Finance Corporation (DFC) industry initiative (maritime reinsurance plan)

AIG joined other U.S. insurers in supporting the DFC's maritime reinsurance plan, leveraging its marine and war insurance expertise to help restore market confidence and support commerce flow in a key trade route.

Risks & headwinds

U.S. large-account E&S property soft market / pricing pressure ongoing through 2026 if current environment persists

North America property pricing -11%; Lexington large-account (shared-and-layered E&S, <10% of global property) new business -19% YoY

Mitigation:Deliberate contraction of the Lexington large-account portfolio, willingness to non-renew sub-return accounts, and rapid redeployment of capacity to more attractive segments (middle-market E&S, casualty, international)

Weak alternative / private-equity investment returns Q1 result, extending into Q2 FY26

Alternative investment income $6M (vs $43M prior year); PE returns 1.6%, below long-term expectation; Q2 expected to remain below expectations

Mitigation:Offset by ~20% growth in core fixed-income NII and reinvestment at ~80 bps higher new-money yields; PE reported on a one-quarter lag

Business-mix shift raising the loss ratio ongoing as Everest casualty/financial lines and organic casualty growth earn in

General Insurance accident-year loss ratio as adjusted +50 bps overall; North America Commercial accident-year loss ratio +90 bps as property is reduced and more casualty earns in

Mitigation:Growth targeted where casualty rate exceeds loss-cost trend; expense discipline and earned-premium growth expected to lower the expense ratio and offset loss-ratio mix pressure; historically conservative margin-building in loss picks

Catastrophe losses Q1 FY26; wind season approaching

~$180M in Q1, largest attributable to winter storms

Mitigation:Consistent low net catastrophe retention through the cycle; comprehensive property-per-risk and excess-of-loss reinsurance placed at or better terms/pricing at January 1; positioning to capitalize on post-CAT market dislocations

Softening financial lines / D&O pricing continuation of Q4 trends into Q1 FY26

U.S. financial lines pricing flat; International financial lines pricing -4%; Global Specialty -1%

Mitigation:Recalibrating in competitive D&O segments, focusing on differentiated value proposition and driving rate in targeted segments

Wider other-operations loss / lower parent liquidity Q1 FY26; Q2 NII-and-other guided to $30M-$40M

Adjusted pretax loss $125M (vs $66M); NII and other $54M (vs $110M)

Mitigation:Recognized as tied to lower parent liquidity and reduced Corebridge dividends; Corebridge exit proceeds to fund buybacks

Middle East conflict / geopolitical accumulation and trade-disruption risk evolving / ongoing

Direct impact on AIG not material based on what has been seen to date (unquantified)

Mitigation:Shifted regional colleagues to remote operations; monitoring accumulation risk, adjusting underwriting guidelines, stress-testing the investment portfolio, and staying close to reinsurance partners and clients

AI regulatory / data-use constraints (notably Europe/GDPR) ongoing / structural

Not quantified

Mitigation:Beta-testing and rollout sequenced outside Europe first; customizing deployment by market (e.g., Japan); size and scale leveraged to test and deploy responsibly with human oversight and guardrails

Emerging casualty rate moderation to be watched into the back half of 2026

Not quantified — management sees casualty 'a little bit more under pressure from rates' but still generating very good returns

Mitigation:Continued disciplined underwriting; monitoring margins closely; casualty still viewed as writing above loss-cost trend for now

Q&A highlights

As both carriers and brokers adopt AI, how does that change what carriers pay brokers?

Zaffino framed AI as primarily improving efficiency in exchanging submission data and augmenting underwriting decisions, while stressing brokers do far more than data gathering — they provide substantial advisory. He argued scale will matter and that as large language models get trained by experts, both the model and the underwriter/claims professional benefit, strengthening carrier–broker collaboration rather than displacing it.

“I think we will be able to augment information that we get in submissions to be able to make better underwriting decisions.”

asked by Meyer Shields · answered by Peter Zaffino

4 min read 7 chapters

Detailed narrative

Broad-based premium growth led by Global Commercial and the Everest conversion

General Insurance net premiums written rose 18% YoY on a constant-dollar basis, with Global Commercial +21% and Global Personal +11%. North America Commercial NPW jumped 36%, largely driven by reinsurance changes and the Everest renewals in the retail business, alongside continued double-digit growth in retail casualty.

International Commercial NPW rose 12%, with the majority of growth from the Convex whole-account quota share, Everest renewals and reinsurance changes. Global Commercial new business was $1.6B including Everest renewals, up 42% YoY, while global commercial retention held at 88% (North America 88%, International 89%).

Reinsurance strategy amplifying net growth and protecting margin

AIG secured enhanced terms, conditions and favorable pricing at the January 1 renewal, negotiating substantial year-over-year savings that — combined with the Everest portfolio — provided a meaningful tailwind to net premiums written. Management stressed the savings came on same attachment points and comparable modeling (i.e. no additional net risk taken), with property-cat placements carrying lower modeled attachment points and higher exhaust limits per geography on a risk-adjusted basis.

AIG's strategy of maintaining a consistently low net catastrophe retention through the cycle lets it benefit from more attractive reinsurance pricing, showing up directly in higher net premiums written.

Property market bifurcation: disciplined U.S. large-account pullback

AIG framed its $6.5B gross-written property portfolio across multiple entry points. International property (~40% of the book) ran a calendar-year combined ratio in the low 70s across 2024-2025 with pricing down only 4% in the quarter — just the second quarter of rate reductions in five years.

U.S. retail property posted combined ratios in the 70s, and the Lexington middle-market E&S book remains one of the fastest-growing, best-performing segments. The exception is the Lexington large-account shared-and-layered E&S business (<10% of global property), under significant pricing pressure with North America property pricing down 11%; AIG cut new business 19% and will keep contracting it, redeploying capacity elsewhere.

Global Personal Insurance turnaround

Global Personal Insurance delivered an 11% NPW increase and a dramatic profitability step-up: the accident-year combined ratio as adjusted improved 570 bps to 89.9% and the calendar-year combined ratio improved over 18 points to 89.4% from 107.9% a year earlier, aided by a 410 bps expense-ratio reduction.

Management attributed the gains to a deliberate multi-year repositioning — restructuring related reinsurance treaties plus organic growth — that continues to earn in, keeping the segment ahead of its 94%-by-2027 target.

AI and digital strategy — from AIG Assist to multi-agent underwriting

AIG detailed a deepening AI program built around underwriting and claims. Its 2025-launched 'underwriting by AIG Assist' is now deployed across 8 lines of business; in Lexington middle-market property it delivered a 30% improvement in quoting more submissions, cut time-to-quote by 55% and lifted binding by ~40%.

Partnering with Palantir (Foundry ontology) and Anthropic, AIG is building a multi-agentic solution with an orchestration layer coordinating purpose-built agents for submission ingestion, risk evaluation and pricing benchmarking, with human oversight retained. Management noted agent autonomy has extended from under an hour (Claude 2.0) to as long as 30 hours, and cited an Anthropic beta in which Claude's fraudulent/legitimate determinations matched a professional adjuster on 88% of 100 claims out-of-the-box.

Investment income, credit positioning and capital

General Insurance net investment income rose 17% to $864M, with core fixed-income NII up nearly 20% as AIG reinvested at new-money yields ~80 bps above sales and maturities (annualized core yield 4.61%, +51 bps YoY). This was partly offset by alternative income of just $6M (vs $43M) on 1.6% PE returns.

AIG slowed private-credit deployment: it defines private credit broadly (CML, IG private placements, asset-backed finance, direct lending), with direct-lending exposure of ~$1.2B (<1.5% of the GI portfolio, avg loan ~$6M, all held on balance sheet not via BDCs) and software exposure of ~$130M (16 bps).

Book value per share was $75.82 (+6%), adjusted tangible book $70.85 (+4%), and total-debt-to-total-adjusted-capital 17.7%.

Leadership transition and geopolitical context

Eric Andersen, who joined in February after three decades as one of AIG's largest trading partners, becomes CEO on June 1 and reaffirmed the 2025 Investor Day strategy and financial guidance, signaling continuity and hard execution rather than a pivot.

Management also addressed the ongoing Middle East conflict, noting a significant colleague presence in the region shifted to remote operations; rising demand for property/energy, trade-credit and political-risk insurance; and that the direct impact on AIG is not material to date while it monitors accumulation risk and stress-tests the investment portfolio.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.