AIG 10-K & 10-Q changes, risk factors and insider trading
American International Group, Inc. · NYSE · Fire, Marine & Casualty Insurance · CIK 5272 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “For additional information on reinsurance, see Note 8 to the Consolidated Financial Statements.”
New heading “For additional information on potential catastrophic events, including a sensitivity analysis of our exposure to certain catastrophes, see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risk.”
New heading “Our development and use of new technology, such as generative artificial intelligence, may present risks.”
New heading “For a detailed discussion of the Corebridge deconsolidation, see Note 4 to the Consolidated Financial Statements.”
Removed heading “For additional information on our reinsurance recoverable, see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risks – Reinsurance Activities – Reinsurance Recoverable.”
Removed heading “For additional information on potential catastrophic events, including a sensitivity analysis of our exposure to certain catastrophes, see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risks.”
Removed heading “Also see Part II, Item 7. MD&A – Business Segment Operations – General Insurance – Business Strategy and – Industry and Economic Factors.”
Removed heading “An epidemic, pandemic or other health crisis could materially and adversely affect our business, results of operations, financial condition or liquidity.”
Removed heading “For information regarding the regulatory response to the COVID-19 pandemic, see Business and Operations – “An epidemic, pandemic or other health crisis could materially and adversely affect our business, results of operations, financial condition or liquidity” above.”
Largest changes
“ITEM 1A | Risk Factors institutions and guarantors. These counterparties may default on their obligations to us due to bankruptcy, insolvency, receivership, financial distress, lack of liquidity, adverse economic conditions, operational failure, fraud, government intervention and other reasons. In addition, for exchange-traded derivatives, such as futures, options as well as "cleared" over-the-counter derivatives, we are generally exposed to the credit risk of the relevant central counterparty clearing house and futures commission merchants through which we clear derivatives. …”see in full comparison
We are exposed to credit risk arising from exposures to various counterparties related to investments, derivatives, premiums receivable, certain businesses and reinsurance recoverables. These counterparties include, but are not limited to, issuers of fixed income and equity securities we hold, borrowers of loans we hold, customers, plan sponsors, trading counterparties, counterparties under swaps and other derivatives instruments, reinsurers, corporate and governmental entities whose payments or performance we insure, joint venture partners, clearing agents, exchanges, clearing houses, custodians, brokers and dealers, commercial banks, investment banks, intra-group counterparties with respect to derivatives and other third parties, financial intermediaries andsee in full comparisoninstitutions and guarantors. These counterparties may default on their obligations to us due to bankruptcy, insolvency, receivership, financial distress, lack of liquidity, adverse economic conditions, operational failure, fraud, government intervention and other reasons. In addition, for exchange-traded derivatives, such as futures, options as well as "cleared" over-the-counter derivatives, we are generally exposed to the credit risk of the relevant central counterparty clearing house and futures commission merchants through which we clear derivatives. Defaults by these counterparties on their obligations to us could have a material adverse effect on the value of our investments, business, financial condition, results of operations and liquidity.
“For information regarding the regulatory response to the COVID-19 pandemic, see Business and Operations – “An epidemic, pandemic or other health crisis could materially and adversely affect our business, results of operations, financial condition or liquidity” above.”see in full comparison
“An epidemic, pandemic or other health crisis could materially and adversely affect our business, results of operations, financial condition or liquidity.”see in full comparison
“In addition, we can, in certain circumstances, be held responsible for the actions of our third-party distributors, including registered representatives, insurance agents and agencies, marketing organizations, and their respective employees, agents and representatives, in connection with the marketing and sale of our products by such parties, including the security of their operations and their handling of confidential information and personal data, in a manner that is deemed not compliant with applicable laws and regulations. …”see in full comparison
“In addition, we can, in certain circumstances, be held responsible for the actions of our third-party distributors, including registered representatives, insurance agents and agencies, marketing organizations, business partners, and their respective employees, agents and representatives, in connection with the marketing and sale of our products by such parties, including the security of their operations and their handling of confidential information and personal data, in a manner that is deemed not compliant with applicable laws and regulations. …”see in full comparison
Full comparison: every changed paragraph (140)
•Deterioration of economic conditions, geopolitical tensions, changes in market conditions or weakening in global capital markets have affected and may continue to materially affect our businesses, results of operations, financial condition and liquidity.
•We rely on investment management and advisory arrangements with third-party investment managers for the majority of our investment portfolio. The historical performance of any investment manager we engage should not be considered as indicative of the future results of our investment portfolio, our future results or any returns expected on our Common Stock.portfolio.
•OurThe valuation of our investments involves the application of methodologies and assumptions to derive estimates, which may differ from actual experience and could result in changes to investment valuations that may materially adversely affect our business, results of operations, financial condition and/or liquidity or lead to volatility in our net income.
•Our development and use of new technology, such as generative artificial intelligence, may present risks.
•BusinessStrategic transactions, including business or asset acquisitions and dispositionsdispositions, may expose us to certain risks.
•We are subject to risks from our continuing equity market exposure to Corebridge. There can be no assurances that theThe anticipated benefits of our sales of Corebridge stock willmay not be achieved.
•Increasing scrutinyScrutiny and evolving expectations from investors, customers, regulators, policymakers and other stakeholders regarding environmental, social, governance and sustainability matters, including governmental responses to such matters, may adversely affect our reputation or otherwise adversely impact our business and results of operations.
•An epidemic, pandemic or other health crisis could materially and adversely affect our business, results of operations, financial condition or liquidity.
Investing in AIG involves risk. In deciding whether to invest in AIG, you should carefully consider the following risk factors. Any of these risk factors could have a significant or material adverse effect on our businesses, results of operations, financial condition or liquidity. They could also cause significant fluctuations and volatility in the trading price of our securities. Readers should not consider any descriptions of these factors to be a complete set of all potential risks that could affect AIG. These factors should be considered carefully together with the other information contained in this report and the other reports and materials filed by us with the SEC. Further, many of these risks are interrelated and could occur under similar business and economic conditions, and the occurrence of certain of them may in turn cause the emergence or exacerbate the effect of others. Such a combination could materially increase the severity of the impact of these risks on our businesses, results of operations, financial condition and liquidity above and beyond a risk’s singular impact.
Deterioration of economic conditions, geopolitical tensions, changes in market conditions or weakening in global capital markets have affected and may continue to materially affect our businesses, results of operations, financial condition and liquidity.
Adverse economic conditions may result from a variety of factors including domestic and global economic and political developments, including changes in interest rate levels, plateauing or decreasing economic growth and business activity, recessions, social inflation, inflationary or deflationary pressures in developed economies, including the United States,States (U.S.), civil unrest, pandemics, geopolitical tensions, changes to international trade and/or tariff policies, foreign investment restrictions, or military action,action such as theor armed conflict between Ukraine and Russiaconflicts and corresponding sanctions imposed by the United StatesU.S. and other countries, or the conflict in Israel and the surrounding areas, and new or evolving legal and regulatory requirements on business investment, data protection, cybersecurity and artificial intelligence, hiring, migration, labor supply and global supply chains.
These and other market, economic, regulatory and political factors, including the effects of inflation, macroeconomic uncertainty, domestic and international political tensions, disruption to our business operations in countries exposed to geopolitical risk, natural disasters and the increased costs associated with meeting customer needs in such regions, adverse impacts resulting from changes to international tradetrade, tariff and tariffmonetary policies, and any potential U.S. government shutdown,shutdowns, have had and could continue to have a material adverse effect on our businesses, results of operations, financial condition, capital and liquidity in many ways, including:
•increased costs related to our direct and third-party support services, labor and financing, increased credit risk and decreased sales as a result of inflationary pressures; and
•limitations on business activities and increased compliance risks with respect to economic sanctions regulations relating to jurisdictions in which our businesses operate or we have operations.regulations.
We are exposed to certain risks arising from or exacerbated by fluctuations in interest rates, such as thea potential mismatch between the expected duration of our liabilities and our assets, changes in certain statutory reserve or capital requirements that are based on formulas or models that consider interest rates or prescribed interest rates, increased financing and refinancing costs, in particular with respect to our corporate debt instruments;instruments, and lower investment income on our floating rate investments that will adjust to lower coupons if short-term rates decrease. Changes in interest rates have had and could continue to have a material adverse effect on the value of our investment portfolio. For example, increases in interest rates have impacted, and may continue to impact, our investment portfolio by decreasing the estimated fair values of the fixed income securities that constitute a substantial portion of our investment portfolio as well as the alternative investments in our investment portfolio. This in turn has in the past increased and could continuein tothe future increase the unrealized loss positions in our portfolio which could materially and adversely affect our business, results of operations, financial condition and liquidity. Should a low interest rate environment return, it could in the future negatively affect the performance of our investments and reduce the level of investment income earned on our investment portfolios. In addition, if our investment managers fail to react appropriately to difficult market or economic conditions, our investment portfolio could incur material losses.
In addition, if our investment managers fail to react appropriately to difficult market or economic conditions, our investment portfolio could incur material losses.
We regularly review the adequacy of the established liability for unpaid losses and loss adjustment expenses. We also conduct extensive analyses of our reserves during the year. Our liability for unpaid losses and loss adjustment expenses, however, has at times developed and may in the future develop adversely and materially impact our businesses, results of operations, financial condition and liquidity.
Estimation of ultimate net losses, loss expenses and the liability for unpaid losses and loss adjustment expenses is a complex process, particularly for both long-tail and medium-tail liability lines of business. There is also greater uncertainty in establishing reserves with respect to new business, particularly new business involving recently introduced product lines. In these cases, there is less historical experience or knowledge and less data upon which the actuaries can rely. Estimating reserves is further complicated by unexpected claims or unintended coverages that may emerge due to unexpected events, such as pandemics or geopolitical conflicts. These emerging issues may increase the size or number of claims beyond our intent at the time of underwriting and may not become apparent for many years after a policy is issued.
While we use a number of analytical reserve development techniques to project future loss development, the liability for unpaid losses and loss adjustment expenses has been and may continue to be significantly affected by changes in loss cost trends or loss development factors that we reliedrely upon in setting the liability for unpaid losses and loss adjustment expenses. These changes in loss cost trends or loss development factors could be due to changes in actual versus expected claims and losses, difficulties in predicting changes, such as changes in inflation, unemployment, or other social or economic factors affecting claims, including judicial and legislative actions, and changes in the tort environment. Any deviation in loss cost trends or in loss development factors might not be identified for an extended period of time after we record the initial loss reserve estimates for any accident year or number of years.
We review and update actuarial assumptions at least annually, typically in the third quarter for reserves.annually. If actual experience or revised future expectations result in projected future losses, we may be required to record additional liabilities through a charge to net realized gains or losses in the then-current period, which could negatively affect our business, results of operations, financial condition and liquidity. For additional information on reserve development, see Part II, Item 7. MD&A – Insurance Reserves.
Our subsidiaries are major purchasers of third-party reinsurance and we use reinsurance as part of our overall risk management strategy. While reinsurance does not discharge our subsidiaries from their obligation to pay claims for losses insured under our policies, it makes the reinsurer liable to our subsidiaries for the reinsured portion of the risk. Market conditions beyond our control have impacted and may in the future impact the availability and cost of reinsurance and could have a material adverse effect on our business, results of operations and financial condition. For example, reinsurance is typically more difficult or costly to obtain after a year or consecutive years with a large number of major catastrophes, the severity and frequency of which have increased in recent years, and their likelihood of which may be further exacerbated by climate change. We have been and may, at certain times be, (i) forced to incur additional costs for reinsurance, (ii) unable to obtain sufficient reinsurance on acceptable terms, or (iii) unable to obtain reinsurance for certain parts of our business. In instances where reinsurance is more costly, insufficient on acceptable terms or unavailable, we have had to, and willmay in the future have toto, accept an increase in exposure to risk, reduce or stop writing certain lines of business written by our subsidiaries or seek alternatives in line with our risk limits, or a combination thereof.
Additionally, we are exposed to credit risk with respect to our subsidiaries’ reinsurers to the extent the reinsurance receivable is not secured, or is or becomes inadequately secured by collateral or does not benefit from other credit enhancements. We also bear the risk that a reinsurer is, or may be, unwilling to pay amounts we have recorded as reinsurance recoverables for any reason, including that (i) the terms of the reinsurance contract do not reflect the intent of the parties to the contract or there is a disagreement between the parties as to their intent, or (ii) the terms of the contract cannot be legally enforced. The insolvency of one or more of our reinsurers, the inability or unwillingness of such reinsurers to make timely payments under the terms of our contracts or payments in an amount equal to our corresponding reinsurance recoverable, or the risk that the reinsurance transaction does not operate as intended, including due to a change in laws and regulations or on account of court or arbitration panel interpretations, could have a material adverse effect on our results of operations and liquidity.
Moreover, the use of reinsurance placed in the capital markets or placed with alternative market reinsurers supported by capital market institutions, like private equity housesfirms that fund single purpose reinsurance capital vehicles, may not provide the same levels of protection as traditional reinsurance transactions. Any disruption, volatility and uncertainty in these markets or with respect to these capital market participants or these types of alternative reinsurance structures may impact the protection provided by this type of reinsurance or may limit our ability to access such markets on terms favorable to us or at all. Also, to the extent that we intend to use structures based on an industry loss index or other non-indemnity triggermetrics rather than on actual losses incurred by us, we could be subject to residual risk.
For additional information on reinsurance, see Note 8 to the Consolidated Financial Statements.
For additional information on our reinsurance recoverable, see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risks – Reinsurance Activities – Reinsurance Recoverable.
Events such as hurricanes, windstorms, hailstorms, flooding, earthquakes, landslides, wildfires, solar storms, earth sinking, tsunamis, war or other military action, acts of terrorism, explosions and fires, cyberattacks, product defects, pandemics and other highly contagious diseases,pandemics, mass torts, civil unrest and other catastrophes have adversely affected our business in the past and could do so in the future.
•limitations on our ability to recover deferred tax assets;
•loss resulting from actual policy experience that is adverse compared to the assumptions made in product pricingpricing, which could adversely affect underwriting profitability;
In addition, legislative and regulatory initiatives and court decisions following major catastrophes (both natural and man-made), as well as new and emerging mass torts,tort claims, have required and could in the future require us to pay the insured beyond the provisionscontractual terms of the original insurance policy and may prohibit the application of a deductible, resulting in inflated and unanticipated claims;claims, or impose other restrictions, which would reduce our ability to mitigate exposure. These initiatives could impair our cash flows and, without regulatory relief, couldand adversely impact our subsidiaries’ capital ratios.
For additional information on potential catastrophic events, including a sensitivity analysis of our exposure to certain catastrophes, see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risk.
For additional information on potential catastrophic events, including a sensitivity analysis of our exposure to certain catastrophes, see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risks.
Climate change presents challenges to our ability to effectively underwrite, model and price catastrophe risk particularly if the frequency and severity of catastrophic events such as pandemics, hurricanes, tornadoes, heatwaves, floods, wildfires and windstorms and other natural disasters continues to increase. For example, losses resulting from actual policy experience may be adverse as compared to the assumptions made in product pricing and our ability to mitigate our exposure may be reduced.
Climate change-relatedClimate-related risks may also adversely impact the value of the securities that we hold or lead to credit risk of other counterparties we transact business with, including reinsurers. Our reputation or corporate brand could also be negatively impacted as a result of changing and divergent customer or societal perceptions of organizations that we either insure or invest in due to their actions (or lack thereof) with respect to climate change, as well as political initiatives or other stakeholder expectations with respect thereto.
In addition, lawmakers and regulators at the federal, state and local levels have imposed and may continue to impose new requirements or issue new guidance aimed at addressing or mitigating climate change-related risks and effortsother undertakensustainability-related in response thereto.risks. Additional actions by foreign governments, regulators and international standard setters have expanded, and could resultsubstantially in substantial expansions ofexpand, the regulations, guidance or expectations to which we may be subject. It is also possible that the laws,Laws, regulations and guidance adopted in U.S. local, state, U.S. federal or foreign jurisdictions regarding climatethese change-related risks willtopics differ from one another,another and thatthis they could be inconsistent with the laws and regulations of other jurisdictions in which we operate. This could resultresults in us having to comply with differing or inconsistent laws, regulations and guidance across jurisdictions.jurisdictions in which we operate.
Additionally, climate-related litigation related to climate change has increased in recent years. Many lawsuits center on enforcement or interpretation of environmental laws and regulations, often seeking to use litigation as a tool to influence governmental and corporate climate policies. Other cases seek damages for contributionalleged contributions to climate change or for insufficient disclosure around material financial risks, which could cause us to experience increased claims under liability policies, such as casualty and directors’ and officers’ insurance policies, increase our liabilities and affect the viability of certain of our business lines. Furthermore, claims asserted against insureds have in the past, and may in the future, include alleged failure to manage risks associated with climate change, or that actions taken by the insured contributed to loss from the event. Such litigation may, through increased claims from our customers, adversely impact our business and results of operations. For more information regarding risks associated with legal proceedings, see Business and Operations – "Significant legal or regulatory proceedings may adversely affect our business, results of operations or financial condition."
In addition, severe weather and other effects of climate change result in more frequent and more severe damages, leading to lawsuits against our insureds. Indirect climate change effects are also seen in litigation over flooding, mudslides and other severe weather that results in injury or damage, as well as in construction defect litigation, chemical release lawsuits, and workers’ compensation claims. Litigation related to climate change may, through increased claims from our customers and adverse impacts to the value of the securities that we hold, adversely impact our business and results of operations.
For information regarding risks associated with other catastrophic events, see Reserves and Exposures – “Our consolidated results of operations, liquidity, financial condition and ratings are subject to the effects of natural and man-made catastrophic events as well as mass torts” above.
In addition, the deconsolidation for accounting purposes and ongoing divestment of our stake in Corebridge, could increase the materiality of these potential concentrations in the remaining portfolio. For additional information on risks associated with our continuing equity market exposure to Corebridge, see Business Operations – “We are subject to risks from our continuing equity market exposure to Corebridge. There can be no assurances that the anticipated benefits of our sales of Corebridge stock will be achieved” below.
Also see Part II, Item 7. MD&A – Business Segment Operations – General Insurance – Business Strategy and – Industry and Economic Factors.
We are exposed to credit risk arising from exposures to various counterparties related to investments, derivatives, premiums receivable, certain businesses and reinsurance recoverables. These counterparties include, but are not limited to, issuers of fixed income and equity securities we hold, borrowers of loans we hold, customers, plan sponsors, trading counterparties, counterparties under swaps and other derivatives instruments, reinsurers, corporate and governmental entities whose payments or performance we insure, joint venture partners, clearing agents, exchanges, clearing houses, custodians, brokers and dealers, commercial banks, investment banks, intra-group counterparties with respect to derivatives and other third parties, financial intermediaries and institutions and guarantors. These counterparties may default on their obligations to us due to bankruptcy, insolvency, receivership, financial distress, lack of liquidity, adverse economic conditions, operational failure, fraud, government intervention and other reasons. In addition, for exchange-traded derivatives, such as futures, options as well as "cleared" over-the-counter derivatives, we are generally exposed to the credit risk of the relevant central counterparty clearing house and futures commission merchants through which we clear derivatives. Defaults by these counterparties on their obligations to us could have a material adverse effect on the value of our investments, business, financial condition, results of operations and liquidity.
ITEM 1A | Risk Factors institutions and guarantors. These counterparties may default on their obligations to us due to bankruptcy, insolvency, receivership, financial distress, lack of liquidity, adverse economic conditions, operational failure, fraud, government intervention and other reasons. In addition, for exchange-traded derivatives, such as futures, options as well as "cleared" over-the-counter derivatives, we are generally exposed to the credit risk of the relevant central counterparty clearing house and futures commission merchants through which we clear derivatives. Defaults by these counterparties on their obligations to us could have a material adverse effect on the value of our investments, business, financial condition, results of operations and liquidity.
Our investment portfolio’s returns have benefited historically from investment opportunities and general market conditions that may not currently exist and may not be repeated. Our results of operations and financial condition have in the past been, and may in the future be, adversely affected by the degree of concentration in our consolidated investment portfolio. For example, we have significant holdings of real estate and real estate-related investments, including residential mortgage- backed securities (both U.S. government-sponsored enterprise-issued and Non-Agency issued), and commercial mortgage-backed securities and whole loans. We also have significant exposures to domestic and global financial institutionsinstitutions, certain industries, such as consumer discretionary and non-discretionary, the U.S. federal, state and local government issuers and authorities, and various governments globally. Events or developments that have a negative effect on any particular industry, asset class, group of related industries or geographic region may adversely affect the valuation of our investments to the extent they are concentrated in such segments. Our ability to sell assets in such segments may be limited.
Our investments are also subject to market risks and uncertainties, including, in addition to interest rate risk, changes in the level of credit spreads, currency rates,rates and equity prices, each of which has affected and will continue to affect the value of investments in our investment portfolio as well as the performance of, and returns generated by, such investments. For information regarding risks associated with interest rate volatility, see Market Conditions above.
Furthermore, our alternative investment portfolio, which is subject to volatility in equity markets, includes investments for which changes in fair value are reported through pre-tax income. An economic downturn or decline in the capital markets has hadhad, and could continuein tothe havefuture have, a material adverse effect on our investment income, including as a result of decreases in the fair value of alternative investments.
We rely on investment management and advisory arrangements with third-party investment managers for the majority of our investment portfolio. The historical performance of any investment manager we engage should not be considered as indicative of the future results of our investment portfolio, our future results or any returns expected on our Common Stock.portfolio.
We rely on external investment managers to manage the majority of our investment portfolio, consisting of liquid fixed income,income securities, structured fixed income securities, certain private placement credit, certain private equityfund, joint venture and partnership investments, structured products, commercial real estate-related equity investments and commercial mortgage loans.
Our investment managers are generally compensated based on the size of the investment portfolios that they manage, rather than based on investment profits or income;income. asAs a result, these investment managers are not directly incentivized to maximize investment returns. Our investment portfolio’s returns have benefited historically from investment opportunities and general market conditions that may not currently exist and may not be repeated. There can be no guarantee that any investment manager we engage will be able to achieve any particular returns or generate investment opportunities with attractive, risk-adjusted returns for our investment portfolio in the future. If any of our investment managers becomes unable to effectively manage our portfolio investments, the concentration of assets in our portfolio that are managed by it could adversely affect our business, results of operations, financial condition and liquidity.
In addition, we have become more reliant on our external asset managers, and such increased dependence has reduced and may continue to reduce our internal capabilities and expertise or expose us to greater risk, including the risk that external asset managers may fail to meet our performance expectations or otherwise experience disruptions or losses.
OurThe valuation of our investments involves the application of methodologies and assumptions to derive estimates, which may differ from actual experience and could result in changes to investment valuations that may materially adversely affect our business, results of operations, financial condition and/or liquidity or lead to volatility in our net income.
It has been and may continue to be difficult to value those of our investments or derivatives that are not actively traded. There also may be cases where, due to the financial environment or market conditions, normally active markets become inactive or less active, which can result in insufficient observable data. As a result, valuations may include inputs and assumptions that are less observable or require greater estimation and judgment as well as valuation methods that are more complex. These values may not be realized in a market transaction, may not reflect the value of the asset and may change very rapidly as market conditions change and valuation assumptions are modified. Decreases in value and/or an inability to realize that value in a market transaction or other disposition may have a material adverse effect on our business, results of operations, financial condition and liquidity.
ITEM 1A | Risk Factors a market transaction, may not reflect the value of the asset and may change very rapidly as market conditions change and valuation assumptions are modified. Decreases in value and/or an inability to realize that value in a market transaction or other disposition may have a material adverse effect on our business, results of operations, financial condition and liquidity.
OurAny decision to pursue strategic changes or transactions in our business and operations may also subject our subsidiaries’ dividend plans to heightened regulatory scrutiny and could make obtaining regulatory approvals for extraordinary distributions by our subsidiaries, if required, more difficult. We are also subject to certain other restrictions on our capital from time to time.
If our liquidity is insufficient to meet our needs, we may need to have recourse to third-party financing, external capital markets or other sources of liquidity, which may not be available or could be expensive. The availability and cost of any additional financing at any given time depends on a variety of factors, including general market conditions, the volume of trading activities, the overall availability of credit, regulatory actions and our credit ratings and credit capacity. It is also possible that, as a result of such increased recourse to external financing, customers, lenders or investors could develop a negative perception of our long- or short-term financial prospects. If AIG Parent is unable to satisfy athe required regulatory capital needneeds of a subsidiary, the subsidiary could become insolvent and be subject to supervisory actions by its regulator, including the appointment of a statutory receiver to assume control of and manage the business. The credit rating agencies could also downgrade the subsidiary’s financial strength ratings or the subsidiary could become insolvent or, in certain cases, could be seized by its regulator.ratings.
We have investments in certain securities,investments, including certain fixed incomeincome, structured and privately placed securities as well as investments in private equityfunds, fundsjoint and hedge funds,ventures, mortgage loans and real estate, for which limited or no established trading markets exist, that are less liquid than other investments, or that limit or restrict, by their terms, our ability to sell or otherwise dispose of such investments. In the event these investments become stressed or distressed, our ability to exit them or otherwise preserve their value may be limited. If it became necessary to sell such assets in a stressed market environment, the prices achieved in any sale may be lower than their carrying value, which could cause a material adverse effect on our business, financial condition, results of operations and cash flows. Adverse changes in the valuation of real estate and real estate-linked assets, volatility or deterioration of capital markets and widening credit spreads have in the past, and may in the future, materially adversely affect the liquidity and the value of our investment portfolios.
ITEM 1A | Risk Factors credit spreads have in the past, and may in the future, materially adversely affect the liquidity and the value of our investment portfolios.
In the event additional liquidity is required by one or more of our companies, it may be difficult for us to generate additional liquidity by selling, pledging or otherwise monetizing these or other of our investments at reasonable prices and time frames.
Downgrades of the Insurer Financial Strength (IFS) ratings of our insurance companies could (i) prevent these companies from selling, or make it more difficult for them to succeed in selling, products and services, (ii) make it more difficult for them to obtain new reinsurance or obtain it on reasonable pricing and other terms, and/or (iii) result in increased policy cancellations or return of premiums. A downgrade of the IFS ratings of our insurance companies could result in a downgrade of AIG Parent’s credit ratings. In the event of a downgrade of AIG Parent’s credit ratings, our financing costs will increase and the availability of financing could be limited. A downgrade could also cause our derivative counterparties to limit or reduce their exposure to us and thus reduce our ability to manage our market risk exposures effectively.
These events could adversely affect our business, results of operations, financial condition and liquidity.
These events could also trigger regulatory scrutiny and potential actions by our regulators. Any of the foregoing events could adversely affect our business, results of operations, financial condition and liquidity. For additional information on rating agency actions, see Part II, Item 7. MD&A – Liquidity and Capital Resources – CreditFinancial Strength Ratings and – Financial StrengthCredit Ratings.
We have developed and continue to enhance enterprise-wide risk management policies, standards and procedures to identify, monitor and mitigate risk to which we are exposed. Our risk management policies, standards and procedures may not be sufficiently comprehensive and may not identify or adequately protect us from every risk to which we are exposed. Many of our methods of identifying, measuring, underwriting and managing risks are based upon our study and use of historical market, applicant, customer, employee and bad actor behavior or statistics based on historical models. As a result, these methods may not accurately predict future exposures from events such as a major financial market disruption asresulting the result offrom a natural or man-made catastrophe, that could be significantly different than the historical measures indicate, and which could also result in claims levels not previously observed. Establishing and maintaining adequate and disciplined underwriting standards is difficult and our efforts to do so may not be successful. We have and will continue to enhance our underwriting processes, including, from time to time, considering and integrating newly available sources of data to confirm and/or refine our traditional underwriting methods. Our efforts at implementing these improvements may not, however, be fully successful, which may adversely affect our competitive position. We have also introduced new product features designed to limit our risk and taken actions on in-force business, which may not be fully successful in limiting or eliminating risk. Moreover, our hedging programs and reinsurance strategies that are designed to manage risk rely on assumptions regarding our assets, liabilities, general market factors and the creditworthiness of our counterparties that could prove to be incorrect or inadequate. Our hedging programs utilize various hedging and derivative instruments, including but not limited to interest rate swaps, credit default swaps and foreign exchange forwards, as well as other hedging instruments, which may not effectively or completely reduce our risk. Assumptions underlying models used to measure accumulations and support reinsurance purchases may prove inaccurate and could leave us exposed to larger than expected catastrophe losses in any given period. In addition, our current business continuity and disaster recovery plans may not be sufficient to reduce the impact of pandemics, a major cyber-attack, including ransomware, and other natural or man-made catastrophic events. Other risk management methods depend upon the evaluation of information regarding markets, clients,clients or other matters that is publicly available or otherwise accessible to us, which may not always be accurate, complete, up-to-date or properly evaluated. Management of operational, legal and regulatory risks requires, among other things, policies and procedures to record and verify large numbers of transactions and events in each jurisdiction in which we operate. Further, various jurisdictions have unique requirements with respect to AIAI, third-party engagement, business resiliency and environmental, social and governance matters,matters as well as matters relating to data protection and cybersecurity, which may impact the efficacy of our standardized risk management tools and techniques;techniques. therefore,Therefore, our policies and procedures may not be fully effective.effective, Accordingly,and accordingly, our risk management policiespolicies, standards and procedures may not adequately mitigate the risks to our business, results of operations, financial condition and liquidity.
Management's Discussion & Analysis (MD&A)
New heading “FINANCIAL HIGHLIGHTS”
New heading “Results of Operations”
New heading “Financial Condition”
New heading “Strategic Transactions”
New heading “The following sensitivity analysis table summarizes the effect on the loss reserve position of using certain alternative loss cost trend (for accident years where we use expected loss ratio methods) or loss development factor assumptions rather than the assumptions actually used in determining our estimates in the year-end loss reserve analyses in 2025:”
New heading “For information regarding the critical accounting estimates that affect our results of operations, see Critical Accounting Estimates. For information regarding AIG’s results of operations for the year ended December 31, 2024 compared with the year ended December 31, 2023, see Part II, Item 7. MD&A – Consolidated Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 (the 2024 Annual Report).”
New heading “Years Ended December 31, 2025 and 2024 Comparison”
New heading “For information regarding AIG’s business segment operations for the year ended December 31, 2024 compared with the year ended December 31, 2023, see Part II, Item 7. MD&A – Business Segment Operations in the 2024 Annual Report.”
New heading “The following tables present General Insurance accident year catastrophes(a) by segment:”
New heading “Premiums Years Ended December 31, 2025 and 2024 Comparison”
New heading “Underwriting Results Years Ended December 31, 2025 and 2024 Comparison”
New heading “For additional information on prior year development, see Insurance Reserves.”
New heading “Premiums Years Ended December 31, 2025 and 2024 Comparison”
New heading “Underwriting Results Years Ended December 31, 2025 and 2024 Comparison”
New heading “For additional information on prior year development, see Insurance Reserves.”
New heading “Premiums Years Ended December 31, 2025 and 2024 Comparison”
New heading “Underwriting Results Years Ended December 31, 2025 and 2024 Comparison”
New heading “For additional information on prior year development, see Insurance Reserves.”
New heading “ITEM 7 | Business Segment Operations | Other Operations”
New heading “ADJUSTED PRE-TAX LOSS BEFORE CONSOLIDATION AND ELIMINATIONS”
New heading “Years Ended December 31, 2025 and 2024 Comparison”
New heading “The following table presents reconciliations of Book value per share to Adjusted book value per share and Core operating book value per share, which are non-GAAP measures.”
New heading “The following table presents reconciliations of Return on equity to Adjusted return on equity and Core operating return on equity, which are non-GAAP measures.”
New heading “For additional information on our investment portfolio, see Note 6 to the Consolidated Financial Statements. For information regarding AIG's net realized gains and losses for the year ended December 31, 2024 compared with the year ended December 31, 2023, see Part II, Item 7. MD&A – Investments – Investment Strategies – Net Realized Gains and Losses in the 2024 Annual Report.”
New heading “Unrealized Gains and Losses on Investments”
New heading “Net Loss Development – 2025”
New heading “For information regarding the 2023 net loss development, see Part II, Item 7. MD&A – Insurance Reserves – Loss Reserves in the 2024 Annual Report.”
New heading “For information regarding cash flow activities for the year ended December 31, 2023, see Part II, Item 7. MD&A – Liquidity and Capital Resources – Analysis of Sources and Uses of Cash of our 2024 Annual Report.”
New heading “TECHNOLOGY RISK”
Removed heading “The following sensitivity analysis table summarizes the effect on the loss reserve position of using certain alternative loss cost trend (for accident years where we use expected loss ratio methods) or loss development factor assumptions rather than the assumptions actually used in determining our estimates in the year-end loss reserve analyses in 2024:”
Removed heading “ALLOWANCE FOR CREDIT LOSSES ON CERTAIN INVESTMENTS”
Removed heading “GOODWILL IMPAIRMENT”
Removed heading “For additional information on goodwill impairment, see Part I, Item 1A. Risk Factors – Estimates and Assumptions and Note 12 to the Consolidated Financial Statements.”
Removed heading “REGULATORY, INDUSTRY AND ECONOMIC FACTORS”
Removed heading “Regulatory Environment”
Removed heading “For information regarding our regulation and supervision by different regulatory authorities in the United States and abroad, see Part I, Item 1. Business – Regulation and Part I, Item 1A. Risk Factors – Regulation and Note 21 to the Consolidated Financial Statements.”
Removed heading “General Insurance businesses are transacted in most major foreign currencies. The following table presents the average of the quarterly weighted average exchange rates of the Major Currencies, which have the most significant impact on our businesses:”
Removed heading “ITEM 7 | Consolidated Results of Operations”
Removed heading “For information regarding the critical accounting estimates that affect our results of operations, see Critical Accounting Estimates above.”
Removed heading “ITEM 7 | Consolidated Results of Operations”
Removed heading “Years Ended December 31, 2024 and 2023 Comparison”
Removed heading “Years Ended December 31, 2023 and 2022 Comparison”
Removed heading “ITEM 7 | Consolidated Results of Operations”
Removed heading “INCOME TAX EXPENSE ANALYSIS”
Removed heading “For additional information, see Note 21 to the Consolidated Financial Statements.”
Removed heading “NON-GAAP RECONCILIATIONS”
Removed heading “The following table presents reconciliations of Book value per share to Adjusted book value per share, Tangible book value per share and Core operating book value per share, which are non-GAAP measures. For additional information, see Use of Non-GAAP Measures.”
Removed heading “ITEM 7 | Consolidated Results of Operations”
Removed heading “The following table presents reconciliations of Return on equity to Adjusted return on equity, Tangible return on equity and Core operating return on equity, which are non-GAAP measures. For additional information, see Use of Non-GAAP Measures.”
Removed heading “(f)For additional information, see Note 1 to the Consolidated Financial Statements.”
Removed heading “PRE-TAX INCOME (LOSS) COMPARISON”
Removed heading “For the main drivers impacting AIG’s results of operations, see – Net Income (Loss) Attributable to AIG Common Shareholders above.”
Removed heading “ADJUSTED PRE-TAX INCOME (LOSS) COMPARISON”
Removed heading “For the main drivers impacting AIG’s adjusted pre-tax income (loss), see Business Segment Operations.”
Removed heading “ITEM 7 | Business Segment Operations | General Insurance”
Removed heading “Commercial Lines”
Removed heading “For additional information, see Note 1 to the Consolidated Financial Statements.”
Removed heading “Personal Insurance”
Removed heading “ITEM 7 | Business Segment Operations | General Insurance”
Removed heading “ITEM 7 | Business Segment Operations | General Insurance”
Removed heading “ITEM 7 | Business Segment Operations | General Insurance”
Removed heading “The following table presents General Insurance net premiums written by segment, showing change on both reported and constant dollar basis:”
Removed heading “The following tables present General Insurance accident year catastrophes(a) by segment and number of events:”
Removed heading “NORTH AMERICA COMMERCIAL RESULTS”
Removed heading “Business and Financial Highlights”
Removed heading “Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023”
Removed heading “Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022”
Removed heading “Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023”
Removed heading “Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022”
Removed heading “INTERNATIONAL COMMERCIAL RESULTS”
Removed heading “Business and Financial Highlights”
Removed heading “Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023”
Removed heading “Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022”
Removed heading “Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023”
Removed heading “Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022”
Removed heading “GLOBAL PERSONAL RESULTS”
Removed heading “Business and Financial Highlights”
Removed heading “Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023”
Removed heading “Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022”
Removed heading “Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023”
Removed heading “Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022”
Removed heading “YEARS ENDED DECEMBER 31, 2024 AND 2023 COMPARISON”
Removed heading “YEARS ENDED DECEMBER 31, 2023 AND 2022 COMPARISON”
Removed heading “Our Investment Management Agreements with BlackRock, Inc.”
Removed heading “Investments in RMBS”
Removed heading “Investments in CMBS”
Removed heading “The following table presents the fair value of our CMBS available for sale securities:”
Removed heading “Investments in CLO/ABS”
Removed heading “The following table presents the fair value of our CLO/ABS available for sale securities by collateral type:”
Removed heading “Unrealized Losses of Fixed Maturity Securities”
Removed heading “The following table shows the aging of the unrealized losses of fixed maturity securities, the extent to which the fair value is less than amortized cost or cost, and the number of respective items in each category:”
Removed heading “The following table presents the commercial mortgage loan exposure by location and class of loan based on amortized cost:”
Removed heading “For additional information on our investment portfolio, see Note 6 to the Consolidated Financial Statements.”
Removed heading “Change in Unrealized Gains and Losses on Investments”
Removed heading “National Association of Insurance Commissioners (NAIC) Designations of Fixed Maturity Securities”
Removed heading “The following table presents the fixed maturity security portfolio categorized by NAIC Designation, at fair value:”
Removed heading “The following table presents the fixed maturity security portfolio categorized by composite AIG credit rating, at fair value:”
Removed heading “Net Loss Development – 2023”
Removed heading “Net Loss Development – 2022”
Removed heading “Senior Notes Offering”
Removed heading “Sale of AIG's Travel Business”
Removed heading “DIVIDEND RESTRICTIONS”
Removed heading “For information regarding restrictions on payments of dividends by our subsidiaries, see Note 16 to the Consolidated Financial Statements.”
Removed heading “RISK GOVERNANCE STRUCTURE”
Removed heading “RISK APPETITE, LIMITS, IDENTIFICATION AND MEASUREMENT”
Removed heading “Risk Appetite Framework”
Removed heading “Risk Identification and Measurement”
Removed heading “For additional information on our three-tiered hierarchy of limits, see – Risk Appetite, Limits, Identification and Measurement – Risk Limits.”
Removed heading “BUSINESS AND STRATEGY RISKS”
Removed heading “For additional information on our three-tiered hierarchy of limits, see – Risk Appetite, Limits, Identification and Measurement – Risk Limits.”
Removed heading “Reinsurance Recoverable”
Largest changes
“Business and strategy risk encompasses those risks that stem from strategy risk, risk of legal and regulatory actions, risk of rating agency actions, reputational risk and intercompany dependencies. The major AIG strategy risks capture risk of losses due to the inability to implement appropriate business plans and strategies, make decisions, allocate resources or adapt to changes in the business environment. These risks include, but are not limited to pricing, distribution channels, acquisitions, and dispositions. …”see in full comparison
“For additional information on goodwill impairment, see Part I, Item 1A. Risk Factors – Estimates and Assumptions and Note 12 to the Consolidated Financial Statements.”see in full comparison
“For information regarding cash flow activities for the year ended December 31, 2023, see Part II, Item 7. MD&A – Liquidity and Capital Resources – Analysis of Sources and Uses of Cash of our 2024 Annual Report.”see in full comparison
“The following table presents the fixed maturity security portfolio categorized by composite AIG credit rating, at fair value:”see in full comparison
“For information regarding our regulation and supervision by different regulatory authorities in the United States and abroad, see Part I, Item 1. Business – Regulation and Part I, Item 1A. Risk Factors – Regulation and Note 21 to the Consolidated Financial Statements.”see in full comparison
Full comparison: every changed paragraph (543)
Cautionary Note on Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Information and Factors That May Affect Future Results This Annual Report on Form 10-K and other publicly available documents may include, and members of management may from time to time make and discuss, statements which, to the extent they are not statements of historical or present fact, may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward‑looking statements are intended to provide management’s current expectations or plans for future operating and financial performance, based on assumptions currently believed to be valid and accurate. Forward-looking statements are often preceded by, followed by or include words such as “will,” “believe,” “anticipate,” “expect,” “expectations,” “intend,” “plan,” “strategy,” “prospects,” “project,” “anticipate,” “should,” “guidance,” “outlook,” “confident,” “focused on achieving,” “view,” “target,” “goal,” “estimate” and other words of similar meaning in connection with a discussion of future operating or financial performance. These statements may include, among other things, projections, goals and assumptions that relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expense reduction efforts, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, the effect of catastrophic events, both natural and man-made, and macroeconomic and/or geopolitical events, anticipated dispositions, monetization and/or acquisitions of businesses or assets, the successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in operations and financial results, and other statements that are not historical facts.
•the impact of adverse developments affecting economic conditions in the markets in which we operate in the U.S. and globally,operate, including financial market conditions, a U.S. federal government shutdown, macroeconomic trends, changes in trade policies, including tariffs, fluctuations in interest rates and foreign currency exchange rates, inflationary pressures, including social inflation, pressures on the commercial real estate market, and an economic slowdown or recessionpandemics, and geopolitical events or conflicts;
•our ability to successfully complete strategic transactions, including to successfully dispose of, monetize and/or acquire businesses or assets or successfully integrate acquired businesses, and the anticipated benefits thereof;
•concentrations in our investment portfolios;
•our ability to successfully dispose of, monetize and/or acquire businesses or assets or successfully integrate acquired businesses, and the anticipated benefits thereof;
•concentrations in our investment portfolios, including our continuing equity market exposure to Corebridge Financial, Inc. (Corebridge);
•changes to tax laws in the countries in which we operate;
•our ability to address evolving global stakeholder expectations and regulatory requirements including with respect to environmental, social and governance matters and to effectively execute on sustainability targets and standards;
•changes to tax laws in the U.S. and other countries in which we operate;
•the outcome of significant legal, regulatory or governmental proceedings; and
•our ability to effectively execute on sustainability targets and standards;
•the impact of epidemics, pandemics and other public health crises and responses thereto; and
ITEM 7 | UseExecutive of Non-GAAP MeasuresSummary
OVERVIEW
FINANCIAL HIGHLIGHTS
Results of Operations
•Generated Net income attributable to AIG common shareholders per diluted share of $5.43 and Adjusted after-tax income attributable to AIG common shareholders per diluted share of $7.09, an increase of 43 percent from the prior year.
•Delivered $2.3 billion of underwriting income, a 22 percent increase from the prior year.
•Produced strong combined ratio of 90.1.
•Achieved Return on equity of 7.5 percent and Core operating return on equity of 11.1 percent.
Financial Condition
•Returned approximately $6.8 billion of capital to shareholders in 2025 through approximately $5.8 billion of stock repurchases, reducing outstanding shares by 11 percent, and approximately $1.0 billion in AIG Common Stock dividends.
•Received upgrades to financial strength ratings of AIG’s significant insurance subsidiaries by Fitch, S&P and Moody's and affirmation by A.M. Best.
Strategic Transactions
•Acquired the renewal rights of Everest Group, Ltd. (Everest) global retail commercial insurance portfolios for an aggregate purchase price of $301 million. For additional information, see Note 1 to the Consolidated Financial Statements.
•Announced strategic investments in Convex Group Limited (Convex), a privately held global specialty insurer for approximately $2.1 billion as well as a 9.9 percent ownership stake in Onex Corporation (Onex), a global asset manager, for approximately $646 million. For additional information, see Note 1 to the Consolidated Financial Statements.
•Announced strategic partnership with CVC Capital Partners plc (CVC) to establish large-scale separately managed accounts (SMAs) across CVC’s credit strategies and the launch of CVC’s private equity secondaries evergreen platform with AIG as a cornerstone investor, contributing up to $1.5 billion from AIG’s existing private equity portfolio. In parallel, AIG intends to allocate up to $2 billion to SMAs and funds managed by CVC, with an initial $1 billion to be deployed through 2026.
•Announced a strategic collaboration with Amwins Group, Inc. and Blackstone Inc. to form Lloyd’s Syndicate 2479, providing capacity for portfolio solutions.
Numerous assumptions are made in determining the best estimate of reserves for each line of business, in consideration of expected ultimate losses, loss cost trends and loss development factors, where appropriate. The importance of any one assumption can vary by both line of business and accident year. Because such assumptions may differ from actual experience, there could be significant variation in the development of loss reserves. This estimation uncertainty is particularly relevant for long-tail lines of business.
In short-tail lines of business, where the nature of these claims tends to be higher frequency with short reporting periods, with volatility arising from occasional severe events, the actual losses reported make up a greater proportion of the ultimate loss estimate. During the first few development quarters of an accident year, the expected ultimate losses generally reflect the average loss costs from a period of preceding accident quarters that have been adjusted for changes in rate and loss cost trends, mix of business, known exposure to unreported losses, or other factors affecting the particular line of business. For more mature quarters, specific loss development methods and/or frequency/severity methods may be used to determine the incurred but not reported (IBNR). IBNR for claims arising from catastrophic events or events of unusual severity would be determined taking into account information known by
ITEM 7 | Critical Accounting Estimates the claims department, using alternative techniques or expected percentages of ultimate loss emergence based on historical emergence of similar events or claim types.
Estimation of loss reserves for our long-tail business depends on a number of factors, including the product line and volume of business, as well as estimates of reinsurance recoveries. Experience in more recent accident years generally provides limited statistical credibility of reported net losses. IBNR reserves constitute a relatively higher proportion of the ultimate net loss incurred in more recent accident years because of the lower level of reported net losses earlier in the development period.
•Tail factors, which are development factors used for certain long-tail lines of business to project future loss development for periods that extend beyond the available development data.
Differences between actual loss emergence in a given period and our expectations based on prior loss reserve estimates are used to monitor reserve adequacy between reserve reviews and may also influence our judgment with respect to adjusting reserve estimates.
The process of determining the current loss ratio for each product line of business is based on a variety of factors. These include considerations such as: prior accident year and policy year loss ratios; rate changes; and changes in coverage, reinsurance, or mix of business. Other considerations include actual and anticipated changes in external factors such as trends in loss costs, inflation, employment rates or unemployment duration or in the legal and claims environment. The current loss ratio for each product line of business is intended to represent our best estimate after reflecting all relevant factors. At the close of each quarter, the assumptions and data underlying the loss ratios are reviewed to determine whether they remain appropriate. This process includes a review of the actual loss experience in the quarter, actual rate changes achieved, actual changes in reinsurance, quantifiable changes in coverage or mix of business, and changes in other factors that may affect the loss ratio.
We conduct a comprehensive reserve review at least annually for each product line of business in accordance with Actuarial Standards of Practice. Our actuarial central estimate for each product line of business represents an expected value generally considering a range of reasonably possible outcomes.
The reserve analysis, globally, for each product line of business is performed by a credentialed actuarial team in collaboration with claims, underwriting, business unit management, risk management and senior management. Our actuaries aggregate the data into reserve segments, balancing considerations of homogeneity and credibility. They update numerous assumptions, including the analysis and selection of loss development and loss trend factors. They also determine and select the appropriate actuarial or other methods used to develop our best estimate for each business product line, and may employ multiple methods and assumptions for each product line. These data groupings, accident year weights, method selections and assumptions necessarily change over time as business mix changes, development factors mature and become more credible and loss characteristics evolve. We seek input from third-party specialists to help inform our judgments as needed.
A critical component of our reserve reviews is an internal peer review of our reserving analyses and conclusions, where actuaries independent of the initial review evaluate the reasonableness of assumptions used, methods selected, and weightings given to different methods. In addition, each detailed valuation review is subjected to a review and challenge process by specialists in our Enterprise Risk Management (ERM) group.
Our actuaries determine the appropriate actuarial methods and segmentation. This determination is based on a variety of factors including the nature of the losses associated with the product line of business, such as the frequency or severity of the claims. In addition to determining the actuarial methods, the actuaries determine the appropriate loss reserve groupings of data. The groupings may change to reflect observed or emerging patterns within and across product lines, or to differentiate risk characteristics (for example, size of deductibles and extent of third-party claims specialists used by our insureds). This determination of data segmentation and related actuarial methods is assessed, reviewed and updated at least annually.
The estimation of liability for loss reserves and loss adjustment expenses relating to asbestos and environmental pollution losses on insurance policies written many years ago is typically subject to greater uncertainty than other types of losses. This is due to inconsistent court decisions, as well as judicial interpretations and legislative actions that in some cases have tended to broaden coverage beyond the original intent of such policies or have expanded theories of liability. In addition, reinsurance recoverable balances relating to asbestos and environmental loss reserves are subject to greater uncertainty due to the underlying age of the claim, underlying legal issues surrounding the nature of the coverage, and determination of proper policy period. For these reasons, these balances tend to be subject to increased levels of disputes and legal collection activity when actually billed.
The following sensitivity analysis table summarizes the effect on the loss reserve position of using certain alternative loss cost trend (for accident years where we use expected loss ratio methods) or loss development factor assumptions rather than the assumptions actually used in determining our estimates in the year-end loss reserve analyses in 2025:
In the ordinary course of business, our insurance companies may use both treaty and facultative reinsurance to minimize their net loss exposure to any single catastrophic loss event or to an accumulation of losses from a number of smaller events or to provide greater diversification of our businesses. Reinsurance assets include the balances due from reinsurance and insurance companies under the terms of our reinsurance agreements for paid and unpaid losses and loss adjustment expenses incurred and ceded unearned premiums. The estimation of reinsurance recoverables involves a significant amount of judgment. Reinsurance assets include reinsurance recoverables on unpaid losses and loss adjustment expenses that are estimated as part of our loss reserving process and, consequently, are subject to similar judgments and uncertainties as the estimation of gross loss reserves. For additional information on reinsurance, see Note 8 to the Consolidated Financial Statements.
The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three-year period ended December 31, 2025. Factors that relate primarily to a specific business are discussed in more detail within the business segment operations section.
For information regarding the critical accounting estimates that affect our results of operations, see Critical Accounting Estimates. For information regarding AIG’s results of operations for the year ended December 31, 2024 compared with the year ended December 31, 2023, see Part II, Item 7. MD&A – Consolidated Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 (the 2024 Annual Report).
Years Ended December 31, 2025 and 2024 Comparison
Net income (loss) attributable to AIG common shareholders increased $4.5 billion primarily driven by:
•higher underwriting income primarily driven by lower catastrophe losses of $258 million and higher net favorable prior year reserve development of $183 million. For additional information, see Business Segment Operations – General Insurance;
•lower Net investment income of $40 million primarily due to lower gains on the changes in the fair value, lower gains on sale of shares, and lower dividends from AIG's investment in Corebridge Financial, Inc. (Corebridge) partially offset by higher income from available for sale fixed maturity securities of $440 million. For additional information, see Note 6 to the Consolidated Financial Statements;
•higher Net realized losses of $654 million, primarily driven by impairments on investments in real estate funds, higher losses on derivative and hedge activity, lower gains on foreign exchange, partially offset by lower losses on fixed income securities. For additional information, see Investments – Investment Strategies – Net Realized Gains and Losses;
•lower General operating and other expenses primarily driven by lower restructuring and other related costs of $306 million;
•lower Income tax expense of $388 million primarily driven by a valuation allowance release related to our U.S. federal consolidated tax attribute carryforwards. For additional information, see Note 21 to the Consolidated Financial Statements;
•absence of loss from discontinued operations, net of income taxes of $3.6 billion as a result of the deconsolidation of Corebridge in June 2024;
•lower Net income attributable to noncontrolling interest of $477 million primarily driven by the Corebridge accounting change post-deconsolidation.
We report the results of our businesses through three segments and Other Operations. The three segments are North America Commercial, International Commercial and Global Personal. Other Operations predominantly consists of Net Investment Income from our AIG Parent liquidity portfolio, Corebridge dividend income, corporate General operating expenses, and Interest expense.
For information regarding AIG’s business segment operations for the year ended December 31, 2024 compared with the year ended December 31, 2023, see Part II, Item 7. MD&A – Business Segment Operations in the 2024 Annual Report.
Our General Insurance business (General Insurance) consists of our three segments and the Net investment income related to our insurance operations.
The following tables present General Insurance accident year catastrophes(a) by segment:
The North America Commercial segment consists of insurance businesses and operations in the United States, Canada and Bermuda. Products include Property, Casualty and Financial Lines, with clients ranging from small and medium-sized businesses to multinational companies.
Premiums Years Ended December 31, 2025 and 2024 Comparison
What changed in the latest 10-Q
Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors in the 2025 Annual Report.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Six Months Ended June 30, 2026 and 2025 Comparison”
New heading “ITEM 2 | Business Segment Operations | General Insurance”
New heading “Premiums Three Months Ended June 30, 2026 and 2025 Comparison”
New heading “Underwriting Results Six Months Ended June 30, 2026 and 2025 Comparison”
New heading “Underwriting Results Three Months Ended June 30, 2026 and 2025 Comparison”
New heading “Underwriting Results Six Months Ended June 30, 2026 and 2025 Comparison”
New heading “Underwriting Results Three Months Ended June 30, 2026 and 2025 Comparison”
New heading “Underwriting Results Six Months Ended June 30, 2026 and 2025 Comparison”
New heading “ITEM 2 | Business Segment Operations | Other Operations”
New heading “Six Months Ended June 30, 2026 and 2025 Comparison”
New heading “Strategic Investments”
New heading “INVESTMENT HIGHLIGHTS”
Removed heading “For information regarding the critical accounting estimates that affect our results of operations, see Critical Accounting Estimates in this MD&A and Part II, Item 7. MD&A – Critical Accounting Estimates in the 2025 Annual Report.”
Removed heading “For additional information on prior year development, see Insurance Reserves.”
Removed heading “For additional information on prior year development, see Insurance Reserves.”
Removed heading “For additional information on prior year development, see Insurance Reserves.”
Largest changes
“For information regarding the critical accounting estimates that affect our results of operations, see Critical Accounting Estimates in this MD&A and Part II, Item 7. MD&A – Critical Accounting Estimates in the 2025 Annual Report.”see in full comparison
“For additional information on prior year development, see Insurance Reserves.”see in full comparison
“For additional information on prior year development, see Insurance Reserves.”see in full comparison
“For additional information on prior year development, see Insurance Reserves.”see in full comparison
“Underwriting Results Three Months Ended June 30, 2026 and 2025 Comparison”see in full comparison
“Underwriting Results Three Months Ended June 30, 2026 and 2025 Comparison”see in full comparison
Full comparison: every changed paragraph (147)
The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three and six months ended MarchJune 31,30, 2026 and 2025. Factors that relate primarily to a specific business are discussed in more detail within the business segment operations section.
For information regarding the critical accounting estimates that affect our results of operations, see Critical Accounting Estimates in this MD&A and Part II, Item 7. MD&A – Critical Accounting Estimates in the 2025 Annual Report.
Three Months Ended MarchJune 31,30, 2026 and 2025 Comparison
Net income (loss) attributable to AIG common shareholders increaseddecreased $65$196 million primarilydue drivento bythe following:
•higher underwriting income primarily driven by lower catastrophe losses of $345 million and higher net favorable prior year reserve development of $68 million. For additional information, see Business Segment Operations – General Insurance; and
•lower Net investment income of $393$339 million primarily due to changes in the fair value of AIG's investments in Corebridge and Equity securities of $449$295 million and lower income on Alternative investments and Mortgage loans of $48$53 million, partially offset by higher income from available for sale fixed maturity securities of $103$29 million. For additional information, see Note 5 to the Condensed Consolidated Financial Statements.Statements; and
•higher underwriting income primarily driven by higher net favorable prior year reserve development of $33 million. For additional information, see Business Segment Operations – General Insurance.
Six Months Ended June 30, 2026 and 2025 Comparison
Net income (loss) attributable to AIG common shareholders decreased $131 million primarily driven by:
•lower Net investment income of $732 million primarily due to changes in the fair value of AIG's investments in Corebridge and Equity securities of $744 million and lower income on Alternative investments and Mortgage loans of $101 million, partially offset by higher income from available for sale fixed maturity securities of $132 million. For additional information, see Note 5 to the Condensed Consolidated Financial Statements; and
•higher underwriting income primarily driven by lower catastrophe losses of $305 million and higher net favorable prior year reserve development of $101 million. For additional information, see Business Segment Operations – General Insurance.
(a)Consistent with our definition of APTI,Adjusted pre-tax income (APTI), excludes net loss reserve discount and the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain.
ITEM 2 | Business Segment Operations | General Insurance
(b)Includes net losses related to the Middle East conflict of $75 million in the three months ended June 30, 2026.
Premiums Three Months Ended June 30, 2026 and 2025 Comparison
Net premiums written increased by $262 million, or 9 percent, primarily due to the impact of strategic transactions and organic growth, notably in Casualty and Financial Lines, partially offset by lower production in certain Property lines. The increase in Net premiums earned is primarily driven by these same factors.
Premiums ThreeSix Months Ended MarchJune 31,30, 2026 and 2025 Comparison
Net premiums written increased by $431$693 million, or 3717 percent, primarily due to the impact of strategic transactions, reinsurance program changes and organic growth, notably in CasualtyCasualty, Property and Property.Financial Lines. The increase in Net premiums earned is primarily driven by businessthese growth.same factors.
Underwriting Results Three Months Ended MarchJune 31,30, 2026 and 2025 Comparison
North America Commercial produced underwriting income of $327$372 million from a combined ratio of 85.5,84.0, which was ana 8.41.9 point improvement. This was driven by a lower loss ratio (8.72.1 points) from:
•lower catastrophe losses (7.2 points); and
•higher net favorable prior year reserve development (2.41.8 points), with favorable development driven by Property.Casualty; and
•lower catastrophe losses (0.6 points).
This was partially offset by a higher accident year loss ratio, as adjusted (0.90.3 points) primarily due to changes in business mix.
The expense ratio increased by 0.30.2 points, as a lowerprimarily mix-driven increase in the acquisition ratio (0.40.5 points) primarilymore driven by changes in business mix partiallythan offset thea increase in thelower general operating expense ratio (0.70.3 points).
Underwriting Results Six Months Ended June 30, 2026 and 2025 Comparison
North America Commercial produced underwriting income of $699 million from a combined ratio of 84.8, which was a 5.1 point improvement. This was driven by a lower loss ratio (5.4 points) from:
•lower catastrophe losses (3.9 points); and
•higher net favorable prior year reserve development (2.0 points), with favorable development primarily driven by Casualty and Property.
This was partially offset by a higher accident year loss ratio, as adjusted (0.5 points) primarily due to changes in business mix.
The expense ratio increased by 0.3 points from an increase in the general operating expense ratio (0.3 points).
For additional information on prior year development, see Insurance Reserves.
Premiums Three Months Ended MarchJune 31,30, 2026 and 2025 Comparison
Net premiums written, excluding the favorable impact of foreign exchange ($162$38 million), increased by $261$225 million, or 1210 percent, primarily due to the impact of strategic transactions, reinsurance program changestransactions and organic growth, notably in PropertySpecialty and Casualty.Property. The increase in Net premiums earned is primarily driven by businessthese growth.same factors.
UnderwritingPremiums Results ThreeSix Months Ended MarchJune 31,30, 2026 and 2025 Comparison
Net premiums written, excluding the favorable impact of foreign exchange ($200 million), increased by $486 million, or 11 percent, primarily due to the impact of strategic transactions, reinsurance program changes and organic growth, notably in Property, Casualty and Specialty. The increase in Net premiums earned is primarily driven by these same factors.
Underwriting Results Three Months Ended June 30, 2026 and 2025 Comparison
International Commercial produced underwriting income of $278$200 million from a combined ratio of 87.3,91.3, which was a 0.95.4 point improvement.increase. This was driven by a lowerhigher loss ratio (0.44.1 points) from lower catastrophe losses (1.4 points), partially offset by:
•higher catastrophe losses (2.5 points);
•higher accident year loss ratio, as adjusted (0.21.0 points) primarily due to changes in business mix; and
•net adverse prior year reserve development (0.80.6 points), with unfavorable development driven by prior year premiums.
The expense ratio improvedincreased by 0.51.3 points, asfrom a primarily mix-driven increase in the acquisition ratio (0.1 points) was more than offset by a lower general operating expense ratio (0.61.3 points).
Underwriting Results Six Months Ended June 30, 2026 and 2025 Comparison
International Commercial produced underwriting income of $478 million from a combined ratio of 89.2, which was a 2.1 point increase. This was driven by a higher loss ratio (1.9 points) from:
•higher catastrophe losses (0.7 points);
•higher accident year loss ratio, as adjusted (0.6 points) primarily due to changes in business mix; and
•net adverse prior year reserve development (0.6 points), with unfavorable development driven by prior year premiums.
The expense ratio increased by 0.2 points, as a primarily mix-driven increase in the acquisition ratio (0.6 points) was partially offset by a lower general operating expense ratio (0.4 points).
For additional information on prior year development, see Insurance Reserves.
Premiums Three Months Ended MarchJune 31,30, 2026 and 2025 Comparison
Net premiums written, excluding the favorableunfavorable impact of foreign exchange ($60$15 million), increased by $159$126 million, or 118 percent, primarily driven by reinsurance program changes and organic growth in U.S. high net worth and Accident & Health. The increasedecrease in Net premiums earned iswas primarily driven by these same factors.Warranty.
UnderwritingPremiums Results ThreeSix Months Ended MarchJune 31,30, 2026 and 2025 Comparison
Net premiums written, excluding the favorable impact of foreign exchange ($45 million) increased by $285 million, or 9 percent, primarily driven by reinsurance program changes and organic growth in U.S. high net worth and Accident & Health. The decrease in Net premiums earned was primarily driven by Warranty.
Underwriting Results Three Months Ended June 30, 2026 and 2025 Comparison
Global Personal produced underwriting income of $169$114 million from a combined ratio of 89.4,92.9, which was ana 18.55.6 point improvement. This was driven by a lower loss ratio (14.43.4 points) from:
•lower catastrophe losses (10.6 points);
•net favorable prior year reserve development (2.2 points), with favorable development driven by U.S. high net worth; and
•lower accident year loss ratio, as adjusted (1.62.7 points) primarily due to changes in business mix.mix; and
•lower catastrophe losses (0.7 points).
The expense ratio improved by 4.12.2 points, reflecting a lower acquisition ratio (2.70.9 points), primarily driven by changes in business mix and improved commission terms,terms and a lower general operating expense ratio (1.41.3 points).
AIG insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 1 filing (1 insider, 2 trade dates, 236,829 shares, about $18.1M; 1 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -236,829 (purchases minus sales); net value about -$18.1M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-01 | Twiningdavis Melissa |
Shares withheld for tax | 2,191 | $75.43 | $165.3K |
| 2026-09-08 | Bewlay Nancy M |
Grant/award | 55,284 | — | — |
| 2026-08-13 | Zaffino Peter |
Open-market sale |
36,629 | $76.13 | $2.8M |
| 2026-08-13 | Zaffino Peter |
Open-market sale |
200 | $76.89 | $15.4K |
| 2026-08-12 | Zaffino Peter |
Open-market sale |
200,000 | $76.47 | $15.3M |
| 2026-07-27 | Schaper Christopher |
Shares withheld for tax | 2,476 | $79.16 | $196.0K |
| 2026-06-03 | Lafnitzegger Kelly |
Shares withheld for tax | 549 | $72.55 | $39.8K |
Well-known investors holding AIG (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Harris Associates (Oakmark Funds) | 2026-06-30 | 20,357,272 | $1.5B | 2.02% | Reduced 1% |
| Viking Global Investors (Andreas Halvorsen) | 2026-06-30 | 4,221,223 | $317.6M | — | Sold out |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 4,153,973 | $309.6M | 0.11% | Added 48% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 1,972,174 | $147.0M | 0.22% | Added 36% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 1,730,140 | $128.9M | 0.07% | Added 4% |
| D. E. Shaw & Co. | 2026-06-30 | 885,079 | $66.0M | 0.04% | Added 580% |
| Millennium Management (Israel Englander) | 2026-06-30 | 516,346 | $38.5M | 0.03% | Reduced 68% |
| Bridgewater Associates | 2026-06-30 | 295,074 | $22.0M | 0.09% | Added 67% |
| Soros Fund Management | 2026-06-30 | 144,410 | $10.8M | 0.14% | Reduced 4% |
| Two Sigma Investments | 2026-06-30 | 24,205 | $1.8M | 0.0% | Reduced 75% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 21,792 | $1.6M | 0.0% | Added 176% |