Analysts See AIG's Q4 As Positive, But Expense Ratio Limits Stock Gains

American International Group, Inc. AIG shares are trading lower today. On Tuesday, the company reported that the fourth quarter adjusted EPS of $1.30 exceeded the consensus of $1.23.

Piper Sandler analyst Paul Newsome writes that results came in above consensus but slightly below his estimates due to weaker underwriting results and higher expenses.

However, catastrophe losses were in line with his expectations and better than consensus, adds the analyst.

Notably, he notes that AIG reported a 92.5% combined ratio, better than consensus (93.3%) but slightly above his estimate of 91.5%.

Despite some segment noise, the company avoided broader casualty issues, adds the analyst.

Overall, Newsome says investors will view the results as better than expected.

Keefe, Bruyette & Woods analyst Meyer Shields notes that AIG’s fourth-quarter operating EPS beat their $1.09 estimate, led by stronger core and catastrophe loss ratios, reserve releases and investment income, partially offset by higher expenses and taxes.

The analyst expects shares to gain on the EPS beat and reaffirmed the 10%+ ROE target for 2025, though gains may be tempered by a higher-than-expected expense ratio.

Investors can gain exposure to the stock via Invesco KBW Property & Casualty Insurance ETF KBWP and iShares U.S. Insurance ETF IAK.

Price Action: AIG shares are down 1.49% at $74.81 at the last check Wednesday.

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