AIG reports Q1 2026 after the close on April 30, its first full quarter as a streamlined general insurer. Consensus is $1.90 of adjusted EPS, up 62.4%, on $6.9 billion of revenue and a general insurance combined ratio of 90.2% against 95.8% a year earlier.
Most of that 5.6-point improvement is a catastrophe comparison rather than an underwriting one. Q1 2025 carried $525 million of catastrophe charges, worth 9.1 loss ratio points, against $106 million and 1.9 points in Q1 2024.
Key Takeaways
- 5.6 points of combined ratio improvement, of which the catastrophe swing accounts for most, since Q1 2025's $525 million of cat charges included the California wildfires and a $126 million personal lines underwriting loss.
- Corebridge moved to the equity method on June 9, 2024, so AIG's revenue base shrinks by the full amount of life and retirement premium and investment income, leaving a general insurer holding a roughly 48% financial stake.
- International Commercial's Q4 2025 combined ratio deteriorated 5.7 points to 88.8% partly on "lean parent" corporate expense reapportionment, which is the recurring cost of the separation rather than a one-time item.
- A 90.2% print would trail Chubb by 6.2 points and Travelers by 1.6, with AIG's full-year 2025 accident year combined ratio of 88.3% against Chubb's 82.1% and Travelers' 85.3%.
- $7.5 billion of buyback authorization at Q1 2025's $2.2 billion quarterly pace runs out in roughly four quarters, which matters because consensus full-year 2026 EPS of $7.75 leans on a falling share count.
The First Clean Quarter
The reason this quarter is a baseline rather than another data point is an accounting change that finished working through the comparisons.
AIG completed the Corebridge IPO in September 2022 and reduced its holding through secondary offerings, including a $3.8 billion sale of a 20% stake in late 2024 that took ownership to approximately 48.4%. On June 9, 2024 it met the deconsolidation requirements by waiving majority board representation. Corebridge moved to the equity method, so AIG now books a proportionate share of earnings as one line rather than consolidating life and retirement revenue and expense.
What remains is a general insurance company with residual investment income from a stake Peter Zaffino has called a "financial asset" rather than a strategic position. Every quarter since June 2024 still carried reclassification and discontinued-operations noise; this is the first without it.
| Metric | Q1 2026 Estimate | Q1 2025 Actual | YoY Change |
|---|---|---|---|
| Adjusted EPS | $1.90 | $1.17 | +62.4% |
| Revenue | $6.9B | $6.6B | +4.1% |
| Net Premiums Earned (GI) | $5.9B | $5.8B | +2.4% |
| Underwriting Income (GI) | $578M | $243M | +138% |
| Combined Ratio (GI) | 90.2% | 95.8% | -5.6 pts |
| Loss Ratio (GI) | 59.7% | 65.3% | -5.6 pts |
| Adjusted Pre-Tax Income | $1.5B | $1.0B | +51.1% |
| Net Investment Income | est. +22.5% YoY | N/A | +22.5% |
The 62.4% EPS estimate reads aggressive until the comparison quarter is unpacked. Q1 2025 absorbed $525 million of catastrophe charges, 9.1 loss ratio points, against $106 million and 1.9 points in Q1 2024, with the California wildfires driving most of it and personal lines posting a $126 million underwriting loss. A benign catastrophe comparison accounts for most of the projected combined ratio improvement on its own.
The Overhead That Did Not Leave
The separation removed a revenue base and did not remove the corporate cost that was spread across it, and the segments are where that now lands.
Corporate overhead previously apportioned across both general insurance and life operations now falls entirely on the general insurance segments. AIG calls it "lean parent" reapportionment, and its clearest appearance so far is International Commercial, where the Q4 2025 combined ratio of 88.8% was a 5.7-point deterioration from 83.1% a year earlier, on higher catastrophe losses and an elevated expense ratio. The catastrophe half of that is cyclical. The expense half is not, and it repeats in every future quarter.
North America Commercial ran the other way in the same period, improving 14.1 points to 84.7% with $330 million of underwriting income against $25 million, and finishing 2025 at an 86.8% combined ratio, 6.5 points better, with underwriting income more than doubled to roughly $1.1 billion. Full-year general insurance underwriting income was $2.3 billion, up 22%, at a 90.1% calendar year combined ratio and an 88.3% adjusted accident year combined ratio, a 17th consecutive quarter below 90%.
The offset AIG has named is technology. Its AI-First claims processing system targets a 15% reduction in administrative costs over two years, which would be worth roughly 1 to 2 combined ratio points, against the underwriting automation already processing approximately 370,000 E&S submissions and the $1.6 billion capacity commitment to McGill and Partners. Whether that lands ahead of or behind the lean parent drag is what the Q1 expense ratio measures, and it is the first quarter in which both effects are visible without separation noise around them.
Against the pure-play peers the gap is now measurable on the same basis for the first time. A 90.2% print trails Chubb's 84.0% by 6.2 points and Travelers' 88.6% by 1.6, and on accident year excluding catastrophes AIG's 88.3% for full-year 2025 sits against Chubb's 82.1% and Travelers' 85.3%. Part of that spread is business mix and part is the expense reapportionment, which is exactly why separating the two matters more this quarter than last.
What the Separation Cost the Capital Model
The complication is that the clean comparison also removes something that was doing unstated work in the capital calculation.
AIG's standalone general insurance operations carry more concentrated exposure to P&C catastrophe risk and casualty reserve risk than the combined entity did. The diversification credit that life and retirement exposure generated against P&C risk is gone with the business that produced it, so the same underwriting book now supports a less diversified risk profile. That is a real capital cost of the separation, and it sits on the denominator of the return metrics the transformation was meant to improve.
The return gap is where it shows. Chubb and Travelers are generating core return on equity of 20.6% and 19.7%; AIG's runs near 10%, improved substantially from the single-digit levels of 2018 to 2020 and still well short of the peer set. Closing it is the strategic problem handed to Eric Andersen, who assumed the CEO role on June 1 after nearly 30 years at Aon, a broking and distribution background rather than an underwriting one.
The near-term arithmetic leans on the buyback rather than on either. AIG returned $6.8 billion to shareholders in 2025, $5.8 billion of it repurchases, and the board authorized up to $7.5 billion in April 2025 including $3.4 billion carried over. At Q1 2025's $2.2 billion quarterly pace that authorization is exhausted in roughly four quarters, and consensus full-year 2026 EPS of $7.75, up 9.3%, is built partly on the share count that pace produces. Debt-to-total-capital at 18.0% and book value per share of $76.44 give room to continue; the per-share growth still has to come from somewhere once it stops.
Further Reading
- Chubb Q1 2026: 84% Combined Ratio and Greenberg's 'Dumb' Property Softening Warning – Chubb's Q1 peer comparison benchmark, with the property rate cycle commentary that contextualizes AIG's commercial lines pricing environment.
- Travelers Q1 2026: $325M Release and AY 2025 Uncertainty IBNR – The second pure-play P&C peer read for Q1 2026, including the reserve posture and underlying combined ratio gap with Chubb and AIG.
- AIG-McGill $1.6B Agentic AI Deal Reshapes the Follow Market – The Palantir-powered agentic AI deployment that underpins AIG's technology strategy and expense ratio improvement thesis.
- Morgan Stanley's $9.3B AI Savings Forecast for P&C Insurers – The carrier-by-carrier expense automation framework that projects AIG among the top beneficiaries of AI-driven expense ratio compression.
- Insurance AI Hits the ROI Wall: Which Carriers Are Converting Spend Into Actuarial Results – Cross-carrier AI ROI scorecard benchmarking AIG, Chubb, Travelers, and Progressive against measurable performance thresholds.
- Q1 2026 P&C Cycle Inflection: The Aggregate Carrier View – How AIG's 87.3% combined ratio fits within the four-carrier 84-88% band and what the sector-level clustering means for cycle timing and competitive dynamics.
- How the Andersen CEO Transition Tests AI Investment Continuity at AIG – Mapping the full AI asset inventory Andersen inherits and the continuity risk across each program as the executive sponsor steps aside.