AIG reported General Insurance underwriting income of $564 million for the third quarter of 2026, down 29% from $793 million a year earlier, as the segment's combined ratio moved to 91.3% from 86.8%, in results released on Tuesday, November 3. Catastrophe charges were $283 million against $100 million, and favorable prior-year development was $91 million against $180 million.
Net premiums written grew 7% to $6.7 billion, or 8% in constant dollars and 10% excluding North America Property. "Despite a more challenging market environment, we maintained strong underwriting performance," said Eric Andersen, AIG President and Chief Executive Officer, in the release. Adjusted after-tax income was $1.1 billion, or $2.06 per diluted share, against $2.20 a year earlier, and core operating return on equity was 11.1%.
The results follow a second quarter in which AIG booked $145 million of favorable development alongside what it called slight strengthening in U.S. excess casualty, as this site reported in August. They land two weeks after Chubb released $511 million of reserves for its own third quarter, and a week after Aon put nine-month insured catastrophe losses at $91 billion, the lowest since 2019.
Key Takeaways
- Most of the 4.5-point combined-ratio deterioration sat outside the current accident year: catastrophes added 2.8 points and lower favorable development 1.6, against a 0.4-point rise in the accident-year loss ratio.
- North America Commercial took the largest hit: underwriting income fell 57% to $167 million as favorable development dropped to 1.4 points of earned premium from 5.9.
- Global Personal moved the other way: its combined ratio improved to 93.2% from 95.2% and underwriting income rose 44% to $114 million, with 2.4 points of favorable development.
- Premium growth held up: net premiums written rose 7% to $6.7 billion, with International Commercial up 13% and Global Personal up 9% in constant dollars.
Where the 4.5 points came from
The General Insurance loss ratio rose 4.8 points to 60.7%. Catastrophe losses and reinstatement premiums accounted for 4.4 points against 1.6 a year earlier, a 2.8-point swing that AIG attributed to severe convective storms in North America and described against "extraordinarily low" catastrophe losses in the prior-year quarter. Favorable prior-year development contributed 1.5 points against 3.1, a further 1.6 points of deterioration. The accident-year loss ratio, as adjusted, rose 0.4 points to 57.8%, which AIG put down to changes in business mix.
The expense ratio improved 0.3 points to 30.6%, leaving the accident-year combined ratio, ex-CAT, at 88.4% against 88.3%. Accident-year underwriting income ex-CAT rose 6% to $756 million. On AIG's definitions, a catastrophe is a weather or seismic event with a net impact above $10 million, or a man-made event such as terrorism or civil unrest over the same threshold.
Against the second quarter, the catastrophe load rose from $210 million, or 3.4 loss ratio points, to $283 million and 4.4 points, and favorable development fell from $145 million, or 2.5 points, to $91 million and 1.5 points, according to the second-quarter release of August 6. The second-quarter release had named U.S. workers' compensation and U.S. property and special risks as the sources of its release, and U.S. excess casualty as the line strengthened; the third-quarter release described releases across most lines of business and singled out none.
Over nine months the picture is flatter. The combined ratio improved to 89.2% from 90.6%, with catastrophes at 3.6 points against 4.5 and favorable development at 2.1 points in both years, so the accident-year combined ratio ex-CAT improved 50 basis points to 87.7%. The third quarter's lower development figure gave back ground the first half had gained on the same line.
North America Commercial carries the reserve line
North America Commercial's combined ratio rose 10.3 points to 92.9% from 82.6%, and underwriting income fell to $167 million from $384 million. Catastrophe losses accounted for 7.1 points of the segment's premium against 3.1 a year earlier, a 4.0-point swing. Favorable development fell to 1.4 points from 5.9, a 4.5-point swing. The accident-year combined ratio rose 1.8 points to 87.2% on a higher accident-year loss ratio and acquisition ratio, which AIG attributed to business mix, partly offset by a lower general operating expense ratio.
Of the segment's $217 million drop in underwriting income, then, 8.5 of the 10.3 combined-ratio points sit in catastrophes and prior-year development and 1.8 in the current accident year. The 1.4 points of favorable development compares with 6.8 points in the second quarter, when the segment's combined ratio was 84.0%, according to the August release.
Net premiums written in the segment grew 2% to $2.5 billion, driven by Retail Casualty and Financial Lines and partly offset by lower production in certain property lines, the release said. Excluding North America Property, the segment's premium grew 6%.
| Segment, Q3 2026 | Combined ratio (Q3 2025) | Cat points (Q3 2025) | Favorable PYD points (Q3 2025) | AYCR ex-CAT (Q3 2025) | Underwriting income (change) | NPW (change) |
|---|---|---|---|---|---|---|
| North America Commercial | 92.9% (82.6%) | 7.1 (3.1) | 1.4 (5.9) | 87.2% (85.4%) | $167M (down 57%) | $2,481M (up 2%) |
| International Commercial | 88.3% (84.9%) | 3.5 (0.8) | 1.0 (1.9) | 85.8% (86.0%) | $283M (down 14%) | $2,387M (up 13%) |
| Global Personal | 93.2% (95.2%) | 2.0 (0.8) | 2.4 (1.1) | 93.6% (95.5%) | $114M (up 44%) | $1,783M (up 6%) |
| General Insurance | 91.3% (86.8%) | 4.4 (1.6) | 1.5 (3.1) | 88.4% (88.3%) | $564M (down 29%) | $6,651M (up 7%) |
Sources: AIG third quarter 2026 earnings release, Form 8-K Exhibit 99.1 (November 3, 2026). Cat and PYD points are the release's reconciliation of each combined ratio to its accident-year combined ratio, as adjusted.
International Commercial and Global Personal
International Commercial's combined ratio rose 3.4 points to 88.3%, with catastrophes at 3.5 points against 0.8 and favorable development at 1.0 point against 1.9. Its accident-year combined ratio improved 0.2 points to 85.8% on a lower general operating expense ratio, partly offset by a higher accident-year loss ratio from business mix. Underwriting income fell 14% to $283 million on premium growth of 13% to $2.4 billion, which AIG described as broad-based across geographies.
The segment's accident-year combined ratio of 85.8% compares with 87.3% in the second quarter, when the August release had cited rate pressure and a higher acquisition ratio from new business growth. Its favorable development of 1.0 point follows a second quarter in which the segment's prior-year line was 0.1 points adverse.
Global Personal was the one segment to improve on every line but catastrophes. Its combined ratio fell to 93.2% from 95.2% and underwriting income rose 44% to $114 million. Favorable development was 2.4 points against 1.1, having been nil in the second quarter, and the accident-year combined ratio improved 190 basis points to 93.6% on a lower accident-year loss ratio and lower general operating expenses, partly offset by a higher acquisition ratio. Net premiums written grew 6%, or 9% in constant dollars, to $1.8 billion, led by the high net worth business and Accident and Health.
Net income, capital and the call
Net income attributable to common shareholders rose 63% to $844 million, or $1.60 per diluted share, from $519 million, or $0.93, which AIG attributed mainly to changes in the fair value of its investments, higher General Insurance net investment income and higher earned premiums. Total net investment income was $1.1 billion against $772 million; on the adjusted pre-tax income basis it was $1.075 billion against $1.024 billion. General Insurance net investment income rose 9% to $1.0 billion on the core fixed income portfolio.
AIG returned $787 million to shareholders in the quarter, $527 million of it through repurchases of about 7 million shares and $260 million in dividends. Diluted weighted average shares fell to 527.3 million from 558.5 million.
On September 24 AIG issued 625 million euros of 4.250% notes due 2031 and 500 million euros of 4.750% notes due 2036, about $1.3 billion in total, and total debt to total capital stood at 20.8% at September 30. Book value per share was $74.96, down 1% year on year, and adjusted book value per share was $81.25, up 5%. Core operating return on equity was 11.1% against 13.6% in the prior-year quarter and 11.4% for the nine months.
For the nine months, adjusted after-tax income per diluted share was $6.18 against $5.14, up 20%.
AIG discussed the results on a conference call at 8:30 a.m. ET on Wednesday, November 4. The board declared a quarterly dividend of $0.50 per share, payable December 30 to holders of record on December 16.
Further Reading
- AIG's $145 Million Reserve Release Comes With an Excess Casualty Catch: the second-quarter print this quarter's reserve line follows.
- Chubb Releases $511M as Commercial Lines Contributes Just $14M: a peer's third quarter with releases concentrated outside commercial lines.
- Chubb Calls Post-2022 Casualty Green as Munich Re Flags 2022 to 2025: how two carriers read the casualty accident years AIG's North America Commercial book carries.
- Aon Puts Nine-Month Insured Cat Losses at $91B, Lowest Since 2019: the industry catastrophe backdrop to AIG's $283 million quarter.
Sources
- American International Group, Inc., "AIG Delivers Strong Third Quarter Results," Form 8-K Exhibit 99.1, November 3, 2026
- American International Group, Inc., second quarter 2026 earnings release, Form 8-K Exhibit 99.1, August 6, 2026
- Insurance Journal, "AIG's General Insurance Q3 Underwriting Income Down 29%," November 4, 2026
- Reinsurance News, "AIG posts 63% rise in net income, GI combined ratio of 91.3% for Q3'26," November 4, 2026