American International Group’s third quarter looked better to Wall Street than it did from the underwriting desk.
The New York-based carrier reported adjusted after-tax income of $2.06 per diluted share, ahead of the $1.89 analysts had expected, according to LSEG estimates. Other trackers had set the bar in the same range; MarketBeat’s consensus was $1.88 a share. Behind the beat, though, the picture was more mixed. Adjusted earnings per share fell 6.4% from $2.20 a year earlier. General insurance underwriting income dropped 29%, from $793 million to $564 million, according to AIG’s third-quarter earnings release filed with the SEC.
Looking at the full year so far changes the picture. Over the first nine months, adjusted EPS climbed 20.2% to $6.18, the combined ratio improved 140 basis points to 89.2%, and underwriting income topped $2 billion.
These were the second quarterly results under chief executive Eric Andersen. He became president and CEO on June 1, 2026, and Peter Zaffino moved to executive chair of the board. That completed a succession that began when AIG recruited the former Aon president as CEO-elect at the start of the year. Andersen said AIG is still on track for the financial targets it set at its 2025 Investor Day, and that “despite a more challenging market environment, we maintained strong underwriting performance.”
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Most of the damage came from the weather, measured against an unusually calm year-ago quarter. Catastrophe-related charges totaled $283 million, or 4.4 loss ratio points, mostly from severe convective storms in North America. AIG described the prior-year figure of $100 million as extraordinarily low. Reserve releases also shrank, with favorable prior-year development falling to $91 million from $180 million.
Those two factors lifted the combined ratio to 91.3% from 86.8%, although a slightly lower expense ratio (30.6% versus 30.9%) softened the blow. Once catastrophes and reserve movements are stripped out, the underlying business barely changed. The accident-year combined ratio, as adjusted, was 88.4%, compared with 88.3%, and accident-year underwriting income excluding catastrophes rose 6% to $756 million.
AIG was not the only carrier hit by storms. According to Triple-I, severe convective storms now drive the largest share of insured disaster losses in the US, with damages above $50 billion for three straight years. In the first half of 2026, these storms generated around $28 billion in insured losses, the Swiss Re Institute estimated. After a Midwest derecho in August, Gallagher Re put year-to-date US convective storm losses above $35 billion. Peers felt it too. Travelers’ third-quarter results showed pretax catastrophe losses rising to $538 million from $402 million, largely from US wind and hail.
Read next: Midwest derecho pushes 2026 US storm losses past $35 billion, brokers say
North America Commercial had the weakest quarter of AIG’s segments. Catastrophes added 7.1 points to the segment’s loss ratio, up from 3.1 a year earlier, while reserve releases fell to 1.4 points from 5.9. The combined ratio rose to 92.9% from 82.6%, and underwriting income fell 57% to $167 million. Excluding catastrophes and reserves, the underlying ratio also worsened, to 87.2% from 85.4%. AIG attributed that mainly to changes in business mix.
Growth there was slow too. Net premiums written rose just 2% to $2.5 billion. Retail casualty and financial lines drove the gains, while some property lines wrote less business. Excluding property, North America commercial premiums grew 6%. That matches what other large carriers are saying as the property market softens. Chubb is shrinking its US large-account book rather than chase inadequate pricing, and its North America commercial net premiums written fell 2.7% to $5.51 billion in the quarter.
AIG’s other segments did better. International Commercial premiums rose 13% to $2.4 billion on broad geographic growth, with an 88.3% combined ratio and a slightly better underlying ratio than last year. Global Personal premiums grew 6%, or 9% in constant dollars, led by high-net-worth and accident and health business. Underwriting income in that segment jumped 44% to $114 million, and its combined ratio improved to 93.2% from 95.2%.
Across general insurance, net premiums written rose 7% to $6.65 billion. Growth was 8% in constant dollars and 10% excluding North America property.
Read next: Chubb shrinks US large account book amid soft market
The headline investment number looks dramatic. Total net investment income rose to $1.1 billion from $772 million. Much of that jump comes from an easy comparison, because last year’s third quarter included a $288 million hit from changes in the fair value of AIG’s equity securities and its Corebridge stake. On the adjusted basis AIG uses to measure operating performance, investment income rose more modestly, to $1.075 billion from $1.024 billion. Within general insurance, investment income grew 9% to $1.0 billion, driven by the core fixed-income portfolio.
At the corporate level, investment income in AIG’s Other Operations segment fell to $45 million from $72 million. The prior-year figure included $20 million of Corebridge dividends that have now ended. AIG sold its remaining Corebridge shares on May 7 for roughly $710 million.
The lower investment income, together with weaker underwriting, pulled core operating return on equity down to 11.1% from 13.6%. Even so, adjusted book value per share rose 5% to $81.25. On a GAAP basis, net income attributable to common shareholders climbed to $844 million, or $1.60 a share, from $519 million, or 93 cents.
AIG returned $787 million to shareholders in the quarter, through $527 million of share buybacks and $260 million of dividends. The board also declared a 50-cent quarterly dividend, payable December 30. In September, the insurer sold €1.125 billion of euro-denominated notes due 2031 and 2036, worth about $1.3 billion. Its debt-to-total-capital ratio ended the quarter at 20.8%.
The fourth quarter brings new tests. Hurricane Isaias came ashore near Destin, Florida, on October 9 as a Category 2 storm, and Moody’s RMS estimates private-market insured losses at $2.5 billion to $4.5 billion. AIG has not disclosed its exposure. For brokers, the bigger question is whether AIG can keep growing casualty, financial lines and international business fast enough to offset a US property market where pricing keeps getting thinner. Its own North America commercial results suggest that gap is not easy to close.
