AIG (AIG) Stock Forecast & Price Target

American International Group (AIG) is expected to experience an expansion in its P/E multiple, driven by profitable premium growth and improvements in its expense and combined ratios, thereby enhancing investor confidence in its loss reserves. The company's strong performance in the P&C insurance sector, as evidenced by its recent outperformance against both the S&P 500 and the KBW Insurance Index, highlights its expected superior return on equity and robust capital return strategy. Furthermore, projections indicate that AIG could achieve a core return on equity of approximately 13% by 2027, bolstered by ongoing underwriting improvements and a disciplined approach to managing expenses.

The financial outlook for American International Group (AIG) reflects a projected decline in earnings per share (EPS) estimates for 2025 due to expectations of lower expense efficiency and a lag in performance relative to near-term consensus. AIG's premium leverage metrics, both on the GAAP and statutory fronts, indicate a troubling trend, with current ratios falling significantly below historical averages, suggesting potential challenges in generating top-line growth and maintaining competitive positioning. Additionally, the company faces pressures from elevated catastrophe losses and a deceleration in commercial insurance rates, which could further hinder margins and overall financial performance.