AIG, American International Group
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- An insurance business, read on its underwriting result, the combined ratio, and the float it invests, rather than an earnings multiple.
- What moves the needle
- Underwriting discipline and the float. What decides it: whether the combined ratio stays below 100% so the policies make money on their own, how large the float is against equity, and what that float earns once it is invested.
- Is it a good business?
- It underwrites at a profit, about a 96% combined ratio (it keeps roughly 4% of premiums before investing the float). Book value per share, the measure Berkshire is judged on, has compounded about 0% a year across the record. The float runs about 1.7× equity, the leverage that magnifies both the underwriting and the investing. Whether the discipline holds through a soft market, and how the float is invested, are what the 10-K decides.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →Revenue spreads across 2 regions, the largest International at 53%.
- International53%$14.1B
- North America47%$12.7B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $52.4B | $49.5B | $47.4B | $49.7B | $43.7B | $52.2B | $30.0B | $27.9B | $27.3B | $26.8B | $26.6B |
| Premiums earnedPremiums | $34.4B | $31.4B | $30.6B | $30.6B | $28.5B | $31.3B | $26.8B | $25.6B | $23.5B | $23.8B | $24.1B |
| Net incomeNet inc. | ($849M) | ($6.1B) | ($6M) | $3.3B | ($5.9B) | $10.4B | $10.2B | $3.6B | ($1.4B) | $3.1B | $3.2B |
| Combined ratioCombined | ≈ 152% | ≈ 153% | ≈ 154% | ≈ 145% | — | ≈ 124% | ≈ 98% | ≈ 98% | ≈ 99% | ≈ 96% | ≈ 95% |
| Loss ratioLoss | 94% | 96% | 90% | 83% | 87% | 76% | 58% | 60% | 62% | 60% | 58% |
| Return on equityROE | -1% | -9% | -0% | 5% | -9% | 16% | 25% | 8% | -3% | 8% | 8% |
| Investment incomeInv. inc. | $14.1B | $14.2B | $13.1B | $14.6B | $13.6B | $14.6B | $2.4B | $3.4B | $4.3B | $4.2B | $3.8B |
| Float (reserves)Float | $77.1B | $78.4B | $83.6B | $78.3B | $77.7B | $79.0B | $75.2B | $70.4B | $69.2B | $70.7B | $70.0B |
| Book value / shareBVPS | $69.93 | $70.03 | $61.93 | $73.83 | $76.34 | $75.27 | $52.00 | $62.53 | $64.69 | $72.13 | $74.53 |
| Dividends / shareDiv/sh | $1.26 | $1.26 | $1.25 | $1.25 | $1.27 | $1.25 | $1.25 | $1.37 | $1.52 | $1.71 | — |
Owner’s Scorecard
Is it a good business?
- Combined ratio ≈ 96%Roughly breakevenTotal benefits, losses and expenses $22.9B ÷ premiums earned $23.8B
The heart of an insurer: claims and costs as a share of premiums. Below 100% means it is paid to hold the float, the gold standard; above 100% means it loses money on the policies and must make it back on investments. Approximate here, taken from the filer's total benefits, losses and expenses over premiums, so it can sit a point or two off the company's headline figure; a number held below 100% across cycles is the mark of a disciplined underwriter, the rarest thing in the business.
- Below the cost of equityNet income $3.1B ÷ equity $41.1B
What it earns on shareholders' capital, the underwriting result plus what the float earns invested. Durably above the ~10% cost of equity is what compounds book value.
The float
- Float (reserves) $70.7B1.7× equityLoss and claim reserves $70.7B, 1.7× equity
Money collected as premiums and held against future claims, invested in the meantime. Buffett's insight was that good underwriting makes this float cost less than nothing, a pool of other people's money the owners earn on. The larger it is against equity, the more that leverage works, for better or worse.
- Investment income $4.2B6.0% on the floatNet investment income $4.2B, 6.0% on the float
What the float and capital earned this year. This is the second engine: an insurer that breaks even on underwriting still wins if the float is large and invested well.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
What the price implies
price / tangible bookAn insurer is worth a multiple of its tangible book value, and the multiple it deserves is set by the return it earns on that book. Type today’s price; we show what you would be paying against what American International Group’s record justifies. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
The justified multiple is (return on tangible equity − growth) ÷ (cost of equity − growth). An insurer earning exactly its cost of equity is worth about one times tangible book; every point of durable excess return above that is worth paying up for. Raise the cost of equity and the justified multiple falls: that is interest-rate gravity on an insurer.
Tangible book $36.7B on 542M shares, a −0% normalized return on it. This is a lens, not a target. It assumes the insurer keeps earning that return; an underwriting cycle, a reserve shortfall or a bad year on the float changes it, which is what the record and the 10-K are for.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Pricing power & competitionBusiness
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“Due to the intense competition in our industry for key employees, we may be unable to retain or hire such employees.”
A judgment, not a number, weigh it against the filing yourself. - Concentrated dependenceBusiness
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“Adverse actions from any single country could adversely affect our results of operations, depending on the magnitude of the event and our financial exposure at that time in that country.”
From the recordOwner-earnings margin at stake (TTM)12% - Debt terms & refinancingMD&A
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“Our ability to utilize the Facility is conditioned on the satisfaction of certain legal, operating, administrative and financial covenants and other requirements contained in the Facility.”
From the recordBalance sheet (TTM)+$1.9B net cash - Litigation & contingenciesBusiness
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“Certain of these matters may also involve potentially significant risk of loss due to the possibility of significant jury awards and settlements, punitive damages or other penalties.”
A judgment, not a number, weigh it against the filing yourself. - Cyclicality & demandBusiness
How the business behaves when the economy turns. A cyclical earns its keep across the whole cycle, not at the peak.
“Operations outside the U.S. have in the past been, and may in the future be, affected by elevated climate risks, regional economic downturns, changes in foreign currency exchange rates and foreign interest rates, geopolitical events or upheaval, sanctions policies, changes to international trade and…”
A judgment, not a number, weigh it against the filing yourself. - Regulation & policyBusiness
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“Also, the Department of the Treasury's Office of Foreign Assets Control administers regulations that restrict or prohibit dealings involving certain organizations, individuals and countries.”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “This was driven by a higher loss ratio (3.4 points) from: higher catastrophe losses (1.9 points); lower net favorable prior year reserve development (1.0 points), with favorable development driven by U.S. high net worth; and higher accident year loss ratio, as adjusted (0.5 points) due primarily to …”
- “Accounting policies that we believe are most dependent on the application of estimates and assumptions are considered our critical accounting estimates and are related to the determination of: loss reserves; reinsurance assets; fair value measurements of certain financial assets and financial liabil…”
- “The accounting policies that we believe are most dependent on the application of estimates and assumptions, which are critical accounting estimates, are related to the determination of: loss reserves; reinsurance assets; fair value measurements of certain financial assets and financial liabilities; …”
- “Total Net investment income decreased for the year ended December 31, 2025 compared to the prior year, primarily due to lower gains on the changes in the fair value, lower gains on sale of shares, and lower dividends from AIG's investment in Corebridge, and lower income from mortgage loans, partiall…”
- “This was driven by a higher loss ratio (3.4 points) from: higher catastrophe losses (1.9 points); lower net favorable prior year reserve development (1.0 points), with favorable development driven by U.S. high net worth; and higher accident year loss ratio, as adjusted (0.5 points) due primarily to …”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Insurance
The same industry, side by side on the underwriting lens, compare, don't rank by a single number. ● marks best in the group.
| Company | Revenue | Combined ratio | Loss ratio | ROE |
|---|---|---|---|---|
| PGRProgressive Corp. | $87.7B | 90% | 66% | 37% |
| ALLAllstate Corp. | $67.7B | 91% | 67% | 34% |
| CBChubb Ltd. | $59.4B | 87% | 50% | 14% |
| TRVTravelers Companies | $48.8B | 93% | 62% | 19% |
| AIGAmerican International Group | $26.8B | 96% | 60% | 8% |