Skip to Content

American International Group Inc AIG

Rating as of

Morningstar’s Analysis

Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price


5-Star Price


Economic Moat


Capital Allocation


AIG Is on the Right Path

Brett Horn, CFA Senior Equity Analyst

Analyst Note

| Brett Horn, CFA |

We think that because of the duration of AIG's underperformance, the market has been slow to react to the underlying improvement current management has effected and that shares are undervalued. On the P&C side, AIG has been a negative outlier, but we see no structural reason for AIG to generate such poor underwriting performance. We believe the company's historical issues have been driven by mismanagement, and we think the current management team has set the company on a path that should allow it to move results to a level in line with peers. Management has set a target for a combined ratio below 90% by the end of 2022, and this target looks very reasonable given recent performance (the underlying combined ratio was 91% in the most recent quarter) and further savings from the AIG 200 plan. We think the outlook for commercial P&C profitability is positive. The industry recently saw the largest pricing increases since 2003, and a more favorable industry backdrop should be a tailwind for the company's turnaround efforts. We believe a sum-of-the parts analysis is useful to backstop our $65 fair value estimate. The impending separation of the life insurance business also makes this approach more relevant. We think a reasonable application of peer multiples supports our view that shares of the no-moat company are undervalued.

Read Full Analysis

Company Profile

Business Description

American International Group is one of the largest insurance and financial services firms in the world and has a global footprint. It operates through a wide range of subsidiaries that provide property, casualty, and life insurance. Its revenue is split roughly evenly between commercial and consumer lines.

175 Water Street
New York, NY, 10038
T +1 212 770-7000
Sector Financial Services
Industry Insurance - Diversified
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 45,000


Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.