Intrinsic Value American International Group, Inc. (AIG.SW)

• Previous Close: CHF47.85
• Intrinsic Value: n/a
• Upside potential: n/a%

Stock Valuation Context

Business Model And Market Position

American International Group, Inc. (AIG) is a global leader in diversified insurance, operating across commercial, institutional, and individual markets. The company’s General Insurance segment provides a broad spectrum of coverage, including liability, property, and specialty lines such as cyber risk and political risk insurance. Its Life and Retirement segment offers annuities, life insurance, and retirement solutions, distributed through independent agents, financial advisors, and direct channels. AIG’s diversified portfolio and strong underwriting capabilities position it as a resilient player in the insurance sector, with a competitive edge in complex risk management. The company’s global footprint and deep industry expertise allow it to serve a wide range of clients, from multinational corporations to high-net-worth individuals. Despite market volatility, AIG maintains a robust market position, supported by its ability to innovate and adapt to evolving risks such as climate change and cybersecurity threats.

Revenue Profitability And Efficiency

AIG reported revenue of CHF 27.03 billion for the period, reflecting its broad insurance and financial services portfolio. However, the company posted a net loss of CHF 1.40 billion, indicating challenges in profitability. Operating cash flow stood at CHF 3.27 billion, demonstrating solid cash generation despite the net loss. The absence of capital expenditures suggests a focus on optimizing existing operations rather than significant reinvestment.

Earnings Power And Capital Efficiency

AIG’s diluted EPS of CHF 3.35 highlights its earnings potential, though the net loss raises questions about sustained profitability. The company’s ability to generate operating cash flow despite a loss suggests underlying operational strength. Capital efficiency is supported by a disciplined approach to underwriting and risk management, though further improvements may be needed to enhance returns.

Balance Sheet And Financial Health

AIG’s balance sheet shows CHF 1.30 billion in cash and equivalents, providing liquidity for near-term obligations. Total debt of CHF 8.52 billion indicates moderate leverage, which is manageable given the company’s cash flow and market position. The financial health appears stable, though the net loss warrants monitoring for potential impacts on solvency ratios.

Growth Trends And Dividend Policy

AIG’s growth trajectory is mixed, with revenue stability offset by profitability challenges. The company pays a dividend of CHF 1.30 per share, signaling a commitment to shareholder returns despite earnings volatility. Future growth may depend on underwriting discipline and expansion in high-margin segments like cyber insurance and retirement solutions.

Valuation And Market Expectations

With a market cap of CHF 38.27 billion and a beta of 1.15, AIG is viewed as a moderately volatile investment. The market likely expects a recovery in profitability, given the company’s strong brand and diversified operations. Valuation metrics will hinge on improved earnings and cash flow stability in coming periods.

Strategic Advantages And Outlook

AIG’s strategic advantages include its global scale, diversified product offerings, and expertise in complex risk solutions. The outlook depends on its ability to navigate underwriting challenges and capitalize on growth opportunities in emerging insurance markets. Long-term success will require balancing profitability with innovation in an increasingly competitive landscape.

Sources

Company filings, market data