Stock Analysis & Valuation American International Group, Inc. (AINN.DE)

• Previous Close: €63.20
• Sector Valuation Confidence Level: High

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	51.80	-18
Intrinsic value (DCF)	42.84	-32
Graham-Dodd Method	20.20	-68
Graham Formula	54.50	-14

Strategic Investment Analysis

Company Overview

American International Group, Inc. (AIG) is a leading global insurance company headquartered in New York, offering a diverse range of insurance products and financial services. Operating in North America and internationally, AIG provides commercial, institutional, and individual insurance solutions through its General Insurance and Life and Retirement segments. The General Insurance segment covers liability, property, and specialty risks, including cyber, marine, and political risk insurance. The Life and Retirement segment offers annuities, life insurance, and retirement planning services. With a history dating back to 1919, AIG serves clients through independent agents, financial advisors, and direct marketing channels. As a key player in the Insurance - Diversified sector, AIG leverages its global footprint and underwriting expertise to maintain a competitive edge in the financial services industry.

Investment Summary

AIG presents a mixed investment profile. The company's diversified insurance portfolio and strong market position in commercial and specialty insurance provide stability. However, its recent net income loss of €1.4 billion and negative EPS (-€2.17) raise concerns about profitability. AIG's operating cash flow of €3.27 billion and manageable debt levels (€8.92 billion) suggest liquidity is not an immediate issue. The stock's low beta (0.7) indicates lower volatility compared to the broader market, which may appeal to risk-averse investors. The dividend yield, supported by a €1.47 per share payout, adds income appeal. Investors should weigh AIG's global scale and underwriting capabilities against its recent earnings challenges and competitive pressures in the insurance sector.

Competitive Analysis

AIG competes in the highly fragmented global insurance market, where scale, underwriting discipline, and risk management are critical. The company's competitive advantage lies in its broad product portfolio, global distribution network, and expertise in complex commercial and specialty insurance lines. AIG's strong brand recognition and long-standing relationships with brokers and corporate clients provide a moat in the commercial insurance space. However, the company faces intense competition from both traditional insurers and insurtech disruptors, pressuring margins. AIG's Life and Retirement segment must contend with low-interest-rate headwinds affecting annuity profitability. The company's recent restructuring efforts aim to improve operational efficiency, but execution risks remain. AIG's ability to leverage data analytics and technology for underwriting and claims management will be key to maintaining competitiveness against nimbler rivals. The company's international presence provides diversification benefits but also exposes it to geopolitical and regulatory risks across multiple jurisdictions.

Major Competitors

• Allstate Corporation (ALL): Allstate is a major competitor in personal lines insurance, particularly auto and homeowners coverage, where it has strong brand recognition. The company has been investing heavily in telematics and digital platforms to improve pricing accuracy and customer experience. However, Allstate lacks AIG's depth in commercial insurance and international markets. Its narrower product focus makes it more vulnerable to competitive pressures in core auto insurance.
• Chubb Limited (CB): Chubb is a global insurance leader with particular strength in high-net-worth personal lines and specialty commercial insurance. The company's underwriting discipline and focus on profitable niches give it an edge over AIG in certain segments. Chubb's international presence is more evenly balanced than AIG's, with strong operations in both developed and emerging markets. However, Chubb has less exposure to the retirement solutions business that forms part of AIG's portfolio.
• American Express Company (AXP): While primarily a financial services company, American Express competes with AIG in travel insurance and premium customer protection products. Amex's direct relationship with cardmembers gives it an advantage in cross-selling insurance products. However, its insurance offerings are much narrower than AIG's comprehensive portfolio, focusing mainly on travel-related coverages and purchase protection.
• MetLife, Inc. (MET): MetLife is a strong competitor in the life insurance and retirement solutions space where it has greater scale than AIG. The company's strong brand in group benefits and institutional business gives it an edge in certain market segments. However, MetLife has been exiting some international markets, reducing its global footprint compared to AIG. Its property and casualty insurance business is much smaller than AIG's.
• Progressive Corporation (PGR): Progressive is a leader in auto insurance with innovative usage-based pricing models. The company's direct-to-consumer approach and technology investments give it cost advantages in personal lines. However, Progressive lacks AIG's commercial insurance capabilities and international presence. Its focus on price competition in auto insurance creates margin pressures that AIG avoids through its diversified business mix.