AMERICAN INTERNATIONAL GROUP, INC. (AIG) stock intrinsic value fair value estimate & owner earnings analysis

AIG is a global property and casualty insurer. Its three operating segments are North America Commercial, International Commercial (which includes the Talbot Lloyd's business and Global Specialty) and Global Personal (accident and health and personal lines, with a large Japan presence). Since Corebridge, its life and retirement arm, was deconsolidated in June 2024, AIG's earnings power comes from underwriting insurance and investing the premiums it holds until claims are paid. Earnings are measured here as the cash the business generates after interest, minus stock-based compensation, minus an estimate of the capital spending needed to stay in business. Growth in insurance reserves and receivables, which can swing operating cash flow from year to year, is stripped out, while the cost of writing new policies (capitalized acquisition costs) is kept as a real expense. On that basis AIG's ongoing business earned about $5.7 billion in 2022, $3.7 billion in 2023, $1.8 billion in 2024 and $3.2 billion in 2025. Because Corebridge and other large pieces have been separated or sold, we measure the business only from 2023 forward and use the middle result, about $3.2 billion a year (roughly $6.00 per share on about 534 million diluted shares today). Older years describe a different, life-insurance-heavy company and are not used. Two figures are estimates: AIG no longer separately reports capital spending, so we used the last disclosed level of about $240 million a year, and the 2025 results are stated on the share count after very large buybacks that were funded partly by selling Corebridge shares and the Validus Re reinsurance business, which is why we divide dollars by today's share count instead of using the per-share history. We could not verify how much of the 2024 dip reflects Corebridge-related items rather than underwriting. Growth. Owner earnings rose about 81 percent in 2025 from a low 2024, but we assume none going forward in any case: net premiums written fell in 2024 as AIG sold businesses (Validus Re in 2023, its travel insurance unit to Zurich in December 2024), and nothing contracted or repeatable supports a growth rate. Higher prices, new products, share gains and further buybacks were left out. For the same reason, AIG's roughly 10 percent remaining stake in Corebridge is credited only through the dividends it already pays into cash flow. Base case, about $99.51 per share. Earnings stay at about $3.2 billion a year indefinitely, because AIG's book renews each year and its General Insurance arm earned underwriting profits of $2.3 billion in 2025, $1.9 billion in 2024 and $2.3 billion in 2023 on roughly $23 to $25 billion of annual earned premiums. That is worth about $53 billion. AIG's long-term debt of about $9.2 billion is a normal cost of running an insurer and its interest is already deducted from these earnings, so no further debt is subtracted. Only about $29 million of long-term debt matures in 2026. Bear case, about $31.10 per share. Earnings fall to the $1.8 billion of 2024, the weakest year of the current business, and stay there for ten years, then fade to zero over the next ten as the book shrinks. This case is worth about $16.6 billion, with the same debt already reflected in interest. It reflects the record: AIG's consolidated operating cash flow was negative in 2017 and 2019 on reserve problems, its reported reserves are large (over $69 billion gross), and about $2.3 billion of them are ceded to Fortitude Re, so a shortfall in old casualty reserves or in a reinsurer would hit earnings. Bull case, about $116.22 per share. Earnings return to the $3.7 billion of 2023 and stay there, worth about $62 billion. That level was actually achieved, though it included Validus Re, which has since been sold, so we do not go higher. What we checked. Six months of 2026 operating cash flow was $1.87 billion against $1.34 billion a year earlier, which is encouraging but is one partial year, so it does not change the level. Compared with our earlier estimate of $28 / $82 / $122, the base and bear cases are higher and the bull case lower. The earlier work used a higher discount rate and also subtracted debt from earnings that were already after interest; we now use a flat 6 percent and count debt only through interest. What would make this wrong: reserve charges on older casualty policies, or a return to the weaker 2024 underwriting results.