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New York-based American International Group, Inc. (AIG) is a leading global insurer valued at a market cap of $48 billion. AIG provides a wide range of insurance and financial services to individuals and businesses, offering solutions to manage risks and protect assets.
Companies valued at $10 billion or more are generally considered "large-caps," and AIG fits this criterion perfectly, signifying its substantial size, stability, and influence in the insurance industry. With a global presence in around 190 countries, AIG diversifies its risk exposure and revenue streams. Its broad portfolio of property, casualty, and specialty insurance offers a hedge against market volatility.
AIG shares are trading 10.7% below their 52-week high of $80.83, which they hit on May 10. Also, the stock has declined 2.8% over the past three months, underperforming the broader Nasdaq Composite’s ($NASX) marginal rise over the same time frame.
Over the longer term, AIG is up 6.5% on a YTD basis, and the shares have gained 20.9% over the past 52 weeks. In comparison, the NASX surged 15.9% in 2024 and has increased 25% over the past year.
Although the stock has generally traded above its 50-day and 200-day moving averages over the past year, it has faced significant volatility in recent months and has been trading below these levels since the beginning of September, indicating a bearish trend.
AIG's underperformance compared to the broader market stems from macroeconomic headwinds, including high oil prices and elevated interest rates. Lower premiums in its North American insurance segment and reduced net realized gains have also affected its profitability, pressuring the stock.
AIG stock fell more than 5% after its Q2 earnings release on July 31, as investors were unhappy with the smaller-than-expected profit increase driven by reduced underwriting income and higher catastrophe losses.
AIG faces competition from major firms like Arthur J. Gallagher & Co. (AJG), a key player in insurance brokerage and risk management. AJG has outperformed AIG and the NASX, delivering a 31% return on a YTD basis and 28.9% over the past year.
Despite AIG's recent underperformance compared to NASX, analysts are moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy" from 18 analysts in coverage. The mean price target of $83.50 reflects a 15.7% premium over current levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
