American International Group arrived at its second quarter of 2026 at the far end of a five-year bet: stripping a sprawling financial conglomerate down to a focused property-and-casualty underwriter, with Eric Andersen now a full year in as president and chief executive. The final piece of that bet closed in May, when AIG sold its remaining stake in Corebridge Financial for roughly $710 million. A headline reading of the quarter looks like a stumble - net income attributable to common shareholders fell 17% to $948 million, down 10% per diluted share to $1.78 - but the decline is almost entirely non-operating noise: fair-value moves on the Corebridge stake and equity securities that AIG is explicitly treating as gone. Strip those out, as the company does, and adjusted after-tax income rose to $1.069 billion, or $2.00 per diluted share, up 10% on a per-share basis from $1.81 on a shrinking share count.
The operating engine, meanwhile, is producing its best results in years. General Insurance net premiums written grew 9% in the quarter and 15% in the first half; underwriting income rose 10% in the quarter and 68% in the half; the calendar-year combined ratio improved to 89.0%; and the accident-year combined ratio, as adjusted, hit 88.1% - a 30-basis-point improvement in both. Core operating return on equity reached 11.1% for the quarter. This is not a turnaround in need of proof; it is a refined P&C insurer performing broadly in line with its better peers. And yet the market prices it like the old story. The stock closed at $77.31, essentially its book value per share of $77.39 - a roughly 1x price-to-book multiple - while direct P&C peers trade between roughly 1.8x and 3.6x book, and at a wide discount to the higher-multiple peers on enterprise value to EBITDA. The separation is done; the re-rating is the test. The question this report asks is whether a shrinking share count, an 11% core operating ROE, and a completed divestiture finally earn AIG a multiple closer to the insurance business it now demonstrably is.