AIG Valuation: Has the Market Priced in American International Group's Steady Progress?

American International Group (AIG) shares edged slightly lower in recent trading, with the stock now up roughly 3% over the past month. Investors appear to be weighing the company’s gradual growth as well as broader market trends as the insurance sector adjusts to the latest data.

See our latest analysis for American International Group.

AIG’s share price momentum has been steady this year, with an 8% gain since January and the stock currently trading at $78.85, while its one-year total return sits at 3.7%. This measured advance suggests that investors see room for gradual improvement, even as insurance sector headlines and recent economic shifts keep near-term sentiment in check. Looking further back, AIG’s five-year total shareholder return of over 180% highlights how much patient investors have benefited from the company’s transformation.

If you’re weighing your next move in today’s market, now is a good time to broaden your search and discover fast growing stocks with high insider ownership

But with AIG trading well below many analyst targets, investors are left questioning whether the market is overlooking the insurer's forward potential or simply signaling caution about the road ahead. Does this create a genuine opportunity for buyers, or are expectations already reflected in the price?

Most Popular Narrative: 10.7% Undervalued

With American International Group's narrative fair value at $88.28 and the last close at $78.85, there is a notable gap that may challenge market assumptions and provoke debate over the insurer's next move.

*Portfolio optimization and divestitures, combined with the completion of the AIG Next transformation (surpassing $500 million in annual run rate expense savings), have created a leaner, more focused organization. These actions are likely to yield lower operating expenses and a consistently lower expense ratio, which could directly boost net margins.*

Read the complete narrative.

Want to know what underpins that higher fair value? The real surprise is in aggressive cost savings and key margin assumptions, but the full narrative reveals which growth levers could lead to a valuation reset. Intrigued? Discover the calculations and expectations that set this target apart from the crowd.

Result: Fair Value of $88.28 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, AIG’s progress could be tempered by rising catastrophe losses and increased competition, both of which have the potential to pressure future margins and growth.

Find out about the key risks to this American International Group narrative.

Another View: What Do Market Ratios Suggest?

While one valuation points to a clear discount, the market’s price-to-earnings ratio presents a more nuanced picture. AIG trades at 13.4x earnings, which is higher than its peer average of 11.3x but remains below the U.S. Insurance industry average of 14x. The fair ratio, a level the market could eventually move toward, is 14.3x. This difference means investors must consider whether AIG’s premium to peers reflects unique strengths or introduces valuation risk as sentiment shifts. Which side of the risk-reward debate will prevail?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own American International Group Narrative

If you have a different perspective or want to dive deeper into AIG’s data, it’s quick and easy to shape your own analysis. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding American International Group.

Looking for More Investment Ideas?

Unlock your next opportunity by jumping into new markets and strategies with confidence. Now’s your chance to spot winning trends before the crowd catches on.

• Tap into the world of healthcare innovation and see which companies are riding the AI-powered medical revolution with these 33 healthcare AI stocks.
• Accelerate your search for strong income potential and reliable payouts by scanning these 17 dividend stocks with yields > 3% with yields surpassing 3%.
• Ride the momentum of cutting-edge computation and stay ahead of tomorrow’s breakthroughs by tracking these 27 quantum computing stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com