Since March 2026, AIG has been in a holding pattern, floating around $77.33. The stock also fell short of the S&P 500’s 13.6% gain during that period.

Is there a buying opportunity in AIG, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.

Why Do We Think AIG Will Underperform?

We’re cautious about AIG. Here are three reasons you should be careful with AIG, plus one stock we’d rather own.

1. Revenue Spiraling Downwards

Insurance companies generate revenue three ways. The first is the core insurance business itself, represented in the income statement as premiums earned. The second source is investment income from investing the “float” (premiums collected but not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from policy administration, annuities, and other value-added services.

AIG’s demand was weak over the last five years as its revenue fell at a 9.3% annual rate. This wasn’t a great result and is a sign of poor business quality.

2. Declining Net Premiums Earned Reflect Weakness

Net premiums earned are net of what’s paid to reinsurers (insurance for insurance companies), which are used by insurers to protect themselves from large losses.

AIG’s net premiums earned has declined by 4.7% annually over the last five years, much worse than the broader insurance industry. A silver lining is that policy underwriting outperformed its other business lines.

3. Substandard BVPS Growth Indicates Limited Asset Expansion

Book value per share (BVPS) serves as a key indicator of an insurer’s financial stability, reflecting a company’s ability to maintain adequate capital levels and meet its long-term obligations to policyholders.

Disappointingly for investors, AIG’s BVPS grew at a sluggish 6.4% annual clip over the last two years.

Final Judgment

We cheer for all companies serving everyday consumers, but in the case of AIG, we’ll be cheering from the sidelines. With its shares lagging the market recently, the stock trades at 0.9× forward P/B (or $77.33 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. There are better stocks to buy right now. We’d suggest looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce.

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