AIG · 8-K · 20260806PR000072

Gross Margin Drivers

AMERICAN INTERNATIONAL GROUP, INC. · 2026-08-06 · Importance 47 · Surprise 48

General Insurance’s combined ratio improved 30 basis points year-over-year to 89.0%, while the adjusted accident-year combined ratio improved 30 basis points to 88.1%. The improvement was driven by $145 million of favorable prior-year development, up from $112 million, and a lower expense ratio. Catastrophe-related charges increased to $210 million, or 3.4 loss-ratio points, from $170 million, including $75 million of net losses related to the Middle East conflict. International Commercial absorbed the greatest pressure, with its combined ratio increasing to 91.3% because of higher catastrophe losses, higher accident-year loss ratios, and higher acquisition ratios.

Key facts

• Total catastrophe-related charges of $210 million in the second quarter of 2026, representing 3.4 loss ratio points, compared to $170 million representing 2.9 loss ratio points in the prior year quarter source
• International Commercial combined ratio of 91.3% in the second quarter of 2026, increasing 540 basis points from 85.9% in the prior year quarter source
• Global Personal combined ratio of 92.9% in the second quarter of 2026, improving 560 basis points from 98.5% in the prior year quarter source
• Second quarter 2026 included favorable prior year development (PYD), net of reinsurance and prior year premiums, of $145 million compared to $112 million in the prior year quarter source
• General Insurance combined ratio of 89.0% in the second quarter of 2026 source
• General Insurance accident year combined ratio, as adjusted (AYCR) of 88.1% in the second quarter of 2026 source
• North America Commercial combined ratio of 84.0% in the second quarter of 2026, improving 190 basis points from 85.9% in the prior year quarter source
• General Insurance accident year loss ratio, as adjusted (AYLR) improved from 57.4% in Q2 2025 to 57.3% in Q2 2026 (change of -0.1 pts) source