American International Group (NYSE:AIG) Stock Analysis: Price Target Adjustment and Q3 Outlook

• Analyst Bob Huang from Morgan Stanley (NYSE:MS) adjusted American International Group (NYSE:AIG)'s price target to $80.00, noting the stock was trading below this new target.
• Investors are keenly awaiting American International Group's Q3 2026 earnings report and conference call for deeper insights into its underwriting results and overall financial performance.
• American International Group is strategically enhancing its combined ratio, integrating AI tools, and optimizing property exposure to bolster underwriting profitability in the competitive insurance market.

American International Group is a leading global insurer that specializes in providing comprehensive coverage to businesses, including robust property and casualty insurance solutions. The company's competitive edge lies in its pricing strategies and its adeptness at selecting and managing risks. Morgan Stanley analyst Bob Huang recently adjusted his price target for AIG, lowering it to $80.00 from $81.00. At $75.97 when the update was published, the stock was approximately 5.30% below this new target, indicating potential upside for investors.

AIG is scheduled to report its highly anticipated third-quarter 2026 results after the market closes on November 3. The subsequent November 4 conference call will be crucial for investors seeking a clearer view of whether the company's underwriting results align with analyst Huang’s target. In the latest figures provided, underwriting income—the amount remaining after insurance costs—demonstrated strong growth, rising 10% to $686.00 million.

AIG’s combined ratio showed significant improvement, reaching 89.00%. This key metric, which measures claims and operating costs against premiums collected, indicates robust underwriting profitability as a figure below 100% signifies an underwriting profit. The insurer is also strategically expanding its AI tools to streamline the review of submissions and accelerate quote preparation, a move aimed at enhancing operational efficiency, though quantifying their precise financial contribution remains a challenge, as highlighted by Zacks Investment Research.

Furthermore, AIG is actively reducing its property exposure in segments where pricing has softened. During the second quarter, premium retention in its Lexington property business decreased by 9 percentage points as the company strategically declined certain risks. This proactive decision, coupled with softer market pricing, led to a reduction in North American growth by more than 3 percentage points, as noted by Zacks Investment Research.

In its General Insurance segment, net premiums saw a healthy increase of 9%, or 11% when excluding North America Property. The current environment of stronger casualty pricing presents significant opportunities for continued growth, as highlighted by Zacks Investment Research. In a later trading snapshot, AIG's stock price stood at $76.03, marking an increase of $0.91, or 1.21%, yet still remaining below analyst Huang’s $80.00 target, suggesting potential for further appreciation.