Here’s How American International Group Inc (AIG) Became an Insurance Top Dog Again

On Thursday, American International Group Inc (NYSE:AIG) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed, kneejerk reaction to news that turns out to be exactly the wrong move.

American International Group Inc (NYSE:AIG) was the poster child for the financial crisis, requiring a huge amount of assistance to keep it from creating a systemic shock that would have shook the entire global financial system. Since then, though, the company has slimmed down and refocused on its core areas, and it’s reasserting its former role as a leader in the industry. Let’s take an early look at what’s been happening with American International Group Inc (NYSE:AIG) over the past quarter and what we’re likely to see in its quarterly report.

Stats on AIG

Source: Yahoo! Finance.

Will AIG top analysts’ guesses again this quarter?
Analysts have had slightly mixed views about American International Group Inc (NYSE:AIG)’s earnings lately, having raised their estimates for the just-ended quarter by $0.02 per share but cut a penny off their full-year 2013 EPS estimates. The stock, though, has moved solidly higher, rising 13% since late January.

American International Group Inc (NYSE:AIG) is aiming to bounce back from a fourth-quarter loss brought on largely by one-time events. Hurricane Sandy cost the company $1.3 billion in after-tax losses, and the company’s ongoing sales of assets also weighed on its results, with the sale of its aircraft leasing unit creating a $4.4 billion charge to earnings.

But the big losses in recent years in the property and casualty insurance area have allowed the survivors to boost their premiums. Already this earnings season, Travelers Companies Inc (NYSE:TRV) has posted greatly improved earnings, with the company having put its Sandy-related losses behind it and hiked its own rates. Even though low investment returns continue to plague the industry, a stronger pricing environment will help American International Group Inc (NYSE:AIG) and its P&C peers get their profits higher.