AIG Earnings: Improved Underwriting Leads to an Acceptable Return

AIG delivered a solid finish to the year. Adjusted tangible return on equity was 10% for both the fourth quarter and the full year, suggesting AIG has now reached a point where the company is generating acceptable returns. We remain encouraged by the improvement in property and casualty, or P&C, underwriting results, which we see as the most critical factor in maintaining acceptable returns over time. We will maintain our $68 per share fair value estimate for the no-moat company and see the shares as fairly valued at the moment.