AIG Raises Quarterly Dividend 11.1% to $0.50

American International Group raised its quarterly dividend 11.1%, lifting the rate to $0.50 per share from $0.45. The increased rate applied to shares that went ex dividend on June 15, 2026, and puts the annual dividend at $2.00 per share.

Why the dividend changed

AIG linked the increase to confidence in its long-term outlook and described it as part of a disciplined capital-management program supported by a strong balance sheet. Management said the company was continuing to balance shareholder returns with investment in the business. The increase was a regular capital-allocation decision, not the result of a stock split, merger or special distribution. In its first-quarter results, AIG said the higher payout reflected “confidence in the long-term outlook of AIG.”

The operating backdrop gave the board room to raise the payment. First-quarter adjusted after-tax income per diluted share was $2.11, while underwriting income more than tripled from a year earlier to $774 million. Net premiums written increased 24% on a reported basis, helped by organic growth, reinsurance changes and strategic transactions. Management also said AIG remained on track to meet or exceed the financial objectives laid out at its 2025 investor day. Those results and comments came from the same first-quarter release.

The subsequent quarter did not alter that rationale. AIG reported adjusted after-tax income per diluted share of $2.00, underwriting income of $686 million and net premiums written growth of 9%. It also completed the sale of its remaining Corebridge Financial stake, further simplifying the group. AIG’s second-quarter release said growth continued to benefit from organic business and recent strategic transactions.

Dividend track record

The payment history shows a step-up pattern rather than uninterrupted long-term compounding. Annual dividends were $1.28 in 2020, remained unchanged at $1.28 in both 2021 and 2022, then rose 9.4% to $1.40 in 2023, 11.4% to $1.56 in 2024 and 12.2% to $1.75 in 2025. The current record is three consecutive years of dividend growth, with 7.1% annual growth over five years.

The quarterly sequence shows how the latest increase took effect. Payments with ex-dividend dates of December 16, 2025, and March 16, 2026, were $0.45. The amount moved to $0.50 for June 15, 2026, and remained $0.50 for September 16, 2026. AIG described the 2026 action as its fourth consecutive year of double-digit percentage increases in the declaration release. The last annual cut was in 2014, so the record includes a past reduction and a later multiyear plateau.

Is the dividend covered?

The dividend consumes 34% of earnings. That payout ratio indicates earnings cover the distribution with a meaningful buffer, while leaving most reported profit available for insurance capital, acquisitions, debt service and share repurchases. Insurer earnings can move with catastrophe losses, reserve development and investment markets, making the persistence of that buffer more important than a single quarter’s profit.

SmarterDividends rates the dividend A with a safety score of 82. That places it in the “very safe (score 80-100)” category. The grade reflects strong current coverage, but it does not eliminate exposure to underwriting volatility or future board decisions.

Yield and valuation

At a share price of $75.38, AIG’s forward yield is 2.65%. That is below the 5.70% median forward yield for the Financial Services sector. The comparison shows that AIG offers less current income than the sector median even after the increase. For 100 shares, the new rate represents $200.00 in annual income.

SmarterDividends estimates fair value at $121.80 and classifies the shares as undervalued, with 62% upside to fair value. The shares have recorded a 4.6% loss over one year. The fair-value figure is a valuation assessment, not a forecast of where or when the market price will move.

What to watch

The next quarterly results will show whether underwriting profitability and premium growth continue to support dividend coverage. The principal operating markers are catastrophe losses, reserve development, pricing and the contribution from AIG’s strategic transactions. In the latest quarter, management reported higher underwriting income despite larger catastrophe-related charges, according to the second-quarter release.

Capital allocation also remains central. AIG has exited its remaining Corebridge position and invested in Convex and Onex as part of its shift toward a more focused general-insurance company. Its second-quarter Form 10-Q says future repurchases depend on market conditions, strategy, financial condition, operating results and liquidity. Investors can monitor those uses of capital alongside the $0.50 quarterly dividend and the 34% earnings payout ratio.