Shares of American International Group (NYSE: AIG) moved higher in early trading on Friday, rising about 3.3% after a senior company executive said AIG has reduced its activity in private credit in response to current market conditions.
The executive made the remark on a post-earnings call with analysts, noting that the company has slowed deployment in the private credit asset class given the market backdrop. The comment followed the insurer's release of quarterly results earlier in the week.
AIG reported a sharp increase in quarterly adjusted profit on Thursday. Company officials attributed the improvement to robust underwriting performance and a steep decline in catastrophe-related losses compared with the same period a year earlier. The insurance industry had faced significant claims from the Los Angeles wildfires last year, which contributed to higher catastrophe losses in the prior-year period.
On the call, the executive also clarified how AIG manages its private lending exposure. The company retains all direct lending on its balance sheet and through business development companies. Business development companies, or BDCs, are publicly traded lenders to private companies and represent an important component of the private credit market.
The combination of the profit beat and the executive's comments on private credit activity appeared to influence investor sentiment, contributing to the early-session share price uptick. The reduced pace of private credit deployment was presented as a tactical response to prevailing market conditions rather than a change in the company's broader strategy, as described by the executive during the analyst call.
Context and implications
Investors reacted to both the earnings results and the disclosure about private credit exposure. The earnings strength was linked to underwriting gains and a fall in catastrophe-related payouts versus the prior-year quarter, while the private credit update signals AIG's caution in deploying capital into that asset class under current conditions.
No additional figures, dates, or commentary beyond the executive's statements and the reported earnings were provided on the call.