Thanks very much, Michelle, and good morning. Today's remarks may include forward-looking statements, which are subject to risks and uncertainties. These statements are not guarantees of future performance or events and are based on management's current expectations. AIG's filings with the SEC provide details on important factors that could cause actual results or events to differ materially. Except as required by applicable securities laws, AIG is under no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change.Today's remarks may also refer to non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures is included in our earnings release, financial supplement and earnings presentation, all of which are available on our website at aig.com. With that, I'd now like to turn the call over to our Chairman and CEO, Peter Zaffino.
Good morning, everyone. Thank you for joining us today to review our Q1 financial results. Following my remarks, Eric Andersen will provide his initial perspectives on AIG and share some commentary on the quarter. Then Keith Walsh will provide more detail on our financial performance. Jon Hancock will join us for the Q&A portion of the call. We had a very strong start to 2026 and delivered an exceptional Q1, the strongest Q1 that we've seen since I've been at AIG. During my remarks, I will share key Q1 highlights and discuss our outstanding progress towards our Investor Day objectives, provide a perspective on the property market since it's receiving a lot of attention this quarter, and outline the progress we're making on our AI and digital strategies.
Before we get started, I'd like to take a moment to address the ongoing conflict in the Middle East and what it means for our people, our clients, and the broader environment in which we operate. We have a significant number of colleagues in the region, and their safety remains our top priority. From the outset, our teams quickly shifted to enable remote operations, and we remain in close contact to make sure our colleagues have the support and resources they need. The impact on our industry will continue to evolve, and we remain focused on managing risk in a complex global market.
Demand for expertise in property and energy, trade credit, and political risk insurance is increasing as clients navigate heightened uncertainty related to shifting trade policies. The direct impact on AIG is not material based on what we've seen to date, but we're not complacent.
We're monitoring accumulation risk, adjusting underwriting guidelines where warranted, stress testing our investment portfolio and staying very close to our reinsurance partners. Just as important, we are continuing to stay close to our clients and brokers, helping them understand coverage, navigate claims issues, and manage through this volatile environment. Let me turn to our results. We had an excellent start to the year and have been very focused on advancing our strategic investments and delivering on the ambitious 3-year guidance that we provided at Investor Day in 2025.
In order to achieve these objectives, we intend to continue delivering balanced net premiums written growth with excellent accident year combined ratios to support earnings expansion across our core businesses while also focusing on our nominal expense base. Net premiums earned growth is expected to benefit AIG in the back half of 2026 and as we enter 2027.
In the Q1, General Insurance net premiums written increased 18% year-over-year on a constant dollar basis, driven by our global commercial insurance business, which increased 21% year-over-year, and our Global Personal Insurance business, which increased 11% year-over-year. All three business segments performed exceptionally well, supported by our recent strategic transactions, our differentiated reinsurance strategy, and profitable organic growth that's in line with market peers. I want to provide a little bit more context on reinsurance. As I discussed during our Q4 call, AIG achieved enhanced terms and conditions and favorable pricing during the January first renewal cycle. We negotiated substantial year-over-year savings, which included the Everest portfolio, providing a meaningful tailwind to our net premiums written in the Q1.
It's worth noting that AIG's property catastrophe placements have lower modeled attachment points and higher exhaust limits for each geography on a risk-adjusted basis. For AIG, our strategy of maintaining a consistent low net retention for natural catastrophes through the cycle means that we will benefit from more attractive reinsurance pricing as evident in the positive impact to our net premiums written. We've discussed our Global Personal Insurance business in prior quarters, and I want to recognize the significant improvement in the financial performance, which has been deliberate. We grew net premiums written 11% in the Q1, benefiting from the restructuring of our related reinsurance treaties and organic growth, along with meaningful improvement in the expense ratio, which decreased 410-basis points.
The accident year combined ratio as adjusted improved 570-basis points to 89.9%. The calendar year combined ratio was 89.4%, a strong improvement from 107.9 in the prior year. We continue to make outstanding progress in our Global Personal Insurance business. Shifting back to overall General Insurance financial results, the expense ratio was 29.3%, an improvement of 120-basis points year-over-year. The accident year combined ratio as adjusted was 86.6%, an improvement of 120-basis points year-over-year. The calendar year combined ratio was 87.3%, an improvement of 850-basis points year-over-year. Adjusted after-tax income per diluted share was $2.11, an increase of 80% year-over-year.
Core Operating ROE was 12.2%. Overall, we achieved very impressive financial results across the entire company. Another exceptional quarter of execution from all of our AIG colleagues from around the world. Turning to capital management, during the quarter, we returned $760 million of capital to shareholders, including $519 million of share repurchases and $241 million of dividends. As we announced yesterday, the AIG Board of Directors approved an 11% increase in our quarterly dividend to $0.50 per share starting in the Q2 of 2026. This marks the fourth consecutive year of double-digit percentage increases and reflects the board's confidence in our strategy and AIG's long-term outlook. Our total debt to total adjusted capital ratio was 17.7% at quarter end.
As we discussed on our last earnings call, we've continued to reduce our ownership of Corebridge Financial. At the end of the Q1, our equity interest in Corebridge was approximately 5.6%. We anticipate fully exiting our position by selling down our remaining stake in 2026, subject to market conditions. We expect the primary use of these proceeds will be for additional share repurchases. As we look ahead, AIG has tremendous financial strength and strategic optionality to execute against our objectives, profitability ambitions, and our capital management priorities. Turning to the property market, on our Q2 call last year, we spent time discussing the market's competitive dynamics and providing detail on our portfolio. I wanted to provide a further update based on current market conditions and the pricing pressure we have seen across the market on the U.S. large account segment.
As a reminder, we have multiple points of entry into the global property market where we deploy capital for the best risk-adjusted returns. First, our balanced and profitable international property business represents approximately 40% of AIG's $6.5 billion gross premiums written property portfolio. I'm using gross premiums written because it's more accurate reflection of our performance without the impact of reinsurance. As a point of reference, the international property portfolio's calendar year combined ratio was on average in the low 70s across 2024 and 2025. The international property market rate environment is very different from the U.S. International pricing was down 4% in the quarter, and this was only the Q2 of rate reductions that we have had in the last five years.
In the U.S., we have a strong performing retail property portfolio, which is majority shared and layered and had calendar year combined ratios in the 70s in 2024 and 2025. In excess and surplus lines, the Lexington middle market portfolio has performed exceptionally well. This has been one of the fastest-growing segments in property and continues to deliver one of the best combined ratios in our global property portfolio. We've been deliberate in our growth and believe our AI implementation, which I will discuss later in more detail, will further enable this. The Lexington large account shared and layered business in excess and surplus lines, which is less than 10% of our global property portfolio, has been under significant pricing pressure over the last year, and that's a different story.
Thank you, Peter. Good morning, everyone. I'm excited to join you today, and I'm honored to be part of AIG's leadership team at this pivotal juncture in the company's journey. I will begin by sharing my perspectives on AIG over the last 90 days since joining the firm. As you know, I served for decades as one of AIG's largest trading partners, and AIG has played an important part in my three-decade-long career in insurance. In that time, I came to know the company extremely well and gained deep appreciation for the valuable role it plays in the global property casualty insurance market. Like many in the industry, I was impressed by the successful execution of the organization's transformation under Peter's leadership over the last several years. The company's balance sheet strength, improved underwriting, balanced portfolio, and ambitious strategic direction, and powerful momentum were clearly evident.
The time I have spent over the last several months meeting with colleagues, clients, distribution partners, and other stakeholders have been invaluable and validated my earlier observations. AIG has demonstrated its ability to drive sustained profitability while balancing disciplined capital management with financial flexibility and building for the long term. This flexibility has enabled the execution of our recent transactions, which are already proving to be accretive to AIG's 2026 earnings. Our culture of underwriting excellence is firmly embedded across the company and is a defining attribute in which our team has great pride. Deep expertise, coupled with our commitment to prudent risk-taking, solidify AIG as a market leader well-positioned to advise and serve clients in today's complex environment while utilizing reinsurance strategically to control volatility.
As Peter has shared in depth, we are implementing a leading AI strategy designed to rapidly evolve alongside other advances in technology to deliver growth, data insights, and quality decision-making. We expect our strategy to enable our businesses to be more effective over time. We have outstanding leaders. Our colleagues are highly engaged, and the company is well-aligned to deliver on our ambitious strategy and objectives. Before joining AIG, I thoroughly reviewed the strategy and how the company's plans for the future were outlined in our 2025 Investor Day.
I believed in the strategy then. Today I want to reaffirm my commitment to the strategy and delivering on our Investor Day financial guidance, which includes delivering Operating EPS compound annual growth of over 20% over the three years ending 2027, driving Core Operating ROE of 10%-13% through 2027, improving General Insurance's expense ratio to less than 30% by 2027, supporting the increase in our dividend by 10% in 2026, and achieving improvement in Global Personal Insurance combined ratio to 94% by 2027. I am encouraged by the strength of our results. I'm even more encouraged by the opportunities ahead. Our ability to grow is supported by our unique global platform, diversity of our products and distribution channels, risk expertise, complex claims capabilities, leadership across admitted and non-admitted markets, GenAI capabilities, and our spirit of innovation.
I am also committed to maintaining our underwriting discipline and culture. One of my personal priorities will be to work very closely with our clients and distribution partners to provide tailored solutions that address the rapidly changing risk landscape. As one of the largest U.S.-domiciled global insurers, we are proud to leverage our deep expertise in marine and war insurance and have joined other U.S. insurers in supporting the U.S. International Development Finance Corporation's maritime reinsurance plan to help restore confidence to the markets and support the flow of commerce in one of the world's busiest trade routes. This initiative builds on AIG's history of playing a central role in both public and private industry-led initiatives to deliver critical insurance solutions to respond to complex situations. Turning to our Q1 financial results, let me provide an overview of our performance in General Insurance.
Q1 net premiums written growth was superb and representative of our intent to position our business favorably regardless of challenges in the market environment and to capitalize on our recent strategic actions. North America Commercial net premiums written increased 36% year over year, with the growth largely driven by reinsurance changes and the Everest renewals in our retail business. We continued to achieve double-digit growth in our retail casualty portfolio as the market conditions are largely disciplined in liability lines. Retail and Lexington Property benefited from our successful January 1st reinsurance renewals. As Peter discussed, the U.S. property market environment remains very competitive, and our teams are continuing to take a highly disciplined approach to the layers in which we participate and how we deploy line sizes as we continue to navigate the current rate environment.
In Financial Lines, our team successfully continued to recalibrate in competitive D&O market segments, where we are focusing on the value proposition of our differentiated offering and industry leadership. Western World, Glatfelter, and Programs each had solid growth, which has been deliberate, and Programs benefited from our new special purpose vehicle with Amwins. International Commercial net premiums written increased 12% year over year, with the majority of growth coming from the Convex whole account quota share, Everest renewals, and reinsurance changes, as the team prioritized organic growth discipline in a generally challenging rate environment. Global Commercial retention remained very strong at 88%. North America Commercial retention was 88%, and International Commercial retention was 89%. Global Commercial new business was $1.6 billion, including Everest renewals, an increase of 42% year over year.
Our team has continued to make very good progress with the conversion of the Everest portfolio. Retention is performing within our expected range, reflecting strong support from our clients and broker partners who are intentionally choosing to work with AIG in a competitive market. The collaboration between our team and Everest has been extremely productive, delivering mutually beneficial outcomes for both organizations. As Peter mentioned, Global Personal Insurance had a very strong quarter, with underlying growth initiatives beginning to gain traction. The team has done significant work to improve profitability and growth over the past year, and we believe we should see continued progress in these areas. Before I close, I want to recognize the efforts of our team across the globe.
They are doing an exceptional job navigating a dynamic market, prioritizing business with the highest risk-adjusted returns, and collaborating with our clients and broker partners to identify optimal risk solutions. I am looking forward to getting out on the road to meet more of my colleagues, clients, partners, and investors around the world in the coming weeks and months. Our Q1 results were outstanding and reflect robust progress on our strategy, substantial growth, and sustained underwriting excellence. This has been an incredible way to start the year from which we will continue to build on our tremendous position of strength. In closing, I am very excited to work with my fellow AIG colleagues to lead this remarkable company into the future.
I want to thank Peter for the extraordinary accomplishments under his leadership to position us for success. I look forward to continuing to work together as we capitalize on our strong foundation, disciplined capital management, and sustained momentum. I'll now turn the call over to Keith.
Thank you, Eric. Good morning. As Peter and Eric mentioned, we had a great Q1. I am going to provide some additional detail. Adjusted pretax income was $1.5 billion, an increase of 65% from the prior year quarter. Underwriting income more than tripled to $774 million year-over-year, driven by lower catastrophe losses, improved accident year underwriting results, higher favorable prior year reserve development. Accident year underwriting income, adjusted for catastrophes, rose 17%. This reflects transaction and organic growth while improving our underwriting margins, an excellent result in the current environment. On a constant dollar basis, General Insurance gross premiums written of $10 billion increased 7% year-over-year. Net premiums written of $5.6 billion increased 18%, reflecting strong growth across all three segments.
For full year 2026, we continue to expect low to mid-teens net premium written growth in General Insurance. Net premiums earned were $6.1 billion, up 5% year-over-year. Moving to our underwriting ratios. General Insurance accident year combined ratio as adjusted was 86.6%, an improvement of 120-basis points from the prior year quarter. This improvement was driven by a lower expense ratio of 29.3%, reflecting increased operating leverage and expense discipline. Over the past several years, we have made significant progress in reducing our cost structure and improving the expense ratio while investing for the future. As individual quarters may reflect seasonal variability when thinking about the expense ratio run rate, it's better to look at the trailing 12-month trends and to model any improvement on a year-over-year basis rather than sequentially.
The accident year loss ratio as adjusted of 57.3% was flat year-over-year. Total catastrophe losses for the quarter were approximately $180 million, with the largest losses attributable to winter storms. Prior year development, net of reinsurance and prior year premium, was $132 million favorable and included $127 million of favorable loss reserve development, $26 million of ADC amortization, and roughly $21 million of reinstatement premiums. The favorable development was driven primarily by continued favorable loss experience, most notably in U.S. property and Financial Lines. Overall, the General Insurance calendar year combined ratio was 87.3%, an 850-basis point improvement year-over-year. Moving to segment results.
North America Commercial accident year combined ratio as adjusted was 85.5%, an increase of 120-basis points over the prior year quarter. This was primarily driven by a 90-basis point increase in the accident year loss ratio as adjusted due to changes in business mix as we reduced certain property lines and earned in more casualty business. North America Commercial calendar year combined ratio was 85.5%, an outstanding result and an improvement of 840-basis points from the prior year. International Commercial accident year combined ratio as adjusted was 85.1%, an improvement of 30-basis points driven by a 50-basis point improvement in the expense ratio.
The International Commercial calendar year combined ratio of 87.3% improved 90-basis points year-over-year and was the 12th consecutive quarter of sub 90% combined ratio, underscoring the strength and consistency of the portfolio. Peter described the performance in Global Personal. I'm going to add some highlights. We continued to improve underlying profitability and delivered strong performance across both net premiums written and underwriting income growth. Accident year combined ratio as adjusted was 89.9%, a 570-basis point improvement compared to the prior year quarter. The calendar year combined ratio improved over 18 percentage points year-over-year to 89.4%. We are encouraged by the progress we're making as actions we've taken to reposition the portfolio continue to earn in. Moving to pricing.
We continue to take a disciplined approach to underwriting and pricing, prioritizing lines and accounts where we see attractive risk-adjusted returns. Starting with North America Commercial. Excluding the property business, our North America Commercial renewal pricing increase was 7%, largely in line with loss cost trend. In North America Casualty, the overall pricing environment remains favorable, with pricing in Retail Excess Casualty up 14% and Lexington Casualty up 8%. In U.S. Financial Lines, pricing was flat, reflecting continued moderation of price reductions aligned with our team's strategy to drive rate in targeted D&O segments. In North America Property, overall pricing decreased 11%. The market remains competitive, as Peter described in his remarks. In International Commercial, overall pricing was down 1% and was slightly positive excluding financial lines in the Q1.
Casualty pricing improved in the quarter, up 5%, benefiting from positive rate change on auto. Property pricing was down 4%, with modest variation by region, while Japan continues to deliver both positive rate and pricing. Global Specialty pricing was down 1% and Financial Lines pricing was down 4%, a continuation of trends from the Q4 for both of these lines. Moving to other operations. Q1 adjusted pre-tax loss was $125 million versus the prior year quarter loss of $66 million. The difference was driven by lower net investment income and other of $54 million compared to $110 million in the prior year quarter, owing to lower parent liquidity levels in addition to lower Corebridge dividends.
Given current short-term interest rate levels, we expect the Q2 other operations net investment income and other line to be in the range of $30-$40 million, subject to market conditions. Moving to General Insurance net investment income. Q1 General Insurance net investment income was $864 million, up 17% year-over-year. The increase was driven by our core fixed income portfolio, which grew net investment income by nearly 20% over the prior-year quarter. This reflects the benefit of our proactive strategy to reposition the public fixed income portfolio. During the Q1, we continued to reinvest at higher yields with the average new money yield on our core fixed income portfolio roughly 80 basis points higher than sales and maturities. The annualized yield was 4.61%, a 51-basis point improvement over the prior-year quarter.
The strong growth in our core fixed income portfolio was partially offset by lower alternative investment income, which was $6 million compared to $43 million in the prior year quarter. Private equity returns yielded 1.6% in the quarter below our long-term expectation. It's worth noting that the private equity results are generally reported on a one-quarter lag. Given the market volatility experienced in public markets throughout the Q1, we expect Q2 alternative returns to remain below our expectations. I want to spend a few minutes on our private credit portfolio as we've slowed our deployment in this asset class given market conditions. We define private credit very broadly, as in everything that is not a public security.
It includes commercial mortgage loans, investment-grade private placements, asset-backed finance, and direct lending. Our direct lending exposure is about $1.2 billion, less than 1.5% of the General Insurance investment portfolio. It is a diversified portfolio of middle market loans with an average loan size of about $6 million. We hold all direct lending on our balance sheet, not through business development companies, and the software exposure is approximately $130 million or just 16-basis points of the General Insurance portfolio. We will continue to deploy funds in a wide variety of assets with key managers, including our new partners, CVC and Onex.
Book value per share at March 31st, 2026 was $75.82, up 6% from the prior year quarter, reflecting strong growth in net income as well as the favorable impact of lower interest rates, partially offset by capital return to shareholders through dividends and share repurchases. Adjusted tangible book value per share was $70.85, up 4% from the prior year quarter. In summary, we delivered a strong Q1 with excellent underwriting results. With that, I will turn the call back over to Peter.
Thank you, Keith. Michelle, we're ready for questions.