American International Group, Inc.'s (AIG) shares have been on a tear in August. Investor sentiment has noticeably improved in October after the insurance company got rid of the burdensome SIFI designation. I see losing the SIFI label and potentially lower-than-expected cat losses as bullish catalysts for American International Group's shares going forward. AIG still remains widely undervalued, exhibiting an attractive reward-to-risk ratio.

American International Group recently lost its SIFI label which was slapped on the insurance company after the financial crisis nearly put AIG out of business. The Financial Stability Oversight Council (Council), or FSOC, rescinded American International Group's 'too-big-to-fail' label earlier in October which has weighed on the company's shares for years. Even Fed Chair Janet Yellen was in favor of stripping the SIFI label from American International Group after the insurance company sold off non-core assets (including its widely profitable mortgage unit United Guarantee) and derisked its balance sheet.

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