May 3 (Reuters) - American International Group Inc executives on Thursday defended their strategy for transforming the company, saying some key improvements would take hold by year-end, but failed to convince investors as shares slid more than 8 percent.
The New York-based insurer reported a 21 percent decline in first-quarter profit on Wednesday, due to higher catastrophe and bad weather claims, as well as weaker investment income.
“We do expect to deliver an underwriting profit by the end of this year,” said AIG chief executive officer Brian Duperreault in a call with analysts on Thursday.
Duperreault took charge of AIG nearly a year ago, promising to grow the company and boost revenues. He has been working to improve underwriting practices, increase AIG’s focus on technology and install new executives across the insurer to jumpstart profits.
But his steps have yet to boost the bottom line and AIG’s shares were trading at $50.38 early on Thursday afternoon.
AIG’s changes to underwriting practices will take some time to show in the company’s income statement, said Peter Zaffino, chief executive of AIG’s general insurance unit, during the call. But a combination of managing expenses and improving ratios of losses to premiums will contribute to AIG’s year-end financial performance, Zaffino said.
The company is also making changes to excess casualty business, trying to shed certain risky bets such as being the lead insurer for initial public offerings and professional liabilities, Duperreault said.
AIG also reported on Wednesday that it had released $104 million in reserves from its general insurance unit, the first such development since 2016. (Reporting by Suzanne Barlyn Editing by Frances Kerry)