American International Group, in its pursuit of commercial insurance business, is making “stupid” moves that threaten to destabilize the market, the chief executive of Liberty Mutual charged.

Edmund F. Kelly, chairman, president and CEO of Boston-based Liberty, made his remarks in the course of a conference call with financial analysts to discuss his company's third quarter results, which saw profits decline 98.5 percent.

An executive of AIG denied that this was the case, during his company's third quarter conference call.

Mr. Kelly said that AIG had “intensified its efforts to increase market share, or at least preserve it,” and was “doing some very stupid things in the market.”

He said this was more than likely because members of the creditors committee that is managing AIG is “more concerned with its interface with government and capital, and are paying little attention to what is actually going on in the trenches.”

Cash-strapped AIG, which has given taxpayers a 78.9 percent stake in the business in exchange for a government bailout, announced today that it had renegotiated terms with the Federal Reserve Bank as part of a $150 billion package.

Mr. Kelly said that if the AIG moves to grab market share is “not reined in, it could be very destabilizing for the market.”

Meanwhile, Kristian P. Moor, president and CEO of AIG's property-casualty business, said there has been misinformation about the performance of the company.

He said September's account retention was down 6.5 percent, while October was down slightly on a year-to-year basis, but was better than September.

The company is continuing to win new business, and whatever business is lost is due to price competition, he said. But customers are continuing to do business with AIG's commercial carriers because of their superior standing in the industry, he added.

“Commercial insurance is not sacrificing underwriting integrity to retain market share,” according to Mr. Moor. “I believe that allegations of excessive price-cutting are coming from certain carriers frustrated by their inability to win significant market share from us.”

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