(Bloomberg) -- American International Group Inc., the largest commercial insurer in the U.S. and Canada, said profit declined 67 percent on costs to pay down debt and add to reserves.

Net income fell to $655 million, or 46 cents a share in the fourth quarter, from $1.98 billion or $1.34 a year earlier, the New York-based insurer said Thursday in a statement. Operating profit, which excludes some results tied to investing and debt redemptions, was 97 cents a share, missing the $1.06 average estimate of 22 analysts surveyed by Bloomberg.

Chief Executive Officer Peter Hancock has been revamping management and working to improve results at the property- casualty operation after taking over in September. AIG has been issuing new bonds at lower interest rates to repay higher-cost debt, and took an $824 million charge tied to those efforts in the fourth quarter.

“We’ll look back and say 2014 was a transitional year and 2015 will show some operational progress,” Josh Stirling, an analyst at Sanford C. Bernstein & Co. said by phone before results were announced.

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