AIG insurance corporate flag For the first-quarter of 2018, the AIG combined ratio for general insurance was 103.8, meaning AIG lost 3.8 cents for every premium dollar after claims and expenses. (AP Photo/Mark Lennihan, file)

(Bloomberg) – American International Group Inc. shares dropped to the lowest level in almost two years after first-quarter profit declined and fell short of analysts’ estimates.

Related: AIG’s Brian Duperreault offers perspective on Q4 losses

Insurance results were hurt by catastrophe costs and a decline in net premiums written, the company said Wednesday. AIG has said it’s making progress in its turnaround, but investors aren’t seeing the results they want yet.

Chief Executive Officer Brian Duperreault, who’s been in charge about a year, has reorganized the company, replacing senior executives and announcing a $5.56 billion deal to buy Bermuda-based reinsurer Validus Holdings Ltd. to expand abroad and enter new businesses.

Underwriting profit expected by end of year

AIG expects to report an underwriting profit by the end of this year, Duperreault said in a conference call Thursday.

“We need to get to an underwriting profit in this place and we’re going to do it,” he said.

The combined ratio for general insurance was 103.8, meaning AIG lost 3.8 cents for every premium dollar after claims and expenses. Duperreault said getting the combined ratio under 100 would produce a good return on equity.

AIG fell 8.5%to $50.17 at 9:48 a.m. in New York. The shares declined 8% this year through Wednesday.

Earnings highlights:

  • Net income fell to $938 million, or $1.01 a share, from $1.19 billion, or $1.18, a year earlier.
  • Adjusted after-tax income per share was $1.04, missing the $1.25 average estimate of 14 analysts surveyed by Bloomberg.
  • Book value was $69.95 at March 31, down from $72.49 as of Dec. 31.
  • The underwriting loss was $251 million.

Related: AIG earnings miss projections after fallout from major weather events

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