American International Group Inc
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Shares of the company, which boosted its share buyback program and dividend, fell 1 percent in after-hours trading.
AIG is facing pressure from activist investor Carl Icahn to split into three - an idea that has been rebuffed by Chief Executive Peter Hancock.
The company is cutting costs as its underwriting business struggles with falling rates for commercial property and casualty insurance. [nL3N15A4C0]
The insurer, which has frozen its employee pension plan, is looking to cut its gross general operating expenses by another $1.6 billion by the end of 2017.
AIG reported an after-tax operating loss attributable to the company of $1.35 billion, or $1.10 per share, for the fourth quarter ended Dec. 31.
Analysts on average were estimating a loss of 93 cents per share, according to Thomson Reuters I/B/E/S.
The company's commercial property and casualty insurance business, traditionally AIG's forte, posted a pre-tax operating loss of $2.34 billion, as the company strengthened its reserves.
AIG added $3.6 billion pre-tax to its non-life loss reserves to cover shortfalls during the quarter.
Net Investment income at the unit fell about 34 percent to $730 million.
AIG, which traces its roots to a two-room office in Shanghai in 1919, said it would buy back an additional $5 billion of its shares and raised its quarterly dividend to 32 cents per share from 28 cents. AIG repurchased about $10.7 billion of shares in 2015.
The company's catastrophe-related losses at its commercial property and casualty unit rose more than six-fold to $213 million.
The unit's combined ratio jumped to 161.5 percent from 103.4 percent.
A ratio below 100 percent means an insurer earns more in premiums than it pays out in claims.
The company's shares closed at $50.52 on the New York Stock Exchange.
(Reporting by Sudarshan Varadhan and Sweta Singh in Bengaluru; Editing by Anil D'Silva)