(Bloomberg) -- American International Group Inc., the insurer that’s shrinking under pressure from activist shareholders, posted a third-straight unprofitable quarter on losses from hedge funds and declines in the value of other investments.

The first-quarter net loss of $183 million, or 16 cents a share, compares with profit of $2.47 billion, or $1.78, a year earlier, the New York-based company said Monday in a statement. Operating profit, which excludes some investment results, was 65 cents a share, missing the $1 estimate of 20 analysts surveyed by Bloomberg.

Chief Executive Officer Peter Hancock is reshaping the insurer’s portfolio, expanding bets on highly rated bonds and property lending while scaling back on hedge funds after the company was burned on those investments. AIG also is among insurers that have large holdings of energy bonds that were pressured by declines in commodity prices.

“Results were impacted by market volatility on investments,” Hancock said in the statement, which also highlighted his efforts to cut costs and simplify the company. “By transforming AIG into a leaner, more profitable and focused insurer, we can leverage our risk expertise.”

Stock slump

The loss on hedge funds widened to $537 million from $349 million in last year’s first quarter.

Results also included $1.11 billion in net realized losses, compared with a gain of $1.34 billion in the first three months of 2015. The insurer had $362 million of capital losses tied to bond sales, mostly in the energy industry, according to the company’s quarterly filing. The insurer had about $13.9 billion of energy holdings in it’s available-for-sale corporate debt portfolio as of March 31.

“While the energy investments are primarily investment grade and are actively managed, the category continues to experience volatility that could adversely affect credit quality and fair value,” according to the filing.

Most of the remaining realized capital losses were tied to foreign exchange contracts.

The insurer dropped 3% to $54.90 in extended trading at 4:53 p.m. in New York. AIG had slipped 8.7 percent this year through 4 p.m., compared with the 1.8% climb in the S&P 500 Index. Results were released after the close of regular trading.

Scaling back

AIG also intends to exit personal insurance in dozens of countries after announcing deals to scale back in Taiwan and sell operations in Panama, El Salvador and Guatemala, Hancock said in his annual letter in March. The CEO also announced a reinsurance agreement that month in which Swiss Re AG agreed to take on some of AIG’s risks tied to casualty policies.

The changes, along with job cuts, are designed to improve return on equity in the long run. Activist investor Carl Icahn has mocked Hancock for failing to generate a 10% ROE. AIG agreed in February to appoint hedge fund manager John Paulson and a representative of Icahn’s firm to the insurer’s board.

The normalized ROE, which excludes some one-time items, was 8.9% in the first quarter, compared with 7.8% a year earlier. Book value, a measure of assets minus liabilities, climbed to $78.28 a share from $75.10 at the end of last year, helped by stock repurchases.

Schimek, Hogan