(Bloomberg) -- American InternationalGroup Inc.’s assurances of underwriting progress are drawingincreased skepticism from Wall Street analysts after anotherdisappointing quarter.

Results from international commercial coverage and the Americanconsumer business were short of estimates, “and this isn’t thefirst time those two areas have shown difficulty,” Michael Nannizziof Goldman Sachs Group Inc. said Thursday on NewYork-based AIG’s conference call discussing third-quarter results.“What are you doing to get there, and how long is it going totake?”

6.9% drop this year

AIG dropped $2.83, or 4.7 percent, to $57.72 at 10:48 a.m. in NewYork, extending the drop this year to 6.9 percent. While ChiefExecutive Officer Peter Hancock has been selling units, buying reinsurance and reshapingthe investment portfolio to limit volatility, the company remainsprone to surprises. He reported losses in three straight quarters through March31, and announced results late Wednesday that missed analysts’estimates.

In recent years, the company has faced higher-than-expectedclaims costs on commercial policies tied to workers’ compensationand environmental risks and suffered declines on hedge fundholdings. Third-quarter operating profit was $1 a share, missing by20 cents the average estimate of analysts surveyed by Bloomberg, ascosts swelled on contracts in which the insurer guarantees paymentsto accident victims.

Those deals, known as structured settlements, have beendesignated for a portfolio of businesses that AIG is seeking toexit or wind down. Hancock said he’s working on selling more assetsthat aren’t central to his strategy of focusing on commercialcoverage and retirement products in key markets.

Quickly, effectively

“I make no promises as to what we will be able to dispose of” fromthe legacy portfolio, he said in a Bloomberg Television interviewThursday. “But we intend to dispose of it as quickly and aseffectively as possible.”

There were again challenges in commercial insurance, where AIGhas sought to improve margins this year by cutting claims costs toan adjusted level 62 cents per each premium dollar. The figure wascloser to 65 cents in the third quarter, and would have been higherif not for an adjustment for natural disasters.

‘Rough quarter’

“This was a rough quarter for AIG,” Charles Sebaski, an analyst atBMO Capital Markets, said in a note, adding that the decision thatmore funds were needed for reserves following a similar move at theend of last year. “Further, we believe investors may questionwhether the increased catastrophe losses are truly unusual as thecompany continues to skew the book toward property exposure toimprove underwriting results.”

Hancock highlighted cost cuts and the reshaping of the businessmix toward what he expects to be better returning lines ofinsurance, even if that means accepting lower revenue. He has facedpressure from activist investors Carl Icahn andJohn Paulson, who won board representation this year.

“We really want to improve the quality and sustainability of ourearnings rather than just the volume,” Hancock said on theconference call. “And I think that the team has done an excellentjob at getting ahead of the curve on the expenses.”

Related: AIG's new commercial insurance leadership teamrevealed

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