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

Insurance results were hurt by catastrophe costs and a decline in net premiums written, the company said. 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 reorganised the company, replacing senior executives and announcing a $5.56 billion deal to buy Bermudian-based reinsurer Validus Holdings Ltd to expand abroad and enter new businesses. AIG expects to report an underwriting profit by the end of this year, Duperreault said in a conference call yesterday.

“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 per cent, meaning AIG lost 3.8 cents for every premium dollar after claims and expenses. Duperreault said getting the combined ratio under 100 per cent would produce a good return on equity.

AIG fell 5.3 per cent to $51.94 in New York yesterday. The shares had declined 8 per cent this year through Wednesday.

AIG’s 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 December 31.

The underwriting loss was $251 million.