American International Group’s shares gained on Friday and yesterday after the insurer reported net income of $648 million for the third quarter.The result was a positive swing from a net loss of $1.3 billion in the corresponding period last year.However, profits were limited by catastrophe losses and a $143 million charge related to an actuarial review of its life and retirement business, which resulted in AIG having to put aside extra cash to meet future claims.The insurer posted a profit of $505 million, or 56 cents per share, on an adjusted basis, well below analysts’ expectations of $1 per share. Shares of AIG climbed 1.5 per cent on Friday after the results were announced and climbed another 2.18 per cent yesterday to close on $54.93 in New York.AIG is in the midst of a turnaround, launched by chief executive officer Brian Duperreault, who took charge in 2017.“Our results this quarter reflect the significant, ongoing work across the company to lay a foundation for long-term, sustainable and profitable growth,” Mr Duperreault said. “Results are in line with our expectations, particularly in general insurance, which demonstrated a significant improvement over the prior-year quarter driven by our focus on underwriting excellence, expense discipline and enhanced reinsurance strategy. “Life and retirement continued to produce solid results despite ongoing headwinds from the sustained low interest rate environment. This business remains on track to deliver double-digit returns for the full year.“As we approach 2020, we remain confident we will deliver underwriting profitability for the full year 2019 and deliver double-digit return on common equity by the end of 2021. “We still have much work ahead of us, but we are well on our way to positioning AIG as a leading global insurance company.”Mr Duperreault has deployed a reinsurance programme to offset catastrophe losses, which he said “played out as designed”.Some of those changes involve AIG’s speciality commercial unit, Lexington Insurance. It reduced total casualty insurance limits by 58 per cent during the quarter while increasing premium rates by more than 30 per cent, AIG chief financial officer Mark Lyons said in a call with analysts.AIG has also been building up “meaningful” cash reserves for potential mass tort claims, Lyons said.AIG’s net pre-tax catastrophe loss narrowed to $511 million in the quarter from $1.6 billion a year earlier.The company also reported a smaller underwriting loss in its general insurance business, $249 million, compared with $1.73 billion last year.