(Bloomberg) -- American International Group's assurances of underwriting progress are drawing increased skepticism from Wall Street analysts after another disappointing quarter.

Results from international commercial coverage and the American consumer business were short of estimates, "and this isn't the first time those two areas have shown difficulty," Michael Nannizzi of Goldman Sachs said Thursday on New York-based AIG's conference call discussing third-quarter results. "What are you doing to get there, and how long is it going to take?"

AIG dropped $2.49, or 4.1%, to $58:05, extending the drop this year to 6.3%. While CEO Peter Hancock has been selling units, buying reinsurance and reshaping the investment portfolio to limit volatility, the company remains prone to surprises. He reported losses in three straight quarters through March 31, and announced results late Wednesday that missed analysts' estimates.

In recent years, the company has posted higher-than-expected claims costs on commercial policies tied to workers' compensation and environmental risks and suffered declines on hedge fund holdings. Third-quarter operating profit was $1 a share, missing by 20 cents the average estimate of analysts surveyed by Bloomberg, as costs swelled on contracts in which the insurer guarantees payments to accident victims.

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

'ROUGH QUARTER'

"This was a rough quarter for AIG," Charles Sebaski, an analyst at BMO Capital Markets, said in a note, adding that the decision that more funds were needed for reserves following a similar move at the end of last year. "Further, we believe investors may question whether the increased catastrophe losses are truly unusual as the company continues to skew the book toward property exposure to improve underwriting results."

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

"We really want to improve the quality and sustainability of our earnings rather than just the volume," Hancock said. "And I think that the team has done an excellent job at getting ahead of the curve on the expenses."

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.