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 percent 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 percent 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 percent 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 percent in the first quarter, compared with 7.8 percent 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

Profit at the commercial insurance operations, run by Rob Schimek since his promotion in December, fell 39 percent to $889 million. Kevin Hogan’s consumer business slipped 17 percent to $788 million. Both divisions were hurt by deteriorating investment results.

At the largest segment under Schimek, property-casualty coverage, income slipped 38 percent to $720 million. Policy sales fell 15 percent to $4.31 billion on the Swiss Re deal. The combined ratio improved to 96.9, meaning the insurer had an underwriting profit of 3.1 cents on every premium dollar, after paying claims and expenses. That compares with a ratio of 97.1 a year earlier.

Hancock has planned some initiatives for growth, including a joint venture announced last week with Hamilton Insurance Group and hedge fund firm Two Sigma Investments to sell coverage to small- and mid-sized enterprises. The goal is to better use data analytics when underwriting insurance policies.

Mortgage Spinoff

At the mortgage insurer, which is led by Donna DeMaio and guards lenders against borrower defaults, profit rose 12 percent to $163 million as claims costs declined. Hancock has filed for an initial public offering to sell a stake in the United Guaranty mortgage insurer, and plans to eventually exit the operation. At the other unit under Schimek, institutional markets, profit plunged to $6 million from $147 million, hurt by investment results.

At the retirement operation, the main segment under Hogan, profit slumped 42 percent to $461 million, driven by hedge fund losses. Life insurance fell 39 percent to $105 million. AIG said personal insurance generated $222 million, compared with $26 million loss a year earlier. The improvement reflects lower expenses and better underwriting results tied to U.S. property coverage.