American International Group Inc. will make an underwriting profit by the end of 2018 despite reporting a 20% drop in first-quarter profit, President and CEO Brian Duperreault said Thursday.

“We need to get to an underwriting profit in this place, and we’re going to do it,” he said during a conference call with analysts.

Mr. Duperreault, who rejoined the struggling insurer last May, has reorganized AIG over the past several months, including making a string of senior hires, rebalancing its book of business and buying more reinsurance coverage.

AIG’s general insurance unit, which includes its main commercial property/casualty insurance business, reported a combined ratio of 103.8%, deteriorating from 99.8% in the same period last year. Insurers reporting underwriting profits have combined ratios of less than 100%.

Mr. Duperreault said AIG will achieve an underwriting profit by improving its underwriting and cutting expenses.

“It’s not just loss ratio — we’ve got to deal with our expense levels, which clearly are too high, and we know that. That’s an effort around the operating model in general insurance, which has to be both effective and efficient,” he said, referring to AIG’s property/casualty operations.

Other efforts to improve AIG’s results include rebalancing its book of liability business, where losses remain too high, Mr. Duperreault said.

“A lot of it is excess, and you don’t fix excess by price; it’s a high-severity, low-frequency book,” he said. “Now price matters, don’t get me wrong, but its selection, attachment, terms and conditions — you fix the excess book by not having losses.”

AIG is also buying more reinsurance coverage to better manage the volatility of its business, said Peter Zaffino, CEO of general insurance.

AIG bought an international catastrophe reinsurance treaty in the fourth quarter of 2017 and bought more reinsurance in the first quarter of 2018, he said, including a new European casualty excess of loss program, which will be extended across all international business, and a new workers compensation catastrophe treaty, which includes terrorism coverage. AIG also expanded its aerospace reinsurance program by increasing the aggregate limit and reducing the net retention.

AIG has an existing massive reinsurance contract with Berkshire Hathaway Inc. to cover past-year liability losses, and the $25 billion attachment point on that program will likely be pierced in mid-2020, said Chief Financial Officer Sid Sankaran on the call. Once the coverage is pierced, claims will be paid 80% by Berkshire Hathaway and 20% by AIG.

For the first quarter of 2018, AIG reported a profit of $938 million, down 20.8% compared with the same period last year.

Its general insurance unit’s adjusted pretax income fell by more than half to $510 million. The unit’s results were hit by $376 million in catastrophe losses, largely in its personal lines segment, including losses related to California mudslides, U.S. winter storms and an earthquake in Papua New Guinea. In addition, the results were hit by $135 million in other severe losses, including winter weather losses, according to an AIG statement.

General insurance profit included favorable prior year loss reserve development of $108 million.

Across all lines of business, including life insurance and retirement, AIG reported total revenue of $11.71 billion, a 7.3% decrease from the same period last year.

General insurance reported net premiums written of $6.17 billion, down 2% compared with the same period last year. For North America, general insurance reported net premiums written of $2.04 billion, down 12%, “driven by the net impact of our reinsurance program and the strategic portfolio actions in U.S. casualty and property,” the statement said.

Net premiums written for North America commercial property/casualty business fell 18% to $1.31 billion. The combined ratio for North America commercial lines deteriorated slightly to 104.7% compared with 104.5% in the same period last year.