American International Group Inc. will continue to restructure its property/casualty business and reinsurance buying program as it strives to improve its future results, CEO Brian Duperreault said Thursday as the insurer reported a $1.26 billion loss for the third quarter of 2018.

Speaking on a conference call to discuss the results, Mr. Duperreault said AIG, which has undergone significant management and operational changes since he was brought in to turn around the company in May 2017, is on course to report an underwriting profit in the first quarter of 2019.

Over the past year, AIG has executed a new reinsurance buying strategy, “and this work will continue as we approach the Jan. 1 renewal season,” Mr. Duperreault said.

So far in 2018, AIG has lowered its North American catastrophe reinsurance attachment point from a per-occurrence of $1.5 billion to an aggregate of $750 million and added additional international reinsurance coverage, he said. In addition, AIG is working to restructure its Japanese reinsurance program to reduce its net exposure after suffering significant typhoon losses in the third quarter.

AIG is working “deliberately and thoughtfully and with a sense of urgency to improve our core underwriting capabilities, reduce volatility,” and deliver an underwriting profit, Mr. Duperreault said.

AIG continues to restructure its property/casualty insurance operations, reducing its limits for the business, said Peter Zaffino, CEO of general insurance.

“With respect to underwriting governance, we’ve reviewed, validated and reissued 100% of global underwriting authorities to align with our revised risk appetite, and instituted a new underwriters scorecard that measures performance across profitability and other key metrics,” he said.

Commercial property/casualty insurance rates increased 4% in North America on average during the third quarter, Mr. Zaffino said. Admitted property insurance rates increased in the mid-single-digit range, excess and surplus lines property rates increased in the low double digits, and casualty rates increased in the low-to-mid-single digits on average, he said.

AIG’s $1.26 billion loss in the third quarter of 2018 compared with a loss of $1.74 billion in the same period last year, which included losses from hurricanes Harvey, Irma and Maria.

The insurer reported total revenue of $11.49 billion for the 2018 quarter, down 2.3% compared with the 2017 third quarter.

Gross premiums written in its general insurance business increased 2.9% to $8.67 billion in the 2018 third quarter, and net premiums written increased 3.9% to $6.84 billion.

AIG’s combined ratio improved to 124.4% compared with 157.1% during the same period last year.

Its core North America commercial lines business reported net premiums written of $2.23 billion, a 5.2% increase over the same period last year. The division reported an underwriting loss of $609 million compared with a $2.68 billion loss in the 2017 quarter and a combined ratio of 125.1% compared with 228.3% in 2017.

AIG reported pretax catastrophe losses of $1.57 billion during the quarter, driven by losses from typhoons Jebi and Trami in Japan, Hurricane Florence in the U.S. and increased estimates on California mudslides from earlier in 2018. AIG expects claims from Hurricane Michael to total between $300 million and $500 Million.

AIG has a 6% market share in Japan and has a 10% market share in the areas hit hardest by the typhoons, Mr. Zaffino said.

The cat losses were made up of $715 million from commercial lines, $660 from personal lines and $192 million from Validus Holdings Ltd., the reinsurer that AIG bought earlier this year.

The insurer also reported unfavorable prior-year loss reserve development, net of reinsurance, of $170 million.

For the first nine months of 2018, AIG reported a profit of $616 million, up 6.9% compared with the same period last year, and revenue of $34.83 billion, down 5.6%.