Excess property insurance buyers should expect higher deductibles and related tightening in terms and conditions this year, American International Group Inc.’s top executive said Thursday.

Speaking on a conference call with analysts to discuss the insurer’s fourth-quarter 2022 results, Chairman and CEO Peter Zaffino said: “In excess and surplus lines property I expect to see higher deductibles, more wind deductibles, tighter terms and conditions.”

Looking back on the fourth quarter, Mr. Zaffino said AIG saw an average 3% increase in its North America commercial lines business, but average rates rose 9% excluding financial lines and workers compensation.

Retail property rates rose 15%, its E&S unit Lexington saw rates increase 12%, and excess casualty was up 9%, he said.

International commercial rates increased 4%, driven by Asia Pacific, where rates climbed 9%, and Europe, the Middle East and Africa, where rates rose 7%.

“While we experienced downward pressure on rate in certain lines early in the fourth quarter, we saw a reacceleration of price increases toward the end of the quarter,” Mr. Zaffino said. For example, retail property renewal rates rose 24% in December when the effect of recent catastrophe losses were felt by the market, he said.

AIG has re-underwritten much of its book over the past five years, which put it into a position to buy more reinsurance coverage at moderate rate increases during year-end renewals, despite significant rate hikes in the overall reinsurance market, Mr. Zaffino said.

AIG bought more property catastrophe reinsurance, securing $6 billion in limits, and improved the terms, he said. AIG’s overall reinsurance costs increased less than 10%, he said.

For the fourth quarter, AIG reported net income of $264 million compared with $3.74 billion in the prior-year quarter, which included a $3 billion gain from the sale of a real estate portfolio. Profit was also hit by a decrease in net realized gains of derivative activities, AIG’s earnings statement said.

On an adjusted basis, AIG’s pre-tax income fell 19.7% to $1.2 billion. The insurer attributed the decline to a $489 million decrease in alternative investment income, largely from private equity investments, which was partially offset by better underwriting results.

Its general insurance business saw net premium written of $5.61 billion, down 6%, largely driven by a decrease in personal lines premium and the effect of foreign exchange changes on international business.

Its North America commercial lines business reported $2.27 billion in net written premium, up 3% compared with the prior-year quarter.

AIG’s general insurance combined ratio was 89.9% for the quarter, improving from 92.4% in the prior-year period. North America commercial lines reported an 84.4% combined ratio, improving from 94.8% in the 2021 period.

For the full year, AIG reported net income of $10.25 billion, up 9.5% compared with 2021.

During the fourth quarter, AIG completed the initial public offering of its life and retirement business Corebridge Financial Inc. AIG expects to complete a secondary offering of Corebridge stock by the end of the first quarter, Mr. Zaffino said.