AIG made a $US2.2 billion ($3.1 billion) profit last year, down from $US7.5 billion ($10.58 billion) the previous year.

The result was hit by a $US1.8 billion ($2.54 billion) loss in the fourth quarter, attributed to restructuring costs, adverse prior-year loss reserve development, and lower returns on alternative investments.

President and CEO Peter Hancock says a three-year plan to transform AIG began at the start of last year.

“Over the past year we have been implementing our strategy and made significant progress towards our objectives,” he said. “During the fourth quarter we streamlined our management structure to accelerate decision-making and strengthen accountability.

“Our recent strategy update detailed the next chapter of our transformation into a leaner, more profitable and focused insurer.”

Last year almost $US12 billion ($16.93 billion) of capital was returned to shareholders in the form of share repurchases and dividends.

The company aims to return $US25 billion ($35.27 billion) by 2017.