Insurance ratings agency AM Best has affirmed the issuer credit rating of AIG after earlier this year placing its ratings “under review with negative implications”.

The positive change in the financial strength ratings and issuer credit ratings of AIG and most of its insurance subsidiaries follows a series of strategic actions and organisational changes to improve results and narrow the group’s focus.

The January review by AM Best was caused by AIG’s decision in late 2015 to strengthen its loss reserves in the general insurance business by $US3.6 billion ($4.9 billion).

The total amount of the deficiency reported at that time exceeded AM Best’s assumptions of loss reserve deficiency.

The under-review status also considered the potential impact on AIG’s business profile and future earnings capacity from management actions to improve profitability and efficiency.

AM Best now notes that AIG continues to implement strategic actions and organisational changes, “although there remains execution risk, as well as continuing competitive pressures that could impede progress of the stated plans”.

“There is a continued strengthening of its balance sheet through the sale of non-core businesses as well as an improvement in its financial flexibility.”

AIG’s financial leverage and coverage ratios are within AM Best’s guidelines for the current rating.

AIG recently reported a first-quarter net loss of $US183 million ($248 million), slumping from a net income of $US2.47 billion ($3.35 billion) in the corresponding period last year.

CEO Peter Hancock said at the time that AIG was making good progress in its strategy to “streamline” the business.