American International Group Inc. is still on course to make an underwriting profit in the first quarter of 2019 after dumping the previous management’s “go large” strategy, the insurer’s top executive said Thursday as it reported another quarterly loss.

On a conference call with analysts to discuss the results, Brian Duperreault, the longtime industry executive who was brought in as president and CEO in May 2017 to turn around the ailing insurer, said he had underestimated the problems at AIG when he took the job but that the new executive team he has put in place has restructured the insurer, re-underwritten its book of business and overhauled its reinsurance buying strategy.

“The problems at AIG were deeper and more pervasive than I anticipated, but we have put the right people and right strategies in place that will allow us to accelerate our progress in 2019,” he said, reaffirming previous statements that he expects AIG to report a combined ratio below 100% in 2019.

“Crossing over into profitability for the first time in over a decade is an important milestone we will achieve in repositioning AIG for the future,” Mr. Duperreault said.

One of the biggest changes implemented was abandoning the prior strategy of writing huge limits on numerous insurance programs, he said.

The so-called go large strategy had created “outsized risk and volatility” for the insurer, Mr. Duperreault said. In addition, the problem was exacerbated by writing some of the large-limit risks on a multiyear basis, he said.

“While I had some understanding of the go large strategy before I arrived at AIG, I had not appreciated the extent of the issues it created or that it had been deployed throughout the company,” Mr. Duperreault said.

Peter Zaffino, CEO of general insurance, detailed AIG’s reduction of limits. For example, gross property limits were reduced to $750 million from $2.5 billion, and net limits were reduced to a range of $5 million to $50 million from $611 million; casualty gross limits were reduced to $100 million from $250 million, and net limits were “reduced significantly”; primary directors and officers liability insurance gross limits were cut by over $8 billion in aggregate; and in its Lexington Insurance Co. unit, which was refocused as primarily an excess and surplus lines insurer, maximum property limits were reduced to about $100 million from $2.5 billion.

“In 2019, we will continue to shift property and casualty lines to have greater balance in risk selection, account size, attachment points and geographic spread,” Mr. Zaffino said.

In its quarterly results, released late Wednesday, AIG reported a loss of $622 million for the 2018 fourth quarter, compared with a $6.66 billion loss in same period in 2017, when the results were hit by a one-off charge related to federal tax reforms. The 2018 period was hit by large catastrophe losses, a volatile investment market — investment income fell to $2.8 billion compared with $3.5 billion in the 2017 period — and unfavorable loss reserve development of $365 million.

Mark Lyons, appointed as chief financial officer in December and one of a slew of senior executives brought in by Mr. Duperreault over the past 18 months, said most of the unfavorable reserve development related to D&O and other financial lines business from 2016 and 2017, when there was a big jump in securities class action claims.

Since then, AIG has implemented a “concerted underwriting effort” to reduce its coverage of initial public offerings and primary life science and health care risks “along with an approximate one-third reduction in total gross limits,” Mr. Lyons said.

General insurance gross premiums written in the fourth quarter were $7.70 billion, up 5.8% compared with the same period last year. The combined ratio was 115% compared with 113.3% in the 2017 period.

North America general insurance net premiums written were $2.94 billion for the fourth quarter of 2018, a 14% increase over the same period a year earlier, largely due the acquisitions of reinsurer Validus Holdings Ltd. and program manager Glatfelter Insurance Group, which were completed 2018, and changes in AIG’s reinsurance purchasing, which resulted in lower attachment points on several reinsurance programs.

North America commercial lines net premium written increased to $2.16 billion, a 19.5% increase compared with the year-earlier period, and the combined ratio for North America commercial lines was 120.9% compared with 99.2% in the same period in 2017.

International net premium written for the fourth quarter was $3.48 billion, up 5.2% compared with the 2017 period, and international commercial lines net premium written increased 9.8% to $1.56 billion. The combined ratio for the international business was 105.4% for the 2018 quarter compared with 114.5% in the 2017 period.

For the full year, AIG reported a loss of $6 million compared with a $6.08 billion loss in 2017. Gross premiums written increased 3.5% to $34.23 billion. The full year combined ratio improved to 111.4% from 117.3% in 2017.

Quizzed by analysts on the conference about how AIG would achieve an underwriting profit in the first quarter of 2019 while insurance rates are increasing only moderately, Mr. Lyons said “we don’t need a hard market to improve this book.”

The re-underwriting of AIG’s book of business, the inclusion of profitable business from Validus and Glatfelter, the termination of about 20 poor-performing program accounts, an average 4% increase in rates and AIG’s restructured reinsurance purchasing strategy will all cut the combined ratio, Mr. Lyons said. In addition, catastrophe losses will likely be lower than other quarters, he said.