(Bloomberg) -- American International Group Inc. said it willrepurchase another $3.5 billion in stock after first- quarterprofit climbed 53 percent on gains at the unit selling property andcasualty insurance to commercial clients.

Net income rose to $2.47 billion, or $1.78 a share, from $1.61billion, or $1.09, a year earlier, the New York-based insurer saidThursday in a statement. Operating profit, which excludes someinvesting results, was $1.22 a share, beating the $1.19 averageestimate of 21 analysts surveyed by Bloomberg.

Chief Executive Officer Peter Hancock has sought to increase theuse of technology in underwriting while limiting sales in volatilelines of commercial coverage to avoid the surprises that hurt AIGin prior periods when reserves proved inadequate. The insurer hasalso been redeeming high-cost debt and paying a dividend since 2013after exiting a bailout the previous year.

“The company should be able to drive an earnings recoveryP&C,” Josh Stirling, an analyst with Sanford C. Bernstein &Co., said in an April 16 note. “With the firm making progress ontheir underwriting, growing in life, buying back stock and paying adividend, we see the company making clear progress at once againbecoming a normal company.”

AIG climbed 0.6 percent to $56.60 in extended trading at 4:40p.m. in New York. The insurer rose about 5.9 percent in the pastyear through the close of regular trading, compared with the 11percent advance of the Standard & Poor’s 500 Index. Resultswere released after 4 p.m.

Book value

Book value, a measure of assets minus liabilities, jumped to$80.16 per share as of March 31, from $77.69 at the end ofDecember. The company repurchased about $1.4 billion of stock inthe first quarter and another $800 million this month.

Pretax operating income at the commercial insurance operation,led by John Doyle, climbed 2.9 percent from a year earlier to $1.46billion.

The combined ratio at the property-casualty segment under Doyleimproved to 97.1 from 98.9, meaning the business had anunderwriting profit of about 3 cents for every premium dollar,after paying claims and expenses. Policy sales rose less than 1percent to $5.05 billion.

Mortgage insurance

At the mortgage insurance unit, which guards lenders againstborrower defaults, profit jumped 91 percent to $145 million assales climbed and claims costs fell. Profit slipped 36 percent to$147 million at the institutional markets segment on lowerinvestment returns.

At Kevin Hogan’s consumer operation, operating income dropped 19percent to $945 million. The contribution from retirementoperations fell 13 percent to $800 million on. Life insurancedropped 27 percent to $171 million. Both segments were pressured bylower returns from alternative holdings, which includeprivate-equity and hedge funds. Personal insurance posted a $26million loss.

AIG’s results were also helped by $174 million of gains fromreal estate investments and a benefit tied to a holding of AerCapHoldings NV.

Private equity

Net investment income fell to $3.84 billion from $4.2 billion ayear earlier, AIG said in a supplemental document on its website.Returns on private-equity investments fell 24 percent to$278 million. The gain from hedge funds declined 31 percent to $246million.

Hancock took over in September and reorganized the company intotwo main divisions, one focusing on commercial clients and theother on consumers. The previous split was between one unit sellingproperty-casualty coverage and another selling life insurance andretirement products.

The CEO has also sought to distinguish AIG by offering productsthat guard clients against complicated risks, such as a cyberbreach. Hancock in September hired Philip Fasano, formerly ofKaiser Permanente, to the newly created position of chiefinformation officer. Fasano this month brought on Michael Brady,also from Kaiser, as the chief technology officer.

With assistance from Doni Bloomfield in New York.

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.