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Weak quarter weighs on AIG shares

AIG fell 1.15 percent Tuesday after the company reported weaker-than-expected quarterly earnings.

The insurance giant posted first-quarter adjusted earnings per share of 65 cents, well below the expected $1. That said, CEO Peter Hancock defended the company's results.

"I think we're making great progress on improving operating margins, improving capital efficiency and expenses. I'm actually pleased with this first quarter; it's a good foundation for the next few quarters," Hancock told CNBC's "Squawk on the Street" on Tuesday.

Hancock added that AIG's is reducing its exposure to hedge funds. "It's our belief that, going forward, [hedge funds] will be much less attractive," he said. "It takes time to exit because of the lock-up periods of these funds."

AIG shares have fallen sharply in 2016, dropping 9.73 percent. Still, the stock has gained about 2 percent in the past three months.

AIG this yearSource: FactSet