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AIG chief: We divested, now it's time for growth

AIG's CEO said Thursday that he was "very pleased" with improvement in several key sectors of the company in the third quarter and he believes they will drive progress.

"The sequential progress is still very much on trend," Peter Hancock, who is also AIG's president, told CNBC.

The insurer reported earnings of $1 per share for the third quarter, short of estimates calling for around $1.21 per share. AIG's board also authorized $3 billion for a share buyback program.

Hancock said on "Squawk on the Street" that the company has made significant reductions in its top line to get a better handle on its loss ratio, or the percentage of difference between premium payments an insurance company receives and the number of claims it settles.

He said those changes will not only enable the company to focus on more valuable parts of its business, but it will improve earnings going forward.

"In insurance, there's a time lag between taking underwriting action and it showing up in earnings," Hancock said. "We have a pretty good line of sight on the next few quarters loss ratio and we feel very good about the trend."

Hancock also noted some of AIG's major moves in the third quarter that he said bring the focus back to the core of the business.

"The most significant things I'd like to bring attention to in the third quarter are the major transactions we executed to really transform the company: five major divestitures and one major growth initiative," he said.

AIG's announcement of its divestitures came earlier this year in response to pressure from shareholders, including billionaire Carl Icahn, who wanted the company to cut expenses by divesting some of its business.

As a result, the insurance giant cut total adjusted costs by 8.6 percent, to $2.44 billion.

Hancock said the changes provide a "fundamental foundation for long-term, profitable growth."

— Reuters contributed to this story.