(Adds details on A.M. Best ratings, background on AIG)
May 23 (Reuters) - A.M. Best Co affirmed its financial strength rating on American International Group Inc on Tuesday, lifting some uncertainty over the New York-based insurer's ability to meet its long-term debt obligations, which had unsettled some investors.
AIG's stock ticked up after A.M. Best issued its rating, ending the day up 1.3 percent.
The largest U.S. underwriter of commercial property and casualty insurance has been through a turbulent few months.
In January, it announced a deal to pay $10.2 billion to Warren Buffett's Berkshire Hathaway Inc to take on many of its long-term commercial insurance policies, as the losses it expects to pay out on them continues to grow.
In February, AIG made a $5.6 billion addition to its reserves to cover future commercial insurance claims on policies it had already written, which led the company to report an unexpectedly large fourth quarter loss, jolting investors and AIG's board.
In March, Chief Executive Peter Hancock, who had been under pressure from activist investor Carl Icahn since 2015, announced his resignation, even though he was only part-way through his plan to turn around the insurer's fortunes. Earlier this month AIG named Brian Duperreault as its new CEO.
A.M. Best launched its review after AIG announced the Berkshire deal, and it has cast a shadow of the insurer for the past four months.
"We view this announcement as a positive step in AIG's plans to improve its franchise," wrote Barclays analyst Jay Gelb in a research note on Tuesday.
A.M. Best's outlook for the ratings assigned to AIG is now "stable," the specialist insurance rating firm said on Tuesday. It also affirmed ratings for AIG's subsidiaries.
AIG's ability to meet its long-term financial obligations is "good," on A.M. Best's scale, which ranges from "exceptional" to "poor."
AIG's appointment of the Bermuda-born Duperreault, who spent many years at the insurer earlier in his career, was a factor in the rating decision, said A.M. Best analyst Darian Ryan.
Duperreault was a protégé of long-time AIG leader Maurice "Hank" Greenberg and he went on to found and run Bermuda-based Hamilton Insurance Group Ltd.
"From this review, it has been possible to make a satisfactory assessment that AIGs consolidated risk-adjusted capitalization remains supportive of the ratings of AIG and its subsidiaries," Ryan wrote. (Reporting by Suzanne Barlyn; Editing by Paul Simao and Bill Rigby)