American International Group (NYSE:AIG) reported today that its operating income per share fell to $1.21 in the first quarter, down almost 10% from the $1.34 seen in the first quarter of 2013.

"I am very pleased with AIG's solid operating profits this quarter," said the CEO of AIG, Robert Benmosche, in the earnings announcement. "The earnings power of our business coupled with our customer strategy reinforce the strength of our foundation throughout our core insurance operations."

In total AIG saw its operating income fall from $2.0 billion in the first quarter of last year to $1.8 billion in the most recent quarter. This was largely the result of its property casualty segment seeing its pre-tax operating income fall by 26%, or almost $400 million, to $1.2 billion.

The company noted the reason behind declining income at its property casualty business was a greater impact from catastrophe and severe losses as well as an unfavorable loss reserve development, and reduced investment income. In total its catastrophe and severe losses stood at $448 million in the first quarter of 2014, versus $101 million last year.

The property casualty business at AIG saw its combined ratio -- its losses and expenses divided by the premiums it earned -- rise from 97.3% in the first quarter of last year to 101.2% in the first quarter of this year. On a positive note, while on a dollar basis its net premiums written fell by 1%, the company noted excluding the effect of foreign exchange, its premiums increased by 3%.

The decline in its property casualty business came from both its commercial and consumer insurance underwriting operations. Its commercial line had its underwriting income fall 71%, from $396 million to $113 million. In addition, its consumer insurance underwriting business swung from an income of $55 million in the first quarter of last year to a loss of $59 million in the most recent quarter.

The Life and Retirement business at AIG did see a gain of 2% in its operating income, growing by $23 million to $1.4 billion. It saw its premiums and deposits rise by 28% year over year, and its assets under management rose by 9% to $324 billion.

"As we look to build upon the important work we have already done, we must continue to develop and grow our company so that it is more sustainable," added Benmosche in his prepared remarks. "We have made great strides in this transformation and in showing what we are capable of as a company, but we still have work to do. Above all else, we must operate and make sound business decisions as a company whose number one priority is to understand and provide for its customers."

Patrick Morris owns shares of American International Group. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group and has the following options: long January 2016 $30 calls on American International Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.