NEW YORK (Bloomberg) American International Group Inc., the insurer rescued by the US government, said profit declined 85 percent on costs tied to repaying its rescue and claims from the earthquake and tsunami in Japan.First-quarter net income attributable to AIG fell to $269 million from $1.78 billion, a year earlier, the New York-based insurer said yesterday in a regulatory filing.Chief executive officer Robert Benmosche, 66, is relying on AIG’s property-casualty unit to deliver a greater portion of profit after the insurer struck deals to divest more than $50 billion in assets since its 2008 bailout. As part of its plan to repay taxpayers, AIG sold the non-US life insurance businesses that previously had cushioned losses from natural disasters such as earthquakes and hurricanes.“This is not the old AIG,” said Cliff Gallant, an analyst at KBW Inc., before the announcement. “It’s much more of a property-casualty company, and when you have these types of events, particularly with their large international market, you’re going to have quarters like this.” He rates the shares “underperform”.AIG has declined 36 percent this year on the New York Stock Exchange, the biggest drop in the Standard & Poor’s 500 Index.Catastrophes during the first quarter, including the earthquake and tsunami in Japan, flooding and a tropical cyclone in Australia and a temblor in New Zealand, hurt insurers. The disasters erased underwriting gains at the insurance operations of Warren Buffett’s Berkshire Hathaway Inc and profit at Munich Re, the world’s largest reinsurer.“We probably had the second-worst quarter for the insurance industry in terms of catastrophes around the globe,” Buffett said on April 30 at Berkshire’s annual meeting in Omaha, Nebraska.Global property-casualty coverage through AIG’s Chartis division is one of the four main businesses Benmosche is retaining. Chartis accounted for 49 percent of AIG’s revenue last year, compared with 46 percent in 2009.