The restructuring that reshaped American International Group over the past two years has been successful in the opinion of analysts for Standard & Poor’s, who boosted the rating for AIG’s the property/casualty operations to “A-plus” from “A” on Monday.

The “successful restructuring,” which involved selling nearly all of the noncore businesses and assets, also prompted S&P to change its assessment of the status of AIG’s P/C operations to “core” from a prior status of “strategically important,” the New York-based rating agency said in its latest research update on AIG.

“We believe that management is committed to maintaining and enhancing AIG’s competitive position in the global P/C and U.S. life businesses represented by the AIG P/C and AIG L&R [life insurance] groups. As a result, we view these significant operations as core to AIG’s group financial strength profile,” the report said.

“Management is now focused on improving the operating results and credit profile of the ongoing operations,” S&P said, noting that proceeds from asset sales were used to fully all the borrowings from the Federal Reserve Bank of New York and the U.S. Treasury during the financial crisis that began in 2008.

Also noting the November 2012 name change of the P/C operations—back to AIG from the Chartis brand created during the financial crisis, S&P said, “AIG has been streamlining the legal organizations of the life and P/C operations to reduce administrative and regulatory compliance costs and improve capital management.”

“The company has been making significant investments in staff, systems, and underwriting tools to improve the profitability of its P/C operations to a level more consistent with its historical underwriting results,” the S&P report said.

Reporting on profitability, S&P noted that AIG P/C reported full-year pretax operating income of $1.8 billion for 2012, compared to $1.2 billion in 2011. Still, the combined ratio remained elevated at 108.6 versus 108.8 in 2011—with a loss ratio dip of 4.4 points nearly offset by a 4.2-point increase in the expense ratio. The increased expense ratio reflected investments in IT, underwriting, and rebranding initiatives, S&P said.

S&P believes that AIG’s P/C operations will report a much improved combined ratio—of roughly 103—in 2013, driving a pretax operating profit in the $3.5-$4 billion range.

Last week, AIG P/C reported first-quarter 2013 operating income of $1.6 billion, and a first-quarter combined ratio of 97.3—marking the first time the P/C combined ratio dipped below 100 since third-quarter 2010.

In Monday’s rating action, S&P also affirmed its “A-plus” ratings on the AIG L&R Group, and assigned a stable outlook to the P/C and L&R ratings. While affirming the “A-minus” long-term counterparty credit rating on AIG, S&P said the outlook on this rating is negative.

S&P said the stable outlook for AIG P/C reflects a belief that the group will sustain its competitive position while improving operating results to a level more consistent with its peers.

“We believe AIG’s enterprise risk management should continue improving as the operating companies implement enhanced risk-management processes and fully integrate them throughout the AIG organization,” S&P added.

In a statement, S&P’s credit analyst David Zuber discussed performance changes that could prompt the S&P to raise or lower its latest ratings.

“We could lower our ratings on AIG, AIG P/C, and AIG L&R if the group’s performance were to fall short of our expectations, particularly with regard to earnings, capitalization, liquidity, leverage, or coverage,” Zuber said.

“On the other hand, we could raise the ratings if the consolidated group were to improve its operating performance, particularly at AIG P/C, to a level consistently better than the industry average while continuing to improve AIG’s risk profile,” he added.