AIG shares have a “significant upside,” the fund said Wednesday in a letter to investors of the New York-based firm.

The U.S. Treasury Department has cut its stake in the New York-based insurer to 16 percent from 92 percent as the stock climbed after results improved at the Chartis property-casualty unit, the company’s largest business. Chartis has worked to expand in emerging markets and reduce business in so called long-tail lines, which require the company to hold larger sums of capital to back obligations to commercial clients.

“Chartis’s management, led by the talented Peter Hancock, is emphasizing international and shorter-tail consumer property lines,” Third Point wrote.

AIG advanced 2.2 percent to end at $34.21 in New York trading. The insurer has rallied about 47 percent this year.

Third Point held 2.25 million shares as of June 30, according to a regulatory filing listing holdings as of the end of the second quarter. Loeb said in today’s letter that his fund “continued to accumulate AIG shares in Treasury’s offerings in the second and third quarters” without specifying the size of the latest purchases.

Elissa Doyle, a spokeswoman for Third Point, declined to comment on the letter.