At American International Group, big is still better, at least for now.

The insurance giant, which became the starkest example of “too big to fail” when it had to be rescued by the government during the financial crisis, is now trying to streamline itself to be more profitable and to fend off activist investors who are calling for it to be broken in three.

After pressure from those activists mounted for months, A.I.G. announced a strategic shift on Tuesday that stopped well short of an outright breakup. Instead, the company will offer part of its mortgage insurance unit in an initial public offering, sell its financial advisory business and create nine distinct operations in its commercial and consumer divisions that could pave the way for future sales or spinoffs.

The company plans to spend $25 billion on stock buybacks and dividends over two years, and to cut $1.6 billion from operating costs. It shored up its loss reserves by another $3.6 billion.

A.I.G.’s president and chief executive, Peter D. Hancock, however, remained resistant to investor demands — led by Carl C. Icahn — that the company take radical action to shake off the regulatory burden of being labeled a systemically important financial institution, or SIFI, by the government.