AIG 2013 Annual Report Download - page 104

of our decision to retain more favorable risks while continuing to manage aggregate exposure. Catastrophe exposed
business retained in the Americas and Asia Pacific region also benefitted from rate increases.
During 2011, as part of the reinsurance strategy discussed above, we secured a three-year catastrophe bond with an
industry index, first occurrence trigger, providing for $575 million in protection for U.S. hurricanes and earthquakes.
The bond transaction reduced net premiums written by approximately $201 million in 2011. There were no
catastrophe bond purchases in 2012.
Specialty net premiums written increased in 2012, compared to the prior year, due to the restructuring of the
aerospace reinsurance program to retain more favorable risks while continuing to manage aggregate exposure. This
increase was slightly offset by our strategic initiatives related to improved risk selection, particularly within products
provided to small and medium sized enterprises in the Americas and EMEA regions. We continue to shift our
business mix towards higher value lines, particularly in aerospace.
Financial lines net premiums written increased in 2012, compared to the prior year, reflecting strong business
growth in all regions, despite targeted decreases where the business did not meet our risk selection and internal
performance criteria. Financial lines net premiums written for year ended December 31, 2011 benefited from a
multi-year Errors and Omissions policy in the Americas that produced net premiums written of $148 million.
The Consumer Insurance business continued to grow its net premiums written and build momentum through its
multiple distribution channels and continuing focus on direct marketing. Consumer Insurance is well-diversified across
the major lines of business and has global strategies that are executed across its regions to enhance customer
relationships and business performance. Consumer Insurance currently has direct marketing operations in over 50
countries, and we continued to emphasize the growth of this channel, which for the year ended December 31, 2012,
accounted for approximately 15 percent of our overall net premiums written.
A&H net premiums written increased in 2012, compared to the prior year, due to the growth of group personal
accident business in the Americas and Asia Pacific, strong growth of new business sales in Fuji Life, travel insurance
business, direct marketing programs in Japan and other Asia Pacific nations and growth in individual personal
accident in other Asia Pacific nations. This was partially offset by the continuing strategies to reposition U.S. direct
marketing operations, as well as pricing and underwriting actions in Europe.
Personal lines net premiums written increased in 2012, compared to the prior year, primarily due to the execution of
our strategic initiative to grow higher value lines of business in non-automobile products and rate increases in Japan
automobile products. Growth in non-automobile net premiums written outpaced growth in automobile net premiums
written, increasing its proportion to total net premiums written, due to our focus on diversifying the global product mix.
Consumer Insurance Net Premiums Written
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AIG 2013 Form 10-K86
ITEM 7 / RESULTS OF OPERATIONS / AIG PROPERTY CASUALTY
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