AIG 2007 Annual Report Download - page 28

26 AIG 2007 Annual Report
REVIEW OF OPERATIONS—
GENERAL INSURANCE
Domestic Brokerage Group
AIG’s Domestic Brokerage Group (DBG) is the largest U.S. com-
mercial property-casualty insurance organization. DBG companies
provide commercial insurance products and services to a wide range
of entities, from multinational and middle market companies to
small entrepreneurs and nonprofit organizations. Record operating
income in 2007 reflects DBG’s steadfast commitment to disciplined
underwriting and focus on profitability.
DBG’s principal operating subsidiaries include American Home
Assurance Company, National Union Fire Insurance Company of
Pittsburgh, Pa., and Lexington Insurance Company.
Many of DBG’s operating units have been writing commercial
insurance for decades. Capitalizing on its market advantages and key
business strategies, DBG is well-positioned to capture new opportu-
nities and continue leading the U.S. commercial insurance industry.
Diversification is a bedrock DBG characteristic that is reflected
in its products, distribution network, customer base, regional struc-
ture and employees. This balanced approach helps the organization
leverage growth opportunities even in the most challenging markets,
exercise flexibility in selecting customers and business segments that
offer the greatest potential, and expand a franchise that cannot easily
be replicated.
DBG companies hold high ratings for financial strength—an
increasingly important consideration for insurance brokers and
customers in placing their business. AIG Executive Liabilityhas
been a leading executive and professional liability underwriter for
AIG’s General Insurance operations include the largest
U.S. underwriters of commercial and industrial insurance,
the most extensive international property-casualty network,
a personal lines business with an emphasis on auto insurance
and high-net-worth clients, a mortgage guaranty insurance
operation and an international reinsurance organization.
General Insurance Financial Results
(in millions, except ratios) 2007 2006
Gross premiums written $58,798 $56,280
Net premiums written 47,067 44,866
Underwriting profit 4,500 4,657
Net investment income 6,132 5,696
Operating income before net
realized capital gains 10,632 10,353
Net realized capital gains (losses) (106) 59
Operating income 10,526 10,412
Operating income before net realized
capital gains (losses), excluding
catastrophe losses 10,908 10,353
Consolidated net reserves for losses and
loss expenses 69,288 62,630
Combined ratio 90.33 89.06
Combined ratio, excluding
catastrophe losses 89.73 89.06
AIG Environmental designed an innovative insurance product to cover the
specific risks associated with the clean up of Fort Ord, previously a U.S. Army
base in California contaminated with munitions and explosives. The compre-
hensive solution enabled the Fort Ord Reuse Authority to enter into a contract
for munitions removal, leading to multimillion-dollar mixed-use development
plans covering over 3,500 acres.