AIG 2010 Annual Report Download - page 99

American International Group, Inc., and Subsidiaries
Chartis U.S. Results
The following table presents Chartis U.S. results:
Percentage Increase/
(Decrease)
Years Ended December 31,
(in millions) 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
Underwriting results:
Net premiums written $17,247 $18,373 $21,243 (6)% (14)%
Decrease in unearned premiums 976 1,405 1,169 (31) 20
Net premiums earned 18,223 19,778 22,412 (8) (12)
Claims and claims adjustment expenses incurred 18,514 17,943 18,255 3 (2)
Underwriting expenses 4,671 4,401 5,887 6 (25)
Underwriting loss (4,962) (2,566) (1,730) - -
Net investment income 3,458 2,790 1,981 24 41
Net realized capital losses (196) (679) (3,294) - -
Pre-tax loss $(1,700) $ (455) $(3,043) -% -%
Chartis U.S. Underwriting Results
Chartis U.S. Net Premiums Written
The following table presents Chartis U.S. net premiums written by line of business:
Percentage Increase/
(Decrease)
Years Ended December 31,
(in millions) 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
Consumer lines:
Accident & health $ 1,428 $ 1,324 $ 1,392 8% (5)%
Personal lines 1,792 1,784 1,709 - 4
Total Consumer lines 3,220 3,108 3,101 4 -
Commercial lines:
Casualty 6,141 6,880 8,824 (11) (22)
Property 1,867 2,170 2,128 (14) 2
Specialty 6,019 6,215 7,190 (3) (14)
Total Commercial lines 14,027 15,265 18,142 (8) (16)
Total net premiums written $17,247 $18,373 $21,243 (6)% (14)%
Chartis U.S. net premiums written decreased in 2010 compared to 2009 primarily due to:
• risk management initiatives undertaken as part of the redefinition of its overall risk appetite resulting in the
reduction of aggregate exposures in certain Commercial Casualty, Property and Specialty lines of business.
Chartis U.S. is reducing its production in capital-intensive or lower margin and catastrophe-exposed
businesses, including excess casualty, workers’ compensation and excess workers’ compensation businesses in
its Commercial Casualty lines, and within its Commercial Property lines it reduced both its gross and net
exposures to catastrophes through the reduction in direct writings and a more strategic use of reinsurance;
and
• lower U.S. workers’ compensation premiums due to declining rates, lower employment levels, increased
competition and Chartis’ continued strategy to remain price disciplined. These factors negatively affected
both its Commercial Casualty and Specialty lines of business.
• declines in the construction, real estate and transportation classes within Commercial Casualty lines and
various classes of professional liability business in the Specialty lines, which were negatively affected to a
greater extent than other classes by the credit crisis. The limited availability of capital for new projects
AIG 2010 Form 10-K 83