AIG 2012 Annual Report Download - page 100

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COMMERCIAL INSURANCE RATIOS
2012 2011 2010
84.1
9.9
14.6
16.6
12.3
80.3 89.3
10.8
14.1
Loss ratio
General operating
expense ratio
Acquisition ratio
ACCIDENT YEAR LOSS RATIOS
2012 2011 2010
74.3
9.9
14.6
16.6
12.3
68.7 74.2
10.8
14.1
Loss ratio
General operating
expense ratio
Acquisition ratio
CONSUMER INSURANCE RATIOS
2012 2011 2010
64.7
14.4
23.8
25.0
15.3
60.9 59.8
14.7
26.5
Loss ratio
General operating
expense ratio
Acquisition ratio
2012 2011 2010
58.9
14.4
23.8
25.0
15.3
58.3 59.8
14.7
26.5
Loss ratio
General operating
expense ratio
Acquisition ratio
ACCIDENT YEAR LOSS RATIOS
Given the nature of the lines of business and the expenses included in Other, management has determined that the
traditional underwriting measures of loss ratio, acquisition ratio, general operating expense ratio and combined ratio
do not provide an appropriate measure of underwriting performance. Therefore, these ratios are not separately
presented for Other.
See Liability for Unpaid Claims and Claims Adjustment Expense for further discussion of discounting of reserves and
prior year development.
2012 and 2011 Comparison
Commercial Insurance Ratios
The improvement in the accident year loss ratio, as adjusted, for the year ended December 31, 2012 reflects the
realization of benefits from the continued execution of our multi-faceted strategy to enhance risk selection, pricing
discipline, exposure management and claims processing. Although the execution of these strategies resulted in a
reduction of Casualty net premiums written, it also improved the accident year loss ratio as we remediated our
primary and excess Casualty books in both the Americas and EMEA regions. Financial lines improved due to rate
strengthening and restructuring and re-underwriting of certain products. Property improved due to rate strengthening,
enhanced engineering and exposure management.
The acquisition ratio increased by 2.0 points primarily due to our strategy of growing higher value lines, which
typically incur higher acquisition costs, and the restructuring of our Casualty lines, especially the loss-sensitive
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AIG 2012 Form 10-K 83
ITEM 7 / RESULTS OF OPERATIONS