AIG 2012 Annual Report Download - page 89

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The following table summarizes the operations of each reportable segment. See also Note 3 to the
Consolidated Financial Statements.
Total revenues:
AIG Property Casualty $ 40,722 $ 37,207 (2)% 9%
AIG Life and Retirement 15,315 14,747 9 4
Total reportable segments 56,037 51,954 1 8
Other Operations 4,079 21,405 145 (81)
Consolidation and eliminations (304) (530) (185) 43
Total 59,812 72,829 10 (18)
Pre-tax income (loss):
AIG Property Casualty 1,820 (93) 1 NM
AIG Life and Retirement 2,956 2,701 28 9
Total reportable segments 4,776 2,608 18 83
Other Operations (4,703) 17,611 NM NM
Consolidation and eliminations 43 28 NM 54
Total 116 20,247 NM (99)
A discussion of significant items affecting pre-tax segment income follows. Factors that affect operating income for a
specific business segment are discussed in the detailed business segment analysis.
2012 and 2011 Pre-tax Income Comparison
AIG Property Casualty – Pre-tax income increased slightly in 2012 compared to 2011. The increase in pre-tax
income was the result of lower underwriting losses due to the impact of lower catastrophe losses, underwriting
improvements related to rate increases and enhanced risk selection, higher net investment income due to asset
diversification by reducing the concentration in tax-exempt municipal instruments and increasing investments in
private placement debt and structured securities. These increases were partially offset by higher acquisition costs as
a result of the change in business mix from Commercial Insurance to Consumer Insurance and higher general
operating expenses and lower net realized capital gains.
AIG Life and Retirement – Pre-tax income increased in 2012 compared to 2011, principally due to efforts to actively
manage net investment spreads. Results benefited from higher net investment income, lower interest credited, lower
reserves for death claims and the impact of more favorable separate account performance on DAC amortization and
policyholder benefit reserves. These items were partially offset by significant proceeds from a legal settlement in
2011, higher mortality costs and an increase in GIC reserves.
Other Operations – Other Operations recorded pre-tax income in 2012 compared to a pre-tax loss in 2011 due to
fair value and realized gains in our interest in AIA ordinary shares, and in our interest in ML III, partially offset by an
increase in estimated litigation liability, and a loss on extinguishment of debt of $3.3 billion in 2011 in connection with
the termination of the FRBNY Credit Facility.
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AIG 2012 Form 10-K72
Percentage Change
Years Ended December 31,
(in millions) 2012 2011 2010 2012 vs. 2011 2011 vs. 2010
$ 39,781
16,767
56,548
9,974
(866)
65,656
1,837
3,780
5,617
3,899
(194)
9,322
ITEM 7 / RESULTS OF OPERATIONS