AIG 2012 Annual Report Download - page 94

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Commercial Insurance Results
Operating income increased in 2011, reflecting the effect of rate increases and enhanced risk selection. These items
were partially offset by higher catastrophe losses, higher acquisition expenses and a decrease in the allocated net
investment income due to a decrease in the risk-free rate. In 2011, catastrophe losses, adjusted for reinstatement
premiums, were $2.6 billion compared to $1.0 billion in 2010, as 2011 included the impact of the Tohoku Catastrophe
in Japan and the earthquakes in New Zealand. In 2011, net prior year favorable development, including premium
adjustments, was $455 million compared to net prior year adverse development of $2.6 billion in 2010.
Consumer Insurance Results
Consumer Insurance recognized an operating loss in 2011 compared to operating income in 2010 primarily due to an
increase in catastrophe losses, which includes the Tohoku Catastrophe and Hurricane Irene. This was partially offset
by an improvement in the accident year loss ratio, and an increase in allocated net investment income. Catastrophe
losses for the year ended December 31, 2011 were $715 million compared to $66 million during the prior year. Net
prior year adverse development was $85 million in 2011 as compared to net prior year favorable development of
$63 million in 2010.
See AIG Property Casualty Underwriting Ratios below for further information on prior year development.
AIG Property Casualty Net Premiums Written
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The following table presents AIG Property Casualty net premiums written by major line of business:
Commercial Insurance
Casualty $ 9,820 $ 9,940 (13)% (1)%
Property 3,811 3,180 10 20
Specialty 3,552 3,335 1 7
Financial lines 3,872 3,718 2 4
Total net premiums written $ 21,055 $ 20,173 (4)% 4%
Consumer Insurance
Accident & Health $ 6,762 $ 5,774 3% 17%
Personal lines 7,000 5,572 3 26
Total net premiums written $ 13,762 $ 11,346 3% 21%
Other 23 93 NM (75)
Total AIG Property Casualty net premiums written $ 34,840 $ 31,612 (1)% 10%
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AIG 2012 Form 10-K 77
Percentage Change
Years Ended December 31,
(in millions) 2012 2011 2010 2012 vs. 2011 2011 vs. 2010
$ 8,574
4,191
3,576
3,959
$ 20,300
$ 6,969
7,181
$ 14,150
(14)
$ 34,436
ITEM 7 / RESULTS OF OPERATIONS