AIG 2013 Annual Report Download - page 106

AIG Property Casualty’s business is transacted in most major foreign currencies. The following table presents the
average of the quarterly weighted average exchange rates of the currencies that have the most significant impact to
our businesses:
Currency:
JPY 79.32 80.16 21% (1)%
EUR 0.78 0.72 (3)% 8%
GBP 0.63 0.62 2% 2%
The Americas net premiums written increased in 2013, compared to the prior year, primarily due to the rate
increases in Commercial Insurance and continued growth in the personal property and private client group and rate
actions for the warranty retail program in Consumer Insurance. This was partially offset by decreases in casualty
businesses reflecting the execution of our strategy to enhance risk selection and the effect of the timing of the
catastrophe bond issuances.
Asia Pacific net premiums written decreased in 2013, compared to the prior year, primarily due to the strengthening
of the U.S. dollar against the Japanese yen. Excluding the effect of foreign exchange, net premiums written
increased primarily due to growth in Consumer Insurance of Fuji Life products and direct marketing business in
Japan. The expansion of business in Asia Pacific countries outside of Japan also continued supported by growth in
individual personal accident insurance, direct marketing and personal lines products. Commercial Insurance net
premiums written increased in the Asia Pacific region primarily due to organic growth and rate increases in Property,
Specialty, and Casualty. In addition, our decision to retain more favorable risks in Property and Financial lines
increased net premiums written during 2013.
EMEA net premiums written increased in 2013, compared to the prior year, due to Commercial Insurance new
business growth, particularly in Property and Financial lines, a change in reinsurance strategies to retain more
favorable risks in those lines, and rate improvements on retained business, as well as growth in all lines of
Consumer Insurance.
The Americas net premiums written decreased primarily due to the restructuring of the Commercial Insurance
Casualty book of business primarily in workers’ compensation and loss-sensitive business, slightly offset by rate
increases. These decreases were partially offset by continued growth in Consumer Insurance, which was primarily
attributable to increases to group accident, personal property, and private client group and warranty lines. Additional
premium recognized on the loss-sensitive book of business was $54 million for the year ended December 31, 2012
compared to additional premium of $172 million in the prior year.
Asia Pacific net premiums written increased in 2012 primarily due to an increase in Consumer Insurance reflecting
growth of personal property business, group personal accident insurance, and direct marketing business in Japan.
The expansion in Asia Pacific countries outside Japan also continued in 2012, supported by growth in individual
personal accident insurance, direct marketing and personal lines products. Commercial Insurance increased in the
region primarily due to organic growth and rate increases in Property and moderate organic growth in Specialty and
Financial lines.
EMEA net premiums written decreased primarily due to the impact of foreign exchange. The continued execution of
underwriting discipline and the reduction in certain casualty lines that did not meet internal performance targets were
offset by rate strengthening initiatives on new and renewal business for Commercial Insurance. Consumer Insurance
experienced modest growth in travel, warranty, and specialty personal lines products while focused on re-building its
direct marketing programs that it previously shared with American Life Insurance Company (ALICO).
2013 and 2012 Comparison
2012 and 2011 Comparison
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AIG 2013 Form 10-K88
ITEM 7 / RESULTS OF OPERATIONS / AIG PROPERTY CASUALTY
Percentage Change
Years Ended December 31,
Rate for 1 USD 2013 2012 2011 2013 vs. 2012 2012 vs. 2011
95.86
0.76
0.64
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