AIG 2014 Annual Report Download - page 97

ITEM 7 / RESULTS OF OPERATIONS / COMMERCIAL INSURANCE
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The following tables present Property Casualty’s accident year catastrophe and severe losses by region and number
of events:
Catastrophes(a)
# of Asia
(in millions) Events Americas Pacific EMEA Total
Year Ended December 31, 2014
Flooding 1 $ 16 $ - $ - $ 16
Windstorms and hailstorms 14 306 63 21 390
Tropical cyclone 496 34 15 145
Earthquakes 148 - 149
Reinstatement premiums - - 2 2
Total catastrophe-related charges 20 $466 $ 97 $ 39 $602
Year Ended December 31, 2013
Flooding 8 $ 195 $ 8 $ 114 $ 317
Windstorms and hailstorms 10 205 - 78 283
Wildfire 1 40 - - 40
Tropical cyclone 3 4 66 - 70
Total catastrophe-related charges 22 $ 444 $ 74 $ 192 $ 710
Year Ended December 31, 2012
Flooding 1 $ - $ - $ 23 $ 23
Windstorms and hailstorms 9 299 30 23 352
Tropical cyclone(b) 3 1,638 9 113 1,760
Drought 1 108 - - 108
Reinstatement premiums 27 - - 27
Total catastrophe-related charges 14 $ 2,072 $ 39 $ 159 $ 2,270
(a) Catastrophes are generally weather or seismic events having a net impact on Commercial Insurance in excess of $10 million each.
(b) Includes Storm Sandy flooding and wind damage losses of $1.7 billion.
Severe Losses*
Years Ended December 31, # of Asia
(in millions) Events Americas Pacific EMEA Total
2014 30 $169 $ 73 $ 350 $592
2013 27 $ 139 $ 184 $ 246 $ 569
2012 19 $ 93 $ 74 $ 126 $ 293
* Severe losses are defined as non-catastrophe individual first party losses and surety losses greater than $10 million, net of related reinsurance and salvage
and subrogation.
2014 and 2013 Comparison
The combined ratio decreased by 1.4 points in 2014 compared to 2013 reflecting decreases in the expense ratio and the loss
ratio.
The accident year combined ratio, as adjusted, decreased by 0.9 points in 2014 compared 2013, primarily due to lower
expense ratio which was partially offset by a higher accident year loss ratio, as adjusted.
The accident year loss ratio, as adjusted, increased by 0.2 points in 2014, compared to 2013, primarily due to higher frequency
of non-severe losses, particularly in Property and Specialty businesses. This was partially offset by an improvement in
Financial lines, particularly in the U.S., reflecting enhanced risk selection and pricing discipline. Severe losses represented
approximately 2.8 points of the accident year loss ratio, as adjusted, in both 2014 and 2013.
The acquisition ratio decreased by 0.4 points in 2014 compared to 2013, primarily due to a reduction in expenses of personnel
engaged in sales support activities, lower premium taxes and guaranty fund and other assessments.