Bring on tomorrow - AIG.com

ITEM 7 / EXECUTIVE SUMMARY.....................................................................................................................................................................................AIG Priorities for 2013AIG is focused on the following priorities for 2013:• Strengthen and improve the operating performance of our core businesses;• Consummate the sale of up to 90 percent of our interest in ILFC;• Enhance the yield on our investments while maintaining focus on credit quality;• Manage AIG’s capital and interest expense more efficiently by redeploying excess capital in areas thatpromote profitable growth;• Work with the Board of Governors of the Federal Reserve System (the FRB) in its capacity as AIG’sprincipal regulator; and• Reduce recurring operating expenses by leveraging AIG’s scale and driving increased standardizationthrough investments in infrastructure.Strategic Outlook for Our Operating BusinessesThe strategic outlook for each of our businesses and management initiatives to improve growth and performance in2013 and over the longer term are described below.AIG PROPERTY CASUALTY STRATEGIC OUTLOOK..............................................................................................................................................................................................We expect that the current low interest rate environment and ongoing uncertainty in global economic conditions willcontinue to challenge the growth of net investment income and limit growth in some markets through at least 2013.These conditions, coupled with overcapacity in the property casualty insurance industry business, are leading carriersto tighten terms and conditions, shed unprofitable business and develop advanced data analytics in order to improveprofitability.We have observed improving trends in certain key indicators that may offset the effect of current economicchallenges. Commencing in the second quarter of 2011, and continuing since, we have benefited from favorablepricing trends, particularly in our U.S. commercial business. The property casualty insurance industry is beginning toexperience modest growth as a result of this positive rate trend and an increase in overall exposures in somemarkets. We expect that expansion in certain growth economies will occur at a faster pace than in developedcountries, although at levels lower than those previously expected due to revised economic assumptions...................................................................................................................................................................................................................................AIG 2012 Form 10-K 63