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ITEM 7 / RESULTS OF OPERATIONS.....................................................................................................................................................................................AIG Property Casualty Results..............................................................................................................................................................................................The following table presents AIG Property Casualty results:Years Ended December 31,Percentage Change(in millions) 2012 2011 2010 2012 vs. 2011 2011 vs. 2010Commercial InsuranceUnderwriting results:Net premiums written $ 20,300 $ 21,055 $ 20,173 (4)% 4%Decrease in unearned premiums 500 748 889 (33) (16)Net premiums earned 20,800 21,803 21,062 (5) 4Claims and claims adjustment expenses incurred 16,696 18,332 18,814 (9) (3)Underwriting expenses 6,009 5,345 5,252 12 2Underwriting loss (1,905) (1,874) (3,004) (2) 38Net investment income 2,809 3,213 3,309 (13) (3)Operating income $ 904 $ 1,339 $ 305 (32)% 339%Consumer InsuranceUnderwriting results:Net premiums written $ 14,150 $ 13,762 $ 11,346 3% 21%Increase in unearned premiums (198) (7) (67) NM 90Net premiums earned 13,952 13,755 11,279 1 22Claims and claims adjustment expenses incurred 8,498 8,900 6,745 (5) 32Underwriting expenses 5,613 5,253 4,650 7 13Underwriting loss (159) (398) (116) 60 (243)Net investment income 451 354 301 27 18Operating income (loss) $ 292 $ (44) $ 185 NM% NM%OtherUnderwriting results:Net premiums written $ (14) $ 23 $ 93 NM% (75)%Decrease in unearned premiums 135 108 87 25 24Net premiums earned 121 131 180 (8) (27)Claims and claims adjustment expenses incurred 591 717 2,308 (18) (69)Underwriting expenses 466 272 200 71 36Underwriting loss (936) (858) (2,328) (9) 63Net investment income 1,560 781 782 100 –Operating income (loss) 624 (77) (1,546) NM 95Net realized capital gains (losses) (2) 607 (38) NM NMLegal settlement 17 – – NM NMBargain purchase gain – – 332 NM NMOther income (expense) – net 2 (5) 669 NM NMPre-tax income (loss) $ 641 $ 525 $ (583) 22% NM%Total AIG Property CasualtyUnderwriting results:Net premiums written $ 34,436 $ 34,840 $ 31,612 (1)% 10%Decrease in unearned premiums 437 849 909 (49) (7)Net premiums earned 34,873 35,689 32,521 (2) 10Claims and claims adjustment expenses incurred 25,785 27,949 27,867 (8) –Underwriting expenses 12,088 10,870 10,102 11 8Underwriting loss (3,000) (3,130) (5,448) 4 43Net investment income 4,820 4,348 4,392 11 (1)Operating income (loss) 1,820 1,218 (1,056) 49 NMNet realized capital gains (losses) (2) 607 (38) NM NMLegal settlement 17 – – NM NMBargain purchase gain – – 332 NM NMOther income (expense) – net * 2 (5) 669 NM NMPre-tax income (loss) $ 1,837 $ 1,820 $ (93) 1% NM%* Includes gain on divested properties of $669 million in 2010...................................................................................................................................................................................................................................AIG 2012 Form 10-K 75