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ITEM 7 / RESULTS OF OPERATIONS.....................................................................................................................................................................................WORLDWIDE NET PREMIUMS WRITTEN BY LINE OF BUSINESSTotal 2012 NPW (in millions) $34,436Commercial InsuranceConsumer Insurance$3,959$3,576$4,191$3,872$3,552$3,811$3,718$3,335$3,180Financial linesSpecialtyPropertyCasualty$7,181$7,000$5,572Personal linesAccident & Health$8,574$9,820$9,940$6,969$6,762$5,7742012 2011 20102012 and 2011 ComparisonCommercial Insurance Net Premiums Written2012 2011 201015FEB201321461922In 2012, Commercial Insurance focused on the execution of the previously announced strategic objectives. Theoverall decrease in Casualty was partially offset by increases in all the other lines of business.Casualty net premiums written decreased, as planned, primarily due to the execution of our strategy to improve lossratios. Our enhanced risk selection process, and adherence to pricing targets resulted in the non-renewal ofapproximately $800 million of net premiums written, primarily within the workers’ compensation business in theAmericas, and within the Primary Casualty business in EMEA. In addition, the restructuring of the loss-sensitiveprograms decreased Casualty net premiums written by approximately $260 million in 2012. The additional premiumsassociated with prior year development in the loss-sensitive business also decreased by approximately $120 million.We also entered into a quota share reinsurance treaty in the U.S. for the Excess Casualty business that decreasednet premiums written by approximately $60 million. We implemented rate increases in retained business, especially inthe U.S., that partially offset the premium decreases noted above.Property net premiums written increased due to rate increases, primarily in the U.S., reduced catastrophe bondpurchases in 2012, and the restructuring of the per-risk reinsurance program as part of our decision to retain morefavorable risks while continuing to manage aggregate exposure. Catastrophe exposed business retained in theAmericas and Asia Pacific region also benefitted from rate increases.We have continued the strategy, adopted in 2010, to improve the allocation of our reinsurance between traditionalreinsurance markets and capital markets. During 2011, as part of this strategy, we secured a three-year catastrophebond with an industry index, first occurrence trigger, providing for $575 million in protection for U.S. hurricanes andearthquakes. The bond transaction reduced net premiums written by approximately $201 million in 2011. There wereno catastrophe bond purchases in 2012.Specialty net premiums written increased in 2012 due to the restructuring of the aerospace reinsurance program toretain more favorable risks while continuing to manage aggregate exposure. This increase was slightly offset by ourstrategic initiatives related to improved risk selection, particularly within products provided to small and medium sizedenterprises in the Americas and EMEA regions. We continue to shift our business mix towards higher value lines,particularly in aerospace.Financial lines net premiums written increased, reflecting strong business growth in all regions, despite targeteddecreases where the business did not meet our risk selection and internal performance criteria. Financial lines netpremiums written for year ended December 31, 2011 benefited from a multi-year Errors and Omissions policy in theAmericas that produced net premiums written of $148 million...................................................................................................................................................................................................................................78 AIG 2012 Form 10-K