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ITEM 7 / RESULTS OF OPERATIONS.....................................................................................................................................................................................Consumer Insurance Net Premiums WrittenThe Consumer Insurance business continued to grow its net premiums written and build momentum through itsmultiple distribution channels and continuing focus on direct marketing. Consumer Insurance is well-diversified acrossthe major lines of business and has global strategies that are executed across its regions to enhance customerrelationships and business performance. Consumer Insurance currently has direct marketing operations in over 50countries, and we continued to emphasize the growth of this channel, which for the year ended December 31, 2012,accounted for approximately 15 percent of our overall net premiums written.A&H net premiums written increased, due to the growth of group personal accident business in the Americas andAsia Pacific, strong growth of new business sales in Fuji Life, travel insurance business, direct marketing programs inJapan and other Asia Pacific nations and growth in individual personal accident in other Asia Pacific nations. Thiswas partially offset by the continuing strategies to reposition U.S. direct marketing operations, as well as pricing andunderwriting actions in Europe.Personal lines net premiums written increased primarily due to the execution of our strategic initiative to grow highervalue lines of business in non-automobile products and rate increases in Japan automobile products. Growth innon-automobile net premiums written outpaced growth in automobile net premiums written, increasing its proportionto total net premiums written, due to our focus on diversifying the global product mix.2011 and 2010 ComparisonCommercial Insurance Net Premiums WrittenIn 2011, net premiums written increased due to the effects of overall improvements in ratable exposures (i.e., assetvalues, payrolls and sales), general pricing improvement and retrospective premium adjustments on loss-sensitivecontracts. We implemented certain initiatives designed to provide for a more effective use of capital, further growth inthe strategic higher value lines of business and improvement in foreign exchange rates.Casualty net premiums written decreased primarily due to our strategic initiatives in workers’ compensation andcertain other lines of business, as well as a continued commitment to maintain price discipline in lines where marketrates are unsatisfactory. However, given the capital intensive nature of these classes of casualty business, we expectthat over time, these actions will improve our results. Net premiums written decreased by approximately $0.6 billionas we ceased writing excess workers’ compensation business as a stand-alone product. This was slightly offset byan increase in additional premiums on loss-sensitive business in the amount of approximately $164 million comparedto 2010.Property net premiums written increased due to particularly strong pricing trends in the U.S. and Japan, coupled withchanges in the reinsurance strategy resulting in increased retentions. The catastrophe bond transactions in 2011 and2010 reduced net premiums written by approximately $201 million and $208 million, respectively.Specialty net premiums written increased due to the strategic initiative to grow higher value lines, includingaerospace, global marine, and credit insurance, all of which benefited from the impact of rate increases as well asnew business growth.Financial lines net premiums written increased primarily due to a multi-year Errors and Omissions policy in theAmericas that produced net premiums written of $148 million in 2011.Consumer Insurance Net Premiums WrittenConsumer Insurance net premiums written increased in 2011 primarily due to the effect of including Fuji results for afull year, improvement in foreign currency exchange rates, primarily in the Japanese Yen, and further growth in thestrategic higher value lines of business. Excluding the effect of the Fuji acquisition and foreign exchange, ConsumerInsurance net premiums written declined by one percent in 2011, primarily due to the non-renewal of certainprograms in the U.S. and Canada that did not meet internal performance targets in Personal lines business.A&H net premiums written increased primarily due to the Fuji acquisition, direct marketing, group and individualaccident, travel business, and the execution of new business strategies at Fuji Life. Excluding the Fuji acquisition,A&H net premiums written increased by approximately 7 percent, mainly attributable to favorable marketing programsand the benefits of rate increases implemented in 2010 in Japan and the effect of foreign exchange. Growth wasalso demonstrated in key geographic markets such as China, Continental Europe and Israel...................................................................................................................................................................................................................................AIG 2012 Form 10-K 79