A late-season megastorm and the announcement of changes at the top of two of the world's three largest brokerages helped make 2012 a year to remember in the annals of risk management. It also was the year the federal government exited the majority ownership of American International Group Inc. it had held since 2008, and the year the federal government called to a halt the judicial proceedings against four former General Reinsurance Corp. executives and a former AIG executive for an alleged sham insurance deal.

But yearlong, 2012 was marked by a slow but steady increase in commercial insurance rates. While short of a hard market, the commercial insurance market firmed, giving no sign of reversing its direction in the foreseeable future.

Questions about reputational risk played across the liability world as two high-profile controversies played out. First, the conviction of former Pennsylvania State University assistant football coach Jerry Sandusky on more than 40 counts of child abuse exposed Penn State to tens of millions of dollars in lawsuits, as well as an uncounted amount of lost sports revenue as the school was banned from college football bowl appearances for four years. Later in the year, the Lance Armstrong doping scandal underscored the need for businesses and other organizations to protect their reputations when they are associated with celebrities who fall from grace.

In January, Aon P.L.C. announced that it would move its headquarters to London from Chicago. Aon said the move would improve Aon's ability to grow its business globally, particularly in emerging markets. Industry analysts also noted that Aon would benefit from favorable tax treatment stemming from the move.

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Hartford Financial Services Group Inc. said in March that it would divest itself of its individual life and annuity businesses, among others, to focus on its property/casualty and group benefits business. The move, which came amid pressure from John Paulson, president of hedge fund manager Paulson & Co. and Hartford's largest shareholder, drew cautious praise from market observers.

At the end of March, a retrial was ordered for four former executives at Gen Re and one at AIG convicted in 2008 of having engaged in a sham reinsurance transaction to make AIG more attractive to investors. The government and the defendants entered into settlement negotiations, which ultimately led to a June agreement in which the defendants admitted that some aspects of the deal made in 2000 and 2001 were fraudulent and agreed to pay fines in return for the government dropping all charges 12 months after the settlement, provided that the defendants met certain requirements set out in the agreement.

Lloyd's of London announced in late March that catastrophes led it to sustain $818.8 million in losses in 2011. But Lloyd's and market analysts agreed that losses were well within expectations and that the market was well-positioned to absorb the impact. Lloyd's later reported a $2.4 billion profit for the first half of 2012. In between, Lloyd's revealed a new growth strategy — Lloyd's 2025 — with an emphasis on emerging markets.

AIG announced in June that it would rebrand its Chartis Inc. property/casualty operation as AIG as the once-troubled insurer became “close to achieving a complete turnaround,” according to AIG President and CEO Robert Benmosche. The turnaround continued as AIG continued to repay financial assistance provided by the federal government after the insurer nearly collapsed in September 2008. In September, AIG and the Treasury Department announced that through paybacks and stock shares, the government's ownership stake in AIG had been reduced to less than 16% from the nearly 80% it assumed in 2008. Later in the year, AIG also revealed that the federal Financial Stability Oversight Council had contacted it, saying that AIG was under consideration to be designated a systemically important financial institution, thus subject to heightened federal oversight.

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In September, Marsh & McLennan Cos. Inc. announced that MMC Group President and Chief Operating Officer Daniel Glaser would succeed Brian Duperreault as president and CEO of the company on Jan. 1, 2013. Mr. Duperreault led the brokerage's turnaround after it became the center of a bid-rigging scandal sparked by a 2004 lawsuit filed by then-New York Attorney General Eliot Spitzer.

A month later, Willis Group Holdings P.L.C. announced that Dominic Casserley, a senior director at McKinsey & Co., had been tapped to succeed CEO Joe Plumeri when Mr. Plumeri retires on Jan. 7, 2013.

Although Superstorm Sandy didn't pack the winds of a major hurricane, the late October storm devastated large areas of the New York metropolitan area and New Jersey shore, leaving thousands homeless and without power into early December. The storm redrew some of the Jersey shoreline and flooded Lower Manhattan. Estimated insured losses climbed throughout November, reaching as high as $22 billion.

In December, the Treasury Department said that it was selling off all of its remaining shares of AIG.