Segments of Operations

6 Months Ended

Jun. 30, 2011

Segments of Operations [Abstract]

Segments of Operations

C. Segments of Operations

AFG manages its business as three segments: (i) property and casualty insurance, (ii) annuity and supplemental insurance and (iii) other, which includes holding company costs and operations of the managed investment entities.

AFG reports its property and casualty insurance business in the following Specialty sub-segments: (i) Property and transportation, which includes physical damage and liability coverage for buses, trucks and recreational vehicles, inland and ocean marine, agricultural-related products and other property coverages, (ii) Specialty casualty, which includes primarily excess and surplus, general liability, executive liability, umbrella and excess liability, customized programs for small to mid-sized businesses and California workers’ compensation, and (iii) Specialty financial, which includes risk management insurance programs for lending and leasing institutions (including collateral and mortgage protection insurance), surety and fidelity products and trade credit insurance. AFG’s annuity and supplemental insurance business markets traditional fixed and indexed annuities and a variety of supplemental insurance products such as Medicare supplement. AFG’s reportable segments and their components were determined based primarily upon similar economic characteristics, products and services.

The following tables (in millions) show AFG’s revenues and operating earnings before income taxes by significant business segment and sub-segment.

	Three months ended						Six months ended
	June 30,						June 30,
	2011			2010			2011			2010
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	274		$	209		$	529		$	425
Specialty casualty		219			219			435			437
Specialty financial		100			127			212			255
Other		16			17			32			34
Total premiums earned		609			572			1,208			1,151
Investment income		75			85			148			177
Realized gains (losses)		32			13			32			23
Other income		20			21			35			36
Total property and casualty insurance		736			691			1,423			1,387
Annuity and supplemental insurance:
Investment income		230			208			456			410
Life, accident and health premiums		107			113			217			228
Realized gains (losses)		(13	)		(2	)		(16	)		(8	)
Other income		27			33			50			58
Total annuity and supplemental insurance		351			352			707			688
Other		6			9			2			11
Total revenues	$	1,093		$	1,052		$	2,132		$	2,086
Operating Earnings Before Income Taxes
Property and casualty insurance:
Underwriting income (loss):
Specialty
Property and transportation	$	—		$	8		$	33		$	40
Specialty casualty		21			23			23			41
Specialty financial		13			33			23			54
Other		5			4			6			10
Other lines (a)		(50	)		(5	)		(50	)		(11	)
Total underwriting		(11	)		63			35			134
Investment and other income, net		70			81			138			162
Realized gains (losses)		32			13			32			23
Total property and casualty insurance		91			157			205			319
Annuity and supplemental insurance:
Operations		56			46			108			90
Realized gains (losses)		(13	)		(2	)		(16	)		(8	)
Total annuity and supplemental insurance		43			44			92			82
Other (b)		(65	)		(43	)		(133	)		(96	)
Total operating earnings before income taxes	$	69		$	158		$	164		$	305

(a)	Includes a second quarter 2011 special charge of $50 million to increase asbestos and environmental reserves.
(b)	Includes a second quarter 2011 special charge of $9 million to increase asbestos and environmental reserves and the following earnings (losses) of managed investment entities for the second quarter and first six months of 2011 and 2010 (in millions):

Attributable to:
AFG shareholders, including management fees	$	6		$	7		$	15		$	15
Noncontrolling interests	$	(20	)	$	(13	)	$	(55	)	$	(33	)