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.
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2011 |
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2010 |
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2011 |
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2010 |
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Revenues
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Property and casualty insurance:
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Premiums earned:
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Specialty
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Property and transportation
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$ |
500 |
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$ |
407 |
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$ |
1,029 |
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$ |
832 |
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Specialty casualty
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|
216 |
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|
224 |
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|
651 |
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|
661 |
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Specialty financial
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|
101 |
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|
92 |
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|
313 |
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|
347 |
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Other
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|
18 |
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|
13 |
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|
50 |
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|
47 |
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Total premiums earned
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835 |
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|
736 |
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|
2,043 |
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|
1,887 |
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Investment income
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|
73 |
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|
80 |
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|
221 |
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|
257 |
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Realized gains (losses)
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15 |
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|
46 |
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|
47 |
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|
69 |
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Other income
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20 |
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|
13 |
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|
55 |
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|
49 |
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Total property and casualty insurance
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|
943 |
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875 |
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|
2,366 |
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|
2,262 |
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Annuity and supplemental insurance:
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|
|
|
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|
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Investment income
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236 |
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215 |
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|
692 |
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|
625 |
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Life, accident and health premiums
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|
107 |
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|
112 |
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|
324 |
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|
340 |
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Realized gains (losses)
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(8 |
) |
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(11 |
) |
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(24 |
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(19 |
) |
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Other income
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28 |
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23 |
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|
78 |
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|
81 |
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Total annuity and supplemental insurance
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|
363 |
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|
339 |
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1,070 |
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|
1,027 |
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Other
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29 |
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|
41 |
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31 |
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|
52 |
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Total revenues
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$ |
1,335 |
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$ |
1,255 |
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$ |
3,467 |
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$ |
3,341 |
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Operating Earnings Before Income Taxes
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Property and casualty insurance:
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|
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Underwriting income (loss):
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Specialty
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Property and transportation
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$ |
5 |
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$ |
41 |
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$ |
38 |
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$ |
81 |
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Specialty casualty
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|
20 |
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(13 |
) |
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|
43 |
|
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|
29 |
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Specialty financial
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|
|
23 |
|
|
|
36 |
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|
46 |
|
|
|
91 |
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Other
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|
8 |
|
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|
4 |
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|
14 |
|
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|
13 |
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Other lines (a)
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— |
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— |
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(50 |
) |
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(12 |
) |
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Total underwriting
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56 |
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68 |
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|
91 |
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|
202 |
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Investment and other income, net
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|
66 |
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|
67 |
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|
|
204 |
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|
|
229 |
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Realized gains (losses)
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|
15 |
|
|
|
46 |
|
|
|
47 |
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|
69 |
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Total property and casualty insurance
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|
|
137 |
|
|
|
181 |
|
|
|
342 |
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|
|
500 |
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Annuity and supplemental insurance:
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Operations
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|
49 |
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|
58 |
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|
157 |
|
|
|
148 |
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Realized gains (losses)
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|
|
(8 |
) |
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|
(11 |
) |
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|
(24 |
) |
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(19 |
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Total annuity and supplemental insurance
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|
41 |
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|
|
47 |
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|
133 |
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|
|
129 |
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Other (b)
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|
(23 |
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(20 |
) |
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|
(156 |
) |
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|
(116 |
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Total operating earnings before income
taxes
|
|
$ |
155 |
|
|
$ |
208 |
|
|
$ |
319 |
|
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$ |
513 |
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| |
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| (a) |
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Includes a second quarter 2011 special charge of $50 million to increase asbestos and
environmental reserves. |
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| (b) |
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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 third quarter and first nine months of 2011 and 2010 (in millions): |
| |
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Attributable to:
|
|
|
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|
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AFG shareholders, including
management fees
|
|
$ |
3 |
|
|
$ |
8 |
|
|
$ |
18 |
|
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$ |
23 |
|
|
Noncontrolling interests
|
|
$ |
8 |
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|
$ |
(4 |
) |
|
$ |
(47 |
) |
|
$ |
(37 |
) |
|