Segments of Operations

9 Months Ended

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

(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 third quarter and first nine months of 2011 and 2010 (in millions):

Attributable to:
AFG shareholders, including management fees	$	3	$	8		$	18		$	23
Noncontrolling interests	$	8	$	(4	)	$	(47	)	$	(37	)