Segments of Operations

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segments of Operations

Segments of Operations

AFG manages its business as five segments: (i) Property and casualty insurance, (ii) Annuity, (iii) Run-off long-term care and life, (iv) Medicare supplement and critical illness (sold in August 2012) and (v) Other, which includes holding company costs, and the operations attributable to the noncontrolling interests 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 workers’ compensation, and (iii) Specialty financial, which includes risk management insurance programs for leasing and financing institutions (including collateral and lender-placed mortgage property insurance), surety and fidelity products and trade credit insurance. AFG’s annuity business markets traditional fixed and fixed-indexed annuities in the retail, financial institutions and education markets. 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 earnings before income taxes by segment and sub-segment.

	Three months ended June 30,						Six months ended June 30,
	2013			2012			2013		2012
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	301		$	290		$	594	$	553
Specialty casualty	277			236			536		456
Specialty financial	113			98			229		201
Other specialty	18			16			37		33
Total premiums earned	709			640			1,396		1,243
Net investment income	65			69			131		139
Other income	6			8			9		11
Total property and casualty insurance	780			717			1,536		1,393
Annuity:
Net investment income	257			245			505		473
Other income	15			12			29		25
Total annuity	272			257			534		498
Run-off long-term care and life	47			49			97		96
Medicare supplement and critical illness (a)	—			79			—		159
Other	(1		)	7			22		6
Total revenues before realized gains	1,098			1,109			2,189		2,152
Realized gains on securities	41			16			98		60
Realized losses on subsidiaries	—			(1		)	—		(1		)
Total revenues	$	1,139		$	1,124		$	2,287	$	2,211

Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	(31	)	$	6		$	(21	)	$	33
Specialty casualty	32			33			51			37
Specialty financial	15			11			28			27
Other specialty	5			2			11			3
Other lines, primarily A&E charges	(2		)	(7		)	(7		)	(7		)
Total underwriting	19			45			62			93
Investment and other income, net	60			60			116			115
Total property and casualty insurance	79			105			178			208
Annuity (b)	77			59			153			119
Run-off long-term care and life	(2		)	5			(3		)	6
Medicare supplement and critical illness (a)	—			12			—			18
Other (c)	(69		)	(60		)	(125		)	(128		)
Total earnings before realized gains and income taxes	85			121			203			223
Realized gains on securities	41			16			98			60
Realized losses on subsidiaries	—			(1		)	—			(1		)
Total earnings before income taxes	$	126		$	136		$	301		$	282

(a) Sold in August 2012.

(b) Includes a $5 million charge in the second quarter of 2013 to cover expected assessments from state guaranty funds related to the insolvency and liquidation of an unaffiliated life insurance company.

(c) Includes holding company expenses and losses of managed investment entities attributable to noncontrolling interest of $31 million and $18 million for the second quarter and $42 million and $46 million for the first six months of 2013 and 2012, respectively.