Investments (Tables)

6 Months Ended

Jun. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Available for sale fixed maturities and equity securities

Available for sale fixed maturities and equity securities at June 30, 2013, and December 31, 2012, consisted of the following (in millions):

	June 30, 2013									December 31, 2012
	Amortized Cost		Fair Value		Gross Unrealized					Amortized Cost		Fair Value		Gross Unrealized
					Gains		Losses							Gains		Losses
Fixed maturities:
U.S. Government and government agencies	$	302	$	312	$	10	$	—		$	373	$	388	$	15	$	—
States, municipalities and political subdivisions	4,705		4,816		190		(79		)	4,144		4,468		329		(5		)
Foreign government	230		242		12		—			242		260		18		—
Residential MBS	3,849		4,153		349		(45		)	3,921		4,204		337		(54		)
Commercial MBS	2,619		2,846		232		(5		)	2,583		2,918		335		—
Asset-backed securities	2,205		2,234		41		(12		)	1,590		1,640		52		(2		)
Corporate and other	9,830		10,432		676		(74		)	9,230		10,240		1,015		(5		)
Total fixed maturities	$	23,740	$	25,035	$	1,510	$	(215	)	$	22,083	$	24,118	$	2,101	$	(66	)
Common stocks	$	759	$	966	$	219	$	(12	)	$	600	$	749	$	157	$	(8	)
Perpetual preferred stocks	$	225	$	233	$	12	$	(4	)	$	178	$	190	$	13	$	(1	)

Available for sale securities in a continuous unrealized loss position

The following tables show gross unrealized losses (in millions) on fixed maturities and equity securities by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2013 and December 31, 2012.

	Less Than Twelve Months							Twelve Months or More
	Unrealized Loss			Fair Value		Fair Value as % of  Cost		Unrealized Loss			Fair Value		Fair Value as % of  Cost
June 30, 2013
Fixed maturities:
U.S. Government and government agencies	$	—		$	84	100	%	$	—		$	—	—	%
States, municipalities and political subdivisions	(78		)	1,581		95	%	(1		)	15		94	%
Foreign government	—			—		—	%	—			—		—	%
Residential MBS	(10		)	618		98	%	(35		)	263		88	%
Commercial MBS	(5		)	150		97	%	—			—		—	%
Asset-backed securities	(11		)	749		99	%	(1		)	24		96	%
Corporate and other	(73		)	1,970		96	%	(1		)	24		96	%
Total fixed maturities	$	(177	)	$	5,152	97	%	$	(38	)	$	326	90	%
Common stocks	$	(12	)	$	138	92	%	$	—		$	—	—	%
Perpetual preferred stocks	$	(3	)	$	78	96	%	$	(1	)	$	24	96	%
December 31, 2012
Fixed maturities:
U.S. Government and government agencies	$	—		$	22	100	%	$	—		$	—	—	%
States, municipalities and political subdivisions	(5		)	285		98	%	—			24		100	%
Foreign government	—			—		—	%	—			—		—	%
Residential MBS	(3		)	146		98	%	(51		)	411		89	%
Commercial MBS	—			16		100	%	—			—		—	%
Asset-backed securities	—			146		100	%	(2		)	57		97	%
Corporate and other	(3		)	237		99	%	(2		)	51		96	%
Total fixed maturities	$	(11	)	$	852	99	%	$	(55	)	$	543	91	%
Common stocks	$	(8	)	$	88	92	%	$	—		$	—	—	%
Perpetual preferred stocks	$	—		$	7	100	%	$	(1	)	$	25	96	%

Roll forward of cumulative credit portion of other-than-temporary impairments on fixed maturity securities

A progression of the credit portion of other-than-temporary impairments on fixed maturity securities for which the non-credit portion of an impairment has been recognized in other comprehensive income is shown below (in millions).

	2013			2012
Balance at March 31	$	191		$	190
Additional credit impairments on:
Previously impaired securities	—			1
Securities without prior impairments	—			—
Reductions — disposals	—			—
Balance at June 30	$	191		$	191
Balance at January 1	$	192		$	187
Additional credit impairments on:
Previously impaired securities	—			4
Securities without prior impairments	—			—
Reductions — disposals	(1		)	—
Balance at June 30	$	191		$	191

Available for sale fixed maturity securities by contractual maturity date

The table below sets forth the scheduled maturities of available for sale fixed maturities as of June 30, 2013 (in millions). Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.

	Amortized		Fair Value
	Cost		Amount		%
Maturity
One year or less	$	1,077	$	1,101	4	%
After one year through five years	4,674		5,014		20	%
After five years through ten years	6,588		6,915		28	%
After ten years	2,728		2,772		11	%
	15,067		15,802		63	%
ABS (average life of approximately 4 1/2 years)	2,205		2,234		9	%
MBS (average life of approximately 3 1/2 years)	6,468		6,999		28	%
Total	$	23,740	$	25,035	100	%

Components of the net unrealized gain on securities, included in Accumulated Other Comprehensive Income

The following table shows (in millions) the components of the net unrealized gain on securities that is included in AOCI in AFG’s Balance Sheet.

	Pretax			Deferred Tax and Amounts  Attributable to Noncontrolling Interests			Net
June 30, 2013
Unrealized gain on:
Fixed maturities	$	1,295		$	(461	)	$	834
Equity securities	215			(77		)	138
Deferred policy acquisition costs	(438		)	153			(285		)
Annuity benefits accumulated	(87		)	31			(56		)
Life, accident and health reserves	(81		)	28			(53		)
Other liabilities	33			(11		)	22
	$	937		$	(337	)	$	600
December 31, 2012
Unrealized gain on:
Fixed maturities	$	2,035		$	(726	)	$	1,309
Equity securities	161			(57		)	104
Deferred policy acquisition costs	(710		)	247			(463		)
Annuity benefits accumulated	(136		)	48			(88		)
Life, accident and health reserves	(117		)	41			(76		)
Other liabilities	57			(20		)	37
	$	1,290		$	(467	)	$	823

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments are summarized as follows (in millions):

	Fixed Maturities			Equity Securities			Mortgage Loans and Other Investments			Other (a)			Tax Effects			Noncon- trolling Interests			Total
Quarter ended June 30, 2013
Realized before impairments	$	8		$	33		$	1		$	—		$	(15	)	$	—		$	27
Realized — impairments	—			—			(1		)	—			—			—			(1		)
Change in unrealized	(725		)	(13		)	—			319			147			7			(265		)
Quarter ended June 30, 2012
Realized before impairments	$	6		$	21		$	(4	)	$	—		$	(8	)	$	(1	)	$	14
Realized — impairments	—			(8		)	—			1			3			—			(4		)
Change in unrealized	231			(30		)	—			(100		)	(35		)	—			66
Six months ended June 30, 2013
Realized before impairments	$	27		$	71		$	2		$	(1	)	$	(35	)	$	(1	)	$	63
Realized — impairments	—			—			(1		)	—			—			—			(1		)
Change in unrealized	(740		)	54			—			333			124			6			(223		)
Six months ended June 30, 2012
Realized before impairments	$	20		$	56		$	(3	)	$	(2	)	$	(25	)	$	(1	)	$	45
Realized — impairments	(4		)	(10		)	—			3			4			—			(7		)
Change in unrealized	363			40			—			(102		)	(105		)	(3		)	193

(a) Primarily adjustments to deferred policy acquisition costs and reserves related to annuities and long-term care business.

Gross realized gains and losses on available for sale fixed maturity and equity security investments

Gross realized gains and losses (excluding impairment writedowns and mark-to-market of derivatives) on available for sale fixed maturity and equity security investment transactions included in the Statement of Cash Flows consisted of the following (in millions):

	Six months ended June 30,
	2013			2012
Fixed maturities:
Gross gains	$	28		$	18
Gross losses	(1		)	(1		)
Equity securities:
Gross gains	71			57
Gross losses	—			(1		)