Investments (Tables)

12 Months Ended

Dec. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Available for sale fixed maturities and equity securities

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

	2013									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	$	310	$	314	$	7	$	(3	)	$	373	$	388	$	15	$	—
States, municipalities and political subdivisions	5,360		5,372		156		(144		)	4,144		4,468		329		(5		)
Foreign government	198		208		10		—			242		260		18		—
Residential MBS	3,947		4,310		391		(28		)	3,921		4,204		337		(54		)
Commercial MBS	2,535		2,724		192		(3		)	2,583		2,918		335		—
Asset-backed securities	2,477		2,493		35		(19		)	1,590		1,640		52		(2		)
Corporate and other	10,539		11,035		604		(108		)	9,230		10,240		1,015		(5		)
Total fixed maturities	$	25,366	$	26,456	$	1,395	$	(305	)	$	22,083	$	24,118	$	2,101	$	(66	)
Common stocks	$	721	$	914	$	209	$	(16	)	$	600	$	749	$	157	$	(8	)
Perpetual preferred stocks	$	266	$	265	$	9	$	(10	)	$	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 December 31, 2013 and 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
2013
Fixed maturities:
U.S. Government and government agencies	$	(3	)	$	60	95	%	$	—		$	—	—	%
States, municipalities and political subdivisions	(135		)	2,219		94	%	(9		)	73		89	%
Residential MBS	(9		)	553		98	%	(19		)	212		92	%
Commercial MBS	(3		)	106		97	%	—			2		100	%
Asset-backed securities	(18		)	1,310		99	%	(1		)	28		97	%
Corporate and other	(101		)	2,634		96	%	(7		)	85		92	%
Total fixed maturities	$	(269	)	$	6,882	96	%	$	(36	)	$	400	92	%
Common stocks	$	(16	)	$	158	91	%	$	—		$	—	—	%
Perpetual preferred stocks	$	(6	)	$	91	94	%	$	(4	)	$	20	83	%
2012
Fixed maturities:
U.S. Government and government agencies	$	—		$	22	100	%	$	—		$	—	—	%
States, municipalities and political subdivisions	(5		)	285		98	%	—			24		100	%
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			2011
Balance at January 1	$	192		$	187		$	143
Additional credit impairments on:
Previously impaired securities	—			5			44
Securities without prior impairments	3			2			8
Reductions — disposals	(1		)	(2		)	(8		)
Balance at December 31	$	194		$	192		$	187

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 December 31, 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	$	886	$	904	3	%
After one year through five years	4,631		4,966		19	%
After five years through ten years	7,287		7,497		28	%
After ten years	3,603		3,562		14	%
	16,407		16,929		64	%
ABS (average life of approximately 5 years)	2,477		2,493		9	%
MBS (average life of approximately 4 1/2 years)	6,482		7,034		27	%
Total	$	25,366	$	26,456	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
December 31, 2013
Unrealized gain on:
Fixed maturities - annuity segment (*)	$	729		$	(255	)	$	474
Fixed maturities - all other	361			(133		)	228
Equity securities	192			(70		)	122
Deferred policy acquisition costs - annuity segment	(345		)	121			(224		)
Annuity benefits accumulated	(71		)	25			(46		)
Life, accident and health reserves	(8		)	3			(5		)
Unearned revenue	22			(8		)	14
	$	880		$	(317	)	$	563
December 31, 2012
Unrealized gain on:
Fixed maturities - annuity segment (*)	$	1,401		$	(490	)	$	911
Fixed maturities - all other	634			(236		)	398
Equity securities	161			(57		)	104
Deferred policy acquisition costs - annuity segment	(710		)	247			(463		)
Annuity benefits accumulated	(136		)	48			(88		)
Life, accident and health reserves	(117		)	41			(76		)
Unearned revenue	57			(20		)	37
	$	1,290		$	(467	)	$	823

Net investment income earned and investment expenses incurred

The following table shows (in millions) investment income earned and investment expenses incurred.

	2013			2012			2011
Investment income:
Fixed maturities	$	1,241		$	1,216		$	1,142
Equity securities	50			36			29
Other	72			66			71
Gross investment income	1,363			1,318			1,242
Investment expenses	(17		)	(17		)	(17		)
Net investment income	$	1,346		$	1,301		$	1,225

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
Year ended December 31, 2013
Realized before impairments	$	36		$	196		$	2		$	(1	)	$	(82	)	$	(2	)	$	149
Realized — impairments	(5		)	(5		)	(5		)	3			4			—			(8		)
Change in unrealized	(945		)	31			—			504			144			6			(260		)
Year ended December 31, 2012
Realized before impairments	$	55		$	192		$	(3	)	$	(8	)	$	(83	)	$	(2	)	$	151
Realized — impairments	(9		)	(24		)	—			7			9			—			(17		)
Change in unrealized	790			(23		)	—			(379		)	(136		)	(7		)	245
Year ended December 31, 2011
Realized before impairments	$	68		$	88		$	(24	)	$	(4	)	$	(45	)	$	(2	)	$	81
Realized — impairments	(57		)	(6		)	(5		)	16			18			1			(33		)
Change in unrealized	407			(48		)	—			(218		)	(49		)	(5		)	87

(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):

	2013			2012			2011
Fixed maturities:
Gross gains	$	44		$	55		$	77
Gross losses	(5		)	(4		)	(9		)
Equity securities:
Gross gains	193			196			90
Gross losses	—			(4		)	(1		)