Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Reconciliation of income taxes at the statutory rate and income taxes shown in the Statement of Earnings

The following is a reconciliation of income taxes at the statutory rate of 35% to the provision for income taxes as shown in the Statement of Earnings (in millions):

	2013					2012					2011
	Amount			% of EBT		Amount			% of EBT		Amount			% of EBT
Earnings before income taxes (“EBT”)	$	689				$	537				$	558
Income taxes at statutory rate	$	241		35	%	$	188		35	%	$	195		35	%
Effect of:
Tax exempt interest	(21		)	(3	%)	(23		)	(4	%)	(23		)	(4	%)
Losses of managed investment entities	9			1	%	34			6	%	9			2	%
Subsidiaries not in AFG’s tax return	2			—	%	(1		)	—	%	5			1	%
Tax case and settlement of open tax years	—			—	%	(67		)	(13	%)	—			—	%
Change in valuation allowance	1			—	%	3			1	%	44			8	%
Other	4			1	%	1			—	%	9			1	%
Provision for income taxes as shown in the Statement of Earnings	$	236		34	%	$	135		25	%	$	239		43	%

Components of income tax provision (credit)

The total income tax provision (credit) consists of (in millions):

	2013			2012			2011
Current taxes:
Federal	$	308		$	146		$	186
State	5			6			4
Deferred taxes:
Federal	(77		)	(17		)	22
Foreign	—			—			27
Provision for income taxes	$	236		$	135		$	239

Summary of operating loss carryforwards

For income tax purposes, AFG and its subsidiaries had the following carryforwards available at December 31, 2013 (in millions):

	Expiring	Amount
Operating Loss – U.S.	2014 - 2020	$	74
	2021 - 2025	71
Operating Loss – United Kingdom	indefinite	137

Components of deferred tax assets and liabilities

Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The significant components of deferred tax assets and liabilities included in the Balance Sheet at December 31 were as follows (in millions):

	2013			2012
Deferred tax assets:
Federal net operating loss carryforwards	$	51		$	51
Foreign underwriting losses	50			46
Insurance claims and reserves	558			528
Employee benefits	98			91
Other, net	51			36
Total deferred tax assets before valuation allowance	808			752
Valuation allowance against deferred tax assets	(103		)	(101		)
Total deferred tax assets	705			651
Deferred tax liabilities:
Subsidiaries not in AFG’s tax return (*)	(60		)	(58		)
Investment securities	(443		)	(753		)
Deferred policy acquisition costs	(234		)	(91		)
Total deferred tax liabilities	(737		)	(902		)
Net deferred tax liability	$	(32	)	$	(251	)

Progression of the liability for uncertain tax positions, excluding interest and penalties

A progression of the liability for uncertain tax positions, excluding interest and penalties, follows (in millions):

	2013		2012			2011
Balance at January 1	$	18	$	59		$	52
Reductions for tax positions of prior years	—		(46		)	—
Additions for tax positions of current year	1		5			7
Balance at December 31	$	19	$	18		$	59