Segments of Operations

12 Months Ended

Dec. 31, 2014

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 assets and costs, and the assets and 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, professional liability, umbrella and excess liability, specialty coverage in targeted markets, customized programs for small to mid-sized businesses and workers’ compensation insurance, 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. Premiums and underwriting profit included under Other specialty represent business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty sub-segments and amortization of deferred gains on retroactive reinsurance transactions related to the sales of businesses in prior years. 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.

Sales of property and casualty insurance outside of the United States represented 5% of AFG’s revenues in 2014, 2013 and 2012.

The following tables (in millions) show AFG’s assets, revenues and earnings before income taxes by segment and sub-segment.

	2014		2013		2012
Assets
Property and casualty insurance (a)	$	14,069	$	11,717	$	12,163
Annuity	27,317		24,294		20,909
Run-off long-term care and life	2,489		2,408		2,304
Other	3,660		3,668		3,795
Total assets	$	47,535	$	42,087	$	39,171

Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	1,544	$	1,521		$	1,423
Specialty casualty	1,765		1,135			948
Specialty financial	469		469			405
Other specialty	100		79			71
Total premiums earned	3,878		3,204			2,847
Net investment income	294		263			275
Other income	9		15			24
Total property and casualty insurance	4,181		3,482			3,146
Annuity:
Net investment income	1,136		1,034			976
Other income	78		67			52
Total annuity	1,214		1,101			1,028
Run-off long-term care and life	194		194			191
Medicare supplement and critical illness (b)	—		—			212
Other	72		98			9
Total revenues before realized gains (losses)	5,661		4,875			4,586
Realized gains on securities	52		221			210
Realized gains (losses) on subsidiaries	—		(4		)	161
Total revenues	$	5,713	$	5,092		$	4,957

(a)   Not allocable to sub-segments.

(b)   Sold in August 2012.

	2014			2013			2012
Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	21		$	12		$	19
Specialty casualty	136			102			53
Specialty financial	64			67			44
Other specialty	16			25			15
Other lines (a)	(25		)	(61		)	(44		)
Total underwriting	212			145			87
Investment and other income, net	244			230			235
Total property and casualty insurance	456			375			322
Annuity (b)	328			323			256
Run-off long-term care and life (c)	(10		)	(10		)	(157		)
Medicare supplement and critical illness (d)	—			—			28
Other (e)	(200		)	(216		)	(283		)
Total earnings before realized gains (losses) and income taxes	574			472			166
Realized gains on securities	52			221			210
Realized gains (losses) on subsidiaries	—			(4		)	161
Total earnings before income taxes	$	626		$	689		$	537

(a) Includes special charges to increase asbestos and environmental (“A&E”) reserves of $24 million, $54 million and $31 million in 2014, 2013 and 2012, respectively.

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

(c) Includes a loss recognition charge of $153 million in the fourth quarter of 2012.

(d) Sold in August 2012.

(e) Includes holding company expenses, special charges to increase A&E reserves ($6 million in 2014, $22 million in 2013 and $2 million in 2012) and losses of managed investment entities attributable to noncontrolling interests ($51 million in 2014, $26 million in 2013 and $98 million in 2012). Holding company expenses in 2012 also include an $8 million loss on retirement of debt and a $15 million charge for a labor matter related to AFG’s former railroad operations.