Insurance (Tables)

12 Months Ended

Dec. 31, 2014

Insurance [Abstract]

Reconciliation of beginning and ending liability for unpaid losses and loss adjustment expenses

The following table provides an analysis of changes in the liability for losses and loss adjustment expenses, net of reinsurance (and grossed up), over the past three years (in millions):

	2014			2013			2012
Balance at beginning of period	$	4,288		$	4,129		$	4,282
Provision for losses and LAE occurring in the current year	2,488			2,055			1,903
Net increase (decrease) in provision for claims of prior years	6			(15		)	(30		)
Total losses and LAE incurred	2,494			2,040			1,873
Payments for losses and LAE of:
Current year	(789		)	(739		)	(841		)
Prior years	(1,340		)	(1,131		)	(1,185		)
Total payments	(2,129		)	(1,870		)	(2,026		)
Reserves of businesses acquired (*)	1,028			—			—
Foreign currency translation and other	(36		)	(11		)	—
Balance at end of period	5,645			4,288			4,129
Add back reinsurance recoverables, net of allowance	2,227			2,122			2,716
Gross unpaid losses and LAE included in the Balance Sheet	$	7,872		$	6,410		$	6,845

(*)   Reflects the acquisition of Summit in April 2014 (see Note B — “Acquisitions and Sales of Businesses”).

Statutory information

Net earnings and capital and surplus on a statutory basis for the insurance subsidiaries were as follows (in millions):

	Net Earnings						Capital and Surplus
	2014		2013		2012		2014		2013
Property and casualty companies	$	318	$	332	$	221	$	2,286	$	1,896
Life insurance companies	349		294		171		1,714		1,619

Reinsurance information

The following table shows (in millions) (i) amounts deducted from property and casualty written and earned premiums in connection with reinsurance ceded, (ii) written and earned premiums included in income for reinsurance assumed and (iii) reinsurance recoveries, which represent ceded losses and loss adjustment expenses.

	2014			2013			2012
Direct premiums written	$	5,387		$	4,744		$	4,283
Reinsurance assumed	90			61			38
Reinsurance ceded	(1,457		)	(1,464		)	(1,372		)
Net written premiums	$	4,020		$	3,341		$	2,949
Direct premiums earned	$	5,195		$	4,684		$	4,120
Reinsurance assumed	75			45			36
Reinsurance ceded	(1,392		)	(1,525		)	(1,309		)
Net earned premiums	$	3,878		$	3,204		$	2,847
Reinsurance recoveries	$	895		$	1,255		$	1,743

Schedule of reserve liabilities for annuity benefits accumulated

For certain products, the liability for “annuity benefits accumulated” includes reserves for excess benefits expected to be paid on future deaths and annuitizations (“EDAR”), guaranteed withdrawal benefits and accrued persistency and premium bonuses. The liabilities included in AFG’s Balance Sheet for these benefits, excluding the impact of unrealized gains on securities, were as follows at December 31 (in millions):

	2014		2013
Excess death and annuitization	$	213	$	197
Guaranteed withdrawal benefits	151		71
Accrued persistency and premium bonuses	14		15