Segments of Operations

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segments of Operations

Segments of Operations

AFG manages its business as four segments: (i) Property and casualty insurance, (ii) Annuity, (iii) Run-off long-term care and life and (iv) Other, which includes holding company costs and the 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.

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

	Three months ended June 30,					Six months ended June 30,
	2015			2014		2015			2014
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	327		$	324	$	640		$	625
Specialty casualty	503			467		993			780
Specialty financial	129			116		249			233
Other specialty	26			24		49			47
Total premiums earned	985			931		1,931			1,685
Net investment income	83			76		162			143
Other income (*)	53			2		59			4
Total property and casualty insurance	1,121			1,009		2,152			1,832
Annuity:
Net investment income	306			289		598			564
Other income	22			19		46			37
Total annuity	328			308		644			601
Run-off long-term care and life	49			48		95			99
Other	44			15		88			40
Total revenues before realized gains (losses)	1,542			1,380		2,979			2,572
Realized gains (losses) on securities	(1		)	12		18			31
Realized loss on subsidiaries	—			—		(162		)	—
Total revenues	$	1,541		$	1,392	$	2,835		$	2,603

(*) Includes pretax income of $51 million (before noncontrolling interest) from the sale of the Le Pavillon Hotel in the second quarter of 2015.

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	(13	)	$	(18	)	$	(6	)	$	(12	)
Specialty casualty	37			30			65			68
Specialty financial	24			15			46			25
Other specialty	3			2			6			7
Other lines	(1		)	—			(1		)	(1		)
Total underwriting	50			29			110			87
Investment and other income, net (a)	124			62			197			116
Total property and casualty insurance	174			91			307			203
Annuity	88			84			163			157
Run-off long-term care and life	4			(2		)	8			(4		)
Other (b)	(39		)	(55		)	(78		)	(96		)
Total earnings before realized gains (losses) and income taxes	227			118			400			260
Realized gains (losses) on securities	(1		)	12			18			31
Realized loss on subsidiaries	—			—			(162		)	—
Total earnings before income taxes	$	226		$	130		$	256		$	291

(a) Includes pretax income of $51 million (before noncontrolling interest) from the sale of the Le Pavillon Hotel in the second quarter of 2015.

(b) Includes holding company expenses. Also includes losses of managed investment entities attributable to noncontrolling interest of $18 million for both the second quarter and the first six months of 2014. Following the adoption of new guidance in the first quarter of 2015, there are no longer earnings (losses) of managed investment entities that are attributable to noncontrolling interests. See Note A — “Accounting Policies — Managed Investment Entities.”