Segments of Operations

12 Months Ended

Dec. 31, 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 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 4% of AFG’s revenues in 2015 and 5% of AFG’s revenues in 2014 and 2013.

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

	2015		2014		2013
Assets
Property and casualty insurance (a)	$	14,689	$	14,069	$	11,717
Annuity	29,865		27,317		24,294
Run-off long-term care and life (b)	772		2,489		2,408
Other	4,533		3,660		3,668
Total assets	$	49,859	$	47,535	$	42,087

Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	1,599		$	1,544	$	1,521
Specialty casualty	2,011			1,765		1,135
Specialty financial	517			469		469
Other specialty	97			100		79
Total premiums earned	4,224			3,878		3,204
Net investment income	319			294		263
Other income (c)	78			9		15
Total property and casualty insurance	4,621			4,181		3,482
Annuity:
Net investment income	1,224			1,136		1,034
Other income	98			97		77
Total annuity	1,322			1,233		1,111
Run-off long-term care and life (b)	188			195		195
Other	194			72		98
Total revenues before realized gains (losses)	6,325			5,681		4,886
Realized gains (losses) on securities	(19		)	52		221
Realized losses on subsidiaries	(161		)	—		(4		)
Total revenues	$	6,145		$	5,733	$	5,103

(a) Not allocable to sub-segments.

(b) AFG sold substantially all of its run-off long-term care insurance business in December 2015.

(c) Includes pretax income of $51 million (before noncontrolling interest) from the sale of the Le Pavillon Hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015.

	2015			2014			2013
Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	48		$	21		$	12
Specialty casualty	146			136			102
Specialty financial	87			64			67
Other specialty	14			16			25
Other lines (a)	(70		)	(25		)	(61		)
Total underwriting	225			212			145
Investment and other income, net (b)	351			244			230
Total property and casualty insurance	576			456			375
Annuity (c)	331			328			323
Run-off long-term care and life (d)	14			(10		)	(10		)
Other (e)	(176		)	(200		)	(216		)
Total earnings before realized gains (losses) and income taxes	745			574			472
Realized gains (losses) on securities	(19		)	52			221
Realized losses on subsidiaries	(161		)	—			(4		)
Total earnings before income taxes	$	565		$	626		$	689

(a) Includes special charges to increase asbestos and environmental (“A&E”) reserves of $67 million, $24 million and $54 million in 2015, 2014 and 2013, respectively.

(b) Includes pretax income of $51 million (before noncontrolling interest) from the sale of the Le Pavillon Hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015.

(c) 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.

(d) AFG sold substantially all of its run-off long-term care insurance business in December 2015.

(e) Primarily holding company expenses, including a $4 million loss on retirement of debt in the third quarter of 2015 and special charges to increase A&E reserves related to AFG’s former railroad and manufacturing operations ($12 million in 2015, $6 million in 2014 and $22 million in 2013) and losses of managed investment entities attributable to noncontrolling interests ($51 million in 2014 and $26 million in 2013). 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.”