Insurance (Tables)

12 Months Ended

Dec. 31, 2015

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):

	2015			2014			2013
Balance at beginning of period	$	5,645		$	4,288		$	4,129
Provision for losses and LAE occurring in the current year	2,662			2,488			2,055
Net increase (decrease) in the provision for claims of prior years:
Special A&E charges	67			24			54
Other	(34		)	(18		)	(69		)
Total losses and LAE incurred	2,695			2,494			2,040
Payments for losses and LAE of:
Current year	(828		)	(789		)	(739		)
Prior years	(1,575		)	(1,340		)	(1,131		)
Total payments	(2,403		)	(2,129		)	(1,870		)
Reserves of businesses acquired (*)	—			1,028			—
Foreign currency translation and other	(11		)	(36		)	(11		)
Balance at end of period	5,926			5,645			4,288
Add back reinsurance recoverables, net of allowance	2,201			2,227			2,122
Gross unpaid losses and LAE included in the balance sheet	$	8,127		$	7,872		$	6,410

(*)   Reflects the acquisition of Summit in April 2014 (see Note B — “Acquisitions and Sale 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
	2015		2014		2013		2015		2014
Property and casualty companies	$	408	$	318	$	332	$	2,488	$	2,286
Life insurance companies	399		349		294		1,721		1,714

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.

	2015			2014			2013
Direct premiums written	$	5,713		$	5,387		$	4,744
Reinsurance assumed	119			90			61
Reinsurance ceded	(1,505		)	(1,457		)	(1,464		)
Net written premiums	$	4,327		$	4,020		$	3,341
Direct premiums earned	$	5,613		$	5,195		$	4,684
Reinsurance assumed	105			75			45
Reinsurance ceded	(1,494		)	(1,392		)	(1,525		)
Net earned premiums	$	4,224		$	3,878		$	3,204
Reinsurance recoveries	$	936		$	895		$	1,255

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):

	2015		2014
Expected death and annuitization	$	214	$	213
Guaranteed withdrawal benefits	203		151
Accrued persistency and premium bonuses	11		14