Segments of Operations

6 Months Ended

Jun. 30, 2016

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,
	2016			2015			2016			2015
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	365		$	327		$	704		$	640
Specialty casualty	497			503			999			993
Specialty financial	139			129			271			249
Other specialty	26			26			51			49
Total premiums earned	1,027			985			2,025			1,931
Net investment income	89			83			172			162
Other income (a)	40			53			43			59
Total property and casualty insurance	1,156			1,121			2,240			2,152
Annuity:
Net investment income	344			306			659			598
Other income	24			24			50			51
Total annuity	368			330			709			649
Run-off long-term care and life (b)	12			49			24			95
Other	59			44			115			88
Total revenues before realized gains (losses)	1,595			1,544			3,088			2,984
Realized gains (losses) on securities	(16		)	(1		)	(34		)	18
Realized gains (losses) on subsidiaries	2			—			2			(162		)
Total revenues	$	1,581		$	1,543		$	3,056		$	2,840

Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	15		$	(13	)	$	47		$	(6	)
Specialty casualty	23			37			52			65
Specialty financial	22			24			45			46
Other specialty	3			3			5			6
Other lines (c)	(66		)	(1		)	(65		)	(1		)
Total underwriting	(3		)	50			84			110
Investment and other income, net (a)	115			124			190			197
Total property and casualty insurance	112			174			274			307
Annuity	76			88			129			163
Run-off long-term care and life (b)	—			4			(1		)	8
Other (d)	(38		)	(39		)	(78		)	(78		)
Total earnings before realized gains (losses) and income taxes	150			227			324			400
Realized gains (losses) on securities	(16		)	(1		)	(34		)	18
Realized gains (losses) on subsidiaries	2			—			2			(162		)
Total earnings before income taxes	$	136		$	226		$	292		$	256

(a) Includes pretax income of $32 million (before noncontrolling interest) from the sale of an apartment property in the second quarter of 2016 and $51 million (before noncontrolling interest) from the sale of the Le Pavillon Hotel in the second quarter of 2015.

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

(c) Includes a $65 million special charge related to the exit of certain lines of business within AFG’s Lloyd’s-based insurer, Neon, in the second quarter of 2016.

(d) Includes holding company interest and expenses.