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Shareholders' Equity
 9 Months Ended
Sep. 30, 2016
Stockholders' Equity Note [Abstract]  
Shareholders' Equity
Shareholders’ Equity

AFG is authorized to issue 12.5 million shares of Voting Preferred Stock and 12.5 million shares of Nonvoting Preferred Stock, each without par value.

Accumulated Other Comprehensive Income, Net of Tax (“AOCI”)   Comprehensive income is defined as all changes in shareholders’ equity except those arising from transactions with shareholders. Comprehensive income includes net earnings and other comprehensive income, which consists primarily of changes in net unrealized gains or losses on available for sale securities.

The progression of the components of accumulated other comprehensive income follows (in millions): 
  
 
 
Other Comprehensive Income
 
 
  
AOCI
Beginning
Balance
 
Pretax
 
Tax
 
Net
of
tax
 
Attributable to
noncontrolling
interests
 
Attributable to
shareholders
 
AOCI
Ending
Balance
Quarter ended September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains (losses) on securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding gains (losses) on securities arising during the period
 
 
$
138

 
$
(49
)
 
$
89

 
$
(1
)
 
$
88

 


Reclassification adjustment for realized (gains) losses included in net earnings (a)
 
 
(2
)
 
1

 
(1
)
 
—

 
(1
)
 


Total net unrealized gains on securities (b)
$
685

 
136

 
(48
)
 
88

 
(1
)
 
87

 
$
772

Net unrealized gains (losses) on cash flow hedges
5

 
(1
)
 
1

 
—

 
—

 
—

 
5

Foreign currency translation adjustments
(15
)
 
(2
)
 
(1
)
 
(3
)
 
—

 
(3
)
 
(18
)
Pension and other postretirement plans adjustments
(6
)
 
—

 
—

 
—

 
—

 
—

 
(6
)
Total
$
669

 
$
133

 
$
(48
)
 
$
85

 
$
(1
)
 
$
84

 
$
753

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter ended September 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains (losses) on securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding losses on securities arising during the period
 
 
$
(171
)
 
$
61

 
$
(110
)
 
$
3

 
$
(107
)
 
 
Reclassification adjustment for realized (gains) losses included in net earnings (a)
 
 
16

 
(6
)
 
10

 
(1
)
 
9

 
 
Total net unrealized gains (losses) on securities
$
587

 
(155
)
 
55

 
(100
)
 
2

 
(98
)
 
$
489

Net unrealized gains on cash flow hedges
—

 
3

 
(1
)
 
2

 
—

 
2

 
2

Foreign currency translation adjustments
(16
)
 
(5
)
 
(2
)
 
(7
)
 
—

 
(7
)
 
(23
)
Pension and other postretirement plans adjustments
(8
)
 
1

 
—

 
1

 
—

 
1

 
(7
)
Total
$
563

 
$
(156
)
 
$
52

 
$
(104
)
 
$
2

 
$
(102
)
 
$
461

 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
Other Comprehensive Income
 
 
  
AOCI
Beginning
Balance
 
Pretax
 
Tax
 
Net
of
tax
 
Attributable to
noncontrolling
interests
 
Attributable to
shareholders
 
AOCI
Ending
Balance
Nine months ended September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains (losses) on securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding gains (losses) on securities arising during the period
 
 
$
656

 
$
(229
)
 
$
427

 
$
(6
)
 
$
421

 


Reclassification adjustment for realized (gains) losses included in net earnings (a)
 
 
32

 
(12
)
 
20

 
(1
)
 
19

 


Total net unrealized gains on securities (b)
$
332

 
688

 
(241
)
 
447

 
(7
)
 
440

 
$
772

Net unrealized gains on cash flow hedges
1

 
6

 
(2
)
 
4

 
—

 
4

 
5

Foreign currency translation adjustments
(22
)
 
2

 
2

 
4

 
—

 
4

 
(18
)
Pension and other postretirement plans adjustments
(7
)
 
1

 
—

 
1

 
—

 
1

 
(6
)
Total
$
304

 
$
697

 
$
(241
)
 
$
456

 
$
(7
)
 
$
449

 
$
753

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains (losses) on securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding losses on securities arising during the period
 
 
$
(394
)
 
$
139

 
$
(255
)
 
$
5

 
$
(250
)
 
 
Reclassification adjustment for realized (gains) losses included in net earnings (a)
 
 
(4
)
 
1

 
(3
)
 
(1
)
 
(4
)
 
 
Total net unrealized gains (losses) on securities
$
743

 
(398
)
 
140

 
(258
)
 
4

 
(254
)
 
$
489

Net unrealized gains on cash flow hedges
—

 
3

 
(1
)
 
2

 
—

 
2

 
2

Foreign currency translation adjustments
(8
)
 
(11
)
 
(4
)
 
(15
)
 
—

 
(15
)
 
(23
)
Pension and other postretirement plans adjustments
(8
)
 
1

 
—

 
1

 
—

 
1

 
(7
)
Total
$
727

 
$
(405
)
 
$
135

 
$
(270
)
 
$
4

 
$
(266
)
 
$
461


(a)
The reclassification adjustment out of net unrealized gains on securities affected the following lines in AFG’s Statement of Earnings:
 
OCI component
 
Affected line in the statement of earnings
 
 
Pretax
 
Realized gains (losses) on securities
 
 
Tax
 
Provision for income taxes
 
 
Attributable to noncontrolling interests
 
Net earnings (loss) attributable to noncontrolling interests
 


(b)
Includes net unrealized gains of $51 million at September 30, 2016 compared to $48 million at June 30, 2016 and $51 million at December 31, 2015 related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings.

Stock Incentive Plans   Under AFG’s stock incentive plans, employees of AFG and its subsidiaries are eligible to receive equity awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units and stock awards. In the first nine months of 2016, AFG issued 318,940 shares of restricted Common Stock (average fair value of $67.00 per share) under the Stock Incentive Plan. In addition, AFG issued 40,336 shares of Common Stock (fair value of $71.05 per share) in the first quarter of 2016 under the Equity Bonus Plan. AFG did not grant any stock options in the first nine months of 2016.

Total compensation expense related to stock incentive plans of AFG and its subsidiaries was $7 million and $5 million in the third quarters of 2016 and 2015 and $21 million and $18 million in the first nine months of 2016 and 2015, respectively.