Segments of Operations

3 Months Ended

Mar. 31, 2017

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.

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 March 31,
	2017		2016
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	342	$	339
Specialty casualty	508		502
Specialty financial	147		132
Other specialty	25		25
Total premiums earned	1,022		998
Net investment income	86		83
Other income (a)	16		3
Total property and casualty insurance	1,124		1,084
Annuity:
Net investment income	347		315
Other income	27		26
Total annuity	374		341
Run-off long-term care and life	12		12
Other	63		56
Total revenues before realized gains (losses)	1,573		1,493
Realized gains (losses) on securities	3		(18		)
Total revenues	$	1,576	$	1,475

Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	43		$	32
Specialty casualty	15			29
Specialty financial	22			23
Other specialty	(1		)	2
Other lines	(1		)	1
Total underwriting	78			87
Investment and other income, net (a)	93			75
Total property and casualty insurance	171			162
Annuity	96			53
Run-off long-term care and life	—			(1		)
Other (b)	(47		)	(40		)
Total earnings before realized gains (losses) and income taxes	220			174
Realized gains (losses) on securities	3			(18		)
Total earnings before income taxes	$	223		$	156

(a) Includes pretax income of $13 million (before noncontrolling interest) from the sale of a hotel in the first quarter of 2017.

(b) Includes holding company interest and expenses.