Segments of Operations

AFG manages its business as three segments: (i) Property and casualty insurance, (ii) Annuity and (iii) Other, which includes holding company costs, revenues and costs of AFG’s limited insurance operations outside of property and casualty insurance and annuities, 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 equipment leasing and 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. Effective January 1, 2018, the results of AFG’s run-off long-term care and life businesses are included in the “Other” segment instead of as a separate reportable segment based on the immaterial size of the remaining operations. Prior period amounts were reclassified for consistent presentation.

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



	Three months ended March 31,
	2018			2017
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	350		$	342
Specialty casualty	579			508
Specialty financial	149			147
Other specialty	29			25
Total premiums earned	1,107			1,022
Net investment income	100			86
Other income (a)	2			16
Total property and casualty insurance	1,209			1,124
Annuity:
Net investment income	394			347
Other income	26			27
Total annuity	420			374
Other	83			75
Total revenues before realized gains (losses)	1,712			1,573
Realized gains (losses) on securities	(93		)	3
Total revenues	$	1,619		$	1,576



Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	33		$	43
Specialty casualty	41			15
Specialty financial	15			22
Other specialty	3			(1		)
Other lines (b)	(1		)	(1		)
Total underwriting	91			78
Investment and other income, net (a)	93			93
Total property and casualty insurance	184			171
Annuity	125			96
Other (b)	(42		)	(47		)
Total earnings before realized gains (losses) and income taxes	267			220
Realized gains (losses) on securities	(93		)	3
Total earnings before income taxes	$	174		$	223


(a)	Includes 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.