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, fixed-indexed and variable-indexed annuities in the retail, financial institutions, registered investment advisor 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 June 30,				Six months ended June 30,
	2018		2017		2018			2017
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	374	$	357	$	724		$	699
Specialty casualty	595		537		1,174			1,045
Specialty financial	159		146		308			293
Other specialty	33		25		62			50
Total premiums earned	1,161		1,065		2,268			2,087
Net investment income	115		96		215			182
Other income (a)	2		4		4			20
Total property and casualty insurance	1,278		1,165		2,487			2,289
Annuity:
Net investment income	412		360		806			707
Other income	27		26		53			53
Total annuity	439		386		859			760
Other	85		87		168			162
Total revenues before realized gains (losses)	1,802		1,638		3,514			3,211
Realized gains (losses) on securities	31		8		(62		)	11
Total revenues	$	1,833	$	1,646	$	3,452		$	3,222



Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	23		$	21		$	56		$	64
Specialty casualty	29			29			70			44
Specialty financial	22			23			37			45
Other specialty	(1		)	—			2			(1		)
Other lines	(1		)	(1		)	(2		)	(2		)
Total underwriting	72			72			163			150
Investment and other income, net (a)	106			91			199			184
Total property and casualty insurance	178			163			362			334
Annuity	99			85			224			181
Other (b)	(48		)	(51		)	(90		)	(98		)
Total earnings before realized gains (losses) and income taxes	229			197			496			417
Realized gains (losses) on securities	31			8			(62		)	11
Total earnings before income taxes	$	260		$	205		$	434		$	428


(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, including a $7 million loss on retirement of debt in the second quarter of 2017.