Segments of Operations

AFG manages its business as three segments: (i) Property and casualty insurance, (ii) Annuity and (iii) Other, which includes holding company assets and 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.

Sales of property and casualty insurance outside of the United States represented 7% of AFG’s revenues in 2018, 5% of AFG’s revenues in 2017 and 4% of AFG’s revenues in 2016.

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



	2018		2017		2016
Assets
Property and casualty insurance (a)	$	17,681	$	17,171	$	15,574
Annuity	39,952		37,179		33,409
Other	5,823		6,308		6,089
Total assets	$	63,456	$	60,658	$	55,072



Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	1,729		$	1,711	$	1,662
Specialty casualty	2,403			2,186		2,006
Specialty financial	598			576		557
Other specialty	135			106		103
Total premiums earned	4,865			4,579		4,328
Net investment income	438			362		350
Other income (b)	10			28		51
Total property and casualty insurance	5,313			4,969		4,729
Annuity:
Net investment income	1,638			1,458		1,356
Other income	107			103		103
Total annuity	1,745			1,561		1,459
Other	358			330		289
Total revenues before realized gains (losses)	7,416			6,860		6,477
Realized gains (losses) on securities	(266		)	5		19
Realized gains on subsidiaries	—			—		2
Total revenues	$	7,150		$	6,865	$	6,498


(a)	Not allocable to sub-segments.


(b)	Includes income of $32 million (before noncontrolling interest) from the sale of an apartment property in 2016.



	2018			2017			2016
Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	120		$	154		$	166
Specialty casualty	141			104			78
Specialty financial	66			61			84
Other specialty	(5		)	(2		)	9
Other lines (a)	(20		)	(75		)	(101		)
Total underwriting	302			242			236
Investment and other income, net (b)	407			349			341
Total property and casualty insurance	709			591			577
Annuity	361			380			368
Other (c)	(165		)	(252		)	(179		)
Total earnings before realized gains (losses) and income taxes	905			719			766
Realized gains (losses) on securities	(266		)	5			19
Realized gains on subsidiaries	—			—			2
Total earnings before income taxes	$	639		$	724		$	787


(a)	Includes special charges to increase asbestos and environmental (“A&E”) reserves of $18 million, $89 million and $36 million in 2018, 2017 and 2016, respectively. Also includes $18 million in favorable development related to the Neon exited lines recorded in connection with a reinsurance to close transaction in 2017 and a charge of $65 million related to Neon exited lines in 2016.


(b)	Includes income of $32 million (before noncontrolling interest) from the sale of an apartment property in 2016.


(c)	Primarily holding company interest and expenses, including losses on retirement of debt of $51 million in 2017 and special charges to increase A&E reserves related to AFG’s former railroad and manufacturing operations ($9 million in 2018, $24 million in 2017 and $5 million in 2016).