Insurance (Tables)

12 Months Ended

Dec. 31, 2018

Reconciliation of beginning and ending liability for unpaid losses and loss adjustment expenses

The following table provides an analysis of changes in the liability for losses and loss adjustment expenses over the past three years (in millions):



	2018			2017			2016
Balance at beginning of period	$	9,678		$	8,563		$	8,127
Less reinsurance recoverables, net of allowance	2,957			2,302			2,201
Net liability at beginning of period	6,721			6,261			5,926
Provision for losses and LAE occurring in the current year	3,195			3,019			2,730
Net increase (decrease) in the provision for claims of prior years:
Special A&E charges	18			89			36
Neon exited lines charge	—			(18		)	57
Other	(210		)	(135		)	(61		)
Total losses and LAE incurred	3,003			2,955			2,762
Payments for losses and LAE of:
Current year	(963		)	(942		)	(841		)
Prior years	(1,639		)	(1,586		)	(1,512		)
Total payments	(2,602		)	(2,528		)	(2,353		)
Reserves of businesses disposed (*)	(319		)	—			(40		)
Foreign currency translation and other	(4		)	33			(34		)
Net liability at end of period	6,799			6,721			6,261
Add back reinsurance recoverables, net of allowance	2,942			2,957			2,302
Gross unpaid losses and LAE included in the balance sheet	$	9,741		$	9,678		$	8,563


(*)	Reflects the reinsurance to close transactions at Neon (discussed below).

Short-duration insurance contracts, reconciliation of claims development to liability

A reconciliation of incurred and paid claims development information to the aggregate carrying amount of the liability for unpaid losses and LAE, with separate disclosure of reinsurance recoverables on unpaid claims is shown below (in millions):



	2018
Unpaid losses and allocated LAE, net of reinsurance:
Specialty
Property and transportation	$	1,117
Specialty casualty	3,884
Specialty financial	225
Other specialty	280
Total Specialty (excluding foreign reserves)	5,506

Other reserves
Reserves for foreign operations:
Neon Lloyd’s business	265
Other subsidiaries	268
A&E reserves	395
Unallocated LAE	335
Other	30
Total other reserves	1,293
Total reserves, net of reinsurance	6,799

Add back reinsurance recoverables, net of allowance	2,942
Gross unpaid losses and LAE included in the balance sheet	$	9,741

Short-duration insurance contracts, claims development

The following claims development tables and associated disclosures related to short-duration insurance contracts are prepared by sub-segment within the property and casualty insurance business for the most recent 10 accident years. AFG determines its claim counts at the claimant or policy feature level depending on the particular facts and circumstances of the underlying claim. While the methodology is generally consistent within each sub-segment, there are minor differences between and within the sub-segments. The methods used to summarize claim counts have not changed significantly over the time periods reported in the tables below.



Property and transportation
(Dollars in Millions)

	Incurred Claims and Allocated LAE, Net of Reinsurance																				As of December 31, 2018
	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)																				Total IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018
2009	$	503	$	487	$	505	$	498	$	494	$	494	$	491	$	491	$	491	$	490	$	2	138,248
2010			680		640		646		654		656		657		661		659		657		3		138,235
2011					816		803		819		833		844		856		853		850		6		139,345
2012							875		866		880		892		905		900		897		13		145,636
2013									894		881		884		890		890		890		18		141,293
2014											856		842		831		834		831		25		136,259
2015													831		794		789		789		36		134,484
2016															762		730		733		74		122,623
2017																	904		868		128		140,963
2018																			952		277		119,817
																	Total		$	7,957



	Cumulative Paid Claims and Allocated LAE, Net of Reinsurance
Accident Year	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		% (a)
2009	$	219	$	333	$	397	$	440	$	462	$	476	$	480	$	481	$	484	$	485	99.0	%
2010			316		487		536		597		627		638		643		648		650		98.9	%
2011					367		670		732		777		810		828		836		839		98.7	%
2012							574		715		780		826		852		866		892		99.4	%
2013									440		710		769		814		843		859		96.5	%
2014											332		638		702		756		784		94.3	%
2015													361		587		675		717		90.9	%
2016															296		528		590		80.5	%
2017																	383		648		74.7	%
2018																			399		41.9	%
																	Total		$	6,863
									Unpaid losses and LAE — years 2009 through 2018										1,094
			Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE)																23
			Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE)																$	1,117



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Annual	46.2	%	28.7	%	8.6	%	6.5	%	3.7	%	2.0	%	1.4	%	0.4	%	0.5	%	0.2	%
Cumulative	46.2	%	74.9	%	83.5	%	90.0	%	93.7	%	95.7	%	97.1	%	97.5	%	98.0	%	98.2	%


(a)	Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018).



Specialty casualty
(Dollars in Millions)

	Incurred Claims and Allocated LAE, Net of Reinsurance																				As of December 31, 2018
	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)																				Total IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018
2009	$	888	$	887	$	864	$	844	$	833	$	828	$	829	$	824	$	820	$	811	$	34	56,985
2010			870		886		887		865		879		868		867		864		853		47		56,411
2011					847		845		833		842		827		822		819		811		52		53,385
2012							890		883		876		876		872		867		838		64		51,885
2013									956		938		933		928		933		913		99		51,620
2014											1,023		994		994		992		966		139		54,494
2015													1,068		1,033		1,031		1,030		185		55,468
2016															1,115		1,108		1,097		313		53,038
2017																	1,196		1,200		539		52,658
2018																			1,257		705		48,996
																	Total		$	9,776



	Cumulative Paid Claims and Allocated LAE, Net of Reinsurance
Accident Year	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		% (a)
2009	$	170	$	381	$	510	$	591	$	653	$	691	$	715	$	731	$	740	$	748	92.2	%
2010			191		411		559		644		699		735		756		770		782		91.7	%
2011					172		380		517		606		655		687		707		725		89.4	%
2012							171		378		508		611		674		713		735		87.7	%
2013									180		388		545		656		717		754		82.6	%
2014											187		406		565		668		741		76.7	%
2015													176		406		569		692		67.2	%
2016															184		411		571		52.1	%
2017																	196		414		34.5	%
2018																			207		16.5	%
																	Total		$	6,369
									Unpaid losses and LAE — years 2009 through 2018										3,407
			Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE)																477
			Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE)																$	3,884



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Annual	19.1	%	23.2	%	16.2	%	11.1	%	7.0	%	4.3	%	2.6	%	1.9	%	1.3	%	1.0	%
Cumulative	19.1	%	42.3	%	58.5	%	69.6	%	76.6	%	80.9	%	83.5	%	85.4	%	86.7	%	87.7	%


(a)	Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018).



Specialty financial
(Dollars in Millions)

	Incurred Claims and Allocated LAE, Net of Reinsurance																				As of December 31, 2018
	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)																				Total IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018
2009	$	192	$	192	$	186	$	184	$	188	$	186	$	187	$	186	$	185	$	186	$	1	27,431
2010			138		145		132		132		135		133		130		127		126		1		21,922
2011					138		157		155		153		147		144		143		139		6		16,368
2012							163		163		151		139		137		135		132		6		21,064
2013									140		145		137		131		127		126		9		28,449
2014											146		157		156		153		147		9		29,411
2015													156		160		158		153		16		37,483
2016															179		184		187		24		44,820
2017																	212		215		34		46,921
2018																			212		79		36,606
																	Total		$	1,623



	Cumulative Paid Claims and Allocated LAE, Net of Reinsurance
Accident Year	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018			% (a)
2009	$	112	$	145	$	157	$	166	$	171	$	181	$	185	$	186	$	186	$	185		99.5	%
2010			61		93		104		122		132		130		128		126		126			100.0	%
2011					58		111		115		123		130		131		131		132			95.0	%
2012							71		104		109		117		121		126		128			97.0	%
2013									70		100		107		113		117		117			92.9	%
2014											62		109		125		128		137			93.2	%
2015													72		110		129		133			86.9	%
2016															88		141		158			84.5	%
2017																	120		169			78.6	%
2018																			112			52.8	%
																	Total		$	1,397
									Unpaid losses and LAE — years 2009 through 2018										226
			Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE)																(1		)
			Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE)																$	225



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Annual	50.5	%	26.4	%	7.5	%	5.8	%	4.7	%	1.7	%	0.5	%	(0.1	%)	—	%	(0.5	%)
Cumulative	50.5	%	76.9	%	84.4	%	90.2	%	94.9	%	96.6	%	97.1	%	97.0	%	97.0	%	96.5	%


(a)	Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018).



Other specialty
(Dollars in Millions)

	Incurred Claims and Allocated LAE, Net of Reinsurance																				As of December 31, 2018
	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)																				Total IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims (a)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018
2009	$	41	$	41	$	41	$	40	$	37	$	37	$	36	$	38	$	33	$	32	$	6	—
2010			36		39		40		39		40		40		40		40		40		3		—
2011					39		43		42		43		43		44		44		43		3		—
2012							42		40		39		40		41		39		39		6		—
2013									46		47		46		47		50		53		2		—
2014											58		57		59		59		60		13		—
2015													59		60		63		66		8		—
2016															61		61		65		21		—
2017																	63		65		36		—
2018																			86		62		—
																	Total		$	549



	Cumulative Paid Claims and Allocated LAE, Net of Reinsurance
Accident Year	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		% (b)
2009	$	8	$	12	$	15	$	19	$	22	$	22	$	24	$	26	$	25	$	27	84.4	%
2010			8		14		21		24		27		33		35		36		37		92.5	%
2011					12		20		25		28		34		36		37		38		88.4	%
2012							8		17		21		25		28		30		30		76.9	%
2013									7		16		22		34		37		44		83.0	%
2014											13		21		30		36		43		71.7	%
2015													10		26		31		50		75.8	%
2016															9		19		31		47.7	%
2017																	10		19		29.2	%
2018																			12		14.0	%
																	Total		$	331
									Unpaid losses and LAE — years 2009 through 2018										218
			Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE)																62
			Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE)																$	280



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Annual	18.7	%	17.0	%	12.6	%	14.1	%	9.3	%	7.6	%	3.4	%	3.7	%	(0.3	%)	6.3	%
Cumulative	18.7	%	35.7	%	48.3	%	62.4	%	71.7	%	79.3	%	82.7	%	86.4	%	86.1	%	92.4	%


(a)	The amounts shown in Other specialty represent business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty property and casualty insurance sub-segments. Accordingly, the liability for incurred claims and allocated LAE represents additional reserves held on claims counted in the tables provided for the other sub-segments (above).


(b)	Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018).



Total Specialty Group
(Dollars in Millions)

	Incurred Claims and Allocated LAE, Net of Reinsurance																				As of December 31, 2018
	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)																				Total IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018
2009	$	1,624	$	1,607	$	1,596	$	1,566	$	1,552	$	1,545	$	1,543	$	1,539	$	1,529	$	1,519	$	43	222,664
2010			1,724		1,710		1,705		1,690		1,710		1,698		1,698		1,690		1,676		54		216,568
2011					1,840		1,848		1,849		1,871		1,861		1,866		1,859		1,843		67		209,098
2012							1,970		1,952		1,946		1,947		1,955		1,941		1,906		89		218,585
2013									2,036		2,011		2,000		1,996		2,000		1,982		128		221,362
2014											2,083		2,050		2,040		2,038		2,004		186		220,164
2015													2,114		2,047		2,041		2,038		245		227,435
2016															2,117		2,083		2,082		432		220,481
2017																	2,375		2,348		737		240,542
2018																			2,507		1,123		205,419
																	Total		$	19,905



	Cumulative Paid Claims and Allocated LAE, Net of Reinsurance
Accident Year	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		% (a)
2009	$	509	$	871	$	1,079	$	1,216	$	1,308	$	1,370	$	1,404	$	1,424	$	1,435	$	1,445	95.1	%
2010			576		1,005		1,220		1,387		1,485		1,536		1,562		1,580		1,595		95.2	%
2011					609		1,181		1,389		1,534		1,629		1,682		1,711		1,734		94.1	%
2012							824		1,214		1,418		1,579		1,675		1,735		1,785		93.7	%
2013									697		1,214		1,443		1,617		1,714		1,774		89.5	%
2014											594		1,174		1,422		1,588		1,705		85.1	%
2015													619		1,129		1,404		1,592		78.1	%
2016															577		1,099		1,350		64.8	%
2017																	709		1,250		53.2	%
2018																			730		29.1	%
																	Total		$	14,960
									Unpaid losses and LAE — years 2009 through 2018										4,945
			Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE)																561
			Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE)																$	5,506



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Annual	32.6	%	25.5	%	12.2	%	8.8	%	5.5	%	3.2	%	2.0	%	1.2	%	0.8	%	0.7	%
Cumulative	32.6	%	58.1	%	70.3	%	79.1	%	84.6	%	87.8	%	89.8	%	91.0	%	91.8	%	92.5	%


(a)	Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018).

Short-duration insurance contracts, schedule of historical claims duration



Property and transportation
(Dollars in Millions)

	Incurred Claims and Allocated LAE, Net of Reinsurance																				As of December 31, 2018
	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)																				Total IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018
2009	$	503	$	487	$	505	$	498	$	494	$	494	$	491	$	491	$	491	$	490	$	2	138,248
2010			680		640		646		654		656		657		661		659		657		3		138,235
2011					816		803		819		833		844		856		853		850		6		139,345
2012							875		866		880		892		905		900		897		13		145,636
2013									894		881		884		890		890		890		18		141,293
2014											856		842		831		834		831		25		136,259
2015													831		794		789		789		36		134,484
2016															762		730		733		74		122,623
2017																	904		868		128		140,963
2018																			952		277		119,817
																	Total		$	7,957



	Cumulative Paid Claims and Allocated LAE, Net of Reinsurance
Accident Year	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		% (a)
2009	$	219	$	333	$	397	$	440	$	462	$	476	$	480	$	481	$	484	$	485	99.0	%
2010			316		487		536		597		627		638		643		648		650		98.9	%
2011					367		670		732		777		810		828		836		839		98.7	%
2012							574		715		780		826		852		866		892		99.4	%
2013									440		710		769		814		843		859		96.5	%
2014											332		638		702		756		784		94.3	%
2015													361		587		675		717		90.9	%
2016															296		528		590		80.5	%
2017																	383		648		74.7	%
2018																			399		41.9	%
																	Total		$	6,863
									Unpaid losses and LAE — years 2009 through 2018										1,094
			Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE)																23
			Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE)																$	1,117



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Annual	46.2	%	28.7	%	8.6	%	6.5	%	3.7	%	2.0	%	1.4	%	0.4	%	0.5	%	0.2	%
Cumulative	46.2	%	74.9	%	83.5	%	90.0	%	93.7	%	95.7	%	97.1	%	97.5	%	98.0	%	98.2	%


(a)	Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018).



Specialty casualty
(Dollars in Millions)

	Incurred Claims and Allocated LAE, Net of Reinsurance																				As of December 31, 2018
	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)																				Total IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018
2009	$	888	$	887	$	864	$	844	$	833	$	828	$	829	$	824	$	820	$	811	$	34	56,985
2010			870		886		887		865		879		868		867		864		853		47		56,411
2011					847		845		833		842		827		822		819		811		52		53,385
2012							890		883		876		876		872		867		838		64		51,885
2013									956		938		933		928		933		913		99		51,620
2014											1,023		994		994		992		966		139		54,494
2015													1,068		1,033		1,031		1,030		185		55,468
2016															1,115		1,108		1,097		313		53,038
2017																	1,196		1,200		539		52,658
2018																			1,257		705		48,996
																	Total		$	9,776



	Cumulative Paid Claims and Allocated LAE, Net of Reinsurance
Accident Year	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		% (a)
2009	$	170	$	381	$	510	$	591	$	653	$	691	$	715	$	731	$	740	$	748	92.2	%
2010			191		411		559		644		699		735		756		770		782		91.7	%
2011					172		380		517		606		655		687		707		725		89.4	%
2012							171		378		508		611		674		713		735		87.7	%
2013									180		388		545		656		717		754		82.6	%
2014											187		406		565		668		741		76.7	%
2015													176		406		569		692		67.2	%
2016															184		411		571		52.1	%
2017																	196		414		34.5	%
2018																			207		16.5	%
																	Total		$	6,369
									Unpaid losses and LAE — years 2009 through 2018										3,407
			Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE)																477
			Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE)																$	3,884



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Annual	19.1	%	23.2	%	16.2	%	11.1	%	7.0	%	4.3	%	2.6	%	1.9	%	1.3	%	1.0	%
Cumulative	19.1	%	42.3	%	58.5	%	69.6	%	76.6	%	80.9	%	83.5	%	85.4	%	86.7	%	87.7	%


(a)	Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018).



Specialty financial
(Dollars in Millions)

	Incurred Claims and Allocated LAE, Net of Reinsurance																				As of December 31, 2018
	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)																				Total IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018
2009	$	192	$	192	$	186	$	184	$	188	$	186	$	187	$	186	$	185	$	186	$	1	27,431
2010			138		145		132		132		135		133		130		127		126		1		21,922
2011					138		157		155		153		147		144		143		139		6		16,368
2012							163		163		151		139		137		135		132		6		21,064
2013									140		145		137		131		127		126		9		28,449
2014											146		157		156		153		147		9		29,411
2015													156		160		158		153		16		37,483
2016															179		184		187		24		44,820
2017																	212		215		34		46,921
2018																			212		79		36,606
																	Total		$	1,623



	Cumulative Paid Claims and Allocated LAE, Net of Reinsurance
Accident Year	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018			% (a)
2009	$	112	$	145	$	157	$	166	$	171	$	181	$	185	$	186	$	186	$	185		99.5	%
2010			61		93		104		122		132		130		128		126		126			100.0	%
2011					58		111		115		123		130		131		131		132			95.0	%
2012							71		104		109		117		121		126		128			97.0	%
2013									70		100		107		113		117		117			92.9	%
2014											62		109		125		128		137			93.2	%
2015													72		110		129		133			86.9	%
2016															88		141		158			84.5	%
2017																	120		169			78.6	%
2018																			112			52.8	%
																	Total		$	1,397
									Unpaid losses and LAE — years 2009 through 2018										226
			Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE)																(1		)
			Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE)																$	225



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Annual	50.5	%	26.4	%	7.5	%	5.8	%	4.7	%	1.7	%	0.5	%	(0.1	%)	—	%	(0.5	%)
Cumulative	50.5	%	76.9	%	84.4	%	90.2	%	94.9	%	96.6	%	97.1	%	97.0	%	97.0	%	96.5	%


(a)	Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018).



Other specialty
(Dollars in Millions)

	Incurred Claims and Allocated LAE, Net of Reinsurance																				As of December 31, 2018
	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)																				Total IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims (a)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018
2009	$	41	$	41	$	41	$	40	$	37	$	37	$	36	$	38	$	33	$	32	$	6	—
2010			36		39		40		39		40		40		40		40		40		3		—
2011					39		43		42		43		43		44		44		43		3		—
2012							42		40		39		40		41		39		39		6		—
2013									46		47		46		47		50		53		2		—
2014											58		57		59		59		60		13		—
2015													59		60		63		66		8		—
2016															61		61		65		21		—
2017																	63		65		36		—
2018																			86		62		—
																	Total		$	549



	Cumulative Paid Claims and Allocated LAE, Net of Reinsurance
Accident Year	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		% (b)
2009	$	8	$	12	$	15	$	19	$	22	$	22	$	24	$	26	$	25	$	27	84.4	%
2010			8		14		21		24		27		33		35		36		37		92.5	%
2011					12		20		25		28		34		36		37		38		88.4	%
2012							8		17		21		25		28		30		30		76.9	%
2013									7		16		22		34		37		44		83.0	%
2014											13		21		30		36		43		71.7	%
2015													10		26		31		50		75.8	%
2016															9		19		31		47.7	%
2017																	10		19		29.2	%
2018																			12		14.0	%
																	Total		$	331
									Unpaid losses and LAE — years 2009 through 2018										218
			Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE)																62
			Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE)																$	280



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Annual	18.7	%	17.0	%	12.6	%	14.1	%	9.3	%	7.6	%	3.4	%	3.7	%	(0.3	%)	6.3	%
Cumulative	18.7	%	35.7	%	48.3	%	62.4	%	71.7	%	79.3	%	82.7	%	86.4	%	86.1	%	92.4	%


(a)	The amounts shown in Other specialty represent business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty property and casualty insurance sub-segments. Accordingly, the liability for incurred claims and allocated LAE represents additional reserves held on claims counted in the tables provided for the other sub-segments (above).


(b)	Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018).



Total Specialty Group
(Dollars in Millions)

	Incurred Claims and Allocated LAE, Net of Reinsurance																				As of December 31, 2018
	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)																				Total IBNR Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018
2009	$	1,624	$	1,607	$	1,596	$	1,566	$	1,552	$	1,545	$	1,543	$	1,539	$	1,529	$	1,519	$	43	222,664
2010			1,724		1,710		1,705		1,690		1,710		1,698		1,698		1,690		1,676		54		216,568
2011					1,840		1,848		1,849		1,871		1,861		1,866		1,859		1,843		67		209,098
2012							1,970		1,952		1,946		1,947		1,955		1,941		1,906		89		218,585
2013									2,036		2,011		2,000		1,996		2,000		1,982		128		221,362
2014											2,083		2,050		2,040		2,038		2,004		186		220,164
2015													2,114		2,047		2,041		2,038		245		227,435
2016															2,117		2,083		2,082		432		220,481
2017																	2,375		2,348		737		240,542
2018																			2,507		1,123		205,419
																	Total		$	19,905



	Cumulative Paid Claims and Allocated LAE, Net of Reinsurance
Accident Year	For the Years Ended (2009–2017 is Supplementary Information and Unaudited)
Accident Year	2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		% (a)
2009	$	509	$	871	$	1,079	$	1,216	$	1,308	$	1,370	$	1,404	$	1,424	$	1,435	$	1,445	95.1	%
2010			576		1,005		1,220		1,387		1,485		1,536		1,562		1,580		1,595		95.2	%
2011					609		1,181		1,389		1,534		1,629		1,682		1,711		1,734		94.1	%
2012							824		1,214		1,418		1,579		1,675		1,735		1,785		93.7	%
2013									697		1,214		1,443		1,617		1,714		1,774		89.5	%
2014											594		1,174		1,422		1,588		1,705		85.1	%
2015													619		1,129		1,404		1,592		78.1	%
2016															577		1,099		1,350		64.8	%
2017																	709		1,250		53.2	%
2018																			730		29.1	%
																	Total		$	14,960
									Unpaid losses and LAE — years 2009 through 2018										4,945
			Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE)																561
			Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE)																$	5,506



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited)
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Annual	32.6	%	25.5	%	12.2	%	8.8	%	5.5	%	3.2	%	2.0	%	1.2	%	0.8	%	0.7	%
Cumulative	32.6	%	58.1	%	70.3	%	79.1	%	84.6	%	87.8	%	89.8	%	91.0	%	91.8	%	92.5	%


(a)	Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018).

Statutory information

Net earnings and capital and surplus on a statutory basis for the insurance subsidiaries were as follows (in millions):



	Net Earnings						Capital and Surplus
	2018		2017		2016		2018		2017
Property and casualty companies	$	546	$	484	$	461	$	2,867	$	2,729
Life insurance companies	802		286		167		2,701		2,132

Reinsurance information

The following table shows (in millions) (i) amounts deducted from property and casualty written and earned premiums in connection with reinsurance ceded, (ii) written and earned premiums included in income for reinsurance assumed and (iii) reinsurance recoveries, which represent ceded losses and loss adjustment expenses.



	2018			2017			2016
Direct premiums written	$	6,626		$	6,310		$	5,858
Reinsurance assumed	214			192			123
Reinsurance ceded	(1,817		)	(1,751		)	(1,595		)
Net written premiums	$	5,023		$	4,751		$	4,386

Direct premiums earned	$	6,472		$	6,112		$	5,745
Reinsurance assumed	204			157			118
Reinsurance ceded	(1,811		)	(1,690		)	(1,535		)
Net earned premiums	$	4,865		$	4,579		$	4,328

Reinsurance recoveries	$	1,249		$	1,379		$	810

Schedule of reserve liabilities for annuity benefits accumulated

For certain products, the liability for “annuity benefits accumulated” includes reserves for excess benefits expected to be paid on future deaths and annuitizations guaranteed withdrawal benefits and accrued persistency and premium bonuses. The liabilities included in AFG’s Balance Sheet for these benefits, excluding the impact of unrealized gains on securities, were as follows at December 31 (in millions):



	2018		2017
Expected death and annuitization	$	229	$	228
Guaranteed withdrawal benefits	472		358
Accrued persistency and premium bonuses	1		3

- Definition

Tabular disclosure of how the entity's reporting under GAAP as of the balance sheet date differs from the results based on prescribed and permitted accounting practices of the state or country of domicile in which a relevant statutory filing is made, or differences in results based on the National Association of Insurance Commissioners (NAIC) prescribed practices, or a combination thereof. Describes the accounting practices used and the related monetary effect on statutory surplus, net income, and risk-based capital. If an insurance enterprise's risk-based capital would have triggered a regulatory event had it not used a permitted practice, that fact is disclosed in the financial statements. Permitted statutory accounting practices include practices not prescribed but allowed by the domiciliary state insurance department regulatory authority.

+ References + Details