Segments of Operations

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segments of Operations

Segments of Operations

Subsequent to the agreement to sell its annuity operations, see Note B — “Discontinued Operations,” AFG manages its business as two segments: Property and casualty insurance and Other, which includes holding company costs 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 and trucks, inland and ocean marine, agricultural-related products and other commercial property coverages, (ii) Specialty casualty, which includes primarily excess and surplus, executive and professional liability, general liability, umbrella and excess liability, specialty coverages 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 lending and leasing institutions (including equipment leasing and collateral and lender-placed mortgage property insurance), fidelity and surety 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 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,
	2021		2020
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	394	$	386
Specialty casualty	571		556
Specialty financial	157		156
Other specialty	51		40
Other lines (a)	—		71
Total premiums earned	1,173		1,209
Net investment income (b)	159		93
Other income	4		5
Total property and casualty insurance	1,336		1,307
Other (c)	96		76
Total revenues before realized gains (losses)	1,432		1,383
Realized gains (losses) on securities	77		(328)
Total revenues	$	1,509	$	1,055

(a)Represents premiums earned in the Neon exited lines (which were sold in December 2020) during the first three months of 2020.

(b)Includes a loss of $6 million in the Neon exited lines in the first three months of 2020 (primarily from the change in fair value of equity securities).

(c)Includes $29 million in the first three months of 2021 and $12 million in the first three months of 2020 in investment income from real estate-related entities to be acquired from the discontinued annuity operations prior to closing of the sale.

	Three months ended March 31,
	2021		2020
Earnings (Loss) Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	56	$	27
Specialty casualty	56		52
Specialty financial	25		17
Other specialty	(3)		(7)
Other lines (a)	—		(2)
Total underwriting	134		87
Investment and other income, net (b)	154		84
Total property and casualty insurance	288		171
Other (c)	(30)		(28)
Total earnings before realized gains (losses) and income taxes	258		143
Realized gains (losses) on securities	77		(328)
Total earnings (loss) before income taxes	$	335	$	(185)

(a)Includes an underwriting loss of $1 million in the first three months of 2020 in the Neon exited lines.

(b)Includes $9 million in the first three months of 2020 in net expenses from the Neon exited lines, before noncontrolling interest.

(c)Includes holding company interest and expenses and $29 million in the first three months of 2021 and $6 million (net of DAC) in the first three months of 2020 of earnings from the real estate-related entities to be acquired from the discontinued annuity operations prior to closing of the sale.