Segments of Operations

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segments of Operations

Segments of Operations

Subsequent to the sale of 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 June 30,				Six months ended June 30,
	2021		2020		2021		2020
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	453	$	390	$	847	$	776
Specialty casualty	588		547		1,159		1,103
Specialty financial	157		144		314		300
Other specialty	52		42		103		82
Other lines (a)	—		61		—		132
Total premiums earned	1,250		1,184		2,423		2,393
Net investment income (b)	143		72		302		165
Other income	1		3		5		8
Total property and casualty insurance	1,394		1,259		2,730		2,566
Other (c)	90		78		186		154
Total revenues before realized gains (losses)	1,484		1,337		2,916		2,720
Realized gains (losses) on securities	43		108		120		(220)
Realized gain on subsidiary	4		—		4		—
Total revenues	$	1,531	$	1,445	$	3,040	$	2,500

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

(b)Includes income of less than $1 million for the second quarter of 2020 and a loss of $6 million in the Neon exited lines in the first six months of 2020 (primarily from the change in fair value of equity securities).

(c)Includes $22 million and $7 million in the second quarter of 2021 and 2020 and $51 million and $19 million in first six months of 2021 and 2020, respectively, in investment income from real estate-related entities acquired from the discontinued annuity operations prior to closing of the sale.

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Earnings (Loss) Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	62	$	33	$	118	$	60
Specialty casualty	71		27		127		79
Specialty financial	21		—		46		17
Other specialty	(1)		(6)		(4)		(13)
Other lines (a)	(1)		(45)		(1)		(47)
Total underwriting	152		9		286		96
Investment and other income, net (b)	136		65		290		149
Total property and casualty insurance	288		74		576		245
Other (c)	(47)		(42)		(77)		(70)
Total earnings before realized gains (losses) and income taxes	241		32		499		175
Realized gains (losses) on securities	43		108		120		(220)
Realized gain on subsidiary	4		—		4		—
Total earnings (loss) before income taxes	$	288	$	140	$	623	$	(45)

(a)Includes an underwriting loss of $43 million in the second quarter of 2020 and $44 million in the first six months of 2020 in the Neon exited lines.

(b)Includes $1 million and $10 million in the second quarter and first six months of 2020, respectively, in net expenses from the Neon exited lines, before noncontrolling interest.

(c)Includes holding company interest and expenses and $22 million and $2 million (net of DAC) in the second quarter of 2021 and 2020 and $51 million and $8 million (net of DAC) in the first six months of 2021 and 2020, respectively, of earnings from the real estate-related entities acquired from the discontinued annuity operations prior to closing of the sale.