Discontinued Operations

12 Months Ended

Dec. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Annuity Business   Effective May 31, 2021, AFG completed the sale of its Annuity business to Massachusetts Mutual Life Insurance Company (“MassMutual”). MassMutual acquired Great American Life Insurance Company and its two insurance subsidiaries, Annuity Investors Life Insurance Company and Manhattan National Life Insurance Company. In addition to AFG’s annuity operations, these subsidiaries included AFG’s run-off life and long-term care operations. Proceeds from the sale were $3.57 billion and AFG realized a $656 million net gain on the sale in 2021.

Details of the assets and liabilities of the Annuity subsidiaries sold were as follows (in millions):

	May 31, 2021
Assets of businesses sold:
Cash and cash equivalents	$	2,060
Investments	38,323
Recoverables from reinsurers	6,748
Other assets	2,152
Total assets of discontinued annuity operations	49,283
Liabilities of businesses sold:
Annuity benefits accumulated	43,690
Other liabilities	1,813
Total liabilities of discontinued annuity operations	45,503
Reclassify AOCI	(913)
Net investment in annuity businesses sold, excluding AOCI	$	2,867

Details of the results of operations for the discontinued annuity operations were (in millions):

	Year Ended December 31,
	2021 (*)		2020
Net investment income	$	746	$	1,670
Realized gains on securities	112		365
Other income	52		123
Total revenues	910		2,158
Annuity benefits	377		1,192
Annuity and supplemental insurance acquisition expenses	136		306
Other expenses	73		151
Total costs and expenses	586		1,649
Earnings before income taxes from discontinued operations	324		509
Provision for income taxes on discontinued operations	66		102
Net earnings from discontinued operations, net of tax	258		407
Gain on sale of discontinued operations, net of tax	656		—
Net earnings from discontinued operations	$	914	$	407

(*)Results through the May 31, 2021 effective date of the sale.

The impact of the sale of the annuity business is shown below (in millions):

	May 31, 2021
Cash proceeds	$	3,571
Sale related expenses	(8)
Total net proceeds	3,563
Net investment in annuity businesses sold, excluding AOCI	2,867
Reclassify net deferred tax asset	(199)
Pretax gain on sale	895
Income tax expense:
Reclassify net deferred tax asset	199
Tax liabilities triggered by the sale	41
Other	(1)
Total income tax expense	239
Net gain on sale	$	656

Summarized cash flows for the discontinued annuity operations were (in millions):

	Year ended December 31,
	2021 (*)		2020
Net cash provided by operating activities	$	67	$	898
Net cash used in investing activities	(1,689)		(285)
Net cash provided by (used in) financing activities	477		(203)

(*)Through the May 31, 2021 effective date of the sale.