Segments of Operations

6 Months Ended

Jun. 30, 2012

Segments of Operations [Abstract]

Segments of Operations

C. Segments of Operations

AFG manages its business as three segments: (i) property and casualty insurance, (ii) annuity and supplemental insurance and (iii) other, which includes holding company costs and amounts 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, umbrella and excess liability, customized programs for small to mid-sized businesses and workers’ compensation, and (iii) Specialty financial, which includes risk management insurance programs for lending and leasing institutions (including collateral and mortgage protection insurance), surety and fidelity products and trade credit insurance. AFG’s annuity and supplemental insurance business markets traditional fixed and indexed annuities and a variety of supplemental insurance products such as Medicare supplement. Following the sale of its Medicare supplement and critical illness businesses (see Note B – “Sale of Operations”), AFG’s annuity and supplemental insurance business will market solely traditional fixed and indexed annuities and, to a much lesser extent, variable annuities. In addition, this segment will include run-off blocks of long-term care and life insurance.

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 operating earnings before income taxes by significant business segment and sub-segment.

	Three months ended June  30,						Six months ended June  30,
	2012			2011			2012			2011
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	290		$	274		$	553		$	529
Specialty casualty		236			219			456			435
Specialty financial		98			100			201			212
Other		16			16			33			32
Total premiums earned		640			609			1,243			1,208
Investment income		70			75			141			150
Realized gains		13			32			44			32
Other income		18			20			31			35
Total property and casualty insurance		741			736			1,459			1,425
Annuity and supplemental insurance:
Investment income		267			230			519			458
Life, accident and health premiums		105			107			210			217
Realized gains (losses)		2			(13	)		15			(16	)
Other income		28			28			54			52
Total annuity and supplemental insurance		402			352			798			711
Other		7			5			6			(4	)
Total revenues	$	1,150		$	1,093		$	2,263		$	2,132
Operating Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	6			($3	)	$	33		$	33
Specialty casualty		33			17			37			18
Specialty financial		11			12			27			28
Other		2			3			3			5
Other lines (a)		(7	)		(50	)		(7	)		(50	)
Total underwriting		45			(21	)		93			34
Investment and other income, net		61			71			116			140
Realized gains		13			32			44			32
Total property and casualty insurance		119			82			253			206
Annuity and supplemental insurance:
Operations		76			56			143			110
Realized gains (losses)		2			(13	)		15			(16	)
Total annuity and supplemental insurance		78			43			158			94
Other (b)		(61	)		(65	)		(129	)		(138	)
Total operating earnings before income taxes	$	136		$	60		$	282		$	162

(a) Includes a second quarter 2011 special charge of $50 million to increase asbestos and environmental reserves.

(b) Includes holding company expenses and losses of managed investment entities attributable to noncontrolling interests of $18 million and $20 million for the second quarter and $46 million and $55 million for the first six months of 2012 and 2011, respectively.