Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 01, 2017 | Jun. 30, 2016 | |
Entity Information [Line Items] | |||
Entity Registrant Name | AMERICAN FINANCIAL GROUP INC | ||
Entity Central Index Key | 1,042,046 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 5,540 | ||
Entity Common Stock, Shares Outstanding | 87,014,273 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Cash and cash equivalents | $ 2,107 | $ 1,220 |
Investments: | ||
Fixed maturities, available for sale at fair value (amortized cost — $33,735 and $31,565) | 34,544 | 32,284 |
Fixed maturities, trading at fair value | 359 | 254 |
Equity securities, available for sale at fair value (cost — $1,351 and $1,469) | 1,502 | 1,553 |
Equity securities, trading at fair value | 56 | 166 |
Mortgage loans | 1,147 | 1,067 |
Policy loans | 192 | 201 |
Equity index call options | 492 | 241 |
Real estate and other investments | 1,034 | 750 |
Total cash and investments | 41,433 | 37,736 |
Recoverables from reinsurers | 2,737 | 2,636 |
Prepaid reinsurance premiums | 539 | 480 |
Agents’ balances and premiums receivable | 997 | 937 |
Deferred policy acquisition costs | 1,239 | 1,184 |
Assets of managed investment entities | 4,765 | 4,047 |
Other receivables | 908 | 820 |
Variable annuity assets (separate accounts) | 600 | 608 |
Other assets | 1,655 | 1,190 |
Goodwill | 199 | 199 |
Total assets | 55,072 | 49,837 |
Liabilities and Equity: | ||
Unpaid losses and loss adjustment expenses | 8,563 | 8,127 |
Unearned premiums | 2,171 | 2,060 |
Annuity benefits accumulated | 29,907 | 26,622 |
Life, accident and health reserves | 691 | 705 |
Payable to reinsurers | 634 | 591 |
Liabilities of managed investment entities | 4,549 | 3,781 |
Long-term debt | 1,283 | 998 |
Variable annuity liabilities (separate accounts) | 600 | 608 |
Other liabilities | 1,755 | 1,575 |
Total liabilities | 50,153 | 45,067 |
Shareholders’ equity: | ||
Common Stock, no par value — 200,000,000 shares authorized — 86,924,399 and 87,474,452 shares outstanding | 87 | 87 |
Capital surplus | 1,111 | 1,214 |
Retained earnings | 3,343 | 2,987 |
Accumulated other comprehensive income, net of tax | 375 | 304 |
Total shareholders’ equity | 4,916 | 4,592 |
Noncontrolling interests | 3 | 178 |
Total equity | 4,919 | 4,770 |
Total liabilities and equity | $ 55,072 | $ 49,837 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available for sale at amortized cost | $ 33,735 | $ 31,565 |
Equity securities, available for sale at cost | $ 1,351 | $ 1,469 |
Common Stock, par value (USD per share) | $ 0 | $ 0 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares outstanding | 86,924,399 | 87,474,452 |
Consolidated Statement of Earni
Consolidated Statement of Earnings - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Property and casualty insurance net earned premiums | $ 4,328 | $ 4,224 | $ 3,878 |
Life, accident and health net earned premiums | 24 | 104 | 108 |
Net investment income | 1,696 | 1,633 | 1,501 |
Realized gains (losses) on: | |||
Securities | 19 | (19) | 52 |
Subsidiaries | 2 | (161) | 0 |
Income (loss) of managed investment entities: | |||
Investment income | 190 | 155 | 116 |
Gain (loss) on change in fair value of assets/liabilities | 15 | (34) | (44) |
Other income | 224 | 243 | 122 |
Total revenues | 6,498 | 6,145 | 5,733 |
Costs and Expenses: | |||
Property and casualty insurance: Losses and loss adjustment expenses | 2,762 | 2,695 | 2,494 |
Property and casualty insurance: Commissions and other underwriting expenses | 1,349 | 1,320 | 1,172 |
Annuity benefits | 800 | 732 | 648 |
Life, accident and health benefits | 33 | 131 | 164 |
Annuity and supplemental insurance acquisition expenses | 186 | 179 | 193 |
Interest charges on borrowed money | 77 | 75 | 74 |
Expenses of managed investment entities | 151 | 112 | 82 |
Other expenses | 353 | 336 | 280 |
Total costs and expenses | 5,711 | 5,580 | 5,107 |
Earnings before income taxes | 787 | 565 | 626 |
Provision for income taxes | 119 | 195 | 220 |
Net earnings, including noncontrolling interests | 668 | 370 | 406 |
Less: Net earnings (loss) attributable to noncontrolling interests | 19 | 18 | (46) |
Net Earnings Attributable to Shareholders | $ 649 | $ 352 | $ 452 |
Earnings Attributable to Shareholders per Common Share: | |||
Basic (USD per share) | $ 7.47 | $ 4.02 | $ 5.07 |
Diluted (USD per share) | $ 7.33 | $ 3.94 | $ 4.97 |
Average number of Common Shares: | |||
Basic (shares) | 86.9 | 87.6 | 89 |
Diluted (shares) | 88.5 | 89.4 | 91 |
Cash dividends per Common Share (USD per share) | $ 2.1525 | $ 2.03 | $ 1.91 |
Supplemental disclosure of Realized gains (losses) on securities: | |||
Realized gains before impairments | $ 135 | $ 106 | $ 88 |
Losses on securities with impairment | (115) | (125) | (36) |
Non-credit portion recognized in other comprehensive income (loss) | (1) | 0 | 0 |
Impairment charges recognized in earnings | (116) | (125) | (36) |
Total realized gains (losses) on securities | $ 19 | $ (19) | $ 52 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings, including noncontrolling interests | $ 668 | $ 370 | $ 406 |
Net unrealized gains (losses) on securities: | |||
Unrealized holding gains (losses) on securities arising during the period | 80 | (406) | 216 |
Reclassification adjustment for realized (gains) losses included in net earnings | (12) | 9 | (33) |
Reclassification for unrealized gains of subsidiaries sold | 0 | (22) | 0 |
Total net unrealized gains (losses) on securities | 68 | (419) | 183 |
Net unrealized gains (losses) on cash flow hedges | (8) | 1 | 0 |
Foreign currency translation adjustments | 7 | (14) | (9) |
Pension and other postretirement plans adjustments | 0 | 1 | (4) |
Other comprehensive income (loss), net of tax | 67 | (431) | 170 |
Total comprehensive income (loss), net of tax | 735 | (61) | 576 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 24 | 10 | (43) |
Comprehensive income (loss) attributable to shareholders | $ 711 | $ (71) | $ 619 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Total | Common Shares | Common Stock and Capital Surplus | Retained Earnings Approp. | Retained Earnings Unapprop. | Accumulated Other Comprehensive Inc. (Loss) | Noncontrolling Interests |
Beginning Balance, shares at Dec. 31, 2013 | 89,513,386 | |||||||
Beginning Balance at Dec. 31, 2013 | $ 4,769 | $ 4,599 | $ 1,213 | $ 49 | $ 2,777 | $ 560 | $ 170 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 406 | 452 | 452 | (46) | ||||
Other comprehensive income (loss) | 170 | 167 | 167 | 3 | ||||
Allocation of losses of managed investment entities | 0 | (51) | (51) | 51 | ||||
Dividends on Common Stock | (169) | (169) | (169) | |||||
Shares issued: | ||||||||
Exercise of stock options, shares | 1,262,313 | |||||||
Exercise of stock options | 36 | 36 | 36 | |||||
Restricted stock awards, shares | 102,330 | |||||||
Restricted stock awards | 0 | 0 | 0 | |||||
Other benefit plans, shares | 140,339 | |||||||
Other benefit plans | 8 | 8 | 8 | |||||
Dividend reinvestment plan, shares | 27,238 | |||||||
Dividend reinvestment plan | 2 | 2 | 2 | |||||
Stock-based compensation: | ||||||||
Stock-based compensation: Expense | 19 | 19 | 19 | |||||
Stock-based compensation: Excess tax benefits | 9 | 9 | 9 | |||||
Shares acquired and retired, shares | (3,303,639) | |||||||
Shares acquired and retired | (191) | (191) | (46) | (145) | ||||
Shares exchanged — benefit plans, shares | (33,174) | |||||||
Shares exchanged — benefit plans | (2) | (2) | (1) | (1) | ||||
Other | (3) | 0 | (3) | |||||
Ending Balance, shares at Dec. 31, 2014 | 87,708,793 | |||||||
Ending Balance at Dec. 31, 2014 | 5,054 | 4,879 | 1,240 | (2) | 2,914 | 727 | 175 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect of accounting change | 2 | 2 | 2 | |||||
Net earnings | 370 | 352 | 352 | 18 | ||||
Other comprehensive income (loss) | (431) | (423) | (423) | (8) | ||||
Dividends on Common Stock | (178) | (178) | (178) | |||||
Shares issued: | ||||||||
Exercise of stock options, shares | 1,475,202 | |||||||
Exercise of stock options | 47 | 47 | 47 | |||||
Restricted stock awards, shares | 171,130 | |||||||
Restricted stock awards | 0 | 0 | 0 | |||||
Other benefit plans, shares | 111,681 | |||||||
Other benefit plans | 7 | 7 | 7 | |||||
Dividend reinvestment plan, shares | 26,167 | |||||||
Dividend reinvestment plan | 2 | 2 | 2 | |||||
Stock-based compensation: | ||||||||
Stock-based compensation: Expense | 21 | 21 | 21 | |||||
Stock-based compensation: Excess tax benefits | 12 | 12 | 12 | |||||
Shares acquired and retired, shares | (1,955,186) | |||||||
Shares acquired and retired | (126) | (126) | (27) | (99) | ||||
Shares exchanged — benefit plans, shares | (45,765) | |||||||
Shares exchanged — benefit plans | (3) | (3) | (1) | (2) | ||||
Forfeitures of restricted stock, shares | (17,570) | |||||||
Forfeitures of restricted stock | 0 | 0 | 0 | |||||
Other | $ (7) | 0 | 0 | 0 | (7) | |||
Ending Balance, shares at Dec. 31, 2015 | 87,474,452 | 87,474,452 | ||||||
Ending Balance at Dec. 31, 2015 | $ 4,770 | 4,592 | 1,301 | 0 | 2,987 | 304 | 178 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 668 | 649 | 649 | 19 | ||||
Other comprehensive income (loss) | 67 | 62 | 62 | 5 | ||||
Dividends on Common Stock | $ (187) | (187) | (187) | |||||
Shares issued: | ||||||||
Exercise of stock options, shares | 958,344 | 958,344 | ||||||
Exercise of stock options | $ 32 | 32 | 32 | |||||
Restricted stock awards, shares | 318,940 | |||||||
Restricted stock awards | 0 | 0 | 0 | |||||
Other benefit plans, shares | 95,875 | |||||||
Other benefit plans | 7 | 7 | 7 | |||||
Dividend reinvestment plan, shares | 25,516 | |||||||
Dividend reinvestment plan | 2 | 2 | 2 | |||||
Stock-based compensation: | ||||||||
Stock-based compensation: Expense | 22 | 22 | 22 | |||||
Shares acquired and retired, shares | (1,911,976) | |||||||
Shares acquired and retired | (133) | (133) | (29) | (104) | ||||
Shares exchanged — benefit plans, shares | (32,707) | |||||||
Shares exchanged — benefit plans | (2) | (2) | 0 | (2) | ||||
Forfeitures of restricted stock, shares | (4,045) | |||||||
Forfeitures of restricted stock | 0 | 0 | 0 | |||||
Acquisition of noncontrolling interests | (315) | (128) | (137) | 9 | (187) | |||
Other | $ (12) | (12) | ||||||
Ending Balance, shares at Dec. 31, 2016 | 86,924,399 | 86,924,399 | ||||||
Ending Balance at Dec. 31, 2016 | $ 4,919 | $ 4,916 | $ 1,198 | $ 0 | $ 3,343 | $ 375 | $ 3 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Activities: | |||
Net earnings, including noncontrolling interests | $ 668 | $ 370 | $ 406 |
Adjustments: | |||
Depreciation and amortization | 134 | 134 | 144 |
Annuity benefits | 800 | 732 | 648 |
Realized (gains) losses on investing activities | (61) | 100 | (58) |
Net (purchases) sales of trading securities | 79 | 10 | (109) |
Deferred annuity and life policy acquisition costs | (230) | (224) | (198) |
Change in: | |||
Reinsurance and other receivables | (315) | (10) | (199) |
Other assets | (467) | (13) | (87) |
Insurance claims and reserves | 533 | 451 | 587 |
Payable to reinsurers | 43 | (54) | 134 |
Other liabilities | 265 | 12 | (63) |
Managed investment entities’ assets/liabilities | (279) | (190) | 2 |
Other operating activities, net | (20) | 35 | 24 |
Net cash provided by operating activities | 1,150 | 1,353 | 1,231 |
Investing Activities: | |||
Purchases of fixed maturities | (7,537) | (7,201) | (6,846) |
Purchases of equity securities | (207) | (570) | (471) |
Purchases of mortgage loans | (341) | (213) | (450) |
Purchases of other investments, including equity index call options | (738) | (534) | (312) |
Purchases of real estate, property and equipment | (49) | (102) | (47) |
Purchases of businesses | 0 | 0 | (267) |
Proceeds from maturities and redemptions of fixed maturities | 4,713 | 3,333 | 2,988 |
Proceeds from repayments of mortgage loans | 262 | 265 | 116 |
Proceeds from sales of fixed maturities | 641 | 321 | 287 |
Proceeds from sales of equity securities | 348 | 364 | 155 |
Proceeds from sales and settlements of other investments, including equity index call options | 319 | 374 | 369 |
Proceeds from sales of real estate, property and equipment | 55 | 117 | 14 |
Proceeds from sales of businesses | 0 | 7 | 0 |
Cash and cash equivalents of businesses acquired (sold) | 0 | (49) | 1,078 |
Managed investment entities: | |||
Purchases of investments | (2,254) | (1,530) | (1,692) |
Proceeds from sales and redemptions of investments | 1,890 | 855 | 1,417 |
Other investing activities, net | (83) | (10) | 33 |
Net cash used in investing activities | (2,981) | (4,573) | (3,628) |
Financing Activities: | |||
Annuity receipts | 4,585 | 4,485 | 3,696 |
Annuity surrenders, benefits and withdrawals | (2,275) | (2,025) | (1,773) |
Net transfers from variable annuity assets | 42 | 43 | 43 |
Additional long-term borrowings | 302 | 145 | 145 |
Reductions of long-term debt | (18) | (192) | (2) |
Issuances of managed investment entities’ liabilities | 2,293 | 1,026 | 1,400 |
Retirements of managed investment entities’ liabilities | (1,600) | (136) | (1,094) |
Issuances of Common Stock | 35 | 61 | 47 |
Repurchases of Common Stock | (133) | (126) | (191) |
Cash dividends paid on Common Stock | (185) | (176) | (167) |
Acquisition of noncontrolling interests in subsidiary | (315) | 0 | 0 |
Other financing activities, net | (13) | (8) | (3) |
Net cash provided by (used in) financing activities | 2,718 | 3,097 | 2,101 |
Net Change in Cash and Cash Equivalents | 887 | (123) | (296) |
Cash and cash equivalents at beginning of year | 1,220 | 1,343 | 1,639 |
Cash and cash equivalents at end of year | $ 2,107 | $ 1,220 | $ 1,343 |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of American Financial Group, Inc. and its subsidiaries (“AFG”). Certain reclassifications have been made to prior years to conform to the current year’s presentation. All significant intercompany balances and transactions have been eliminated. The results of operations of companies since their formation or acquisition are included in the consolidated financial statements. Events or transactions occurring subsequent to December 31, 2016 , and prior to the filing of this Form 10-K, have been evaluated for potential recognition or disclosure herein. The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates. Fair Value Measurements Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The standards establish a hierarchy of valuation techniques based on whether the assumptions that market participants would use in pricing the asset or liability (“inputs”) are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect AFG’s assumptions about the assumptions market participants would use in pricing the asset or liability. Other than the fair value measurements used in recording the loss on the sale of substantially all of its long-term care business in 2015 (see Note B — “ Acquisitions and Sale of Businesses ”), AFG did not have any significant nonrecurring fair value measurements of nonfinancial assets and liabilities in 2016 or 2015 . Investments Fixed maturity and equity securities classified as “available for sale” are reported at fair value with unrealized gains and losses included in accumulated other comprehensive income (“AOCI”) in AFG’s Balance Sheet. Fixed maturity and equity securities classified as “trading” are reported at fair value with changes in unrealized holding gains or losses during the period included in net investment income. Mortgage and policy loans are carried primarily at the aggregate unpaid balance. In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, which, among other things, will require all equity securities currently classified as “available for sale” to be reported at fair value, with holding gains and losses recognized in net income, instead of AOCI. AFG will be required to adopt this guidance effective January 1, 2018. Premiums and discounts on fixed maturity securities are amortized using the interest method. Mortgage-backed securities (“MBS”) are amortized over a period based on estimated future principal payments, including prepayments. Prepayment assumptions are reviewed periodically and adjusted to reflect actual prepayments and changes in expectations. Gains or losses on securities are determined on the specific identification basis. When a decline in the value of a specific investment is considered to be other-than-temporary at the balance sheet date, a provision for impairment is charged to earnings (included in realized gains (losses) on securities) and the cost basis of that investment is reduced. If management can assert that it does not intend to sell an impaired fixed maturity security and it is not more likely than not that it will have to sell the security before recovery of its amortized cost basis, then the other-than-temporary impairment is separated into two components: (i) the amount related to credit losses (recorded in earnings) and (ii) the amount related to all other factors (recorded in other comprehensive income). The credit-related portion of an other-than-temporary impairment is measured by comparing a security’s amortized cost to the present value of its current expected cash flows discounted at its effective yield prior to the impairment charge. Both components are shown in the statement of earnings. If management intends to sell an impaired security, or it is more likely than not that it will be required to sell the security before recovery, an impairment charge to earnings is recorded to reduce the amortized cost of that security to fair value. Derivatives Derivatives included in AFG’s Balance Sheet are recorded at fair value. Changes in fair value of derivatives are included in earnings, unless the derivatives are designated and qualify as highly effective cash flow hedges. Derivatives that do not qualify for hedge accounting under GAAP consist primarily of (i) components of certain fixed maturity securities (primarily interest-only MBS) and (ii) the equity-based component of certain annuity products (included in annuity benefits accumulated) and related equity index call options designed to be consistent with the characteristics of the liabilities and used to mitigate the risk embedded in those annuity products. To qualify for hedge accounting, at the inception of a derivative contract, AFG formally documents the relationship between the terms of the hedge and the hedged items and its risk management objective. This documentation includes defining how hedge effectiveness and ineffectiveness will be measured on a retrospective and prospective basis. Changes in the fair value of derivatives that are designated and qualify as highly effective cash flow hedges are recorded in AOCI and are reclassified into earnings when the variability of the cash flows from the hedged items impacts earnings. Any hedge ineffectiveness is immediately recorded in current period earnings. When the change in the fair value of a qualifying cash flow hedge is included in earnings, it is included in the same line item in the statement of earnings as the cash flows from the hedged item. AFG uses interest rate swaps that are designated and qualify as highly effective cash flow hedges to mitigate interest rate risk related to certain floating-rate securities included in AFG’s portfolio of fixed maturity securities. For derivatives that are designated and qualify as highly effective fair value hedges, changes in the fair value of the derivative, along with changes in the fair value of the hedged item attributable to the hedged risk, are recognized in current period earnings. AFG has entered into an interest rate swap that qualifies as a highly effective fair value hedge to mitigate the interest rate risk associated with fixed-rate long-term debt by economically converting certain fixed-rate debt obligations to floating-rate obligations. Since the terms of the swap match the terms of the hedged debt, changes in the fair value of the swap are offset by changes in the fair value of the hedged debt attributable to changes in interest rates. Accordingly, the net impact on AFG’s current period earnings is that the interest expense associated with the hedged debt is effectively recorded at the floating rate. Goodwill Goodwill represents the excess of cost of subsidiaries over AFG’s equity in their underlying net assets. Goodwill is not amortized, but is subject to an impairment test at least annually. An entity is not required to complete the quantitative annual goodwill impairment test on a reporting unit if the entity elects to perform a qualitative analysis and determines that it is more likely than not that the reporting unit’s fair value exceeds its carrying amount. Reinsurance Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policies. AFG’s property and casualty insurance subsidiaries report as assets (i) the estimated reinsurance recoverable on paid and unpaid losses, including an estimate for losses incurred but not reported, and (ii) amounts paid or due to reinsurers applicable to the unexpired terms of policies in force. Payable to reinsurers includes ceded premiums due to reinsurers, as well as ceded premiums retained by AFG’s property and casualty insurance subsidiaries under contracts to fund ceded losses as they become due. AFG’s insurance subsidiaries also assume reinsurance from other companies. Earnings on reinsurance assumed is recognized based on information received from ceding companies. An AFG subsidiary cedes life insurance policies to a third party on a funds withheld basis whereby the subsidiary retains the assets (securities) associated with the reinsurance contract. Interest is credited to the reinsurer based on the actual investment performance of the retained assets. This reinsurance contract is considered to contain an embedded derivative (that must be adjusted to fair value) because the yield on the payable is based on a specific block of the ceding company’s assets, rather than the overall creditworthiness of the ceding company. AFG determined that changes in the fair value of the underlying portfolio of fixed maturity securities is an appropriate measure of the value of the embedded derivative. The securities related to this contract are classified as “trading.” The adjustment to fair value on the embedded derivative offsets the investment income recorded on the adjustment to fair value of the related trading portfolio. Deferred Policy Acquisition Costs (“DPAC”) Policy acquisition costs (principally commissions, premium taxes and certain underwriting and policy issuance costs) directly related to the successful acquisition or renewal of an insurance contract are deferred. DPAC also includes capitalized costs associated with sales inducements offered to fixed annuity policyholders such as enhanced interest rates and premium and persistency bonuses. For the property and casualty companies, DPAC is limited based upon recoverability without any consideration for anticipated investment income and is charged against income ratably over the terms of the related policies. A premium deficiency is recognized if the sum of expected claims costs, claims adjustment expenses and unamortized acquisition costs exceed the related unearned premiums. A premium deficiency is first recognized by charging any unamortized acquisition costs to expense to the extent required to eliminate the deficiency. If the premium deficiency is greater than unamortized acquisition costs, a liability is accrued for the excess deficiency and reported with unpaid losses and loss adjustment expenses. DPAC related to annuities is deferred to the extent deemed recoverable and amortized, with interest, in relation to the present value of actual and expected gross profits on the policies. Expected gross profits consist principally of estimated future investment margin (estimated future net investment income less interest credited on policyholder funds) and surrender, mortality, and other life and annuity policy charges, less death, annuitization and guaranteed withdrawal benefits in excess of account balances and estimated future policy administration expenses. To the extent that realized gains and losses result in adjustments to the amortization of DPAC related to annuities, such adjustments are reflected as components of realized gains (losses) on securities. DPAC related to traditional life and health insurance is amortized over the expected premium paying period of the related policies, in proportion to the ratio of annual premium revenues to total anticipated premium revenues. See “ Life, Accident and Health Reserves ” below for details on the impact of loss recognition on the accounting for traditional life and health insurance contracts. DPAC includes the present value of future profits on business in force of annuity and life, accident and health insurance companies acquired (“PVFP”). PVFP represents the portion of the costs to acquire companies that is allocated to the value of the right to receive future cash flows from insurance contracts existing at the date of acquisition. PVFP is amortized with interest in relation to expected gross profits of the acquired policies for annuities and universal life products and in relation to the premium paying period for traditional life and health insurance products. DPAC and certain other balance sheet amounts related to annuity, long-term care and life businesses are also adjusted, net of tax, for the change in expense that would have been recorded if the unrealized gains (losses) from securities had actually been realized. These adjustments are included in unrealized gains (losses) on marketable securities, a component of AOCI in AFG’s Balance Sheet. Managed Investment Entities A company is considered the primary beneficiary of, and therefore must consolidate, a variable interest entity (“VIE”) based primarily on its ability to direct the activities of the VIE that most significantly impact that entity’s economic performance and the obligation to absorb losses of, or receive benefits from, the entity that could potentially be significant to the VIE. AFG manages, and has investments in, collateralized loan obligations (“CLOs”) that are VIEs (see Note H — “ Managed Investment Entities ” ). AFG has determined that it is the primary beneficiary of the CLOs because (i) its role as asset manager gives it the power to direct the activities that most significantly impact the economic performance of the CLOs and (ii) through its investment in the CLO debt tranches, it has exposure to CLO losses (limited to the amount AFG invested) and the right to receive CLO benefits that could potentially be significant to the CLOs. On January 1, 2016, AFG adopted ASU 2015-02, which amended certain consolidation accounting guidance, including the VIE guidance that applies to collateralized financing entities such as CLOs. The new guidance affects how fee arrangements with CLO asset managers impact the determination of the primary beneficiary of those entities. Due to the significance of AFG’s investments in the CLOs that it manages, the new guidance did not impact the consolidation of AFG’s currently outstanding CLOs. The new guidance also impacted the consolidation analysis that applies to limited partnerships and similar entities, but did not result in a change to the accounting for AFG’s existing investments in those entities. Because AFG has no right to use the CLO assets and no obligation to pay the CLO liabilities, the assets and liabilities of the CLOs are shown separately in AFG’s Balance Sheet. AFG has elected the fair value option for reporting on the CLO assets and liabilities to improve the transparency of financial reporting related to the CLOs. The net gain or loss from accounting for the CLO assets and liabilities at fair value is presented separately in AFG’s Statement of Earnings. Effective January 1, 2015, AFG adopted (on a modified retrospective basis) ASU 2014-13, which addresses the diversity in practice regarding the accounting for assets and liabilities of a consolidated collateralized financing entity (such as a CLO) when an election has been made to account for that entity’s assets and liabilities at fair value. The fair values of a CLO’s assets may differ from the separately measured fair values of its liabilities even though the CLO liabilities only have recourse to the CLO assets. Under the new guidance, AFG elected to set the carrying value of the CLO liabilities equal to the fair value of the CLO assets (which have more observable fair values) as an alternative to reporting those liabilities at a separately measured fair value. CLO earnings attributable to AFG’s shareholders continue to be measured by the change in the fair value of AFG’s investments in the CLOs and management fees earned. Prior to the adoption of ASU 2014-13, measuring both the CLO assets and CLO liabilities at separately determined fair values resulted in a difference between the carrying value of the CLO assets and the carrying value of the CLO liabilities that was not attributable to AFG’s ownership interest in the CLOs and CLO earnings (losses) that were not attributable to AFG’s shareholders. This difference was recorded as “appropriated retained earnings — managed investment entities” in AFG’s Balance Sheet and the earnings (losses) that were not attributable to AFG’s shareholders were included in net earnings (loss) attributable to noncontrolling interests in AFG’s Statement of Earnings. In accordance with the guidance adopted in 2015, the amount reported as “appropriated retained earnings — managed investment entities” at December 31, 2014 was reclassified to “liabilities of managed investment entities” on January 1, 2015 as the cumulative effect of an accounting change. At December 31, 2016 , assets and liabilities of managed investment entities included $23 million in assets and $18 million in liabilities of a temporary warehousing entity that was established in connection with the formation of a new CLO that is expected to close in the first half of 2017. Upon closing, all warehoused assets are expected to be transferred to the new CLO and the liabilities will be repaid. Unpaid Losses and Loss Adjustment Expenses The net liabilities stated for unpaid claims and for expenses of investigation and adjustment of unpaid claims represent management’s best estimate and are based upon (i) the accumulation of case estimates for losses reported prior to the close of the accounting period on direct business written; (ii) estimates received from ceding reinsurers and insurance pools and associations; (iii) estimates of unreported losses (including possible development on known claims) based on past experience; (iv) estimates based on experience of expenses for investigating and adjusting claims; and (v) the current state of the law and coverage litigation. Establishing reserves for asbestos, environmental and other mass tort claims involves considerably more judgment than other types of claims due to, among other things, inconsistent court decisions, an increase in bankruptcy filings as a result of asbestos-related liabilities, novel theories of coverage, and judicial interpretations that often expand theories of recovery and broaden the scope of coverage. Loss reserve liabilities are subject to the impact of changes in claim amounts and frequency and other factors. Changes in estimates of the liabilities for losses and loss adjustment expenses are reflected in the statement of earnings in the period in which determined. Despite the variability inherent in such estimates, management believes that the liabilities for unpaid losses and loss adjustment expenses are adequate. Annuity Benefits Accumulated Annuity receipts and benefit payments are recorded as increases or decreases in annuity benefits accumulated rather than as revenue and expense. Increases in this liability for interest credited are charged to expense and decreases for policy charges are credited to other income. For certain products, annuity benefits accumulated also includes reserves for accrued persistency and premium bonuses, guaranteed withdrawals and excess benefits expected to be paid on future deaths and annuitizations (“EDAR”). The liabilities for EDAR and guaranteed withdrawals are accrued for and modified using assumptions consistent with those used in determining DPAC and DPAC amortization, except that amounts are determined in relation to the present value of total expected assessments. Total expected assessments consist principally of estimated future investment margin, surrender, mortality, and other life and annuity policy charges, and unearned revenues once they are recognized as income. Annuity benefits accumulated also includes amounts advanced from the Federal Home Loan Bank of Cincinnati. Unearned Revenue Certain upfront policy charges on annuities are deferred as unearned revenue (included in other liabilities) and recognized in net earnings (included in other income) using the same assumptions and estimated gross profits used to amortize DPAC. Life, Accident and Health Reserves Liabilities for future policy benefits under traditional life, accident and health policies are computed using the net level premium method. Computations are based on the original projections of investment yields, mortality, morbidity and surrenders and include provisions for unfavorable deviations unless a loss recognition event (premium deficiency) occurs. Claim reserves and liabilities established for accident and health claims are modified as necessary to reflect actual experience and developing trends. For long-duration contracts (such as traditional life and long-term care policies), loss recognition occurs when, based on current expectations as of the measurement date, existing contract liabilities plus the present value of future premiums (including reasonably expected rate increases) are not expected to cover the present value of future claims payments and related settlement and maintenance costs (excluding overhead) as well as unamortized acquisition costs. If a block of business is determined to be in loss recognition, a charge is recorded in earnings in an amount equal to the excess of the present value of expected future claims costs and unamortized acquisition costs over existing reserves plus the present value of expected future premiums (with no provision for adverse deviation). The charge is recorded first to reduce unamortized acquisition costs and then as an additional reserve (if unamortized acquisition costs have been reduced to zero). In addition, reserves for traditional life and long-term care policies are subject to adjustment for loss recognition charges that would have been recorded if the unrealized gains from securities had actually been realized. This adjustment is included in unrealized gains (losses) on marketable securities, a component of AOCI in AFG’s Balance Sheet. Debt Issuance Costs Debt issuance costs related to AFG’s outstanding debt are amortized over the life of the related debt using the effective interest method. Effective January 1, 2016, AFG adopted (on a retrospective basis) ASU 2015-03, which requires debt issuance costs to be presented in the balance sheet as a direct reduction in the carrying value of long-term debt (consistent with the treatment of debt discounts) with the periodic amortization of such costs included in interest expense. Debt issuance costs related to AFG’s revolving credit facilities will continue to be included in other assets in AFG’s Balance Sheet. Prior to AFG’s adoption of ASU 2015-03, AFG reported unamortized debt issuance costs as a deferred charge asset (included in other assets) in AFG’s Balance Sheet and the periodic amortization was included in other expenses in AFG’s Statement of Earnings. The updated guidance did not affect the overall recognition and measurement guidance for debt issuance costs. Accordingly, the guidance did not have an overall impact on AFG’s Shareholders’ Equity or results of operations. Variable Annuity Assets and Liabilities Separate accounts related to variable annuities represent the fair value of deposits invested in underlying investment funds on which AFG earns a fee. Investment funds are selected and may be changed only by the policyholder, who retains all investment risk. AFG’s variable annuity contracts contain a guaranteed minimum death benefit (“GMDB”) to be paid if the policyholder dies before the annuity payout period commences. In periods of declining equity markets, the GMDB may exceed the value of the policyholder’s account. A GMDB liability is established for future excess death benefits using assumptions together with a range of reasonably possible scenarios for investment fund performance that are consistent with DPAC capitalization and amortization assumptions. Premium Recognition Property and casualty premiums are earned generally over the terms of the policies on a pro rata basis. Unearned premiums represent that portion of premiums written, which is applicable to the unexpired terms of policies in force. On reinsurance assumed from other insurance companies or written through various underwriting organizations, unearned premiums are based on information received from such companies and organizations. For traditional life, accident and health products, premiums are recognized as revenue when legally collectible from policyholders. For interest-sensitive life and universal life products, premiums are recorded in a policyholder account, which is reflected as a liability. Revenue is recognized as amounts are assessed against the policyholder account for mortality coverage and contract expenses. Noncontrolling Interests For balance sheet purposes, noncontrolling interests represents the interests of shareholders other than AFG in consolidated entities. In the statement of earnings, net earnings and losses attributable to noncontrolling interests represents such shareholders’ interest in the earnings and losses of those entities. Income Taxes Deferred income taxes are calculated using the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases and are measured using enacted tax rates. A valuation allowance is established to reduce total deferred tax assets to an amount that will more likely than not be realized. AFG recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained under examination by the appropriate taxing authority. Interest and penalties on AFG’s reserve for uncertain tax positions are recognized as a component of tax expense. Stock-Based Compensation All share-based grants are recognized as compensation expense on a straight-line basis over their vesting periods based on their calculated fair value at the date of grant. AFG uses the Black-Scholes pricing model to measure the fair value of employee stock options. See Note K — “ Shareholders’ Equity ” for further information. In the fourth quarter of 2016, AFG early adopted ASU 2016-09, which, among other things, requires excess tax benefits or deficiencies for share-based payments to be recorded through income tax expense in the statement of earnings instead of directly to capital surplus (as required under the previous guidance). As a result, AFG’s Statement of Earnings for 2016 includes a tax benefit of $9 million that under the previous guidance would have been recorded directly to capital surplus. In addition, the new guidance allows entities to elect to account for forfeitures of awards when they occur rather than accruing expense based on an estimate of expected forfeitures (as required under the previous guidance). AFG has elected to account for forfeitures as they occur. The resulting cumulative effect of accounting change of less than $1 million was recorded directly to retained earnings. Benefit Plans AFG provides retirement benefits to qualified employees of participating companies through the AFG 401(k) Retirement and Savings Plan, a defined contribution plan. AFG makes all contributions to the retirement fund portion of the plan and matches a percentage of employee contributions to the savings fund. Company contributions are expensed in the year for which they are declared. AFG and many of its subsidiaries provide health care and life insurance benefits to eligible retirees. AFG also provides postemployment benefits to former or inactive employees (primarily those on disability) who were not deemed retired under other company plans. The projected future cost of providing these benefits is expensed over the period employees earn such benefits. Earnings Per Share Although basic earnings per share only considers shares of common stock outstanding during the period, the calculation of diluted earnings per share includes the following adjustments to weighted average common shares related to stock-based compensation plans: 2016 – 1.6 million , 2015 – 1.8 million and 2014 – 2.0 million . AFG’s weighted average diluted shares outstanding excludes the following anti-dilutive potential common shares related to stock compensation plans: 2016 – 0.4 million , 2015 – 1.1 million and 2014 – 1.0 million . Adjustments to net earnings attributable to shareholders in the calculation of diluted earnings per share were nominal in the 2016 , 2015 and 2014 periods. Statement of Cash Flows For cash flow purposes, “investing activities” are defined as making and collecting loans and acquiring and disposing of debt or equity instruments and property and equipment. “Financing activities” include obtaining resources from owners and providing them with a return on their investments, borrowing money and repaying amounts borrowed. Annuity receipts, surrenders, benefits and withdrawals are also reflected as financing activities. All other activities are considered “operating.” Short-term investments having original maturities of three months or less when purchased are considered to be cash equivalents for purposes of the financial statements. Effective October 1, 2016, AFG early adopted (on a retrospective basis) ASU 2016-15, which addresses the diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. Among other things, this guidance requires proceeds received from the settlement of corporate-owned life insurance policies to be classified as cash inflows from investing activities and allows premiums paid for policies to be reported as cash outflows either from investing activities or operating activities. AFG has elected to show all corporate-owned life insurance activity in investing activities. Prior to adoption of this guidance, AFG accounted for these transactions as operating activities. In addition, ASU 2016-15 clarifies when distributions received from investees accounted under the equity method should be accounted for as a cash inflow from operating activities or as a cash inflow from investing activities. AFG had previously accounted for all distributions from investments accounted for under the equity method as investing activities. The new guidance solely related to the presentation of certain transactions in the statement of cash flows. Accordingly, adoption of this guidance did not impact AFG’s results of operations or financial position. Revenue Recognition Guidance Effective in 2018 In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when (or as) the entity satisfies a performance obligation under the contract. The new guidance also updates the accounting for certain costs associated with obtaining and fulfilling contracts with customers and requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Revenue recognition for insurance contracts and financial instruments, which are AFG’s primary sources of revenue, is excluded from the scope of the new guidance. AFG will adopt the new guidance effective January 1, 2018. Because the new guidance does not apply to the vast majority of AFG’s business, management does not expect the adoption of this guidance to have a material impact on AFG’s results of operations or financial position. Based on implementation efforts to date, management believes that the new standard will only apply to 2% of AFG’s consolidated revenues. |
Acquisitions and Sale of Busine
Acquisitions and Sale of Businesses | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions and Sale of Businesses | Acquisitions and Sale of Businesses Acquisition of Noncontrolling Interest in National Interstate Corporation On November 10, 2016, AFG acquired the 49% of National Interstate Corporation (“NATL”) not previously owned by AFG’s wholly-owned subsidiary, Great American Insurance Company (“GAI”) for $315 million ( $32.00 per share) in a merger transaction. In addition, NATL paid a one-time special cash dividend of $0.50 per share to its shareholders immediately prior to the merger closing ( $5 million was paid to noncontrolling shareholders). Expenses related to the merger were approximately $10 million and were expensed as incurred. Because NATL was already a consolidated subsidiary of AFG prior to the merger, the acquisition was accounted for as an equity transaction. As a result, the excess of the consideration paid over the carrying value of the noncontrolling interest acquired was recorded as a $137 million reduction in AFG’s Capital Surplus. In addition, the merger allowed NATL and its subsidiaries to become members of the AFG consolidated tax group, which resulted in a tax benefit of $66 million in the fourth quarter of 2016. Acquisition of Summit Holding Southeast, Inc. In April 2014, AFG acquired Summit Holding Southeast, Inc. and its related companies (“Summit”), from Liberty Mutual Insurance for $259 million using cash on hand at the parent company. Immediately following the acquisition, AFG made a capital contribution of $140 million , bringing its total capital investment in the Summit business to $399 million . Summit is based in Lakeland, Florida and is a leading provider of specialty workers’ compensation solutions in the southeastern United States. Summit continues to operate under the Summit brand as a member of AFG’s Great American Insurance Group. Summit is included in the Specialty casualty sub-segment and generated $540 million and $529 million in net earned premiums in 2016 and 2015, respectively, and $410 million in net earned premiums during the nine months subsequent to AFG’s acquisition in 2014. Expenses related to the acquisition were less than $1 million and were expensed as incurred. The purchase price was allocated to the acquired assets and liabilities of Summit based on management’s best estimate of fair value as of the acquisition date. The allocation of the purchase price is shown in the table below (in millions): April 1, 2014 Total purchase price $ 259 Tangible assets acquired: Cash and cash equivalents $ 1,078 Fixed maturities, available for sale 92 Recoverables from reinsurers 116 Agents’ balances and premiums receivable 41 Deferred tax assets, net (*) 67 Other receivables 21 Other assets 11 Total tangible assets acquired 1,426 Liabilities acquired: Unpaid losses and loss adjustment expenses 1,142 Unearned premiums 3 Payable to reinsurers 3 Other liabilities 66 Total liabilities acquired 1,214 Net tangible assets acquired, at fair value 212 Excess purchase price over net tangible assets acquired $ 47 Allocation of excess purchase price: Intangible assets acquired (*) $ 47 Deferred tax on intangible assets acquired (*) (16 ) Goodwill 16 $ 47 (*) Included in Other assets in AFG’s Balance Sheet. Acquisition of Renewal Rights In March 2014, AFG completed a renewal rights agreement with Selective Insurance Company of America to acquire Selective’s pooled public entity book of business for $8 million . At the acquisition date, this book of business had approximately $38 million in in-force gross written premiums. The acquired business generated $34 million in gross written premiums and $16 million in net written premiums in 2016. Sale of Long-term Care Business In December 2015, AFG completed the sale of substantially all of its run-off long-term care insurance business (which was included in the run-off long-term care and life segment) to HC2 Holdings, Inc. (“HC2”) for an initial payment of $7 million in cash and HC2 securities with a fair value of $11 million . AFG may also receive up to $13 million of additional proceeds from HC2 in the future contingent upon the release of certain statutory-basis liabilities of the legal entities sold by AFG. In connection with obtaining regulatory approval for the transaction, AFG agreed to provide up to an aggregate of $35 million of capital support for the insurance companies, on an as-needed basis to maintain specified surplus levels, subject to immediate reimbursement by HC2 through a five -year capital maintenance agreement. The legal entities involved in the transaction, United Teacher Associates Insurance Company (“UTA”) and Continental General Insurance Company (“CGIC”), contained substantially all of AFG’s long-term care insurance reserves ( 96% as measured by net statutory reserves as of November 30, 2015), as well as smaller blocks of annuity and life insurance business. Following the sale of these subsidiaries, AFG has only a small block of long-term care insurance ( 1,600 policies) with approximately $37 million in reserves at December 31, 2016 . AFG had ceased new sales of long-term care insurance in January 2010, but continued to service and accept renewal premiums on its outstanding policies, which are guaranteed renewable. In addition to the $18 million in cash and securities received at closing and the $13 million of potential additional proceeds in the future from the release of statutory liabilities, AFG received a total of $97 million in tax benefits in 2016 related to the sale through reduced estimated tax payments and a tax refund resulting from the carryback of the tax-basis capital loss. The receivables for these tax benefits were reflected in AFG’s financial statements at December 31, 2015. Based on the status of ongoing negotiations at the end of the first quarter of 2015, management determined that the potential sale of the run-off long-term care insurance business met the GAAP “held for sale” criteria as of March 31, 2015. Accordingly, AFG recorded a $162 million pretax loss ( $105 million loss after tax) in the first quarter of 2015 to establish a liability equal to the excess of the net carrying value of the assets and liabilities to be disposed over the estimated net sale proceeds. At the closing date, the loss was adjusted to $166 million ( $108 million loss after tax) based on the actual proceeds received and the final carrying value of the net assets disposed. In the second quarter of 2016, AFG received additional proceeds based on the final closing balance sheet and adjusted certain accrued expense estimates associated with the sale, resulting in a $2 million pretax gain. At March 31, 2015 and at the sale date, the carrying value of the assets and liabilities disposed represented approximately 4% of both AFG’s assets and liabilities. Under accounting guidance effective in January 2015, only disposals of components of an entity that represent a strategic shift and that have a major effect on a reporting entity’s operations and financial results are reported as discontinued operations. Due to the run-off nature of the business and the immaterial expected impact on AFG’s results of operations, the sale of AFG’s long-term care insurance business has not been reported as a discontinued operation. The impact of the sale of the run-off long-term care insurance business is shown below (in millions): December 24, 2015 Net sale proceeds (*) $ 13 Assets of businesses sold: Cash and investments $ 1,334 Recoverables from reinsurers 630 Deferred policy acquisition costs 16 Other receivables 16 Other assets (4 ) Goodwill 2 Total assets 1,994 Liabilities of businesses sold: Annuity benefits accumulated 261 Life, accident and health reserves 1,525 Other liabilities 7 Total liabilities 1,793 Reclassify net unrealized gain on marketable securities 22 Net assets of businesses sold 179 Loss on subsidiaries, pretax (166 ) Tax benefit 58 Loss on subsidiaries, net of tax $ (108 ) (*) Includes the fair value of the potential additional consideration and capital maintenance agreement and is shown net of estimated expenses. Revenues, costs and expenses, and earnings before income taxes for the subsidiaries sold were (in millions): Year ended December 31, 2015 2014 Life, accident and health net earned premiums: Long-term care $ 73 $ 74 Life operations 11 11 Net investment income 73 75 Realized gains (losses) on securities and other income (11 ) (6 ) Total revenues 146 154 Annuity benefits 8 7 Life, accident and health benefits: Long-term care 91 119 Life operations 11 11 Annuity and supplemental insurance acquisition expenses 12 11 Other expenses 16 14 Total costs and expenses 138 162 Earnings before income taxes $ 8 $ (8 ) Other In addition to the loss on the sale of substantially all of AFG’s run-off long-term care insurance business (discussed above), AFG recorded a $5 million pretax realized gain in the third quarter of 2015 representing an adjustment to a previously recognized realized loss on a small property and casualty subsidiary sold several years ago. |
Segments of Operations
Segments of Operations | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segments of Operations | Segments of Operations AFG manages its business as four segments: (i) Property and casualty insurance, (ii) Annuity, (iii) Run-off long-term care and life and (iv) Other, which includes holding company assets and costs, and the assets 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, 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, professional liability, umbrella and excess liability, specialty coverage 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 leasing and financing institutions (including collateral and lender-placed mortgage property insurance), surety and fidelity 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 annuity business markets traditional fixed and fixed-indexed annuities in the retail, financial institutions and education markets. AFG’s reportable segments and their components were determined based primarily upon similar economic characteristics, products and services. Sales of property and casualty insurance outside of the United States represented 4% of AFG’s revenues in 2016 and 2015 and 5% of AFG’s revenues in 2014 . The following tables (in millions) show AFG’s assets, revenues and earnings before income taxes by segment and sub-segment. 2016 2015 2014 Assets Property and casualty insurance (a) $ 15,574 $ 14,689 $ 14,069 Annuity 33,409 29,865 27,317 Run-off long-term care and life (b) 752 772 2,489 Other 5,337 4,511 3,638 Total assets $ 55,072 $ 49,837 $ 47,513 Revenues Property and casualty insurance: Premiums earned: Specialty Property and transportation $ 1,662 $ 1,599 $ 1,544 Specialty casualty 2,006 2,011 1,765 Specialty financial 557 517 469 Other specialty 103 97 100 Total premiums earned 4,328 4,224 3,878 Net investment income 350 319 294 Other income (c) 51 78 9 Total property and casualty insurance 4,729 4,621 4,181 Annuity: Net investment income 1,356 1,224 1,136 Other income 103 98 97 Total annuity 1,459 1,322 1,233 Run-off long-term care and life (b) 49 188 195 Other 240 194 72 Total revenues before realized gains (losses) 6,477 6,325 5,681 Realized gains (losses) on securities 19 (19 ) 52 Realized gains (losses) on subsidiaries 2 (161 ) — Total revenues $ 6,498 $ 6,145 $ 5,733 (a) Not allocable to sub-segments. (b) AFG sold substantially all of its run-off long-term care insurance business in December 2015. (c) Includes pretax income of $32 million (before noncontrolling interest) from the sale of an apartment property in the second quarter of 2016, $51 million (before noncontrolling interest) from the sale of a hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015. 2016 2015 2014 Earnings Before Income Taxes Property and casualty insurance: Underwriting: Specialty Property and transportation $ 166 $ 48 $ 21 Specialty casualty 78 146 136 Specialty financial 84 87 64 Other specialty 9 14 16 Other lines (a) (101 ) (70 ) (25 ) Total underwriting 236 225 212 Investment and other income, net (b) 341 351 244 Total property and casualty insurance 577 576 456 Annuity 368 331 328 Run-off long-term care and life (c) 2 14 (10 ) Other (d) (181 ) (176 ) (200 ) Total earnings before realized gains (losses) and income taxes 766 745 574 Realized gains (losses) on securities 19 (19 ) 52 Realized gains (losses) on subsidiaries 2 (161 ) — Total earnings before income taxes $ 787 $ 565 $ 626 (a) Includes a special charge of $65 million related to the exit of certain lines of business within AFG’s Lloyd’s-based insurer, Neon, in the second quarter of 2016 and special charges to increase asbestos and environmental (“A&E”) reserves of $36 million , $67 million and $24 million in 2016 , 2015 and 2014 , respectively. (b) Includes pretax income of $32 million (before noncontrolling interest) from the sale of an apartment property in the second quarter of 2016, $51 million (before noncontrolling interest) from the sale of a hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015. (c) AFG sold substantially all of its run-off long-term care insurance business in December 2015. (d) Primarily holding company interest and expenses, including a $4 million loss on retirement of debt in the third quarter of 2015, and special charges to increase A&E reserves related to AFG’s former railroad and manufacturing operations ( $5 million in 2016 , $12 million in 2015 and $6 million in 2014 ) and losses of managed investment entities attributable to noncontrolling interests ( $51 million in 2014 ). Following the adoption of new guidance in the first quarter of 2015, there are no longer earnings (losses) of managed investment entities that are attributable to noncontrolling interests. See Note A — “ Accounting Policies — Managed Investment Entities .” |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Accounting standards for measuring fair value are based on inputs used in estimating fair value. The three levels of the hierarchy are as follows: Level 1 — Quoted prices for identical assets or liabilities in active markets (markets in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis). AFG’s Level 1 financial instruments consist primarily of publicly traded equity securities and highly liquid government bonds for which quoted market prices in active markets are available and short-term investments of managed investment entities. Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar assets or liabilities in inactive markets (markets in which there are few transactions, the prices are not current, price quotations vary substantially over time or among market makers, or in which little information is released publicly); and valuations based on other significant inputs that are observable in active markets. AFG’s Level 2 financial instruments include separate account assets, corporate and municipal fixed maturity securities, mortgage-backed securities (“MBS”) and investments of managed investment entities priced using observable inputs. Level 2 inputs include benchmark yields, reported trades, corroborated broker/dealer quotes, issuer spreads and benchmark securities. When non-binding broker quotes can be corroborated by comparison to similar securities priced using observable inputs, they are classified as Level 2. Level 3 — Valuations derived from market valuation techniques generally consistent with those used to estimate the fair values of Level 2 financial instruments in which one or more significant inputs are unobservable or when the market for a security exhibits significantly less liquidity relative to markets supporting Level 2 fair value measurements. The unobservable inputs may include management’s own assumptions about the assumptions market participants would use based on the best information available in the circumstances. AFG’s Level 3 is comprised of financial instruments whose fair value is estimated based on non-binding broker quotes or internally developed using significant inputs not based on, or corroborated by, observable market information, and prior to 2015 certain liabilities of the CLOs. Under new guidance adopted in the first quarter of 2015, discussed in Note A — “ Accounting Policies — Managed Investment Entities ,” AFG has elected to set the carrying value of the CLO liabilities equal to the fair value of the CLO assets (which have more observable fair values) as an alternative to reporting those liabilities at separately measured fair values. Following the adoption of the new guidance, the CLO liabilities are categorized within the fair value hierarchy on the same basis (proportionally) as the related CLO assets. Since the portion of the CLO liabilities allocated to Level 3 is derived from the fair value of the CLO assets, these amounts are excluded from the progression of Level 3 financial instruments. AFG’s management is responsible for the valuation process and uses data from outside sources (including nationally recognized pricing services and broker/dealers) in establishing fair value. AFG’s internal investment professionals are a group of approximately 25 analysts whose primary responsibility is to manage AFG’s investment portfolio. These professionals monitor individual investments as well as overall industries and are active in the financial markets on a daily basis. The group is led by AFG’s chief investment officer, who reports directly to one of AFG’s Co-CEOs. Valuation techniques utilized by pricing services and prices obtained from external sources are reviewed by AFG’s internal investment professionals who are familiar with the securities being priced and the markets in which they trade to ensure the fair value determination is representative of an exit price. To validate the appropriateness of the prices obtained, these investment managers consider widely published indices (as benchmarks), recent trades, changes in interest rates, general economic conditions and the credit quality of the specific issuers. In addition, the Company communicates directly with the pricing services regarding the methods and assumptions used in pricing, including verifying, on a test basis, the inputs used by the service to value specific securities. In December 2015, AFG completed the sale of substantially all of its run-off long-term care insurance business. As discussed in Note B — “ Acquisitions and Sale of Businesses ,” AFG recorded a loss in the first quarter of 2015 to write down the net carrying value of the assets and liabilities to be disposed to the estimated net sale proceeds (estimated fair value less costs to sell). The estimate of fair value used to determine that loss was derived using significant unobservable inputs (Level 3). At the closing date, approximately $11 million (excluding cash) of the net proceeds was measured at fair value. These fair value measurements are categorized in the fair value hierarchy as follows: Level 1 — $5 million ; Level 2 — $2 million and Level 3 — $4 million . Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions): Level 1 Level 2 Level 3 Total December 31, 2016 Assets: Available for sale (“AFS”) fixed maturities: U.S. Government and government agencies $ 133 $ 174 $ 8 $ 315 States, municipalities and political subdivisions — 6,641 140 6,781 Foreign government — 136 — 136 Residential MBS — 3,445 190 3,635 Commercial MBS — 1,468 25 1,493 Asset-backed securities (“ABS”) — 5,475 484 5,959 Corporate and other 29 15,484 712 16,225 Total AFS fixed maturities 162 32,823 1,559 34,544 Trading fixed maturities 30 329 — 359 Equity securities — AFS and trading 1,305 79 174 1,558 Assets of managed investment entities (“MIE”) 380 4,356 29 4,765 Variable annuity assets (separate accounts) (*) — 600 — 600 Equity index call options — 492 — 492 Other assets — derivatives — 1 — 1 Total assets accounted for at fair value $ 1,877 $ 38,680 $ 1,762 $ 42,319 Liabilities: Liabilities of managed investment entities $ 363 $ 4,158 $ 28 $ 4,549 Derivatives in annuity benefits accumulated — — 1,759 1,759 Derivatives in long-term debt — (1 ) — (1 ) Other liabilities — derivatives — 30 — 30 Total liabilities accounted for at fair value $ 363 $ 4,187 $ 1,787 $ 6,337 December 31, 2015 Assets: Available for sale fixed maturities: U.S. Government and government agencies $ 100 $ 192 $ 15 $ 307 States, municipalities and political subdivisions — 6,767 89 6,856 Foreign government — 154 — 154 Residential MBS — 3,305 224 3,529 Commercial MBS — 2,148 39 2,187 Asset-backed securities — 4,464 470 4,934 Corporate and other 50 13,634 633 14,317 Total AFS fixed maturities 150 30,664 1,470 32,284 Trading fixed maturities 13 241 — 254 Equity securities — AFS and trading 1,362 217 140 1,719 Assets of managed investment entities 309 3,712 26 4,047 Variable annuity assets (separate accounts) (*) — 608 — 608 Equity index call options — 241 — 241 Other assets — derivatives — 2 — 2 Total assets accounted for at fair value $ 1,834 $ 35,685 $ 1,636 $ 39,155 Liabilities: Liabilities of managed investment entities $ 289 $ 3,468 $ 24 $ 3,781 Derivatives in annuity benefits accumulated — — 1,369 1,369 Derivatives in long-term debt — (2 ) — (2 ) Other liabilities — derivatives — 8 — 8 Total liabilities accounted for at fair value $ 289 $ 3,474 $ 1,393 $ 5,156 (*) Variable annuity liabilities equal the fair value of variable annuity assets. The transfers between Level 1 and Level 2 for the years ended December 31, 2016 , 2015 and 2014 are reflected in the table below at fair value as of the end of the reporting period (dollars in millions): Level 2 To Level 1 Transfers Level 1 To Level 2 Transfers # of Transfers Fair Value # of Transfers Fair Value 2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014 Perpetual preferred stocks 6 5 14 $ 35 $ 19 $ 96 7 7 13 $ 28 $ 31 $ 83 Common stocks 3 7 — — 80 — 2 — 7 — — 26 Redeemable preferred stocks — 2 1 — 11 5 — — — — — — Transfers between Level 1 and Level 2 for all periods presented were a result of increases or decreases in observable trade activity. Approximately 4% of the total assets carried at fair value on December 31, 2016 , were Level 3 assets. Approximately 78% ( $1.37 billion ) of the Level 3 assets were priced using non-binding broker quotes, for which there is a lack of transparency as to the inputs used to determine fair value. Details as to the quantitative inputs are neither provided by the brokers nor otherwise reasonably obtainable by AFG. Since internally developed Level 3 asset fair values represent less than 10% of AFG’s Shareholders’ Equity, any justifiable changes in unobservable inputs used to determine internally developed fair values would not have a material impact on AFG’s financial position. The only significant Level 3 assets or liabilities carried at fair value in the financial statements that were not measured using broker quotes are the derivatives embedded in AFG’s fixed-indexed annuity liabilities, which are measured using a discounted cash flow approach and had a fair value of $1.76 billion at December 31, 2016 . The following table presents information about the unobservable inputs used by management in determining fair value of these embedded derivatives. See Note F — “ Derivatives .” Unobservable Input Range Adjustment for insurance subsidiary’s credit risk 0.4% – 2.9% over the risk free rate Risk margin for uncertainty in cash flows 0.68% reduction in the discount rate Surrenders 3% – 21% of indexed account value Partial surrenders 2% – 10% of indexed account value Annuitizations 0.1% – 1% of indexed account value Deaths 1.5% – 8.0% of indexed account value Budgeted option costs 2.4% – 3.6% of indexed account value The range of adjustments for insurance subsidiary’s credit risk reflects credit spread variations across the yield curve. The range of projected surrender rates reflects the specific surrender charges and other features of AFG’s individual fixed-indexed annuity products with an expected range of 6% to 10% in the majority of future calendar years ( 3% to 21% over all periods). Increasing the budgeted option cost or risk margin for uncertainty in cash flows assumptions in the table above would increase the fair value of the fixed-indexed annuity embedded derivatives, while increasing any of the other unobservable inputs in the table above would decrease the fair value of the embedded derivatives. Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2016 , 2015 and 2014 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period. Total realized/unrealized gains (losses) included in Balance at December 31, 2015 Net income Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2016 AFS fixed maturities: U.S. government agency $ 15 $ (8 ) $ 1 $ — $ — $ — $ — $ 8 State and municipal 89 — (4 ) 57 (2 ) — — 140 Residential MBS 224 (4 ) (2 ) 8 (28 ) 34 (42 ) 190 Commercial MBS 39 (1 ) — — (7 ) — (6 ) 25 Asset-backed securities 470 (1 ) 1 50 (52 ) 60 (44 ) 484 Corporate and other 633 — (10 ) 176 (100 ) 30 (17 ) 712 Total AFS fixed maturities 1,470 (14 ) (14 ) 291 (189 ) 124 (109 ) 1,559 Equity securities 140 (12 ) 35 44 (28 ) 15 (20 ) 174 Assets of MIE 26 (9 ) — 12 — — — 29 Total Level 3 assets $ 1,636 $ (35 ) $ 21 $ 347 $ (217 ) $ 139 $ (129 ) $ 1,762 Embedded derivatives (a) $ (1,369 ) $ (211 ) $ — $ (277 ) $ 98 $ — $ — $ (1,759 ) Total Level 3 liabilities (b) $ (1,369 ) $ (211 ) $ — $ (277 ) $ 98 $ — $ — $ (1,759 ) (a) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016 . (b) As discussed above, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets. Total realized/unrealized gains (losses) included in Bal. at Dec. 31, 2014 Impact of Net income Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Sale of subsidiaries Bal. at Dec. 31, 2015 AFS fixed maturities: U.S. government agency $ 15 $ — $ — $ — $ — $ — $ — $ — $ — $ 15 State and municipal 100 — — (1 ) 34 (1 ) 2 (39 ) (6 ) 89 Residential MBS 300 — (11 ) (1 ) — (34 ) 86 (88 ) (28 ) 224 Commercial MBS 44 — (1 ) (1 ) — (2 ) 4 (1 ) (4 ) 39 Asset-backed securities 226 — 1 (7 ) 265 (56 ) 53 (10 ) (2 ) 470 Corporate and other 546 — (5 ) (9 ) 161 (90 ) 41 (5 ) (6 ) 633 Total AFS fixed maturities 1,231 — (16 ) (19 ) 460 (183 ) 186 (143 ) (46 ) 1,470 Equity securities 93 — (4 ) (9 ) 77 — — (17 ) — 140 Assets of MIE 31 — (11 ) — 6 — — — — 26 Total Level 3 assets $ 1,355 $ — $ (31 ) $ (28 ) $ 543 $ (183 ) $ 186 $ (160 ) $ (46 ) $ 1,636 Liabilities of MIE $ (2,701 ) $ 2,701 $ — $ — $ — $ — $ — $ — $ — $ — Embedded derivatives (a) (1,160 ) — (17 ) — (257 ) 65 — — — (1,369 ) Total Level 3 liabilities $ (3,861 ) $ 2,701 $ (17 ) $ — $ (257 ) $ 65 $ — $ — $ — $ (1,369 ) (a) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $28 million in 2015 . (b) The impact of implementing new guidance adopted in 2015, as discussed above and in Note A — “ Accounting Policies — Managed Investment Entities .” Total realized/unrealized gains (losses) included in Balance at December 31, 2013 Net income Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2014 AFS fixed maturities: U.S. government agency $ 15 $ — $ — $ — $ — $ — $ — $ 15 State and municipal 61 (1 ) — 30 — 10 — 100 Residential MBS 316 4 3 13 (31 ) 111 (116 ) 300 Commercial MBS 28 (1 ) — — — 17 — 44 Asset-backed securities 75 3 (2 ) 99 (39 ) 117 (27 ) 226 Corporate and other 335 2 13 102 (73 ) 172 (5 ) 546 Total AFS fixed maturities 830 7 14 244 (143 ) 427 (148 ) 1,231 Equity securities 31 1 2 62 (9 ) 22 (16 ) 93 Assets of MIE 30 (3 ) — 6 (2 ) — — 31 Total Level 3 assets $ 891 $ 5 $ 16 $ 312 $ (154 ) $ 449 $ (164 ) $ 1,355 Liabilities of MIE (a) $ (2,411 ) $ 22 $ — $ (817 ) $ 505 $ — $ — $ (2,701 ) Embedded derivatives (b) (804 ) (182 ) — (221 ) 47 — — (1,160 ) Total Level 3 liabilities $ (3,215 ) $ (160 ) $ — $ (1,038 ) $ 552 $ — $ — $ (3,861 ) (a) Total realized/unrealized gains (losses) included in net income includes gains of $50 million related to liabilities outstanding as of December 31, 2014 . See Note H — “ Managed Investment Entities .” (b) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects gains related to the unlocking of actuarial assumptions of $58 million in 2014 . Fair Value of Financial Instruments The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements at December 31 are summarized below (in millions): Carrying Fair Value Value Total Level 1 Level 2 Level 3 2016 Financial assets: Cash and cash equivalents $ 2,107 $ 2,107 $ 2,107 $ — $ — Mortgage loans 1,147 1,146 — — 1,146 Policy loans 192 192 — — 192 Total financial assets not accounted for at fair value $ 3,446 $ 3,445 $ 2,107 $ — $ 1,338 Financial liabilities: Annuity benefits accumulated (*) $ 29,703 $ 28,932 $ — $ — $ 28,932 Long-term debt 1,284 1,356 — 1,353 3 Total financial liabilities not accounted for at fair value $ 30,987 $ 30,288 $ — $ 1,353 $ 28,935 2015 Financial assets: Cash and cash equivalents $ 1,220 $ 1,220 $ 1,220 $ — $ — Mortgage loans 1,067 1,074 — — 1,074 Policy loans 201 201 — — 201 Total financial assets not accounted for at fair value $ 2,488 $ 2,495 $ 1,220 $ — $ 1,275 Financial liabilities: Annuity benefits accumulated (*) $ 26,422 $ 25,488 $ — $ — $ 25,488 Long-term debt 1,000 1,120 — 1,105 15 Total financial liabilities not accounted for at fair value $ 27,422 $ 26,608 $ — $ 1,105 $ 25,503 (*) Excludes $204 million and $200 million of life contingent annuities in the payout phase at December 31, 2016 and 2015 , respectively. The carrying amount of cash and cash equivalents approximates fair value. Fair values for mortgage loans are estimated by discounting the future contractual cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings. The fair value of policy loans is estimated to approximate carrying value; policy loans have no defined maturity dates and are inseparable from insurance contracts. The fair value of annuity benefits was estimated based on expected cash flows discounted using forward interest rates adjusted for the Company’s credit risk and includes the impact of maintenance expenses and capital costs. Fair values of long-term debt are based primarily on quoted market prices. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Available for sale fixed maturities and equity securities at December 31 consisted of the following (in millions): 2016 2015 Amortized Cost Gross Unrealized Net Unrealized Fair Value Amortized Cost Gross Unrealized Net Unrealized Fair Value Gains Losses Gains Losses Fixed maturities: U.S. Government and government agencies $ 315 $ 3 $ (3 ) $ — $ 315 $ 305 $ 5 $ (3 ) $ 2 $ 307 States, municipalities and political subdivisions 6,650 200 (69 ) 131 6,781 6,642 249 (35 ) 214 6,856 Foreign government 131 5 — 5 136 147 7 — 7 154 Residential MBS 3,367 281 (13 ) 268 3,635 3,236 308 (15 ) 293 3,529 Commercial MBS 1,446 49 (2 ) 47 1,493 2,111 77 (1 ) 76 2,187 Asset-backed securities 5,962 43 (46 ) (3 ) 5,959 4,961 25 (52 ) (27 ) 4,934 Corporate and other 15,864 473 (112 ) 361 16,225 14,163 422 (268 ) 154 14,317 Total fixed maturities $ 33,735 $ 1,054 $ (245 ) $ 809 $ 34,544 $ 31,565 $ 1,093 $ (374 ) $ 719 $ 32,284 Equity Securities: Common stocks $ 879 $ 160 $ (23 ) $ 137 $ 1,016 $ 1,051 $ 146 $ (79 ) $ 67 $ 1,118 Perpetual preferred stocks 472 21 (7 ) 14 486 418 23 (6 ) 17 435 Total equity securities $ 1,351 $ 181 $ (30 ) $ 151 $ 1,502 $ 1,469 $ 169 $ (85 ) $ 84 $ 1,553 The non-credit related portion of other-than-temporary impairment charges is included in other comprehensive income. Cumulative non-credit charges taken for securities still owned at December 31, 2016 and December 31, 2015 , respectively, were $189 million and $205 million . Gross unrealized gains on such securities at December 31, 2016 and December 31, 2015 were $130 million and $134 million , respectively. Gross unrealized losses on such securities at December 31, 2016 and December 31, 2015 were $3 million and $6 million , respectively. These amounts represent the non-credit other-than-temporary impairment charges recorded in AOCI adjusted for subsequent changes in fair values and relate to residential MBS. The following tables show gross unrealized losses (dollars in millions) on fixed maturities and equity securities by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2016 and 2015 . Less Than Twelve Months Twelve Months or More Unrealized Loss Fair Value Fair Value as % of Cost Unrealized Loss Fair Value Fair Value as % of Cost 2016 Fixed maturities: U.S. Government and government agencies $ (1 ) $ 153 99 % $ (2 ) $ 8 80 % States, municipalities and political subdivisions (64 ) 2,289 97 % (5 ) 44 90 % Residential MBS (7 ) 502 99 % (6 ) 162 96 % Commercial MBS (2 ) 121 98 % — — — % Asset-backed securities (29 ) 1,737 98 % (17 ) 634 97 % Corporate and other (93 ) 3,849 98 % (19 ) 312 94 % Total fixed maturities $ (196 ) $ 8,651 98 % $ (49 ) $ 1,160 96 % Equity securities: Common stocks $ (23 ) $ 215 90 % $ — $ — — % Perpetual preferred stocks (6 ) 135 96 % (1 ) 6 86 % Total equity securities $ (29 ) $ 350 92 % $ (1 ) $ 6 86 % 2015 Fixed maturities: U.S. Government and government agencies $ (1 ) $ 112 99 % $ (2 ) $ 15 88 % States, municipalities and political subdivisions (33 ) 1,419 98 % (2 ) 50 96 % Residential MBS (7 ) 438 98 % (8 ) 201 96 % Commercial MBS — 95 100 % (1 ) 28 97 % Asset-backed securities (42 ) 2,706 98 % (10 ) 455 98 % Corporate and other (229 ) 4,661 95 % (39 ) 165 81 % Total fixed maturities $ (312 ) $ 9,431 97 % $ (62 ) $ 914 94 % Equity securities: Common stocks $ (79 ) $ 509 87 % $ — $ — — % Perpetual preferred stocks (3 ) 91 97 % (3 ) 22 88 % Total equity securities $ (82 ) $ 600 88 % $ (3 ) $ 22 88 % At December 31, 2016 , the gross unrealized losses on fixed maturities of $245 million relate to 1,242 securities. Investment grade securities (as determined by nationally recognized rating agencies) represented approximately 84% of the gross unrealized loss and 91% of the fair value. The determination of whether unrealized losses are “other-than-temporary” requires judgment based on subjective as well as objective factors. Factors considered and resources used by management include: a) whether the unrealized loss is credit-driven or a result of changes in market interest rates, b) the extent to which fair value is less than cost basis, c) cash flow projections received from independent sources, d) historical operating, balance sheet and cash flow data contained in issuer SEC filings and news releases, e) near-term prospects for improvement in the issuer and/or its industry, f) third party research and communications with industry specialists, g) financial models and forecasts, h) the continuity of dividend payments, maintenance of investment grade ratings and hybrid nature of certain investments, i) discussions with issuer management, and j) ability and intent to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value. AFG analyzes its MBS securities for other-than-temporary impairment each quarter based upon expected future cash flows. Management estimates expected future cash flows based upon its knowledge of the MBS market, cash flow projections (which reflect loan to collateral values, subordination, vintage and geographic concentration) received from independent sources, implied cash flows inherent in security ratings and analysis of historical payment data. During 2016 , AFG recorded $3 million in other-than-temporary impairment charges related to its residential MBS. In 2016 , AFG recorded approximately $23 million and $12 million in other-than-temporary impairment charges related to corporate bonds and other fixed maturities, respectively. AFG recorded $89 million in other-than-temporary impairment charges on common stocks in 2016 . At December 31, 2016 , the gross unrealized losses on common stocks of $23 million relate to 23 securities, none of which has been in an unrealized loss position for more than 12 months. AFG recorded $4 million in other-than-temporary impairment charges on preferred stock in 2016. At December 31, 2016 , the gross unrealized losses on preferred stocks of $7 million relate to 24 securities. Only one preferred stock has been in an unrealized loss position for 12 months or more and it has an investment grade rating. Management believes AFG will recover its cost basis in the securities with unrealized losses and that AFG has the ability to hold the securities until they recover in value and had no intent to sell them at December 31, 2016 . A progression of the credit portion of other-than-temporary impairments on fixed maturity securities for which the non-credit portion of an impairment has been recognized in other comprehensive income is shown below (in millions): 2016 2015 2014 Balance at January 1 $ 160 $ 170 $ 194 Additional credit impairments on: Previously impaired securities 2 1 — Securities without prior impairments 1 2 — Reductions due to: Sales or redemptions (10 ) (9 ) (24 ) Sale of subsidiaries — (4 ) — Balance at December 31 $ 153 $ 160 $ 170 The table below sets forth the scheduled maturities of available for sale fixed maturities as of December 31, 2016 (dollars in millions). Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers. Amortized Fair Value Cost Amount % Maturity One year or less $ 1,120 $ 1,136 3 % After one year through five years 5,609 5,866 17 % After five years through ten years 11,744 11,921 35 % After ten years 4,487 4,534 13 % 22,960 23,457 68 % ABS (average life of approximately 5 years) 5,962 5,959 17 % MBS (average life of approximately 4.5 years) 4,813 5,128 15 % Total $ 33,735 $ 34,544 100 % Certain risks are inherent in fixed maturity securities, including loss upon default, price volatility in reaction to changes in interest rates, and general market factors and risks associated with reinvestment of proceeds due to prepayments or redemptions in a period of declining interest rates. There were no investments in individual issuers that exceeded 10% of shareholders’ equity at December 31, 2016 or 2015 . Net Unrealized Gain on Marketable Securities In addition to adjusting equity securities and fixed maturity securities classified as “available for sale” to fair value, GAAP requires that deferred policy acquisition costs and certain other balance sheet amounts related to annuity, long-term care and life businesses be adjusted to the extent that unrealized gains and losses from securities would result in adjustments to those balances had the unrealized gains or losses actually been realized. The following table shows (in millions) the components of the net unrealized gain on securities that is included in AOCI in AFG’s Balance Sheet. Pretax Deferred Tax and Amounts Attributable to Noncontrolling Interests Net December 31, 2016 Net unrealized gain on: Fixed maturities — annuity segment (*) $ 640 $ (224 ) $ 416 Fixed maturities — all other 169 (59 ) 110 Total fixed maturities 809 (283 ) 526 Equity securities 151 (53 ) 98 Total investments 960 (336 ) 624 Deferred policy acquisition costs — annuity segment (273 ) 96 (177 ) Annuity benefits accumulated (78 ) 27 (51 ) Unearned revenue 13 (5 ) 8 Total net unrealized gain on marketable securities $ 622 $ (218 ) $ 404 December 31, 2015 Net unrealized gain on: Fixed maturities — annuity segment (*) $ 523 $ (183 ) $ 340 Fixed maturities — all other 196 (72 ) 124 Total fixed maturities 719 (255 ) 464 Equity securities 84 (30 ) 54 Total investments 803 (285 ) 518 Deferred policy acquisition costs — annuity segment (233 ) 82 (151 ) Annuity benefits accumulated (64 ) 22 (42 ) Unearned revenue 11 (4 ) 7 Total net unrealized gain on marketable securities $ 517 $ (185 ) $ 332 (*) Net unrealized gains on fixed maturity investments supporting AFG’s annuity benefits accumulated. Net Investment Income The following table shows (in millions) investment income earned and investment expenses incurred. 2016 2015 2014 Investment income: Fixed maturities $ 1,510 $ 1,461 $ 1,352 Equity securities 81 76 66 Equity in earnings of partnerships and similar investments 44 27 18 Other 81 87 77 Gross investment income 1,716 1,651 1,513 Investment expenses (20 ) (18 ) (12 ) Net investment income $ 1,696 $ 1,633 $ 1,501 Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments are summarized as follows (in millions): 2016 2015 Realized gains (losses) Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 36 $ (38 ) $ (2 ) $ 90 $ 19 $ (43 ) $ (24 ) $ (941 ) Equity securities 106 (93 ) 13 67 94 (94 ) — (134 ) Mortgage loans and other investments — — — — (2 ) (3 ) (5 ) — Other (*) (7 ) 15 8 (52 ) (5 ) 15 10 430 Total pretax 135 (116 ) 19 105 106 (125 ) (19 ) (645 ) Tax effects (48 ) 41 (7 ) (37 ) (38 ) 45 7 226 Noncontrolling interests (2 ) 3 1 4 (2 ) 2 — 8 Net of tax and noncontrolling interests $ 85 $ (72 ) $ 13 $ 72 $ 66 $ (78 ) $ (12 ) $ (411 ) 2014 Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 36 $ (15 ) $ 21 $ 570 Equity securities 53 (26 ) 27 26 Mortgage loans and other investments 1 — 1 — Other (*) (2 ) 5 3 (314 ) Total pretax 88 (36 ) 52 282 Tax effects (32 ) 13 (19 ) (99 ) Noncontrolling interests (2 ) 1 (1 ) (3 ) Net of tax and noncontrolling interests $ 54 $ (22 ) $ 32 $ 180 (*) Primarily adjustments to deferred policy acquisition costs and reserves related to annuities and long-term care business. Gross realized gains and losses (excluding impairment write-downs and mark-to-market of derivatives) on available for sale fixed maturity and equity security investment transactions included in the statement of cash flows consisted of the following (in millions): 2016 2015 2014 Fixed maturities: Gross gains $ 55 $ 38 $ 36 Gross losses (10 ) (7 ) (2 ) Equity securities: Gross gains 110 99 53 Gross losses (4 ) (5 ) — |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives As discussed under “ Derivatives ” in Note A — “ Accounting Policies ” to the financial statements, AFG uses derivatives in certain areas of its operations. Derivatives That Do Not Qualify for Hedge Accounting The following derivatives that do not qualify for hedge accounting under GAAP are included in AFG’s Balance Sheet at fair value (in millions): December 31, 2016 December 31, 2015 Derivative Balance Sheet Line Asset Liability Asset Liability MBS with embedded derivatives Fixed maturities $ 107 $ — $ 130 $ — Public company warrants Equity securities 4 — 4 — Fixed-indexed annuities (embedded derivative) Annuity benefits accumulated — 1,759 — 1,369 Equity index call options Equity index call options 492 — 241 — Reinsurance contracts (embedded derivative) Other liabilities — 8 — 7 $ 603 $ 1,767 $ 375 $ 1,376 The MBS with embedded derivatives consist primarily of interest-only MBS with interest rates that float inversely with short-term rates. AFG records the entire change in the fair value of these securities in earnings. These investments are part of AFG’s overall investment strategy and represent a small component of AFG’s overall investment portfolio. Warrants to purchase shares of publicly traded companies, which represent a small component of AFG’s overall investment portfolio, are considered to be derivatives that are required to be carried at fair value through earnings. AFG’s fixed-indexed annuities provide policyholders with a crediting rate tied, in part, to the performance of an existing stock market index. AFG attempts to mitigate the risk in the index-based component of these products through the purchase of call options on the appropriate index. AFG receives collateral from its counterparties to support its purchased call option assets. This collateral ( $380 million at December 31, 2016 and $211 million at December 31, 2015 ) is included in other assets in AFG’s Balance Sheet with an offsetting liability to return the collateral, which is included in other liabilities. AFG’s strategy is designed so that the change in the fair value of the call option assets will generally offset the economic change in the liabilities from the index participation. Both the index-based component of the annuities and the related call options are considered derivatives. Fluctuations in interest rates and the stock market, among other factors, can cause volatility in the periodic measurement of fair value of the embedded derivative that management believes can be inconsistent with the long-term economics of these products. As discussed under “ Reinsurance ” in Note A to the financial statements, certain reinsurance contracts are considered to contain embedded derivatives. The following table summarizes the gain (loss) included in AFG’s Statement of Earnings for changes in the fair value of derivatives that do not qualify for hedge accounting for 2016 , 2015 and 2014 (in millions): Derivative Statement of Earnings Line 2016 2015 2014 MBS with embedded derivatives Realized gains on securities $ (9 ) $ (16 ) $ 3 Public company warrants Realized gains on securities — — — Interest rate swaptions Realized gains on securities — — (2 ) Fixed-indexed annuities (embedded derivative) (*) Annuity benefits (211 ) (17 ) (182 ) Equity index call options Annuity benefits 141 (56 ) 181 Reinsurance contracts (embedded derivative) Net investment income (1 ) 6 (3 ) $ (80 ) $ (83 ) $ (3 ) (*) The change in fair value of the embedded derivative includes losses related to unlocking of actuarial assumptions of $17 million in 2016 compared to losses of $28 million in 2015 and gains related to unlocking of actuarial assumptions of $58 million in 2014 . Derivatives Designated and Qualifying as Cash Flow Hedges As of December 31, 2016 , AFG has entered into seven interest rate swaps that are designated and qualify as highly effective cash flow hedges to mitigate interest rate risk related to certain floating-rate securities included in AFG’s portfolio of fixed maturity securities. The purpose of each of these swaps is to effectively convert a portion of AFG’s floating-rate fixed maturity securities to fixed rates by offsetting the variability in cash flows attributable to changes in short-term LIBOR. Under the terms of the swaps, AFG receives fixed-rate interest payments in exchange for variable interest payments based on short-term LIBOR. The notional amounts of the interest rate swaps amortize down over each swap’s respective life (the swaps expire between August 2019 and June 2030) in anticipation of the expected decline in AFG’s portfolio of fixed maturity securities with floating interest rates based on short-term LIBOR. The total outstanding notional amount of AFG’s interest rate swaps increased to $1.08 billion at December 31, 2016 compared to $604 million at December 31, 2015 , reflecting four new swaps with an aggregate notional amount at issuance of $610 million entered into in 2016 , partially offset by the scheduled amortization discussed above. The fair value of the effective portion of the interest rate swaps in an asset position and included in other assets was $1 million at December 31, 2016 and $2 million at December 31, 2015 . The fair value of the effective portion of interest rate swaps in a liability position and included in other liabilities was $22 million at December 31, 2016 and less than $1 million at December 31, 2015 . The net unrealized gain or loss on cash flow hedges is included in AOCI, net of DPAC and deferred taxes. Amounts reclassified from AOCI (before DPAC and taxes) to net investment income were $7 million and $6 million in 2016 and 2015 , respectively. There was no ineffectiveness recorded in net earnings during these periods. A collateral receivable supporting these swaps of $60 million at December 31, 2016 and $14 million at December 31, 2015 is included in other assets in AFG’s Balance Sheet. Derivative Designated and Qualifying as a Fair Value Hedge In June 2015, AFG entered into an interest rate swap to mitigate the interest rate risk associated with its fixed-rate 9-7/8% Senior Notes due June 2019 by effectively converting the interest rate on those notes to a floating rate of three-month LIBOR plus 8.099% ( 9.0624% at December 31, 2016 ). Since the terms of the interest rate swap match the terms of the hedged debt, changes in the fair value of the interest rate swap are offset by changes in the fair value of the hedged debt attributable to changes in interest rates. The fair value of the interest rate swap (asset of $1 million and $2 million at December 31, 2016 and December 31, 2015 , respectively) and the offsetting adjustment to the carrying value of the 9-7/8% Senior Notes are both included in long-term debt on AFG’s Balance Sheet. Accordingly, the net impact on AFG’s current period earnings is that the interest expense associated with the hedged debt is effectively recorded at the floating rate. The net reduction in interest expense from the swap for 2016 and 2015 was $3 million and $2 million , respectively. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs A progression of deferred policy acquisition costs is presented below (in millions): P&C Annuity and Run-off Long-term Care and Life Deferred Deferred Sales Consolidated Costs Costs Inducements PVFP Subtotal Unrealized Total Total Balance at December 31, 2013 $ 211 $ 875 $ 149 $ 85 $ 1,109 $ (345 ) $ 764 $ 975 Additions 497 198 8 — 206 — 206 703 Amortization: Periodic amortization (485 ) (130 ) (26 ) (11 ) (167 ) — (167 ) (652 ) Annuity unlocking — (20 ) — — (20 ) — (20 ) (20 ) Included in realized gains — 2 1 — 3 — 3 3 Foreign currency translation (2 ) — — — — — — (2 ) Change in unrealized — — — — — (186 ) (186 ) (186 ) Balance at December 31, 2014 221 925 132 74 1,131 (531 ) 600 821 Additions 519 224 11 — 235 — 235 754 Amortization: Periodic amortization (511 ) (162 ) (26 ) (11 ) (199 ) — (199 ) (710 ) Annuity unlocking — 31 4 — 35 — 35 35 Included in realized gains — 8 1 — 9 — 9 9 Sale of subsidiaries — (8 ) (3 ) (8 ) (19 ) — (19 ) (19 ) Foreign currency translation (3 ) — — — — — — (3 ) Change in unrealized — — — — — 297 297 297 Balance at December 31, 2015 226 1,018 119 55 1,192 (234 ) 958 1,184 Additions 535 230 9 — 239 — 239 774 Amortization: Periodic amortization (520 ) (169 ) (24 ) (9 ) (202 ) — (202 ) (722 ) Annuity unlocking — 25 4 — 29 — 29 29 Included in realized gains — 6 2 — 8 — 8 8 Foreign currency translation (3 ) — — — — — — (3 ) Change in unrealized — — — — — (31 ) (31 ) (31 ) Balance at December 31, 2016 $ 238 $ 1,110 $ 110 $ 46 $ 1,266 $ (265 ) $ 1,001 $ 1,239 The present value of future profits (“PVFP”) amounts in the table above are net of $134 million and $125 million of accumulated amortization at December 31, 2016 and 2015 , respectively. During each of the next five years, the PVFP is expected to decrease at a rate of approximately one-sixth of the balance at the beginning of each respective year. |
Managed Investment Entities
Managed Investment Entities | 12 Months Ended |
Dec. 31, 2016 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Managed Investment Entities | Managed Investment Entities AFG is the investment manager and its subsidiaries have investments ranging from 15.0% to 64.4% of the most subordinate debt tranche of fifteen collateralized loan obligation entities or “CLOs,” which are considered variable interest entities. AFG’s subsidiaries also own portions of the senior debt tranches of certain of these CLOs. Upon formation between 2004 and 2016, these entities issued securities in various senior and subordinate classes and invested the proceeds primarily in secured bank loans, which serve as collateral for the debt securities issued by each particular CLO. None of the collateral was purchased from AFG. AFG’s investments in the subordinate debt tranches of these entities receive residual income from the CLOs only after the CLOs pay expenses (including management fees to AFG) and interest on and returns of capital to senior levels of debt securities. There are no contractual requirements for AFG to provide additional funding for these entities. AFG has not provided and does not intend to provide any financial support to these entities. AFG’s maximum exposure to economic loss on its CLOs is limited to its investment in the CLOs, which had an aggregate fair value of $216 million (including $144 million invested in the most subordinate tranches) at December 31, 2016 , and $266 million at December 31, 2015 . In 2016 , AFG formed two new CLOs, which issued an aggregate of $866 million face amount of liabilities (including $64 million face amount purchased by subsidiaries of AFG). During 2016 , AFG subsidiaries also purchased $24 million face amount of senior debt and subordinate tranches of existing CLOs for $17 million . During 2016 , AFG subsidiaries received $115 million in sale and redemption proceeds from its CLO investments. In 2015 , AFG formed two new CLOs, which issued an aggregate of $869 million face amount of liabilities (including $81 million face amount purchased by subsidiaries of AFG). During 2015 , AFG subsidiaries also received $77 million in redemption proceeds from its CLO investments. In 2014 , AFG formed two new CLOs, which issued an aggregate of $917 million face amount of liabilities (including $94 million face amount purchased by subsidiaries of AFG). During 2014 , AFG subsidiaries also purchased $13 million face amount of senior debt tranches of existing CLOs for $13 million and received $81 million in redemption proceeds from its CLO investments. In 2014, four AFG CLOs were substantially liquidated as permitted by the CLO indentures. The revenues and expenses of the CLOs are separately identified in AFG’s Statement of Earnings, after the elimination of management fees and earnings attributable to shareholders of AFG as measured by the change in the fair value of AFG’s investments in the CLOs. See Note A — “ Accounting Policies — Managed Investment Entities ,” for a discussion of accounting guidance adopted on January 1, 2015 that impacts the measurement of the fair value of CLO liabilities. Selected financial information related to the CLOs is shown below (in millions): Year ended December 31, 2016 2015 2014 Investment in CLO tranches $ 216 $ 266 $ 289 Gains (losses) on change in fair value of assets/liabilities (a): Assets 131 (116 ) (66 ) Liabilities (116 ) 82 22 Management fees paid to AFG 17 15 25 CLO earnings (losses) attributable to (b): AFG shareholders 37 (6 ) 16 Noncontrolling interests — — (51 ) (a) Included in revenues in AFG’s Statement of Earnings. (b) Included in earnings before income taxes in AFG’s Statement of Earnings. The aggregate unpaid principal balance of the CLOs’ fixed maturity investments exceeded the fair value of the investments by $75 million and $214 million at December 31, 2016 and 2015 . The aggregate unpaid principal balance of the CLOs’ debt exceeded its carrying value by $159 million and $205 million at those dates. The CLO assets include $1 million in loans at both December 31, 2016 and December 31, 2015 , for which the CLOs are not accruing interest because the loans are in default (aggregate unpaid principal balance of $10 million at both of those dates). |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | Goodwill and Other Intangibles Changes in the carrying value of goodwill during 2014 , 2015 and 2016 , by reporting segment, are presented in the following table (in millions): Property and Casualty Annuity Total Balance at January 1, 2014 $ 152 $ 33 $ 185 Acquisition of subsidiary in 2014 16 — 16 Balance at December 31, 2014 168 33 201 Sale of subsidiaries in 2015 — (2 ) (2 ) Balance at December 31, 2015 and December 31, 2016 $ 168 $ 31 $ 199 Goodwill increased by $16 million in the second quarter of 2014 due to the purchase of Summit and decreased by $2 million in the fourth quarter of 2015 due to the sale of UTA and CGIC as discussed in Note B — “ Acquisitions and Sale of Businesses .” Included in other assets in AFG’s Balance Sheet is $34 million at December 31, 2016 and $41 million at December 31, 2015 of amortizable intangible assets related to property and casualty insurance acquisitions, primarily the acquisition of Summit in 2014. These amounts are net of accumulated amortization of $25 million and $18 million , respectively. Amortization of intangibles was $8 million in 2016 and 2015 and $19 million in 2014 . Future amortization of intangibles (weighted average amortization period of 4 years ) is estimated to be $8 million per year in each of 2017 through 2020 and $2 million in 2021. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following at December 31 (in millions): 2016 2015 Principal Discount and Issue Costs Carrying Value Principal Discount and Issue Costs Carrying Value Direct Senior Obligations of AFG: 9-7/8% Senior Notes due June 2019 $ 350 $ (1 ) $ 349 $ 350 $ (1 ) $ 349 3.50% Senior Notes due August 2026 300 (3 ) 297 — — — 6-3/8% Senior Notes due June 2042 230 (7 ) 223 230 (7 ) 223 5-3/4% Senior Notes due August 2042 125 (4 ) 121 125 (4 ) 121 Other 3 — 3 3 — 3 1,008 (15 ) 993 708 (12 ) 696 Direct Subordinated Obligations of AFG: 6-1/4% Subordinated Debentures due September 2054 150 (5 ) 145 150 (5 ) 145 6% Subordinated Debentures due November 2055 150 (5 ) 145 150 (5 ) 145 300 (10 ) 290 300 (10 ) 290 Subsidiaries: National Interstate bank credit facility — — — 12 — 12 $ 1,308 $ (25 ) $ 1,283 $ 1,020 $ (22 ) $ 998 To achieve a desired balance between fixed and variable rate debt, AFG entered into an interest rate swap in June 2015, which effectively converts its 9-7/8% Senior Notes to a floating rate of three-month LIBOR plus 8.099% ( 9.0624% at December 31, 2016 and 8.6110% at December 31, 2015 ). The fair value of the interest rate swap (asset of $1 million and $2 million at December 31, 2016 and December 31, 2015 , respectively) and the offsetting adjustment to the carrying value of the notes are both included in the carrying value of the 9-7/8% Senior Notes in the table above. At December 31, 2016 , scheduled principal payments on debt for the subsequent five years and thereafter were as follows: 2017 — none ; 2018 — none ; 2019 — $350 million ; 2020 — none ; 2021 — none and thereafter — $958 million . As shown below at December 31 (principal amount, in millions), the majority of AFG’s long-term debt is unsecured obligations of the holding company and its subsidiaries: 2016 2015 Senior unsecured obligations $ 1,008 $ 720 Subordinated unsecured obligations 300 300 $ 1,308 $ 1,020 In August 2016, AFG issued $300 million in 3.50% Senior Notes due in 2026 at a price of 99.608% . The net proceeds of the offering were used to fund a portion of the November 10, 2016 acquisition of the noncontrolling interest in NATL (discussed in Note B — “ Acquisitions and Sale of Businesses ” ). At the acquisition date, the $18 million outstanding under NATL’s bank credit facility, including $6 million borrowed in September 2016, was repaid and the credit agreement was terminated. In June 2016, AFG replaced its existing credit facility with a new five -year, $500 million revolving credit facility which expires in June 2021. Amounts borrowed under this agreement bear interest at rates ranging from 1.00% to 1.875% (currently 1.375% ) over LIBOR based on AFG’s credit rating. No amounts were borrowed under this facility at December 31, 2016 or AFG’s previous credit facility at December 31, 2015 . In September 2015, AFG used cash on hand to redeem the $132 million in outstanding AFG 7% Senior Notes due September 2050 at par value. In November 2015, AFG issued $150 million in 6% Subordinated Debentures due in 2055. During 2015, subsidiaries of AFG repaid all of the outstanding notes secured by real estate. In September 2014, AFG issued $150 million in 6-1/4% Subordinated Debentures due 2054. Cash interest payments on long-term debt were $75 million in 2016 , $75 million in 2015 and $72 million in 2014 . In 2016 and 2015 , AFG received $3 million and $2 million , respectively, in interest under the interest rate swap discussed above. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity AFG is authorized to issue 12.5 million shares of Voting Preferred Stock and 12.5 million shares of Nonvoting Preferred Stock, each without par value. Stock Incentive Plans Under AFG’s stock incentive plans, employees of AFG and its subsidiaries are eligible to receive equity awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units and stock awards. At December 31, 2016 , there were 9.3 million shares of AFG Common Stock reserved for issuance under AFG’s stock incentive plans. The restricted Common Stock that AFG has granted generally vests over a three or four year period. Data relating to grants of restricted stock is presented below: Shares Average Grant Date Fair Value Outstanding at January 1, 2016 505,698 $ 51.43 Granted 318,940 $ 67.00 Vested (141,598 ) $ 40.73 Forfeited (4,165 ) $ 64.08 Outstanding at December 31, 2016 678,875 $ 60.90 AFG issued 40,336 shares of Common Stock (fair value of $71.05 per share) in the first quarter of 2016 and 54,732 shares (fair value of $62.55 per share) in the first quarter of 2015 under its Equity Bonus Plan. AFG did not grant any stock options in 2016. Options granted in years prior to 2016 have an exercise price equal to the market price of AFG Common Stock at the date of grant. Options generally become exercisable at the rate of 20% per year commencing one year after grant and expire ten years after the date of grant. Data for stock options issued under AFG’s stock incentive plans is presented below: Shares Average Exercise Price Average Remaining Contractual Term Aggregate Intrinsic Value (in millions) Outstanding at January 1, 2016 5,516,090 $ 41.46 Exercised (958,344 ) $ 33.56 Forfeited/Cancelled (52,645 ) $ 51.91 Outstanding at December 31, 2016 4,505,101 $ 43.02 5.4 years $ 203 Options exercisable at December 31, 2016 2,908,200 $ 36.95 4.4 years $ 149 The total intrinsic value of options exercised during 2016 , 2015 and 2014 was $38 million , $52 million and $38 million , respectively. During 2016 , 2015 and 2014 , AFG received $32 million , $47 million and $35 million , respectively, in cash from the exercise of stock options. The total tax benefit related to the exercises was $11 million , $16 million and $12 million (including $12 million and $9 million credited directly to capital surplus in 2015 and 2014, respectively) during those years, respectively. AFG used the Black-Scholes option pricing model to calculate the fair value of its option grants issued during 2015 and 2014 ( no options were granted in 2016). The expected dividend yield is based on AFG’s current dividend rate. To determine expected volatility, AFG considers its daily historical volatility as well as implied volatility on traded options. The expected term was estimated based on historical exercise patterns and post vesting cancellations. The risk-free rate for periods associated with the expected term is based upon the U.S. Treasury yield curve in effect on the grant date. 2015 2014 Exercise price $ 63.15 $ 56.47 Expected dividend yield 1.6 % 1.6 % Expected volatility 25 % 26 % Expected term (in years) 7.25 7.25 Risk-free rate 1.88 % 2.20 % Grant date fair value $ 15.29 $ 14.66 Total compensation expense related to stock incentive plans of AFG and its subsidiaries for 2016 , 2015 and 2014 was $28 million , $27 million and $25 million , respectively. AFG’s provision for income tax includes tax benefits of $19 million in 2016 and $8 million in 2015 and 2014 related to AFG’s stock incentive plans. The $19 million tax benefit in 2016 includes $9 million that under previous guidance would have been credited to capital surplus. At December 31, 2016 , there was $16 million and $24 million of unrecognized compensation expense related to nonvested stock options and restricted stock awards, respectively. Both of these amounts are expected to be recognized over a weighted average of 2.3 years. Accumulated Other Comprehensive Income, Net of Tax (“AOCI”) Comprehensive income is defined as all changes in shareholders’ equity except those arising from transactions with shareholders. Comprehensive income includes net earnings and other comprehensive income, which consists primarily of changes in net unrealized gains or losses on available for sale securities. The progression of the components of accumulated other comprehensive income follows (in millions): Other Comprehensive Income AOCI Beginning Balance Pretax Tax Net of tax Attributable to noncontrolling interests Attributable to shareholders Other (c) AOCI Ending Balance Year ended December 31, 2016 Net unrealized gains on securities: Unrealized holding gains (losses) on securities arising during the period $ 124 $ (44 ) $ 80 $ (4 ) $ 76 Reclassification adjustment for realized (gains) losses included in net earnings (a) (19 ) 7 (12 ) (1 ) (13 ) Total net unrealized gains on securities (b) $ 332 105 (37 ) 68 (5 ) 63 $ 9 $ 404 Net unrealized gains (losses) on cash flow hedges 1 (12 ) 4 (8 ) — (8 ) — (7 ) Foreign currency translation adjustments (22 ) 6 1 7 — 7 — (15 ) Pension and other postretirement plans adjustments (7 ) — — — — — — (7 ) Total $ 304 $ 99 $ (32 ) $ 67 $ (5 ) $ 62 $ 9 $ 375 Year ended December 31, 2015 Net unrealized gains (losses) on securities: Unrealized holding gains (losses) on securities arising during the period $ (625 ) $ 219 $ (406 ) $ 9 $ (397 ) Reclassification adjustment for realized (gains) losses included in net earnings (a) 14 (5 ) 9 (1 ) 8 Reclassification for unrealized gains of subsidiaries sold (34 ) 12 (22 ) — (22 ) Total net unrealized gains (losses) on securities (b) $ 743 (645 ) 226 (419 ) 8 (411 ) $ — $ 332 Net unrealized gains on cash flow hedges — 1 — 1 — 1 — 1 Foreign currency translation adjustments (8 ) (9 ) (5 ) (14 ) — (14 ) — (22 ) Pension and other postretirement plans adjustments (8 ) 1 — 1 — 1 — (7 ) Total $ 727 $ (652 ) $ 221 $ (431 ) $ 8 $ (423 ) $ — $ 304 Year ended December 31, 2014 Net unrealized gains on securities: Unrealized holding gains on securities arising during the period $ 334 $ (118 ) $ 216 $ (4 ) $ 212 Reclassification adjustment for realized (gains) losses included in net earnings (a) (52 ) 19 (33 ) 1 (32 ) Total net unrealized gains on securities (b) $ 563 282 (99 ) 183 (3 ) 180 $ — $ 743 Foreign currency translation adjustments 1 (8 ) (1 ) (9 ) — (9 ) — (8 ) Pension and other postretirement plans adjustments (4 ) (6 ) 2 (4 ) — (4 ) — (8 ) Total $ 560 $ 268 $ (98 ) $ 170 $ (3 ) $ 167 $ — $ 727 (a) The reclassification adjustment out of net unrealized gains on securities affected the following lines in AFG’s Statement of Earnings: OCI component Affected line in the statement of earnings Pretax Realized gains (losses) on securities Tax Provision for income taxes Attributable to noncontrolling interests Net earnings (loss) attributable to noncontrolling interests (b) Includes net unrealized gains of $52 million at December 31, 2016 compared to net unrealized gains of $51 million and $58 million at December 31, 2015 and 2014 , related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings. (c) Other represents the impact on AOCI of the November 2016 acquisition of the noncontrolling interest in NATL (see Note B — “ Acquisitions and Sale of Businesses ”). |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following is a reconciliation of income taxes at the statutory rate of 35% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions): 2016 2015 2014 Amount % of EBT Amount % of EBT Amount % of EBT Earnings before income taxes (“EBT”) $ 787 $ 565 $ 626 Income taxes at statutory rate $ 275 35 % $ 198 35 % $ 219 35 % Effect of: Tax exempt interest (24 ) (3 %) (27 ) (5 %) (25 ) (4 %) Change in valuation allowance 52 7 % 23 4 % 7 1 % Stock-based compensation (9 ) (1 %) 1 — % 1 — % Subsidiaries not in AFG’s tax return 3 — % 2 1 % 1 — % Acquisition of noncontrolling interest in NATL (66 ) (8 %) — — % — — % Neon restructuring (111 ) (14 %) — — % — — % Losses of managed investment entities — — % — — % 18 3 % Other (1 ) (1 %) (2 ) — % (1 ) — % Provision for income taxes as shown in the statement of earnings $ 119 15 % $ 195 35 % $ 220 35 % The changes in valuation allowance in the table above are primarily increases in the valuation allowance on tax benefits related to losses in the Neon Lloyd’s insurance business. AFG maintains a full valuation allowance against the deferred tax benefits associated with losses related to Neon. As discussed in Note B — “ Acquisitions and Sale of Businesses ,” AFG acquired the noncontrolling interest in NATL in November 2016. This transaction allowed NATL and its subsidiaries to become members of the AFG consolidated tax group, which resulted in a tax benefit of $66 million to AFG during the fourth quarter of 2016. In January 2008, AFG paid $75 million in cash to acquire approximately 67% of Neon Underwriting Limited (“Neon”, formerly known as Marketform Group Limited), a United Kingdom-based Lloyd’s insurer. During 2012, AFG acquired the then-remaining shares of Neon that it did not already own for $17 million . Neon has recorded underwriting losses in each period from the date of AFG’s initial investment, including adverse prior year reserve development related to Italian public hospital medical malpractice business which Neon ceased writing in 2008, as well as other lines of business. AFG’s investment in Neon includes the cost of acquiring the company as well as additional capital provided to Neon since the date of acquisition. In 2011, cumulative losses at Neon across multiple lines of business resulted in uncertainty concerning the realization of the deferred tax benefits associated with the losses. Consequently, AFG began maintaining a full valuation allowance against the deferred tax assets related to the Lloyd’s insurance business in 2011. In connection with the ongoing reorganization of the Neon Lloyd’s business, in December 2016, AFG undertook a restructuring that included the liquidation for tax purposes of the foreign subsidiary that is the parent of the Neon Lloyd’s operations, resulting in a taxable loss for U.S. tax purposes. AFG reported the $111 million tax benefit associated with this loss in the fourth quarter of 2016. Approximately $29 million of the $111 million tax benefit reduced current taxes payable while the remaining tax benefit will be received from the carry-back of the tax-basis capital loss to offset capital gains in prior tax years. Excluding a $65 million charge related to the exit of certain lines of business within Neon and the tax benefits related to the acquisition of the noncontrolling interest in NATL and the Neon restructuring, AFG’s effective tax rate for the year ended December 31, 2016, was 35% . AFG’s 2012 — 2016 tax years remain subject to examination by the IRS. Total earnings before income taxes include losses subject to tax in foreign jurisdictions of $160 million in 2016 , $66 million in 2015 and $4 million in 2014 . The total income tax provision (credit) consists of (in millions): 2016 2015 2014 Current taxes: Federal $ 299 $ 216 $ 265 State 12 8 8 Deferred taxes: Federal (192 ) (29 ) (53 ) Provision for income taxes $ 119 $ 195 $ 220 For income tax purposes, AFG and its subsidiaries had the following carryforwards available at December 31, 2016 (in millions): Expiring Amount Operating Loss – U.S. 2017 - 2022 $ 143 Operating Loss – United Kingdom indefinite 139 (*) Capital Loss – U.S. 2021 237 (*) £112 million Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The significant components of deferred tax assets and liabilities included in AFG’s Balance Sheet at December 31 were as follows (in millions): 2016 2015 Excluding Unrealized Gains Impact of Unrealized Gains Total Excluding Unrealized Gains Impact of Unrealized Gains Total Deferred tax assets: Federal net operating loss carryforwards $ 50 $ — $ 50 $ 50 $ — $ 50 Foreign underwriting losses 120 — 120 77 — 77 Capital loss carryforwards 83 — 83 32 — 32 Insurance claims and reserves 774 27 801 691 22 713 Employee benefits 131 — 131 115 — 115 Other, net 40 (5 ) 35 33 (4 ) 29 Total deferred tax assets before valuation allowance 1,198 22 1,220 998 18 1,016 Valuation allowance against deferred tax assets (173 ) — (173 ) (130 ) — (130 ) Total deferred tax assets 1,025 22 1,047 868 18 886 Deferred tax liabilities: Subsidiaries not in AFG’s tax return — — — (63 ) — (63 ) Investment securities 29 (336 ) (307 ) 23 (281 ) (258 ) Deferred policy acquisition costs (448 ) 96 (352 ) (418 ) 82 (336 ) Total deferred tax liabilities (419 ) (240 ) (659 ) (458 ) (199 ) (657 ) Net deferred tax asset (liability) $ 606 $ (218 ) $ 388 $ 410 $ (181 ) $ 229 AFG’s net deferred tax asset at December 31, 2016 and 2015 is included in other assets in AFG’s Balance Sheet. The likelihood of realizing deferred tax assets is reviewed periodically; any adjustments required to the valuation allowance are made in the period during which developments requiring an adjustment become known. “Foreign underwriting losses” in the table above include the net operating loss carryforward and other deferred tax assets related to the Neon Lloyd’s insurance business. Due to uncertainty concerning the realization of the deferred tax benefits associated with these losses, AFG maintains a full valuation allowance of $120 million against these deferred tax assets at December 31, 2016 . In addition to the valuation allowance related to the Neon Lloyd’s insurance business, the gross deferred tax asset has also been reduced by a $50 million valuation allowance related to a portion of AFG’s net operating loss carryforwards (“NOL”) subject to the separate return limitation year (“SRLY”) tax rules. A SRLY NOL can be used only by the entity that created it and only in years that both it and the consolidated group have taxable income. “Subsidiaries not in AFG’s tax return” in the table above represents a deferred tax liability related to AFG’s investment in NATL during the time that it was a less than 80% -owned subsidiary of AFG. In November 2016, AFG completed the acquisition of the noncontrolling interest in NATL. This transaction allowed NATL and its subsidiaries to become members of AFG’s consolidated tax group, which enabled AFG to release the deferred tax liability ( $66 million at the transaction date) associated with its investment in NATL. AFG increased its liability for uncertain tax positions by $1 million in 2015 due to uncertainty in state taxation of its surplus lines insurance subsidiaries. In July 2014, AFG finalized a settlement with the IRS related to tax years 2008 and 2009. As a result, AFG’s uncertain tax positions were effectively settled, allowing AFG to reduce its liability for previously uncertain tax positions by $19 million in the third quarter of 2014. Although AFG agreed to pay $11 million to the IRS, the majority of the reduction in this liability resulted in offsetting adjustments to AFG’s deferred tax liability and did not impact AFG’s effective tax rate. The portion of the reduction in this liability that favorably impacted the effective tax rate was approximately $4 million including interest. The reduction of the liability for previously uncertain tax positions includes $17 million related to the timing of recognition of investment income on certain debt securities and $2 million related to the deductibility of certain financing expenses. A progression of the liability for uncertain tax positions, excluding interest and penalties, follows (in millions): 2016 2015 2014 Balance at January 1 $ 1 $ — $ 19 Additions for tax positions of prior years — 1 — Reductions for tax positions of prior years — — (8 ) Additions for tax positions of current year — — — Settlements — — (11 ) Balance at December 31 $ 1 $ 1 $ — AFG’s provision for income taxes included an expense of less than $1 million in 2016 and 2015 and a benefit of $1 million in 2014 of interest (net of federal benefit or expense). AFG’s liability for interest related to unrecognized tax benefits was less than $1 million at December 31, 2016 and December 31, 2015 (net of federal benefit); no interest was accrued at December 31, 2014 . AFG’s provision for income taxes in 2016 included an expense of less than $1 million for penalties; no penalties were recorded in 2015 or 2014 . AFG’s liability for penalties related to unrecognized tax benefits was less than $1 million at December 31, 2016 ; no penalties were accrued at December 31, 2015 or December 31, 2014 . Cash payments for income taxes, net of refunds, were $308 million , $234 million and $347 million for 2016 , 2015 and 2014 , respectively. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Establishing property and casualty insurance reserves for claims related to environmental exposures, asbestos and other mass tort claims is subject to uncertainties that are significantly greater than those presented by other types of claims. For this group of claims, traditional actuarial techniques that rely on historical loss development trends cannot be used and a range of reasonably possible losses cannot be estimated. In addition, accruals (included in other liabilities) have been recorded for various environmental and occupational injury and disease claims and other contingencies arising out of the railroad operations disposed of by American Premier’s predecessor, Penn Central Transportation Company (“PCTC”) and its subsidiaries, prior to its bankruptcy reorganization in 1978 and certain manufacturing operations disposed of by American Premier and Great American Financial Resources, Inc. (“GAFRI”). AFG completed an in-depth internal review of its asbestos and environmental (“A&E”) exposures in the third quarter of 2016. The review resulted in special A&E charges of $36 million for the property and casualty group and $5 million for the former railroad and manufacturing operations. AFG completed a comprehensive external study of its A&E exposures in the third quarter of 2015 with the aid of specialty actuarial, engineering and consulting firms and outside counsel. The study resulted in special A&E charges of $67 million for the property and casualty group and $12 million for the former railroad and manufacturing operations. AFG completed an in-depth internal review of its A&E exposures in the third quarter of 2014, which resulted in special A&E charges of $24 million for the property and casualty group and $6 million for the former railroad and manufacturing operations. The property and casualty group’s liability for asbestos and environmental reserves was $443 million at December 31, 2016 ; related recoverables from reinsurers (net of allowances for doubtful accounts) at that date were $106 million . At December 31, 2016 , American Premier and its subsidiaries had liabilities for environmental and personal injury claims and other contingencies aggregating $77 million . The environmental claims consist of a number of proceedings and claims seeking to impose responsibility for hazardous waste remediation costs related to certain sites formerly owned or operated by the railroad and manufacturing operations. Remediation costs are difficult to estimate for a number of reasons, including the number and financial resources of other potentially responsible parties, the range of costs for remediation alternatives, changing technology and the time period over which these matters develop. The personal injury claims and other contingencies include pending and expected claims, primarily by former employees of PCTC, for injury or disease allegedly caused by exposure to excessive noise, asbestos or other substances in the workplace and other labor disputes. At December 31, 2016 , GAFRI had a liability of approximately $9 million for environmental costs and certain other matters associated with the sales of its former manufacturing operations. See Note B — “ Acquisitions and Sale of Businesses ” for a discussion of the five -year capital maintenance agreement that AFG entered into in connection with obtaining regulatory approval for the sale of substantially all of its run-off long-term care insurance business in December 2015. While management believes AFG has recorded adequate reserves for the items discussed above in this note, the outcome is uncertain and could result in liabilities that may vary from amounts AFG has currently recorded. Such amounts could have a material effect on AFG’s future results of operations and financial condition. In addition, AFG and its subsidiaries are involved in litigation from time to time, generally arising in the ordinary course of business. This litigation may include, but is not limited to, general commercial disputes, lawsuits brought by policyholders, employment matters, reinsurance collection matters and actions challenging certain business practices of insurance subsidiaries. None of these matters are expected to have a material adverse impact on AFG’s results of operations or financial condition. |
Quarterly Operating Results (Un
Quarterly Operating Results (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Operating Results (Unaudited) | Quarterly Operating Results (Unaudited) The operations of certain AFG business segments are seasonal in nature. While insurance premiums are recognized on a relatively level basis, claim losses related to adverse weather (snow, hail, hurricanes, severe storms, tornadoes, etc.) may be seasonal. The profitability of AFG’s crop insurance business is primarily recognized during the second half of the year as crop prices and yields are determined. Quarterly results necessarily rely heavily on estimates. These estimates and certain other factors, such as the discretionary sales of assets, cause the quarterly results not to be necessarily indicative of results for longer periods of time. The following are quarterly results of consolidated operations for the two years ended December 31, 2016 (in millions, except per share amounts). Quarterly earnings per share do not add to year-to-date amounts due to changes in shares outstanding. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Year 2016 Revenues $ 1,475 $ 1,581 $ 1,705 $ 1,737 $ 6,498 Net earnings, including noncontrolling interests 104 63 113 388 668 Net earnings attributable to shareholders 101 54 109 385 649 Earnings attributable to shareholders per Common Share: Basic $ 1.16 $ 0.63 $ 1.25 $ 4.43 $ 7.47 Diluted 1.14 0.62 1.23 4.33 7.33 Average number of Common Shares: Basic 86.9 86.8 86.9 86.9 86.9 Diluted 88.5 88.4 88.5 88.8 88.5 2015 Revenues $ 1,297 $ 1,543 $ 1,687 $ 1,618 $ 6,145 Net earnings, including noncontrolling interests 25 149 66 130 370 Net earnings attributable to shareholders 19 141 63 129 352 Earnings attributable to shareholders per Common Share: Basic $ 0.22 $ 1.60 $ 0.72 $ 1.48 $ 4.02 Diluted 0.21 1.57 0.71 1.45 3.94 Average number of Common Shares: Basic 87.6 87.7 87.5 87.4 87.6 Diluted 89.4 89.5 89.3 89.2 89.4 Pretax realized gains on subsidiaries and securities (including other-than-temporary impairments) and favorable (adverse) prior year development of AFG’s liability for losses and loss adjustment expenses (“LAE”) were as follows (in millions): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Year Realized Gains (Losses) on Securities and Subsidiaries 2016 $ (18 ) $ (14 ) $ 2 $ 51 $ 21 2015 (143 ) (1 ) (11 ) (25 ) (180 ) Prior Year Development Favorable (Adverse) 2016 $ 28 $ (28 ) $ (22 ) $ (10 ) $ (32 ) 2015 7 10 (55 ) 5 (33 ) Realized losses on subsidiaries in 2015 include a $166 million realized loss (consisting of an initial loss estimate of $162 million recorded in the first quarter and a $4 million loss adjustment in the fourth quarter) related to the impact of the sale of two subsidiaries, which contained substantially all of AFG’s long-term care insurance business. See Note B — “ Acquisitions and Sale of Businesses .” During the second quarter of 2016, AFG recorded a pretax charge of $65 million related to Neon’s claims review of its exited lines of business, including $57 million to increase loss reserves primarily related to its medical malpractice and general liability classes. Adverse prior year development for the third quarters of 2016 and 2015 include pretax special charges of $36 million and $67 million , respectively, to strengthen property and casualty insurance A&E reserves. Results include pretax gains (included in other income) of $32 million from the sale of an apartment property in the second quarter of 2016, $51 million from the sale of a hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015. Results for the third quarter of 2016 and 2015 include pretax special charges of $5 million and $12 million , respectively, to strengthen reserves for A&E exposures related to AFG’s former railroad and manufacturing operations. Net earnings in the fourth quarter of 2016 includes $177 million in tax benefits related to the NATL merger and Neon restructuring. See Note L — “ Income Taxes .” |
Insurance
Insurance | 12 Months Ended |
Dec. 31, 2016 | |
Insurance [Abstract] | |
Insurance | Insurance Cash and securities owned by U.S.-based insurance subsidiaries, having a carrying value of approximately $1.00 billion at December 31, 2016 , were on deposit as required by regulatory authorities. In addition, $215 million was on deposit in support of AFG’s underwriting activities at Lloyd’s. At December 31, 2016 , AFG and its subsidiaries had $332 million in undrawn letters of credit ( none of which was collateralized) supporting the underwriting capacity of its U.K.-based Lloyd’s insurer, Neon. Property and Casualty Insurance Reserves Estimating the liability for unpaid losses and loss adjustment expenses (“LAE”) is inherently judgmental and is influenced by factors that are subject to significant variation. Determining the liability is a complex process incorporating input from many areas of the Company including actuarial, underwriting, pricing, claims and operations management. The process used to determine the total reserve for liabilities involves estimating the ultimate incurred losses and LAE, adjusted for amounts already paid on the claims. The IBNR reserve is derived by first estimating the ultimate unpaid reserve liability and subtracting case reserves for loss and LAE. In determining management’s best estimate of the ultimate liability, management (with the assistance of Company actuaries) considers items such as the effect of inflation on medical, hospitalization, material, repair and replacement costs, the nature and maturity of lines of insurance, general economic trends and the legal environment. In addition, historical trends adjusted for changes in underwriting standards, policy provisions, product mix and other factors are analyzed using actuarial reserve development techniques. Weighing all of the factors, the management team determines a single or “point” estimate that it records as its best estimate of the ultimate liability. Ranges of loss reserves are not developed by Company actuaries. This reserve analysis and review is completed each quarter and for almost every business within AFG’s property and casualty sub-segments. Each review includes in-depth analysis of several hundred subdivisions of the business, employing multiple actuarial techniques. For each subdivision, actuaries use informed, professional judgment to adjust these techniques as necessary to respond to specific conditions in the data or within the business. Some of the standard actuarial methods employed for the quarterly reserve analysis may include (but may not be limited to): • Case Incurred Development Method • Paid Development Method • Bornhuetter-Ferguson Method • Incremental Paid LAE to Paid Loss Methods Management believes that each method has particular strengths and weaknesses and that no single estimation method is most accurate in all situations. When applied to a particular group of claims, the relative strengths and weaknesses of each method can change over time based on the facts and circumstances. Ultimately, the estimation methods chosen are those which management believes produce the most reliable indication for the particular liabilities under review. The period of time from the occurrence of a loss through the settlement of the liability is referred to as the “tail”. Generally, the same actuarial methods are considered for both short-tail and long-tail lines of business because most of them work properly for both. The methods are designed to incorporate the effects of the differing length of time to settle particular claims. For short-tail lines, management tends to give more weight to the Case Incurred and Paid Development methods, although the various methods tend to produce similar results. For long-tail lines, more judgment is involved, and more weight may be given to the Bornhuetter-Ferguson method. Liability claims for long-tail lines are more susceptible to litigation and can be significantly affected by changing contract interpretation and the legal environment. Therefore, the estimation of loss reserves for these classes is more complex and subject to a higher degree of variability. The level of detail in which data is analyzed varies among the different lines of business. Data is generally analyzed by major product or by coverage within product, using countrywide data; however, in some situations, data may be reviewed by state or region. Appropriate segmentation of the data is determined based on data credibility, homogeneity of development patterns, mix of business, and other actuarial considerations. Supplementary statistical information is also reviewed to determine which methods are most appropriate to use or if adjustments are needed to particular methods. Such information includes: • Open and closed claim counts • Average case reserves and average incurred on open claims • Closure rates and statistics related to closed and open claim percentages • Average closed claim severity • Ultimate claim severity • Reported loss ratios • Projected ultimate loss ratios • Loss payment patterns Within each business, results of individual methods are reviewed, supplementary statistical information is analyzed, and data from underwriting, operating and claim management are considered in deriving management’s best estimate of the ultimate liability. This estimate may be the result of one method, a weighted average of several methods, or a judgmental selection as the management team determines is appropriate. The liability for losses and LAE for a very limited number of claims with long-term scheduled payments under certain workers’ compensation policies has been discounted at 4.5% at both December 31, 2016 and 2015 , which represents an approximation of long-term investment yields. Because of the limited amount of claims involved, the net impact of discounting did not materially impact AFG’s total liability for unpaid losses and loss adjustment expenses (net reductions from discounting of $16 million and $18 million at December 31, 2016 and 2015 , respectively). The following table provides an analysis of changes in the liability for losses and loss adjustment expenses over the past three years (in millions): 2016 2015 2014 Balance at beginning of period $ 8,127 $ 7,872 $ 6,410 Less reinsurance recoverables, net of allowance 2,201 2,227 2,122 Net liability at beginning of period 5,926 5,645 4,288 Provision for losses and LAE occurring in the current year 2,730 2,662 2,488 Net increase (decrease) in the provision for claims of prior years: Special A&E charges 36 67 24 Neon exited lines charge 57 — — Other (61 ) (34 ) (18 ) Total losses and LAE incurred 2,762 2,695 2,494 Payments for losses and LAE of: Current year (841 ) (828 ) (789 ) Prior years (1,512 ) (1,575 ) (1,340 ) Total payments (2,353 ) (2,403 ) (2,129 ) Reserves of businesses acquired (disposed) (*) (40 ) — 1,028 Foreign currency translation and other (34 ) (11 ) (36 ) Net liability at end of period 6,261 5,926 5,645 Add back reinsurance recoverables, net of allowance 2,302 2,201 2,227 Gross unpaid losses and LAE included in the balance sheet $ 8,563 $ 8,127 $ 7,872 (*) Reflects the November 2016 reinsurance to close transaction at Neon (discussed below) and the acquisition of Summit in April 2014 (discussed in Note B — “ Acquisitions and Sale of Businesses ” ). The net increase in the provision for claims of prior years in 2016 reflects (i) reserve strengthening at National Interstate (within the Property and transportation sub-segment), (ii) adverse reserve development at Neon and higher than anticipated severity in New York contractor claims (within the Specialty casualty sub-segment), (iii) the $57 million special charge to increase loss reserves related to Neon’s exit of its UK and international medical malpractice and general liability lines of business, and (iv) the $36 million special charge to increase asbestos and environmental reserves. This adverse development was partially offset by (i) lower than expected losses in crop operations and lower than expected claim severity in the property and inland marine and trucking businesses (all within the Property and transportation sub-segment), (ii) lower than anticipated claim frequency and severity in workers’ compensation business, lower than expected claim severity in directors and officers liability insurance and lower than expected claim frequency and severity in excess liability business (all within the Specialty casualty sub-segment), and (iii) lower than anticipated claim severity in the fidelity and crime business and lower than expected claim frequency and severity in the surety business (within the Specialty financial sub-segment). The net increase in the provision for claims of prior years in 2015 reflects (i) higher than expected claim severity at National Interstate and higher than anticipated claim frequency in the ocean marine business (all within the Property and transportation sub-segment), (ii) adverse reserve development at Neon (within the Specialty casualty sub-segment), and (iii) the $67 million special charge to increase asbestos and environmental reserves. This adverse development was partially offset by (i) lower than expected claim severity in the property and inland marine business, agricultural operations and a run-off book of homebuilders business (all within the Property and transportation sub-segment), (ii) lower than anticipated claim severity in workers’ compensation business, lower than anticipated claim severity and frequency in excess liability insurance and lower than expected claim severity in directors and officers liability insurance (all within the Specialty casualty sub-segment), and (iii) lower than anticipated claim frequency and severity in the surety business and products for financial institutions and lower than expected claim severity in the fidelity business and run-off collateral value insurance (all within the Specialty financial sub-segment). Net adverse reserve development in 2014 reflects higher than expected severity in commercial auto liability losses written in the transportation businesses (within the Property and transportation sub-segment), higher than expected claims severity in contractor claims and in a run-off book of casualty business and adverse reserve development at Neon (all within the Specialty casualty sub-segment), and the $24 million special charge to increase asbestos and environmental reserves. This adverse reserve development was offset by (i) lower than expected claim severity in directors and officers liability insurance, lower than expected claim severity and frequency in excess liability insurance and lower than anticipated claim severity in specialty workers’ compensation business (all within the Specialty casualty sub-segment), and (ii) lower than expected claim severity in the surety and fidelity businesses and lower than expected claim frequency and severity in the foreign credit business and products for financial institutions (all within the Specialty financial sub-segment). In November 2016, the Neon Lloyd’s syndicate completed a reinsurance to close transaction for its 2007 year of account with StarStone Underwriting Limited, a subsidiary of Enstar Group Limited. The transaction included a quota share of the Italian public hospital business written in Neon’s 2008 year of account and represents Neon’s complete exit from the Italian public hospital medical malpractice business. In the Lloyd’s market, a reinsurance to close transaction transfers the responsibility for discharging all of the liabilities that attach to the transferred year of account plus the right to any income due to the closing year of account in return for a premium. In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures about Short-Duration Contracts . The ASU requires insurance entities to disclose incurred and paid claims development information by accident year, net of reinsurance. All of AFG’s material short-duration insurance contracts are written in its property and casualty insurance segment. The development tables and the associated disclosures are aggregated in the following Specialty sub-segments: Property and transportation, Specialty casualty, Specialty financial and Other specialty. See Note C — “ Segments of Operations ” to the financial statements for a discussion of these sub-segments. 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): 2016 2015 Unpaid losses and allocated LAE, net of reinsurance: Specialty Property and transportation $ 1,020 $ 971 Specialty casualty 3,356 3,170 Specialty financial 228 219 Other specialty 240 240 Total Specialty (excluding foreign reserves) 4,844 4,600 Other reserves Reserves for foreign operations 710 648 A&E reserves 337 327 Unallocated LAE 310 296 Other 60 55 Total other reserves 1,417 1,326 Total reserves, net of reinsurance 6,261 5,926 Add back reinsurance recoverables, net of allowance 2,302 2,201 Gross unpaid losses and LAE included in the balance sheet $ 8,563 $ 8,127 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, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 657 $ 595 $ 577 $ 572 $ 572 $ 569 $ 569 $ 568 $ 568 $ 568 $ 1 126,900 2008 923 871 852 853 856 854 855 856 854 3 157,173 2009 526 506 523 516 511 511 508 508 4 140,530 2010 702 662 668 676 679 679 683 10 140,614 2011 830 816 831 845 856 868 16 140,408 2012 890 884 897 909 922 27 146,584 2013 911 898 902 908 40 142,139 2014 868 852 841 67 137,214 2015 840 802 106 134,407 2016 760 250 109,187 Total $ 7,714 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 284 $ 450 $ 492 $ 523 $ 539 $ 553 $ 559 $ 562 $ 563 $ 564 99.3 % 2008 352 706 761 799 824 835 846 846 847 99.2 % 2009 229 348 413 456 479 493 497 499 98.2 % 2010 328 505 556 618 649 660 665 97.4 % 2011 373 679 742 787 821 840 96.8 % 2012 582 725 793 841 868 94.1 % 2013 449 721 784 831 91.5 % 2014 337 646 711 84.5 % 2015 367 594 74.1 % 2016 296 38.9 % Total $ 6,715 Unpaid losses and LAE — years 2007 through 2016 999 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 21 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 1,020 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 46.5 % 29.5 % 7.9 % 6.1 % 3.6 % 2.1 % 1.0 % 0.3 % 0.1 % 0.2 % Cumulative 46.5 % 76.0 % 83.9 % 90.0 % 93.6 % 95.7 % 96.7 % 97.0 % 97.1 % 97.3 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). Specialty casualty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 1,036 $ 957 $ 892 $ 852 $ 828 $ 821 $ 818 $ 794 $ 802 $ 803 $ 40 62,676 2008 905 891 874 860 871 856 855 849 855 48 59,886 2009 864 867 845 826 816 811 812 807 58 53,097 2010 847 863 864 842 856 846 845 74 52,771 2011 831 831 819 828 814 808 89 50,635 2012 874 865 859 859 855 124 49,732 2013 938 921 915 910 159 49,239 2014 1,011 984 984 263 51,808 2015 1,057 1,023 380 52,001 2016 1,105 636 47,436 Total $ 8,995 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 166 $ 357 $ 477 $ 563 $ 623 $ 664 $ 692 $ 708 $ 724 $ 733 91.3 % 2008 162 355 490 588 653 702 727 751 768 89.8 % 2009 160 366 494 575 636 673 698 713 88.4 % 2010 179 393 539 623 676 712 734 86.9 % 2011 165 369 506 595 643 674 83.4 % 2012 163 368 495 596 658 77.0 % 2013 171 377 530 638 70.1 % 2014 182 398 556 56.5 % 2015 170 398 38.9 % 2016 181 16.4 % Total $ 6,053 Unpaid losses and LAE — years 2007 through 2016 2,942 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 414 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 3,356 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 19.0 % 23.7 % 16.1 % 11.0 % 7.0 % 4.7 % 3.0 % 2.2 % 2.0 % 1.1 % Cumulative 19.0 % 42.7 % 58.8 % 69.8 % 76.8 % 81.5 % 84.5 % 86.7 % 88.7 % 89.8 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). Specialty financial (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 170 $ 165 $ 159 $ 149 $ 145 $ 144 $ 142 $ 141 $ 140 $ 136 $ 1 21,643 2008 190 207 212 209 203 199 198 197 198 1 27,287 2009 193 193 187 184 188 186 187 186 1 27,438 2010 139 146 133 133 135 133 130 3 21,921 2011 140 158 157 155 148 146 14 16,364 2012 164 163 151 139 137 15 21,029 2013 141 145 137 131 15 28,220 2014 146 157 156 22 28,814 2015 156 159 36 35,880 2016 179 75 29,464 Total $ 1,558 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 82 $ 114 $ 126 $ 133 $ 134 $ 135 $ 135 $ 135 $ 136 $ 135 99.3 % 2008 103 153 185 189 189 191 193 194 194 98.0 % 2009 112 145 157 166 171 182 185 186 100.0 % 2010 61 93 104 122 133 131 128 98.5 % 2011 59 113 116 124 131 132 90.4 % 2012 71 104 109 117 121 88.3 % 2013 70 100 107 114 87.0 % 2014 62 108 125 80.1 % 2015 72 109 68.6 % 2016 87 48.6 % Total $ 1,331 Unpaid losses and LAE — years 2007 through 2016 227 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 1 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 228 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 49.9 % 25.3 % 7.7 % 6.1 % 3.3 % 1.4 % 0.1 % 0.3 % 0.4 % (0.7 %) Cumulative 49.9 % 75.2 % 82.9 % 89.0 % 92.3 % 93.7 % 93.8 % 94.1 % 94.5 % 93.8 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). Other specialty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims (a) Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 45 $ 42 $ 42 $ 42 $ 40 $ 39 $ 36 $ 36 $ 33 $ 30 $ 10 — 2008 49 49 49 49 48 46 45 45 44 4 — 2009 41 41 41 40 37 37 36 38 11 — 2010 36 39 40 39 40 40 40 4 — 2011 39 43 42 43 43 44 5 — 2012 42 40 39 40 41 10 — 2013 46 47 46 47 6 — 2014 58 57 59 21 — 2015 59 60 27 — 2016 61 44 — Total $ 464 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (b) 2007 $ 6 $ 10 $ 12 $ 15 $ 17 $ 18 $ 19 $ 20 $ 21 $ 21 70.0 % 2008 10 16 23 31 35 37 37 37 38 86.4 % 2009 8 12 15 19 22 22 24 26 68.4 % 2010 8 14 21 24 27 33 35 87.5 % 2011 12 20 25 28 34 36 81.8 % 2012 8 17 21 25 28 68.3 % 2013 7 16 22 34 72.3 % 2014 13 21 30 50.8 % 2015 10 26 43.3 % 2016 9 14.8 % Total $ 283 Unpaid losses and LAE — years 2007 through 2016 181 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 59 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 240 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 19.9 % 16.9 % 12.1 % 12.6 % 8.7 % 5.5 % 3.4 % 2.9 % 2.8 % — % Cumulative 19.9 % 36.8 % 48.9 % 61.5 % 70.2 % 75.7 % 79.1 % 82.0 % 84.8 % 84.8 % (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, 2016 ). Total Specialty Group (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 1,908 $ 1,759 $ 1,670 $ 1,615 $ 1,585 $ 1,573 $ 1,565 $ 1,539 $ 1,543 $ 1,537 $ 52 211,219 2008 2,067 2,018 1,987 1,971 1,978 1,955 1,953 1,947 1,951 56 244,346 2009 1,624 1,607 1,596 1,566 1,552 1,545 1,543 1,539 74 221,065 2010 1,724 1,710 1,705 1,690 1,710 1,698 1,698 91 215,306 2011 1,840 1,848 1,849 1,871 1,861 1,866 124 207,407 2012 1,970 1,952 1,946 1,947 1,955 176 217,345 2013 2,036 2,011 2,000 1,996 220 219,598 2014 2,083 2,050 2,040 373 217,836 2015 2,112 2,044 549 222,288 2016 2,105 1,005 186,087 Total $ 18,731 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 538 $ 931 $ 1,107 $ 1,234 $ 1,313 $ 1,370 $ 1,405 $ 1,425 $ 1,444 $ 1,453 94.5 % 2008 627 1,230 1,459 1,607 1,701 1,765 1,803 1,828 1,847 94.7 % 2009 509 871 1,079 1,216 1,308 1,370 1,404 1,424 92.5 % 2010 576 1,005 1,220 1,387 1,485 1,536 1,562 92.0 % 2011 609 1,181 1,389 1,534 1,629 1,682 90.1 % 2012 824 1,214 1,418 1,579 1,675 85.7 % 2013 697 1,214 1,443 1,617 81.0 % 2014 594 1,173 1,422 69.7 % 2015 619 1,127 55.1 % 2016 573 27.2 % Total $ 14,382 Unpaid losses and LAE — years 2007 through 2016 4,349 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 495 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 4,844 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 33.0 % 26.1 % 11.8 % 8.5 % 5.3 % 3.4 % 2.0 % 1.3 % 1.1 % 0.6 % Cumulative 33.0 % 59.1 % 70.9 % 79.4 % 84.7 % 88.1 % 90.1 % 91.4 % 92.5 % 93.1 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). Closed Block of Long-Term Care Insurance Following the completion of the sale of substantially all of its run-off long-term care insurance business in December 2015, AFG’s remaining long-term care insurance reserves were $37 million at December 31, 2016 and $34 million at December 31, 2015 , net of reinsurance recoverables and excluding the impact of unrealized gains on securities. AFG’s remaining outstanding long-term care policies have level premiums and are guaranteed renewable. Premium rates can potentially be increased in reaction to adverse experience; however, any rate increases would require regulatory approval. FHLB Funding Agreements Great American Life Insurance Company (“GALIC”), a wholly-owned annuity subsidiary, is a member of the Federal Home Loan Bank of Cincinnati (“FHLB”). The FHLB makes advances and provides other banking services to member institutions. Members are required to purchase stock in the FHLB in addition to maintaining collateral deposits that back any funds advanced. GALIC’s $44 million investment in FHLB capital stock at December 31, 2016 , is included in other investments at cost. Membership in the FHLB provides the annuity operations with an additional source of liquidity. These advances further the FHLB’s mission of improving access to housing by increasing liquidity in the residential mortgage-backed securities market. In 2016 , the FHLB advanced GALIC $150 million , increasing the total amount advanced to $935 million (included in annuity benefits accumulated) at December 31, 2016 . In the fourth quarter of 2016 , GALIC extended the terms on advances totaling $200 million by four years. Interest rates under the various funding agreements on these advances range from 0.03% to 0.53% over LIBOR (average rate of 1.18% at December 31, 2016 ). While these advances must be repaid between 2018 and 2021 ( $285 million in 2018, $500 million in 2020 and $150 million in 2021), GALIC has the option to prepay all or a portion of the advances. The advances on these agreements are collateralized by mortgage-backed securities, which have a total fair value of $1.08 billion (included in available for sale fixed maturity securities) at December 31, 2016 and which have similar expected lives as the advances. Interest credited on the funding agreements, which is included in annuity benefits, was $8 million in 2016 , $3 million in 2015 and $1 million in 2014 . Statutory Information AFG’s U.S.-based insurance subsidiaries are required to file financial statements with state insurance regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). Net earnings and capital and surplus on a statutory basis for the insurance subsidiaries were as follows (in millions): Net Earnings Capital and Surplus 2016 2015 2014 2016 2015 Property and casualty companies $ 461 $ 408 $ 318 $ 2,939 $ 2,488 Life insurance companies 167 399 349 1,976 1,721 The National Association of Insurance Commissioners’ (“NAIC”) model law for risk based capital (“RBC”) applies to both life and property and casualty insurance companies. RBC formulas determine the amount of capital that an insurance company needs so that it has an acceptable expectation of not becoming financially impaired. Companies below specific trigger points or ratios are subject to regulatory action. At December 31, 2016 and 2015 , the capital ratios of all AFG insurance companies substantially exceeded the RBC requirements. AFG’s insurance companies did not use any prescribed or permitted statutory accounting practices that differed from the NAIC statutory accounting practices at December 31, 2016 or 2015 . Payments of dividends by AFG’s insurance companies are subject to various state laws that limit the amount of dividends that can be paid. Under applicable restrictions, the maximum amount of dividends available to AFG in 2017 from its insurance subsidiaries without seeking regulatory approval is $693 million . Additional amounts of dividends require regulatory approval. AFG paid common stock dividends to shareholders totaling $187 million , $178 million and $169 million in 2016 , 2015 and 2014 , respectively. Currently, there are no regulatory restrictions on AFG’s retained earnings or net income that materially impact its ability to pay dividends. Based on shareholders’ equity at December 31, 2016 , AFG could pay dividends in excess of $1 billion without violating its most restrictive debt covenant. However, the payment of future dividends will be at the discretion of AFG’s Board of Directors and will be dependent on many factors including AFG’s financial condition and results of operations, the capital requirements of its insurance subsidiaries, and rating agency commitments. Reinsurance In the normal course of business, AFG’s insurance subsidiaries cede reinsurance to other companies to diversify risk and limit maximum loss arising from large claims. To the extent that any reinsuring companies are unable to meet obligations under agreements covering reinsurance ceded, AFG’s insurance subsidiaries would remain liable. 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. 2016 2015 2014 Direct premiums written $ 5,858 $ 5,713 $ 5,387 Reinsurance assumed 123 119 90 Reinsurance ceded (1,595 ) (1,505 ) (1,457 ) Net written premiums $ 4,386 $ 4,327 $ 4,020 Direct premiums earned $ 5,745 $ 5,613 $ 5,195 Reinsurance assumed 118 105 75 Reinsurance ceded (1,535 ) (1,494 ) (1,392 ) Net earned premiums $ 4,328 $ 4,224 $ 3,878 Reinsurance recoveries $ 810 $ 936 $ 895 In March 2014, AFG’s property and casualty insurance operations entered into a reinsurance agreement to obtain additional catastrophe protection through a catastrophe bond structure with Riverfront Re Ltd. (“Riverfront”). The reinsurance agreement provided supplemental reinsurance coverage for catastrophe losses occurring between April 1, 2014 and January 6, 2017. In connection with the reinsurance agreement, Riverfront issued notes to unrelated investors for the full amount of coverage provided under the reinsurance agreement. At the time of the agreement, AFG concluded that Riverfront is a variable interest entity, but that it did not have a variable interest in the entity because the variability in Riverfront’s results was expected to be absorbed entirely by the investors in Riverfront. Accordingly, Riverfront is not consolidated in AFG’s financial statements and the reinsurance agreement is accounted for as ceded reinsurance. AFG’s cost for this coverage was approximately $5 million per year. AFG has reinsured approximately $10.22 billion of its $13.49 billion in face amount of life insurance at December 31, 2016 compared to $11.19 billion of its $14.67 billion in face amount of life insurance at December 31, 2015 . Life written premiums ceded were $31 million , $40 million and $41 million for 2016 , 2015 and 2014 , respectively. Reinsurance recoveries on ceded life policies were $41 million , $50 million and $59 million for 2016 , 2015 and 2014 , respectively. Fixed Annuities For certain products, the liability for “annuity benefits accumulated” includes reserves for excess benefits expected to be paid on future deaths and annuitizations (“EDAR”), 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): 2016 2015 Expected death and annuitization $ 223 $ 214 Guaranteed withdrawal benefits 278 203 Accrued persistency and premium bonuses 6 11 Variable Annuities At December 31, 2016 , the aggregate guaranteed minimum death benefit value (assuming every variable annuity policyholder died on that date) on AFG’s variable annuity policies exceeded the fair value of the underlying variable annuities by $20 million , compared to $27 million at December 31, 2015 . Death benefits paid in excess of the variable annuity account balances were less than $1 million in each of the last three years. |
Additional Information
Additional Information | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Information | Additional Information AFG’s aggregate allowance for uncollectible reinsurance recoverables was $22 million at both December 31, 2016 and 2015 . AFG reviews the allowance quarterly and adjusts it as necessary to reflect changes in estimates of uncollectible balances. In 2016 and 2015, AFG recorded net expense reductions of less than $1 million and $3 million , respectively, against the allowance. In 2014, AFG recorded a charge of $4 million against the allowance (included in losses and loss adjustment expenses). In 2014, the allowance was reduced by reinsurance recoverable write-offs of $6 million . Operating Leases Total rental expense for various leases of office space and equipment was $67 million in 2016 , $70 million in 2015 and $65 million in 2014 . Future minimum rentals, related principally to office space, required under operating leases having initial or remaining noncancelable lease terms in excess of one year at December 31, 2016 , were as follows: 2017 – $66 million ; 2018 – $60 million ; 2019 – $53 million ; 2020 – $45 million ; 2021 – $37 million ; and $128 million thereafter. Financial Instruments — Unfunded Commitments On occasion, AFG and its subsidiaries have entered into financial instrument transactions that may present off-balance-sheet risks of both a credit and market risk nature. These transactions include commitments to fund loans, loan guarantees and commitments to purchase and sell securities or loans. At December 31, 2016 , AFG and its subsidiaries had commitments to fund credit facilities and contribute capital to limited partnerships and limited liability corporations of approximately $377 million . Benefit Plans AFG expensed approximately $43 million in 2016 , $34 million in 2015 and $30 million in 2014 for its retirement and employee savings plans. |
Condensed Financial Information
Condensed Financial Information of Parent Company | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Financial Information of Parent Company | AMERICAN FINANCIAL GROUP, INC. — PARENT ONLY SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT (In Millions) Condensed Balance Sheet December 31, 2016 2015 Assets: Cash and cash equivalents $ 197 $ 189 Investment in securities 63 63 Investment in subsidiaries (a) 5,989 5,439 Other investments 2 2 Other assets 136 84 Total assets $ 6,387 $ 5,777 Liabilities and Equity: Long-term debt $ 1,283 $ 986 Other liabilities 188 199 Shareholders’ equity 4,916 4,592 Total liabilities and equity $ 6,387 $ 5,777 Condensed Statement of Earnings Year ended December 31, 2016 2015 2014 Revenues: Dividends from subsidiaries $ 643 $ 311 $ 480 Equity in undistributed earnings of subsidiaries 286 386 332 Investment and other income 7 4 5 Total revenues 936 701 817 Costs and Expenses: Interest charges on intercompany borrowings 9 9 10 Interest charges on other borrowings 77 73 70 Other expenses 82 72 65 Total costs and expenses 168 154 145 Earnings before income taxes 768 547 672 Provision for income taxes 119 195 220 Net Earnings Attributable to Shareholders $ 649 $ 352 $ 452 Condensed Statement of Comprehensive Income Net earnings attributable to shareholders $ 649 $ 352 $ 452 Other comprehensive income (loss), net of tax 62 (423 ) 167 Total comprehensive income (loss), net of tax $ 711 $ (71 ) $ 619 ________________________ (a) Investment in subsidiaries includes intercompany receivables and payables. Condensed Statement of Cash Flows Year ended December 31, 2016 2015 2014 Operating Activities: Net earnings attributable to shareholders $ 649 $ 352 $ 452 Adjustments: Equity in net earnings of subsidiaries (638 ) (451 ) (545 ) Dividends from subsidiaries 611 280 451 Other operating activities, net (67 ) (19 ) 14 Net cash provided by operating activities 555 162 372 Investing Activities: Capital contributions to subsidiaries (560 ) (27 ) (431 ) Returns of capital from subsidiaries — 1 — Purchases of investments, property and equipment (1 ) (10 ) (1 ) Proceeds from maturities and redemptions of investments 1 — — Proceeds from sales of investments, property and equipment — 3 — Net cash used in investing activities (560 ) (33 ) (432 ) Financing Activities: Additional long-term borrowings 296 145 145 Reductions of long-term debt — (132 ) — Issuances of Common Stock 35 57 42 Repurchases of Common Stock (133 ) (126 ) (191 ) Cash dividends paid on Common Stock (185 ) (176 ) (167 ) Net cash provided by (used in) financing activities 13 (232 ) (171 ) Net Change in Cash and Cash Equivalents 8 (103 ) (231 ) Cash and cash equivalents at beginning of year 189 292 523 Cash and cash equivalents at end of year $ 197 $ 189 $ 292 |
Supplementary Insurance Informa
Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2016 | |
Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information | AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES SCHEDULE III — SUPPLEMENTARY INSURANCE INFORMATION THREE YEARS ENDED DECEMBER 31, 2016 (IN MILLIONS) Segment Deferred policy acquisition costs Reserves for future policy benefits, claims and unpaid losses and LAE Unearned premiums Net earned premiums Net investment income Benefits, claims, losses and settlement expenses Amortization of deferred policy acquisition costs Other operating expenses Net written premiums (excluding life) 2016 Property and casualty insurance $ 238 $ 8,563 $ 2,171 $ 4,328 $ 350 $ 2,762 $ 520 $ 870 $ 4,386 Annuity 981 29,907 — — 1,356 800 149 142 — Run-off long-term care and life 20 691 — 24 21 33 4 10 3 Other — — — — (31 ) — — 421 — Total $ 1,239 $ 39,161 $ 2,171 $ 4,352 $ 1,696 $ 3,595 $ 673 $ 1,443 $ 4,389 2015 Property and casualty insurance $ 226 $ 8,127 $ 2,060 $ 4,224 $ 319 $ 2,695 $ 511 $ 839 $ 4,327 Annuity 934 26,622 — — 1,224 732 136 123 — Run-off long-term care and life 24 705 — 104 80 131 6 37 73 Other — — — — 10 — — 370 — Total $ 1,184 $ 35,454 $ 2,060 $ 4,328 $ 1,633 $ 3,558 $ 653 $ 1,369 $ 4,400 2014 Property and casualty insurance $ 221 $ 7,872 $ 1,956 $ 3,878 $ 294 $ 2,494 $ 485 $ 746 $ 4,020 Annuity 564 23,764 — — 1,136 648 155 102 — Run-off long-term care and life 36 2,175 — 108 82 164 6 35 74 Other — — — — (11 ) — — 272 — Total $ 821 $ 33,811 $ 1,956 $ 3,986 $ 1,501 $ 3,306 $ 646 $ 1,155 $ 4,094 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of American Financial Group, Inc. and its subsidiaries (“AFG”). Certain reclassifications have been made to prior years to conform to the current year’s presentation. All significant intercompany balances and transactions have been eliminated. The results of operations of companies since their formation or acquisition are included in the consolidated financial statements. Events or transactions occurring subsequent to December 31, 2016 , and prior to the filing of this Form 10-K, have been evaluated for potential recognition or disclosure herein. The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates. |
Fair Value Measurements | Fair Value Measurements Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The standards establish a hierarchy of valuation techniques based on whether the assumptions that market participants would use in pricing the asset or liability (“inputs”) are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect AFG’s assumptions about the assumptions market participants would use in pricing the asset or liability. Other than the fair value measurements used in recording the loss on the sale of substantially all of its long-term care business in 2015 (see Note B — “ Acquisitions and Sale of Businesses ”), AFG did not have any significant nonrecurring fair value measurements of nonfinancial assets and liabilities in 2016 or 2015 . |
Investments | Investments Fixed maturity and equity securities classified as “available for sale” are reported at fair value with unrealized gains and losses included in accumulated other comprehensive income (“AOCI”) in AFG’s Balance Sheet. Fixed maturity and equity securities classified as “trading” are reported at fair value with changes in unrealized holding gains or losses during the period included in net investment income. Mortgage and policy loans are carried primarily at the aggregate unpaid balance. In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, which, among other things, will require all equity securities currently classified as “available for sale” to be reported at fair value, with holding gains and losses recognized in net income, instead of AOCI. AFG will be required to adopt this guidance effective January 1, 2018. Premiums and discounts on fixed maturity securities are amortized using the interest method. Mortgage-backed securities (“MBS”) are amortized over a period based on estimated future principal payments, including prepayments. Prepayment assumptions are reviewed periodically and adjusted to reflect actual prepayments and changes in expectations. Gains or losses on securities are determined on the specific identification basis. When a decline in the value of a specific investment is considered to be other-than-temporary at the balance sheet date, a provision for impairment is charged to earnings (included in realized gains (losses) on securities) and the cost basis of that investment is reduced. If management can assert that it does not intend to sell an impaired fixed maturity security and it is not more likely than not that it will have to sell the security before recovery of its amortized cost basis, then the other-than-temporary impairment is separated into two components: (i) the amount related to credit losses (recorded in earnings) and (ii) the amount related to all other factors (recorded in other comprehensive income). The credit-related portion of an other-than-temporary impairment is measured by comparing a security’s amortized cost to the present value of its current expected cash flows discounted at its effective yield prior to the impairment charge. Both components are shown in the statement of earnings. If management intends to sell an impaired security, or it is more likely than not that it will be required to sell the security before recovery, an impairment charge to earnings is recorded to reduce the amortized cost of that security to fair value. |
Derivatives | Derivatives Derivatives included in AFG’s Balance Sheet are recorded at fair value. Changes in fair value of derivatives are included in earnings, unless the derivatives are designated and qualify as highly effective cash flow hedges. Derivatives that do not qualify for hedge accounting under GAAP consist primarily of (i) components of certain fixed maturity securities (primarily interest-only MBS) and (ii) the equity-based component of certain annuity products (included in annuity benefits accumulated) and related equity index call options designed to be consistent with the characteristics of the liabilities and used to mitigate the risk embedded in those annuity products. To qualify for hedge accounting, at the inception of a derivative contract, AFG formally documents the relationship between the terms of the hedge and the hedged items and its risk management objective. This documentation includes defining how hedge effectiveness and ineffectiveness will be measured on a retrospective and prospective basis. Changes in the fair value of derivatives that are designated and qualify as highly effective cash flow hedges are recorded in AOCI and are reclassified into earnings when the variability of the cash flows from the hedged items impacts earnings. Any hedge ineffectiveness is immediately recorded in current period earnings. When the change in the fair value of a qualifying cash flow hedge is included in earnings, it is included in the same line item in the statement of earnings as the cash flows from the hedged item. AFG uses interest rate swaps that are designated and qualify as highly effective cash flow hedges to mitigate interest rate risk related to certain floating-rate securities included in AFG’s portfolio of fixed maturity securities. For derivatives that are designated and qualify as highly effective fair value hedges, changes in the fair value of the derivative, along with changes in the fair value of the hedged item attributable to the hedged risk, are recognized in current period earnings. AFG has entered into an interest rate swap that qualifies as a highly effective fair value hedge to mitigate the interest rate risk associated with fixed-rate long-term debt by economically converting certain fixed-rate debt obligations to floating-rate obligations. Since the terms of the swap match the terms of the hedged debt, changes in the fair value of the swap are offset by changes in the fair value of the hedged debt attributable to changes in interest rates. Accordingly, the net impact on AFG’s current period earnings is that the interest expense associated with the hedged debt is effectively recorded at the floating rate. |
Goodwill | Goodwill Goodwill represents the excess of cost of subsidiaries over AFG’s equity in their underlying net assets. Goodwill is not amortized, but is subject to an impairment test at least annually. An entity is not required to complete the quantitative annual goodwill impairment test on a reporting unit if the entity elects to perform a qualitative analysis and determines that it is more likely than not that the reporting unit’s fair value exceeds its carrying amount. |
Reinsurance | Reinsurance Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policies. AFG’s property and casualty insurance subsidiaries report as assets (i) the estimated reinsurance recoverable on paid and unpaid losses, including an estimate for losses incurred but not reported, and (ii) amounts paid or due to reinsurers applicable to the unexpired terms of policies in force. Payable to reinsurers includes ceded premiums due to reinsurers, as well as ceded premiums retained by AFG’s property and casualty insurance subsidiaries under contracts to fund ceded losses as they become due. AFG’s insurance subsidiaries also assume reinsurance from other companies. Earnings on reinsurance assumed is recognized based on information received from ceding companies. An AFG subsidiary cedes life insurance policies to a third party on a funds withheld basis whereby the subsidiary retains the assets (securities) associated with the reinsurance contract. Interest is credited to the reinsurer based on the actual investment performance of the retained assets. This reinsurance contract is considered to contain an embedded derivative (that must be adjusted to fair value) because the yield on the payable is based on a specific block of the ceding company’s assets, rather than the overall creditworthiness of the ceding company. AFG determined that changes in the fair value of the underlying portfolio of fixed maturity securities is an appropriate measure of the value of the embedded derivative. The securities related to this contract are classified as “trading.” The adjustment to fair value on the embedded derivative offsets the investment income recorded on the adjustment to fair value of the related trading portfolio. |
Deferred Policy Acquisition Costs (''DPAC'') | Deferred Policy Acquisition Costs (“DPAC”) Policy acquisition costs (principally commissions, premium taxes and certain underwriting and policy issuance costs) directly related to the successful acquisition or renewal of an insurance contract are deferred. DPAC also includes capitalized costs associated with sales inducements offered to fixed annuity policyholders such as enhanced interest rates and premium and persistency bonuses. For the property and casualty companies, DPAC is limited based upon recoverability without any consideration for anticipated investment income and is charged against income ratably over the terms of the related policies. A premium deficiency is recognized if the sum of expected claims costs, claims adjustment expenses and unamortized acquisition costs exceed the related unearned premiums. A premium deficiency is first recognized by charging any unamortized acquisition costs to expense to the extent required to eliminate the deficiency. If the premium deficiency is greater than unamortized acquisition costs, a liability is accrued for the excess deficiency and reported with unpaid losses and loss adjustment expenses. DPAC related to annuities is deferred to the extent deemed recoverable and amortized, with interest, in relation to the present value of actual and expected gross profits on the policies. Expected gross profits consist principally of estimated future investment margin (estimated future net investment income less interest credited on policyholder funds) and surrender, mortality, and other life and annuity policy charges, less death, annuitization and guaranteed withdrawal benefits in excess of account balances and estimated future policy administration expenses. To the extent that realized gains and losses result in adjustments to the amortization of DPAC related to annuities, such adjustments are reflected as components of realized gains (losses) on securities. DPAC related to traditional life and health insurance is amortized over the expected premium paying period of the related policies, in proportion to the ratio of annual premium revenues to total anticipated premium revenues. See “ Life, Accident and Health Reserves ” below for details on the impact of loss recognition on the accounting for traditional life and health insurance contracts. DPAC includes the present value of future profits on business in force of annuity and life, accident and health insurance companies acquired (“PVFP”). PVFP represents the portion of the costs to acquire companies that is allocated to the value of the right to receive future cash flows from insurance contracts existing at the date of acquisition. PVFP is amortized with interest in relation to expected gross profits of the acquired policies for annuities and universal life products and in relation to the premium paying period for traditional life and health insurance products. DPAC and certain other balance sheet amounts related to annuity, long-term care and life businesses are also adjusted, net of tax, for the change in expense that would have been recorded if the unrealized gains (losses) from securities had actually been realized. These adjustments are included in unrealized gains (losses) on marketable securities, a component of AOCI in AFG’s Balance Sheet. |
Managed Investment Entities | Managed Investment Entities A company is considered the primary beneficiary of, and therefore must consolidate, a variable interest entity (“VIE”) based primarily on its ability to direct the activities of the VIE that most significantly impact that entity’s economic performance and the obligation to absorb losses of, or receive benefits from, the entity that could potentially be significant to the VIE. AFG manages, and has investments in, collateralized loan obligations (“CLOs”) that are VIEs (see Note H — “ Managed Investment Entities ” ). AFG has determined that it is the primary beneficiary of the CLOs because (i) its role as asset manager gives it the power to direct the activities that most significantly impact the economic performance of the CLOs and (ii) through its investment in the CLO debt tranches, it has exposure to CLO losses (limited to the amount AFG invested) and the right to receive CLO benefits that could potentially be significant to the CLOs. On January 1, 2016, AFG adopted ASU 2015-02, which amended certain consolidation accounting guidance, including the VIE guidance that applies to collateralized financing entities such as CLOs. The new guidance affects how fee arrangements with CLO asset managers impact the determination of the primary beneficiary of those entities. Due to the significance of AFG’s investments in the CLOs that it manages, the new guidance did not impact the consolidation of AFG’s currently outstanding CLOs. The new guidance also impacted the consolidation analysis that applies to limited partnerships and similar entities, but did not result in a change to the accounting for AFG’s existing investments in those entities. Because AFG has no right to use the CLO assets and no obligation to pay the CLO liabilities, the assets and liabilities of the CLOs are shown separately in AFG’s Balance Sheet. AFG has elected the fair value option for reporting on the CLO assets and liabilities to improve the transparency of financial reporting related to the CLOs. The net gain or loss from accounting for the CLO assets and liabilities at fair value is presented separately in AFG’s Statement of Earnings. Effective January 1, 2015, AFG adopted (on a modified retrospective basis) ASU 2014-13, which addresses the diversity in practice regarding the accounting for assets and liabilities of a consolidated collateralized financing entity (such as a CLO) when an election has been made to account for that entity’s assets and liabilities at fair value. The fair values of a CLO’s assets may differ from the separately measured fair values of its liabilities even though the CLO liabilities only have recourse to the CLO assets. Under the new guidance, AFG elected to set the carrying value of the CLO liabilities equal to the fair value of the CLO assets (which have more observable fair values) as an alternative to reporting those liabilities at a separately measured fair value. CLO earnings attributable to AFG’s shareholders continue to be measured by the change in the fair value of AFG’s investments in the CLOs and management fees earned. Prior to the adoption of ASU 2014-13, measuring both the CLO assets and CLO liabilities at separately determined fair values resulted in a difference between the carrying value of the CLO assets and the carrying value of the CLO liabilities that was not attributable to AFG’s ownership interest in the CLOs and CLO earnings (losses) that were not attributable to AFG’s shareholders. This difference was recorded as “appropriated retained earnings — managed investment entities” in AFG’s Balance Sheet and the earnings (losses) that were not attributable to AFG’s shareholders were included in net earnings (loss) attributable to noncontrolling interests in AFG’s Statement of Earnings. In accordance with the guidance adopted in 2015, the amount reported as “appropriated retained earnings — managed investment entities” at December 31, 2014 was reclassified to “liabilities of managed investment entities” on January 1, 2015 as the cumulative effect of an accounting change. At December 31, 2016 , assets and liabilities of managed investment entities included $23 million in assets and $18 million in liabilities of a temporary warehousing entity that was established in connection with the formation of a new CLO that is expected to close in the first half of 2017. Upon closing, all warehoused assets are expected to be transferred to the new CLO and the liabilities will be repaid. |
Unpaid Losses and Loss Adjustment Expenses | Unpaid Losses and Loss Adjustment Expenses The net liabilities stated for unpaid claims and for expenses of investigation and adjustment of unpaid claims represent management’s best estimate and are based upon (i) the accumulation of case estimates for losses reported prior to the close of the accounting period on direct business written; (ii) estimates received from ceding reinsurers and insurance pools and associations; (iii) estimates of unreported losses (including possible development on known claims) based on past experience; (iv) estimates based on experience of expenses for investigating and adjusting claims; and (v) the current state of the law and coverage litigation. Establishing reserves for asbestos, environmental and other mass tort claims involves considerably more judgment than other types of claims due to, among other things, inconsistent court decisions, an increase in bankruptcy filings as a result of asbestos-related liabilities, novel theories of coverage, and judicial interpretations that often expand theories of recovery and broaden the scope of coverage. Loss reserve liabilities are subject to the impact of changes in claim amounts and frequency and other factors. Changes in estimates of the liabilities for losses and loss adjustment expenses are reflected in the statement of earnings in the period in which determined. Despite the variability inherent in such estimates, management believes that the liabilities for unpaid losses and loss adjustment expenses are adequate. |
Annuity Benefits Accumulated | Annuity Benefits Accumulated Annuity receipts and benefit payments are recorded as increases or decreases in annuity benefits accumulated rather than as revenue and expense. Increases in this liability for interest credited are charged to expense and decreases for policy charges are credited to other income. For certain products, annuity benefits accumulated also includes reserves for accrued persistency and premium bonuses, guaranteed withdrawals and excess benefits expected to be paid on future deaths and annuitizations (“EDAR”). The liabilities for EDAR and guaranteed withdrawals are accrued for and modified using assumptions consistent with those used in determining DPAC and DPAC amortization, except that amounts are determined in relation to the present value of total expected assessments. Total expected assessments consist principally of estimated future investment margin, surrender, mortality, and other life and annuity policy charges, and unearned revenues once they are recognized as income. Annuity benefits accumulated also includes amounts advanced from the Federal Home Loan Bank of Cincinnati. |
Unearned Revenue | Unearned Revenue Certain upfront policy charges on annuities are deferred as unearned revenue (included in other liabilities) and recognized in net earnings (included in other income) using the same assumptions and estimated gross profits used to amortize DPAC. |
Life, Accident and Health Reserves | Life, Accident and Health Reserves Liabilities for future policy benefits under traditional life, accident and health policies are computed using the net level premium method. Computations are based on the original projections of investment yields, mortality, morbidity and surrenders and include provisions for unfavorable deviations unless a loss recognition event (premium deficiency) occurs. Claim reserves and liabilities established for accident and health claims are modified as necessary to reflect actual experience and developing trends. For long-duration contracts (such as traditional life and long-term care policies), loss recognition occurs when, based on current expectations as of the measurement date, existing contract liabilities plus the present value of future premiums (including reasonably expected rate increases) are not expected to cover the present value of future claims payments and related settlement and maintenance costs (excluding overhead) as well as unamortized acquisition costs. If a block of business is determined to be in loss recognition, a charge is recorded in earnings in an amount equal to the excess of the present value of expected future claims costs and unamortized acquisition costs over existing reserves plus the present value of expected future premiums (with no provision for adverse deviation). The charge is recorded first to reduce unamortized acquisition costs and then as an additional reserve (if unamortized acquisition costs have been reduced to zero). In addition, reserves for traditional life and long-term care policies are subject to adjustment for loss recognition charges that would have been recorded if the unrealized gains from securities had actually been realized. This adjustment is included in unrealized gains (losses) on marketable securities, a component of AOCI in AFG’s Balance Sheet. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs related to AFG’s outstanding debt are amortized over the life of the related debt using the effective interest method. Effective January 1, 2016, AFG adopted (on a retrospective basis) ASU 2015-03, which requires debt issuance costs to be presented in the balance sheet as a direct reduction in the carrying value of long-term debt (consistent with the treatment of debt discounts) with the periodic amortization of such costs included in interest expense. Debt issuance costs related to AFG’s revolving credit facilities will continue to be included in other assets in AFG’s Balance Sheet. Prior to AFG’s adoption of ASU 2015-03, AFG reported unamortized debt issuance costs as a deferred charge asset (included in other assets) in AFG’s Balance Sheet and the periodic amortization was included in other expenses in AFG’s Statement of Earnings. The updated guidance did not affect the overall recognition and measurement guidance for debt issuance costs. Accordingly, the guidance did not have an overall impact on AFG’s Shareholders’ Equity or results of operations. |
Variable Annuity Assets and Liabilities | Variable Annuity Assets and Liabilities Separate accounts related to variable annuities represent the fair value of deposits invested in underlying investment funds on which AFG earns a fee. Investment funds are selected and may be changed only by the policyholder, who retains all investment risk. AFG’s variable annuity contracts contain a guaranteed minimum death benefit (“GMDB”) to be paid if the policyholder dies before the annuity payout period commences. In periods of declining equity markets, the GMDB may exceed the value of the policyholder’s account. A GMDB liability is established for future excess death benefits using assumptions together with a range of reasonably possible scenarios for investment fund performance that are consistent with DPAC capitalization and amortization assumptions. |
Premium Recognition | Premium Recognition Property and casualty premiums are earned generally over the terms of the policies on a pro rata basis. Unearned premiums represent that portion of premiums written, which is applicable to the unexpired terms of policies in force. On reinsurance assumed from other insurance companies or written through various underwriting organizations, unearned premiums are based on information received from such companies and organizations. For traditional life, accident and health products, premiums are recognized as revenue when legally collectible from policyholders. For interest-sensitive life and universal life products, premiums are recorded in a policyholder account, which is reflected as a liability. Revenue is recognized as amounts are assessed against the policyholder account for mortality coverage and contract expenses. |
Noncontrolling Interests | Noncontrolling Interests For balance sheet purposes, noncontrolling interests represents the interests of shareholders other than AFG in consolidated entities. In the statement of earnings, net earnings and losses attributable to noncontrolling interests represents such shareholders’ interest in the earnings and losses of those entities. |
Income Taxes | Income Taxes Deferred income taxes are calculated using the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases and are measured using enacted tax rates. A valuation allowance is established to reduce total deferred tax assets to an amount that will more likely than not be realized. AFG recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained under examination by the appropriate taxing authority. Interest and penalties on AFG’s reserve for uncertain tax positions are recognized as a component of tax expense. |
Stock-Based Compensation | Stock-Based Compensation All share-based grants are recognized as compensation expense on a straight-line basis over their vesting periods based on their calculated fair value at the date of grant. AFG uses the Black-Scholes pricing model to measure the fair value of employee stock options. See Note K — “ Shareholders’ Equity ” for further information. In the fourth quarter of 2016, AFG early adopted ASU 2016-09, which, among other things, requires excess tax benefits or deficiencies for share-based payments to be recorded through income tax expense in the statement of earnings instead of directly to capital surplus (as required under the previous guidance). As a result, AFG’s Statement of Earnings for 2016 includes a tax benefit of $9 million that under the previous guidance would have been recorded directly to capital surplus. In addition, the new guidance allows entities to elect to account for forfeitures of awards when they occur rather than accruing expense based on an estimate of expected forfeitures (as required under the previous guidance). AFG has elected to account for forfeitures as they occur. The resulting cumulative effect of accounting change of less than $1 million was recorded directly to retained earnings. |
Benefit Plans | Benefit Plans AFG provides retirement benefits to qualified employees of participating companies through the AFG 401(k) Retirement and Savings Plan, a defined contribution plan. AFG makes all contributions to the retirement fund portion of the plan and matches a percentage of employee contributions to the savings fund. Company contributions are expensed in the year for which they are declared. AFG and many of its subsidiaries provide health care and life insurance benefits to eligible retirees. AFG also provides postemployment benefits to former or inactive employees (primarily those on disability) who were not deemed retired under other company plans. The projected future cost of providing these benefits is expensed over the period employees earn such benefits. |
Earnings Per Share | Earnings Per Share Although basic earnings per share only considers shares of common stock outstanding during the period, the calculation of diluted earnings per share includes the following adjustments to weighted average common shares related to stock-based compensation plans: 2016 – 1.6 million , 2015 – 1.8 million and 2014 – 2.0 million . AFG’s weighted average diluted shares outstanding excludes the following anti-dilutive potential common shares related to stock compensation plans: 2016 – 0.4 million , 2015 – 1.1 million and 2014 – 1.0 million . Adjustments to net earnings attributable to shareholders in the calculation of diluted earnings per share were nominal in the 2016 , 2015 and 2014 periods. |
Statement of Cash Flows | Statement of Cash Flows For cash flow purposes, “investing activities” are defined as making and collecting loans and acquiring and disposing of debt or equity instruments and property and equipment. “Financing activities” include obtaining resources from owners and providing them with a return on their investments, borrowing money and repaying amounts borrowed. Annuity receipts, surrenders, benefits and withdrawals are also reflected as financing activities. All other activities are considered “operating.” Short-term investments having original maturities of three months or less when purchased are considered to be cash equivalents for purposes of the financial statements. Effective October 1, 2016, AFG early adopted (on a retrospective basis) ASU 2016-15, which addresses the diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. Among other things, this guidance requires proceeds received from the settlement of corporate-owned life insurance policies to be classified as cash inflows from investing activities and allows premiums paid for policies to be reported as cash outflows either from investing activities or operating activities. AFG has elected to show all corporate-owned life insurance activity in investing activities. Prior to adoption of this guidance, AFG accounted for these transactions as operating activities. In addition, ASU 2016-15 clarifies when distributions received from investees accounted under the equity method should be accounted for as a cash inflow from operating activities or as a cash inflow from investing activities. AFG had previously accounted for all distributions from investments accounted for under the equity method as investing activities. The new guidance solely related to the presentation of certain transactions in the statement of cash flows. Accordingly, adoption of this guidance did not impact AFG’s results of operations or financial position. |
Revenue Recognition Guidance Effective in 2018 | Revenue Recognition Guidance Effective in 2018 In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when (or as) the entity satisfies a performance obligation under the contract. The new guidance also updates the accounting for certain costs associated with obtaining and fulfilling contracts with customers and requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Revenue recognition for insurance contracts and financial instruments, which are AFG’s primary sources of revenue, is excluded from the scope of the new guidance. AFG will adopt the new guidance effective January 1, 2018. Because the new guidance does not apply to the vast majority of AFG’s business, management does not expect the adoption of this guidance to have a material impact on AFG’s results of operations or financial position. Based on implementation efforts to date, management believes that the new standard will only apply to 2% of AFG’s consolidated revenues. |
Acquisitions and Sale of Busi27
Acquisitions and Sale of Businesses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of estimated fair values of assets acquired and liabilities assumed | The allocation of the purchase price is shown in the table below (in millions): April 1, 2014 Total purchase price $ 259 Tangible assets acquired: Cash and cash equivalents $ 1,078 Fixed maturities, available for sale 92 Recoverables from reinsurers 116 Agents’ balances and premiums receivable 41 Deferred tax assets, net (*) 67 Other receivables 21 Other assets 11 Total tangible assets acquired 1,426 Liabilities acquired: Unpaid losses and loss adjustment expenses 1,142 Unearned premiums 3 Payable to reinsurers 3 Other liabilities 66 Total liabilities acquired 1,214 Net tangible assets acquired, at fair value 212 Excess purchase price over net tangible assets acquired $ 47 Allocation of excess purchase price: Intangible assets acquired (*) $ 47 Deferred tax on intangible assets acquired (*) (16 ) Goodwill 16 $ 47 (*) Included in Other assets in AFG’s Balance Sheet. |
Summarized financial information | The impact of the sale of the run-off long-term care insurance business is shown below (in millions): December 24, 2015 Net sale proceeds (*) $ 13 Assets of businesses sold: Cash and investments $ 1,334 Recoverables from reinsurers 630 Deferred policy acquisition costs 16 Other receivables 16 Other assets (4 ) Goodwill 2 Total assets 1,994 Liabilities of businesses sold: Annuity benefits accumulated 261 Life, accident and health reserves 1,525 Other liabilities 7 Total liabilities 1,793 Reclassify net unrealized gain on marketable securities 22 Net assets of businesses sold 179 Loss on subsidiaries, pretax (166 ) Tax benefit 58 Loss on subsidiaries, net of tax $ (108 ) (*) Includes the fair value of the potential additional consideration and capital maintenance agreement and is shown net of estimated expenses. Revenues, costs and expenses, and earnings before income taxes for the subsidiaries sold were (in millions): Year ended December 31, 2015 2014 Life, accident and health net earned premiums: Long-term care $ 73 $ 74 Life operations 11 11 Net investment income 73 75 Realized gains (losses) on securities and other income (11 ) (6 ) Total revenues 146 154 Annuity benefits 8 7 Life, accident and health benefits: Long-term care 91 119 Life operations 11 11 Annuity and supplemental insurance acquisition expenses 12 11 Other expenses 16 14 Total costs and expenses 138 162 Earnings before income taxes $ 8 $ (8 ) |
Segments of Operations (Tables)
Segments of Operations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting Information, by Segment | The following tables (in millions) show AFG’s assets, revenues and earnings before income taxes by segment and sub-segment. 2016 2015 2014 Assets Property and casualty insurance (a) $ 15,574 $ 14,689 $ 14,069 Annuity 33,409 29,865 27,317 Run-off long-term care and life (b) 752 772 2,489 Other 5,337 4,511 3,638 Total assets $ 55,072 $ 49,837 $ 47,513 Revenues Property and casualty insurance: Premiums earned: Specialty Property and transportation $ 1,662 $ 1,599 $ 1,544 Specialty casualty 2,006 2,011 1,765 Specialty financial 557 517 469 Other specialty 103 97 100 Total premiums earned 4,328 4,224 3,878 Net investment income 350 319 294 Other income (c) 51 78 9 Total property and casualty insurance 4,729 4,621 4,181 Annuity: Net investment income 1,356 1,224 1,136 Other income 103 98 97 Total annuity 1,459 1,322 1,233 Run-off long-term care and life (b) 49 188 195 Other 240 194 72 Total revenues before realized gains (losses) 6,477 6,325 5,681 Realized gains (losses) on securities 19 (19 ) 52 Realized gains (losses) on subsidiaries 2 (161 ) — Total revenues $ 6,498 $ 6,145 $ 5,733 (a) Not allocable to sub-segments. (b) AFG sold substantially all of its run-off long-term care insurance business in December 2015. (c) Includes pretax income of $32 million (before noncontrolling interest) from the sale of an apartment property in the second quarter of 2016, $51 million (before noncontrolling interest) from the sale of a hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015. 2016 2015 2014 Earnings Before Income Taxes Property and casualty insurance: Underwriting: Specialty Property and transportation $ 166 $ 48 $ 21 Specialty casualty 78 146 136 Specialty financial 84 87 64 Other specialty 9 14 16 Other lines (a) (101 ) (70 ) (25 ) Total underwriting 236 225 212 Investment and other income, net (b) 341 351 244 Total property and casualty insurance 577 576 456 Annuity 368 331 328 Run-off long-term care and life (c) 2 14 (10 ) Other (d) (181 ) (176 ) (200 ) Total earnings before realized gains (losses) and income taxes 766 745 574 Realized gains (losses) on securities 19 (19 ) 52 Realized gains (losses) on subsidiaries 2 (161 ) — Total earnings before income taxes $ 787 $ 565 $ 626 (a) Includes a special charge of $65 million related to the exit of certain lines of business within AFG’s Lloyd’s-based insurer, Neon, in the second quarter of 2016 and special charges to increase asbestos and environmental (“A&E”) reserves of $36 million , $67 million and $24 million in 2016 , 2015 and 2014 , respectively. (b) Includes pretax income of $32 million (before noncontrolling interest) from the sale of an apartment property in the second quarter of 2016, $51 million (before noncontrolling interest) from the sale of a hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015. (c) AFG sold substantially all of its run-off long-term care insurance business in December 2015. (d) Primarily holding company interest and expenses, including a $4 million loss on retirement of debt in the third quarter of 2015, and special charges to increase A&E reserves related to AFG’s former railroad and manufacturing operations ( $5 million in 2016 , $12 million in 2015 and $6 million in 2014 ) and losses of managed investment entities attributable to noncontrolling interests ( $51 million in 2014 ). Following the adoption of new guidance in the first quarter of 2015, there are no longer earnings (losses) of managed investment entities that are attributable to noncontrolling interests. See Note A — “ Accounting Policies — Managed Investment Entities .” |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value | Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions): Level 1 Level 2 Level 3 Total December 31, 2016 Assets: Available for sale (“AFS”) fixed maturities: U.S. Government and government agencies $ 133 $ 174 $ 8 $ 315 States, municipalities and political subdivisions — 6,641 140 6,781 Foreign government — 136 — 136 Residential MBS — 3,445 190 3,635 Commercial MBS — 1,468 25 1,493 Asset-backed securities (“ABS”) — 5,475 484 5,959 Corporate and other 29 15,484 712 16,225 Total AFS fixed maturities 162 32,823 1,559 34,544 Trading fixed maturities 30 329 — 359 Equity securities — AFS and trading 1,305 79 174 1,558 Assets of managed investment entities (“MIE”) 380 4,356 29 4,765 Variable annuity assets (separate accounts) (*) — 600 — 600 Equity index call options — 492 — 492 Other assets — derivatives — 1 — 1 Total assets accounted for at fair value $ 1,877 $ 38,680 $ 1,762 $ 42,319 Liabilities: Liabilities of managed investment entities $ 363 $ 4,158 $ 28 $ 4,549 Derivatives in annuity benefits accumulated — — 1,759 1,759 Derivatives in long-term debt — (1 ) — (1 ) Other liabilities — derivatives — 30 — 30 Total liabilities accounted for at fair value $ 363 $ 4,187 $ 1,787 $ 6,337 December 31, 2015 Assets: Available for sale fixed maturities: U.S. Government and government agencies $ 100 $ 192 $ 15 $ 307 States, municipalities and political subdivisions — 6,767 89 6,856 Foreign government — 154 — 154 Residential MBS — 3,305 224 3,529 Commercial MBS — 2,148 39 2,187 Asset-backed securities — 4,464 470 4,934 Corporate and other 50 13,634 633 14,317 Total AFS fixed maturities 150 30,664 1,470 32,284 Trading fixed maturities 13 241 — 254 Equity securities — AFS and trading 1,362 217 140 1,719 Assets of managed investment entities 309 3,712 26 4,047 Variable annuity assets (separate accounts) (*) — 608 — 608 Equity index call options — 241 — 241 Other assets — derivatives — 2 — 2 Total assets accounted for at fair value $ 1,834 $ 35,685 $ 1,636 $ 39,155 Liabilities: Liabilities of managed investment entities $ 289 $ 3,468 $ 24 $ 3,781 Derivatives in annuity benefits accumulated — — 1,369 1,369 Derivatives in long-term debt — (2 ) — (2 ) Other liabilities — derivatives — 8 — 8 Total liabilities accounted for at fair value $ 289 $ 3,474 $ 1,393 $ 5,156 (*) Variable annuity liabilities equal the fair value of variable annuity assets. |
Fair value measurements, Levels 1 and 2 transfers | The transfers between Level 1 and Level 2 for the years ended December 31, 2016 , 2015 and 2014 are reflected in the table below at fair value as of the end of the reporting period (dollars in millions): Level 2 To Level 1 Transfers Level 1 To Level 2 Transfers # of Transfers Fair Value # of Transfers Fair Value 2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014 Perpetual preferred stocks 6 5 14 $ 35 $ 19 $ 96 7 7 13 $ 28 $ 31 $ 83 Common stocks 3 7 — — 80 — 2 — 7 — — 26 Redeemable preferred stocks — 2 1 — 11 5 — — — — — — |
Unobservable inputs used by management in determining fair value of embedded derivatives | The following table presents information about the unobservable inputs used by management in determining fair value of these embedded derivatives. See Note F — “ Derivatives .” Unobservable Input Range Adjustment for insurance subsidiary’s credit risk 0.4% – 2.9% over the risk free rate Risk margin for uncertainty in cash flows 0.68% reduction in the discount rate Surrenders 3% – 21% of indexed account value Partial surrenders 2% – 10% of indexed account value Annuitizations 0.1% – 1% of indexed account value Deaths 1.5% – 8.0% of indexed account value Budgeted option costs 2.4% – 3.6% of indexed account value |
Changes in balances of Level 3 financial assets | Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2016 , 2015 and 2014 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period. Total realized/unrealized gains (losses) included in Balance at December 31, 2015 Net income Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2016 AFS fixed maturities: U.S. government agency $ 15 $ (8 ) $ 1 $ — $ — $ — $ — $ 8 State and municipal 89 — (4 ) 57 (2 ) — — 140 Residential MBS 224 (4 ) (2 ) 8 (28 ) 34 (42 ) 190 Commercial MBS 39 (1 ) — — (7 ) — (6 ) 25 Asset-backed securities 470 (1 ) 1 50 (52 ) 60 (44 ) 484 Corporate and other 633 — (10 ) 176 (100 ) 30 (17 ) 712 Total AFS fixed maturities 1,470 (14 ) (14 ) 291 (189 ) 124 (109 ) 1,559 Equity securities 140 (12 ) 35 44 (28 ) 15 (20 ) 174 Assets of MIE 26 (9 ) — 12 — — — 29 Total Level 3 assets $ 1,636 $ (35 ) $ 21 $ 347 $ (217 ) $ 139 $ (129 ) $ 1,762 Embedded derivatives (a) $ (1,369 ) $ (211 ) $ — $ (277 ) $ 98 $ — $ — $ (1,759 ) Total Level 3 liabilities (b) $ (1,369 ) $ (211 ) $ — $ (277 ) $ 98 $ — $ — $ (1,759 ) (a) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016 . (b) As discussed above, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets. Total realized/unrealized gains (losses) included in Bal. at Dec. 31, 2014 Impact of Net income Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Sale of subsidiaries Bal. at Dec. 31, 2015 AFS fixed maturities: U.S. government agency $ 15 $ — $ — $ — $ — $ — $ — $ — $ — $ 15 State and municipal 100 — — (1 ) 34 (1 ) 2 (39 ) (6 ) 89 Residential MBS 300 — (11 ) (1 ) — (34 ) 86 (88 ) (28 ) 224 Commercial MBS 44 — (1 ) (1 ) — (2 ) 4 (1 ) (4 ) 39 Asset-backed securities 226 — 1 (7 ) 265 (56 ) 53 (10 ) (2 ) 470 Corporate and other 546 — (5 ) (9 ) 161 (90 ) 41 (5 ) (6 ) 633 Total AFS fixed maturities 1,231 — (16 ) (19 ) 460 (183 ) 186 (143 ) (46 ) 1,470 Equity securities 93 — (4 ) (9 ) 77 — — (17 ) — 140 Assets of MIE 31 — (11 ) — 6 — — — — 26 Total Level 3 assets $ 1,355 $ — $ (31 ) $ (28 ) $ 543 $ (183 ) $ 186 $ (160 ) $ (46 ) $ 1,636 Liabilities of MIE $ (2,701 ) $ 2,701 $ — $ — $ — $ — $ — $ — $ — $ — Embedded derivatives (a) (1,160 ) — (17 ) — (257 ) 65 — — — (1,369 ) Total Level 3 liabilities $ (3,861 ) $ 2,701 $ (17 ) $ — $ (257 ) $ 65 $ — $ — $ — $ (1,369 ) (a) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $28 million in 2015 . (b) The impact of implementing new guidance adopted in 2015, as discussed above and in Note A — “ Accounting Policies — Managed Investment Entities .” Total realized/unrealized gains (losses) included in Balance at December 31, 2013 Net income Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2014 AFS fixed maturities: U.S. government agency $ 15 $ — $ — $ — $ — $ — $ — $ 15 State and municipal 61 (1 ) — 30 — 10 — 100 Residential MBS 316 4 3 13 (31 ) 111 (116 ) 300 Commercial MBS 28 (1 ) — — — 17 — 44 Asset-backed securities 75 3 (2 ) 99 (39 ) 117 (27 ) 226 Corporate and other 335 2 13 102 (73 ) 172 (5 ) 546 Total AFS fixed maturities 830 7 14 244 (143 ) 427 (148 ) 1,231 Equity securities 31 1 2 62 (9 ) 22 (16 ) 93 Assets of MIE 30 (3 ) — 6 (2 ) — — 31 Total Level 3 assets $ 891 $ 5 $ 16 $ 312 $ (154 ) $ 449 $ (164 ) $ 1,355 Liabilities of MIE (a) $ (2,411 ) $ 22 $ — $ (817 ) $ 505 $ — $ — $ (2,701 ) Embedded derivatives (b) (804 ) (182 ) — (221 ) 47 — — (1,160 ) Total Level 3 liabilities $ (3,215 ) $ (160 ) $ — $ (1,038 ) $ 552 $ — $ — $ (3,861 ) (a) Total realized/unrealized gains (losses) included in net income includes gains of $50 million related to liabilities outstanding as of December 31, 2014 . See Note H — “ Managed Investment Entities .” (b) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects gains related to the unlocking of actuarial assumptions of $58 million in 2014 . |
Changes in balances of Level 3 financial liabilities | Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2016 , 2015 and 2014 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period. Total realized/unrealized gains (losses) included in Balance at December 31, 2015 Net income Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2016 AFS fixed maturities: U.S. government agency $ 15 $ (8 ) $ 1 $ — $ — $ — $ — $ 8 State and municipal 89 — (4 ) 57 (2 ) — — 140 Residential MBS 224 (4 ) (2 ) 8 (28 ) 34 (42 ) 190 Commercial MBS 39 (1 ) — — (7 ) — (6 ) 25 Asset-backed securities 470 (1 ) 1 50 (52 ) 60 (44 ) 484 Corporate and other 633 — (10 ) 176 (100 ) 30 (17 ) 712 Total AFS fixed maturities 1,470 (14 ) (14 ) 291 (189 ) 124 (109 ) 1,559 Equity securities 140 (12 ) 35 44 (28 ) 15 (20 ) 174 Assets of MIE 26 (9 ) — 12 — — — 29 Total Level 3 assets $ 1,636 $ (35 ) $ 21 $ 347 $ (217 ) $ 139 $ (129 ) $ 1,762 Embedded derivatives (a) $ (1,369 ) $ (211 ) $ — $ (277 ) $ 98 $ — $ — $ (1,759 ) Total Level 3 liabilities (b) $ (1,369 ) $ (211 ) $ — $ (277 ) $ 98 $ — $ — $ (1,759 ) (a) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016 . (b) As discussed above, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets. Total realized/unrealized gains (losses) included in Bal. at Dec. 31, 2014 Impact of Net income Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Sale of subsidiaries Bal. at Dec. 31, 2015 AFS fixed maturities: U.S. government agency $ 15 $ — $ — $ — $ — $ — $ — $ — $ — $ 15 State and municipal 100 — — (1 ) 34 (1 ) 2 (39 ) (6 ) 89 Residential MBS 300 — (11 ) (1 ) — (34 ) 86 (88 ) (28 ) 224 Commercial MBS 44 — (1 ) (1 ) — (2 ) 4 (1 ) (4 ) 39 Asset-backed securities 226 — 1 (7 ) 265 (56 ) 53 (10 ) (2 ) 470 Corporate and other 546 — (5 ) (9 ) 161 (90 ) 41 (5 ) (6 ) 633 Total AFS fixed maturities 1,231 — (16 ) (19 ) 460 (183 ) 186 (143 ) (46 ) 1,470 Equity securities 93 — (4 ) (9 ) 77 — — (17 ) — 140 Assets of MIE 31 — (11 ) — 6 — — — — 26 Total Level 3 assets $ 1,355 $ — $ (31 ) $ (28 ) $ 543 $ (183 ) $ 186 $ (160 ) $ (46 ) $ 1,636 Liabilities of MIE $ (2,701 ) $ 2,701 $ — $ — $ — $ — $ — $ — $ — $ — Embedded derivatives (a) (1,160 ) — (17 ) — (257 ) 65 — — — (1,369 ) Total Level 3 liabilities $ (3,861 ) $ 2,701 $ (17 ) $ — $ (257 ) $ 65 $ — $ — $ — $ (1,369 ) (a) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $28 million in 2015 . (b) The impact of implementing new guidance adopted in 2015, as discussed above and in Note A — “ Accounting Policies — Managed Investment Entities .” Total realized/unrealized gains (losses) included in Balance at December 31, 2013 Net income Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2014 AFS fixed maturities: U.S. government agency $ 15 $ — $ — $ — $ — $ — $ — $ 15 State and municipal 61 (1 ) — 30 — 10 — 100 Residential MBS 316 4 3 13 (31 ) 111 (116 ) 300 Commercial MBS 28 (1 ) — — — 17 — 44 Asset-backed securities 75 3 (2 ) 99 (39 ) 117 (27 ) 226 Corporate and other 335 2 13 102 (73 ) 172 (5 ) 546 Total AFS fixed maturities 830 7 14 244 (143 ) 427 (148 ) 1,231 Equity securities 31 1 2 62 (9 ) 22 (16 ) 93 Assets of MIE 30 (3 ) — 6 (2 ) — — 31 Total Level 3 assets $ 891 $ 5 $ 16 $ 312 $ (154 ) $ 449 $ (164 ) $ 1,355 Liabilities of MIE (a) $ (2,411 ) $ 22 $ — $ (817 ) $ 505 $ — $ — $ (2,701 ) Embedded derivatives (b) (804 ) (182 ) — (221 ) 47 — — (1,160 ) Total Level 3 liabilities $ (3,215 ) $ (160 ) $ — $ (1,038 ) $ 552 $ — $ — $ (3,861 ) (a) Total realized/unrealized gains (losses) included in net income includes gains of $50 million related to liabilities outstanding as of December 31, 2014 . See Note H — “ Managed Investment Entities .” (b) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects gains related to the unlocking of actuarial assumptions of $58 million in 2014 . |
Fair value of financial instruments | The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements at December 31 are summarized below (in millions): Carrying Fair Value Value Total Level 1 Level 2 Level 3 2016 Financial assets: Cash and cash equivalents $ 2,107 $ 2,107 $ 2,107 $ — $ — Mortgage loans 1,147 1,146 — — 1,146 Policy loans 192 192 — — 192 Total financial assets not accounted for at fair value $ 3,446 $ 3,445 $ 2,107 $ — $ 1,338 Financial liabilities: Annuity benefits accumulated (*) $ 29,703 $ 28,932 $ — $ — $ 28,932 Long-term debt 1,284 1,356 — 1,353 3 Total financial liabilities not accounted for at fair value $ 30,987 $ 30,288 $ — $ 1,353 $ 28,935 2015 Financial assets: Cash and cash equivalents $ 1,220 $ 1,220 $ 1,220 $ — $ — Mortgage loans 1,067 1,074 — — 1,074 Policy loans 201 201 — — 201 Total financial assets not accounted for at fair value $ 2,488 $ 2,495 $ 1,220 $ — $ 1,275 Financial liabilities: Annuity benefits accumulated (*) $ 26,422 $ 25,488 $ — $ — $ 25,488 Long-term debt 1,000 1,120 — 1,105 15 Total financial liabilities not accounted for at fair value $ 27,422 $ 26,608 $ — $ 1,105 $ 25,503 (*) Excludes $204 million and $200 million of life contingent annuities in the payout phase at December 31, 2016 and 2015 , respectively. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Available for sale fixed maturities and equity securities | Available for sale fixed maturities and equity securities at December 31 consisted of the following (in millions): 2016 2015 Amortized Cost Gross Unrealized Net Unrealized Fair Value Amortized Cost Gross Unrealized Net Unrealized Fair Value Gains Losses Gains Losses Fixed maturities: U.S. Government and government agencies $ 315 $ 3 $ (3 ) $ — $ 315 $ 305 $ 5 $ (3 ) $ 2 $ 307 States, municipalities and political subdivisions 6,650 200 (69 ) 131 6,781 6,642 249 (35 ) 214 6,856 Foreign government 131 5 — 5 136 147 7 — 7 154 Residential MBS 3,367 281 (13 ) 268 3,635 3,236 308 (15 ) 293 3,529 Commercial MBS 1,446 49 (2 ) 47 1,493 2,111 77 (1 ) 76 2,187 Asset-backed securities 5,962 43 (46 ) (3 ) 5,959 4,961 25 (52 ) (27 ) 4,934 Corporate and other 15,864 473 (112 ) 361 16,225 14,163 422 (268 ) 154 14,317 Total fixed maturities $ 33,735 $ 1,054 $ (245 ) $ 809 $ 34,544 $ 31,565 $ 1,093 $ (374 ) $ 719 $ 32,284 Equity Securities: Common stocks $ 879 $ 160 $ (23 ) $ 137 $ 1,016 $ 1,051 $ 146 $ (79 ) $ 67 $ 1,118 Perpetual preferred stocks 472 21 (7 ) 14 486 418 23 (6 ) 17 435 Total equity securities $ 1,351 $ 181 $ (30 ) $ 151 $ 1,502 $ 1,469 $ 169 $ (85 ) $ 84 $ 1,553 |
Available for sale securities in a continuous unrealized loss position | The following tables show gross unrealized losses (dollars in millions) on fixed maturities and equity securities by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2016 and 2015 . Less Than Twelve Months Twelve Months or More Unrealized Loss Fair Value Fair Value as % of Cost Unrealized Loss Fair Value Fair Value as % of Cost 2016 Fixed maturities: U.S. Government and government agencies $ (1 ) $ 153 99 % $ (2 ) $ 8 80 % States, municipalities and political subdivisions (64 ) 2,289 97 % (5 ) 44 90 % Residential MBS (7 ) 502 99 % (6 ) 162 96 % Commercial MBS (2 ) 121 98 % — — — % Asset-backed securities (29 ) 1,737 98 % (17 ) 634 97 % Corporate and other (93 ) 3,849 98 % (19 ) 312 94 % Total fixed maturities $ (196 ) $ 8,651 98 % $ (49 ) $ 1,160 96 % Equity securities: Common stocks $ (23 ) $ 215 90 % $ — $ — — % Perpetual preferred stocks (6 ) 135 96 % (1 ) 6 86 % Total equity securities $ (29 ) $ 350 92 % $ (1 ) $ 6 86 % 2015 Fixed maturities: U.S. Government and government agencies $ (1 ) $ 112 99 % $ (2 ) $ 15 88 % States, municipalities and political subdivisions (33 ) 1,419 98 % (2 ) 50 96 % Residential MBS (7 ) 438 98 % (8 ) 201 96 % Commercial MBS — 95 100 % (1 ) 28 97 % Asset-backed securities (42 ) 2,706 98 % (10 ) 455 98 % Corporate and other (229 ) 4,661 95 % (39 ) 165 81 % Total fixed maturities $ (312 ) $ 9,431 97 % $ (62 ) $ 914 94 % Equity securities: Common stocks $ (79 ) $ 509 87 % $ — $ — — % Perpetual preferred stocks (3 ) 91 97 % (3 ) 22 88 % Total equity securities $ (82 ) $ 600 88 % $ (3 ) $ 22 88 % |
Roll forward of cumulative credit portion of other-than-temporary impairments on fixed maturity securities | A progression of the credit portion of other-than-temporary impairments on fixed maturity securities for which the non-credit portion of an impairment has been recognized in other comprehensive income is shown below (in millions): 2016 2015 2014 Balance at January 1 $ 160 $ 170 $ 194 Additional credit impairments on: Previously impaired securities 2 1 — Securities without prior impairments 1 2 — Reductions due to: Sales or redemptions (10 ) (9 ) (24 ) Sale of subsidiaries — (4 ) — Balance at December 31 $ 153 $ 160 $ 170 |
Available for sale fixed maturity securities by contractual maturity date | The table below sets forth the scheduled maturities of available for sale fixed maturities as of December 31, 2016 (dollars in millions). Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers. Amortized Fair Value Cost Amount % Maturity One year or less $ 1,120 $ 1,136 3 % After one year through five years 5,609 5,866 17 % After five years through ten years 11,744 11,921 35 % After ten years 4,487 4,534 13 % 22,960 23,457 68 % ABS (average life of approximately 5 years) 5,962 5,959 17 % MBS (average life of approximately 4.5 years) 4,813 5,128 15 % Total $ 33,735 $ 34,544 100 % |
Components of the net unrealized gain on securities, included in Accumulated Other Comprehensive Income | The following table shows (in millions) the components of the net unrealized gain on securities that is included in AOCI in AFG’s Balance Sheet. Pretax Deferred Tax and Amounts Attributable to Noncontrolling Interests Net December 31, 2016 Net unrealized gain on: Fixed maturities — annuity segment (*) $ 640 $ (224 ) $ 416 Fixed maturities — all other 169 (59 ) 110 Total fixed maturities 809 (283 ) 526 Equity securities 151 (53 ) 98 Total investments 960 (336 ) 624 Deferred policy acquisition costs — annuity segment (273 ) 96 (177 ) Annuity benefits accumulated (78 ) 27 (51 ) Unearned revenue 13 (5 ) 8 Total net unrealized gain on marketable securities $ 622 $ (218 ) $ 404 December 31, 2015 Net unrealized gain on: Fixed maturities — annuity segment (*) $ 523 $ (183 ) $ 340 Fixed maturities — all other 196 (72 ) 124 Total fixed maturities 719 (255 ) 464 Equity securities 84 (30 ) 54 Total investments 803 (285 ) 518 Deferred policy acquisition costs — annuity segment (233 ) 82 (151 ) Annuity benefits accumulated (64 ) 22 (42 ) Unearned revenue 11 (4 ) 7 Total net unrealized gain on marketable securities $ 517 $ (185 ) $ 332 (*) Net unrealized gains on fixed maturity investments supporting AFG’s annuity benefits accumulated. |
Net investment income earned and investment expenses incurred | The following table shows (in millions) investment income earned and investment expenses incurred. 2016 2015 2014 Investment income: Fixed maturities $ 1,510 $ 1,461 $ 1,352 Equity securities 81 76 66 Equity in earnings of partnerships and similar investments 44 27 18 Other 81 87 77 Gross investment income 1,716 1,651 1,513 Investment expenses (20 ) (18 ) (12 ) Net investment income $ 1,696 $ 1,633 $ 1,501 |
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments are summarized as follows (in millions): 2016 2015 Realized gains (losses) Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 36 $ (38 ) $ (2 ) $ 90 $ 19 $ (43 ) $ (24 ) $ (941 ) Equity securities 106 (93 ) 13 67 94 (94 ) — (134 ) Mortgage loans and other investments — — — — (2 ) (3 ) (5 ) — Other (*) (7 ) 15 8 (52 ) (5 ) 15 10 430 Total pretax 135 (116 ) 19 105 106 (125 ) (19 ) (645 ) Tax effects (48 ) 41 (7 ) (37 ) (38 ) 45 7 226 Noncontrolling interests (2 ) 3 1 4 (2 ) 2 — 8 Net of tax and noncontrolling interests $ 85 $ (72 ) $ 13 $ 72 $ 66 $ (78 ) $ (12 ) $ (411 ) 2014 Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 36 $ (15 ) $ 21 $ 570 Equity securities 53 (26 ) 27 26 Mortgage loans and other investments 1 — 1 — Other (*) (2 ) 5 3 (314 ) Total pretax 88 (36 ) 52 282 Tax effects (32 ) 13 (19 ) (99 ) Noncontrolling interests (2 ) 1 (1 ) (3 ) Net of tax and noncontrolling interests $ 54 $ (22 ) $ 32 $ 180 (*) Primarily adjustments to deferred policy acquisition costs and reserves related to annuities and long-term care business. |
Gross realized gains and losses on available for sale fixed maturity and equity security investments | Gross realized gains and losses (excluding impairment write-downs and mark-to-market of derivatives) on available for sale fixed maturity and equity security investment transactions included in the statement of cash flows consisted of the following (in millions): 2016 2015 2014 Fixed maturities: Gross gains $ 55 $ 38 $ 36 Gross losses (10 ) (7 ) (2 ) Equity securities: Gross gains 110 99 53 Gross losses (4 ) (5 ) — |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives included in Balance Sheet at fair value | The following derivatives that do not qualify for hedge accounting under GAAP are included in AFG’s Balance Sheet at fair value (in millions): December 31, 2016 December 31, 2015 Derivative Balance Sheet Line Asset Liability Asset Liability MBS with embedded derivatives Fixed maturities $ 107 $ — $ 130 $ — Public company warrants Equity securities 4 — 4 — Fixed-indexed annuities (embedded derivative) Annuity benefits accumulated — 1,759 — 1,369 Equity index call options Equity index call options 492 — 241 — Reinsurance contracts (embedded derivative) Other liabilities — 8 — 7 $ 603 $ 1,767 $ 375 $ 1,376 |
Summary of gain (loss) included in the Statement of Earnings for changes in the fair value of derivatives | The following table summarizes the gain (loss) included in AFG’s Statement of Earnings for changes in the fair value of derivatives that do not qualify for hedge accounting for 2016 , 2015 and 2014 (in millions): Derivative Statement of Earnings Line 2016 2015 2014 MBS with embedded derivatives Realized gains on securities $ (9 ) $ (16 ) $ 3 Public company warrants Realized gains on securities — — — Interest rate swaptions Realized gains on securities — — (2 ) Fixed-indexed annuities (embedded derivative) (*) Annuity benefits (211 ) (17 ) (182 ) Equity index call options Annuity benefits 141 (56 ) 181 Reinsurance contracts (embedded derivative) Net investment income (1 ) 6 (3 ) $ (80 ) $ (83 ) $ (3 ) (*) The change in fair value of the embedded derivative includes losses related to unlocking of actuarial assumptions of $17 million in 2016 compared to losses of $28 million in 2015 and gains related to unlocking of actuarial assumptions of $58 million in 2014 . |
Deferred Policy Acquisition C32
Deferred Policy Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs Details | A progression of deferred policy acquisition costs is presented below (in millions): P&C Annuity and Run-off Long-term Care and Life Deferred Deferred Sales Consolidated Costs Costs Inducements PVFP Subtotal Unrealized Total Total Balance at December 31, 2013 $ 211 $ 875 $ 149 $ 85 $ 1,109 $ (345 ) $ 764 $ 975 Additions 497 198 8 — 206 — 206 703 Amortization: Periodic amortization (485 ) (130 ) (26 ) (11 ) (167 ) — (167 ) (652 ) Annuity unlocking — (20 ) — — (20 ) — (20 ) (20 ) Included in realized gains — 2 1 — 3 — 3 3 Foreign currency translation (2 ) — — — — — — (2 ) Change in unrealized — — — — — (186 ) (186 ) (186 ) Balance at December 31, 2014 221 925 132 74 1,131 (531 ) 600 821 Additions 519 224 11 — 235 — 235 754 Amortization: Periodic amortization (511 ) (162 ) (26 ) (11 ) (199 ) — (199 ) (710 ) Annuity unlocking — 31 4 — 35 — 35 35 Included in realized gains — 8 1 — 9 — 9 9 Sale of subsidiaries — (8 ) (3 ) (8 ) (19 ) — (19 ) (19 ) Foreign currency translation (3 ) — — — — — — (3 ) Change in unrealized — — — — — 297 297 297 Balance at December 31, 2015 226 1,018 119 55 1,192 (234 ) 958 1,184 Additions 535 230 9 — 239 — 239 774 Amortization: Periodic amortization (520 ) (169 ) (24 ) (9 ) (202 ) — (202 ) (722 ) Annuity unlocking — 25 4 — 29 — 29 29 Included in realized gains — 6 2 — 8 — 8 8 Foreign currency translation (3 ) — — — — — — (3 ) Change in unrealized — — — — — (31 ) (31 ) (31 ) Balance at December 31, 2016 $ 238 $ 1,110 $ 110 $ 46 $ 1,266 $ (265 ) $ 1,001 $ 1,239 |
Managed Investment Entities (Ta
Managed Investment Entities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Selected financial information related to collateralized loan obligations | Selected financial information related to the CLOs is shown below (in millions): Year ended December 31, 2016 2015 2014 Investment in CLO tranches $ 216 $ 266 $ 289 Gains (losses) on change in fair value of assets/liabilities (a): Assets 131 (116 ) (66 ) Liabilities (116 ) 82 22 Management fees paid to AFG 17 15 25 CLO earnings (losses) attributable to (b): AFG shareholders 37 (6 ) 16 Noncontrolling interests — — (51 ) (a) Included in revenues in AFG’s Statement of Earnings. (b) Included in earnings before income taxes in AFG’s Statement of Earnings. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying value of goodwill by reporting segment | Changes in the carrying value of goodwill during 2014 , 2015 and 2016 , by reporting segment, are presented in the following table (in millions): Property and Casualty Annuity Total Balance at January 1, 2014 $ 152 $ 33 $ 185 Acquisition of subsidiary in 2014 16 — 16 Balance at December 31, 2014 168 33 201 Sale of subsidiaries in 2015 — (2 ) (2 ) Balance at December 31, 2015 and December 31, 2016 $ 168 $ 31 $ 199 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Long-term debt consisted of the following at December 31 (in millions): 2016 2015 Principal Discount and Issue Costs Carrying Value Principal Discount and Issue Costs Carrying Value Direct Senior Obligations of AFG: 9-7/8% Senior Notes due June 2019 $ 350 $ (1 ) $ 349 $ 350 $ (1 ) $ 349 3.50% Senior Notes due August 2026 300 (3 ) 297 — — — 6-3/8% Senior Notes due June 2042 230 (7 ) 223 230 (7 ) 223 5-3/4% Senior Notes due August 2042 125 (4 ) 121 125 (4 ) 121 Other 3 — 3 3 — 3 1,008 (15 ) 993 708 (12 ) 696 Direct Subordinated Obligations of AFG: 6-1/4% Subordinated Debentures due September 2054 150 (5 ) 145 150 (5 ) 145 6% Subordinated Debentures due November 2055 150 (5 ) 145 150 (5 ) 145 300 (10 ) 290 300 (10 ) 290 Subsidiaries: National Interstate bank credit facility — — — 12 — 12 $ 1,308 $ (25 ) $ 1,283 $ 1,020 $ (22 ) $ 998 |
Summary of secured and unsecured long-term debt | As shown below at December 31 (principal amount, in millions), the majority of AFG’s long-term debt is unsecured obligations of the holding company and its subsidiaries: 2016 2015 Senior unsecured obligations $ 1,008 $ 720 Subordinated unsecured obligations 300 300 $ 1,308 $ 1,020 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Summary of restricted stock awards activity | The restricted Common Stock that AFG has granted generally vests over a three or four year period. Data relating to grants of restricted stock is presented below: Shares Average Grant Date Fair Value Outstanding at January 1, 2016 505,698 $ 51.43 Granted 318,940 $ 67.00 Vested (141,598 ) $ 40.73 Forfeited (4,165 ) $ 64.08 Outstanding at December 31, 2016 678,875 $ 60.90 |
Summary of stock options activity | Data for stock options issued under AFG’s stock incentive plans is presented below: Shares Average Exercise Price Average Remaining Contractual Term Aggregate Intrinsic Value (in millions) Outstanding at January 1, 2016 5,516,090 $ 41.46 Exercised (958,344 ) $ 33.56 Forfeited/Cancelled (52,645 ) $ 51.91 Outstanding at December 31, 2016 4,505,101 $ 43.02 5.4 years $ 203 Options exercisable at December 31, 2016 2,908,200 $ 36.95 4.4 years $ 149 |
Assumptions used in estimating weighted average fair value of options on grant date | The risk-free rate for periods associated with the expected term is based upon the U.S. Treasury yield curve in effect on the grant date. 2015 2014 Exercise price $ 63.15 $ 56.47 Expected dividend yield 1.6 % 1.6 % Expected volatility 25 % 26 % Expected term (in years) 7.25 7.25 Risk-free rate 1.88 % 2.20 % Grant date fair value $ 15.29 $ 14.66 |
Components of accumulated other comprehensive income (loss) | The progression of the components of accumulated other comprehensive income follows (in millions): Other Comprehensive Income AOCI Beginning Balance Pretax Tax Net of tax Attributable to noncontrolling interests Attributable to shareholders Other (c) AOCI Ending Balance Year ended December 31, 2016 Net unrealized gains on securities: Unrealized holding gains (losses) on securities arising during the period $ 124 $ (44 ) $ 80 $ (4 ) $ 76 Reclassification adjustment for realized (gains) losses included in net earnings (a) (19 ) 7 (12 ) (1 ) (13 ) Total net unrealized gains on securities (b) $ 332 105 (37 ) 68 (5 ) 63 $ 9 $ 404 Net unrealized gains (losses) on cash flow hedges 1 (12 ) 4 (8 ) — (8 ) — (7 ) Foreign currency translation adjustments (22 ) 6 1 7 — 7 — (15 ) Pension and other postretirement plans adjustments (7 ) — — — — — — (7 ) Total $ 304 $ 99 $ (32 ) $ 67 $ (5 ) $ 62 $ 9 $ 375 Year ended December 31, 2015 Net unrealized gains (losses) on securities: Unrealized holding gains (losses) on securities arising during the period $ (625 ) $ 219 $ (406 ) $ 9 $ (397 ) Reclassification adjustment for realized (gains) losses included in net earnings (a) 14 (5 ) 9 (1 ) 8 Reclassification for unrealized gains of subsidiaries sold (34 ) 12 (22 ) — (22 ) Total net unrealized gains (losses) on securities (b) $ 743 (645 ) 226 (419 ) 8 (411 ) $ — $ 332 Net unrealized gains on cash flow hedges — 1 — 1 — 1 — 1 Foreign currency translation adjustments (8 ) (9 ) (5 ) (14 ) — (14 ) — (22 ) Pension and other postretirement plans adjustments (8 ) 1 — 1 — 1 — (7 ) Total $ 727 $ (652 ) $ 221 $ (431 ) $ 8 $ (423 ) $ — $ 304 Year ended December 31, 2014 Net unrealized gains on securities: Unrealized holding gains on securities arising during the period $ 334 $ (118 ) $ 216 $ (4 ) $ 212 Reclassification adjustment for realized (gains) losses included in net earnings (a) (52 ) 19 (33 ) 1 (32 ) Total net unrealized gains on securities (b) $ 563 282 (99 ) 183 (3 ) 180 $ — $ 743 Foreign currency translation adjustments 1 (8 ) (1 ) (9 ) — (9 ) — (8 ) Pension and other postretirement plans adjustments (4 ) (6 ) 2 (4 ) — (4 ) — (8 ) Total $ 560 $ 268 $ (98 ) $ 170 $ (3 ) $ 167 $ — $ 727 (a) The reclassification adjustment out of net unrealized gains on securities affected the following lines in AFG’s Statement of Earnings: OCI component Affected line in the statement of earnings Pretax Realized gains (losses) on securities Tax Provision for income taxes Attributable to noncontrolling interests Net earnings (loss) attributable to noncontrolling interests (b) Includes net unrealized gains of $52 million at December 31, 2016 compared to net unrealized gains of $51 million and $58 million at December 31, 2015 and 2014 , related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings. (c) Other represents the impact on AOCI of the November 2016 acquisition of the noncontrolling interest in NATL (see Note B — “ Acquisitions and Sale of Businesses ”). |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of income taxes at the statutory rate and income taxes shown in the Statement of Earnings | The following is a reconciliation of income taxes at the statutory rate of 35% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions): 2016 2015 2014 Amount % of EBT Amount % of EBT Amount % of EBT Earnings before income taxes (“EBT”) $ 787 $ 565 $ 626 Income taxes at statutory rate $ 275 35 % $ 198 35 % $ 219 35 % Effect of: Tax exempt interest (24 ) (3 %) (27 ) (5 %) (25 ) (4 %) Change in valuation allowance 52 7 % 23 4 % 7 1 % Stock-based compensation (9 ) (1 %) 1 — % 1 — % Subsidiaries not in AFG’s tax return 3 — % 2 1 % 1 — % Acquisition of noncontrolling interest in NATL (66 ) (8 %) — — % — — % Neon restructuring (111 ) (14 %) — — % — — % Losses of managed investment entities — — % — — % 18 3 % Other (1 ) (1 %) (2 ) — % (1 ) — % Provision for income taxes as shown in the statement of earnings $ 119 15 % $ 195 35 % $ 220 35 % |
Components of income tax provision (credit) | The total income tax provision (credit) consists of (in millions): 2016 2015 2014 Current taxes: Federal $ 299 $ 216 $ 265 State 12 8 8 Deferred taxes: Federal (192 ) (29 ) (53 ) Provision for income taxes $ 119 $ 195 $ 220 |
Summary of operating loss carryforwards | For income tax purposes, AFG and its subsidiaries had the following carryforwards available at December 31, 2016 (in millions): Expiring Amount Operating Loss – U.S. 2017 - 2022 $ 143 Operating Loss – United Kingdom indefinite 139 (*) Capital Loss – U.S. 2021 237 (*) £112 million |
Components of deferred tax assets and liabilities | Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The significant components of deferred tax assets and liabilities included in AFG’s Balance Sheet at December 31 were as follows (in millions): 2016 2015 Excluding Unrealized Gains Impact of Unrealized Gains Total Excluding Unrealized Gains Impact of Unrealized Gains Total Deferred tax assets: Federal net operating loss carryforwards $ 50 $ — $ 50 $ 50 $ — $ 50 Foreign underwriting losses 120 — 120 77 — 77 Capital loss carryforwards 83 — 83 32 — 32 Insurance claims and reserves 774 27 801 691 22 713 Employee benefits 131 — 131 115 — 115 Other, net 40 (5 ) 35 33 (4 ) 29 Total deferred tax assets before valuation allowance 1,198 22 1,220 998 18 1,016 Valuation allowance against deferred tax assets (173 ) — (173 ) (130 ) — (130 ) Total deferred tax assets 1,025 22 1,047 868 18 886 Deferred tax liabilities: Subsidiaries not in AFG’s tax return — — — (63 ) — (63 ) Investment securities 29 (336 ) (307 ) 23 (281 ) (258 ) Deferred policy acquisition costs (448 ) 96 (352 ) (418 ) 82 (336 ) Total deferred tax liabilities (419 ) (240 ) (659 ) (458 ) (199 ) (657 ) Net deferred tax asset (liability) $ 606 $ (218 ) $ 388 $ 410 $ (181 ) $ 229 |
Progression of the liability for uncertain tax positions, excluding interest and penalties | A progression of the liability for uncertain tax positions, excluding interest and penalties, follows (in millions): 2016 2015 2014 Balance at January 1 $ 1 $ — $ 19 Additions for tax positions of prior years — 1 — Reductions for tax positions of prior years — — (8 ) Additions for tax positions of current year — — — Settlements — — (11 ) Balance at December 31 $ 1 $ 1 $ — |
Quarterly Operating Results (38
Quarterly Operating Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly operating results | The following are quarterly results of consolidated operations for the two years ended December 31, 2016 (in millions, except per share amounts). Quarterly earnings per share do not add to year-to-date amounts due to changes in shares outstanding. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Year 2016 Revenues $ 1,475 $ 1,581 $ 1,705 $ 1,737 $ 6,498 Net earnings, including noncontrolling interests 104 63 113 388 668 Net earnings attributable to shareholders 101 54 109 385 649 Earnings attributable to shareholders per Common Share: Basic $ 1.16 $ 0.63 $ 1.25 $ 4.43 $ 7.47 Diluted 1.14 0.62 1.23 4.33 7.33 Average number of Common Shares: Basic 86.9 86.8 86.9 86.9 86.9 Diluted 88.5 88.4 88.5 88.8 88.5 2015 Revenues $ 1,297 $ 1,543 $ 1,687 $ 1,618 $ 6,145 Net earnings, including noncontrolling interests 25 149 66 130 370 Net earnings attributable to shareholders 19 141 63 129 352 Earnings attributable to shareholders per Common Share: Basic $ 0.22 $ 1.60 $ 0.72 $ 1.48 $ 4.02 Diluted 0.21 1.57 0.71 1.45 3.94 Average number of Common Shares: Basic 87.6 87.7 87.5 87.4 87.6 Diluted 89.4 89.5 89.3 89.2 89.4 |
Quarterly information on realized gains (losses) and favorable (unfavorable) development on unpaid loss and loss adjustment expenses | Pretax realized gains on subsidiaries and securities (including other-than-temporary impairments) and favorable (adverse) prior year development of AFG’s liability for losses and loss adjustment expenses (“LAE”) were as follows (in millions): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Year Realized Gains (Losses) on Securities and Subsidiaries 2016 $ (18 ) $ (14 ) $ 2 $ 51 $ 21 2015 (143 ) (1 ) (11 ) (25 ) (180 ) Prior Year Development Favorable (Adverse) 2016 $ 28 $ (28 ) $ (22 ) $ (10 ) $ (32 ) 2015 7 10 (55 ) 5 (33 ) |
Insurance (Tables)
Insurance (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Insurance [Abstract] | |
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): 2016 2015 2014 Balance at beginning of period $ 8,127 $ 7,872 $ 6,410 Less reinsurance recoverables, net of allowance 2,201 2,227 2,122 Net liability at beginning of period 5,926 5,645 4,288 Provision for losses and LAE occurring in the current year 2,730 2,662 2,488 Net increase (decrease) in the provision for claims of prior years: Special A&E charges 36 67 24 Neon exited lines charge 57 — — Other (61 ) (34 ) (18 ) Total losses and LAE incurred 2,762 2,695 2,494 Payments for losses and LAE of: Current year (841 ) (828 ) (789 ) Prior years (1,512 ) (1,575 ) (1,340 ) Total payments (2,353 ) (2,403 ) (2,129 ) Reserves of businesses acquired (disposed) (*) (40 ) — 1,028 Foreign currency translation and other (34 ) (11 ) (36 ) Net liability at end of period 6,261 5,926 5,645 Add back reinsurance recoverables, net of allowance 2,302 2,201 2,227 Gross unpaid losses and LAE included in the balance sheet $ 8,563 $ 8,127 $ 7,872 (*) Reflects the November 2016 reinsurance to close transaction at Neon (discussed below) and the acquisition of Summit in April 2014 (discussed in Note B — “ Acquisitions and Sale of Businesses ” ). |
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): 2016 2015 Unpaid losses and allocated LAE, net of reinsurance: Specialty Property and transportation $ 1,020 $ 971 Specialty casualty 3,356 3,170 Specialty financial 228 219 Other specialty 240 240 Total Specialty (excluding foreign reserves) 4,844 4,600 Other reserves Reserves for foreign operations 710 648 A&E reserves 337 327 Unallocated LAE 310 296 Other 60 55 Total other reserves 1,417 1,326 Total reserves, net of reinsurance 6,261 5,926 Add back reinsurance recoverables, net of allowance 2,302 2,201 Gross unpaid losses and LAE included in the balance sheet $ 8,563 $ 8,127 |
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, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 657 $ 595 $ 577 $ 572 $ 572 $ 569 $ 569 $ 568 $ 568 $ 568 $ 1 126,900 2008 923 871 852 853 856 854 855 856 854 3 157,173 2009 526 506 523 516 511 511 508 508 4 140,530 2010 702 662 668 676 679 679 683 10 140,614 2011 830 816 831 845 856 868 16 140,408 2012 890 884 897 909 922 27 146,584 2013 911 898 902 908 40 142,139 2014 868 852 841 67 137,214 2015 840 802 106 134,407 2016 760 250 109,187 Total $ 7,714 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 284 $ 450 $ 492 $ 523 $ 539 $ 553 $ 559 $ 562 $ 563 $ 564 99.3 % 2008 352 706 761 799 824 835 846 846 847 99.2 % 2009 229 348 413 456 479 493 497 499 98.2 % 2010 328 505 556 618 649 660 665 97.4 % 2011 373 679 742 787 821 840 96.8 % 2012 582 725 793 841 868 94.1 % 2013 449 721 784 831 91.5 % 2014 337 646 711 84.5 % 2015 367 594 74.1 % 2016 296 38.9 % Total $ 6,715 Unpaid losses and LAE — years 2007 through 2016 999 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 21 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 1,020 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 46.5 % 29.5 % 7.9 % 6.1 % 3.6 % 2.1 % 1.0 % 0.3 % 0.1 % 0.2 % Cumulative 46.5 % 76.0 % 83.9 % 90.0 % 93.6 % 95.7 % 96.7 % 97.0 % 97.1 % 97.3 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). Specialty casualty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 1,036 $ 957 $ 892 $ 852 $ 828 $ 821 $ 818 $ 794 $ 802 $ 803 $ 40 62,676 2008 905 891 874 860 871 856 855 849 855 48 59,886 2009 864 867 845 826 816 811 812 807 58 53,097 2010 847 863 864 842 856 846 845 74 52,771 2011 831 831 819 828 814 808 89 50,635 2012 874 865 859 859 855 124 49,732 2013 938 921 915 910 159 49,239 2014 1,011 984 984 263 51,808 2015 1,057 1,023 380 52,001 2016 1,105 636 47,436 Total $ 8,995 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 166 $ 357 $ 477 $ 563 $ 623 $ 664 $ 692 $ 708 $ 724 $ 733 91.3 % 2008 162 355 490 588 653 702 727 751 768 89.8 % 2009 160 366 494 575 636 673 698 713 88.4 % 2010 179 393 539 623 676 712 734 86.9 % 2011 165 369 506 595 643 674 83.4 % 2012 163 368 495 596 658 77.0 % 2013 171 377 530 638 70.1 % 2014 182 398 556 56.5 % 2015 170 398 38.9 % 2016 181 16.4 % Total $ 6,053 Unpaid losses and LAE — years 2007 through 2016 2,942 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 414 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 3,356 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 19.0 % 23.7 % 16.1 % 11.0 % 7.0 % 4.7 % 3.0 % 2.2 % 2.0 % 1.1 % Cumulative 19.0 % 42.7 % 58.8 % 69.8 % 76.8 % 81.5 % 84.5 % 86.7 % 88.7 % 89.8 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). Specialty financial (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 170 $ 165 $ 159 $ 149 $ 145 $ 144 $ 142 $ 141 $ 140 $ 136 $ 1 21,643 2008 190 207 212 209 203 199 198 197 198 1 27,287 2009 193 193 187 184 188 186 187 186 1 27,438 2010 139 146 133 133 135 133 130 3 21,921 2011 140 158 157 155 148 146 14 16,364 2012 164 163 151 139 137 15 21,029 2013 141 145 137 131 15 28,220 2014 146 157 156 22 28,814 2015 156 159 36 35,880 2016 179 75 29,464 Total $ 1,558 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 82 $ 114 $ 126 $ 133 $ 134 $ 135 $ 135 $ 135 $ 136 $ 135 99.3 % 2008 103 153 185 189 189 191 193 194 194 98.0 % 2009 112 145 157 166 171 182 185 186 100.0 % 2010 61 93 104 122 133 131 128 98.5 % 2011 59 113 116 124 131 132 90.4 % 2012 71 104 109 117 121 88.3 % 2013 70 100 107 114 87.0 % 2014 62 108 125 80.1 % 2015 72 109 68.6 % 2016 87 48.6 % Total $ 1,331 Unpaid losses and LAE — years 2007 through 2016 227 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 1 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 228 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 49.9 % 25.3 % 7.7 % 6.1 % 3.3 % 1.4 % 0.1 % 0.3 % 0.4 % (0.7 %) Cumulative 49.9 % 75.2 % 82.9 % 89.0 % 92.3 % 93.7 % 93.8 % 94.1 % 94.5 % 93.8 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). Other specialty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims (a) Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 45 $ 42 $ 42 $ 42 $ 40 $ 39 $ 36 $ 36 $ 33 $ 30 $ 10 — 2008 49 49 49 49 48 46 45 45 44 4 — 2009 41 41 41 40 37 37 36 38 11 — 2010 36 39 40 39 40 40 40 4 — 2011 39 43 42 43 43 44 5 — 2012 42 40 39 40 41 10 — 2013 46 47 46 47 6 — 2014 58 57 59 21 — 2015 59 60 27 — 2016 61 44 — Total $ 464 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (b) 2007 $ 6 $ 10 $ 12 $ 15 $ 17 $ 18 $ 19 $ 20 $ 21 $ 21 70.0 % 2008 10 16 23 31 35 37 37 37 38 86.4 % 2009 8 12 15 19 22 22 24 26 68.4 % 2010 8 14 21 24 27 33 35 87.5 % 2011 12 20 25 28 34 36 81.8 % 2012 8 17 21 25 28 68.3 % 2013 7 16 22 34 72.3 % 2014 13 21 30 50.8 % 2015 10 26 43.3 % 2016 9 14.8 % Total $ 283 Unpaid losses and LAE — years 2007 through 2016 181 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 59 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 240 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 19.9 % 16.9 % 12.1 % 12.6 % 8.7 % 5.5 % 3.4 % 2.9 % 2.8 % — % Cumulative 19.9 % 36.8 % 48.9 % 61.5 % 70.2 % 75.7 % 79.1 % 82.0 % 84.8 % 84.8 % (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, 2016 ). Total Specialty Group (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 1,908 $ 1,759 $ 1,670 $ 1,615 $ 1,585 $ 1,573 $ 1,565 $ 1,539 $ 1,543 $ 1,537 $ 52 211,219 2008 2,067 2,018 1,987 1,971 1,978 1,955 1,953 1,947 1,951 56 244,346 2009 1,624 1,607 1,596 1,566 1,552 1,545 1,543 1,539 74 221,065 2010 1,724 1,710 1,705 1,690 1,710 1,698 1,698 91 215,306 2011 1,840 1,848 1,849 1,871 1,861 1,866 124 207,407 2012 1,970 1,952 1,946 1,947 1,955 176 217,345 2013 2,036 2,011 2,000 1,996 220 219,598 2014 2,083 2,050 2,040 373 217,836 2015 2,112 2,044 549 222,288 2016 2,105 1,005 186,087 Total $ 18,731 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 538 $ 931 $ 1,107 $ 1,234 $ 1,313 $ 1,370 $ 1,405 $ 1,425 $ 1,444 $ 1,453 94.5 % 2008 627 1,230 1,459 1,607 1,701 1,765 1,803 1,828 1,847 94.7 % 2009 509 871 1,079 1,216 1,308 1,370 1,404 1,424 92.5 % 2010 576 1,005 1,220 1,387 1,485 1,536 1,562 92.0 % 2011 609 1,181 1,389 1,534 1,629 1,682 90.1 % 2012 824 1,214 1,418 1,579 1,675 85.7 % 2013 697 1,214 1,443 1,617 81.0 % 2014 594 1,173 1,422 69.7 % 2015 619 1,127 55.1 % 2016 573 27.2 % Total $ 14,382 Unpaid losses and LAE — years 2007 through 2016 4,349 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 495 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 4,844 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 33.0 % 26.1 % 11.8 % 8.5 % 5.3 % 3.4 % 2.0 % 1.3 % 1.1 % 0.6 % Cumulative 33.0 % 59.1 % 70.9 % 79.4 % 84.7 % 88.1 % 90.1 % 91.4 % 92.5 % 93.1 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). |
Short-duration insurance contracts, schedule of historical claims duration | 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, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 657 $ 595 $ 577 $ 572 $ 572 $ 569 $ 569 $ 568 $ 568 $ 568 $ 1 126,900 2008 923 871 852 853 856 854 855 856 854 3 157,173 2009 526 506 523 516 511 511 508 508 4 140,530 2010 702 662 668 676 679 679 683 10 140,614 2011 830 816 831 845 856 868 16 140,408 2012 890 884 897 909 922 27 146,584 2013 911 898 902 908 40 142,139 2014 868 852 841 67 137,214 2015 840 802 106 134,407 2016 760 250 109,187 Total $ 7,714 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 284 $ 450 $ 492 $ 523 $ 539 $ 553 $ 559 $ 562 $ 563 $ 564 99.3 % 2008 352 706 761 799 824 835 846 846 847 99.2 % 2009 229 348 413 456 479 493 497 499 98.2 % 2010 328 505 556 618 649 660 665 97.4 % 2011 373 679 742 787 821 840 96.8 % 2012 582 725 793 841 868 94.1 % 2013 449 721 784 831 91.5 % 2014 337 646 711 84.5 % 2015 367 594 74.1 % 2016 296 38.9 % Total $ 6,715 Unpaid losses and LAE — years 2007 through 2016 999 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 21 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 1,020 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 46.5 % 29.5 % 7.9 % 6.1 % 3.6 % 2.1 % 1.0 % 0.3 % 0.1 % 0.2 % Cumulative 46.5 % 76.0 % 83.9 % 90.0 % 93.6 % 95.7 % 96.7 % 97.0 % 97.1 % 97.3 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). Specialty casualty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 1,036 $ 957 $ 892 $ 852 $ 828 $ 821 $ 818 $ 794 $ 802 $ 803 $ 40 62,676 2008 905 891 874 860 871 856 855 849 855 48 59,886 2009 864 867 845 826 816 811 812 807 58 53,097 2010 847 863 864 842 856 846 845 74 52,771 2011 831 831 819 828 814 808 89 50,635 2012 874 865 859 859 855 124 49,732 2013 938 921 915 910 159 49,239 2014 1,011 984 984 263 51,808 2015 1,057 1,023 380 52,001 2016 1,105 636 47,436 Total $ 8,995 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 166 $ 357 $ 477 $ 563 $ 623 $ 664 $ 692 $ 708 $ 724 $ 733 91.3 % 2008 162 355 490 588 653 702 727 751 768 89.8 % 2009 160 366 494 575 636 673 698 713 88.4 % 2010 179 393 539 623 676 712 734 86.9 % 2011 165 369 506 595 643 674 83.4 % 2012 163 368 495 596 658 77.0 % 2013 171 377 530 638 70.1 % 2014 182 398 556 56.5 % 2015 170 398 38.9 % 2016 181 16.4 % Total $ 6,053 Unpaid losses and LAE — years 2007 through 2016 2,942 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 414 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 3,356 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 19.0 % 23.7 % 16.1 % 11.0 % 7.0 % 4.7 % 3.0 % 2.2 % 2.0 % 1.1 % Cumulative 19.0 % 42.7 % 58.8 % 69.8 % 76.8 % 81.5 % 84.5 % 86.7 % 88.7 % 89.8 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). Specialty financial (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 170 $ 165 $ 159 $ 149 $ 145 $ 144 $ 142 $ 141 $ 140 $ 136 $ 1 21,643 2008 190 207 212 209 203 199 198 197 198 1 27,287 2009 193 193 187 184 188 186 187 186 1 27,438 2010 139 146 133 133 135 133 130 3 21,921 2011 140 158 157 155 148 146 14 16,364 2012 164 163 151 139 137 15 21,029 2013 141 145 137 131 15 28,220 2014 146 157 156 22 28,814 2015 156 159 36 35,880 2016 179 75 29,464 Total $ 1,558 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 82 $ 114 $ 126 $ 133 $ 134 $ 135 $ 135 $ 135 $ 136 $ 135 99.3 % 2008 103 153 185 189 189 191 193 194 194 98.0 % 2009 112 145 157 166 171 182 185 186 100.0 % 2010 61 93 104 122 133 131 128 98.5 % 2011 59 113 116 124 131 132 90.4 % 2012 71 104 109 117 121 88.3 % 2013 70 100 107 114 87.0 % 2014 62 108 125 80.1 % 2015 72 109 68.6 % 2016 87 48.6 % Total $ 1,331 Unpaid losses and LAE — years 2007 through 2016 227 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 1 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 228 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 49.9 % 25.3 % 7.7 % 6.1 % 3.3 % 1.4 % 0.1 % 0.3 % 0.4 % (0.7 %) Cumulative 49.9 % 75.2 % 82.9 % 89.0 % 92.3 % 93.7 % 93.8 % 94.1 % 94.5 % 93.8 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). Other specialty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims (a) Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 45 $ 42 $ 42 $ 42 $ 40 $ 39 $ 36 $ 36 $ 33 $ 30 $ 10 — 2008 49 49 49 49 48 46 45 45 44 4 — 2009 41 41 41 40 37 37 36 38 11 — 2010 36 39 40 39 40 40 40 4 — 2011 39 43 42 43 43 44 5 — 2012 42 40 39 40 41 10 — 2013 46 47 46 47 6 — 2014 58 57 59 21 — 2015 59 60 27 — 2016 61 44 — Total $ 464 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (b) 2007 $ 6 $ 10 $ 12 $ 15 $ 17 $ 18 $ 19 $ 20 $ 21 $ 21 70.0 % 2008 10 16 23 31 35 37 37 37 38 86.4 % 2009 8 12 15 19 22 22 24 26 68.4 % 2010 8 14 21 24 27 33 35 87.5 % 2011 12 20 25 28 34 36 81.8 % 2012 8 17 21 25 28 68.3 % 2013 7 16 22 34 72.3 % 2014 13 21 30 50.8 % 2015 10 26 43.3 % 2016 9 14.8 % Total $ 283 Unpaid losses and LAE — years 2007 through 2016 181 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 59 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 240 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 19.9 % 16.9 % 12.1 % 12.6 % 8.7 % 5.5 % 3.4 % 2.9 % 2.8 % — % Cumulative 19.9 % 36.8 % 48.9 % 61.5 % 70.2 % 75.7 % 79.1 % 82.0 % 84.8 % 84.8 % (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, 2016 ). Total Specialty Group (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2016 For the Years Ended (2007–2015 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 $ 1,908 $ 1,759 $ 1,670 $ 1,615 $ 1,585 $ 1,573 $ 1,565 $ 1,539 $ 1,543 $ 1,537 $ 52 211,219 2008 2,067 2,018 1,987 1,971 1,978 1,955 1,953 1,947 1,951 56 244,346 2009 1,624 1,607 1,596 1,566 1,552 1,545 1,543 1,539 74 221,065 2010 1,724 1,710 1,705 1,690 1,710 1,698 1,698 91 215,306 2011 1,840 1,848 1,849 1,871 1,861 1,866 124 207,407 2012 1,970 1,952 1,946 1,947 1,955 176 217,345 2013 2,036 2,011 2,000 1,996 220 219,598 2014 2,083 2,050 2,040 373 217,836 2015 2,112 2,044 549 222,288 2016 2,105 1,005 186,087 Total $ 18,731 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2007–2015 is Supplementary Information and Unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % (a) 2007 $ 538 $ 931 $ 1,107 $ 1,234 $ 1,313 $ 1,370 $ 1,405 $ 1,425 $ 1,444 $ 1,453 94.5 % 2008 627 1,230 1,459 1,607 1,701 1,765 1,803 1,828 1,847 94.7 % 2009 509 871 1,079 1,216 1,308 1,370 1,404 1,424 92.5 % 2010 576 1,005 1,220 1,387 1,485 1,536 1,562 92.0 % 2011 609 1,181 1,389 1,534 1,629 1,682 90.1 % 2012 824 1,214 1,418 1,579 1,675 85.7 % 2013 697 1,214 1,443 1,617 81.0 % 2014 594 1,173 1,422 69.7 % 2015 619 1,127 55.1 % 2016 573 27.2 % Total $ 14,382 Unpaid losses and LAE — years 2007 through 2016 4,349 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 495 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 4,844 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Annual 33.0 % 26.1 % 11.8 % 8.5 % 5.3 % 3.4 % 2.0 % 1.3 % 1.1 % 0.6 % Cumulative 33.0 % 59.1 % 70.9 % 79.4 % 84.7 % 88.1 % 90.1 % 91.4 % 92.5 % 93.1 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016 ). |
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 2016 2015 2014 2016 2015 Property and casualty companies $ 461 $ 408 $ 318 $ 2,939 $ 2,488 Life insurance companies 167 399 349 1,976 1,721 |
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. 2016 2015 2014 Direct premiums written $ 5,858 $ 5,713 $ 5,387 Reinsurance assumed 123 119 90 Reinsurance ceded (1,595 ) (1,505 ) (1,457 ) Net written premiums $ 4,386 $ 4,327 $ 4,020 Direct premiums earned $ 5,745 $ 5,613 $ 5,195 Reinsurance assumed 118 105 75 Reinsurance ceded (1,535 ) (1,494 ) (1,392 ) Net earned premiums $ 4,328 $ 4,224 $ 3,878 Reinsurance recoveries $ 810 $ 936 $ 895 |
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 (“EDAR”), 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): 2016 2015 Expected death and annuitization $ 223 $ 214 Guaranteed withdrawal benefits 278 203 Accrued persistency and premium bonuses 6 11 |
Accounting Policies - Narrative
Accounting Policies - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Significant Accounting Policies [Line Items] | ||||
Assets | $ 4,765 | $ 4,765 | $ 4,047 | |
Liabilities | 4,549 | 4,549 | 3,781 | |
Cumulative effect of accounting change | $ 2 | |||
Tax benefit related to exercise of stock options | $ 11 | $ 16 | $ 12 | |
Weighted average common shares adjustment related to stock-based compensation | 1.6 | 1.8 | 2 | |
Anti-dilutive potential common shares related to stock-based compensation plans | 0.4 | 1.1 | 1 | |
Maturities of short term investments | 3 months | |||
New collateralized loan obligation temporary warehousing entities | ||||
Significant Accounting Policies [Line Items] | ||||
Assets | 23 | $ 23 | ||
Liabilities | 18 | $ 18 | ||
Accounting Standards Update 2014-09 | ||||
Significant Accounting Policies [Line Items] | ||||
Expected effect on consolidated revenues under new revenue recognition guidance effective in 2018 | 2.00% | |||
Retained Earnings | Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Cumulative effect of accounting change | 1 | $ 1 | ||
Stock Options | Capital surplus under previous accounting guidance | ||||
Significant Accounting Policies [Line Items] | ||||
Tax benefit related to exercise of stock options | $ 9 | $ 9 |
Accounting Policies - Narrati41
Accounting Policies - Narrative on Revenue Recognition Guidance (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Standards Update 2014-09 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Expected effect on consolidated revenues under new revenue recognition guidance effective in 2018 | 2.00% |
Acquisitions and Sale of Busi42
Acquisitions and Sale of Businesses - Narrative on acquisitions of subsidiaries (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 10, 2016 | Apr. 01, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisitions [Line Items] | |||||||||
Payments to acquire additional interest in subsidiaries | $ 315 | $ 0 | $ 0 | ||||||
Income tax expense (benefit) | 119 | 195 | 220 | ||||||
Payments to acquire business | $ 0 | 0 | 267 | ||||||
Weighted average useful life of finite-lived intangible assets acquired | 4 years | ||||||||
Goodwill | $ 199 | $ 201 | $ 199 | 199 | 201 | $ 185 | |||
National Interstate | |||||||||
Business Acquisitions [Line Items] | |||||||||
Percentage ownership of National Interstate by noncontrolling owners prior to acquisition | 49.00% | ||||||||
Payments to acquire additional interest in subsidiaries | $ 315 | ||||||||
Acquisition price per share (USD per share) | $ 32 | ||||||||
Cash dividend paid (USD per share) | $ 0.50 | ||||||||
Payment of special cash dividends | $ 5 | ||||||||
Payments for acquisition related costs | 10 | ||||||||
Summit Holding Southeast, Inc | |||||||||
Business Acquisitions [Line Items] | |||||||||
Payments to acquire business | $ 259 | ||||||||
Capital contributions to acquired business | 140 | ||||||||
Total capital investment in acquired business | 399 | ||||||||
Net earned premiums of acquired business | $ 410 | 540 | 529 | ||||||
Goodwill | 16 | ||||||||
Selective Insurance Company of America Self-Insured Pooled Group | |||||||||
Business Acquisitions [Line Items] | |||||||||
Payments to acquire business | $ 8 | ||||||||
In-force gross written premiums of acquired book of business | $ 38 | ||||||||
Gross written premiums of acquired business | 34 | ||||||||
Net written premiums of acquired business | 16 | ||||||||
Maximum | Summit Holding Southeast, Inc | |||||||||
Business Acquisitions [Line Items] | |||||||||
Payments for acquisition related costs | $ 1 | ||||||||
AFG | |||||||||
Business Acquisitions [Line Items] | |||||||||
Income tax expense (benefit) | (177) | 119 | 195 | 220 | |||||
Capital contributions to acquired business | $ 560 | $ 27 | $ 431 | ||||||
AFG | National Interstate | |||||||||
Business Acquisitions [Line Items] | |||||||||
Reduction to capital surplus | $ (137) | ||||||||
Income tax expense (benefit) | $ (66) |
Acquisitions and Sale of Busi43
Acquisitions and Sale of Businesses - Narrative on sale of businesses (Details) $ in Millions | Dec. 24, 2015USD ($) | Mar. 31, 2015 | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)policy | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Nov. 30, 2015 |
Sale of Businesses | ||||||||||
Cash proceeds from the sale of business | $ 0 | $ 7 | $ 0 | |||||||
Long-term care insurance reserves | $ 34 | 37 | 34 | |||||||
Realized gains (losses) on subsidiaries | 2 | (161) | $ 0 | |||||||
Property and Casualty Group | ||||||||||
Sale of Businesses | ||||||||||
Realized gains (losses) on subsidiaries | $ 5 | |||||||||
Run-off long-term care insurance business | ||||||||||
Sale of Businesses | ||||||||||
Cash proceeds from the sale of business | $ 7 | |||||||||
Investment securities proceeds received from the sale of business | 11 | |||||||||
Potential additional sale proceeds based on the release of certain statutory liabilities of the legal entities sold | 13 | |||||||||
Contingent capital support agreement amount | $ 35 | |||||||||
Contingent capital support agreement term | 5 years | |||||||||
Long-term care insurance reserves of business sold as a percentage of total long-term care insurance reserves | 96.00% | |||||||||
Cash and investment securities proceeds from the sale of business | $ 18 | |||||||||
Total tax benefits proceeds from the sale of business | $ 97 | |||||||||
Realized gains (losses) on subsidiaries | (166) | $ 2 | $ (4) | $ (162) | $ (166) | |||||
Loss on subsidiaries, net of tax | $ (108) | $ (105) | ||||||||
Carrying value of the assets and liabilities of business sold as a percentage of total assets and liabilities | 4.00% | 4.00% | ||||||||
Run-off long-term care insurance business | AFG | ||||||||||
Sale of Businesses | ||||||||||
Number of long-term care insurance policies | policy | 1,600 | |||||||||
Long-term care insurance reserves | $ 37 |
Acquisitions and Sale of Busi44
Acquisitions and Sale of Businesses - Allocation of the purchase price of subsidiary (Details) - USD ($) $ in Millions | Apr. 01, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisitions [Line Items] | ||||||
Total purchase price | $ 0 | $ 0 | $ 267 | |||
Allocation of excess purchase price: | ||||||
Goodwill | $ 199 | $ 199 | $ 201 | $ 185 | ||
Summit Holding Southeast, Inc | ||||||
Business Acquisitions [Line Items] | ||||||
Total purchase price | $ 259 | |||||
Tangible assets acquired: | ||||||
Cash and cash equivalents | 1,078 | |||||
Fixed maturities, available for sale | 92 | |||||
Recoverables from reinsurers | 116 | |||||
Agents’ balances and premiums receivable | 41 | |||||
Deferred tax assets, net | [1] | 67 | ||||
Other receivables | 21 | |||||
Other assets | 11 | |||||
Total tangible assets acquired | 1,426 | |||||
Liabilities acquired: | ||||||
Unpaid losses and loss adjustment expenses | 1,142 | |||||
Unearned premiums | 3 | |||||
Payable to reinsurers | 3 | |||||
Other liabilities | 66 | |||||
Total liabilities acquired | 1,214 | |||||
Net tangible assets acquired, at fair value | 212 | |||||
Excess purchase price over net tangible assets acquired | 47 | |||||
Allocation of excess purchase price: | ||||||
Intangible assets acquired | [1] | 47 | ||||
Deferred tax on intangible assets acquired | [1] | (16) | ||||
Goodwill | $ 16 | |||||
[1] | Included in Other assets in AFG’s Balance Sheet. |
Acquisitions and Sale of Busi45
Acquisitions and Sale of Businesses - Impact of the sale of subsidiaries sold (Details) - USD ($) $ in Millions | Dec. 24, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Liabilities of businesses sold: | ||||||||
Realized gains (losses) on subsidiaries | $ 2 | $ (161) | $ 0 | |||||
Run-off long-term care insurance business | ||||||||
Sale of Businesses | ||||||||
Net sale proceeds | [1] | $ 13 | ||||||
Assets of businesses sold: | ||||||||
Cash and investments | 1,334 | |||||||
Recoverables from reinsurers | 630 | |||||||
Deferred policy acquisition costs | 16 | |||||||
Other receivables | 16 | |||||||
Other assets | (4) | |||||||
Goodwill | 2 | |||||||
Total assets | 1,994 | |||||||
Liabilities of businesses sold: | ||||||||
Annuity benefits accumulated | 261 | |||||||
Life, accident and health reserves | 1,525 | |||||||
Other liabilities | 7 | |||||||
Total liabilities | 1,793 | |||||||
Reclassify net unrealized gain on marketable securities | 22 | |||||||
Net assets of businesses sold | 179 | |||||||
Realized gains (losses) on subsidiaries | (166) | $ 2 | $ (4) | $ (162) | $ (166) | |||
Tax benefit | 58 | |||||||
Loss on subsidiaries, net of tax | $ (108) | $ (105) | ||||||
[1] | Includes the fair value of the potential additional consideration and capital maintenance agreement and is shown net of estimated expenses. |
Acquisitions and Sale of Busi46
Acquisitions and Sale of Businesses - Revenues, costs and expenses, and earnings before income taxes for the subsidiaries sold (Details) - Run-off long-term care insurance business - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Life, accident and health net earned premiums: | ||
Long-term care | $ 73 | $ 74 |
Life operations | 11 | 11 |
Net investment income | 73 | 75 |
Realized gains (losses) on securities and other income | (11) | (6) |
Total revenues | 146 | 154 |
Annuity benefits | 8 | 7 |
Life, accident and health benefits: | ||
Long-term care | 91 | 119 |
Life operations | 11 | 11 |
Annuity and supplemental insurance acquisition expenses | 12 | 11 |
Other expenses | 16 | 14 |
Total costs and expenses | 138 | 162 |
Earnings before income taxes | $ 8 | $ (8) |
Segments of Operations - Narrat
Segments of Operations - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | ||
Segment Reporting Information [Line Items] | |||||||||
Number of segments | segment | 4 | ||||||||
Revenue derived from sales of property and casualty insurance outside of the United States | 4.00% | 4.00% | 5.00% | ||||||
Other income | $ 224 | $ 243 | $ 122 | ||||||
Earnings (losses) of managed investment entities attributable to noncontrolling interests | [1] | 0 | 0 | (51) | |||||
Property and casualty insurance | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Other income | [2] | 51 | 78 | 9 | |||||
Property and casualty insurance | Real estate investment | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Other income | $ 32 | $ 15 | $ 51 | ||||||
Property and casualty insurance | Other lines | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Special charges related to the exit of certain lines of business within subsidiaries | $ 65 | ||||||||
Special charges to increase asbestos and environmental reserves | $ 36 | $ 67 | 36 | 67 | 24 | ||||
Other | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Special charges to increase asbestos and environmental reserves | $ 5 | $ 12 | 6 | ||||||
Write off of deferred debt issuance cost due to the retirement of debt | $ 4 | ||||||||
Earnings (losses) of managed investment entities attributable to noncontrolling interests | $ (51) | ||||||||
[1] | Included in earnings before income taxes in AFG’s Statement of Earnings. | ||||||||
[2] | Includes pretax income of $32 million (before noncontrolling interest) from the sale of an apartment property in the second quarter of 2016, $51 million (before noncontrolling interest) from the sale of a hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015. |
Segments of Operations - Assets
Segments of Operations - Assets by segment and sub-segment (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | ||||
Total assets | $ 55,072 | $ 49,837 | $ 47,513 | |
Property and casualty insurance | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | [1] | 15,574 | 14,689 | 14,069 |
Annuity | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | 33,409 | 29,865 | 27,317 | |
Run-off long-term care and life | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | [2] | 752 | 772 | 2,489 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | $ 5,337 | $ 4,511 | $ 3,638 | |
[1] | Not allocable to sub-segments. | |||
[2] | AFG sold substantially all of its run-off long-term care insurance business in December 2015. |
Segments of Operations - Revenu
Segments of Operations - Revenues by segment and sub-segment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | $ 4,328 | $ 4,224 | $ 3,878 | |||||||||
Net investment income | 1,696 | 1,633 | 1,501 | |||||||||
Other income | 224 | 243 | 122 | |||||||||
Revenues before realized gains (losses) | 6,477 | 6,325 | 5,681 | |||||||||
Realized gains (losses) on securities | 19 | (19) | 52 | |||||||||
Realized gains (losses) on subsidiaries | 2 | (161) | 0 | |||||||||
Total revenues | $ 1,737 | $ 1,705 | $ 1,581 | $ 1,475 | $ 1,618 | $ 1,687 | $ 1,543 | $ 1,297 | 6,498 | 6,145 | 5,733 | |
Property and casualty insurance | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net investment income | 350 | 319 | 294 | |||||||||
Other income | [1] | 51 | 78 | 9 | ||||||||
Revenues before realized gains (losses) | 4,729 | 4,621 | 4,181 | |||||||||
Annuity | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net investment income | 1,356 | 1,224 | 1,136 | |||||||||
Other income | 103 | 98 | 97 | |||||||||
Revenues before realized gains (losses) | 1,459 | 1,322 | 1,233 | |||||||||
Run-off long-term care and life | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues before realized gains (losses) | [2] | 49 | 188 | 195 | ||||||||
Other | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues before realized gains (losses) | 240 | 194 | 72 | |||||||||
Property and transportation | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | 1,662 | 1,599 | 1,544 | |||||||||
Specialty casualty | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | 2,006 | 2,011 | 1,765 | |||||||||
Specialty financial | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | 557 | 517 | 469 | |||||||||
Other specialty | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | $ 103 | $ 97 | $ 100 | |||||||||
[1] | Includes pretax income of $32 million (before noncontrolling interest) from the sale of an apartment property in the second quarter of 2016, $51 million (before noncontrolling interest) from the sale of a hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015. | |||||||||||
[2] | AFG sold substantially all of its run-off long-term care insurance business in December 2015. |
Segments of Operations - Earnin
Segments of Operations - Earnings before income taxes by segment and sub-segment (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Segment Reporting Information [Line Items] | ||||
Earnings before realized gains (losses) and income taxes | $ 766 | $ 745 | $ 574 | |
Realized gains (losses) on securities | 19 | (19) | 52 | |
Realized gains (losses) on subsidiaries | 2 | (161) | 0 | |
Earnings before income taxes | 787 | 565 | 626 | |
Property and casualty insurance | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | 236 | 225 | 212 | |
Investment and other income, net | [1] | 341 | 351 | 244 |
Earnings before realized gains (losses) and income taxes | 577 | 576 | 456 | |
Annuity | ||||
Segment Reporting Information [Line Items] | ||||
Earnings before realized gains (losses) and income taxes | 368 | 331 | 328 | |
Run-off long-term care and life | ||||
Segment Reporting Information [Line Items] | ||||
Earnings before realized gains (losses) and income taxes | [2] | 2 | 14 | (10) |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Earnings before realized gains (losses) and income taxes | [3] | (181) | (176) | (200) |
Property and transportation | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | 166 | 48 | 21 | |
Specialty casualty | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | 78 | 146 | 136 | |
Specialty financial | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | 84 | 87 | 64 | |
Other specialty | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | 9 | 14 | 16 | |
Other lines | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | [4] | $ (101) | $ (70) | $ (25) |
[1] | Includes pretax income of $32 million (before noncontrolling interest) from the sale of an apartment property in the second quarter of 2016, $51 million (before noncontrolling interest) from the sale of a hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015. | |||
[2] | AFG sold substantially all of its run-off long-term care insurance business in December 2015. | |||
[3] | Primarily holding company interest and expenses, including a $4 million loss on retirement of debt in the third quarter of 2015, and special charges to increase A&E reserves related to AFG’s former railroad and manufacturing operations ($5 million in 2016, $12 million in 2015 and $6 million in 2014) and losses of managed investment entities attributable to noncontrolling interests ($51 million in 2014). Following the adoption of new guidance in the first quarter of 2015, there are no longer earnings (losses) of managed investment entities that are attributable to noncontrolling interests. See Note A — “Accounting Policies — Managed Investment Entities.” | |||
[4] | Includes a special charge of $65 million related to the exit of certain lines of business within AFG’s Lloyd’s-based insurer, Neon, in the second quarter of 2016 and special charges to increase asbestos and environmental (“A&E”) reserves of $36 million, $67 million and $24 million in 2016, 2015 and 2014, respectively. |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | Dec. 24, 2015USD ($) | Dec. 31, 2016USD ($)professional | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Fair Value Measurements (Textual) [Abstract] | |||||
AFG's internal investment professionals | professional | 25 | ||||
Level 3 assets as a percentage of total assets measured at fair value | 4.00% | ||||
Percentage of level 3 assets that were priced using non-binding broker quotes | 78.00% | ||||
Level 3 assets that were priced using non-binding broker quotes | $ 1,370 | ||||
Total realized/unrealized gains (losses) included in net income on liabilities still outstanding | $ 50 | ||||
Life contingent annuities | $ 204 | $ 200 | |||
Maximum | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Percentage of internally developed Level 3 asset fair values to Shareholders' equity (are less than) | 10.00% | ||||
Fixed-indexed annuities (embedded derivative) | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Fair value of derivatives in annuity benefits accumulated measured using a discounted cash flow approach | $ 1,760 | ||||
Fixed-indexed annuities (embedded derivative) | Minimum | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Unobservable input surrenders used in Level 3 fair value determination | 3.00% | ||||
Fixed-indexed annuities (embedded derivative) | Maximum | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Unobservable input surrenders used in Level 3 fair value determination | 21.00% | ||||
Fixed-indexed annuities (embedded derivative), majority of future years | Minimum | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Unobservable input surrenders used in Level 3 fair value determination | 6.00% | ||||
Fixed-indexed annuities (embedded derivative), majority of future years | Maximum | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Unobservable input surrenders used in Level 3 fair value determination | 10.00% | ||||
Not Designated as Hedging Instrument | Annuity benefits | Fixed-indexed annuities (embedded derivative) | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Total realized/unrealized gains (losses) included in net income for the embedded derivatives related to the unlocking of actuarial assumptions | $ (17) | $ (28) | $ 58 | ||
Run-off long-term care insurance business | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Investment securities proceeds received from the sale of the run-off long-term care insurance business | $ 11 | ||||
Estimated net sale proceeds of the run-off long-term care insurance business | [1] | 13 | |||
Level 1 | Run-off long-term care insurance business | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Investment securities proceeds received from the sale of the run-off long-term care insurance business | 5 | ||||
Level 2 | Run-off long-term care insurance business | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Investment securities proceeds received from the sale of the run-off long-term care insurance business | 2 | ||||
Level 3 | Run-off long-term care insurance business | |||||
Fair Value Measurements (Textual) [Abstract] | |||||
Investment securities proceeds received from the sale of the run-off long-term care insurance business | $ 4 | ||||
[1] | Includes the fair value of the potential additional consideration and capital maintenance agreement and is shown net of estimated expenses. |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and liabilities measured and carried at fair value in the financial statements (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets: | |||
Available for sale (AFS) fixed maturities | $ 34,544 | $ 32,284 | |
Trading fixed maturities | 359 | 254 | |
Assets of managed investment entities (MIE) | 4,765 | 4,047 | |
Variable annuity assets (separate accounts) | [1] | 600 | 608 |
Derivatives including equity index call options and other assets | 492 | 241 | |
Total assets accounted for at fair value | 42,319 | 39,155 | |
Liabilities: | |||
Liabilities of managed investment entities | 4,549 | 3,781 | |
Total liabilities accounted for at fair value | 6,337 | 5,156 | |
Derivatives in annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 1,759 | 1,369 | |
Derivatives in long-term debt | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | (1) | (2) | |
Other liabilities — derivatives | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 30 | 8 | |
Fixed maturities | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 34,544 | 32,284 | |
Trading fixed maturities | 359 | 254 | |
U.S. Government and government agencies | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 315 | 307 | |
States, municipalities and political subdivisions | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 6,781 | 6,856 | |
Foreign government | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 136 | 154 | |
Residential MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 3,635 | 3,529 | |
Commercial MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 1,493 | 2,187 | |
Asset-backed securities (“ABS”) | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 5,959 | 4,934 | |
Corporate and other | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 16,225 | 14,317 | |
Equity securities | |||
Assets: | |||
Equity securities — AFS and trading | 1,558 | 1,719 | |
Other assets — derivatives | |||
Assets: | |||
Derivatives including equity index call options and other assets | 1 | 2 | |
Level 1 | |||
Assets: | |||
Assets of managed investment entities (MIE) | 380 | 309 | |
Variable annuity assets (separate accounts) | [1] | 0 | 0 |
Total assets accounted for at fair value | 1,877 | 1,834 | |
Liabilities: | |||
Liabilities of managed investment entities | 363 | 289 | |
Total liabilities accounted for at fair value | 363 | 289 | |
Level 1 | Derivatives in annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 0 | 0 | |
Level 1 | Derivatives in long-term debt | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 0 | 0 | |
Level 1 | Other liabilities — derivatives | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 0 | 0 | |
Level 1 | Fixed maturities | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 162 | 150 | |
Trading fixed maturities | 30 | 13 | |
Level 1 | U.S. Government and government agencies | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 133 | 100 | |
Level 1 | States, municipalities and political subdivisions | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 0 | 0 | |
Level 1 | Foreign government | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 0 | 0 | |
Level 1 | Residential MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 0 | 0 | |
Level 1 | Commercial MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 0 | 0 | |
Level 1 | Asset-backed securities (“ABS”) | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 0 | 0 | |
Level 1 | Corporate and other | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 29 | 50 | |
Level 1 | Equity securities | |||
Assets: | |||
Equity securities — AFS and trading | 1,305 | 1,362 | |
Level 1 | Other assets — derivatives | |||
Assets: | |||
Derivatives including equity index call options and other assets | 0 | 0 | |
Level 2 | |||
Assets: | |||
Assets of managed investment entities (MIE) | 4,356 | 3,712 | |
Variable annuity assets (separate accounts) | [1] | 600 | 608 |
Total assets accounted for at fair value | 38,680 | 35,685 | |
Liabilities: | |||
Liabilities of managed investment entities | 4,158 | 3,468 | |
Total liabilities accounted for at fair value | 4,187 | 3,474 | |
Level 2 | Derivatives in annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 0 | 0 | |
Level 2 | Derivatives in long-term debt | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | (1) | (2) | |
Level 2 | Other liabilities — derivatives | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 30 | 8 | |
Level 2 | Fixed maturities | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 32,823 | 30,664 | |
Trading fixed maturities | 329 | 241 | |
Level 2 | U.S. Government and government agencies | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 174 | 192 | |
Level 2 | States, municipalities and political subdivisions | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 6,641 | 6,767 | |
Level 2 | Foreign government | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 136 | 154 | |
Level 2 | Residential MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 3,445 | 3,305 | |
Level 2 | Commercial MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 1,468 | 2,148 | |
Level 2 | Asset-backed securities (“ABS”) | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 5,475 | 4,464 | |
Level 2 | Corporate and other | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 15,484 | 13,634 | |
Level 2 | Equity securities | |||
Assets: | |||
Equity securities — AFS and trading | 79 | 217 | |
Level 2 | Other assets — derivatives | |||
Assets: | |||
Derivatives including equity index call options and other assets | 1 | 2 | |
Level 3 | |||
Assets: | |||
Assets of managed investment entities (MIE) | 29 | 26 | |
Variable annuity assets (separate accounts) | [1] | 0 | 0 |
Total assets accounted for at fair value | 1,762 | 1,636 | |
Liabilities: | |||
Liabilities of managed investment entities | 28 | 24 | |
Total liabilities accounted for at fair value | 1,787 | 1,393 | |
Level 3 | Derivatives in annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 1,759 | 1,369 | |
Level 3 | Derivatives in long-term debt | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 0 | 0 | |
Level 3 | Other liabilities — derivatives | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 0 | 0 | |
Level 3 | Fixed maturities | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 1,559 | 1,470 | |
Trading fixed maturities | 0 | 0 | |
Level 3 | U.S. Government and government agencies | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 8 | 15 | |
Level 3 | States, municipalities and political subdivisions | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 140 | 89 | |
Level 3 | Foreign government | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 0 | 0 | |
Level 3 | Residential MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 190 | 224 | |
Level 3 | Commercial MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 25 | 39 | |
Level 3 | Asset-backed securities (“ABS”) | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 484 | 470 | |
Level 3 | Corporate and other | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 712 | 633 | |
Level 3 | Equity securities | |||
Assets: | |||
Equity securities — AFS and trading | 174 | 140 | |
Level 3 | Other assets — derivatives | |||
Assets: | |||
Derivatives including equity index call options and other assets | 0 | 0 | |
Equity index call options | Equity index call options | |||
Assets: | |||
Derivatives including equity index call options and other assets | 492 | 241 | |
Equity index call options | Level 1 | Equity index call options | |||
Assets: | |||
Derivatives including equity index call options and other assets | 0 | 0 | |
Equity index call options | Level 2 | Equity index call options | |||
Assets: | |||
Derivatives including equity index call options and other assets | 492 | 241 | |
Equity index call options | Level 3 | Equity index call options | |||
Assets: | |||
Derivatives including equity index call options and other assets | $ 0 | $ 0 | |
[1] | Variable annuity liabilities equal the fair value of variable annuity assets. |
Fair Value Measurements - Trans
Fair Value Measurements - Transfers between Level 1 and Level 2 (Details) $ in Millions | Dec. 31, 2016USD ($)stock | Dec. 31, 2015USD ($)stock | Dec. 31, 2014USD ($)stock |
Perpetual preferred stocks | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of stocks transferred from Level 2 to Level 1 | stock | 6 | 5 | 14 |
Fair value of assets transferred from Level 2 to Level 1 | $ | $ 35 | $ 19 | $ 96 |
Number of stocks transferred from Level 1 to Level 2 | stock | 7 | 7 | 13 |
Fair value of assets transferred from Level 1 to Level 2 | $ | $ 28 | $ 31 | $ 83 |
Common stocks | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of stocks transferred from Level 2 to Level 1 | stock | 3 | 7 | 0 |
Fair value of assets transferred from Level 2 to Level 1 | $ | $ 0 | $ 80 | $ 0 |
Number of stocks transferred from Level 1 to Level 2 | stock | 2 | 0 | 7 |
Fair value of assets transferred from Level 1 to Level 2 | $ | $ 0 | $ 0 | $ 26 |
Redeemable preferred stocks | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of stocks transferred from Level 2 to Level 1 | stock | 0 | 2 | 1 |
Fair value of assets transferred from Level 2 to Level 1 | $ | $ 0 | $ 11 | $ 5 |
Number of stocks transferred from Level 1 to Level 2 | stock | 0 | 0 | 0 |
Fair value of assets transferred from Level 1 to Level 2 | $ | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable inputs used in determining fair value of embedded derivatives (Details) - Embedded derivatives | 12 Months Ended |
Dec. 31, 2016 | |
Unobservable inputs used by management in determining fair value of embedded derivatives | |
Risk margin for uncertainty in cash flows | 0.68% |
Minimum | |
Unobservable inputs used by management in determining fair value of embedded derivatives | |
Adjustment for insurance subsidiary's credit risk | 0.40% |
Surrenders | 3.00% |
Partial surrenders | 2.00% |
Annuitizations | 0.10% |
Deaths | 1.50% |
Budgeted option costs | 2.40% |
Maximum | |
Unobservable inputs used by management in determining fair value of embedded derivatives | |
Adjustment for insurance subsidiary's credit risk | 2.90% |
Surrenders | 21.00% |
Partial surrenders | 10.00% |
Annuitizations | 1.00% |
Deaths | 8.00% |
Budgeted option costs | 3.60% |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in balances of Level 3 financial assets carried at fair value (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Financial assets, Beginning Balance | $ 1,636 | $ 1,355 | $ 891 |
Impact of accounting change | 0 | ||
Total realized/unrealized gains (losses) included in Net income | (35) | (31) | 5 |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 21 | (28) | 16 |
Purchases and issuances | 347 | 543 | 312 |
Sales and settlements | (217) | (183) | (154) |
Transfer into Level 3 | 139 | 186 | 449 |
Transfer out of Level 3 | (129) | (160) | (164) |
Sale of subsidiaries | (46) | ||
Financial assets, Ending Balance | 1,762 | 1,636 | 1,355 |
Fixed maturities | |||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Financial assets, Beginning Balance | 1,470 | 1,231 | 830 |
Impact of accounting change | 0 | ||
Total realized/unrealized gains (losses) included in Net income | (14) | (16) | 7 |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (14) | (19) | 14 |
Purchases and issuances | 291 | 460 | 244 |
Sales and settlements | (189) | (183) | (143) |
Transfer into Level 3 | 124 | 186 | 427 |
Transfer out of Level 3 | (109) | (143) | (148) |
Sale of subsidiaries | (46) | ||
Financial assets, Ending Balance | 1,559 | 1,470 | 1,231 |
U.S. government agency | |||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Financial assets, Beginning Balance | 15 | 15 | 15 |
Impact of accounting change | 0 | ||
Total realized/unrealized gains (losses) included in Net income | (8) | 0 | 0 |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 1 | 0 | 0 |
Purchases and issuances | 0 | 0 | 0 |
Sales and settlements | 0 | 0 | 0 |
Transfer into Level 3 | 0 | 0 | 0 |
Transfer out of Level 3 | 0 | 0 | 0 |
Sale of subsidiaries | 0 | ||
Financial assets, Ending Balance | 8 | 15 | 15 |
State and municipal | |||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Financial assets, Beginning Balance | 89 | 100 | 61 |
Impact of accounting change | 0 | ||
Total realized/unrealized gains (losses) included in Net income | 0 | 0 | (1) |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (4) | (1) | 0 |
Purchases and issuances | 57 | 34 | 30 |
Sales and settlements | (2) | (1) | 0 |
Transfer into Level 3 | 0 | 2 | 10 |
Transfer out of Level 3 | 0 | (39) | 0 |
Sale of subsidiaries | (6) | ||
Financial assets, Ending Balance | 140 | 89 | 100 |
Residential MBS | |||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Financial assets, Beginning Balance | 224 | 300 | 316 |
Impact of accounting change | 0 | ||
Total realized/unrealized gains (losses) included in Net income | (4) | (11) | 4 |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (2) | (1) | 3 |
Purchases and issuances | 8 | 0 | 13 |
Sales and settlements | (28) | (34) | (31) |
Transfer into Level 3 | 34 | 86 | 111 |
Transfer out of Level 3 | (42) | (88) | (116) |
Sale of subsidiaries | (28) | ||
Financial assets, Ending Balance | 190 | 224 | 300 |
Commercial MBS | |||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Financial assets, Beginning Balance | 39 | 44 | 28 |
Impact of accounting change | 0 | ||
Total realized/unrealized gains (losses) included in Net income | (1) | (1) | (1) |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | (1) | 0 |
Purchases and issuances | 0 | 0 | 0 |
Sales and settlements | (7) | (2) | 0 |
Transfer into Level 3 | 0 | 4 | 17 |
Transfer out of Level 3 | (6) | (1) | 0 |
Sale of subsidiaries | (4) | ||
Financial assets, Ending Balance | 25 | 39 | 44 |
Asset-backed securities | |||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Financial assets, Beginning Balance | 470 | 226 | 75 |
Impact of accounting change | 0 | ||
Total realized/unrealized gains (losses) included in Net income | (1) | 1 | 3 |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 1 | (7) | (2) |
Purchases and issuances | 50 | 265 | 99 |
Sales and settlements | (52) | (56) | (39) |
Transfer into Level 3 | 60 | 53 | 117 |
Transfer out of Level 3 | (44) | (10) | (27) |
Sale of subsidiaries | (2) | ||
Financial assets, Ending Balance | 484 | 470 | 226 |
Corporate and other | |||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Financial assets, Beginning Balance | 633 | 546 | 335 |
Impact of accounting change | 0 | ||
Total realized/unrealized gains (losses) included in Net income | 0 | (5) | 2 |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (10) | (9) | 13 |
Purchases and issuances | 176 | 161 | 102 |
Sales and settlements | (100) | (90) | (73) |
Transfer into Level 3 | 30 | 41 | 172 |
Transfer out of Level 3 | (17) | (5) | (5) |
Sale of subsidiaries | (6) | ||
Financial assets, Ending Balance | 712 | 633 | 546 |
Equity securities | |||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Financial assets, Beginning Balance | 140 | 93 | 31 |
Impact of accounting change | 0 | ||
Total realized/unrealized gains (losses) included in Net income | (12) | (4) | 1 |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 35 | (9) | 2 |
Purchases and issuances | 44 | 77 | 62 |
Sales and settlements | (28) | 0 | (9) |
Transfer into Level 3 | 15 | 0 | 22 |
Transfer out of Level 3 | (20) | (17) | (16) |
Sale of subsidiaries | 0 | ||
Financial assets, Ending Balance | 174 | 140 | 93 |
Assets of MIE | |||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Financial assets, Beginning Balance | 26 | 31 | 30 |
Impact of accounting change | 0 | ||
Total realized/unrealized gains (losses) included in Net income | (9) | (11) | (3) |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 |
Purchases and issuances | 12 | 6 | 6 |
Sales and settlements | 0 | 0 | (2) |
Transfer into Level 3 | 0 | 0 | 0 |
Transfer out of Level 3 | 0 | 0 | 0 |
Sale of subsidiaries | 0 | ||
Financial assets, Ending Balance | $ 29 | $ 26 | $ 31 |
Fair Value Measurements - Cha56
Fair Value Measurements - Changes in balances of Level 3 financial liabilities carried at fair value (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Financial liabilities, Beginning Balance | $ (1,369) | $ (3,861) | $ (3,215) | ||||
Impact of accounting change | 2,701 | ||||||
Total realized/unrealized gains (losses) included in Net income | (211) | (17) | (160) | ||||
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 | ||||
Purchases and issuances | (277) | (257) | (1,038) | ||||
Sales and settlements | 98 | 65 | 552 | ||||
Transfer into Level 3 | 0 | 0 | 0 | ||||
Transfer out of Level 3 | 0 | 0 | 0 | ||||
Sale of subsidiaries | 0 | ||||||
Financial liabilities, Ending Balance | (1,759) | [1] | (1,369) | (3,861) | |||
Liabilities of MIE | |||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Financial liabilities, Beginning Balance | 0 | (2,701) | (2,411) | ||||
Impact of accounting change | [2] | 2,701 | |||||
Total realized/unrealized gains (losses) included in Net income | 0 | 22 | [3] | ||||
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | |||||
Purchases and issuances | 0 | (817) | |||||
Sales and settlements | 0 | 505 | |||||
Transfer into Level 3 | 0 | 0 | |||||
Transfer out of Level 3 | 0 | 0 | |||||
Sale of subsidiaries | 0 | ||||||
Financial liabilities, Ending Balance | 0 | (2,701) | |||||
Embedded derivatives | |||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||
Financial liabilities, Beginning Balance | (1,369) | (1,160) | (804) | ||||
Impact of accounting change | 0 | ||||||
Total realized/unrealized gains (losses) included in Net income | (211) | [4] | (17) | [5] | (182) | [6] | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 | ||||
Purchases and issuances | (277) | (257) | (221) | ||||
Sales and settlements | 98 | 65 | 47 | ||||
Transfer into Level 3 | 0 | 0 | 0 | ||||
Transfer out of Level 3 | 0 | 0 | 0 | ||||
Sale of subsidiaries | 0 | ||||||
Financial liabilities, Ending Balance | $ (1,759) | $ (1,369) | $ (1,160) | ||||
[1] | As discussed above, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets. | ||||||
[2] | The impact of implementing new guidance adopted in 2015, as discussed above and in Note A — “Accounting Policies — Managed Investment Entities.” | ||||||
[3] | Total realized/unrealized gains (losses) included in net income includes gains of $50 million related to liabilities outstanding as of December 31, 2014. See Note H — “Managed Investment Entities.” | ||||||
[4] | Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016. | ||||||
[5] | Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $28 million in 2015. | ||||||
[6] | Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects gains related to the unlocking of actuarial assumptions of $58 million in 2014. |
Fair Value Measurements - The c
Fair Value Measurements - The carrying value and fair value of financial instruments (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | |
Financial assets: | |||
Mortgage loans | $ 1,147 | $ 1,067 | |
Policy loans | 192 | 201 | |
Financial liabilities: | |||
Long-term debt | 1,283 | 998 | |
Level 1 | |||
Financial assets: | |||
Cash and cash equivalents | 2,107 | 1,220 | |
Mortgage loans | 0 | 0 | |
Policy loans | 0 | 0 | |
Total financial assets not accounted for at fair value | 2,107 | 1,220 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 0 | 0 |
Long-term debt | 0 | 0 | |
Total financial liabilities not accounted for at fair value | 0 | 0 | |
Level 2 | |||
Financial assets: | |||
Cash and cash equivalents | 0 | 0 | |
Mortgage loans | 0 | 0 | |
Policy loans | 0 | 0 | |
Total financial assets not accounted for at fair value | 0 | 0 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 0 | 0 |
Long-term debt | 1,353 | 1,105 | |
Total financial liabilities not accounted for at fair value | 1,353 | 1,105 | |
Level 3 | |||
Financial assets: | |||
Cash and cash equivalents | 0 | 0 | |
Mortgage loans | 1,146 | 1,074 | |
Policy loans | 192 | 201 | |
Total financial assets not accounted for at fair value | 1,338 | 1,275 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 28,932 | 25,488 |
Long-term debt | 3 | 15 | |
Total financial liabilities not accounted for at fair value | 28,935 | 25,503 | |
Carrying Value | |||
Financial assets: | |||
Cash and cash equivalents | 2,107 | 1,220 | |
Mortgage loans | 1,147 | 1,067 | |
Policy loans | 192 | 201 | |
Total financial assets not accounted for at fair value | 3,446 | 2,488 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 29,703 | 26,422 |
Long-term debt | 1,284 | 1,000 | |
Total financial liabilities not accounted for at fair value | 30,987 | 27,422 | |
Fair Value | |||
Financial assets: | |||
Cash and cash equivalents | 2,107 | 1,220 | |
Mortgage loans | 1,146 | 1,074 | |
Policy loans | 192 | 201 | |
Total financial assets not accounted for at fair value | 3,445 | 2,495 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 28,932 | 25,488 |
Long-term debt | 1,356 | 1,120 | |
Total financial liabilities not accounted for at fair value | $ 30,288 | $ 26,608 | |
[1] | Excludes $204 million and $200 million of life contingent annuities in the payout phase at December 31, 2016 and 2015, respectively. |
Investments - Narrative (Detail
Investments - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)security | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Investment [Line Items] | |||
Percentage (based on amount of unrealized loss) of available for sale fixed maturities that are in an unrealized loss position and rated investment grade | 84.00% | ||
Percentage (based on fair value) of available for sale fixed maturities that are in an unrealized loss position and rated investment grade | 91.00% | ||
Other than temporary impairment charges | $ 116 | $ 125 | $ 36 |
Average life of ABS | 5 years | ||
Average life of MBS | 4 years 6 months | ||
Residential MBS | |||
Investment [Line Items] | |||
Non-credit related portion of other-than-temporary impairment charges taken for securities still owned | $ 189 | 205 | |
Fixed maturities, Gross Unrealized, Losses | (13) | (15) | |
Other than temporary impairment charges | 3 | ||
Securities with non-credit other-than-temporary impairment charges | |||
Investment [Line Items] | |||
Gross Unrealized, Gains | 130 | 134 | |
Gross Unrealized, Losses | (3) | (6) | |
Fixed maturities | |||
Investment [Line Items] | |||
Fixed maturities, Gross Unrealized, Losses | $ (245) | (374) | |
Number of available for sale securities in an unrealized loss position | security | 1,242 | ||
Other than temporary impairment charges | $ 38 | 43 | $ 15 |
Corporate bonds | |||
Investment [Line Items] | |||
Other than temporary impairment charges | 23 | ||
Fixed maturities — all other | |||
Investment [Line Items] | |||
Other than temporary impairment charges | $ 12 | ||
Common stocks | |||
Investment [Line Items] | |||
Number of available for sale securities in an unrealized loss position | security | 23 | ||
Other than temporary impairment charges | $ 89 | ||
Equity securities, Gross Unrealized, Losses | $ (23) | (79) | |
Preferred stocks | |||
Investment [Line Items] | |||
Number of available for sale securities in an unrealized loss position | security | 24 | ||
Other than temporary impairment charges | $ 4 | ||
Equity securities, Gross Unrealized, Losses | $ (7) | $ (6) | |
Number of available for sale securities in an unrealized loss position for twelve months or longer | Common stocks | |||
Investment [Line Items] | |||
Number of available for sale securities in an unrealized loss position | security | 0 | ||
Number of available for sale securities in an unrealized loss position for twelve months or longer | Preferred stocks | |||
Investment [Line Items] | |||
Number of available for sale securities in an unrealized loss position | security | 1 |
Investments - Available for sal
Investments - Available for sale fixed maturities and equity securities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | $ 33,735 | $ 31,565 |
Available for sale (AFS) fixed maturities | 34,544 | 32,284 |
Equity securities, Available for sale, Amortized Cost | 1,351 | 1,469 |
Equity securities, Available for sale, Fair Value | 1,502 | 1,553 |
Total fixed maturities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 33,735 | 31,565 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 1,054 | 1,093 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (245) | (374) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 809 | 719 |
Available for sale (AFS) fixed maturities | 34,544 | 32,284 |
U.S. Government and government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 315 | 305 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 3 | 5 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (3) | (3) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 0 | 2 |
Available for sale (AFS) fixed maturities | 315 | 307 |
States, municipalities and political subdivisions | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 6,650 | 6,642 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 200 | 249 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (69) | (35) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 131 | 214 |
Available for sale (AFS) fixed maturities | 6,781 | 6,856 |
Foreign government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 131 | 147 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 5 | 7 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | 0 | 0 |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 5 | 7 |
Available for sale (AFS) fixed maturities | 136 | 154 |
Residential MBS | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 3,367 | 3,236 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 281 | 308 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (13) | (15) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 268 | 293 |
Available for sale (AFS) fixed maturities | 3,635 | 3,529 |
Commercial MBS | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 1,446 | 2,111 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 49 | 77 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (2) | (1) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 47 | 76 |
Available for sale (AFS) fixed maturities | 1,493 | 2,187 |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 5,962 | 4,961 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 43 | 25 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (46) | (52) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | (3) | (27) |
Available for sale (AFS) fixed maturities | 5,959 | 4,934 |
Corporate and other | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 15,864 | 14,163 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 473 | 422 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (112) | (268) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 361 | 154 |
Available for sale (AFS) fixed maturities | 16,225 | 14,317 |
Total equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Equity securities, Available for sale, Amortized Cost | 1,351 | 1,469 |
Equity securities, Available for sale, Gross Unrealized, Gains | 181 | 169 |
Equity securities, Available for sale, Gross Unrealized, Losses | (30) | (85) |
Equity securities, Available for sale, Net Unrealized, Gains (Losses) | 151 | 84 |
Equity securities, Available for sale, Fair Value | 1,502 | 1,553 |
Common stocks | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Equity securities, Available for sale, Amortized Cost | 879 | 1,051 |
Equity securities, Available for sale, Gross Unrealized, Gains | 160 | 146 |
Equity securities, Available for sale, Gross Unrealized, Losses | (23) | (79) |
Equity securities, Available for sale, Net Unrealized, Gains (Losses) | 137 | 67 |
Equity securities, Available for sale, Fair Value | 1,016 | 1,118 |
Perpetual preferred stocks | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Equity securities, Available for sale, Amortized Cost | 472 | 418 |
Equity securities, Available for sale, Gross Unrealized, Gains | 21 | 23 |
Equity securities, Available for sale, Gross Unrealized, Losses | (7) | (6) |
Equity securities, Available for sale, Net Unrealized, Gains (Losses) | 14 | 17 |
Equity securities, Available for sale, Fair Value | $ 486 | $ 435 |
Investments - Gross unrealized
Investments - Gross unrealized losses on securities by investment category and length of time that have been in a continuous unrealized loss position (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fixed maturities | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (196) | $ (312) |
Fair Value - Less than twelve months | $ 8,651 | $ 9,431 |
Fair Value as % of Cost - Less than twelve months | 98.00% | 97.00% |
Unrealized Loss - Twelve months or more | $ (49) | $ (62) |
Fair Value - Twelve months or more | $ 1,160 | $ 914 |
Fair Value as % of Cost - Twelve months or more | 96.00% | 94.00% |
U.S. Government and government agencies | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (1) | $ (1) |
Fair Value - Less than twelve months | $ 153 | $ 112 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 99.00% |
Unrealized Loss - Twelve months or more | $ (2) | $ (2) |
Fair Value - Twelve months or more | $ 8 | $ 15 |
Fair Value as % of Cost - Twelve months or more | 80.00% | 88.00% |
States, municipalities and political subdivisions | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (64) | $ (33) |
Fair Value - Less than twelve months | $ 2,289 | $ 1,419 |
Fair Value as % of Cost - Less than twelve months | 97.00% | 98.00% |
Unrealized Loss - Twelve months or more | $ (5) | $ (2) |
Fair Value - Twelve months or more | $ 44 | $ 50 |
Fair Value as % of Cost - Twelve months or more | 90.00% | 96.00% |
Residential MBS | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (7) | $ (7) |
Fair Value - Less than twelve months | $ 502 | $ 438 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 98.00% |
Unrealized Loss - Twelve months or more | $ (6) | $ (8) |
Fair Value - Twelve months or more | $ 162 | $ 201 |
Fair Value as % of Cost - Twelve months or more | 96.00% | 96.00% |
Commercial MBS | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (2) | $ 0 |
Fair Value - Less than twelve months | $ 121 | $ 95 |
Fair Value as % of Cost - Less than twelve months | 98.00% | 100.00% |
Unrealized Loss - Twelve months or more | $ 0 | $ (1) |
Fair Value - Twelve months or more | $ 0 | $ 28 |
Fair Value as % of Cost - Twelve months or more | 0.00% | 97.00% |
Asset-backed securities | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (29) | $ (42) |
Fair Value - Less than twelve months | $ 1,737 | $ 2,706 |
Fair Value as % of Cost - Less than twelve months | 98.00% | 98.00% |
Unrealized Loss - Twelve months or more | $ (17) | $ (10) |
Fair Value - Twelve months or more | $ 634 | $ 455 |
Fair Value as % of Cost - Twelve months or more | 97.00% | 98.00% |
Corporate and other | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (93) | $ (229) |
Fair Value - Less than twelve months | $ 3,849 | $ 4,661 |
Fair Value as % of Cost - Less than twelve months | 98.00% | 95.00% |
Unrealized Loss - Twelve months or more | $ (19) | $ (39) |
Fair Value - Twelve months or more | $ 312 | $ 165 |
Fair Value as % of Cost - Twelve months or more | 94.00% | 81.00% |
Equity securities | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (29) | $ (82) |
Fair Value - Less than twelve months | $ 350 | $ 600 |
Fair Value as % of Cost - Less than twelve months | 92.00% | 88.00% |
Unrealized Loss - Twelve months or more | $ (1) | $ (3) |
Fair Value - Twelve months or more | $ 6 | $ 22 |
Fair Value as % of Cost - Twelve months or more | 86.00% | 88.00% |
Common stocks | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (23) | $ (79) |
Fair Value - Less than twelve months | $ 215 | $ 509 |
Fair Value as % of Cost - Less than twelve months | 90.00% | 87.00% |
Unrealized Loss - Twelve months or more | $ 0 | $ 0 |
Fair Value - Twelve months or more | $ 0 | $ 0 |
Fair Value as % of Cost - Twelve months or more | 0.00% | 0.00% |
Perpetual preferred stocks | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (6) | $ (3) |
Fair Value - Less than twelve months | $ 135 | $ 91 |
Fair Value as % of Cost - Less than twelve months | 96.00% | 97.00% |
Unrealized Loss - Twelve months or more | $ (1) | $ (3) |
Fair Value - Twelve months or more | $ 6 | $ 22 |
Fair Value as % of Cost - Twelve months or more | 86.00% | 88.00% |
Investments - Credit portion of
Investments - Credit portion of other-than-temporary impairments on fixed maturities for which the non-credit portion of an impairment has been recognized in OCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | |||
Balance at January 1 | $ 160 | $ 170 | $ 194 |
Additional credit impairments on: | |||
Previously impaired securities | 2 | 1 | 0 |
Securities without prior impairments | 1 | 2 | 0 |
Reductions due to: | |||
Sales or redemptions | (10) | (9) | (24) |
Sale of subsidiaries | 0 | (4) | 0 |
Balance at December 31 | $ 153 | $ 160 | $ 170 |
Investments - Scheduled maturit
Investments - Scheduled maturities of available for sale fixed maturities (Details) - Fixed maturities $ in Millions | Dec. 31, 2016USD ($) |
Amortized Cost Basis, Fiscal Year Maturity [Abstract] | |
One year or less | $ 1,120 |
After one year through five years | 5,609 |
After five years through ten years | 11,744 |
After ten years | 4,487 |
Fixed maturities amortized cost, Subtotal | 22,960 |
ABS (average life of approximately 5 years) | 5,962 |
MBS (average life of approximately 4.5 years) | 4,813 |
Amortized Cost | 33,735 |
Fair Value, Fiscal Year Maturity [Abstract] | |
One year or less | 1,136 |
After one year through five years | 5,866 |
After five years through ten years | 11,921 |
After ten years | 4,534 |
Fixed maturities fair value, Subtotal | 23,457 |
ABS (average life of approximately 5 years) | 5,959 |
MBS (average life of approximately 4.5 years) | 5,128 |
Fair Value | $ 34,544 |
Fair Value Percent, Fiscal Year Maturity [Abstract] | |
One year or less | 3.00% |
After one year through five years | 17.00% |
After five years through ten years | 35.00% |
After ten years | 13.00% |
Fixed maturities fair value, Subtotal, Percent | 68.00% |
ABS (average life of approximately 5 years) | 17.00% |
MBS (average life of approximately 4.5 years) | 15.00% |
Fair value, Total, Percent | 100.00% |
Investments - Components of the
Investments - Components of the net unrealized gain on securities that is included in AOCI in the Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | |
Unrealized gain on: | |||
Pretax | $ 622 | $ 517 | |
Deferred Tax and Amounts Attributable to Noncontrolling Interests | (218) | (185) | |
Net | 404 | 332 | |
Total investments | |||
Unrealized gain on: | |||
Pretax | 960 | 803 | |
Deferred Tax and Amounts Attributable to Noncontrolling Interests | (336) | (285) | |
Net | 624 | 518 | |
Total fixed maturities | |||
Unrealized gain on: | |||
Pretax | 809 | 719 | |
Deferred Tax and Amounts Attributable to Noncontrolling Interests | (283) | (255) | |
Net | 526 | 464 | |
Fixed maturities — annuity segment | |||
Unrealized gain on: | |||
Pretax | [1] | 640 | 523 |
Deferred Tax and Amounts Attributable to Noncontrolling Interests | [1] | (224) | (183) |
Net | [1] | 416 | 340 |
Fixed maturities — all other | |||
Unrealized gain on: | |||
Pretax | 169 | 196 | |
Deferred Tax and Amounts Attributable to Noncontrolling Interests | (59) | (72) | |
Net | 110 | 124 | |
Equity securities | |||
Unrealized gain on: | |||
Pretax | 151 | 84 | |
Deferred Tax and Amounts Attributable to Noncontrolling Interests | (53) | (30) | |
Net | 98 | 54 | |
Deferred policy acquisition costs — annuity segment | |||
Unrealized gain on: | |||
Pretax | (273) | (233) | |
Deferred Tax and Amounts Attributable to Noncontrolling Interests | 96 | 82 | |
Net | (177) | (151) | |
Annuity benefits accumulated | |||
Unrealized gain on: | |||
Pretax | (78) | (64) | |
Deferred Tax and Amounts Attributable to Noncontrolling Interests | 27 | 22 | |
Net | (51) | (42) | |
Unearned revenue | |||
Unrealized gain on: | |||
Pretax | 13 | 11 | |
Deferred Tax and Amounts Attributable to Noncontrolling Interests | (5) | (4) | |
Net | $ 8 | $ 7 | |
[1] | Net unrealized gains on fixed maturity investments supporting AFG’s annuity benefits accumulated. |
Investments - Schedule of sourc
Investments - Schedule of sources of net investment income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net Investment Income [Line Items] | |||
Gross investment income | $ 1,716 | $ 1,651 | $ 1,513 |
Investment expenses | (20) | (18) | (12) |
Net investment income | 1,696 | 1,633 | 1,501 |
Fixed maturities | |||
Net Investment Income [Line Items] | |||
Gross investment income | 1,510 | 1,461 | 1,352 |
Equity securities | |||
Net Investment Income [Line Items] | |||
Gross investment income | 81 | 76 | 66 |
Equity in earnings of partnerships and similar investments | |||
Net Investment Income [Line Items] | |||
Gross investment income | 44 | 27 | 18 |
Other | |||
Net Investment Income [Line Items] | |||
Gross investment income | $ 81 | $ 87 | $ 77 |
Investments - Realized gains (l
Investments - Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | |||
Realized before impairments | $ 135 | $ 106 | $ 88 |
Realized - impairments | (116) | (125) | (36) |
Total realized gains (losses) on securities | 19 | (19) | 52 |
Net of tax and noncontrolling interests | |||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | |||
Realized before impairments | 85 | 66 | 54 |
Realized - impairments | (72) | (78) | (22) |
Total realized gains (losses) on securities | 13 | (12) | 32 |
Change in unrealized | 72 | (411) | 180 |
Total pretax | |||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | |||
Realized before impairments | 135 | 106 | 88 |
Realized - impairments | (116) | (125) | (36) |
Total realized gains (losses) on securities | 19 | (19) | 52 |
Change in unrealized | 105 | (645) | 282 |
Fixed maturities | |||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | |||
Realized before impairments | 36 | 19 | 36 |
Realized - impairments | (38) | (43) | (15) |
Total realized gains (losses) on securities | (2) | (24) | 21 |
Change in unrealized | 90 | (941) | 570 |
Equity securities | |||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | |||
Realized before impairments | 106 | 94 | 53 |
Realized - impairments | (93) | (94) | (26) |
Total realized gains (losses) on securities | 13 | 0 | 27 |
Change in unrealized | 67 | (134) | 26 |
Mortgage loans and other investments | |||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | |||
Realized before impairments | 0 | (2) | 1 |
Realized - impairments | 0 | (3) | 0 |
Total realized gains (losses) on securities | 0 | (5) | 1 |
Change in unrealized | 0 | 0 | 0 |
Other, Including DPAC and reserves on annuities and long-term care | |||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | |||
Realized before impairments | (7) | (5) | (2) |
Realized - impairments | 15 | 15 | 5 |
Total realized gains (losses) on securities | 8 | 10 | 3 |
Change in unrealized | (52) | 430 | (314) |
Tax effects | |||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | |||
Realized before impairments | (48) | (38) | (32) |
Realized - impairments | 41 | 45 | 13 |
Total realized gains (losses) on securities | (7) | 7 | (19) |
Change in unrealized | (37) | 226 | (99) |
Noncontrolling interests | |||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | |||
Realized before impairments | (2) | (2) | (2) |
Realized - impairments | 3 | 2 | 1 |
Total realized gains (losses) on securities | 1 | 0 | (1) |
Change in unrealized | $ 4 | $ 8 | $ (3) |
Investments - Gross realized ga
Investments - Gross realized gains and losses on available for sale fixed maturity and equity security investment transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fixed maturities | |||
Gross realized gains and losses on the sale of available for sale fixed maturity and equity security investments | |||
Gross gains | $ 55 | $ 38 | $ 36 |
Gross losses | (10) | (7) | (2) |
Equity securities | |||
Gross realized gains and losses on the sale of available for sale fixed maturity and equity security investments | |||
Gross gains | 110 | 99 | 53 |
Gross losses | $ (4) | $ (5) | $ 0 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)swap | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jun. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Carrying value of collateral received to support purchased call options | $ 380,000,000 | $ 211,000,000 | ||
Senior Notes | 9-7/8% Senior Notes due June 2019 | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Stated interest rate, percentage | 9.875% | 9.875% | ||
AFG | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest rate description of fair value hedge activity | three-month LIBOR plus 8.099% | |||
AFG | Senior Notes | 9-7/8% Senior Notes due June 2019 | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Stated interest rate, percentage | 9.875% | 9.875% | ||
Not Designated as Hedging Instrument | Fixed-indexed annuities (embedded derivative) | Annuity benefits | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
The portion of the change in fair value of the embedded derivative related to the unlocking of actuarial assumptions | $ (17,000,000) | $ (28,000,000) | $ 58,000,000 | |
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Notional amount of derivative instrument outstanding | $ 1,080,000,000 | 604,000,000 | ||
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Number of interest rate swaps designated and qualifying as a cash flow hedges | swap | 7 | |||
Number of interest rate swaps entered into during the period | swap | 4 | |||
Gain (loss) reclassified from AOCI into net investment income | $ 7,000,000 | 6,000,000 | ||
Collateral receivable supporting interest rate swaps | 60,000,000 | 14,000,000 | ||
Gain (loss) on cash flow hedge ineffectiveness recorded in Net Earnings | 0 | 0 | ||
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | Other assets | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net derivatives, at fair value | 1,000,000 | 2,000,000 | ||
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | Other liabilities | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net derivatives, at fair value | 22,000,000 | |||
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | Other liabilities | Maximum | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net derivatives, at fair value | $ (1,000,000) | |||
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | New interest rate swaps entered into during the period | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Notional amount of derivative instrument outstanding | $ 610,000,000 | |||
Designated as Hedging Instrument | Interest rate swaps | Fair Value Hedge | AFG | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Effective interest rate, percentage | 9.0624% | 8.611% | ||
The net reduction in interest expense from interest rate swaps | $ 3,000,000 | $ 2,000,000 | ||
Designated as Hedging Instrument | Interest rate swaps | Fair Value Hedge | AFG | LIBOR | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Basis spread on variable interest rate | 8.099% | |||
Designated as Hedging Instrument | Interest rate swaps | Fair Value Hedge | Long-term debt | AFG | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net derivatives, at fair value | $ 1,000,000 | $ 2,000,000 |
Derivatives - Derivatives that
Derivatives - Derivatives that do not qualify for hedge accounting under GAAP included in the Balance Sheet at fair value (Details) - Not Designated as Hedging Instrument - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | $ 603 | $ 375 |
Derivative liability, at fair value | 1,767 | 1,376 |
MBS with embedded derivatives | Fixed maturities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | 107 | 130 |
Public company warrants | Equity securities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | 4 | 4 |
Fixed-indexed annuities (embedded derivative) | Annuity benefits accumulated | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative liability, at fair value | 1,759 | 1,369 |
Equity index call options | Equity index call options | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | 492 | 241 |
Reinsurance contracts (embedded derivative) | Other liabilities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative liability, at fair value | $ 8 | $ 7 |
Derivatives - Gain (loss) inclu
Derivatives - Gain (loss) included in the Statement of Earnings for changes in the fair value of derivatives that do not qualify for hedge accounting (Details) - Not Designated as Hedging Instrument - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ (80) | $ (83) | $ (3) | |
MBS with embedded derivatives | Realized gains on securities | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (9) | (16) | 3 | |
Public company warrants | Realized gains on securities | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0 | 0 | |
Interest rate swaptions | Realized gains on securities | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0 | (2) | |
Fixed-indexed annuities (embedded derivative) | Annuity benefits | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | [1] | (211) | (17) | (182) |
Equity index call options | Annuity benefits | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 141 | (56) | 181 | |
Reinsurance contracts (embedded derivative) | Net investment income | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ (1) | $ 6 | $ (3) | |
[1] | The change in fair value of the embedded derivative includes losses related to unlocking of actuarial assumptions of $17 million in 2016 compared to losses of $28 million in 2015 and gains related to unlocking of actuarial assumptions of $58 million in 2014. |
Deferred Policy Acquisition C70
Deferred Policy Acquisition Costs - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | ||
Accumulated amortization of present value of future profits | $ 134 | $ 125 |
Approximate annual rate of decrease in present value of future profits during next five years | 0.167 |
Deferred Policy Acquisition C71
Deferred Policy Acquisition Costs - Progression of deferred policy acquisition costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement Analysis of Deferred Policy Acquisition Costs and Present Value of Future Profits [Roll Forward] | |||
Deferred policy acquisition costs and present value of future profits, beginning balance | $ 1,184 | $ 821 | $ 975 |
Deferred policy acquisition costs and present value of future profits, additions | 774 | 754 | 703 |
Deferred policy acquisition costs and present value of future profits, periodic amortization | (722) | (710) | (652) |
Deferred policy acquisition costs and present value of future profits, annuity unlocking | 29 | 35 | (20) |
Deferred policy acquisition costs and present value of future profits, change included in realized gains | 8 | 9 | 3 |
Deferred policy acquisition costs and present value of future profits, sale of subsidiaries | (19) | ||
Deferred policy acquisition costs and present value of future profits, foreign currency translation | (3) | (3) | (2) |
Deferred policy acquisition costs and present value of future profits, change in unrealized | (31) | 297 | (186) |
Deferred policy acquisition costs and present value of future profits, ending balance | 1,239 | 1,184 | 821 |
Property and casualty insurance | |||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | |||
Deferred policy acquisition costs, beginning balance | 226 | 221 | 211 |
Deferred policy acquisition costs, additions | 535 | 519 | 497 |
Deferred policy acquisition costs, periodic amortization | (520) | (511) | (485) |
Deferred policy acquisition costs, foreign currency translation | (3) | (3) | (2) |
Deferred policy acquisition costs, ending balance | 238 | 226 | 221 |
Annuity and Run-off Long-term Care and Life | |||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | |||
Deferred policy acquisition costs, beginning balance | 1,018 | 925 | 875 |
Deferred policy acquisition costs, additions | 230 | 224 | 198 |
Deferred policy acquisition costs, periodic amortization | (169) | (162) | (130) |
Deferred policy acquisition costs, annuity unlocking | 25 | 31 | (20) |
Deferred policy acquisition costs, change included in realized gains | 6 | 8 | 2 |
Deferred policy acquisition costs, sale of subsidiaries | (8) | ||
Deferred policy acquisition costs, ending balance | 1,110 | 1,018 | 925 |
Movement in Deferred Sales Inducements [Roll Forward] | |||
Deferred sales inducements, beginning balance | 119 | 132 | 149 |
Deferred sales inducements, additions | 9 | 11 | 8 |
Deferred sales inducements, periodic amortization | (24) | (26) | (26) |
Deferred sales inducements, annuity unlocking | 4 | 4 | 0 |
Deferred sales inducements, change included in realized gains | 2 | 1 | 1 |
Deferred sales inducements, sale of subsidiaries | (3) | ||
Deferred sales inducements, ending balance | 110 | 119 | 132 |
Movement in Present Value of Future Insurance Profits [Roll Forward] | |||
Present value of future profits, beginning balance | 55 | 74 | 85 |
Present value of future profits, periodic amortization | (9) | (11) | (11) |
Present value of future profits, annuity unlocking | 0 | 0 | 0 |
Present value of future profits, sale of subsidiaries | (8) | ||
Present value of future profits, ending balance | 46 | 55 | 74 |
Movement in Unrealized Gains (Losses) Related to Deferred Policy Acquisition Costs and Present Value of Future Profits [Roll Forward] | |||
Unrealized investment gains (losses), beginning balance | (234) | (531) | (345) |
Unrealized investment gains (losses), change in unrealized | (31) | 297 | (186) |
Unrealized investment gains (losses), ending balance | (265) | (234) | (531) |
Movement Analysis of Deferred Policy Acquisition Costs and Present Value of Future Profits [Roll Forward] | |||
Deferred policy acquisition costs and present value of future profits, beginning balance | 958 | 600 | 764 |
Deferred policy acquisition costs and present value of future profits, additions | 239 | 235 | 206 |
Deferred policy acquisition costs and present value of future profits, periodic amortization | (202) | (199) | (167) |
Deferred policy acquisition costs and present value of future profits, annuity unlocking | 29 | 35 | (20) |
Deferred policy acquisition costs and present value of future profits, change included in realized gains | 8 | 9 | 3 |
Deferred policy acquisition costs and present value of future profits, sale of subsidiaries | (19) | ||
Deferred policy acquisition costs and present value of future profits, change in unrealized | (31) | 297 | (186) |
Deferred policy acquisition costs and present value of future profits, ending balance | 1,001 | 958 | 600 |
Excluding Unrealized Gains | Annuity and Run-off Long-term Care and Life | |||
Movement Analysis of Deferred Policy Acquisition Costs and Present Value of Future Profits [Roll Forward] | |||
Deferred policy acquisition costs and present value of future profits, beginning balance | 1,192 | 1,131 | 1,109 |
Deferred policy acquisition costs and present value of future profits, change in unrealized | 0 | 0 | 0 |
Deferred policy acquisition costs and present value of future profits, ending balance | $ 1,266 | $ 1,192 | $ 1,131 |
Managed Investment Entities - N
Managed Investment Entities - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)collateralizedloanobligation | Dec. 31, 2015USD ($)collateralizedloanobligation | Dec. 31, 2014USD ($)collateralizedloanobligation | |
Variable Interest Entity [Line Items] | |||
Percentage of investment of most subordinate debt tranche, Minimum | 15.00% | ||
Percentage of investment of most subordinate debt tranche, Maximum | 64.40% | ||
Number of collateralized loan obligation entities | collateralizedloanobligation | 15 | ||
Number of collateralized loan obligation entities formed during the period | collateralizedloanobligation | 2 | 2 | 2 |
Face amount of managed investment entities liabilities purchased by subsidiaries after issuance date | $ 24 | ||
Amount paid by subsidiaries to purchase managed investment entities liabilities after issuance date | 17 | ||
Proceeds received by subsidiaries related to sales and redemptions of managed investment entities liabilities | 115 | ||
Proceeds received by subsidiaries related to redemptions of managed investment entities liabilities | $ 77 | $ 81 | |
Number of collateralized loan obligation entities that were substantially liquidated during the period | collateralizedloanobligation | 4 | ||
Difference between aggregate unpaid principal balance and fair value of CLOs' fixed maturity investments | 75 | 214 | |
Difference between aggregate unpaid principal balance and fair value of CLOs' debt | 159 | 205 | |
Carrying amount of CLO loans in default | 1 | 1 | |
Aggregate unpaid principal balance of CLO loans in default | 10 | 10 | |
Variable interest entity, primary beneficiary | |||
Variable Interest Entity [Line Items] | |||
Aggregate fair value of investment in collateralized loan obligations | 216 | 266 | $ 289 |
New collateralized loan obligation entities | |||
Variable Interest Entity [Line Items] | |||
Face value of liabilities issued by managed investment entities on issuance date | 866 | 869 | 917 |
Face amount of managed investment entities liabilities purchased by subsidiaries at issuance date | 64 | $ 81 | 94 |
Subordinated debt obligations | Variable interest entity, primary beneficiary | |||
Variable Interest Entity [Line Items] | |||
Aggregate fair value of investment in collateralized loan obligations | $ 144 | ||
Senior debt obligations | |||
Variable Interest Entity [Line Items] | |||
Face amount of managed investment entities liabilities purchased by subsidiaries after issuance date | 13 | ||
Amount paid by subsidiaries to purchase managed investment entities liabilities after issuance date | $ 13 |
Managed Investment Entities - S
Managed Investment Entities - Selected financial information related to CLOs (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Gains (losses) on change in fair value of assets/liabilities: | ||||
Assets | [1] | $ 131 | $ (116) | $ (66) |
Liabilities | [1] | (116) | 82 | 22 |
Management fees paid to AFG | 17 | 15 | 25 | |
CLO earnings (losses) attributable to: | ||||
AFG shareholders | [2] | 37 | (6) | 16 |
Noncontrolling interests | [2] | 0 | 0 | (51) |
Variable interest entity, primary beneficiary | ||||
Variable Interest Entity [Line Items] | ||||
Investment in CLO tranches | $ 216 | $ 266 | $ 289 | |
[1] | Included in revenues in AFG’s Statement of Earnings. | |||
[2] | Included in earnings before income taxes in AFG’s Statement of Earnings. |
Goodwill and Other Intangible74
Goodwill and Other Intangibles - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill acquired during period | $ 16 | $ 16 | |||
Goodwill decrease due to the sale of a subsidiary | $ (2) | $ (2) | |||
Amortizable intangible assets related to property and casualty insurance acquisitions | 41 | $ 34 | 41 | ||
Accumulated amortization | $ 18 | 25 | 18 | ||
Amortization of intangible assets | $ 8 | $ 8 | $ 19 | ||
Weighted average useful life of finite-lived intangible assets acquired | 4 years | ||||
Future amortization of intangibles in next year | $ 8 | ||||
Future amortization of intangibles in year two | 8 | ||||
Future amortization of intangibles in year three | 8 | ||||
Future amortization of intangibles in year four | 8 | ||||
Future amortization of intangibles after year four | $ 2 |
Goodwill and Other Intangible75
Goodwill and Other Intangibles - Changes in the carrying value of goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2013 | |
Changes in the carrying value of goodwill by reporting segment | ||||||
Goodwill, Beginning balance | $ 199 | $ 199 | $ 201 | $ 199 | $ 185 | |
Goodwill, Acquired during period | $ 16 | 16 | ||||
Goodwill, Sale of subsidiary | (2) | (2) | ||||
Goodwill, Ending balance | 199 | 199 | 201 | |||
Property and Casualty | ||||||
Changes in the carrying value of goodwill by reporting segment | ||||||
Goodwill, Beginning balance | 168 | 168 | 168 | 168 | 152 | |
Goodwill, Acquired during period | 16 | |||||
Goodwill, Sale of subsidiary | 0 | |||||
Goodwill, Ending balance | 168 | 168 | 168 | |||
Annuity | ||||||
Changes in the carrying value of goodwill by reporting segment | ||||||
Goodwill, Beginning balance | 31 | 31 | 33 | $ 31 | $ 33 | |
Goodwill, Acquired during period | 0 | |||||
Goodwill, Sale of subsidiary | (2) | |||||
Goodwill, Ending balance | $ 31 | $ 31 | $ 33 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 10, 2016 | Aug. 31, 2016 | Nov. 30, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2014 |
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Scheduled principal payments on debt in next year | $ 0 | $ 0 | |||||||||
Scheduled principal payments on debt in year two | 0 | 0 | |||||||||
Scheduled principal payments on debt in year three | 350,000,000 | 350,000,000 | |||||||||
Scheduled principal payments on debt in year four | 0 | 0 | |||||||||
Scheduled principal payments on debt in year five | 0 | 0 | |||||||||
Scheduled principal payments on debt after year five | 958,000,000 | 958,000,000 | |||||||||
Principal | 1,308,000,000 | 1,308,000,000 | $ 1,020,000,000 | ||||||||
Cash interest payments on long-term debt | 75,000,000 | 75,000,000 | $ 72,000,000 | ||||||||
AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Revolving credit line term | 5 years | ||||||||||
Revolving credit line | $ 500,000,000 | ||||||||||
Amount borrowed under AFG revolving credit facility | $ 0 | $ 0 | $ 0 | ||||||||
Interest rate description of fair value hedge activity | three-month LIBOR plus 8.099% | ||||||||||
Interest rate description for revolving credit facility | 1.00% to 1.875% (currently 1.375%) over LIBOR | ||||||||||
LIBOR | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Interest rate on revolving debt facility | 1.375% | ||||||||||
LIBOR | AFG | Minimum | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Interest rate on revolving debt facility | 1.00% | ||||||||||
LIBOR | AFG | Maximum | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Interest rate on revolving debt facility | 1.875% | ||||||||||
Interest rate swaps | Fair Value Hedge | Designated as Hedging Instrument | AFG | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Effective interest rate, percentage | 9.0624% | 9.0624% | 8.611% | ||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Cash interest received on long-term debt affiliated with interest rate swap | $ 3,000,000 | $ 2,000,000 | |||||||||
Interest rate swaps | Fair Value Hedge | Designated as Hedging Instrument | LIBOR | AFG | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate | 8.099% | 8.099% | |||||||||
Long-term debt | Interest rate swaps | Fair Value Hedge | Designated as Hedging Instrument | AFG | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Net derivatives, at fair value | $ 1,000,000 | $ 1,000,000 | 2,000,000 | ||||||||
Senior Notes | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | $ 1,008,000,000 | $ 1,008,000,000 | 708,000,000 | ||||||||
Senior Notes | 9-7/8% Senior Notes due June 2019 | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Interest rate on debt instruments | 9.875% | 9.875% | 9.875% | ||||||||
Senior Notes | 9-7/8% Senior Notes due June 2019 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | ||||||||
Interest rate on debt instruments | 9.875% | 9.875% | 9.875% | ||||||||
Senior Notes | 3.50% Senior Notes due August 2026 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Senior Notes, aggregate principal amount | $ 300,000,000 | ||||||||||
Senior Notes, issuance price as a percentage of par value | 99.608% | ||||||||||
Principal | $ 300,000,000 | $ 300,000,000 | $ 0 | ||||||||
Interest rate on debt instruments | 3.50% | 3.50% | 3.50% | ||||||||
Senior Notes | 6-3/8% Senior Notes due June 2042 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | $ 230,000,000 | $ 230,000,000 | 230,000,000 | ||||||||
Interest rate on debt instruments | 6.375% | 6.375% | |||||||||
Senior Notes | 5-3/4% Senior Notes due August 2042 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | $ 125,000,000 | $ 125,000,000 | 125,000,000 | ||||||||
Interest rate on debt instruments | 5.75% | 5.75% | |||||||||
Senior Notes | 7% Senior Notes due September 2050 | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Senior Notes, amount of the original debt instrument that was redeemed | $ 132,000,000 | ||||||||||
Senior Notes | 7% Senior Notes due September 2050 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Interest rate on debt instruments | 7.00% | ||||||||||
Subordinated Debt | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | $ 300,000,000 | $ 300,000,000 | 300,000,000 | ||||||||
Subordinated Debt | 6-1/4% Subordinated Debentures due September 2054 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Senior Notes, aggregate principal amount | $ 150,000,000 | ||||||||||
Principal | $ 150,000,000 | $ 150,000,000 | 150,000,000 | ||||||||
Interest rate on debt instruments | 6.25% | 6.25% | 6.25% | ||||||||
Subordinated Debt | 6% Subordinated Debentures due November 2055 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Senior Notes, aggregate principal amount | $ 150,000,000 | ||||||||||
Principal | $ 150,000,000 | $ 150,000,000 | 150,000,000 | ||||||||
Interest rate on debt instruments | 6.00% | 6.00% | 6.00% | ||||||||
Revolving Credit Facility | National Interstate | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | $ 0 | $ 0 | $ 12,000,000 | $ 18,000,000 | |||||||
Revolving Credit Facility | Line of Credit | National Interstate | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | $ 6,000,000 |
Long-Term Debt - Schedule of lo
Long-Term Debt - Schedule of long-term debt (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Nov. 10, 2016 | Dec. 31, 2015 |
Summary of Carrying value of long-term debt | |||
Principal | $ 1,308 | $ 1,020 | |
Discount and Issue Costs | (25) | (22) | |
Carrying Value | 1,283 | 998 | |
AFG | |||
Summary of Carrying value of long-term debt | |||
Carrying Value | 1,283 | 986 | |
Senior Notes | AFG | |||
Summary of Carrying value of long-term debt | |||
Principal | 1,008 | 708 | |
Discount and Issue Costs | (15) | (12) | |
Carrying Value | 993 | 696 | |
Senior Notes | 9-7/8% Senior Notes due June 2019 | AFG | |||
Summary of Carrying value of long-term debt | |||
Principal | 350 | 350 | |
Discount and Issue Costs | (1) | (1) | |
Carrying Value | 349 | 349 | |
Senior Notes | 3.50% Senior Notes due August 2026 | AFG | |||
Summary of Carrying value of long-term debt | |||
Principal | 300 | 0 | |
Discount and Issue Costs | (3) | 0 | |
Carrying Value | 297 | 0 | |
Senior Notes | 6-3/8% Senior Notes due June 2042 | AFG | |||
Summary of Carrying value of long-term debt | |||
Principal | 230 | 230 | |
Discount and Issue Costs | (7) | (7) | |
Carrying Value | 223 | 223 | |
Senior Notes | 5-3/4% Senior Notes due August 2042 | AFG | |||
Summary of Carrying value of long-term debt | |||
Principal | 125 | 125 | |
Discount and Issue Costs | (4) | (4) | |
Carrying Value | 121 | 121 | |
Senior Notes | Other | AFG | |||
Summary of Carrying value of long-term debt | |||
Principal | 3 | 3 | |
Discount and Issue Costs | 0 | 0 | |
Carrying Value | 3 | 3 | |
Subordinated Debentures | AFG | |||
Summary of Carrying value of long-term debt | |||
Principal | 300 | 300 | |
Discount and Issue Costs | (10) | (10) | |
Carrying Value | 290 | 290 | |
Subordinated Debentures | 6-1/4% Subordinated Debentures due September 2054 | AFG | |||
Summary of Carrying value of long-term debt | |||
Principal | 150 | 150 | |
Discount and Issue Costs | (5) | (5) | |
Carrying Value | 145 | 145 | |
Subordinated Debentures | 6% Subordinated Debentures due November 2055 | AFG | |||
Summary of Carrying value of long-term debt | |||
Principal | 150 | 150 | |
Discount and Issue Costs | (5) | (5) | |
Carrying Value | 145 | 145 | |
Revolving Credit Facility | National Interstate | |||
Summary of Carrying value of long-term debt | |||
Principal | 0 | $ 18 | 12 |
Discount and Issue Costs | 0 | 0 | |
Carrying Value | $ 0 | $ 12 |
Long-Term Debt - Unsecured long
Long-Term Debt - Unsecured long-term debt obligations (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,308 | $ 1,020 |
Senior unsecured obligations | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,008 | 720 |
Subordinated unsecured obligations | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 300 | $ 300 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Rate of options exercisable per year, commencing one year after grant | 20% per year commencing one year after grant | |||||
Duration of options expiration, after date of grant | 10 years | |||||
Total intrinsic value of options exercised | $ 38 | $ 52 | $ 38 | |||
Cash received from the exercise of stock options | 32 | 47 | 35 | |||
Tax benefit related to exercise of stock options | 11 | 16 | 12 | |||
Total compensation expense related to stock incentive plans | 28 | 27 | 25 | |||
Tax benefit related to compensation costs | 19 | 8 | 8 | |||
Net of tax unrealized gains (losses) related to credit-only impaired securities | $ 52 | $ 52 | 51 | 58 | ||
Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted Common Stock vesting period | 3 years | |||||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted Common Stock vesting period | 4 years | |||||
Stock Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common Stock reserved for issuance under stock incentive plans (shares) | 9,300,000 | 9,300,000 | ||||
Common Stock options issued under stock incentive plan (shares) | 0 | |||||
Annual Equity Bonus Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Other benefit plans, shares issued (shares) | 40,336 | 54,732 | ||||
Common Stock issued, fair value per share (USD per share) | $ 71.05 | $ 62.55 | ||||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense related to equity-based awards that have yet to vest | $ 16 | $ 16 | ||||
Weighted average period of cost expected to be recognized | 2 years 3 months 18 days | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense related to equity-based awards that have yet to vest | 24 | $ 24 | ||||
Weighted average period of cost expected to be recognized | 2 years 3 months 18 days | |||||
Capital surplus | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Tax benefit related to exercise of stock options | $ 12 | $ 9 | ||||
Capital surplus under previous accounting guidance | Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Tax benefit related to exercise of stock options | $ 9 | $ 9 |
Shareholders' Equity - Preferre
Shareholders' Equity - Preferred stock authorized for issuance (Details) | Dec. 31, 2016$ / sharesshares |
Voting Preferred Stock | |
Class of Stock [Line Items] | |
Preferred Stock, par value | $ / shares | $ 0 |
Preferred Stock, shares authorized | shares | 12,500,000 |
Nonvoting Preferred Stock | |
Class of Stock [Line Items] | |
Preferred Stock, par value | $ / shares | $ 0 |
Preferred Stock, shares authorized | shares | 12,500,000 |
Shareholders' Equity - Data rel
Shareholders' Equity - Data relating to grants of restricted stock (Details) - Restricted Stock | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding at January 1, 2016 | shares | 505,698 |
Granted | shares | 318,940 |
Vested | shares | (141,598) |
Forfeited | shares | (4,165) |
Outstanding at December 31, 2016 | shares | 678,875 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Average grant date fair value, Outstanding, Beginning balance | $ / shares | $ 51.43 |
Average grant date fair value, Granted | $ / shares | 67 |
Average grant date fair value, Vested | $ / shares | 40.73 |
Average grant date fair value, Forfeited | $ / shares | 64.08 |
Average grant date fair value, Outstanding, Ending balance | $ / shares | $ 60.90 |
Shareholders' Equity - Data for
Shareholders' Equity - Data for stock options issued under the stock incentive plans (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at January 1, 2016 | 5,516,090 | ||
Exercised | (958,344) | ||
Forfeited/Cancelled | (52,645) | ||
Outstanding at December 31, 2016 | 4,505,101 | 5,516,090 | |
Options exercisable at December 31, 2016 | 2,908,200 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Average exercise price, Beginning balance | $ 41.46 | ||
Average exercise price, Granted | $ 63.15 | $ 56.47 | |
Average exercise price, Exercised | 33.56 | ||
Average exercise price, Forfeited/Cancelled | 51.91 | ||
Average exercise price, Ending balance | 43.02 | $ 41.46 | |
Average exercise price, Options exercisable | $ 36.95 | ||
Average remaining contractual term, Options outstanding | 5 years 4 months 24 days | ||
Average remaining contractual term, Options exercisable | 4 years 4 months 24 days | ||
Aggregate intrinsic value, Options outstanding | $ 203 | ||
Aggregate intrinsic value, Options exercisable | $ 149 |
Shareholders' Equity - Assumpti
Shareholders' Equity - Assumptions used in estimating weighted average fair value of options on grant date (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Options, Valuation Assumptions | ||
Exercise price | $ 63.15 | $ 56.47 |
Expected dividend yield | 1.60% | 1.60% |
Expected volatility | 25.00% | 26.00% |
Expected term (in years) | 7 years 3 months | 7 years 3 months |
Risk-free rate | 1.88% | 2.20% |
Grant date fair value | $ 15.29 | $ 14.66 |
Shareholders' Equity - Progress
Shareholders' Equity - Progression of the components of accumulated other comprehensive income (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
AOCI beginning balance | $ 304 | |||||
Other comprehensive income (loss), net of tax | 67 | $ (431) | $ 170 | |||
Other comprehensive income (loss), net of tax, acquisition of noncontrolling interest | (315) | |||||
AOCI ending balance | 375 | 304 | ||||
Accumulated net investment gain (loss) including portion attributable to noncontrolling interest | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Other comprehensive income (loss), unrealized holding gains on securities arising during the period, Pretax | 124 | (625) | 334 | |||
Other comprehensive income (loss), unrealized holding gains on securities arising during the period, tax | (44) | 219 | (118) | |||
Other comprehensive income (loss), unrealized holding gains on securities arising during the period, net of tax | 80 | (406) | 216 | |||
Reclassification from accumulated other comprehensive income, pretax | [1] | (19) | 14 | (52) | ||
Reclassification from accumulated other comprehensive income, tax | [1] | 7 | (5) | 19 | ||
Reclassification from accumulated other comprehensive income, net of tax | (12) | 9 | (33) | |||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), pretax | 105 | (645) | 282 | |||
Other comprehensive income (loss), tax | (37) | 226 | (99) | |||
Other comprehensive income (loss), net of tax | 68 | (419) | 183 | |||
Accumulated net investment gain (loss) including portion attributable to noncontrolling interest | Reclassification out of Accumulated Other Comprehensive Income | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Reclassification from accumulated other comprehensive income, pretax | (34) | |||||
Reclassification from accumulated other comprehensive income, tax | 12 | |||||
Reclassification from accumulated other comprehensive income, net of tax | (22) | |||||
Accumulated net investment gain (loss) attributable to noncontrolling interest | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Other comprehensive income (loss), unrealized holding gains on securities arising during the period, net of tax | (4) | 9 | (4) | |||
Reclassification from accumulated other comprehensive income, net of tax | [1] | (1) | (1) | 1 | ||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), net of tax | (5) | 8 | (3) | |||
Accumulated net investment gain (loss) attributable to noncontrolling interest | Reclassification out of Accumulated Other Comprehensive Income | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Reclassification from accumulated other comprehensive income, net of tax | 0 | |||||
Accumulated net investment gain (loss) attributable to parent | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Other comprehensive income (loss), unrealized holding gains on securities arising during the period, net of tax | 76 | (397) | 212 | |||
Reclassification from accumulated other comprehensive income, net of tax | (13) | 8 | (32) | |||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
AOCI beginning balance | 332 | [2] | 743 | [2] | 563 | |
Other comprehensive income (loss), net of tax | 63 | (411) | 180 | |||
Other comprehensive income (loss), net of tax, acquisition of noncontrolling interest | 9 | |||||
AOCI ending balance | [2] | 404 | 332 | 743 | ||
Accumulated net investment gain (loss) attributable to parent | Reclassification out of Accumulated Other Comprehensive Income | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Reclassification from accumulated other comprehensive income, net of tax | (22) | |||||
Accumulated net gain (loss) from cash flow hedges including portion attributable to noncontrolling interest | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), pretax | (12) | 1 | ||||
Other comprehensive income (loss), tax | 4 | 0 | ||||
Other comprehensive income (loss), net of tax | (8) | 1 | ||||
Accumulated net gain (loss) from cash flow hedges attributable to noncontrolling interest | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), net of tax | 0 | 0 | ||||
Accumulated net gain (loss) from cash flow hedges attributable to parent | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
AOCI beginning balance | 1 | 0 | ||||
Other comprehensive income (loss), net of tax | (8) | 1 | ||||
AOCI ending balance | (7) | 1 | 0 | |||
Accumulated foreign currency adjustment including portion attributable to noncontrolling interest | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), pretax | 6 | (9) | (8) | |||
Other comprehensive income (loss), tax | 1 | (5) | (1) | |||
Other comprehensive income (loss), net of tax | 7 | (14) | (9) | |||
Accumulated foreign currency adjustment attributable to noncontrolling interest | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | |||
Accumulated foreign currency adjustment attributable to parent | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
AOCI beginning balance | (22) | (8) | 1 | |||
Other comprehensive income (loss), net of tax | 7 | (14) | (9) | |||
AOCI ending balance | (15) | (22) | (8) | |||
Accumulated defined benefit plans adjustment including portion attributable to noncontrolling interest | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), pretax | 0 | 1 | (6) | |||
Other comprehensive income (loss), tax | 0 | 0 | 2 | |||
Other comprehensive income (loss), net of tax | 0 | 1 | (4) | |||
Accumulated defined benefit plans adjustment attributable to noncontrolling interest | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | |||
Accumulated defined benefit plans adjustment attributable to parent | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
AOCI beginning balance | (7) | (8) | (4) | |||
Other comprehensive income (loss), net of tax | 0 | 1 | (4) | |||
AOCI ending balance | (7) | (7) | (8) | |||
AOCI including portion attributable to noncontrolling interest | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), pretax | 99 | (652) | 268 | |||
Other comprehensive income (loss), tax | (32) | 221 | (98) | |||
Other comprehensive income (loss), net of tax | 67 | (431) | 170 | |||
AOCI attributable to noncontrolling interest | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), net of tax | (5) | 8 | (3) | |||
AOCI attributable to parent | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
AOCI beginning balance | 304 | 727 | 560 | |||
Other comprehensive income (loss), net of tax | 62 | (423) | 167 | |||
Other comprehensive income (loss), net of tax, acquisition of noncontrolling interest | 9 | |||||
AOCI ending balance | $ 375 | $ 304 | $ 727 | |||
[1] | The reclassification adjustment out of net unrealized gains on securities affected the following lines in AFG’s Statement of Earnings: OCI component Affected line in the statement of earnings Pretax Realized gains (losses) on securities Tax Provision for income taxes Attributable to noncontrolling interests Net earnings (loss) attributable to noncontrolling interests | |||||
[2] | Includes net unrealized gains of $52 million at December 31, 2016 compared to net unrealized gains of $51 million and $58 million at December 31, 2015 and 2014, related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings. |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) £ in Millions, $ in Millions | Nov. 10, 2016USD ($) | Jan. 31, 2008USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2016GBP (£) | |
Income Tax Reconciliation [Line Items] | |||||||||||
Statutory rate of income taxes | 35.00% | 35.00% | 35.00% | ||||||||
Income tax expense (benefit) | $ 119 | $ 195 | $ 220 | ||||||||
Payments to acquire additional interest in subsidiaries | $ 315 | 0 | 0 | ||||||||
Effective tax rate excluding the charge related to the exit of certain lines of business within subsidiaries | 35.00% | ||||||||||
Income (losses) subject to tax in foreign jurisdictions | $ (160) | (66) | (4) | ||||||||
Operating loss carryforwards, valuation allowance | $ 50 | $ 50 | |||||||||
Percentage ownership of National Interstate needed to be included in AFG's consolidated tax group | 80.00% | 80.00% | 80.00% | ||||||||
Decrease in AFG's liability for uncertain tax positions | $ (19) | ||||||||||
Decrease in AFG's liability for uncertain tax positions, settlements | (11) | $ 0 | 0 | (11) | |||||||
The portion of the reduction in the liability for uncertain tax positions that favorably impacted the effective tax rate | 4 | ||||||||||
Change in AFG's liability for uncertain tax positions of prior year | 0 | 0 | (8) | ||||||||
Income tax penalties accrued | 0 | 0 | |||||||||
Cash payments for income taxes | 308 | 234 | 347 | ||||||||
National Interstate | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Income tax expense (benefit) | $ (66) | ||||||||||
Release of deferred tax liabilities | $ 66 | ||||||||||
Neon Capital Limited | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Income tax expense (benefit) | (111) | ||||||||||
Increase (Decrease) in current taxes payable | (29) | ||||||||||
Charge for valuation allowance | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Charge for valuation allowance against deferred tax assets | 120 | ||||||||||
AFG | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Income tax expense (benefit) | (177) | 119 | 195 | 220 | |||||||
Interest included in tax provision | (1) | ||||||||||
Decrease in related accrued interest (are less than in 2016 and 2015) | 0 | ||||||||||
Amount of expense for penalties related to a tax position | 0 | $ 0 | |||||||||
Maximum | AFG | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Interest included in tax provision | 1 | 1 | |||||||||
Decrease in related accrued interest (are less than in 2016 and 2015) | 1 | 1 | 1 | ||||||||
Amount of expense for penalties related to a tax position | 1 | ||||||||||
Income tax penalties accrued | 1 | 1 | |||||||||
Timing of recognition of investment income | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Decrease in AFG's liability for uncertain tax positions | (17) | ||||||||||
Deductibility of certain financing expenses | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Decrease in AFG's liability for uncertain tax positions | $ (2) | ||||||||||
United Kingdom | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Operating loss carryforwards | [1] | $ 139 | 139 | £ 112 | |||||||
Property and casualty insurance | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Change in AFG’s liability for uncertain tax positions due to the uncertainty in state taxation | $ 1 | ||||||||||
Property and casualty insurance | Other lines | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Special charges related to the exit of certain lines of business within subsidiaries | $ 65 | ||||||||||
Property and casualty insurance | Other lines | Neon Capital Limited | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Special charges related to the exit of certain lines of business within subsidiaries | $ 65 | ||||||||||
Neon Capital Limited | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Payments to acquire controlling interest in subsidiaries | $ 75 | ||||||||||
Percentage ownership of subsidiary | 67.00% | ||||||||||
Payments to acquire additional interest in subsidiaries | $ 17 | ||||||||||
[1] | £112 million |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income taxes at the statutory rate to the provision for income taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Earnings before income taxes (“EBT”) | $ 787 | $ 565 | $ 626 |
Income taxes at statutory rate | 275 | 198 | 219 |
Effect of tax exempt interest | (24) | (27) | (25) |
Effect of change in valuation allowance | 52 | 23 | 7 |
Effect of stock-based compensation | (9) | 1 | 1 |
Effect of subsidiaries not in AFG's tax return | 3 | 2 | 1 |
Effect of acquisition of noncontrolling interest | (66) | 0 | 0 |
Effect of Neon restructuring | (111) | 0 | 0 |
Effect of losses of managed investment entities | 0 | 0 | 18 |
Effect of other income tax reconciliation | (1) | (2) | (1) |
Provision for income taxes as shown in the Statement of Earnings | $ 119 | $ 195 | $ 220 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Income taxes at statutory rate as a percentage of EBT | 35.00% | 35.00% | 35.00% |
Effect of tax exempt interest as a percentage of EBT | (3.00%) | (5.00%) | (4.00%) |
Effect of change in valuation allowance as a percentage of EBT | 7.00% | 4.00% | 1.00% |
Effect of stock-based compensation as a percentage of EBT | (1.00%) | 0.00% | 0.00% |
Effect of subsidiaries not in AFG's tax return as a percentage of EBT | 0.00% | 1.00% | 0.00% |
Effect of acquisition of noncontrolling interest as a percentage of EBT | (8.00%) | 0.00% | 0.00% |
Effect of Neon restructuring as a percentage of EBT | (14.00%) | 0.00% | 0.00% |
Effect of losses of managed investment entities as a percentage of EBT | 0.00% | 0.00% | 3.00% |
Effect of other income tax reconciliation as a percentage of EBT | (1.00%) | 0.00% | 0.00% |
Provision for income taxes as shown in the Statement of Earnings as a percentage of EBT | 15.00% | 35.00% | 35.00% |
Income Taxes - Total income tax
Income Taxes - Total income tax provision (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current taxes: | |||
Federal | $ 299 | $ 216 | $ 265 |
State | 12 | 8 | 8 |
Deferred taxes: | |||
Federal | (192) | (29) | (53) |
Provision for income taxes as shown in the Statement of Earnings | $ 119 | $ 195 | $ 220 |
Income Taxes - Operating and ca
Income Taxes - Operating and capital loss carryforwards available (Details) - Dec. 31, 2016 £ in Millions, $ in Millions | USD ($) | GBP (£) | |
U.S. | Expiring 2017 - 2022 | |||
Operating and capital loss carryforwards [Line Items] | |||
Operating loss carryforwards | $ 143 | ||
U.S. | Capital loss carryforward | Expiring 2020 | |||
Operating and capital loss carryforwards [Line Items] | |||
Capital loss carryforwards | 237 | ||
United Kingdom | |||
Operating and capital loss carryforwards [Line Items] | |||
Operating loss carryforwards | [1] | $ 139 | £ 112 |
[1] | £112 million |
Income Taxes - Significant comp
Income Taxes - Significant components of deferred tax assets and liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Federal net operating loss carryforwards | $ 50 | $ 50 |
Foreign underwriting losses | 120 | 77 |
Capital loss carryforwards | 83 | 32 |
Insurance claims and reserves | 801 | 713 |
Employee benefits | 131 | 115 |
Other, net | 35 | 29 |
Total deferred tax assets before valuation allowance | 1,220 | 1,016 |
Valuation allowance against deferred tax assets | (173) | (130) |
Total deferred tax assets | 1,047 | 886 |
Deferred tax liabilities: | ||
Subsidiaries not in AFG’s tax return | 0 | (63) |
Investment securities | (307) | (258) |
Deferred policy acquisition costs | (352) | (336) |
Total deferred tax liabilities | (659) | (657) |
Net deferred tax asset (liability) | 388 | 229 |
Excluding Unrealized Gains | ||
Deferred tax assets: | ||
Federal net operating loss carryforwards | 50 | 50 |
Foreign underwriting losses | 120 | 77 |
Capital loss carryforwards | 83 | 32 |
Insurance claims and reserves | 774 | 691 |
Employee benefits | 131 | 115 |
Other, net | 40 | 33 |
Total deferred tax assets before valuation allowance | 1,198 | 998 |
Valuation allowance against deferred tax assets | (173) | (130) |
Total deferred tax assets | 1,025 | 868 |
Deferred tax liabilities: | ||
Subsidiaries not in AFG’s tax return | 0 | (63) |
Investment securities | 29 | 23 |
Deferred policy acquisition costs | (448) | (418) |
Total deferred tax liabilities | (419) | (458) |
Net deferred tax asset (liability) | 606 | 410 |
Impact of Unrealized Gains | ||
Deferred tax assets: | ||
Federal net operating loss carryforwards | 0 | 0 |
Foreign underwriting losses | 0 | 0 |
Capital loss carryforwards | 0 | 0 |
Insurance claims and reserves | 27 | 22 |
Employee benefits | 0 | 0 |
Other, net | (5) | (4) |
Total deferred tax assets before valuation allowance | 22 | 18 |
Valuation allowance against deferred tax assets | 0 | 0 |
Total deferred tax assets | 22 | 18 |
Deferred tax liabilities: | ||
Subsidiaries not in AFG’s tax return | 0 | 0 |
Investment securities | (336) | (281) |
Deferred policy acquisition costs | 96 | 82 |
Total deferred tax liabilities | (240) | (199) |
Net deferred tax asset (liability) | $ (218) | $ (181) |
Income Taxes - Progression of t
Income Taxes - Progression of the liability for uncertain tax positions, excluding interest and penalties (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Progression of the liability for uncertain tax positions, excluding interest and penalties | ||||
Balance at January 1 | $ 1 | $ 0 | $ 19 | |
Additions for tax positions of prior years | 0 | 1 | 0 | |
Reductions for tax positions of prior years | 0 | 0 | (8) | |
Additions for tax positions of current year | 0 | 0 | 0 | |
Settlements | $ (11) | 0 | 0 | (11) |
Balance at December 31 | $ 1 | $ 1 | $ 0 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) - USD ($) $ in Millions | Dec. 24, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2016 |
Property and Casualty Group | |||||
Loss Contingencies [Line Items] | |||||
Increase in asbestos and environmental reserves | $ 36 | $ 67 | $ 24 | ||
Liability for asbestos and environmental reserves | $ 443 | ||||
Reinsurance recoverables on asbestos and environmental reserves, net of allowance | 106 | ||||
Former railroad and manufacturing operations | |||||
Loss Contingencies [Line Items] | |||||
Increase in asbestos and environmental reserves | $ 5 | $ 12 | $ 6 | ||
American Premier and its subsidiaries | |||||
Loss Contingencies [Line Items] | |||||
Liability for environmental and other claims | 77 | ||||
GAFRI | |||||
Loss Contingencies [Line Items] | |||||
Liability for environmental and other claims | $ 9 | ||||
Run-off long-term care insurance business | |||||
Loss Contingencies [Line Items] | |||||
Contingent capital support agreement term | 5 years |
Quarterly Operating Results (92
Quarterly Operating Results (Unaudited) - Narrative (Details) - USD ($) $ in Millions | Dec. 24, 2015 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Operating Results (Unaudited) [Line Items] | ||||||||||||
Realized gains (losses) on subsidiaries | $ 2 | $ (161) | $ 0 | |||||||||
Other income | 224 | 243 | 122 | |||||||||
Income tax expense (benefit) | 119 | 195 | 220 | |||||||||
Run-off long-term care insurance business | ||||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | ||||||||||||
Realized gains (losses) on subsidiaries | $ (166) | $ 2 | $ (4) | $ (162) | (166) | |||||||
Property and casualty insurance | ||||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | ||||||||||||
Other income | [1] | 51 | 78 | 9 | ||||||||
Property and casualty insurance | Other lines | ||||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | ||||||||||||
Special charges related to the exit of certain lines of business within subsidiaries | 65 | |||||||||||
Special charges to increase asbestos and environmental reserves | $ 36 | $ 67 | 36 | 67 | 24 | |||||||
Property and casualty insurance | Other lines | Increased insurance loss reserves related to medical malpractice and general liability lines | ||||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | ||||||||||||
Special charges related to the exit of certain lines of business within subsidiaries | 57 | |||||||||||
Property and casualty insurance | Real estate investment | ||||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | ||||||||||||
Other income | $ 32 | $ 15 | $ 51 | |||||||||
Other | ||||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | ||||||||||||
Special charges to increase asbestos and environmental reserves | 5 | 12 | 6 | |||||||||
Other | Former railroad and manufacturing operations | ||||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | ||||||||||||
Special charges to increase asbestos and environmental reserves | $ 5 | $ 12 | ||||||||||
AFG | ||||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | ||||||||||||
Income tax expense (benefit) | $ (177) | $ 119 | $ 195 | $ 220 | ||||||||
[1] | Includes pretax income of $32 million (before noncontrolling interest) from the sale of an apartment property in the second quarter of 2016, $51 million (before noncontrolling interest) from the sale of a hotel in the second quarter of 2015 and $15 million from the sale of an apartment property in the fourth quarter of 2015. |
Quarterly Operating Results (93
Quarterly Operating Results (Unaudited) - Quarterly results of consolidated operations (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Statement of Earnings | |||||||||||
Revenues | $ 1,737 | $ 1,705 | $ 1,581 | $ 1,475 | $ 1,618 | $ 1,687 | $ 1,543 | $ 1,297 | $ 6,498 | $ 6,145 | $ 5,733 |
Net earnings, including noncontrolling interests | 388 | 113 | 63 | 104 | 130 | 66 | 149 | 25 | 668 | 370 | 406 |
Net earnings attributable to shareholders | $ 385 | $ 109 | $ 54 | $ 101 | $ 129 | $ 63 | $ 141 | $ 19 | $ 649 | $ 352 | $ 452 |
Earnings Attributable to Shareholders per Common Share: | |||||||||||
Basic (USD per share) | $ 4.43 | $ 1.25 | $ 0.63 | $ 1.16 | $ 1.48 | $ 0.72 | $ 1.60 | $ 0.22 | $ 7.47 | $ 4.02 | $ 5.07 |
Diluted (USD per share) | $ 4.33 | $ 1.23 | $ 0.62 | $ 1.14 | $ 1.45 | $ 0.71 | $ 1.57 | $ 0.21 | $ 7.33 | $ 3.94 | $ 4.97 |
Average number of Common Shares: | |||||||||||
Basic (shares) | 86.9 | 86.9 | 86.8 | 86.9 | 87.4 | 87.5 | 87.7 | 87.6 | 86.9 | 87.6 | 89 |
Diluted (shares) | 88.8 | 88.5 | 88.4 | 88.5 | 89.2 | 89.3 | 89.5 | 89.4 | 88.5 | 89.4 | 91 |
Quarterly Operating Results (94
Quarterly Operating Results (Unaudited) - Realized gains and favorable (adverse) prior year development of the liability for losses and LAE (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Realized gains (losses) and favorable (adverse) development on unpaid loss and loss adjustment expenses | ||||||||||
Realized Gains (Losses) on Securities and Subsidiaries | $ 51 | $ 2 | $ (14) | $ (18) | $ (25) | $ (11) | $ (1) | $ (143) | $ 21 | $ (180) |
Prior Year Development Favorable (Adverse) | $ (10) | $ (22) | $ (28) | $ 28 | $ 5 | $ (55) | $ 10 | $ 7 | $ (32) | $ (33) |
Insurance - Narrative (Details)
Insurance - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Insurance [Line Items] | |||||||
Carrying value of cash and securities owned by U.S.-based insurance subsidiaries on deposit | $ 1,000 | $ 1,000 | |||||
Carrying value of cash and securities owned by insurance subsidiaries on deposit in support of underwriting activities at Lloyd's | 215 | 215 | |||||
Undrawn letters of credit | 332 | 332 | |||||
Undrawn letters of credit, collateralized | 0 | $ 0 | |||||
Workers' compensation insurance discount rate | 4.50% | 4.50% | |||||
Workers' compensation insurance discount, which has reduced the liability for unpaid losses and loss adjustment expenses | 16 | $ 16 | $ 18 | ||||
Long-term care insurance reserves, net of reinsurance recoverables | 37 | 37 | 34 | ||||
Investment in Federal Home Loan Bank capital stock | 44 | 44 | |||||
Proceeds received under funding agreements with the Federal Home Loan Bank | 200 | 150 | |||||
Advances from Federal Home Loan Bank | 935 | $ 935 | |||||
Description of variable rate basis | LIBOR | ||||||
Repayments of advances from Federal Home Loan Bank due in year two | 285 | $ 285 | |||||
Repayments of advances from Federal Home Loan Bank due in year four | 500 | 500 | |||||
Repayments of advances from Federal Home Loan Bank due in year five | 150 | 150 | |||||
Fair value of mortgage-backed securities held as collateral by the Federal Home Loan Bank | 1,080 | 1,080 | |||||
Interest on advances from Federal Home Loan Bank | 8 | 3 | $ 1 | ||||
Maximum amount of dividends available to be paid by insurance subsidiaries to AFG without prior approval of regulatory authorities | 693 | 693 | |||||
Dividends on Common Stock | (187) | (178) | (169) | ||||
Aggregate guaranteed minimum death benefit value on variable annuity polices in force | 20 | 20 | 27 | ||||
Minimum | |||||||
Insurance [Line Items] | |||||||
Dividends payments without violating the most restrictive debt covenants, minimum | 1,000 | $ 1,000 | |||||
Minimum | LIBOR | |||||||
Insurance [Line Items] | |||||||
FHLB advances, basis spread on variable rate | 0.03% | ||||||
Maximum | LIBOR | |||||||
Insurance [Line Items] | |||||||
FHLB advances, basis spread on variable rate | 0.53% | ||||||
Average | LIBOR | |||||||
Insurance [Line Items] | |||||||
FHLB advances, basis spread on variable rate | 1.18% | ||||||
Catastrophe Bonds | |||||||
Insurance [Line Items] | |||||||
Catastrophe reinsurance coverage, annual cost | $ 5 | ||||||
Life insurance | |||||||
Insurance [Line Items] | |||||||
Life insurance in force, ceded premiums | 10,220 | 10,220 | 11,190 | ||||
Life insurance in force, direct premiums | $ 13,490 | 13,490 | 14,670 | ||||
Life written premiums ceded | 31 | 40 | 41 | ||||
Reinsurance recoveries | 41 | 50 | 59 | ||||
Variable annuities | Maximum | |||||||
Insurance [Line Items] | |||||||
Death benefits paid in excess of the variable annuity account balances (are less than in 2014, 2015 and 2016) | 1 | 1 | 1 | ||||
Property and casualty insurance | Other lines | |||||||
Insurance [Line Items] | |||||||
Special charges related to the exit of certain lines of business within subsidiaries | $ 65 | ||||||
Special charges to increase asbestos and environmental reserves | $ 36 | $ 67 | $ 36 | $ 67 | $ 24 | ||
Property and casualty insurance | Other lines | Increased insurance loss reserves related to medical malpractice and general liability lines | |||||||
Insurance [Line Items] | |||||||
Special charges related to the exit of certain lines of business within subsidiaries | $ 57 |
Insurance - Analysis of changes
Insurance - Analysis of changes in the liability for losses and loss adjustment expenses, net of reinsurance (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Analysis of changes in the liability for losses and loss adjustment expenses, net of reinsurance | |||||||||||||
Balance at beginning of period | $ 8,127 | $ 7,872 | $ 8,127 | $ 7,872 | $ 6,410 | ||||||||
Less reinsurance recoverables, net of allowance | 2,201 | 2,227 | 2,201 | 2,227 | 2,122 | ||||||||
Net liability at beginning of period | 5,926 | 5,645 | 5,926 | 5,645 | 4,288 | ||||||||
Liability for losses and loss adjustment expenses, period increase (decrease) [Abstract] | |||||||||||||
Provision for losses and LAE occurring in the current year | 2,730 | 2,662 | 2,488 | ||||||||||
Net increase (decrease) in the provision for claims of prior years: | |||||||||||||
Provision for claims of prior years related to special A&E charges and other | $ 10 | $ 22 | $ 28 | $ (28) | $ (5) | $ 55 | $ (10) | $ (7) | 32 | 33 | |||
Total losses and LAE incurred | 2,762 | 2,695 | 2,494 | ||||||||||
Payments for losses and LAE of: | |||||||||||||
Current year | (841) | (828) | (789) | ||||||||||
Prior years | (1,512) | (1,575) | (1,340) | ||||||||||
Total payments | (2,353) | (2,403) | (2,129) | ||||||||||
Reserves of businesses acquired | (40) | [1] | 0 | 1,028 | [1] | ||||||||
Foreign currency translation and other | (34) | (11) | (36) | ||||||||||
Net liability at end of period | 6,261 | 5,926 | 6,261 | 5,926 | 5,645 | ||||||||
Add back reinsurance recoverables, net of allowance | 2,302 | 2,201 | 2,302 | 2,201 | 2,227 | ||||||||
Gross unpaid losses and LAE included in the balance sheet | $ 8,563 | $ 8,127 | 8,563 | 8,127 | 7,872 | ||||||||
Special A&E charges | |||||||||||||
Net increase (decrease) in the provision for claims of prior years: | |||||||||||||
Provision for claims of prior years related to special A&E charges and other | 36 | 67 | 24 | ||||||||||
Neon exited lines charge | |||||||||||||
Net increase (decrease) in the provision for claims of prior years: | |||||||||||||
Provision for claims of prior years related to special A&E charges and other | 57 | 0 | 0 | ||||||||||
Other | |||||||||||||
Net increase (decrease) in the provision for claims of prior years: | |||||||||||||
Provision for claims of prior years related to special A&E charges and other | $ (61) | $ (34) | $ (18) | ||||||||||
[1] | Reflects the November 2016 reinsurance to close transaction at Neon (discussed below) and the acquisition of Summit in April 2014 (discussed in Note B — “Acquisitions and Sale of Businesses”). |
Insurance - Reconciliation of i
Insurance - Reconciliation of incurred and paid claims development information to the aggregate carrying amount of the liability for unpaid losses and LAE (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Total reserves, net of reinsurance | $ 6,261 | $ 5,926 | $ 5,645 | $ 4,288 |
Add back reinsurance recoverables, net of allowance | (2,302) | (2,201) | (2,227) | (2,122) |
Gross unpaid losses and LAE included in the balance sheet | 8,563 | 8,127 | $ 7,872 | $ 6,410 |
Property and casualty insurance | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Specialty unpaid losses and LAE, net of reinsurance | 4,844 | 4,600 | ||
Other unpaid losses and LAE, net of reinsurance | 1,417 | 1,326 | ||
Unallocated LAE | 310 | 296 | ||
Total reserves, net of reinsurance | 6,261 | 5,926 | ||
Add back reinsurance recoverables, net of allowance | 2,302 | 2,201 | ||
Gross unpaid losses and LAE included in the balance sheet | 8,563 | 8,127 | ||
Property and casualty insurance | Reserves for foreign operations | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Other unpaid losses and LAE, net of reinsurance | 710 | 648 | ||
Property and casualty insurance | A&E reserves | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Other unpaid losses and LAE, net of reinsurance | 337 | 327 | ||
Property and casualty insurance | Other | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Other unpaid losses and LAE, net of reinsurance | 60 | 55 | ||
Property and casualty insurance | Property and transportation | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Specialty unpaid losses and LAE, net of reinsurance | 1,020 | 971 | ||
Property and casualty insurance | Specialty casualty | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Specialty unpaid losses and LAE, net of reinsurance | 3,356 | 3,170 | ||
Property and casualty insurance | Specialty financial | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Specialty unpaid losses and LAE, net of reinsurance | 228 | 219 | ||
Property and casualty insurance | Other specialty | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Specialty unpaid losses and LAE, net of reinsurance | $ 240 | $ 240 |
Insurance - Short-duration insu
Insurance - Short-duration insurance contracts, claims development (Details) - Property and casualty insurance $ in Millions | Dec. 31, 2016USD ($)claim | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2009USD ($) | Dec. 31, 2008USD ($) | Dec. 31, 2007USD ($) | |
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 18,731 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | 14,382 | ||||||||||
Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) | 495 | ||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | 4,844 | $ 4,600 | |||||||||
Accident Year 2007 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 1,537 | 1,543 | $ 1,539 | $ 1,565 | $ 1,573 | $ 1,585 | $ 1,615 | $ 1,670 | $ 1,759 | $ 1,908 | |
Total IBNR Plus Expected Development on Reported Claims | $ 52 | ||||||||||
Cumulative Number of Reported Claims | claim | 211,219 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,453 | 1,444 | 1,425 | 1,405 | 1,370 | 1,313 | 1,234 | 1,107 | 931 | 538 | |
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 94.50% | |||||||||
Accident Year 2008 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,951 | 1,947 | 1,953 | 1,955 | 1,978 | 1,971 | 1,987 | 2,018 | 2,067 | ||
Total IBNR Plus Expected Development on Reported Claims | $ 56 | ||||||||||
Cumulative Number of Reported Claims | claim | 244,346 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,847 | 1,828 | 1,803 | 1,765 | 1,701 | 1,607 | 1,459 | 1,230 | 627 | ||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 94.70% | |||||||||
Accident Year 2009 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,539 | 1,543 | 1,545 | 1,552 | 1,566 | 1,596 | 1,607 | 1,624 | |||
Total IBNR Plus Expected Development on Reported Claims | $ 74 | ||||||||||
Cumulative Number of Reported Claims | claim | 221,065 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,424 | 1,404 | 1,370 | 1,308 | 1,216 | 1,079 | 871 | 509 | |||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 92.50% | |||||||||
Accident Year 2010 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,698 | 1,698 | 1,710 | 1,690 | 1,705 | 1,710 | 1,724 | ||||
Total IBNR Plus Expected Development on Reported Claims | $ 91 | ||||||||||
Cumulative Number of Reported Claims | claim | 215,306 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,562 | 1,536 | 1,485 | 1,387 | 1,220 | 1,005 | 576 | ||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 92.00% | |||||||||
Accident Year 2011 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,866 | 1,861 | 1,871 | 1,849 | 1,848 | 1,840 | |||||
Total IBNR Plus Expected Development on Reported Claims | $ 124 | ||||||||||
Cumulative Number of Reported Claims | claim | 207,407 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,682 | 1,629 | 1,534 | 1,389 | 1,181 | 609 | |||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 90.10% | |||||||||
Accident Year 2012 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,955 | 1,947 | 1,946 | 1,952 | 1,970 | ||||||
Total IBNR Plus Expected Development on Reported Claims | $ 176 | ||||||||||
Cumulative Number of Reported Claims | claim | 217,345 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,675 | 1,579 | 1,418 | 1,214 | 824 | ||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 85.70% | |||||||||
Accident Year 2013 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,996 | 2,000 | 2,011 | 2,036 | |||||||
Total IBNR Plus Expected Development on Reported Claims | $ 220 | ||||||||||
Cumulative Number of Reported Claims | claim | 219,598 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,617 | 1,443 | 1,214 | 697 | |||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 81.00% | |||||||||
Accident Year 2014 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 2,040 | 2,050 | 2,083 | ||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 373 | ||||||||||
Cumulative Number of Reported Claims | claim | 217,836 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,422 | 1,173 | 594 | ||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 69.70% | |||||||||
Accident Year 2015 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 2,044 | 2,112 | |||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 549 | ||||||||||
Cumulative Number of Reported Claims | claim | 222,288 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,127 | 619 | |||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 55.10% | |||||||||
Accident Year 2016 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 2,105 | ||||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 1,005 | ||||||||||
Cumulative Number of Reported Claims | claim | 186,087 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 573 | ||||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 27.20% | |||||||||
Excludes short-duration insurance contracts detail for accident years not separately presented | |||||||||||
Claims Development [Line Items] | |||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | $ 4,349 | ||||||||||
Property and transportation | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 7,714 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | 6,715 | ||||||||||
Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) | 21 | ||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | 1,020 | 971 | |||||||||
Property and transportation | Accident Year 2007 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 568 | 568 | 568 | 569 | 569 | 572 | 572 | 577 | 595 | 657 | |
Total IBNR Plus Expected Development on Reported Claims | $ 1 | ||||||||||
Cumulative Number of Reported Claims | claim | 126,900 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 564 | 563 | 562 | 559 | 553 | 539 | 523 | 492 | 450 | 284 | |
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 99.30% | |||||||||
Property and transportation | Accident Year 2008 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 854 | 856 | 855 | 854 | 856 | 853 | 852 | 871 | 923 | ||
Total IBNR Plus Expected Development on Reported Claims | $ 3 | ||||||||||
Cumulative Number of Reported Claims | claim | 157,173 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 847 | 846 | 846 | 835 | 824 | 799 | 761 | 706 | 352 | ||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 99.20% | |||||||||
Property and transportation | Accident Year 2009 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 508 | 508 | 511 | 511 | 516 | 523 | 506 | 526 | |||
Total IBNR Plus Expected Development on Reported Claims | $ 4 | ||||||||||
Cumulative Number of Reported Claims | claim | 140,530 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 499 | 497 | 493 | 479 | 456 | 413 | 348 | 229 | |||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 98.20% | |||||||||
Property and transportation | Accident Year 2010 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 683 | 679 | 679 | 676 | 668 | 662 | 702 | ||||
Total IBNR Plus Expected Development on Reported Claims | $ 10 | ||||||||||
Cumulative Number of Reported Claims | claim | 140,614 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 665 | 660 | 649 | 618 | 556 | 505 | 328 | ||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 97.40% | |||||||||
Property and transportation | Accident Year 2011 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 868 | 856 | 845 | 831 | 816 | 830 | |||||
Total IBNR Plus Expected Development on Reported Claims | $ 16 | ||||||||||
Cumulative Number of Reported Claims | claim | 140,408 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 840 | 821 | 787 | 742 | 679 | 373 | |||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 96.80% | |||||||||
Property and transportation | Accident Year 2012 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 922 | 909 | 897 | 884 | 890 | ||||||
Total IBNR Plus Expected Development on Reported Claims | $ 27 | ||||||||||
Cumulative Number of Reported Claims | claim | 146,584 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 868 | 841 | 793 | 725 | 582 | ||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 94.10% | |||||||||
Property and transportation | Accident Year 2013 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 908 | 902 | 898 | 911 | |||||||
Total IBNR Plus Expected Development on Reported Claims | $ 40 | ||||||||||
Cumulative Number of Reported Claims | claim | 142,139 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 831 | 784 | 721 | 449 | |||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 91.50% | |||||||||
Property and transportation | Accident Year 2014 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 841 | 852 | 868 | ||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 67 | ||||||||||
Cumulative Number of Reported Claims | claim | 137,214 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 711 | 646 | 337 | ||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 84.50% | |||||||||
Property and transportation | Accident Year 2015 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 802 | 840 | |||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 106 | ||||||||||
Cumulative Number of Reported Claims | claim | 134,407 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 594 | 367 | |||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 74.10% | |||||||||
Property and transportation | Accident Year 2016 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 760 | ||||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 250 | ||||||||||
Cumulative Number of Reported Claims | claim | 109,187 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 296 | ||||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 38.90% | |||||||||
Property and transportation | Excludes short-duration insurance contracts detail for accident years not separately presented | |||||||||||
Claims Development [Line Items] | |||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | $ 999 | ||||||||||
Specialty casualty | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 8,995 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | 6,053 | ||||||||||
Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) | 414 | ||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | 3,356 | 3,170 | |||||||||
Specialty casualty | Accident Year 2007 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 803 | 802 | 794 | 818 | 821 | 828 | 852 | 892 | 957 | 1,036 | |
Total IBNR Plus Expected Development on Reported Claims | $ 40 | ||||||||||
Cumulative Number of Reported Claims | claim | 62,676 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 733 | 724 | 708 | 692 | 664 | 623 | 563 | 477 | 357 | 166 | |
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 91.30% | |||||||||
Specialty casualty | Accident Year 2008 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 855 | 849 | 855 | 856 | 871 | 860 | 874 | 891 | 905 | ||
Total IBNR Plus Expected Development on Reported Claims | $ 48 | ||||||||||
Cumulative Number of Reported Claims | claim | 59,886 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 768 | 751 | 727 | 702 | 653 | 588 | 490 | 355 | 162 | ||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 89.80% | |||||||||
Specialty casualty | Accident Year 2009 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 807 | 812 | 811 | 816 | 826 | 845 | 867 | 864 | |||
Total IBNR Plus Expected Development on Reported Claims | $ 58 | ||||||||||
Cumulative Number of Reported Claims | claim | 53,097 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 713 | 698 | 673 | 636 | 575 | 494 | 366 | 160 | |||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 88.40% | |||||||||
Specialty casualty | Accident Year 2010 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 845 | 846 | 856 | 842 | 864 | 863 | 847 | ||||
Total IBNR Plus Expected Development on Reported Claims | $ 74 | ||||||||||
Cumulative Number of Reported Claims | claim | 52,771 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 734 | 712 | 676 | 623 | 539 | 393 | 179 | ||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 86.90% | |||||||||
Specialty casualty | Accident Year 2011 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 808 | 814 | 828 | 819 | 831 | 831 | |||||
Total IBNR Plus Expected Development on Reported Claims | $ 89 | ||||||||||
Cumulative Number of Reported Claims | claim | 50,635 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 674 | 643 | 595 | 506 | 369 | 165 | |||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 83.40% | |||||||||
Specialty casualty | Accident Year 2012 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 855 | 859 | 859 | 865 | 874 | ||||||
Total IBNR Plus Expected Development on Reported Claims | $ 124 | ||||||||||
Cumulative Number of Reported Claims | claim | 49,732 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 658 | 596 | 495 | 368 | 163 | ||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 77.00% | |||||||||
Specialty casualty | Accident Year 2013 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 910 | 915 | 921 | 938 | |||||||
Total IBNR Plus Expected Development on Reported Claims | $ 159 | ||||||||||
Cumulative Number of Reported Claims | claim | 49,239 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 638 | 530 | 377 | 171 | |||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 70.10% | |||||||||
Specialty casualty | Accident Year 2014 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 984 | 984 | 1,011 | ||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 263 | ||||||||||
Cumulative Number of Reported Claims | claim | 51,808 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 556 | 398 | 182 | ||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 56.50% | |||||||||
Specialty casualty | Accident Year 2015 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,023 | 1,057 | |||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 380 | ||||||||||
Cumulative Number of Reported Claims | claim | 52,001 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 398 | 170 | |||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 38.90% | |||||||||
Specialty casualty | Accident Year 2016 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,105 | ||||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 636 | ||||||||||
Cumulative Number of Reported Claims | claim | 47,436 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 181 | ||||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 16.40% | |||||||||
Specialty casualty | Excludes short-duration insurance contracts detail for accident years not separately presented | |||||||||||
Claims Development [Line Items] | |||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | $ 2,942 | ||||||||||
Specialty financial | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 1,558 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | 1,331 | ||||||||||
Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) | 1 | ||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | 228 | 219 | |||||||||
Specialty financial | Accident Year 2007 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 136 | 140 | 141 | 142 | 144 | 145 | 149 | 159 | 165 | 170 | |
Total IBNR Plus Expected Development on Reported Claims | $ 1 | ||||||||||
Cumulative Number of Reported Claims | claim | 21,643 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 135 | 136 | 135 | 135 | 135 | 134 | 133 | 126 | 114 | 82 | |
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 99.30% | |||||||||
Specialty financial | Accident Year 2008 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 198 | 197 | 198 | 199 | 203 | 209 | 212 | 207 | 190 | ||
Total IBNR Plus Expected Development on Reported Claims | $ 1 | ||||||||||
Cumulative Number of Reported Claims | claim | 27,287 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 194 | 194 | 193 | 191 | 189 | 189 | 185 | 153 | 103 | ||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 98.00% | |||||||||
Specialty financial | Accident Year 2009 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 186 | 187 | 186 | 188 | 184 | 187 | 193 | 193 | |||
Total IBNR Plus Expected Development on Reported Claims | $ 1 | ||||||||||
Cumulative Number of Reported Claims | claim | 27,438 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 186 | 185 | 182 | 171 | 166 | 157 | 145 | 112 | |||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 100.00% | |||||||||
Specialty financial | Accident Year 2010 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 130 | 133 | 135 | 133 | 133 | 146 | 139 | ||||
Total IBNR Plus Expected Development on Reported Claims | $ 3 | ||||||||||
Cumulative Number of Reported Claims | claim | 21,921 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 128 | 131 | 133 | 122 | 104 | 93 | 61 | ||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 98.50% | |||||||||
Specialty financial | Accident Year 2011 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 146 | 148 | 155 | 157 | 158 | 140 | |||||
Total IBNR Plus Expected Development on Reported Claims | $ 14 | ||||||||||
Cumulative Number of Reported Claims | claim | 16,364 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 132 | 131 | 124 | 116 | 113 | 59 | |||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 90.40% | |||||||||
Specialty financial | Accident Year 2012 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 137 | 139 | 151 | 163 | 164 | ||||||
Total IBNR Plus Expected Development on Reported Claims | $ 15 | ||||||||||
Cumulative Number of Reported Claims | claim | 21,029 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 121 | 117 | 109 | 104 | 71 | ||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 88.30% | |||||||||
Specialty financial | Accident Year 2013 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 131 | 137 | 145 | 141 | |||||||
Total IBNR Plus Expected Development on Reported Claims | $ 15 | ||||||||||
Cumulative Number of Reported Claims | claim | 28,220 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 114 | 107 | 100 | 70 | |||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 87.00% | |||||||||
Specialty financial | Accident Year 2014 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 156 | 157 | 146 | ||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 22 | ||||||||||
Cumulative Number of Reported Claims | claim | 28,814 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 125 | 108 | 62 | ||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 80.10% | |||||||||
Specialty financial | Accident Year 2015 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 159 | 156 | |||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 36 | ||||||||||
Cumulative Number of Reported Claims | claim | 35,880 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 109 | 72 | |||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 68.60% | |||||||||
Specialty financial | Accident Year 2016 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 179 | ||||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 75 | ||||||||||
Cumulative Number of Reported Claims | claim | 29,464 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 87 | ||||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 48.60% | |||||||||
Specialty financial | Excludes short-duration insurance contracts detail for accident years not separately presented | |||||||||||
Claims Development [Line Items] | |||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | $ 227 | ||||||||||
Other specialty | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 464 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | 283 | ||||||||||
Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) | 59 | ||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | 240 | 240 | |||||||||
Other specialty | Accident Year 2007 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 30 | 33 | 36 | 36 | 39 | 40 | 42 | 42 | 42 | 45 | |
Total IBNR Plus Expected Development on Reported Claims | $ 10 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 21 | 21 | 20 | 19 | 18 | 17 | 15 | 12 | 10 | $ 6 | |
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 70.00% | |||||||||
Other specialty | Accident Year 2008 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 44 | 45 | 45 | 46 | 48 | 49 | 49 | 49 | 49 | ||
Total IBNR Plus Expected Development on Reported Claims | $ 4 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 38 | 37 | 37 | 37 | 35 | 31 | 23 | 16 | $ 10 | ||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 86.40% | |||||||||
Other specialty | Accident Year 2009 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 38 | 36 | 37 | 37 | 40 | 41 | 41 | 41 | |||
Total IBNR Plus Expected Development on Reported Claims | $ 11 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 26 | 24 | 22 | 22 | 19 | 15 | 12 | $ 8 | |||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 68.40% | |||||||||
Other specialty | Accident Year 2010 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 40 | 40 | 40 | 39 | 40 | 39 | 36 | ||||
Total IBNR Plus Expected Development on Reported Claims | $ 4 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 35 | 33 | 27 | 24 | 21 | 14 | $ 8 | ||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 87.50% | |||||||||
Other specialty | Accident Year 2011 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 44 | 43 | 43 | 42 | 43 | 39 | |||||
Total IBNR Plus Expected Development on Reported Claims | $ 5 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 36 | 34 | 28 | 25 | 20 | $ 12 | |||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 81.80% | |||||||||
Other specialty | Accident Year 2012 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 41 | 40 | 39 | 40 | 42 | ||||||
Total IBNR Plus Expected Development on Reported Claims | $ 10 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 28 | 25 | 21 | 17 | $ 8 | ||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 68.30% | |||||||||
Other specialty | Accident Year 2013 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 47 | 46 | 47 | 46 | |||||||
Total IBNR Plus Expected Development on Reported Claims | $ 6 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 34 | 22 | 16 | $ 7 | |||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 72.30% | |||||||||
Other specialty | Accident Year 2014 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 59 | 57 | 58 | ||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 21 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 30 | 21 | $ 13 | ||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 50.80% | |||||||||
Other specialty | Accident Year 2015 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 60 | 59 | |||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 27 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 26 | $ 10 | |||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 43.30% | |||||||||
Other specialty | Accident Year 2016 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 61 | ||||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 44 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 9 | ||||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 14.80% | |||||||||
Other specialty | Excludes short-duration insurance contracts detail for accident years not separately presented | |||||||||||
Claims Development [Line Items] | |||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | $ 181 | ||||||||||
[1] | Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016). | ||||||||||
[2] | Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016). | ||||||||||
[3] | Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016). | ||||||||||
[4] | Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016). | ||||||||||
[5] | 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). | ||||||||||
[6] | Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2016). |
Insurance - Short-duration in99
Insurance - Short-duration insurance contracts, historical claims duration (Details) - Property and casualty insurance | Dec. 31, 2016 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Line Items] | |
Year 1 | 33.00% |
Year 2 | 26.10% |
Year 3 | 11.80% |
Year 4 | 8.50% |
Year 5 | 5.30% |
Year 6 | 3.40% |
Year 7 | 2.00% |
Year 8 | 1.30% |
Year 9 | 1.10% |
Year 10 | 0.60% |
Year 1, Cumulative | 33.00% |
Year 2, Cumulative | 59.10% |
Year 3, Cumulative | 70.90% |
Year 4, Cumulative | 79.40% |
Year 5, Cumulative | 84.70% |
Year 6, Cumulative | 88.10% |
Year 7, Cumulative | 90.10% |
Year 8, Cumulative | 91.40% |
Year 9, Cumulative | 92.50% |
Year 10, Cumulative | 93.10% |
Property and transportation | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Line Items] | |
Year 1 | 46.50% |
Year 2 | 29.50% |
Year 3 | 7.90% |
Year 4 | 6.10% |
Year 5 | 3.60% |
Year 6 | 2.10% |
Year 7 | 1.00% |
Year 8 | 0.30% |
Year 9 | 0.10% |
Year 10 | 0.20% |
Year 1, Cumulative | 46.50% |
Year 2, Cumulative | 76.00% |
Year 3, Cumulative | 83.90% |
Year 4, Cumulative | 90.00% |
Year 5, Cumulative | 93.60% |
Year 6, Cumulative | 95.70% |
Year 7, Cumulative | 96.70% |
Year 8, Cumulative | 97.00% |
Year 9, Cumulative | 97.10% |
Year 10, Cumulative | 97.30% |
Specialty casualty | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Line Items] | |
Year 1 | 19.00% |
Year 2 | 23.70% |
Year 3 | 16.10% |
Year 4 | 11.00% |
Year 5 | 7.00% |
Year 6 | 4.70% |
Year 7 | 3.00% |
Year 8 | 2.20% |
Year 9 | 2.00% |
Year 10 | 1.10% |
Year 1, Cumulative | 19.00% |
Year 2, Cumulative | 42.70% |
Year 3, Cumulative | 58.80% |
Year 4, Cumulative | 69.80% |
Year 5, Cumulative | 76.80% |
Year 6, Cumulative | 81.50% |
Year 7, Cumulative | 84.50% |
Year 8, Cumulative | 86.70% |
Year 9, Cumulative | 88.70% |
Year 10, Cumulative | 89.80% |
Specialty financial | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Line Items] | |
Year 1 | 49.90% |
Year 2 | 25.30% |
Year 3 | 7.70% |
Year 4 | 6.10% |
Year 5 | 3.30% |
Year 6 | 1.40% |
Year 7 | 0.10% |
Year 8 | 0.30% |
Year 9 | 0.40% |
Year 10 | (0.70%) |
Year 1, Cumulative | 49.90% |
Year 2, Cumulative | 75.20% |
Year 3, Cumulative | 82.90% |
Year 4, Cumulative | 89.00% |
Year 5, Cumulative | 92.30% |
Year 6, Cumulative | 93.70% |
Year 7, Cumulative | 93.80% |
Year 8, Cumulative | 94.10% |
Year 9, Cumulative | 94.50% |
Year 10, Cumulative | 93.80% |
Other specialty | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Line Items] | |
Year 1 | 19.90% |
Year 2 | 16.90% |
Year 3 | 12.10% |
Year 4 | 12.60% |
Year 5 | 8.70% |
Year 6 | 5.50% |
Year 7 | 3.40% |
Year 8 | 2.90% |
Year 9 | 2.80% |
Year 10 | 0.00% |
Year 1, Cumulative | 19.90% |
Year 2, Cumulative | 36.80% |
Year 3, Cumulative | 48.90% |
Year 4, Cumulative | 61.50% |
Year 5, Cumulative | 70.20% |
Year 6, Cumulative | 75.70% |
Year 7, Cumulative | 79.10% |
Year 8, Cumulative | 82.00% |
Year 9, Cumulative | 84.80% |
Year 10, Cumulative | 84.80% |
Insurance - Net earnings and ca
Insurance - Net earnings and capital and surplus on a statutory basis for the insurance subsidiaries (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property and casualty companies | |||
Statutory information | |||
Net Earnings | $ 461 | $ 408 | $ 318 |
Capital and Surplus | 2,939 | 2,488 | |
Life insurance companies | |||
Statutory information | |||
Net Earnings | 167 | 399 | $ 349 |
Capital and Surplus | $ 1,976 | $ 1,721 |
Insurance - Reinsurance informa
Insurance - Reinsurance information table including assumed, ceded, and recoveries (Details) - Property and casualty insurance - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Effects of Reinsurance [Line Items] | |||
Direct premiums written | $ 5,858 | $ 5,713 | $ 5,387 |
Reinsurance assumed | 123 | 119 | 90 |
Reinsurance ceded | (1,595) | (1,505) | (1,457) |
Net written premiums | 4,386 | 4,327 | 4,020 |
Direct premiums earned | 5,745 | 5,613 | 5,195 |
Reinsurance assumed | 118 | 105 | 75 |
Reinsurance ceded | (1,535) | (1,494) | (1,392) |
Net earned premiums | 4,328 | 4,224 | 3,878 |
Reinsurance recoveries | $ 810 | $ 936 | $ 895 |
Insurance - Liabilities for exc
Insurance - Liabilities for excess benefits expected to be paid on future deaths and annuitizations, guaranteed withdrawal benefits and accrued persistency and premium bonuses (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Insurance [Abstract] | ||
Expected death and annuitization | $ 223 | $ 214 |
Guaranteed withdrawal benefits | 278 | 203 |
Accrued persistency and premium bonuses | $ 6 | $ 11 |
Additional Information - Narrat
Additional Information - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for reinsurance recoverables [Line Items] | |||
Total rental expense | $ 67 | $ 70 | $ 65 |
Operating lease future minimum payments due in next year | 66 | ||
Operating lease future minimum payments due in year two | 60 | ||
Operating lease future minimum payments due in year three | 53 | ||
Operating lease future minimum payments due in year four | 45 | ||
Operating lease future minimum payments due in year five | 37 | ||
Operating lease future minimum payments due after year five | 128 | ||
Commitments to fund limited partnerships | 377 | ||
Retirement and employee savings plan expense | 43 | 34 | 30 |
Allowance for reinsurance recoverables | |||
Allowance for reinsurance recoverables [Line Items] | |||
Aggregate allowance for losses on reinsurance recoverables | 22 | 22 | |
Net expense reduction against allowance for losses on reinsurance recoverables | $ (3) | ||
Charges for possible losses on reinsurance recoverables | 4 | ||
Reinsurance recoverable write-offs | $ 6 | ||
Maximum | Allowance for reinsurance recoverables | |||
Allowance for reinsurance recoverables [Line Items] | |||
Net expense reduction against allowance for losses on reinsurance recoverables | $ (1) |
Condensed Financial Informat104
Condensed Financial Information of Parent Company - Condensed Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Assets: | |||||
Cash and cash equivalents | $ 2,107 | $ 1,220 | $ 1,343 | $ 1,639 | |
Other investments | 1,034 | 750 | |||
Total assets | 55,072 | 49,837 | 47,513 | ||
Liabilities and Equity: | |||||
Long-term debt | 1,283 | 998 | |||
Shareholders’ equity | 4,916 | 4,592 | |||
Total liabilities and equity | 55,072 | 49,837 | |||
AFG | |||||
Assets: | |||||
Cash and cash equivalents | 197 | 189 | $ 292 | $ 523 | |
Investment in securities | 63 | 63 | |||
Investment in subsidiaries | [1] | 5,989 | 5,439 | ||
Other investments | 2 | 2 | |||
Other assets | 136 | 84 | |||
Total assets | 6,387 | 5,777 | |||
Liabilities and Equity: | |||||
Long-term debt | 1,283 | 986 | |||
Other liabilities | 188 | 199 | |||
Shareholders’ equity | 4,916 | 4,592 | |||
Total liabilities and equity | $ 6,387 | $ 5,777 | |||
[1] | Investment in subsidiaries includes intercompany receivables and payables. |
Condensed Financial Informat105
Condensed Financial Information of Parent Company - Condensed Statement of Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||||||||||
Total revenues | $ 1,737 | $ 1,705 | $ 1,581 | $ 1,475 | $ 1,618 | $ 1,687 | $ 1,543 | $ 1,297 | $ 6,498 | $ 6,145 | $ 5,733 |
Costs and Expenses: | |||||||||||
Other expenses | 353 | 336 | 280 | ||||||||
Total costs and expenses | 5,711 | 5,580 | 5,107 | ||||||||
Earnings before income taxes | 787 | 565 | 626 | ||||||||
Provision for income taxes | 119 | 195 | 220 | ||||||||
Net Earnings Attributable to Shareholders | 385 | $ 109 | $ 54 | $ 101 | $ 129 | $ 63 | $ 141 | $ 19 | 649 | 352 | 452 |
AFG | |||||||||||
Revenues: | |||||||||||
Dividends from subsidiaries | 643 | 311 | 480 | ||||||||
Equity in undistributed earnings of subsidiaries | 286 | 386 | 332 | ||||||||
Investment and other income | 7 | 4 | 5 | ||||||||
Total revenues | 936 | 701 | 817 | ||||||||
Costs and Expenses: | |||||||||||
Interest charges on intercompany borrowings | 9 | 9 | 10 | ||||||||
Interest charges on other borrowings | 77 | 73 | 70 | ||||||||
Other expenses | 82 | 72 | 65 | ||||||||
Total costs and expenses | 168 | 154 | 145 | ||||||||
Earnings before income taxes | 768 | 547 | 672 | ||||||||
Provision for income taxes | $ (177) | 119 | 195 | 220 | |||||||
Net Earnings Attributable to Shareholders | $ 649 | $ 352 | $ 452 |
Condensed Financial Informat106
Condensed Financial Information of Parent Company - Condensed Statement of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Other Comprehensive Income [Abstract] | |||||||||||
Net earnings attributable to shareholders | $ 385 | $ 109 | $ 54 | $ 101 | $ 129 | $ 63 | $ 141 | $ 19 | $ 649 | $ 352 | $ 452 |
Comprehensive income (loss) attributable to shareholders | 711 | (71) | 619 | ||||||||
AFG | |||||||||||
Statement of Other Comprehensive Income [Abstract] | |||||||||||
Net earnings attributable to shareholders | 649 | 352 | 452 | ||||||||
Other comprehensive income (loss), net of tax | 62 | (423) | 167 | ||||||||
Comprehensive income (loss) attributable to shareholders | $ 711 | $ (71) | $ 619 |
Condensed Financial Informat107
Condensed Financial Information of Parent Company - Condensed Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Activities: | |||||||||||
Net earnings attributable to shareholders | $ 385 | $ 109 | $ 54 | $ 101 | $ 129 | $ 63 | $ 141 | $ 19 | $ 649 | $ 352 | $ 452 |
Adjustments: | |||||||||||
Net cash provided by operating activities | 1,150 | 1,353 | 1,231 | ||||||||
Investing Activities: | |||||||||||
Net cash used in investing activities | (2,981) | (4,573) | (3,628) | ||||||||
Financing Activities: | |||||||||||
Additional long-term borrowings | 302 | 145 | 145 | ||||||||
Reductions of long-term debt | (18) | (192) | (2) | ||||||||
Issuances of Common Stock | 35 | 61 | 47 | ||||||||
Repurchases of Common Stock | (133) | (126) | (191) | ||||||||
Cash dividends paid on Common Stock | (185) | (176) | (167) | ||||||||
Net cash provided by (used in) financing activities | 2,718 | 3,097 | 2,101 | ||||||||
Net Change in Cash and Cash Equivalents | 887 | (123) | (296) | ||||||||
Cash and cash equivalents at beginning of year | 1,220 | 1,343 | 1,220 | 1,343 | 1,639 | ||||||
Cash and cash equivalents at end of year | 2,107 | 1,220 | 2,107 | 1,220 | 1,343 | ||||||
AFG | |||||||||||
Operating Activities: | |||||||||||
Net earnings attributable to shareholders | 649 | 352 | 452 | ||||||||
Adjustments: | |||||||||||
Equity in net earnings of subsidiaries | (638) | (451) | (545) | ||||||||
Dividends from subsidiaries | 611 | 280 | 451 | ||||||||
Other operating activities, net | (67) | (19) | 14 | ||||||||
Net cash provided by operating activities | 555 | 162 | 372 | ||||||||
Investing Activities: | |||||||||||
Capital contributions to subsidiaries | (560) | (27) | (431) | ||||||||
Returns of capital from subsidiaries | 0 | 1 | 0 | ||||||||
Purchases of investments, property and equipment | (1) | (10) | (1) | ||||||||
Proceeds from maturities and redemptions of investments | 1 | 0 | 0 | ||||||||
Proceeds from sales of investments, property and equipment | 0 | 3 | 0 | ||||||||
Net cash used in investing activities | (560) | (33) | (432) | ||||||||
Financing Activities: | |||||||||||
Additional long-term borrowings | 296 | 145 | 145 | ||||||||
Reductions of long-term debt | 0 | (132) | 0 | ||||||||
Issuances of Common Stock | 35 | 57 | 42 | ||||||||
Repurchases of Common Stock | (133) | (126) | (191) | ||||||||
Cash dividends paid on Common Stock | (185) | (176) | (167) | ||||||||
Net cash provided by (used in) financing activities | 13 | (232) | (171) | ||||||||
Net Change in Cash and Cash Equivalents | 8 | (103) | (231) | ||||||||
Cash and cash equivalents at beginning of year | $ 189 | $ 292 | 189 | 292 | 523 | ||||||
Cash and cash equivalents at end of year | $ 197 | $ 189 | $ 197 | $ 189 | $ 292 |
Supplementary Insurance Info108
Supplementary Insurance Information - Table (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | $ 1,239 | $ 1,184 | $ 821 |
Reserves for future policy benefits, claims and unpaid losses and LAE | 39,161 | 35,454 | 33,811 |
Unearned premiums | 2,171 | 2,060 | 1,956 |
Net earned premiums | 4,352 | 4,328 | 3,986 |
Net investment income | 1,696 | 1,633 | 1,501 |
Benefits, claims, losses and settlement expenses | 3,595 | 3,558 | 3,306 |
Amortization of deferred policy acquisition costs | 673 | 653 | 646 |
Other operating expenses | 1,443 | 1,369 | 1,155 |
Net written premiums (excluding life) | 4,389 | 4,400 | 4,094 |
Property and casualty insurance | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 238 | 226 | 221 |
Reserves for future policy benefits, claims and unpaid losses and LAE | 8,563 | 8,127 | 7,872 |
Unearned premiums | 2,171 | 2,060 | 1,956 |
Net earned premiums | 4,328 | 4,224 | 3,878 |
Net investment income | 350 | 319 | 294 |
Benefits, claims, losses and settlement expenses | 2,762 | 2,695 | 2,494 |
Amortization of deferred policy acquisition costs | 520 | 511 | 485 |
Other operating expenses | 870 | 839 | 746 |
Net written premiums (excluding life) | 4,386 | 4,327 | 4,020 |
Annuity | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 981 | 934 | 564 |
Reserves for future policy benefits, claims and unpaid losses and LAE | 29,907 | 26,622 | 23,764 |
Net investment income | 1,356 | 1,224 | 1,136 |
Benefits, claims, losses and settlement expenses | 800 | 732 | 648 |
Amortization of deferred policy acquisition costs | 149 | 136 | 155 |
Other operating expenses | 142 | 123 | 102 |
Run-off long-term care and life | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 20 | 24 | 36 |
Reserves for future policy benefits, claims and unpaid losses and LAE | 691 | 705 | 2,175 |
Net earned premiums | 24 | 104 | 108 |
Net investment income | 21 | 80 | 82 |
Benefits, claims, losses and settlement expenses | 33 | 131 | 164 |
Amortization of deferred policy acquisition costs | 4 | 6 | 6 |
Other operating expenses | 10 | 37 | 35 |
Net written premiums (excluding life) | 3 | 73 | 74 |
Other | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Net investment income | (31) | 10 | (11) |
Other operating expenses | $ 421 | $ 370 | $ 272 |