Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 01, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | AMERICAN FINANCIAL GROUP INC | ||
Entity Central Index Key | 1,042,046 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,018 | ||
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 Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 8,400 | ||
Entity Common Stock, Shares Outstanding | 89,312,398 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Cash and cash equivalents | $ 1,515 | $ 2,338 |
Investments: | ||
Fixed maturities, available for sale at fair value (amortized cost — $41,837 and $37,038) | 41,997 | 38,379 |
Fixed maturities, trading at fair value | 105 | 348 |
Equity securities, at fair value | 1,814 | 1,662 |
Investments accounted for using the equity method | 1,374 | 999 |
Mortgage loans | 1,068 | 1,125 |
Policy loans | 174 | 184 |
Equity index call options | 184 | 701 |
Real estate and other investments | 267 | 312 |
Total cash and investments | 48,498 | 46,048 |
Recoverables from reinsurers | 3,349 | 3,369 |
Prepaid reinsurance premiums | 610 | 600 |
Agents’ balances and premiums receivable | 1,234 | 1,146 |
Deferred policy acquisition costs | 1,682 | 1,216 |
Assets of managed investment entities | 4,700 | 4,902 |
Other receivables | 1,090 | 1,030 |
Variable annuity assets (separate accounts) | 557 | 644 |
Other assets | 1,529 | 1,504 |
Goodwill | 207 | 199 |
Total assets | 63,456 | 60,658 |
Liabilities and Equity: | ||
Unpaid losses and loss adjustment expenses | 9,741 | 9,678 |
Unearned premiums | 2,595 | 2,410 |
Annuity benefits accumulated | 36,616 | 33,316 |
Life, accident and health reserves | 635 | 658 |
Payable to reinsurers | 752 | 743 |
Liabilities of managed investment entities | 4,512 | 4,687 |
Long-term debt | 1,302 | 1,301 |
Variable annuity liabilities (separate accounts) | 557 | 644 |
Other liabilities | 1,774 | 1,887 |
Total liabilities | 58,484 | 55,324 |
Redeemable noncontrolling interests | 0 | 3 |
Shareholders’ equity: | ||
Common Stock, no par value — 200,000,000 shares authorized — 89,291,724 and 88,275,460 shares outstanding | 89 | 88 |
Capital surplus | 1,245 | 1,181 |
Retained earnings | 3,588 | 3,248 |
Accumulated other comprehensive income, net of tax | 48 | 813 |
Total shareholders’ equity | 4,970 | 5,330 |
Noncontrolling interests | 2 | 1 |
Total equity | 4,972 | 5,331 |
Total liabilities and equity | $ 63,456 | $ 60,658 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available for sale at amortized cost | $ 41,837 | $ 37,038 |
Common Stock, par value (USD per share) | $ 0 | $ 0 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares outstanding | 89,291,724 | 88,275,460 |
Consolidated Statement of Earni
Consolidated Statement of Earnings - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Property and casualty insurance net earned premiums | $ 4,865 | $ 4,579 | $ 4,328 |
Life, accident and health net earned premiums | 24 | 22 | 24 |
Net investment income | 2,094 | 1,831 | 1,696 |
Realized gains (losses) on: | |||
Securities | (266) | 5 | 19 |
Subsidiaries | 0 | 0 | 2 |
Income (loss) of managed investment entities: | |||
Investment income | 255 | 210 | 190 |
Gain (loss) on change in fair value of assets/liabilities | (21) | 12 | 15 |
Other income | 199 | 206 | 224 |
Total revenues | 7,150 | 6,865 | 6,498 |
Costs and Expenses: | |||
Property and casualty insurance: Losses and loss adjustment expenses | 3,003 | 2,955 | 2,762 |
Property and casualty insurance: Commissions and other underwriting expenses | 1,583 | 1,407 | 1,349 |
Annuity benefits | 998 | 892 | 800 |
Life, accident and health benefits | 40 | 26 | 33 |
Annuity and supplemental insurance acquisition expenses | 261 | 173 | 186 |
Interest charges on borrowed money | 62 | 85 | 77 |
Expenses of managed investment entities | 211 | 181 | 151 |
Other expenses | 353 | 422 | 353 |
Total costs and expenses | 6,511 | 6,141 | 5,711 |
Earnings before income taxes | 639 | 724 | 787 |
Provision for income taxes | 122 | 247 | 119 |
Net earnings, including noncontrolling interests | 517 | 477 | 668 |
Less: Net earnings (losses) attributable to noncontrolling interests | (13) | 2 | 19 |
Net Earnings Attributable to Shareholders | $ 530 | $ 475 | $ 649 |
Earnings Attributable to Shareholders per Common Share: | |||
Basic (USD per share) | $ 5.95 | $ 5.40 | $ 7.47 |
Diluted (USD per share) | $ 5.85 | $ 5.28 | $ 7.33 |
Average number of Common Shares: | |||
Basic (shares) | 89 | 87.8 | 86.9 |
Diluted (shares) | 90.6 | 89.8 | 88.5 |
Supplemental disclosure of Realized gains (losses) on securities: | |||
Realized gains (losses) before impairments | $ (247) | $ 78 | $ 135 |
Losses on securities with impairment | (19) | (74) | (115) |
Non-credit portion recognized in other comprehensive income (loss) | 0 | 1 | (1) |
Impairment charges recognized in earnings | (19) | (73) | (116) |
Total realized gains (losses) on securities | $ (266) | $ 5 | $ 19 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings, including noncontrolling interests | $ 517 | $ 477 | $ 668 |
Net unrealized gains (losses) on securities: | |||
Unrealized holding gains (losses) on securities arising during the period | (544) | 297 | 80 |
Reclassification adjustment for realized (gains) losses included in net earnings | 8 | (10) | (12) |
Total net unrealized gains (losses) on securities | (536) | 287 | 68 |
Net unrealized gains (losses) on cash flow hedges | 2 | (4) | (8) |
Foreign currency translation adjustments | (10) | 12 | 7 |
Pension and other postretirement plans adjustments | 0 | 1 | 0 |
Other comprehensive income (loss), net of tax | (544) | 296 | 67 |
Total comprehensive income (loss), net of tax | (27) | 773 | 735 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | (13) | 2 | 24 |
Comprehensive income (loss) attributable to shareholders | $ (14) | $ 771 | $ 711 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Total | Common Shares | Common Stock and Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Inc. (Loss) | Noncontrolling Interests | |
Beginning Balance, shares at Dec. 31, 2015 | 87,474,452 | |||||||
Beginning Balance at Dec. 31, 2015 | $ 4,770 | $ 4,592 | $ 1,301 | $ 2,987 | $ 304 | $ 178 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) attributable to parent | 649 | 649 | 649 | |||||
Net income (loss), including portion attributable to nonredeemable noncontrolling interest | 668 | 19 | ||||||
Other comprehensive income (loss) | 67 | 62 | 62 | 5 | ||||
Dividends | (187) | (187) | (187) | |||||
Shares issued: | ||||||||
Exercise of stock options, shares | 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: 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 | [1] | (187) | ||
Other | (12) | 0 | (12) | |||||
Ending Balance, shares at Dec. 31, 2016 | 86,924,399 | |||||||
Ending Balance at Dec. 31, 2016 | 4,919 | 4,916 | 1,198 | 3,343 | 375 | 3 | ||
Beginning Balance, Redeemable Noncontrolling Interests at Dec. 31, 2015 | 0 | |||||||
Ending Balance, Redeemable Noncontrolling Interests at Dec. 31, 2016 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) attributable to parent | 475 | 475 | 475 | |||||
Net income (loss), including portion attributable to nonredeemable noncontrolling interest | 477 | 2 | ||||||
Other comprehensive income (loss) | 296 | 296 | 296 | 0 | ||||
Impact of the U.S. corporate tax rate change on AOCI | 0 | 0 | (145) | 145 | 0 | |||
Dividends | (421) | (421) | (421) | |||||
Shares issued: | ||||||||
Exercise of stock options, shares | 1,020,986 | |||||||
Exercise of stock options | 34 | 34 | 34 | |||||
Restricted stock awards, shares | 232,250 | |||||||
Restricted stock awards | 0 | 0 | 0 | |||||
Other benefit plans, shares | 99,588 | |||||||
Other benefit plans | 10 | 10 | 10 | |||||
Dividend reinvestment plan, shares | 42,572 | |||||||
Dividend reinvestment plan | 4 | 4 | 4 | |||||
Stock-based compensation: Expense | 24 | 24 | 24 | |||||
Shares exchanged — benefit plans, shares | (37,718) | |||||||
Shares exchanged — benefit plans | (5) | (5) | (1) | (4) | ||||
Forfeitures of restricted stock, shares | (6,617) | |||||||
Forfeitures of restricted stock | 0 | 0 | 0 | |||||
Sale of redeemable noncontrolling interests | (3) | (3) | (3) | 0 | ||||
Other | $ (4) | 0 | 0 | 0 | (4) | |||
Ending Balance, shares at Dec. 31, 2017 | 88,275,460 | 88,275,460 | ||||||
Ending Balance at Dec. 31, 2017 | $ 5,331 | 5,330 | 1,269 | 3,248 | 813 | 1 | ||
Ending Balance, Redeemable Noncontrolling Interests at Dec. 31, 2017 | 3 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect of accounting change | 4 | 4 | 225 | (221) | ||||
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Abstract] | ||||||||
Redeemable noncontrolling interests | 3 | |||||||
Net income (loss) attributable to parent | 530 | 530 | 530 | |||||
Net income (loss), including portion attributable to nonredeemable noncontrolling interest | 531 | 1 | ||||||
Other comprehensive income (loss) | (544) | (544) | (544) | 0 | ||||
Dividends | $ (397) | (397) | (397) | |||||
Exercise of stock options, shares | 778,270 | 778,270 | ||||||
Exercise of stock options | $ 29 | 29 | 29 | |||||
Restricted stock awards, shares | 200,625 | |||||||
Restricted stock awards | 0 | 0 | 0 | |||||
Other benefit plans, shares | 103,797 | |||||||
Other benefit plans | 12 | 12 | 12 | |||||
Dividend reinvestment plan, shares | 29,998 | |||||||
Dividend reinvestment plan | 3 | 3 | 3 | |||||
Stock-based compensation: Expense | 23 | 23 | 23 | |||||
Shares acquired and retired, shares | (65,589) | |||||||
Shares acquired and retired | (6) | (6) | (1) | (5) | ||||
Shares exchanged — benefit plans, shares | (26,520) | |||||||
Shares exchanged — benefit plans | (3) | (3) | (1) | (2) | ||||
Forfeitures of restricted stock, shares | (4,317) | |||||||
Forfeitures of restricted stock | 0 | 0 | 0 | |||||
Other | $ (11) | (11) | (11) | 0 | ||||
Ending Balance, shares at Dec. 31, 2018 | 89,291,724 | 89,291,724 | ||||||
Ending Balance at Dec. 31, 2018 | $ 4,972 | $ 4,970 | $ 1,334 | $ 3,588 | $ 48 | $ 2 | ||
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Abstract] | ||||||||
Net income (loss) attributable to redeemable noncontrolling interest | (14) | |||||||
Shareholders' equity, redeemable noncontrolling interests, other changes | 11 | |||||||
Ending Balance, Redeemable Noncontrolling Interests at Dec. 31, 2018 | 0 | |||||||
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Abstract] | ||||||||
Redeemable noncontrolling interests | $ 0 | |||||||
[1] | On January 1, 2018, AFG adopted new guidance that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At the date of adoption, the $221 million net unrealized gain on equity securities classified as available for sale (with unrealized holding gains and losses reported in AOCI) under the prior guidance was reclassified from AOCI to retained earnings as the cumulative effect of an accounting change. Other also includes the December 2017 reclassification of $145 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings (see Note A — “Accounting Policies — Income Taxes”), the impact on AOCI of the December 2017 sale of redeemable noncontrolling interests in Neon and the November 2016 acquisition of the noncontrolling interest in NATL (see Note B — “Acquisitions and Sale of Businesses”). |
Consolidated Statement of Cha_2
Consolidated Statement of Changes in Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends per Common Share (USD per share) | $ 4.45 | $ 4.7875 | $ 2.1525 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities: | |||
Net earnings, including noncontrolling interests | $ 517 | $ 477 | $ 668 |
Adjustments: | |||
Depreciation and amortization | 210 | 107 | 134 |
Annuity benefits | 998 | 892 | 800 |
Realized (gains) losses on investing activities | 265 | (23) | (61) |
Net sales of trading securities | 111 | 17 | 79 |
Deferred annuity and life policy acquisition costs | (263) | (225) | (230) |
Change in: | |||
Reinsurance and other receivables | (211) | (963) | (315) |
Other assets | 96 | 13 | (467) |
Insurance claims and reserves | 425 | 1,321 | 533 |
Payable to reinsurers | 9 | 109 | 43 |
Other liabilities | (140) | (18) | 265 |
Managed investment entities’ assets/liabilities | 148 | 60 | (279) |
Other operating activities, net | (82) | 37 | (20) |
Net cash provided by operating activities | 2,083 | 1,804 | 1,150 |
Investing Activities: | |||
Purchases of fixed maturities | (10,183) | (9,485) | (7,537) |
Purchases of equity securities | (568) | (182) | (207) |
Purchases of mortgage loans | (167) | (254) | (341) |
Purchases of equity index call options and other investments | (973) | (831) | (738) |
Purchases of real estate, property and equipment | (80) | (109) | (49) |
Purchases of businesses | (36) | 0 | 0 |
Proceeds from maturities and redemptions of fixed maturities | 4,948 | 6,105 | 4,713 |
Proceeds from repayments of mortgage loans | 201 | 215 | 262 |
Proceeds from sales of fixed maturities | 501 | 392 | 641 |
Proceeds from sales of equity securities | 247 | 216 | 348 |
Proceeds from sales and settlements of equity index call options and other investments | 883 | 789 | 319 |
Proceeds from sales of real estate, property and equipment | 3 | 55 | 55 |
Cash and cash equivalents of businesses acquired | 13 | 0 | 0 |
Managed investment entities: | |||
Purchases of investments | (2,117) | (2,979) | (2,254) |
Proceeds from sales and redemptions of investments | 1,948 | 2,774 | 1,890 |
Other investing activities, net | 30 | 2 | (83) |
Net cash used in investing activities | (5,350) | (3,292) | (2,981) |
Financing Activities: | |||
Annuity receipts | 5,632 | 4,341 | 4,585 |
Annuity surrenders, benefits and withdrawals | (2,916) | (2,405) | (2,275) |
Net transfers from variable annuity assets | 47 | 54 | 42 |
Additional long-term borrowings | 0 | 712 | 302 |
Reductions of long-term debt | 0 | (745) | (18) |
Issuances of managed investment entities’ liabilities | 1,983 | 2,731 | 2,293 |
Retirements of managed investment entities’ liabilities | (1,935) | (2,585) | (1,600) |
Issuances of Common Stock | 33 | 37 | 35 |
Repurchases of Common Stock | (6) | 0 | (133) |
Cash dividends paid on Common Stock | (394) | (417) | (185) |
Acquisition of noncontrolling interests in subsidiary | 0 | 0 | (315) |
Other financing activities, net | 0 | (4) | (13) |
Net cash provided by (used in) financing activities | 2,444 | 1,719 | 2,718 |
Net Change in Cash and Cash Equivalents | (823) | 231 | 887 |
Cash and cash equivalents at beginning of year | 2,338 | 2,107 | 1,220 |
Cash and cash equivalents at end of year | $ 1,515 | $ 2,338 | $ 2,107 |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 , 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. AFG did not have any significant nonrecurring fair value measurements of nonfinancial assets and liabilities in 2018 or 2017 . Investments On January 1, 2018, AFG adopted Accounting Standards Update (“ASU”) 2016-01, which requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At December 31, 2017, AFG had $1.60 billion in equity securities classified as “available for sale” under the prior guidance with holding gains and losses included in accumulated other comprehensive income (“AOCI”) instead of net earnings. At the date of adoption, the $221 million net unrealized gain on equity securities included in AOCI was reclassified to retained earnings as the cumulative effect of an accounting change. The cumulative effect of the accounting change also includes the net unrealized gain on AFG’s small number of limited partnerships and similar investments carried at cost under the prior guidance that are carried at fair value through net earnings under the new guidance ( $4 million net of tax at the date of adoption). Holding gains and losses on equity securities carried at fair value under ASU 2016-01 are generally recorded in realized gains (losses) on securities. However, prior to the adoption of the new guidance, AFG classified a small portion of its equity securities as “trading” and reported those investments at fair value with holding gains and losses recognized in net investment income. These investments consisted primarily of equity securities held to offset the impact of changes in the stock market on employee benefit plans that are impacted by stock market performance and totaled $62 million at December 31, 2017. Following the adoption of the new guidance, AFG continues to record holding gains and losses on these securities, as well as its small portfolio of limited partnerships and similar investments carried at fair value under the new guidance and certain other securities classified at purchase as “fair value through net investment income” in net investment income. Under the new guidance, AFG recorded holding losses of $257 million on equity securities in net earnings during 2018 on securities that were still owned at December 31, 2018 . Under the prior guidance, these holding losses would have been recorded in AOCI (with the exception of any impairment charge that may have been recorded). Because almost all of the equity securities impacted by the new guidance were carried at fair value through AOCI under the prior guidance, the adoption of the new guidance did not have a material impact on AFG’s financial position. Fixed maturity securities classified as “available for sale” are reported at fair value with unrealized gains and losses included in AOCI in AFG’s Balance Sheet. Fixed maturity 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. Premiums and discounts on fixed maturity securities are amortized using the effective 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. Limited partnerships and similar investments are generally accounted for using the equity method of accounting. Under the equity method, AFG records its share of the earnings or losses of the investee based on when they are reported by the investee in its financial statements rather than in the period in which the investee declares a dividend. AFG’s share of the earnings or losses from equity method investments is generally recorded on a quarter lag due to the timing of the receipt of the investee’s financial statements. AFG’s equity in the earnings (losses) of limited partnerships and similar investments is included in net investment income. Gains or losses on fixed-maturity 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 and principal-only MBS) and (ii) the equity-based component of certain annuity products (included in annuity benefits accumulated) and related equity index 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. 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 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. 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. 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. AFG has 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 are measured by the change in the fair value of AFG’s investments in the CLOs and management fees earned. 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 annuity benefits expense and decreases for annuity policy charges are recorded in other income. For traditional fixed annuities, the liability for annuity benefits accumulated represents the account value that had accrued to the benefit of the policyholder as of the balance sheet date. For fixed-indexed annuities, the liability for annuity benefits accumulated includes an embedded derivative that represents the estimated fair value of the index participation with the remaining component representing the discounted value of the guaranteed minimum contract benefits. 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 (losses) 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 presented in its Balance Sheet as a direct reduction in the carrying value of long-term debt and are amortized over the life of the related debt using the effective interest method as a component of interest expense. Debt issuance costs related to AFG’s revolving credit facilities are included in other assets in AFG’s Balance Sheet. 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 represent 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. Noncontrolling interests that are redeemable at the option of the holder are presented separately in the mezzanine section of the balance sheet (between liabilities and equity). 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. The effect of a change in tax rates on deferred tax assets and liabilities is recorded in net earnings in the period that includes the enactment date. This includes the impact on deferred tax assets or liabilities established through AOCI, which results in an amount equal to the difference between the deferred tax at the historical corporate rate and the newly enacted rate stranded in AOCI. As permitted under guidance adopted effective December 31, 2017 (ASU 2018-02), AFG reclassified the $145 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings at December 31, 2017. See Note L — “ Income Taxes ” for further information. 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. 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: 2018 – 1.6 million , 2017 – 2.0 million and 2016 – 1.6 million . AFG’s weighted average diluted shares outstanding excludes the following anti-dilutive potential common shares related to stock compensation plans: 2018 and 2017 – none and 2016 – 0.4 million . Adjustments to net earnings attributable to shareholders in the calculation of diluted earnings per share were nominal in the 2018 , 2017 and 2016 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, property and equipment and businesses. “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. Revenue Recognition Guidance Effective in 2018 On January 1, 2018, AFG adopted ASU 2014-09, which provides guidance on recognizing revenue when (or as) performance obligations under the contract are satisfied. The new guidance also updates the accounting for certain costs associated with obtaining and fulfilling contracts with customers and requires certain new disclosures. Because revenue recognition for insurance contracts and financial instruments (AFG’s primary sources of revenue) were excluded from the scope of the new guidance, the adoption of ASU 2014-09 did not have a material impact on AFG’s results of operations and financial position. Lease Accounting Guidance Effective in 2019 In February 2016, the FASB issued ASU 2016-02, which requires entities that lease assets for terms longer than one year to recognize the assets and liabilities for the rights and obligations created by those leases on the balance sheet based on the present value of contractual cash flows. Qualitative and quantitative disclosures of the amount, timing and uncertainty of cash flows arising from leases will also be required. AFG will adopt the updated guidance effective January 1, 2019. The new guidance will not have a material effect on AFG’s results of operations because it does not change the manner in which lease-related expenses are recognized in the statement of earnings. In addition, the new guidance will not have a material effect on AFG’s financial position as recognizing the assets and liabilities related to operating leases upon adoption of the new guidance in January 2019 will increase AFG’s consolidated assets and consolidated liabilities by less than one-half of 1% as compared to AFG’s Balance Sheet at December 31, 2018. |
Acquisitions and Sale of Busine
Acquisitions and Sale of Businesses | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and Sale of Businesses | Acquisitions and Sale of Businesses ABA Insurance Services Inc. In November 2018, AFG acquired ABA Insurance Services Inc. (“ABAIS”) from American Bankers Mutual Insurance, Ltd. for approximately $30 million using cash on hand at the parent company. Additional contingent consideration of up to $3 million could be due after four years based on achieving certain operating milestones. ABAIS is based in Ohio and is a market-leading provider of directors and officers liability and other complementary insurance solutions for banks, small businesses and nonprofit organizations. The allocation of the purchase price is shown in the table below (in millions): November 30, Total purchase price $ 30 Tangible assets acquired 28 Liabilities acquired 26 Net tangible assets acquired, at fair value 2 Excess purchase price over net tangible assets acquired $ 28 Allocation of excess purchase price: Intangible assets acquired (*) $ 25 Deferred tax on intangible assets acquired (*) (5 ) Goodwill 8 $ 28 (*) Included in Other assets in AFG’s Balance Sheet. Approximately $25 million of the purchase price was recorded as a finite lived customer relationship intangible asset, which will be amortized over its estimated life of 9 years . The fair value of this intangible was estimated using a multi-period excess earnings method, which is a form of the income approach. The acquisition resulted in the recognition of $8 million in goodwill based on the excess of the purchase price over the fair value of the net assets acquired. The goodwill represents the fair value of acquired intangible assets that do not qualify for separate recognition, including the value of ABAIS’s assembled workforce. Business generated by ABAIS is included in the Specialty casualty sub-segment. Neon Lloyd’s Business On December 29, 2017, AFG completed the sale of an indirect noncontrolling interest in Neon, its United Kingdom-based Lloyd’s insurer, to certain Neon executives for cash equal to the fair value of the interest sold as determined by a third-party valuation firm. Because AFG continues to have a controlling interest in Neon, the sale was accounted for as an equity transaction with the excess of the carrying value of the net assets attributable to the noncontrolling interest sold over the consideration received recorded as a $3 million reduction in AFG’s Capital Surplus. As discussed in Note L — “ Income Taxes ,” the sale of the noncontrolling interest also resulted in the recognition of a $56 million tax benefit, including a $48 million tax benefit previously deferred in the 2016 restructuring of the Neon Lloyd’s operations. 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 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. |
Segments of Operations
Segments of Operations | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segments of Operations | Segments of Operations AFG manages its business as three segments: (i) Property and casualty insurance, (ii) Annuity and (iii) Other, which includes holding company assets and costs, revenues and costs of AFG’s limited insurance operations outside of property and casualty insurance and annuities, 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 equipment leasing and 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, fixed-indexed and variable-indexed annuities in the retail, financial institutions, registered investment advisor and education markets. AFG’s reportable segments and their components were determined based primarily upon similar economic characteristics, products and services. Effective January 1, 2018, the results of AFG’s run-off long-term care and life businesses are included in the “Other” segment instead of as a separate reportable segment based on the immaterial size of the remaining operations. Prior period amounts were reclassified for consistent presentation. Sales of property and casualty insurance outside of the United States represented 7% of AFG’s revenues in 2018 , 5% of AFG’s revenues in 2017 and 4% of AFG’s revenues in 2016 . The following tables (in millions) show AFG’s assets, revenues and earnings before income taxes by segment and sub-segment. 2018 2017 2016 Assets Property and casualty insurance (a) $ 17,681 $ 17,171 $ 15,574 Annuity 39,952 37,179 33,409 Other 5,823 6,308 6,089 Total assets $ 63,456 $ 60,658 $ 55,072 Revenues Property and casualty insurance: Premiums earned: Specialty Property and transportation $ 1,729 $ 1,711 $ 1,662 Specialty casualty 2,403 2,186 2,006 Specialty financial 598 576 557 Other specialty 135 106 103 Total premiums earned 4,865 4,579 4,328 Net investment income 438 362 350 Other income (b) 10 28 51 Total property and casualty insurance 5,313 4,969 4,729 Annuity: Net investment income 1,638 1,458 1,356 Other income 107 103 103 Total annuity 1,745 1,561 1,459 Other 358 330 289 Total revenues before realized gains (losses) 7,416 6,860 6,477 Realized gains (losses) on securities (266 ) 5 19 Realized gains on subsidiaries — — 2 Total revenues $ 7,150 $ 6,865 $ 6,498 (a) Not allocable to sub-segments. (b) Includes income of $32 million (before noncontrolling interest) from the sale of an apartment property in 2016. 2018 2017 2016 Earnings Before Income Taxes Property and casualty insurance: Underwriting: Specialty Property and transportation $ 120 $ 154 $ 166 Specialty casualty 141 104 78 Specialty financial 66 61 84 Other specialty (5 ) (2 ) 9 Other lines (a) (20 ) (75 ) (101 ) Total underwriting 302 242 236 Investment and other income, net (b) 407 349 341 Total property and casualty insurance 709 591 577 Annuity 361 380 368 Other (c) (165 ) (252 ) (179 ) Total earnings before realized gains (losses) and income taxes 905 719 766 Realized gains (losses) on securities (266 ) 5 19 Realized gains on subsidiaries — — 2 Total earnings before income taxes $ 639 $ 724 $ 787 (a) Includes special charges to increase asbestos and environmental (“A&E”) reserves of $18 million , $89 million and $36 million in 2018 , 2017 and 2016 , respectively. Also includes $18 million in favorable development related to the Neon exited lines recorded in connection with a reinsurance to close transaction in 2017 and a charge of $65 million related to Neon exited lines in 2016. (b) Includes income of $32 million (before noncontrolling interest) from the sale of an apartment property in 2016. (c) Primarily holding company interest and expenses, including losses on retirement of debt of $51 million in 2017 and special charges to increase A&E reserves related to AFG’s former railroad and manufacturing operations ( $9 million in 2018 , $24 million in 2017 and $5 million in 2016 ). |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
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, 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, asset-backed securities (“ABS”), mortgage-backed securities (“MBS”), non-affiliated common stocks, equity index options 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 at the valuation date. 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. As discussed in Note A — “ Accounting Policies — Managed Investment Entities ,” AFG has set the carrying value of its 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. As a result, 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. 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, 2018 Assets: Available for sale (“AFS”) fixed maturities: U.S. Government and government agencies $ 141 $ 83 $ 9 $ 233 States, municipalities and political subdivisions — 6,880 59 6,939 Foreign government — 142 — 142 Residential MBS — 2,547 197 2,744 Commercial MBS — 864 56 920 Asset-backed securities — 8,964 847 9,811 Corporate and other 28 19,184 1,996 21,208 Total AFS fixed maturities 169 38,664 3,164 41,997 Trading fixed maturities 9 96 — 105 Equity securities 1,410 68 336 1,814 Equity index call options — 184 — 184 Assets of managed investment entities (“MIE”) 203 4,476 21 4,700 Variable annuity assets (separate accounts) (*) — 557 — 557 Other assets — derivatives — 16 — 16 Total assets accounted for at fair value $ 1,791 $ 44,061 $ 3,521 $ 49,373 Liabilities: Liabilities of managed investment entities $ 195 $ 4,297 $ 20 $ 4,512 Derivatives in annuity benefits accumulated — — 2,720 2,720 Other liabilities — derivatives — 49 — 49 Total liabilities accounted for at fair value $ 195 $ 4,346 $ 2,740 $ 7,281 December 31, 2017 Assets: Available for sale fixed maturities: U.S. Government and government agencies $ 122 $ 112 $ 8 $ 242 States, municipalities and political subdivisions — 6,975 148 7,123 Foreign government — 127 — 127 Residential MBS — 3,105 122 3,227 Commercial MBS — 926 36 962 Asset-backed securities — 7,218 744 7,962 Corporate and other 30 17,662 1,044 18,736 Total AFS fixed maturities 152 36,125 2,102 38,379 Trading fixed maturities 44 304 — 348 Equity securities 1,411 86 165 1,662 Equity index call options — 701 — 701 Assets of managed investment entities 307 4,572 23 4,902 Variable annuity assets (separate accounts) (*) — 644 — 644 Other assets — derivatives — — — — Total assets accounted for at fair value $ 1,914 $ 42,432 $ 2,290 $ 46,636 Liabilities: Liabilities of managed investment entities $ 293 $ 4,372 $ 22 $ 4,687 Derivatives in annuity benefits accumulated — — 2,542 2,542 Other liabilities — derivatives — 35 — 35 Total liabilities accounted for at fair value $ 293 $ 4,407 $ 2,564 $ 7,264 (*) 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, 2018 , 2017 and 2016 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 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 Perpetual preferred stocks 2 4 6 $ 5 $ 23 $ 35 2 2 7 $ 6 $ 11 $ 28 Common stocks — — 3 — — — — 1 2 — — — Transfers between Level 1 and Level 2 for all periods presented were a result of increases or decreases in observable trade activity. Approximately 7% of the total assets carried at fair value on December 31, 2018 , were Level 3 assets. Approximately 69% ( $2.41 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. Internally developed Level 3 asset fair values represent approximately $1.05 billion at December 31, 2018 . Of this amount, approximately $590 million relates to fixed maturity securities that were priced using management’s best estimate of an appropriate credit spread over the treasury yield (of a similar duration) to discount future expected cash flows using a third party model. The credit spread applied by management is the significant unobservable input. For this group of approximately 100 securities, the average spread used was 585 basis points over the reference treasury yield and the spreads ranged from 131 basis points to 2,966 basis points (approximately 80% of the spreads were between 400 and 700 basis points). Had management used higher spreads, the fair value of this group of securities would have been lower. Conversely, if the spreads used were lower, the fair values would have been higher. For the remainder of the internally developed prices, any justifiable changes in unobservable inputs used to determine fair value would not have resulted in a material change in AFG’s financial position. The derivatives embedded in AFG’s fixed-indexed and variable-indexed annuity liabilities are measured using a discounted cash flow approach and had a fair value of $2.72 billion at December 31, 2018 . The following table presents information about the unobservable inputs used by management in determining fair value of these Level 3 liabilities. See Note F — “ Derivatives .” Unobservable Input Range Adjustment for insurance subsidiary’s credit risk 0.6% – 2.1% over the risk free rate Risk margin for uncertainty in cash flows 0.73% reduction in the discount rate Surrenders 3% – 23% of indexed account value Partial surrenders 2% – 9% of indexed account value Annuitizations 0.1% – 1% of indexed account value Deaths 1.5% – 9.5% of indexed account value Budgeted option costs 2.6% – 3.6% of indexed account value The range of adjustments for insurance subsidiary’s credit risk is based on the Moody’s corporate A2 bond index and 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 and variable-indexed annuity products with an expected range of 7% to 11% in the majority of future calendar years ( 3% to 23% over all periods). Increasing the budgeted option cost or risk margin for uncertainty in cash flow assumptions in the table above would increase the fair value of the fixed-indexed and variable-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 2018 , 2017 and 2016 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs and $29 million of equity securities transferred into Level 3 in the first quarter of 2018 related to a small number of limited partnerships and similar investments carried at cost under the prior guidance that are carried at fair value through net earnings under new guidance adopted on January 1, 2018, as discussed in Note A — “ Accounting Policies — Investments .” 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, 2017 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2018 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ 1 $ — $ 9 State and municipal 148 — (2 ) — (3 ) — (84 ) 59 Residential MBS 122 (9 ) (4 ) — (21 ) 130 (21 ) 197 Commercial MBS 36 — — 20 — — — 56 Asset-backed securities 744 (3 ) (15 ) 426 (248 ) 82 (139 ) 847 Corporate and other 1,044 (10 ) (18 ) 1,221 (204 ) 27 (64 ) 1,996 Total AFS fixed maturities 2,102 (22 ) (39 ) 1,667 (476 ) 240 (308 ) 3,164 Equity securities 165 9 — 155 (6 ) 30 (17 ) 336 Assets of MIE 23 (8 ) — 6 — — — 21 Total Level 3 assets $ 2,290 $ (21 ) $ (39 ) $ 1,828 $ (482 ) $ 270 $ (325 ) $ 3,521 Embedded derivatives (a) $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) Total Level 3 liabilities (b) $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) (a) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $44 million in 2018 . (b) As previously discussed, 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 Balance at December 31, 2016 Net Other Purchases Sales and Transfer Transfer Balance at December 31, 2017 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ — $ — $ 8 State and municipal 140 — 2 — (2 ) 10 (2 ) 148 Residential MBS 190 (4 ) 2 1 (40 ) 44 (71 ) 122 Commercial MBS 25 2 — 15 (10 ) 4 — 36 Asset-backed securities 484 — 1 410 (132 ) 202 (221 ) 744 Corporate and other 712 (5 ) 2 606 (237 ) 29 (63 ) 1,044 Total AFS fixed maturities 1,559 (7 ) 7 1,032 (421 ) 289 (357 ) 2,102 Equity securities 174 (21 ) 10 38 (16 ) — (20 ) 165 Assets of MIE 29 (11 ) — 9 — — (4 ) 23 Total Level 3 assets $ 1,762 $ (39 ) $ 17 $ 1,079 $ (437 ) $ 289 $ (381 ) $ 2,290 Embedded derivatives (a) $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) Total Level 3 liabilities (b) $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) (a) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $25 million in 2017 . (b) As previously discussed, 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 Balance at December 31, 2015 Net earnings 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 earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016 . (b) As previously discussed, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets. 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 2018 Financial assets: Cash and cash equivalents $ 1,515 $ 1,515 $ 1,515 $ — $ — Mortgage loans 1,068 1,056 — — 1,056 Policy loans 174 174 — — 174 Total financial assets not accounted for at fair value $ 2,757 $ 2,745 $ 1,515 $ — $ 1,230 Financial liabilities: Annuity benefits accumulated (*) $ 36,384 $ 34,765 $ — $ — $ 34,765 Long-term debt 1,302 1,231 — 1,228 3 Total financial liabilities not accounted for at fair value $ 37,686 $ 35,996 $ — $ 1,228 $ 34,768 2017 Financial assets: Cash and cash equivalents $ 2,338 $ 2,338 $ 2,338 $ — $ — Mortgage loans 1,125 1,119 — — 1,119 Policy loans 184 184 — — 184 Total financial assets not accounted for at fair value $ 3,647 $ 3,641 $ 2,338 $ — $ 1,303 Financial liabilities: Annuity benefits accumulated (*) $ 33,110 $ 32,461 $ — $ — $ 32,461 Long-term debt 1,301 1,354 — 1,351 3 Total financial liabilities not accounted for at fair value $ 34,411 $ 33,815 $ — $ 1,351 $ 32,464 (*) Excludes $232 million and $206 million of life contingent annuities in the payout phase at December 31, 2018 and 2017 , 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, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Available for sale fixed maturities at December 31 consisted of the following (in millions): 2018 2017 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 $ 235 $ 1 $ (3 ) $ (2 ) $ 233 $ 244 $ 1 $ (3 ) $ (2 ) $ 242 States, municipalities and political subdivisions 6,825 169 (55 ) 114 6,939 6,887 254 (18 ) 236 7,123 Foreign government 140 2 — 2 142 124 3 — 3 127 Residential MBS 2,476 277 (9 ) 268 2,744 2,884 349 (6 ) 343 3,227 Commercial MBS 905 17 (2 ) 15 920 927 36 (1 ) 35 962 Asset-backed securities 9,781 130 (100 ) 30 9,811 7,836 142 (16 ) 126 7,962 Corporate and other 21,475 167 (434 ) (267 ) 21,208 18,136 638 (38 ) 600 18,736 Total fixed maturities $ 41,837 $ 763 $ (603 ) $ 160 $ 41,997 $ 37,038 $ 1,423 $ (82 ) $ 1,341 $ 38,379 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, 2018 and December 31, 2017 , respectively, were $140 million and $158 million . Gross unrealized gains on such securities at December 31, 2018 and December 31, 2017 were $119 million and $137 million , respectively. Gross unrealized losses on such securities at both December 31, 2018 and December 31, 2017 were $4 million . These amounts represent the non-credit other-than-temporary impairment charges recorded in AOCI adjusted for subsequent changes in fair values and relate primarily to residential MBS. As discussed in Note A — “ Accounting Policies — Investments ,” AFG implemented new accounting guidance effective on January 1, 2018, which requires all equity securities previously classified as “available for sale” to be reported at fair value, with holding gains and losses recognized in net earnings. Equity securities reported at fair value consisted of the following at December 31, 2018 (in millions): Fair Value over (under) Actual Cost Fair Value Cost Common stocks $ 1,241 $ 1,148 $ (93 ) Perpetual preferred stocks 705 666 (39 ) Total equity securities carried at fair value $ 1,946 $ 1,814 $ (132 ) The following tables show gross unrealized losses (dollars in millions) on available for sale fixed maturities and equity securities by investment category and length of time that individual securities have been in a continuous unrealized loss position at the following balance sheet dates. 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 December 31, 2018 Fixed maturities: U.S. Government and government agencies $ — $ 41 100 % $ (3 ) $ 120 98 % States, municipalities and political subdivisions (23 ) 1,497 98 % (32 ) 902 97 % Foreign government — 18 100 % — 4 100 % Residential MBS (4 ) 279 99 % (5 ) 139 97 % Commercial MBS (1 ) 147 99 % (1 ) 30 97 % Asset-backed securities (77 ) 5,406 99 % (23 ) 629 96 % Corporate and other (306 ) 10,378 97 % (128 ) 2,078 94 % Total fixed maturities $ (411 ) $ 17,766 98 % $ (192 ) $ 3,902 95 % December 31, 2017 Fixed maturities: U.S. Government and government agencies $ — $ 55 100 % $ (3 ) $ 123 98 % States, municipalities and political subdivisions (8 ) 825 99 % (10 ) 431 98 % Foreign government — 4 100 % — — — % Residential MBS (1 ) 118 99 % (5 ) 118 96 % Commercial MBS (1 ) 67 99 % — — — % Asset-backed securities (7 ) 1,195 99 % (9 ) 299 97 % Corporate and other (20 ) 2,031 99 % (18 ) 603 97 % Total fixed maturities $ (37 ) $ 4,295 99 % $ (45 ) $ 1,574 97 % Equity securities: Common stocks $ (22 ) $ 117 84 % $ — $ — — % Perpetual preferred stocks — 41 100 % (1 ) 13 93 % Total equity securities $ (22 ) $ 158 88 % $ (1 ) $ 13 93 % At December 31, 2018 , the gross unrealized losses on fixed maturities of $603 million relate to 2,324 securities. Investment grade securities (as determined by nationally recognized rating agencies) represented approximately 92% of the gross unrealized loss and 96% 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 interest 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 2018 , 2017 and 2016 , AFG recorded other-than-temporary impairment charges related to its residential MBS of $6 million , $1 million and $3 million , respectively. In 2018 , AFG recorded approximately $20 million in other-than-temporary impairment charges related to fixed maturities other than residential MBS, including $14 million related to aircraft financing. Other-than-temporary impairment charges on fixed maturities other than residential MBS were $19 million in 2017 and $35 million in 2016 . In addition, AFG recorded $4 million in other-than-temporary impairment charges in 2017 on investments that are included in other investments on the balance sheet. 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, 2018 . As discussed in Note A — “ Accounting Policies — Investments ,” effective January 1, 2018, all equity securities previously classified as “available for sale” are required to be carried at fair value through net earnings instead of accumulated other comprehensive income and therefore are no longer evaluated for other-than-temporary impairment. In 2017 and 2016 , AFG recorded other-than-temporary impairment charges on equity securities classified as available for sale of $64 million and $93 million , respectively. 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): 2018 2017 2016 Balance at January 1 $ 145 $ 153 $ 160 Additional credit impairments on: Previously impaired securities 1 1 2 Securities without prior impairments 1 3 1 Reductions due to sales or redemptions (5 ) (12 ) (10 ) Balance at December 31 $ 142 $ 145 $ 153 The table below sets forth the scheduled maturities of available for sale fixed maturities as of December 31, 2018 (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 $ 1,310 $ 1,318 3 % After one year through five years 8,521 8,554 20 % After five years through ten years 14,235 14,044 34 % After ten years 4,609 4,606 11 % 28,675 28,522 68 % ABS (average life of approximately 4.5 years) 9,781 9,811 23 % MBS (average life of approximately 4.5 years) 3,381 3,664 9 % Total $ 41,837 $ 41,997 100 % 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, 2018 or 2017 . Net Unrealized Gain on Marketable Securities In addition to adjusting fixed maturity securities and equity 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 Net December 31, 2018 Net unrealized gain on: Fixed maturities — annuity segment (a) $ 101 $ (21 ) $ 80 Fixed maturities — all other 59 (13 ) 46 Total fixed maturities 160 (34 ) 126 Deferred policy acquisition costs — annuity segment (42 ) 9 (33 ) Annuity benefits accumulated (14 ) 3 (11 ) Unearned revenue 1 — 1 Total net unrealized gain on marketable securities $ 105 $ (22 ) $ 83 December 31, 2017 Net unrealized gain on: Fixed maturities — annuity segment (a) $ 1,082 $ (227 ) $ 855 Fixed maturities — all other 259 (55 ) 204 Total fixed maturities 1,341 (282 ) 1,059 Equity securities (b) 279 (58 ) 221 Total investments 1,620 (340 ) 1,280 Deferred policy acquisition costs — annuity segment (433 ) 91 (342 ) Annuity benefits accumulated (137 ) 29 (108 ) Unearned revenue 13 (3 ) 10 Total net unrealized gain on marketable securities $ 1,063 $ (223 ) $ 840 (a) Net unrealized gains on fixed maturity investments supporting AFG’s annuity benefits accumulated. (b) As discussed in Note A — “ Accounting Policies — Investments ,” effective January 1, 2018, all equity securities other than those accounted for under the equity method are carried at fair value through net earnings. Net Investment Income The following table shows (in millions) investment income earned and investment expenses incurred. 2018 2017 2016 Investment income: Fixed maturities $ 1,742 $ 1,607 $ 1,510 Equity securities: Dividends 79 73 77 Change in fair value (*) 22 6 4 Equity in earnings of partnerships and similar investments 161 64 44 Other 112 102 81 Gross investment income 2,116 1,852 1,716 Investment expenses (22 ) (21 ) (20 ) Net investment income $ 2,094 $ 1,831 $ 1,696 (*) As discussed in Note A — “ Accounting Policies — Investments ,” AFG adopted guidance in January 2018 that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. Although the change in the fair value of the majority of AFG’s equity securities is recorded in realized gains (losses) on securities, AFG records holding gains and losses in net investment income on equity securities classified as “trading” under the previous guidance and on a small portfolio of limited partnership and similar investments that do not qualify for the equity method of accounting. Realized gains (losses) and changes in unrealized appreciation (depreciation) included in AOCI related to fixed maturity and equity security investments are summarized as follows (in millions): 2018 2017 Realized gains (losses) Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 6 $ (26 ) $ (20 ) $ (1,181 ) $ 17 $ (20 ) $ (3 ) $ 532 Equity securities (265 ) — (265 ) — 70 (64 ) 6 128 Mortgage loans and other investments 1 — 1 — (6 ) (4 ) (10 ) — Other (*) 11 7 18 502 (3 ) 15 12 (219 ) Total pretax (247 ) (19 ) (266 ) (679 ) 78 (73 ) 5 441 Tax effects: Reclassify impact of U.S. corporate tax rate change — — — — — — — 149 Other 52 4 56 143 (27 ) 25 (2 ) (154 ) Total tax effects 52 4 56 143 (27 ) 25 (2 ) (5 ) Net of tax $ (195 ) $ (15 ) $ (210 ) $ (536 ) $ 51 $ (48 ) $ 3 $ 436 2016 Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 36 $ (38 ) $ (2 ) $ 90 Equity securities 106 (93 ) 13 67 Other (*) (7 ) 15 8 (52 ) Total pretax 135 (116 ) 19 105 Tax effects (48 ) 41 (7 ) (37 ) Noncontrolling interests (2 ) 3 1 4 Net of tax and noncontrolling interests $ 85 $ (72 ) $ 13 $ 72 (*) Primarily adjustments to deferred policy acquisition costs and reserves related to the annuity business. As discussed in Note A — “ Accounting Policies — Investments ,” effective January 1, 2018, all equity securities other than those accounted for under the equity method are carried at fair value through net earnings. AFG recorded net holding gains (losses) on equity securities during 2018 on securities that were still owned at December 31, 2018 as follows (in millions): 2018 Included in realized gains (losses) $ (279 ) Included in net investment income 22 $ (257 ) Gross realized gains and losses (excluding impairment write-downs and mark-to-market of derivatives) on available for sale fixed maturity investment transactions consisted of the following (in millions): 2018 2017 2016 Fixed maturities: Gross gains $ 22 $ 43 $ 55 Gross losses (14 ) (20 ) (10 ) During 2017 and 2016 , AFG recorded gross gains of $87 million and $110 million and gross losses of $17 million and $4 million , respectively, on available for sale equity securities. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives As discussed under “ Derivatives ” in Note A — “ Accounting Policies ,” 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, 2018 December 31, 2017 Derivative Balance Sheet Line Asset Liability Asset Liability MBS with embedded derivatives Fixed maturities $ 109 $ — $ 105 $ — Public company warrants Equity securities — — 4 — Fixed-indexed and variable-indexed annuities (embedded derivative) Annuity benefits accumulated — 2,720 — 2,542 Equity index call options Equity index call options 184 — 701 — Equity index put options Other liabilities — 1 — — Reinsurance contract (embedded derivative) Other liabilities — 2 — 4 $ 293 $ 2,723 $ 810 $ 2,546 The MBS with embedded derivatives consist of primarily interest-only and principal-only MBS. 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 and variable-indexed annuities provide policyholders with a crediting rate tied, in part, to the performance of an existing stock market or other financial index. AFG attempts to mitigate the risk in the index-based component of these products through the purchase and sale of call and put options on the appropriate index. AFG receives collateral from certain counterparties to support its purchased call option assets (net of collateral required under put option contracts with the same counterparties). This collateral ( $103 million at December 31, 2018 and $389 million at December 31, 2017 ) 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 and put options 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 and put 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 , AFG has a reinsurance contract that is considered to contain an embedded derivative. The following table summarizes the gains (losses) included in AFG’s Statement of Earnings for changes in the fair value of derivatives that do not qualify for hedge accounting for 2018 , 2017 and 2016 (in millions): Derivative Statement of Earnings Line 2018 2017 2016 MBS with embedded derivatives Realized gains (losses) on securities $ (7 ) $ (6 ) $ (9 ) Public company warrants Realized gains (losses) on securities (3 ) — — Fixed-indexed and variable-indexed annuities (embedded derivative) (*) Annuity benefits 204 (589 ) (211 ) Equity index call options Annuity benefits (298 ) 494 141 Equity index put options Annuity benefits (1 ) — — Reinsurance contracts (embedded derivative) Net investment income 2 (2 ) (1 ) $ (103 ) $ (103 ) $ (80 ) (*) The change in fair value of the embedded derivative includes losses related to unlocking of actuarial assumptions of $44 million in 2018 , $25 million in 2017 and $17 million in 2016 . Derivatives Designated and Qualifying as Cash Flow Hedges As of December 31, 2018 , AFG has entered into sixteen 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 generally decline 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 $2.35 billion at December 31, 2018 compared to $1.58 billion at December 31, 2017 , reflecting six new swaps with an aggregate notional amount at issuance of $911 million entered into in 2018 , 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 $16 million at December 31, 2018 and less than $1 million at December 31, 2017 . The fair value of the effective portion of interest rate swaps in a liability position and included in other liabilities was $46 million at December 31, 2018 and $31 million at December 31, 2017 . 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 losses of $3 million in 2018 compared to income of $6 million in 2017 and $7 million in 2016 . There was no ineffectiveness recorded in net earnings during these periods. A collateral receivable supporting these swaps of $135 million at December 31, 2018 and $70 million at December 31, 2017 is included in other assets in AFG’s Balance Sheet. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 2018 | |
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, 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 Additions 588 225 4 — 229 — 229 817 Amortization: Periodic amortization (556 ) (161 ) (19 ) (8 ) (188 ) — (188 ) (744 ) Annuity unlocking — 34 6 1 41 — 41 41 Included in realized gains — 9 1 — 10 — 10 10 Foreign currency translation — — — — — — — — Other — — — 10 10 — 10 10 Change in unrealized — — — — — (157 ) (157 ) (157 ) Balance at December 31, 2017 270 1,217 102 49 1,368 (422 ) 946 1,216 Additions 675 263 2 — 265 — 265 940 Amortization: Periodic amortization (644 ) (238 ) (19 ) (7 ) (264 ) — (264 ) (908 ) Annuity unlocking — 29 — — 29 — 29 29 Included in realized gains — 14 1 — 15 — 15 15 Foreign currency translation (2 ) — — — — — — (2 ) Change in unrealized — — — — — 392 392 392 Balance at December 31, 2018 $ 299 $ 1,285 $ 86 $ 42 $ 1,413 $ (30 ) $ 1,383 $ 1,682 (*) Adjustments to DPAC related to net unrealized gains/losses on securities and cash flow hedges. The present value of future profits (“PVFP”) amounts in the table above are net of $148 million and $141 million of accumulated amortization at December 31, 2018 and 2017 , respectively. During each of the next five years, the PVFP is expected to decrease at a rate of approximately one-eighth of the balance at the beginning of each respective year. |
Managed Investment Entities
Managed Investment Entities | 12 Months Ended |
Dec. 31, 2018 | |
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 60.9% 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 2018, 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 $188 million (including $125 million invested in the most subordinate tranches) at December 31, 2018 , and $215 million at December 31, 2017 . In 2018 , AFG formed a new CLO, which issued $463 million face amount of liabilities (including $31 million face amount purchased by subsidiaries of AFG). During 2018 , AFG subsidiaries also purchased $7 million face amount of a senior debt tranche of an existing CLO for $7 million and received $45 million in sale and redemption proceeds from its CLO investments. In 2017 , AFG formed two new CLOs, which issued an aggregate of $865 million face amount of liabilities (including $48 million face amount purchased by subsidiaries of AFG). During 2017 , AFG subsidiaries also purchased $71 million face amount of senior debt and subordinate tranches of existing CLOs for $71 million and received $103 million in sale and redemption proceeds from its CLO investments. 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 and received $115 million in sale and redemption proceeds from its CLO investments. In 2018 and 2017 , one and two AFG CLOs, respectively, 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. Selected financial information related to the CLOs is shown below (in millions): Year ended December 31, 2018 2017 2016 Investment in CLO tranches $ 188 $ 215 $ 216 Gains (losses) on change in fair value of assets/liabilities (a): Assets (189 ) (8 ) 131 Liabilities 168 20 (116 ) Management fees paid to AFG 16 18 17 CLO earnings attributable to AFG Shareholders (b) 7 23 37 (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 $232 million and $55 million at December 31, 2018 and 2017 . The aggregate unpaid principal balance of the CLOs’ debt exceeded its carrying value by $241 million and $118 million at those dates. The CLO assets include loans with an aggregate fair value of $1 million at December 31, 2017 , for which the CLOs are not accruing interest because the loans are in default (aggregate unpaid principal balance of $8 million ; none at December 31, 2018 ). |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | Goodwill and Other Intangibles Changes in the carrying value of goodwill during 2016 , 2017 and 2018 , by reporting segment, are presented in the following table (in millions): Property and Casualty Annuity Total Balance at January 1, 2016, December 31, 2016 and December 31, 2017 $ 168 $ 31 $ 199 Acquisition of subsidiary in 2018 8 — 8 Balance at December 31, 2018 $ 176 $ 31 $ 207 Goodwill increased by $8 million in the fourth quarter of 2018 due to the purchase of ABAIS as discussed in Note B — “ Acquisitions and Sale of Businesses .” Included in other assets in AFG’s Balance Sheet is $54 million at December 31, 2018 and $26 million at December 31, 2017 of amortizable intangible assets related to property and casualty insurance acquisitions. These amounts are net of accumulated amortization of $39 million and $30 million , respectively. The increase in amortizable intangible assets in 2018 relates to the November 2018 acquisition of ABAIS (discussed in Note B — “ Acquisitions and Sale of Businesses ” ) and a renewal rights intangible asset established in connection with the acquisition of a small property and casualty book of business in January 2018. Amortization of intangibles was $9 million in 2018 and $8 million in both 2017 and 2016 . Future amortization of intangibles (weighted average amortization period of 7 years ) is estimated to be $12 million per year in 2019 and 2020, $6 million in 2021, $4 million per year in 2022 and 2023 and $16 million thereafter. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following at December 31 (in millions): 2018 2017 Principal Discount and Issue Costs Carrying Value Principal Discount and Issue Costs Carrying Value Direct Senior Obligations of AFG: 4.50% Senior Notes due June 2047 $ 590 $ (2 ) $ 588 $ 590 $ (2 ) $ 588 3.50% Senior Notes due August 2026 425 (4 ) 421 425 (5 ) 420 Other 3 — 3 3 — 3 1,018 (6 ) 1,012 1,018 (7 ) 1,011 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 $ 1,318 $ (16 ) $ 1,302 $ 1,318 $ (17 ) $ 1,301 AFG has no scheduled principal payments on its long-term debt in the next five years. In June 2017, AFG issued $350 million in 4.50% Senior Notes due in 2047 at a price of 99.46% . The net proceeds of the offering were used to redeem AFG’s $230 million outstanding principal amount of 6-3/8% Senior Notes due June 2042 at par value and to redeem AFG’s $125 million outstanding principal amount of 5-3/4% Senior Notes due August 2042 at par value in June 2017 and August 2017, respectively. In November 2017, AFG issued an additional $125 million of 3.50% Senior Notes due in 2026 at a price of 99.698% and $240 million of 4.50% Senior Notes due in 2047 at a price of 102.374% . The net proceeds of the offering were used to redeem AFG’s $350 million outstanding principal amount of 9-7/8% Senior Notes due in June 2019 for $388 million (including a make-whole premium of $38 million ) in December 2017. 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 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. To achieve a desired balance between fixed and variable rate debt, AFG entered into an interest rate swap in June 2015, which effectively converted its 9-7/8% Senior Notes to a floating rate of three-month LIBOR plus 8.099% . In December 2017, AFG settled the interest rate swap contemporaneously with the redemption of the 9-7/8% Senior Notes. AFG can borrow up to $500 million under its 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, 2018 or December 31, 2017 . Cash interest payments on long-term debt were $59 million in 2018 , $85 million in 2017 and $75 million in 2016 . In 2017 and 2016 , AFG received $2 million and $3 million , respectively, in interest under the interest rate swap discussed above. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 , there were 7.0 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, 2018 759,035 $ 73.40 Granted 200,625 $ 112.86 Vested (86,177 ) $ 56.89 Forfeited (7,553 ) $ 87.47 Outstanding at December 31, 2018 865,930 $ 84.06 The total fair value of restricted stock that vested during 2018 , 2017 and 2016 was $10 million , $14 million and $10 million , respectively. AFG issued 45,804 shares of Common Stock (fair value of $115.49 per share) in the first quarter of 2018 and 47,826 shares (fair value of $96.13 per share) in the first quarter of 2017 under its Equity Bonus Plan. AFG did not grant any stock options in 2018 , 2017 or 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, 2018 3,467,340 $ 45.80 Exercised (778,270 ) $ 37.66 Forfeited/Cancelled (21,628 ) $ 42.10 Outstanding at December 31, 2018 2,667,442 $ 48.20 4.2 years $ 113 Options exercisable at December 31, 2018 2,253,003 $ 45.95 3.9 years $ 100 The total intrinsic value of options exercised during 2018 , 2017 and 2016 was $57 million , $65 million and $38 million , respectively. During 2018 , 2017 and 2016 , AFG received $29 million , $34 million and $32 million , respectively, in cash from the exercise of stock options. The total tax benefit related to the exercises was $9 million , $18 million and $11 million during those years, respectively. Total compensation expense related to stock incentive plans of AFG and its subsidiaries for 2018 , 2017 and 2016 was $23 million , $30 million and $28 million , respectively. AFG’s provision for income tax includes tax benefits of $13 million in 2018 , $27 million in 2017 and $19 million in 2016 related to AFG’s stock incentive plans. At December 31, 2018 , there was $3 million and $35 million of unrecognized compensation expense related to nonvested stock options and restricted stock awards, respectively. The nonvested stock options and restricted stock awards amounts are expected to be recognized over a weighted average of 1.0 year and 2.5 years, respectively. 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 (Loss) AOCI Beginning Balance Pretax Tax Net of tax Attributable to noncontrolling interests Attributable to shareholders Other (c) AOCI Ending Balance Year ended December 31, 2018 Net unrealized gains (losses) on securities: Unrealized holding losses on securities arising during the period $ (689 ) $ 145 $ (544 ) $ — $ (544 ) Reclassification adjustment for realized (gains) losses included in net earnings (a) 10 (2 ) 8 — 8 Total net unrealized gains (losses) on securities (b) $ 840 (679 ) 143 (536 ) — (536 ) $ (221 ) $ 83 Net unrealized gains (losses) on cash flow hedges (13 ) 2 — 2 — 2 — (11 ) Foreign currency translation adjustments (6 ) (9 ) (1 ) (10 ) — (10 ) — (16 ) Pension and other postretirement plans adjustments (8 ) — — — — — — (8 ) Total $ 813 $ (686 ) $ 142 $ (544 ) $ — $ (544 ) $ (221 ) $ 48 Year ended December 31, 2017 Net unrealized gains on securities: Unrealized holding gains on securities arising during the period $ 456 $ (159 ) $ 297 $ — $ 297 Reclassification adjustment for realized (gains) losses included in net earnings (a) (15 ) 5 (10 ) — (10 ) Total net unrealized gains on securities (b) $ 404 441 (154 ) 287 — 287 $ 149 $ 840 Net unrealized losses on cash flow hedges (7 ) (6 ) 2 (4 ) — (4 ) (2 ) (13 ) Foreign currency translation adjustments (15 ) 9 3 12 — 12 (3 ) (6 ) Pension and other postretirement plans adjustments (7 ) 1 — 1 — 1 (2 ) (8 ) Total $ 375 $ 445 $ (149 ) $ 296 $ — $ 296 $ 142 $ 813 Year ended December 31, 2016 Net unrealized gains on securities: Unrealized holding gains 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 (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 attributable to noncontrolling interests (b) Includes net unrealized gains of $58 million at December 31, 2018 compared to net unrealized gains of $68 million and $52 million at December 31, 2017 and 2016 , related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings. (c) On January 1, 2018, AFG adopted new guidance that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At the date of adoption, the $221 million net unrealized gain on equity securities classified as available for sale (with unrealized holding gains and losses reported in AOCI) under the prior guidance was reclassified from AOCI to retained earnings as the cumulative effect of an accounting change. Other also includes the December 2017 reclassification of $145 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings (see Note A — “ Accounting Policies — Income Taxes ”) , the impact on AOCI of the December 2017 sale of redeemable noncontrolling interests in Neon and 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, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following is a reconciliation of income taxes at the statutory rate ( 21% in 2018 and 35% in both 2017 and 2016) to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions): 2018 2017 2016 Amount % of EBT Amount % of EBT Amount % of EBT Earnings before income taxes (“EBT”) $ 639 $ 724 $ 787 Income taxes at statutory rate $ 134 21 % $ 253 35 % $ 275 35 % Effect of: Tax exempt interest (13 ) (2 %) (23 ) (3 %) (24 ) (3 %) Adjustment to prior year taxes (8 ) (1 %) (4 ) (1 %) (2 ) — % Stock-based compensation (8 ) (1 %) (16 ) (2 %) (9 ) (1 %) Dividend received deduction (4 ) (1 %) (8 ) (1 %) (7 ) (1 %) Employee stock ownership plan dividend paid deduction (3 ) (1 %) (5 ) (1 %) (2 ) — % Foreign operations (2 ) — % 21 3 % 5 — % Change in valuation allowance (excluding change in tax rate) 11 2 % (7 ) (1 %) 52 7 % Nondeductible expenses 7 1 % 6 1 % 7 1 % Neon restructuring — — % (56 ) (8 %) (111 ) (14 %) Change in U.S corporate tax rate — — % 83 11 % — — % Acquisition of noncontrolling interest in NATL — — % — — % (66 ) (8 %) Subsidiaries not in AFG’s tax return — — % — — % 3 — % Other 8 1 % 3 1 % (2 ) (1 %) Provision for income taxes as shown in the statement of earnings $ 122 19 % $ 247 34 % $ 119 15 % The favorable impact of stock-based compensation on AFG’s effective tax rate in the year ended December 31, 2017 reflects the high volume of employee stock option exercises during that period and the increase in the market price of AFG Common Stock. 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 . 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. Approximately $14 million of the $21 million impact of “foreign operations” for 2017 in the table above relates to a reduction in the “foreign underwriting losses” deferred tax asset as a result of the sale of the noncontrolling interest in Neon. Since AFG maintains a full valuation allowance against the deferred tax assets related to Neon, this reduction in deferred tax assets was offset by a corresponding reduction in the valuation allowance and had no overall impact on AFG’s income tax expense or results of operations. 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. The $61 million decrease in the valuation allowance in 2017 related to the change in the U.S. corporate tax rate is included in “Change in U.S. corporate tax rate” in table above. In connection with the 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 a $111 million tax benefit associated with this loss in the fourth quarter of 2016. Approximately $29 million of the $111 million tax benefit recorded in 2016 reduced current taxes payable for 2016, while the remaining tax benefit was received in 2017 from the carry-back of the tax-basis capital loss to offset capital gains in prior years. An additional loss associated with the 2016 restructuring was deferred under U.S. tax laws, resulting in an unrecognized potential tax benefit of $48 million at December 31, 2016. The sale of the noncontrolling interest in Neon resulted in the recognition of an additional tax benefit of $56 million in the fourth quarter of 2017, including the recognition of the deferred loss from the 2016 restructuring. Approximately $20 million of the $56 million tax benefit recorded in 2017 reduced current taxes payable for 2017. The majority of the remaining 2017 tax benefit is expected to be received in 2019 as a result of the filing of a refund claim in 2018 to carry back tax basis capital losses to offset prior year tax basis capital gains. The Tax Cuts and Jobs Act of 2017 (“TCJA”), which was enacted on December 22, 2017, lowered the U.S corporate tax rate to 21% and made other widespread changes to the U.S. tax code effective in 2018. Because the TCJA was enacted in December 2017, AFG recorded the $83 million decrease in its net deferred tax asset resulting from the changes in the tax code (primarily the lower corporate tax rate applicable to 2018 and future years) in the fourth quarter of 2017. In addition to the lower U.S. corporate tax rate, the TCJA implemented a new global minimum tax on income earned by foreign subsidiaries of U.S.-based entities known as the Global Intangible Low-taxed Income (“GILTI”) provision. Since almost all of AFG’s earnings are taxable based on U.S. tax rates, the GILTI is not expected to be material to AFG’s results of operations and will be recorded in the period that any tax arises. At the time it was enacted, the TCJA was subject to further clarification and interpretation by the U.S. Treasury Department and the Internal Revenue Service. For example, the TCJA changed the way that companies calculate their insurance claims and reserves for tax purposes, including revaluing those tax basis liabilities as of January 1, 2018, based on a methodology and discount factors that had not been published. The resulting transitional deferred tax liability (taxes payable over eight years under the TCJA) and offsetting increase in AFG’s insurance claims and reserves deferred tax assets, were recorded at December 31, 2017 using reasonable estimates based on available information and were considered provisional in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 118 (“SAB 118”). Because the established transition liability was completely offset by an increase in related deferred tax assets, the adjustment to the final amount when the factors were published in 2018 did not impact AFG’s effective tax rate. In accordance with SAB 118, the insurance claims and reserves transitional deferred tax liability (and offsetting adjustment to the related deferred tax assets) and all other changes in deferred taxes resulting from clarification and interpretation of the TCJA were recorded in 2018 in the period in which the guidance was published and did not have a material impact on AFG’s effective tax rate. As a result, AFG’s implementation of the TCJA is complete as of December 31, 2018. 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. Excluding the tax benefit related to the Neon restructuring and the impact of the change in the U.S. corporate tax rate, AFG’s effective tax rate for the year ended December 31, 2017 was 31% . 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 — 2018 tax years remain subject to examination by the IRS. Total earnings before income taxes include losses subject to tax in foreign jurisdictions of $69 million in 2018 , $58 million in 2017 and $160 million in 2016 , primarily related to the Neon Lloyd’s operations. The total income tax provision (credit) consists of (in millions): 2018 2017 2016 Current taxes: Federal $ 196 $ 153 $ 299 State 8 6 12 Deferred taxes: Federal (82 ) 5 (192 ) Impact of change in U.S. corporate tax rate — 83 — Total Federal deferred taxes (82 ) 88 (192 ) Provision for income taxes $ 122 $ 247 $ 119 For income tax purposes, AFG and its subsidiaries had the following carryforwards available at December 31, 2018 (in millions): Expiring Amount Operating Loss – U.S. 2019 - 2022 $ 112 Operating Loss – United Kingdom indefinite 215 (*) (*) £168 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): 2018 2017 Excluding Unrealized Gains Impact of Unrealized Gains Total Excluding Unrealized Gains Impact of Unrealized Gains Total Deferred tax assets: Federal net operating loss carryforwards $ 23 $ — $ 23 $ 27 $ — $ 27 Foreign underwriting losses 93 — 93 80 — 80 Capital loss carryforwards — — — 32 — 32 Insurance claims and reserves 740 3 743 665 29 694 Employee benefits 88 — 88 84 — 84 Other, net 44 — 44 48 (3 ) 45 Total deferred tax assets before valuation allowance 988 3 991 936 26 962 Valuation allowance against deferred tax assets (119 ) — (119 ) (109 ) — (109 ) Total deferred tax assets 869 3 872 827 26 853 Deferred tax liabilities: Investment securities (36 ) (34 ) (70 ) (1 ) (340 ) (341 ) Deferred policy acquisition costs (300 ) 9 (291 ) (293 ) 91 (202 ) Insurance claims and reserves transition liability (110 ) — (110 ) (128 ) — (128 ) Real estate, property and equipment (36 ) — (36 ) (35 ) — (35 ) Total deferred tax liabilities (482 ) (25 ) (507 ) (457 ) (249 ) (706 ) Net deferred tax asset (liability) $ 387 $ (22 ) $ 365 $ 370 $ (223 ) $ 147 AFG’s net deferred tax asset at December 31, 2018 and 2017 is included in other assets in AFG’s Balance Sheet. The increase in AFG’s net deferred tax asset at December 31, 2018 compared to December 31, 2017 reflects significantly lower pretax unrealized gains on securities. 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 $93 million against these deferred tax assets at December 31, 2018 . 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 $23 million valuation allowance related to 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. Approximately $19 million of AFG’s SRLY NOLs expired unutilized at December 31, 2018 . Since AFG maintains a full valuation allowance against its SRLY NOLs, the expiration of these loss carryforwards was offset by corresponding reduction in the valuation allowance and had no overall impact on AFG’s income tax expense or results of operations. 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 2017, this uncertainty was resolved, resulting in total tax payments of less than $1 million . A progression of the liability for uncertain tax positions, excluding interest and penalties, follows (in millions): 2018 2017 2016 Balance at January 1 $ — $ 1 $ 1 Additions for tax positions of prior years — — — Reductions for tax positions of prior years — — — Additions for tax positions of current year — — — Settlements — (1 ) — Balance at December 31 $ — $ — $ 1 The total unrecognized tax benefits and related interest and penalties that, if recognized, would impact the effective tax rate is less than $1 million at December 31, 2018 and December 31, 2017 . AFG’s provision for income taxes in 2018 , 2017 and 2016 included interest expense related to unrecognized tax benefits of less than $1 million in each year (net of federal benefit or expense). There was no liability for interest related to unrecognized tax benefits at December 31, 2018 . AFG’s liability for interest related to unrecognized tax benefits was less than $1 million at December 31, 2017 (net of federal benefit). AFG’s provision for income taxes in 2018 , 2017 and 2016 included penalties of less than $1 million in each year. AFG’s liability for penalties related to unrecognized tax benefits was less than $1 million at December 31, 2018 and December 31, 2017 . Cash payments for income taxes, net of refunds, were $156 million , $194 million and $308 million for 2018 , 2017 and 2016 , respectively. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
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 2018. The review resulted in special A&E charges of $18 million for the property and casualty group and $9 million for the former railroad and manufacturing operations. AFG completed a comprehensive external study of its A&E exposures in the third quarter of 2017 with the aid of specialty actuarial, engineering and consulting firms and outside counsel. The study resulted in special A&E charges of $89 million for the property and casualty group and $24 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 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. The property and casualty group’s liability for A&E reserves was $524 million at December 31, 2018 ; related recoverables from reinsurers (net of allowances for doubtful accounts) at that date were $129 million . At December 31, 2018 , American Premier and its subsidiaries had liabilities for environmental and personal injury claims and other contingencies aggregating $83 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, 2018 , GAFRI had a liability of $8 million for environmental costs and certain other matters associated with the sales of its former manufacturing operations. In December 2015, AFG completed the sale of substantially all of its run-off long-term care insurance business to HC2 Holdings, Inc. (“HC2”). 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 expiring in 2020. While management believes AFG has recorded adequate reserves for the items discussed above, 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, 2018 | |
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, 2018 (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 2018 Revenues $ 1,619 $ 1,833 $ 2,008 $ 1,690 $ 7,150 Net earnings (losses), including noncontrolling interests 141 208 203 (35 ) 517 Net earnings (losses) attributable to shareholders 145 210 204 (29 ) 530 Earnings (losses) attributable to shareholders per Common Share: Basic $ 1.64 $ 2.36 $ 2.30 $ (0.33 ) $ 5.95 Diluted 1.60 2.31 2.26 (0.33 ) 5.85 Average number of Common Shares: Basic 88.6 89.0 89.1 89.3 89.0 Diluted 90.4 90.7 90.7 89.3 90.6 2017 Revenues $ 1,576 $ 1,646 $ 1,835 $ 1,808 $ 6,865 Net earnings, including noncontrolling interests 155 145 11 166 477 Net earnings attributable to shareholders 153 145 11 166 475 Earnings attributable to shareholders per Common Share: Basic $ 1.76 $ 1.64 $ 0.13 $ 1.88 $ 5.40 Diluted 1.72 1.61 0.13 1.84 5.28 Average number of Common Shares: Basic 87.2 87.8 88.1 88.2 87.8 Diluted 89.3 89.8 90.0 90.1 89.8 Pretax realized gains on subsidiaries and securities (including other-than-temporary impairments), favorable (adverse) prior year development of AFG’s liability for losses and loss adjustment expenses (“LAE”) and the impact of derivatives related to fixed-indexed and variable-indexed annuities (“FIAs”) were as follows (in millions): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Year Realized Gains (Losses) on Securities and Subsidiaries 2018 – change in fair value of equity securities $ (95 ) $ 23 $ 33 $ (223 ) $ (262 ) 2018 – other realized gains (losses) 2 8 1 (15 ) (4 ) 2017 3 8 (12 ) 6 5 Prior Year Development Favorable (Adverse) 2018 $ 56 $ 44 $ 31 $ 61 $ 192 2017 28 22 (52 ) 66 64 Impact of Derivatives related to FIAs Favorable (Adverse) 2018 $ 13 $ 3 $ (2 ) $ (47 ) $ (33 ) 2017 (2 ) (16 ) (4 ) (11 ) (33 ) As discussed in Note A — “ Accounting Policies — Investments ” and Note E — “ Investments ,” effective January 1, 2018, all equity securities other than those accounted for under the equity method are carried at fair value through net earnings. Realized gains (losses) on securities for the fourth quarter and full-year 2018 includes net holding losses on equity securities that were still owned at December 31, 2018 of $228 million and $279 million , respectively. Under the prior guidance, these holding losses would have been recorded in AOCI (with the exception of any impairment charge that may have been recorded). Prior year development in the third quarters of 2018 and 2017 includes pretax special charges of $18 million and $89 million , respectively, to strengthen property and casualty insurance A&E reserves. As a result of the Neon reinsurance to close agreement discussed in Note O — “ Insurance ,” Neon recorded $42 million in favorable development in the fourth quarter of 2017, of which $24 million related to its ongoing lines of business and $18 million related to its exited lines of business. FIAs provide policyholders with a crediting rate tied, in part, to the performance of an existing stock market or other financial index. AFG attempts to mitigate the risk in the index-based component of these products through the purchase and sale of call and put options on the appropriate index. AFG’s strategy is designed so that the change in the fair value of the call and put options 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 and put options are considered derivatives that must be marked-to-market through earnings each period. 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. In the table above, the impact of changes in the fair value of the derivatives related to FIAs is presented net of an estimate of the related acceleration/deceleration of the amortization of deferred policy acquisition costs and deferred sales inducements. The vast majority of AFG’s FIAs are indexed to the S&P 500, which decreased 14% in the fourth quarter of 2018. This poor stock market performance adversely impacted AFG’s earnings before income taxes from its annuity operations for the fourth quarter of 2018 beyond the impact on derivatives related to FIAs by $30 million , particularly related to FIAs with guaranteed withdrawal benefits. AFG recorded net charges as a result of updating (unlocking) actuarial assumptions underlying its annuity operations of $27 million in the second quarter of 2018, $4 million in the fourth quarter of 2018 and $3 million in the fourth quarter of 2017. AFG’s property and casualty operations recorded catastrophe losses totaling $103 million in 2018 (primarily from Hurricanes Florence and Michael and wildfires in California). Catastrophe losses for 2017 totaled $140 million , including $107 million in the third quarter (primarily from Hurricanes Harvey, Irma and Maria and earthquakes in Mexico). Results include pretax gains (included in other income) of $13 million from the sale of a hotel in the first quarter of 2017. Results for the third quarter of 2018 and 2017 include pretax special charges of $9 million and $24 million , respectively, to strengthen reserves for A&E exposures related to AFG’s former railroad and manufacturing operations. In 2017, AFG recorded pretax losses on the retirement of debt of $7 million in the second quarter, $4 million in the third quarter and $40 million in the fourth quarter. Net earnings in the fourth quarter of 2017 includes $56 million in tax benefits related to the Neon restructuring. See Note L — “ Income Taxes .” |
Insurance
Insurance | 12 Months Ended |
Dec. 31, 2018 | |
Insurance [Abstract] | |
Insurance | Insurance Cash and securities owned by U.S.-based insurance subsidiaries, having a carrying value of approximately $1.06 billion at December 31, 2018 , were on deposit as required by regulatory authorities. In addition, $118 million was on deposit in support of AFG’s underwriting activities at Lloyd’s. At December 31, 2018 , AFG and its subsidiaries had $296 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 insurance 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, 2018 and 2017 , 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 $13 million and $15 million at December 31, 2018 and 2017 , 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): 2018 2017 2016 Balance at beginning of period $ 9,678 $ 8,563 $ 8,127 Less reinsurance recoverables, net of allowance 2,957 2,302 2,201 Net liability at beginning of period 6,721 6,261 5,926 Provision for losses and LAE occurring in the current year 3,195 3,019 2,730 Net increase (decrease) in the provision for claims of prior years: Special A&E charges 18 89 36 Neon exited lines charge — (18 ) 57 Other (210 ) (135 ) (61 ) Total losses and LAE incurred 3,003 2,955 2,762 Payments for losses and LAE of: Current year (963 ) (942 ) (841 ) Prior years (1,639 ) (1,586 ) (1,512 ) Total payments (2,602 ) (2,528 ) (2,353 ) Reserves of businesses disposed (*) (319 ) — (40 ) Foreign currency translation and other (4 ) 33 (34 ) Net liability at end of period 6,799 6,721 6,261 Add back reinsurance recoverables, net of allowance 2,942 2,957 2,302 Gross unpaid losses and LAE included in the balance sheet $ 9,741 $ 9,678 $ 8,563 (*) Reflects the reinsurance to close transactions at Neon (discussed below). The net decrease in the provision for claims of prior years in 2018 reflects (i) lower than expected losses in the crop business and lower than expected claim severity at National Interstate (within the Property and transportation sub-segment), (ii) lower than anticipated claim severity in the workers’ compensation businesses, lower than expected emergence in assumed 2017 property catastrophe losses at Neon and lower than expected claim severity in the executive liability business (within the Specialty casualty sub-segment) and (iii) lower than expected claim frequency and severity in the surety business, lower than expected claim severity in the fidelity business and lower than expected claim frequency in run-off businesses (within the Specialty financial sub-segment). This favorable development was partially offset by (i) the $18 million special charge to increase asbestos and environmental reserves and (ii) higher than expected claim frequency and severity in the Singapore branch and aviation operations (within the Property and transportation sub-segment). The net decrease in the provision for claims of prior years in 2017 reflects (i) lower than expected losses in the crop and equine businesses and lower than expected claim severity in the property and inland marine and transportation businesses (all within the Property and transportation sub-segment), (ii) favorable reserve development of $18 million on Neon’s exited lines, as well as additional favorable development on ongoing lines of business within Neon, recorded in connection with the reinsurance to close agreement entered into in December 2017 for the 2015 and prior years of account, lower than anticipated claim severity in the workers’ compensation businesses and lower than expected losses in the executive liability business (all within the Specialty casualty sub-segment) and (iii) lower than anticipated claim severity in the fidelity business and lower than expected claim frequency and severity in the surety business (both within the Specialty financial sub-segment). This favorable development was partially offset by (i) the $89 million special charge to increase asbestos and environmental reserves, (ii) higher than expected claim frequency and severity in the ocean marine business (within the Property and transportation sub-segment), (iii) higher than anticipated claim severity in the targeted markets and general liability businesses and higher than anticipated severity in New York contractor claims (all within the Specialty casualty sub-segment) and (iv) a charge to adjust to the deferred gain on the retroactive reinsurance transaction entered into in connection with the sale of businesses in 1998 (included in Other specialty sub-segment). The net increase in the provision for claims of prior years in 2016 reflects (i) the $36 million special charge to increase asbestos and environmental reserves, (ii) reserve strengthening at National Interstate and higher than expected claim frequency in the ocean marine business (within the Property and transportation sub-segment), (iii) adverse reserve development at Neon, higher than anticipated severity in New York contractor claims, higher than anticipated claim frequency and severity in general liability insurance and higher than expected claim frequency and severity in the targeted markets business (within the Specialty casualty sub-segment) and (iv) 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. This adverse development was partially offset by (i) lower than expected losses in the crop business 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, lower than expected claim frequency and severity in the surety business and lower than anticipated claim frequency in the financial institutions business (within the Specialty financial sub-segment). In December 2017, the Neon Lloyd’s syndicate entered into a reinsurance to close transaction for the 2015 and prior years of account with StarStone Underwriting Limited, a subsidiary of Enstar Group Limited, which was effective as of December 31, 2017 and settled in early 2018. 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. This transaction provides Neon with finality on its legacy business. As a result of the reinsurance to close agreement, Neon was able to better estimate its ultimate liability for the 2015 and prior years of account as of December 31, 2017, resulting in favorable development of $42 million , of which $24 million related to its ongoing lines of business (included in Specialty casualty) and $18 million related to its exited lines of business (discussed below and included in Neon exited lines charge). In November 2016, the Neon Lloyd’s syndicate completed a similar reinsurance to close transaction with StarStone, which covered liabilities relating to the syndicate’s 2007 and prior years of account. That transaction also included a quota share of the Italian public hospital business written in Neon’s 2008 year of account and represented Neon’s complete exit from the Italian public hospital medical malpractice business. 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): 2018 Unpaid losses and allocated LAE, net of reinsurance: Specialty Property and transportation $ 1,117 Specialty casualty 3,884 Specialty financial 225 Other specialty 280 Total Specialty (excluding foreign reserves) 5,506 Other reserves Reserves for foreign operations: Neon Lloyd’s business 265 Other subsidiaries 268 A&E reserves 395 Unallocated LAE 335 Other 30 Total other reserves 1,293 Total reserves, net of reinsurance 6,799 Add back reinsurance recoverables, net of allowance 2,942 Gross unpaid losses and LAE included in the balance sheet $ 9,741 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, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 503 $ 487 $ 505 $ 498 $ 494 $ 494 $ 491 $ 491 $ 491 $ 490 $ 2 138,248 2010 680 640 646 654 656 657 661 659 657 3 138,235 2011 816 803 819 833 844 856 853 850 6 139,345 2012 875 866 880 892 905 900 897 13 145,636 2013 894 881 884 890 890 890 18 141,293 2014 856 842 831 834 831 25 136,259 2015 831 794 789 789 36 134,484 2016 762 730 733 74 122,623 2017 904 868 128 140,963 2018 952 277 119,817 Total $ 7,957 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 219 $ 333 $ 397 $ 440 $ 462 $ 476 $ 480 $ 481 $ 484 $ 485 99.0 % 2010 316 487 536 597 627 638 643 648 650 98.9 % 2011 367 670 732 777 810 828 836 839 98.7 % 2012 574 715 780 826 852 866 892 99.4 % 2013 440 710 769 814 843 859 96.5 % 2014 332 638 702 756 784 94.3 % 2015 361 587 675 717 90.9 % 2016 296 528 590 80.5 % 2017 383 648 74.7 % 2018 399 41.9 % Total $ 6,863 Unpaid losses and LAE — years 2009 through 2018 1,094 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 23 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 1,117 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 46.2 % 28.7 % 8.6 % 6.5 % 3.7 % 2.0 % 1.4 % 0.4 % 0.5 % 0.2 % Cumulative 46.2 % 74.9 % 83.5 % 90.0 % 93.7 % 95.7 % 97.1 % 97.5 % 98.0 % 98.2 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). Specialty casualty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 888 $ 887 $ 864 $ 844 $ 833 $ 828 $ 829 $ 824 $ 820 $ 811 $ 34 56,985 2010 870 886 887 865 879 868 867 864 853 47 56,411 2011 847 845 833 842 827 822 819 811 52 53,385 2012 890 883 876 876 872 867 838 64 51,885 2013 956 938 933 928 933 913 99 51,620 2014 1,023 994 994 992 966 139 54,494 2015 1,068 1,033 1,031 1,030 185 55,468 2016 1,115 1,108 1,097 313 53,038 2017 1,196 1,200 539 52,658 2018 1,257 705 48,996 Total $ 9,776 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 170 $ 381 $ 510 $ 591 $ 653 $ 691 $ 715 $ 731 $ 740 $ 748 92.2 % 2010 191 411 559 644 699 735 756 770 782 91.7 % 2011 172 380 517 606 655 687 707 725 89.4 % 2012 171 378 508 611 674 713 735 87.7 % 2013 180 388 545 656 717 754 82.6 % 2014 187 406 565 668 741 76.7 % 2015 176 406 569 692 67.2 % 2016 184 411 571 52.1 % 2017 196 414 34.5 % 2018 207 16.5 % Total $ 6,369 Unpaid losses and LAE — years 2009 through 2018 3,407 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 477 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 3,884 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 19.1 % 23.2 % 16.2 % 11.1 % 7.0 % 4.3 % 2.6 % 1.9 % 1.3 % 1.0 % Cumulative 19.1 % 42.3 % 58.5 % 69.6 % 76.6 % 80.9 % 83.5 % 85.4 % 86.7 % 87.7 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). Specialty financial (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 192 $ 192 $ 186 $ 184 $ 188 $ 186 $ 187 $ 186 $ 185 $ 186 $ 1 27,431 2010 138 145 132 132 135 133 130 127 126 1 21,922 2011 138 157 155 153 147 144 143 139 6 16,368 2012 163 163 151 139 137 135 132 6 21,064 2013 140 145 137 131 127 126 9 28,449 2014 146 157 156 153 147 9 29,411 2015 156 160 158 153 16 37,483 2016 179 184 187 24 44,820 2017 212 215 34 46,921 2018 212 79 36,606 Total $ 1,623 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 112 $ 145 $ 157 $ 166 $ 171 $ 181 $ 185 $ 186 $ 186 $ 185 99.5 % 2010 61 93 104 122 132 130 128 126 126 100.0 % 2011 58 111 115 123 130 131 131 132 95.0 % 2012 71 104 109 117 121 126 128 97.0 % 2013 70 100 107 113 117 117 92.9 % 2014 62 109 125 128 137 93.2 % 2015 72 110 129 133 86.9 % 2016 88 141 158 84.5 % 2017 120 169 78.6 % 2018 112 52.8 % Total $ 1,397 Unpaid losses and LAE — years 2009 through 2018 226 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) (1 ) Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 225 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 50.5 % 26.4 % 7.5 % 5.8 % 4.7 % 1.7 % 0.5 % (0.1 %) — % (0.5 %) Cumulative 50.5 % 76.9 % 84.4 % 90.2 % 94.9 % 96.6 % 97.1 % 97.0 % 97.0 % 96.5 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). Other specialty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims (a) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 41 $ 41 $ 41 $ 40 $ 37 $ 37 $ 36 $ 38 $ 33 $ 32 $ 6 — 2010 36 39 40 39 40 40 40 40 40 3 — 2011 39 43 42 43 43 44 44 43 3 — 2012 42 40 39 40 41 39 39 6 — 2013 46 47 46 47 50 53 2 — 2014 58 57 59 59 60 13 — 2015 59 60 63 66 8 — 2016 61 61 65 21 — 2017 63 65 36 — 2018 86 62 — Total $ 549 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (b) 2009 $ 8 $ 12 $ 15 $ 19 $ 22 $ 22 $ 24 $ 26 $ 25 $ 27 84.4 % 2010 8 14 21 24 27 33 35 36 37 92.5 % 2011 12 20 25 28 34 36 37 38 88.4 % 2012 8 17 21 25 28 30 30 76.9 % 2013 7 16 22 34 37 44 83.0 % 2014 13 21 30 36 43 71.7 % 2015 10 26 31 50 75.8 % 2016 9 19 31 47.7 % 2017 10 19 29.2 % 2018 12 14.0 % Total $ 331 Unpaid losses and LAE — years 2009 through 2018 218 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 62 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 280 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 18.7 % 17.0 % 12.6 % 14.1 % 9.3 % 7.6 % 3.4 % 3.7 % (0.3 %) 6.3 % Cumulative 18.7 % 35.7 % 48.3 % 62.4 % 71.7 % 79.3 % 82.7 % 86.4 % 86.1 % 92.4 % (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, 2018 ). Total Specialty Group (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 1,624 $ 1,607 $ 1,596 $ 1,566 $ 1,552 $ 1,545 $ 1,543 $ 1,539 $ 1,529 $ 1,519 $ 43 222,664 2010 1,724 1,710 1,705 1,690 1,710 1,698 1,698 1,690 1,676 54 216,568 2011 1,840 1,848 1,849 1,871 1,861 1,866 1,859 1,843 67 209,098 2012 1,970 1,952 1,946 1,947 1,955 1,941 1,906 89 218,585 2013 2,036 2,011 2,000 1,996 2,000 1,982 128 221,362 2014 2,083 2,050 2,040 2,038 2,004 186 220,164 2015 2,114 2,047 2,041 2,038 245 227,435 2016 2,117 2,083 2,082 432 220,481 2017 2,375 2,348 737 240,542 2018 2,507 1,123 205,419 Total $ 19,905 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 509 $ 871 $ 1,079 $ 1,216 $ 1,308 $ 1,370 $ 1,404 $ 1,424 $ 1,435 $ 1,445 95.1 % 2010 576 1,005 1,220 1,387 1,485 1,536 1,562 1,580 1,595 95.2 % 2011 609 1,181 1,389 1,534 1,629 1,682 1,711 1,734 94.1 % 2012 824 1,214 1,418 1,579 1,675 1,735 1,785 93.7 % 2013 697 1,214 1,443 1,617 1,714 1,774 89.5 % 2014 594 1,174 1,422 1,588 1,705 85.1 % 2015 619 1,129 1,404 1,592 78.1 % 2016 577 1,099 1,350 64.8 % 2017 709 1,250 53.2 % 2018 730 29.1 % Total $ 14,960 Unpaid losses and LAE — years 2009 through 2018 4,945 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 561 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 5,506 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 32.6 % 25.5 % 12.2 % 8.8 % 5.5 % 3.2 % 2.0 % 1.2 % 0.8 % 0.7 % Cumulative 32.6 % 58.1 % 70.3 % 79.1 % 84.6 % 87.8 % 89.8 % 91.0 % 91.8 % 92.5 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). 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 $45 million at December 31, 2018 and $39 million at December 31, 2017 , 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 $47 million investment in FHLB capital stock at December 31, 2018 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 the fourth quarter of 2018, GALIC refinanced the terms on a $40 million advance to extend the maturity and the FHLB advanced GALIC $225 million , increasing the total amount advanced to $1.10 billion (included in annuity benefits accumulated) at December 31, 2018. In 2017, GALIC refinanced the terms on advances totaling $831 million , which lowered the weighted average spread over LIBOR. Interest rates under the various funding agreements on the advances range from 0.15% to 0.24% over LIBOR (average rate of 2.68% at December 31, 2018 ). While these advances must be repaid between 2019 and 2021 ( $445 million in 2019, $40 million in 2020 and $611 million in 2021), GALIC has the option to prepay all or a portion of the advances. GALIC has invested the proceeds from the advances in fixed maturity securities with similar expected lives as the advances for the purpose of earning a spread over the interest payments due to the FHLB. The advances on these agreements are collateralized by fixed maturity investments, which have a total fair value of $1.28 billion (included in available for sale fixed maturity securities) at December 31, 2018 . Interest credited on the funding agreements, which is included in annuity benefits, was $20 million in 2018 , $14 million in 2017 and $8 million in 2016 . 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 2018 2017 2016 2018 2017 Property and casualty companies $ 546 $ 484 $ 461 $ 2,867 $ 2,729 Life insurance companies 802 286 167 2,701 2,132 In the fourth quarter of 2018, GALIC, AFG’s primary annuity subsidiary, entered into a reinsurance treaty with Hannover Life Reassurance Company of America that transfers the risk of certain surrender activity in GALIC’s fixed-indexed annuity business. This treaty meets the statutory risk transfer rules and resulted in a $510 million increase in statutory surplus (through an after-tax reserve credit), which is reflected in the life insurance companies capital and surplus in the table above. Under GAAP, this transaction does not meet the GAAP insurance risk transfer criteria and did not have a material impact on AFG’s financial statements. 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, 2018 and 2017 , 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, 2018 or 2017 . 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 2019 from its insurance subsidiaries without seeking regulatory approval is $1.30 billion . Additional amounts of dividends require regulatory approval. Holding Company Dividends AFG declared and paid common stock dividends to shareholders totaling $397 million , $421 million and $187 million in 2018 , 2017 and 2016 , respectively. Currently, there are no regulatory restrictions on AFG’s retained earnings or net earnings that materially impact its ability to pay dividends. Based on shareholders’ equity at December 31, 2018 , AFG could pay dividends of nearly $2 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. However, AFG remains liable to its insureds regardless of whether a reinsurer is able to meet its obligations. 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. 2018 2017 2016 Direct premiums written $ 6,626 $ 6,310 $ 5,858 Reinsurance assumed 214 192 123 Reinsurance ceded (1,817 ) (1,751 ) (1,595 ) Net written premiums $ 5,023 $ 4,751 $ 4,386 Direct premiums earned $ 6,472 $ 6,112 $ 5,745 Reinsurance assumed 204 157 118 Reinsurance ceded (1,811 ) (1,690 ) (1,535 ) Net earned premiums $ 4,865 $ 4,579 $ 4,328 Reinsurance recoveries $ 1,249 $ 1,379 $ 810 In June 2017, AFG’s property and casualty insurance subsidiaries entered into a reinsurance agreement to obtain supplemental catastrophe protection through a catastrophe bond structure with Riverfront Re Ltd. (“Riverfront”). The reinsurance agreement provides supplemental reinsurance coverage up to 95% of $200 million (fully collateralized) for catastrophe losses in excess of $104 million (per occurrence and annual aggregate) occurring between June 1, 2017 and December 31, 2020. In connection with the reinsurance agreement, Riverfront issued notes to unrelated investors for the full amount of coverage provided under the reinsurance agreement. Through December 31, 2018 , AFG’s incurred catastrophe losses have not reached the level of attachment for the catastrophe bond structure. Riverfront is a variable interest entity in which AFG does not have a variable interest because the variability in Riverfront’s results will 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 reinsuranc |
Additional Information
Additional Information | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Information | Additional Information Allowance for Uncollectible Reinsurance AFG’s aggregate allowance for uncollectible reinsurance recoverables was $18 million at December 31, 2018 and $20 million at December 31, 2017 . AFG reviews the allowance quarterly and adjusts it as necessary to reflect changes in estimates of uncollectible balances. AFG recorded net expense reductions against the allowance of $2 million in 2018 and less than $1 million in both 2017 and 2016. In 2017, the allowance was reduced by reinsurance recoverable write-offs of $2 million . Operating Leases Total rental expense for various leases of office space and equipment was $70 million in 2018 , $69 million in 2017 and $67 million in 2016 . 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, 2018 , were as follows: 2019 – $65 million ; 2020 – $57 million ; 2021 – $50 million ; 2022 – $40 million ; 2023 – $35 million ; and $79 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, 2018 , AFG and its subsidiaries had commitments to fund credit facilities and contribute capital to limited partnerships and limited liability corporations of approximately $949 million . Benefit Plans AFG expensed approximately $37 million in 2018 , $45 million in 2017 and $43 million in 2016 for its retirement and employee savings plans. |
Condensed Financial Information
Condensed Financial Information of Parent Company | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information 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, 2018 2017 Assets: Cash and cash equivalents $ 158 $ 299 Investment in securities 65 70 Investment in subsidiaries (a) 6,155 6,310 Other investments 2 2 Other assets 68 141 Total assets $ 6,448 $ 6,822 Liabilities and Equity: Long-term debt $ 1,302 $ 1,301 Other liabilities 176 191 Shareholders’ equity 4,970 5,330 Total liabilities and equity $ 6,448 $ 6,822 Condensed Statement of Earnings Year ended December 31, 2018 2017 2016 Revenues: Dividends from subsidiaries $ 261 $ 681 $ 643 Equity in undistributed earnings of subsidiaries 529 264 286 Investment and other income 2 13 7 Total revenues 792 958 936 Costs and Expenses: Interest charges on intercompany borrowings 8 9 9 Interest charges on other borrowings 62 85 77 Other expenses 70 142 82 Total costs and expenses 140 236 168 Earnings before income taxes 652 722 768 Provision for income taxes 122 247 119 Net Earnings Attributable to Shareholders $ 530 $ 475 $ 649 Condensed Statement of Comprehensive Income Net earnings attributable to shareholders $ 530 $ 475 $ 649 Other comprehensive income (loss), net of tax (544 ) 296 62 Total comprehensive income (loss), net of tax $ (14 ) $ 771 $ 711 ________________________ (a) Investment in subsidiaries includes intercompany receivables and payables. Condensed Statement of Cash Flows Year ended December 31, 2018 2017 2016 Operating Activities: Net earnings attributable to shareholders $ 530 $ 475 $ 649 Adjustments: Equity in net earnings of subsidiaries (637 ) (575 ) (638 ) Dividends from subsidiaries 238 580 611 Other operating activities, net 84 98 (67 ) Net cash provided by operating activities 215 578 555 Investing Activities: Capital contributions to subsidiaries (11 ) (93 ) (560 ) Returns of capital from subsidiaries 23 30 — Purchases of investments, property and equipment (5 ) (2 ) (1 ) Proceeds from maturities and redemptions of investments 3 2 1 Net cash provided by (used in) investing activities 10 (63 ) (560 ) Financing Activities: Additional long-term borrowings — 712 296 Reductions of long-term debt — (745 ) — Issuances of Common Stock 34 37 35 Repurchases of Common Stock (6 ) — (133 ) Cash dividends paid on Common Stock (394 ) (417 ) (185 ) Net cash provided by (used in) financing activities (366 ) (413 ) 13 Net Change in Cash and Cash Equivalents (141 ) 102 8 Cash and cash equivalents at beginning of year 299 197 189 Cash and cash equivalents at end of year $ 158 $ 299 $ 197 |
Supplementary Insurance Informa
Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information | AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES SCHEDULE III — SUPPLEMENTARY INSURANCE INFORMATION THREE YEARS ENDED DECEMBER 31, 2018 (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) 2018 Property and casualty insurance $ 299 $ 9,741 $ 2,595 $ 4,865 $ 438 $ 3,003 $ 644 $ 957 $ 5,023 Annuity 1,360 36,616 — — 1,638 998 212 174 — Other 23 635 — 24 18 40 4 479 3 Total $ 1,682 $ 46,992 $ 2,595 $ 4,889 $ 2,094 $ 4,041 $ 860 $ 1,610 $ 5,026 2017 Property and casualty insurance $ 270 $ 9,678 $ 2,410 $ 4,579 $ 362 $ 2,955 $ 556 $ 867 $ 4,751 Annuity 920 33,316 — — 1,458 892 130 159 — Other 26 658 — 22 11 26 4 552 3 Total $ 1,216 $ 43,652 $ 2,410 $ 4,601 $ 1,831 $ 3,873 $ 690 $ 1,578 $ 4,754 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 — Other 20 691 — 24 (10 ) 33 4 431 3 Total $ 1,239 $ 39,161 $ 2,171 $ 4,352 $ 1,696 $ 3,595 $ 673 $ 1,443 $ 4,389 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 , 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. AFG did not have any significant nonrecurring fair value measurements of nonfinancial assets and liabilities in 2018 or 2017 . |
Investments | Investments On January 1, 2018, AFG adopted Accounting Standards Update (“ASU”) 2016-01, which requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At December 31, 2017, AFG had $1.60 billion in equity securities classified as “available for sale” under the prior guidance with holding gains and losses included in accumulated other comprehensive income (“AOCI”) instead of net earnings. At the date of adoption, the $221 million net unrealized gain on equity securities included in AOCI was reclassified to retained earnings as the cumulative effect of an accounting change. The cumulative effect of the accounting change also includes the net unrealized gain on AFG’s small number of limited partnerships and similar investments carried at cost under the prior guidance that are carried at fair value through net earnings under the new guidance ( $4 million net of tax at the date of adoption). Holding gains and losses on equity securities carried at fair value under ASU 2016-01 are generally recorded in realized gains (losses) on securities. However, prior to the adoption of the new guidance, AFG classified a small portion of its equity securities as “trading” and reported those investments at fair value with holding gains and losses recognized in net investment income. These investments consisted primarily of equity securities held to offset the impact of changes in the stock market on employee benefit plans that are impacted by stock market performance and totaled $62 million at December 31, 2017. Following the adoption of the new guidance, AFG continues to record holding gains and losses on these securities, as well as its small portfolio of limited partnerships and similar investments carried at fair value under the new guidance and certain other securities classified at purchase as “fair value through net investment income” in net investment income. Under the new guidance, AFG recorded holding losses of $257 million on equity securities in net earnings during 2018 on securities that were still owned at December 31, 2018 . Under the prior guidance, these holding losses would have been recorded in AOCI (with the exception of any impairment charge that may have been recorded). Because almost all of the equity securities impacted by the new guidance were carried at fair value through AOCI under the prior guidance, the adoption of the new guidance did not have a material impact on AFG’s financial position. Fixed maturity securities classified as “available for sale” are reported at fair value with unrealized gains and losses included in AOCI in AFG’s Balance Sheet. Fixed maturity 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. Premiums and discounts on fixed maturity securities are amortized using the effective 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. Limited partnerships and similar investments are generally accounted for using the equity method of accounting. Under the equity method, AFG records its share of the earnings or losses of the investee based on when they are reported by the investee in its financial statements rather than in the period in which the investee declares a dividend. AFG’s share of the earnings or losses from equity method investments is generally recorded on a quarter lag due to the timing of the receipt of the investee’s financial statements. AFG’s equity in the earnings (losses) of limited partnerships and similar investments is included in net investment income. Gains or losses on fixed-maturity 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 and principal-only MBS) and (ii) the equity-based component of certain annuity products (included in annuity benefits accumulated) and related equity index 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. |
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 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. 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. 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. AFG has 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 are measured by the change in the fair value of AFG’s investments in the CLOs and management fees earned. |
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 annuity benefits expense and decreases for annuity policy charges are recorded in other income. For traditional fixed annuities, the liability for annuity benefits accumulated represents the account value that had accrued to the benefit of the policyholder as of the balance sheet date. For fixed-indexed annuities, the liability for annuity benefits accumulated includes an embedded derivative that represents the estimated fair value of the index participation with the remaining component representing the discounted value of the guaranteed minimum contract benefits. 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 (losses) 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 presented in its Balance Sheet as a direct reduction in the carrying value of long-term debt and are amortized over the life of the related debt using the effective interest method as a component of interest expense. Debt issuance costs related to AFG’s revolving credit facilities are included in other assets in AFG’s Balance Sheet. |
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 represent 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. Noncontrolling interests that are redeemable at the option of the holder are presented separately in the mezzanine section of the balance sheet (between liabilities and equity). |
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. The effect of a change in tax rates on deferred tax assets and liabilities is recorded in net earnings in the period that includes the enactment date. This includes the impact on deferred tax assets or liabilities established through AOCI, which results in an amount equal to the difference between the deferred tax at the historical corporate rate and the newly enacted rate stranded in AOCI. As permitted under guidance adopted effective December 31, 2017 (ASU 2018-02), AFG reclassified the $145 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings at December 31, 2017. See Note L — “ Income Taxes ” for further information. |
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. |
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: 2018 – 1.6 million , 2017 – 2.0 million and 2016 – 1.6 million . AFG’s weighted average diluted shares outstanding excludes the following anti-dilutive potential common shares related to stock compensation plans: 2018 and 2017 – none and 2016 – 0.4 million . Adjustments to net earnings attributable to shareholders in the calculation of diluted earnings per share were nominal in the 2018 , 2017 and 2016 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, property and equipment and businesses. “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. |
New Accounting Pronouncements | Revenue Recognition Guidance Effective in 2018 On January 1, 2018, AFG adopted ASU 2014-09, which provides guidance on recognizing revenue when (or as) performance obligations under the contract are satisfied. The new guidance also updates the accounting for certain costs associated with obtaining and fulfilling contracts with customers and requires certain new disclosures. Because revenue recognition for insurance contracts and financial instruments (AFG’s primary sources of revenue) were excluded from the scope of the new guidance, the adoption of ASU 2014-09 did not have a material impact on AFG’s results of operations and financial position. Lease Accounting Guidance Effective in 2019 In February 2016, the FASB issued ASU 2016-02, which requires entities that lease assets for terms longer than one year to recognize the assets and liabilities for the rights and obligations created by those leases on the balance sheet based on the present value of contractual cash flows. Qualitative and quantitative disclosures of the amount, timing and uncertainty of cash flows arising from leases will also be required. AFG will adopt the updated guidance effective January 1, 2019. The new guidance will not have a material effect on AFG’s results of operations because it does not change the manner in which lease-related expenses are recognized in the statement of earnings. In addition, the new guidance will not have a material effect on AFG’s financial position as recognizing the assets and liabilities related to operating leases upon adoption of the new guidance in January 2019 will increase AFG’s consolidated assets and consolidated liabilities by less than one-half of 1% as compared to AFG’s Balance Sheet at December 31, 2018. |
Acquisitions and Sale of Busi_2
Acquisitions and Sale of Businesses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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): November 30, Total purchase price $ 30 Tangible assets acquired 28 Liabilities acquired 26 Net tangible assets acquired, at fair value 2 Excess purchase price over net tangible assets acquired $ 28 Allocation of excess purchase price: Intangible assets acquired (*) $ 25 Deferred tax on intangible assets acquired (*) (5 ) Goodwill 8 $ 28 (*) Included in Other assets in AFG’s Balance Sheet. |
Segments of Operations (Tables)
Segments of Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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. 2018 2017 2016 Assets Property and casualty insurance (a) $ 17,681 $ 17,171 $ 15,574 Annuity 39,952 37,179 33,409 Other 5,823 6,308 6,089 Total assets $ 63,456 $ 60,658 $ 55,072 Revenues Property and casualty insurance: Premiums earned: Specialty Property and transportation $ 1,729 $ 1,711 $ 1,662 Specialty casualty 2,403 2,186 2,006 Specialty financial 598 576 557 Other specialty 135 106 103 Total premiums earned 4,865 4,579 4,328 Net investment income 438 362 350 Other income (b) 10 28 51 Total property and casualty insurance 5,313 4,969 4,729 Annuity: Net investment income 1,638 1,458 1,356 Other income 107 103 103 Total annuity 1,745 1,561 1,459 Other 358 330 289 Total revenues before realized gains (losses) 7,416 6,860 6,477 Realized gains (losses) on securities (266 ) 5 19 Realized gains on subsidiaries — — 2 Total revenues $ 7,150 $ 6,865 $ 6,498 (a) Not allocable to sub-segments. (b) Includes income of $32 million (before noncontrolling interest) from the sale of an apartment property in 2016. 2018 2017 2016 Earnings Before Income Taxes Property and casualty insurance: Underwriting: Specialty Property and transportation $ 120 $ 154 $ 166 Specialty casualty 141 104 78 Specialty financial 66 61 84 Other specialty (5 ) (2 ) 9 Other lines (a) (20 ) (75 ) (101 ) Total underwriting 302 242 236 Investment and other income, net (b) 407 349 341 Total property and casualty insurance 709 591 577 Annuity 361 380 368 Other (c) (165 ) (252 ) (179 ) Total earnings before realized gains (losses) and income taxes 905 719 766 Realized gains (losses) on securities (266 ) 5 19 Realized gains on subsidiaries — — 2 Total earnings before income taxes $ 639 $ 724 $ 787 (a) Includes special charges to increase asbestos and environmental (“A&E”) reserves of $18 million , $89 million and $36 million in 2018 , 2017 and 2016 , respectively. Also includes $18 million in favorable development related to the Neon exited lines recorded in connection with a reinsurance to close transaction in 2017 and a charge of $65 million related to Neon exited lines in 2016. (b) Includes income of $32 million (before noncontrolling interest) from the sale of an apartment property in 2016. (c) Primarily holding company interest and expenses, including losses on retirement of debt of $51 million in 2017 and special charges to increase A&E reserves related to AFG’s former railroad and manufacturing operations ( $9 million in 2018 , $24 million in 2017 and $5 million in 2016 ). |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 Assets: Available for sale (“AFS”) fixed maturities: U.S. Government and government agencies $ 141 $ 83 $ 9 $ 233 States, municipalities and political subdivisions — 6,880 59 6,939 Foreign government — 142 — 142 Residential MBS — 2,547 197 2,744 Commercial MBS — 864 56 920 Asset-backed securities — 8,964 847 9,811 Corporate and other 28 19,184 1,996 21,208 Total AFS fixed maturities 169 38,664 3,164 41,997 Trading fixed maturities 9 96 — 105 Equity securities 1,410 68 336 1,814 Equity index call options — 184 — 184 Assets of managed investment entities (“MIE”) 203 4,476 21 4,700 Variable annuity assets (separate accounts) (*) — 557 — 557 Other assets — derivatives — 16 — 16 Total assets accounted for at fair value $ 1,791 $ 44,061 $ 3,521 $ 49,373 Liabilities: Liabilities of managed investment entities $ 195 $ 4,297 $ 20 $ 4,512 Derivatives in annuity benefits accumulated — — 2,720 2,720 Other liabilities — derivatives — 49 — 49 Total liabilities accounted for at fair value $ 195 $ 4,346 $ 2,740 $ 7,281 December 31, 2017 Assets: Available for sale fixed maturities: U.S. Government and government agencies $ 122 $ 112 $ 8 $ 242 States, municipalities and political subdivisions — 6,975 148 7,123 Foreign government — 127 — 127 Residential MBS — 3,105 122 3,227 Commercial MBS — 926 36 962 Asset-backed securities — 7,218 744 7,962 Corporate and other 30 17,662 1,044 18,736 Total AFS fixed maturities 152 36,125 2,102 38,379 Trading fixed maturities 44 304 — 348 Equity securities 1,411 86 165 1,662 Equity index call options — 701 — 701 Assets of managed investment entities 307 4,572 23 4,902 Variable annuity assets (separate accounts) (*) — 644 — 644 Other assets — derivatives — — — — Total assets accounted for at fair value $ 1,914 $ 42,432 $ 2,290 $ 46,636 Liabilities: Liabilities of managed investment entities $ 293 $ 4,372 $ 22 $ 4,687 Derivatives in annuity benefits accumulated — — 2,542 2,542 Other liabilities — derivatives — 35 — 35 Total liabilities accounted for at fair value $ 293 $ 4,407 $ 2,564 $ 7,264 (*) 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, 2018 , 2017 and 2016 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 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 Perpetual preferred stocks 2 4 6 $ 5 $ 23 $ 35 2 2 7 $ 6 $ 11 $ 28 Common stocks — — 3 — — — — 1 2 — — — |
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 Level 3 liabilities. See Note F — “ Derivatives .” Unobservable Input Range Adjustment for insurance subsidiary’s credit risk 0.6% – 2.1% over the risk free rate Risk margin for uncertainty in cash flows 0.73% reduction in the discount rate Surrenders 3% – 23% of indexed account value Partial surrenders 2% – 9% of indexed account value Annuitizations 0.1% – 1% of indexed account value Deaths 1.5% – 9.5% of indexed account value Budgeted option costs 2.6% – 3.6% of indexed account value |
Changes in asset balances of Level 3 financial assets | Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2018 , 2017 and 2016 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs and $29 million of equity securities transferred into Level 3 in the first quarter of 2018 related to a small number of limited partnerships and similar investments carried at cost under the prior guidance that are carried at fair value through net earnings under new guidance adopted on January 1, 2018, as discussed in Note A — “ Accounting Policies — Investments .” 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, 2017 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2018 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ 1 $ — $ 9 State and municipal 148 — (2 ) — (3 ) — (84 ) 59 Residential MBS 122 (9 ) (4 ) — (21 ) 130 (21 ) 197 Commercial MBS 36 — — 20 — — — 56 Asset-backed securities 744 (3 ) (15 ) 426 (248 ) 82 (139 ) 847 Corporate and other 1,044 (10 ) (18 ) 1,221 (204 ) 27 (64 ) 1,996 Total AFS fixed maturities 2,102 (22 ) (39 ) 1,667 (476 ) 240 (308 ) 3,164 Equity securities 165 9 — 155 (6 ) 30 (17 ) 336 Assets of MIE 23 (8 ) — 6 — — — 21 Total Level 3 assets $ 2,290 $ (21 ) $ (39 ) $ 1,828 $ (482 ) $ 270 $ (325 ) $ 3,521 Embedded derivatives (a) $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) Total Level 3 liabilities (b) $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) (a) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $44 million in 2018 . (b) As previously discussed, 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 Balance at December 31, 2016 Net Other Purchases Sales and Transfer Transfer Balance at December 31, 2017 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ — $ — $ 8 State and municipal 140 — 2 — (2 ) 10 (2 ) 148 Residential MBS 190 (4 ) 2 1 (40 ) 44 (71 ) 122 Commercial MBS 25 2 — 15 (10 ) 4 — 36 Asset-backed securities 484 — 1 410 (132 ) 202 (221 ) 744 Corporate and other 712 (5 ) 2 606 (237 ) 29 (63 ) 1,044 Total AFS fixed maturities 1,559 (7 ) 7 1,032 (421 ) 289 (357 ) 2,102 Equity securities 174 (21 ) 10 38 (16 ) — (20 ) 165 Assets of MIE 29 (11 ) — 9 — — (4 ) 23 Total Level 3 assets $ 1,762 $ (39 ) $ 17 $ 1,079 $ (437 ) $ 289 $ (381 ) $ 2,290 Embedded derivatives (a) $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) Total Level 3 liabilities (b) $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) (a) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $25 million in 2017 . (b) As previously discussed, 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 Balance at December 31, 2015 Net earnings 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 earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016 . (b) As previously discussed, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets. |
Changes in liability balances of Level 3 financial liabilities | Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2018 , 2017 and 2016 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs and $29 million of equity securities transferred into Level 3 in the first quarter of 2018 related to a small number of limited partnerships and similar investments carried at cost under the prior guidance that are carried at fair value through net earnings under new guidance adopted on January 1, 2018, as discussed in Note A — “ Accounting Policies — Investments .” 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, 2017 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2018 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ 1 $ — $ 9 State and municipal 148 — (2 ) — (3 ) — (84 ) 59 Residential MBS 122 (9 ) (4 ) — (21 ) 130 (21 ) 197 Commercial MBS 36 — — 20 — — — 56 Asset-backed securities 744 (3 ) (15 ) 426 (248 ) 82 (139 ) 847 Corporate and other 1,044 (10 ) (18 ) 1,221 (204 ) 27 (64 ) 1,996 Total AFS fixed maturities 2,102 (22 ) (39 ) 1,667 (476 ) 240 (308 ) 3,164 Equity securities 165 9 — 155 (6 ) 30 (17 ) 336 Assets of MIE 23 (8 ) — 6 — — — 21 Total Level 3 assets $ 2,290 $ (21 ) $ (39 ) $ 1,828 $ (482 ) $ 270 $ (325 ) $ 3,521 Embedded derivatives (a) $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) Total Level 3 liabilities (b) $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) (a) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $44 million in 2018 . (b) As previously discussed, 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 Balance at December 31, 2016 Net Other Purchases Sales and Transfer Transfer Balance at December 31, 2017 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ — $ — $ 8 State and municipal 140 — 2 — (2 ) 10 (2 ) 148 Residential MBS 190 (4 ) 2 1 (40 ) 44 (71 ) 122 Commercial MBS 25 2 — 15 (10 ) 4 — 36 Asset-backed securities 484 — 1 410 (132 ) 202 (221 ) 744 Corporate and other 712 (5 ) 2 606 (237 ) 29 (63 ) 1,044 Total AFS fixed maturities 1,559 (7 ) 7 1,032 (421 ) 289 (357 ) 2,102 Equity securities 174 (21 ) 10 38 (16 ) — (20 ) 165 Assets of MIE 29 (11 ) — 9 — — (4 ) 23 Total Level 3 assets $ 1,762 $ (39 ) $ 17 $ 1,079 $ (437 ) $ 289 $ (381 ) $ 2,290 Embedded derivatives (a) $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) Total Level 3 liabilities (b) $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) (a) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $25 million in 2017 . (b) As previously discussed, 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 Balance at December 31, 2015 Net earnings 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 earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016 . (b) As previously discussed, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets. |
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 2018 Financial assets: Cash and cash equivalents $ 1,515 $ 1,515 $ 1,515 $ — $ — Mortgage loans 1,068 1,056 — — 1,056 Policy loans 174 174 — — 174 Total financial assets not accounted for at fair value $ 2,757 $ 2,745 $ 1,515 $ — $ 1,230 Financial liabilities: Annuity benefits accumulated (*) $ 36,384 $ 34,765 $ — $ — $ 34,765 Long-term debt 1,302 1,231 — 1,228 3 Total financial liabilities not accounted for at fair value $ 37,686 $ 35,996 $ — $ 1,228 $ 34,768 2017 Financial assets: Cash and cash equivalents $ 2,338 $ 2,338 $ 2,338 $ — $ — Mortgage loans 1,125 1,119 — — 1,119 Policy loans 184 184 — — 184 Total financial assets not accounted for at fair value $ 3,647 $ 3,641 $ 2,338 $ — $ 1,303 Financial liabilities: Annuity benefits accumulated (*) $ 33,110 $ 32,461 $ — $ — $ 32,461 Long-term debt 1,301 1,354 — 1,351 3 Total financial liabilities not accounted for at fair value $ 34,411 $ 33,815 $ — $ 1,351 $ 32,464 (*) Excludes $232 million and $206 million of life contingent annuities in the payout phase at December 31, 2018 and 2017 , respectively. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Available for sale fixed maturities and equity securities | Available for sale fixed maturities at December 31 consisted of the following (in millions): 2018 2017 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 $ 235 $ 1 $ (3 ) $ (2 ) $ 233 $ 244 $ 1 $ (3 ) $ (2 ) $ 242 States, municipalities and political subdivisions 6,825 169 (55 ) 114 6,939 6,887 254 (18 ) 236 7,123 Foreign government 140 2 — 2 142 124 3 — 3 127 Residential MBS 2,476 277 (9 ) 268 2,744 2,884 349 (6 ) 343 3,227 Commercial MBS 905 17 (2 ) 15 920 927 36 (1 ) 35 962 Asset-backed securities 9,781 130 (100 ) 30 9,811 7,836 142 (16 ) 126 7,962 Corporate and other 21,475 167 (434 ) (267 ) 21,208 18,136 638 (38 ) 600 18,736 Total fixed maturities $ 41,837 $ 763 $ (603 ) $ 160 $ 41,997 $ 37,038 $ 1,423 $ (82 ) $ 1,341 $ 38,379 |
Equity securities reported at fair value | As discussed in Note A — “ Accounting Policies — Investments ,” AFG implemented new accounting guidance effective on January 1, 2018, which requires all equity securities previously classified as “available for sale” to be reported at fair value, with holding gains and losses recognized in net earnings. Equity securities reported at fair value consisted of the following at December 31, 2018 (in millions): Fair Value over (under) Actual Cost Fair Value Cost Common stocks $ 1,241 $ 1,148 $ (93 ) Perpetual preferred stocks 705 666 (39 ) Total equity securities carried at fair value $ 1,946 $ 1,814 $ (132 ) |
Available for sale securities in a continuous unrealized loss position | The following tables show gross unrealized losses (dollars in millions) on available for sale fixed maturities and equity securities by investment category and length of time that individual securities have been in a continuous unrealized loss position at the following balance sheet dates. 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 December 31, 2018 Fixed maturities: U.S. Government and government agencies $ — $ 41 100 % $ (3 ) $ 120 98 % States, municipalities and political subdivisions (23 ) 1,497 98 % (32 ) 902 97 % Foreign government — 18 100 % — 4 100 % Residential MBS (4 ) 279 99 % (5 ) 139 97 % Commercial MBS (1 ) 147 99 % (1 ) 30 97 % Asset-backed securities (77 ) 5,406 99 % (23 ) 629 96 % Corporate and other (306 ) 10,378 97 % (128 ) 2,078 94 % Total fixed maturities $ (411 ) $ 17,766 98 % $ (192 ) $ 3,902 95 % December 31, 2017 Fixed maturities: U.S. Government and government agencies $ — $ 55 100 % $ (3 ) $ 123 98 % States, municipalities and political subdivisions (8 ) 825 99 % (10 ) 431 98 % Foreign government — 4 100 % — — — % Residential MBS (1 ) 118 99 % (5 ) 118 96 % Commercial MBS (1 ) 67 99 % — — — % Asset-backed securities (7 ) 1,195 99 % (9 ) 299 97 % Corporate and other (20 ) 2,031 99 % (18 ) 603 97 % Total fixed maturities $ (37 ) $ 4,295 99 % $ (45 ) $ 1,574 97 % Equity securities: Common stocks $ (22 ) $ 117 84 % $ — $ — — % Perpetual preferred stocks — 41 100 % (1 ) 13 93 % Total equity securities $ (22 ) $ 158 88 % $ (1 ) $ 13 93 % |
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): 2018 2017 2016 Balance at January 1 $ 145 $ 153 $ 160 Additional credit impairments on: Previously impaired securities 1 1 2 Securities without prior impairments 1 3 1 Reductions due to sales or redemptions (5 ) (12 ) (10 ) Balance at December 31 $ 142 $ 145 $ 153 |
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, 2018 (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 $ 1,310 $ 1,318 3 % After one year through five years 8,521 8,554 20 % After five years through ten years 14,235 14,044 34 % After ten years 4,609 4,606 11 % 28,675 28,522 68 % ABS (average life of approximately 4.5 years) 9,781 9,811 23 % MBS (average life of approximately 4.5 years) 3,381 3,664 9 % Total $ 41,837 $ 41,997 100 % |
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 Net December 31, 2018 Net unrealized gain on: Fixed maturities — annuity segment (a) $ 101 $ (21 ) $ 80 Fixed maturities — all other 59 (13 ) 46 Total fixed maturities 160 (34 ) 126 Deferred policy acquisition costs — annuity segment (42 ) 9 (33 ) Annuity benefits accumulated (14 ) 3 (11 ) Unearned revenue 1 — 1 Total net unrealized gain on marketable securities $ 105 $ (22 ) $ 83 December 31, 2017 Net unrealized gain on: Fixed maturities — annuity segment (a) $ 1,082 $ (227 ) $ 855 Fixed maturities — all other 259 (55 ) 204 Total fixed maturities 1,341 (282 ) 1,059 Equity securities (b) 279 (58 ) 221 Total investments 1,620 (340 ) 1,280 Deferred policy acquisition costs — annuity segment (433 ) 91 (342 ) Annuity benefits accumulated (137 ) 29 (108 ) Unearned revenue 13 (3 ) 10 Total net unrealized gain on marketable securities $ 1,063 $ (223 ) $ 840 (a) Net unrealized gains on fixed maturity investments supporting AFG’s annuity benefits accumulated. (b) As discussed in Note A — “ Accounting Policies — Investments ,” effective January 1, 2018, all equity securities other than those accounted for under the equity method are carried at fair value through net earnings. |
Net investment income earned and investment expenses incurred | The following table shows (in millions) investment income earned and investment expenses incurred. 2018 2017 2016 Investment income: Fixed maturities $ 1,742 $ 1,607 $ 1,510 Equity securities: Dividends 79 73 77 Change in fair value (*) 22 6 4 Equity in earnings of partnerships and similar investments 161 64 44 Other 112 102 81 Gross investment income 2,116 1,852 1,716 Investment expenses (22 ) (21 ) (20 ) Net investment income $ 2,094 $ 1,831 $ 1,696 (*) As discussed in Note A — “ Accounting Policies — Investments ,” AFG adopted guidance in January 2018 that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. Although the change in the fair value of the majority of AFG’s equity securities is recorded in realized gains (losses) on securities, AFG records holding gains and losses in net investment income on equity securities classified as “trading” under the previous guidance and on a small portfolio of limited partnership and similar investments that do not qualify for the equity method of accounting. |
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) included in AOCI related to fixed maturity and equity security investments are summarized as follows (in millions): 2018 2017 Realized gains (losses) Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 6 $ (26 ) $ (20 ) $ (1,181 ) $ 17 $ (20 ) $ (3 ) $ 532 Equity securities (265 ) — (265 ) — 70 (64 ) 6 128 Mortgage loans and other investments 1 — 1 — (6 ) (4 ) (10 ) — Other (*) 11 7 18 502 (3 ) 15 12 (219 ) Total pretax (247 ) (19 ) (266 ) (679 ) 78 (73 ) 5 441 Tax effects: Reclassify impact of U.S. corporate tax rate change — — — — — — — 149 Other 52 4 56 143 (27 ) 25 (2 ) (154 ) Total tax effects 52 4 56 143 (27 ) 25 (2 ) (5 ) Net of tax $ (195 ) $ (15 ) $ (210 ) $ (536 ) $ 51 $ (48 ) $ 3 $ 436 2016 Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 36 $ (38 ) $ (2 ) $ 90 Equity securities 106 (93 ) 13 67 Other (*) (7 ) 15 8 (52 ) Total pretax 135 (116 ) 19 105 Tax effects (48 ) 41 (7 ) (37 ) Noncontrolling interests (2 ) 3 1 4 Net of tax and noncontrolling interests $ 85 $ (72 ) $ 13 $ 72 (*) Primarily adjustments to deferred policy acquisition costs and reserves related to the annuity business. |
Holding gains (losses) on equity securities still held | As discussed in Note A — “ Accounting Policies — Investments ,” effective January 1, 2018, all equity securities other than those accounted for under the equity method are carried at fair value through net earnings. AFG recorded net holding gains (losses) on equity securities during 2018 on securities that were still owned at December 31, 2018 as follows (in millions): 2018 Included in realized gains (losses) $ (279 ) Included in net investment income 22 $ (257 ) |
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 investment transactions consisted of the following (in millions): 2018 2017 2016 Fixed maturities: Gross gains $ 22 $ 43 $ 55 Gross losses (14 ) (20 ) (10 ) |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 December 31, 2017 Derivative Balance Sheet Line Asset Liability Asset Liability MBS with embedded derivatives Fixed maturities $ 109 $ — $ 105 $ — Public company warrants Equity securities — — 4 — Fixed-indexed and variable-indexed annuities (embedded derivative) Annuity benefits accumulated — 2,720 — 2,542 Equity index call options Equity index call options 184 — 701 — Equity index put options Other liabilities — 1 — — Reinsurance contract (embedded derivative) Other liabilities — 2 — 4 $ 293 $ 2,723 $ 810 $ 2,546 |
Summary of gain (loss) included in the Statement of Earnings for changes in the fair value of derivatives | The following table summarizes the gains (losses) included in AFG’s Statement of Earnings for changes in the fair value of derivatives that do not qualify for hedge accounting for 2018 , 2017 and 2016 (in millions): Derivative Statement of Earnings Line 2018 2017 2016 MBS with embedded derivatives Realized gains (losses) on securities $ (7 ) $ (6 ) $ (9 ) Public company warrants Realized gains (losses) on securities (3 ) — — Fixed-indexed and variable-indexed annuities (embedded derivative) (*) Annuity benefits 204 (589 ) (211 ) Equity index call options Annuity benefits (298 ) 494 141 Equity index put options Annuity benefits (1 ) — — Reinsurance contracts (embedded derivative) Net investment income 2 (2 ) (1 ) $ (103 ) $ (103 ) $ (80 ) (*) The change in fair value of the embedded derivative includes losses related to unlocking of actuarial assumptions of $44 million in 2018 , $25 million in 2017 and $17 million in 2016 . |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 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 Additions 588 225 4 — 229 — 229 817 Amortization: Periodic amortization (556 ) (161 ) (19 ) (8 ) (188 ) — (188 ) (744 ) Annuity unlocking — 34 6 1 41 — 41 41 Included in realized gains — 9 1 — 10 — 10 10 Foreign currency translation — — — — — — — — Other — — — 10 10 — 10 10 Change in unrealized — — — — — (157 ) (157 ) (157 ) Balance at December 31, 2017 270 1,217 102 49 1,368 (422 ) 946 1,216 Additions 675 263 2 — 265 — 265 940 Amortization: Periodic amortization (644 ) (238 ) (19 ) (7 ) (264 ) — (264 ) (908 ) Annuity unlocking — 29 — — 29 — 29 29 Included in realized gains — 14 1 — 15 — 15 15 Foreign currency translation (2 ) — — — — — — (2 ) Change in unrealized — — — — — 392 392 392 Balance at December 31, 2018 $ 299 $ 1,285 $ 86 $ 42 $ 1,413 $ (30 ) $ 1,383 $ 1,682 (*) Adjustments to DPAC related to net unrealized gains/losses on securities and cash flow hedges. |
Managed Investment Entities (Ta
Managed Investment Entities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 Investment in CLO tranches $ 188 $ 215 $ 216 Gains (losses) on change in fair value of assets/liabilities (a): Assets (189 ) (8 ) 131 Liabilities 168 20 (116 ) Management fees paid to AFG 16 18 17 CLO earnings attributable to AFG Shareholders (b) 7 23 37 (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, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying value of goodwill by reporting segment | Changes in the carrying value of goodwill during 2016 , 2017 and 2018 , by reporting segment, are presented in the following table (in millions): Property and Casualty Annuity Total Balance at January 1, 2016, December 31, 2016 and December 31, 2017 $ 168 $ 31 $ 199 Acquisition of subsidiary in 2018 8 — 8 Balance at December 31, 2018 $ 176 $ 31 $ 207 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Long-term debt consisted of the following at December 31 (in millions): 2018 2017 Principal Discount and Issue Costs Carrying Value Principal Discount and Issue Costs Carrying Value Direct Senior Obligations of AFG: 4.50% Senior Notes due June 2047 $ 590 $ (2 ) $ 588 $ 590 $ (2 ) $ 588 3.50% Senior Notes due August 2026 425 (4 ) 421 425 (5 ) 420 Other 3 — 3 3 — 3 1,018 (6 ) 1,012 1,018 (7 ) 1,011 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 $ 1,318 $ (16 ) $ 1,302 $ 1,318 $ (17 ) $ 1,301 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 759,035 $ 73.40 Granted 200,625 $ 112.86 Vested (86,177 ) $ 56.89 Forfeited (7,553 ) $ 87.47 Outstanding at December 31, 2018 865,930 $ 84.06 |
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, 2018 3,467,340 $ 45.80 Exercised (778,270 ) $ 37.66 Forfeited/Cancelled (21,628 ) $ 42.10 Outstanding at December 31, 2018 2,667,442 $ 48.20 4.2 years $ 113 Options exercisable at December 31, 2018 2,253,003 $ 45.95 3.9 years $ 100 |
Components of accumulated other comprehensive income (loss) | The progression of the components of accumulated other comprehensive income follows (in millions): Other Comprehensive Income (Loss) AOCI Beginning Balance Pretax Tax Net of tax Attributable to noncontrolling interests Attributable to shareholders Other (c) AOCI Ending Balance Year ended December 31, 2018 Net unrealized gains (losses) on securities: Unrealized holding losses on securities arising during the period $ (689 ) $ 145 $ (544 ) $ — $ (544 ) Reclassification adjustment for realized (gains) losses included in net earnings (a) 10 (2 ) 8 — 8 Total net unrealized gains (losses) on securities (b) $ 840 (679 ) 143 (536 ) — (536 ) $ (221 ) $ 83 Net unrealized gains (losses) on cash flow hedges (13 ) 2 — 2 — 2 — (11 ) Foreign currency translation adjustments (6 ) (9 ) (1 ) (10 ) — (10 ) — (16 ) Pension and other postretirement plans adjustments (8 ) — — — — — — (8 ) Total $ 813 $ (686 ) $ 142 $ (544 ) $ — $ (544 ) $ (221 ) $ 48 Year ended December 31, 2017 Net unrealized gains on securities: Unrealized holding gains on securities arising during the period $ 456 $ (159 ) $ 297 $ — $ 297 Reclassification adjustment for realized (gains) losses included in net earnings (a) (15 ) 5 (10 ) — (10 ) Total net unrealized gains on securities (b) $ 404 441 (154 ) 287 — 287 $ 149 $ 840 Net unrealized losses on cash flow hedges (7 ) (6 ) 2 (4 ) — (4 ) (2 ) (13 ) Foreign currency translation adjustments (15 ) 9 3 12 — 12 (3 ) (6 ) Pension and other postretirement plans adjustments (7 ) 1 — 1 — 1 (2 ) (8 ) Total $ 375 $ 445 $ (149 ) $ 296 $ — $ 296 $ 142 $ 813 Year ended December 31, 2016 Net unrealized gains on securities: Unrealized holding gains 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 (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 attributable to noncontrolling interests (b) Includes net unrealized gains of $58 million at December 31, 2018 compared to net unrealized gains of $68 million and $52 million at December 31, 2017 and 2016 , related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings. (c) On January 1, 2018, AFG adopted new guidance that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At the date of adoption, the $221 million net unrealized gain on equity securities classified as available for sale (with unrealized holding gains and losses reported in AOCI) under the prior guidance was reclassified from AOCI to retained earnings as the cumulative effect of an accounting change. Other also includes the December 2017 reclassification of $145 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings (see Note A — “ Accounting Policies — Income Taxes ”) , the impact on AOCI of the December 2017 sale of redeemable noncontrolling interests in Neon and 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, 2018 | |
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 ( 21% in 2018 and 35% in both 2017 and 2016) to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions): 2018 2017 2016 Amount % of EBT Amount % of EBT Amount % of EBT Earnings before income taxes (“EBT”) $ 639 $ 724 $ 787 Income taxes at statutory rate $ 134 21 % $ 253 35 % $ 275 35 % Effect of: Tax exempt interest (13 ) (2 %) (23 ) (3 %) (24 ) (3 %) Adjustment to prior year taxes (8 ) (1 %) (4 ) (1 %) (2 ) — % Stock-based compensation (8 ) (1 %) (16 ) (2 %) (9 ) (1 %) Dividend received deduction (4 ) (1 %) (8 ) (1 %) (7 ) (1 %) Employee stock ownership plan dividend paid deduction (3 ) (1 %) (5 ) (1 %) (2 ) — % Foreign operations (2 ) — % 21 3 % 5 — % Change in valuation allowance (excluding change in tax rate) 11 2 % (7 ) (1 %) 52 7 % Nondeductible expenses 7 1 % 6 1 % 7 1 % Neon restructuring — — % (56 ) (8 %) (111 ) (14 %) Change in U.S corporate tax rate — — % 83 11 % — — % Acquisition of noncontrolling interest in NATL — — % — — % (66 ) (8 %) Subsidiaries not in AFG’s tax return — — % — — % 3 — % Other 8 1 % 3 1 % (2 ) (1 %) Provision for income taxes as shown in the statement of earnings $ 122 19 % $ 247 34 % $ 119 15 % |
Components of income tax provision (credit) | The total income tax provision (credit) consists of (in millions): 2018 2017 2016 Current taxes: Federal $ 196 $ 153 $ 299 State 8 6 12 Deferred taxes: Federal (82 ) 5 (192 ) Impact of change in U.S. corporate tax rate — 83 — Total Federal deferred taxes (82 ) 88 (192 ) Provision for income taxes $ 122 $ 247 $ 119 |
Summary of operating loss carryforwards | For income tax purposes, AFG and its subsidiaries had the following carryforwards available at December 31, 2018 (in millions): Expiring Amount Operating Loss – U.S. 2019 - 2022 $ 112 Operating Loss – United Kingdom indefinite 215 (*) (*) £168 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): 2018 2017 Excluding Unrealized Gains Impact of Unrealized Gains Total Excluding Unrealized Gains Impact of Unrealized Gains Total Deferred tax assets: Federal net operating loss carryforwards $ 23 $ — $ 23 $ 27 $ — $ 27 Foreign underwriting losses 93 — 93 80 — 80 Capital loss carryforwards — — — 32 — 32 Insurance claims and reserves 740 3 743 665 29 694 Employee benefits 88 — 88 84 — 84 Other, net 44 — 44 48 (3 ) 45 Total deferred tax assets before valuation allowance 988 3 991 936 26 962 Valuation allowance against deferred tax assets (119 ) — (119 ) (109 ) — (109 ) Total deferred tax assets 869 3 872 827 26 853 Deferred tax liabilities: Investment securities (36 ) (34 ) (70 ) (1 ) (340 ) (341 ) Deferred policy acquisition costs (300 ) 9 (291 ) (293 ) 91 (202 ) Insurance claims and reserves transition liability (110 ) — (110 ) (128 ) — (128 ) Real estate, property and equipment (36 ) — (36 ) (35 ) — (35 ) Total deferred tax liabilities (482 ) (25 ) (507 ) (457 ) (249 ) (706 ) Net deferred tax asset (liability) $ 387 $ (22 ) $ 365 $ 370 $ (223 ) $ 147 |
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): 2018 2017 2016 Balance at January 1 $ — $ 1 $ 1 Additions for tax positions of prior years — — — Reductions for tax positions of prior years — — — Additions for tax positions of current year — — — Settlements — (1 ) — Balance at December 31 $ — $ — $ 1 |
Quarterly Operating Results (_2
Quarterly Operating Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 (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 2018 Revenues $ 1,619 $ 1,833 $ 2,008 $ 1,690 $ 7,150 Net earnings (losses), including noncontrolling interests 141 208 203 (35 ) 517 Net earnings (losses) attributable to shareholders 145 210 204 (29 ) 530 Earnings (losses) attributable to shareholders per Common Share: Basic $ 1.64 $ 2.36 $ 2.30 $ (0.33 ) $ 5.95 Diluted 1.60 2.31 2.26 (0.33 ) 5.85 Average number of Common Shares: Basic 88.6 89.0 89.1 89.3 89.0 Diluted 90.4 90.7 90.7 89.3 90.6 2017 Revenues $ 1,576 $ 1,646 $ 1,835 $ 1,808 $ 6,865 Net earnings, including noncontrolling interests 155 145 11 166 477 Net earnings attributable to shareholders 153 145 11 166 475 Earnings attributable to shareholders per Common Share: Basic $ 1.76 $ 1.64 $ 0.13 $ 1.88 $ 5.40 Diluted 1.72 1.61 0.13 1.84 5.28 Average number of Common Shares: Basic 87.2 87.8 88.1 88.2 87.8 Diluted 89.3 89.8 90.0 90.1 89.8 |
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), favorable (adverse) prior year development of AFG’s liability for losses and loss adjustment expenses (“LAE”) and the impact of derivatives related to fixed-indexed and variable-indexed annuities (“FIAs”) were as follows (in millions): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Year Realized Gains (Losses) on Securities and Subsidiaries 2018 – change in fair value of equity securities $ (95 ) $ 23 $ 33 $ (223 ) $ (262 ) 2018 – other realized gains (losses) 2 8 1 (15 ) (4 ) 2017 3 8 (12 ) 6 5 Prior Year Development Favorable (Adverse) 2018 $ 56 $ 44 $ 31 $ 61 $ 192 2017 28 22 (52 ) 66 64 Impact of Derivatives related to FIAs Favorable (Adverse) 2018 $ 13 $ 3 $ (2 ) $ (47 ) $ (33 ) 2017 (2 ) (16 ) (4 ) (11 ) (33 ) |
Insurance (Tables)
Insurance (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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): 2018 2017 2016 Balance at beginning of period $ 9,678 $ 8,563 $ 8,127 Less reinsurance recoverables, net of allowance 2,957 2,302 2,201 Net liability at beginning of period 6,721 6,261 5,926 Provision for losses and LAE occurring in the current year 3,195 3,019 2,730 Net increase (decrease) in the provision for claims of prior years: Special A&E charges 18 89 36 Neon exited lines charge — (18 ) 57 Other (210 ) (135 ) (61 ) Total losses and LAE incurred 3,003 2,955 2,762 Payments for losses and LAE of: Current year (963 ) (942 ) (841 ) Prior years (1,639 ) (1,586 ) (1,512 ) Total payments (2,602 ) (2,528 ) (2,353 ) Reserves of businesses disposed (*) (319 ) — (40 ) Foreign currency translation and other (4 ) 33 (34 ) Net liability at end of period 6,799 6,721 6,261 Add back reinsurance recoverables, net of allowance 2,942 2,957 2,302 Gross unpaid losses and LAE included in the balance sheet $ 9,741 $ 9,678 $ 8,563 (*) Reflects the reinsurance to close transactions at Neon (discussed below). |
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): 2018 Unpaid losses and allocated LAE, net of reinsurance: Specialty Property and transportation $ 1,117 Specialty casualty 3,884 Specialty financial 225 Other specialty 280 Total Specialty (excluding foreign reserves) 5,506 Other reserves Reserves for foreign operations: Neon Lloyd’s business 265 Other subsidiaries 268 A&E reserves 395 Unallocated LAE 335 Other 30 Total other reserves 1,293 Total reserves, net of reinsurance 6,799 Add back reinsurance recoverables, net of allowance 2,942 Gross unpaid losses and LAE included in the balance sheet $ 9,741 |
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, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 503 $ 487 $ 505 $ 498 $ 494 $ 494 $ 491 $ 491 $ 491 $ 490 $ 2 138,248 2010 680 640 646 654 656 657 661 659 657 3 138,235 2011 816 803 819 833 844 856 853 850 6 139,345 2012 875 866 880 892 905 900 897 13 145,636 2013 894 881 884 890 890 890 18 141,293 2014 856 842 831 834 831 25 136,259 2015 831 794 789 789 36 134,484 2016 762 730 733 74 122,623 2017 904 868 128 140,963 2018 952 277 119,817 Total $ 7,957 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 219 $ 333 $ 397 $ 440 $ 462 $ 476 $ 480 $ 481 $ 484 $ 485 99.0 % 2010 316 487 536 597 627 638 643 648 650 98.9 % 2011 367 670 732 777 810 828 836 839 98.7 % 2012 574 715 780 826 852 866 892 99.4 % 2013 440 710 769 814 843 859 96.5 % 2014 332 638 702 756 784 94.3 % 2015 361 587 675 717 90.9 % 2016 296 528 590 80.5 % 2017 383 648 74.7 % 2018 399 41.9 % Total $ 6,863 Unpaid losses and LAE — years 2009 through 2018 1,094 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 23 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 1,117 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 46.2 % 28.7 % 8.6 % 6.5 % 3.7 % 2.0 % 1.4 % 0.4 % 0.5 % 0.2 % Cumulative 46.2 % 74.9 % 83.5 % 90.0 % 93.7 % 95.7 % 97.1 % 97.5 % 98.0 % 98.2 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). Specialty casualty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 888 $ 887 $ 864 $ 844 $ 833 $ 828 $ 829 $ 824 $ 820 $ 811 $ 34 56,985 2010 870 886 887 865 879 868 867 864 853 47 56,411 2011 847 845 833 842 827 822 819 811 52 53,385 2012 890 883 876 876 872 867 838 64 51,885 2013 956 938 933 928 933 913 99 51,620 2014 1,023 994 994 992 966 139 54,494 2015 1,068 1,033 1,031 1,030 185 55,468 2016 1,115 1,108 1,097 313 53,038 2017 1,196 1,200 539 52,658 2018 1,257 705 48,996 Total $ 9,776 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 170 $ 381 $ 510 $ 591 $ 653 $ 691 $ 715 $ 731 $ 740 $ 748 92.2 % 2010 191 411 559 644 699 735 756 770 782 91.7 % 2011 172 380 517 606 655 687 707 725 89.4 % 2012 171 378 508 611 674 713 735 87.7 % 2013 180 388 545 656 717 754 82.6 % 2014 187 406 565 668 741 76.7 % 2015 176 406 569 692 67.2 % 2016 184 411 571 52.1 % 2017 196 414 34.5 % 2018 207 16.5 % Total $ 6,369 Unpaid losses and LAE — years 2009 through 2018 3,407 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 477 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 3,884 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 19.1 % 23.2 % 16.2 % 11.1 % 7.0 % 4.3 % 2.6 % 1.9 % 1.3 % 1.0 % Cumulative 19.1 % 42.3 % 58.5 % 69.6 % 76.6 % 80.9 % 83.5 % 85.4 % 86.7 % 87.7 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). Specialty financial (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 192 $ 192 $ 186 $ 184 $ 188 $ 186 $ 187 $ 186 $ 185 $ 186 $ 1 27,431 2010 138 145 132 132 135 133 130 127 126 1 21,922 2011 138 157 155 153 147 144 143 139 6 16,368 2012 163 163 151 139 137 135 132 6 21,064 2013 140 145 137 131 127 126 9 28,449 2014 146 157 156 153 147 9 29,411 2015 156 160 158 153 16 37,483 2016 179 184 187 24 44,820 2017 212 215 34 46,921 2018 212 79 36,606 Total $ 1,623 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 112 $ 145 $ 157 $ 166 $ 171 $ 181 $ 185 $ 186 $ 186 $ 185 99.5 % 2010 61 93 104 122 132 130 128 126 126 100.0 % 2011 58 111 115 123 130 131 131 132 95.0 % 2012 71 104 109 117 121 126 128 97.0 % 2013 70 100 107 113 117 117 92.9 % 2014 62 109 125 128 137 93.2 % 2015 72 110 129 133 86.9 % 2016 88 141 158 84.5 % 2017 120 169 78.6 % 2018 112 52.8 % Total $ 1,397 Unpaid losses and LAE — years 2009 through 2018 226 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) (1 ) Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 225 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 50.5 % 26.4 % 7.5 % 5.8 % 4.7 % 1.7 % 0.5 % (0.1 %) — % (0.5 %) Cumulative 50.5 % 76.9 % 84.4 % 90.2 % 94.9 % 96.6 % 97.1 % 97.0 % 97.0 % 96.5 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). Other specialty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims (a) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 41 $ 41 $ 41 $ 40 $ 37 $ 37 $ 36 $ 38 $ 33 $ 32 $ 6 — 2010 36 39 40 39 40 40 40 40 40 3 — 2011 39 43 42 43 43 44 44 43 3 — 2012 42 40 39 40 41 39 39 6 — 2013 46 47 46 47 50 53 2 — 2014 58 57 59 59 60 13 — 2015 59 60 63 66 8 — 2016 61 61 65 21 — 2017 63 65 36 — 2018 86 62 — Total $ 549 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (b) 2009 $ 8 $ 12 $ 15 $ 19 $ 22 $ 22 $ 24 $ 26 $ 25 $ 27 84.4 % 2010 8 14 21 24 27 33 35 36 37 92.5 % 2011 12 20 25 28 34 36 37 38 88.4 % 2012 8 17 21 25 28 30 30 76.9 % 2013 7 16 22 34 37 44 83.0 % 2014 13 21 30 36 43 71.7 % 2015 10 26 31 50 75.8 % 2016 9 19 31 47.7 % 2017 10 19 29.2 % 2018 12 14.0 % Total $ 331 Unpaid losses and LAE — years 2009 through 2018 218 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 62 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 280 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 18.7 % 17.0 % 12.6 % 14.1 % 9.3 % 7.6 % 3.4 % 3.7 % (0.3 %) 6.3 % Cumulative 18.7 % 35.7 % 48.3 % 62.4 % 71.7 % 79.3 % 82.7 % 86.4 % 86.1 % 92.4 % (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, 2018 ). Total Specialty Group (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 1,624 $ 1,607 $ 1,596 $ 1,566 $ 1,552 $ 1,545 $ 1,543 $ 1,539 $ 1,529 $ 1,519 $ 43 222,664 2010 1,724 1,710 1,705 1,690 1,710 1,698 1,698 1,690 1,676 54 216,568 2011 1,840 1,848 1,849 1,871 1,861 1,866 1,859 1,843 67 209,098 2012 1,970 1,952 1,946 1,947 1,955 1,941 1,906 89 218,585 2013 2,036 2,011 2,000 1,996 2,000 1,982 128 221,362 2014 2,083 2,050 2,040 2,038 2,004 186 220,164 2015 2,114 2,047 2,041 2,038 245 227,435 2016 2,117 2,083 2,082 432 220,481 2017 2,375 2,348 737 240,542 2018 2,507 1,123 205,419 Total $ 19,905 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 509 $ 871 $ 1,079 $ 1,216 $ 1,308 $ 1,370 $ 1,404 $ 1,424 $ 1,435 $ 1,445 95.1 % 2010 576 1,005 1,220 1,387 1,485 1,536 1,562 1,580 1,595 95.2 % 2011 609 1,181 1,389 1,534 1,629 1,682 1,711 1,734 94.1 % 2012 824 1,214 1,418 1,579 1,675 1,735 1,785 93.7 % 2013 697 1,214 1,443 1,617 1,714 1,774 89.5 % 2014 594 1,174 1,422 1,588 1,705 85.1 % 2015 619 1,129 1,404 1,592 78.1 % 2016 577 1,099 1,350 64.8 % 2017 709 1,250 53.2 % 2018 730 29.1 % Total $ 14,960 Unpaid losses and LAE — years 2009 through 2018 4,945 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 561 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 5,506 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 32.6 % 25.5 % 12.2 % 8.8 % 5.5 % 3.2 % 2.0 % 1.2 % 0.8 % 0.7 % Cumulative 32.6 % 58.1 % 70.3 % 79.1 % 84.6 % 87.8 % 89.8 % 91.0 % 91.8 % 92.5 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). |
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, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 503 $ 487 $ 505 $ 498 $ 494 $ 494 $ 491 $ 491 $ 491 $ 490 $ 2 138,248 2010 680 640 646 654 656 657 661 659 657 3 138,235 2011 816 803 819 833 844 856 853 850 6 139,345 2012 875 866 880 892 905 900 897 13 145,636 2013 894 881 884 890 890 890 18 141,293 2014 856 842 831 834 831 25 136,259 2015 831 794 789 789 36 134,484 2016 762 730 733 74 122,623 2017 904 868 128 140,963 2018 952 277 119,817 Total $ 7,957 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 219 $ 333 $ 397 $ 440 $ 462 $ 476 $ 480 $ 481 $ 484 $ 485 99.0 % 2010 316 487 536 597 627 638 643 648 650 98.9 % 2011 367 670 732 777 810 828 836 839 98.7 % 2012 574 715 780 826 852 866 892 99.4 % 2013 440 710 769 814 843 859 96.5 % 2014 332 638 702 756 784 94.3 % 2015 361 587 675 717 90.9 % 2016 296 528 590 80.5 % 2017 383 648 74.7 % 2018 399 41.9 % Total $ 6,863 Unpaid losses and LAE — years 2009 through 2018 1,094 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 23 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 1,117 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 46.2 % 28.7 % 8.6 % 6.5 % 3.7 % 2.0 % 1.4 % 0.4 % 0.5 % 0.2 % Cumulative 46.2 % 74.9 % 83.5 % 90.0 % 93.7 % 95.7 % 97.1 % 97.5 % 98.0 % 98.2 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). Specialty casualty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 888 $ 887 $ 864 $ 844 $ 833 $ 828 $ 829 $ 824 $ 820 $ 811 $ 34 56,985 2010 870 886 887 865 879 868 867 864 853 47 56,411 2011 847 845 833 842 827 822 819 811 52 53,385 2012 890 883 876 876 872 867 838 64 51,885 2013 956 938 933 928 933 913 99 51,620 2014 1,023 994 994 992 966 139 54,494 2015 1,068 1,033 1,031 1,030 185 55,468 2016 1,115 1,108 1,097 313 53,038 2017 1,196 1,200 539 52,658 2018 1,257 705 48,996 Total $ 9,776 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 170 $ 381 $ 510 $ 591 $ 653 $ 691 $ 715 $ 731 $ 740 $ 748 92.2 % 2010 191 411 559 644 699 735 756 770 782 91.7 % 2011 172 380 517 606 655 687 707 725 89.4 % 2012 171 378 508 611 674 713 735 87.7 % 2013 180 388 545 656 717 754 82.6 % 2014 187 406 565 668 741 76.7 % 2015 176 406 569 692 67.2 % 2016 184 411 571 52.1 % 2017 196 414 34.5 % 2018 207 16.5 % Total $ 6,369 Unpaid losses and LAE — years 2009 through 2018 3,407 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 477 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 3,884 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 19.1 % 23.2 % 16.2 % 11.1 % 7.0 % 4.3 % 2.6 % 1.9 % 1.3 % 1.0 % Cumulative 19.1 % 42.3 % 58.5 % 69.6 % 76.6 % 80.9 % 83.5 % 85.4 % 86.7 % 87.7 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). Specialty financial (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 192 $ 192 $ 186 $ 184 $ 188 $ 186 $ 187 $ 186 $ 185 $ 186 $ 1 27,431 2010 138 145 132 132 135 133 130 127 126 1 21,922 2011 138 157 155 153 147 144 143 139 6 16,368 2012 163 163 151 139 137 135 132 6 21,064 2013 140 145 137 131 127 126 9 28,449 2014 146 157 156 153 147 9 29,411 2015 156 160 158 153 16 37,483 2016 179 184 187 24 44,820 2017 212 215 34 46,921 2018 212 79 36,606 Total $ 1,623 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 112 $ 145 $ 157 $ 166 $ 171 $ 181 $ 185 $ 186 $ 186 $ 185 99.5 % 2010 61 93 104 122 132 130 128 126 126 100.0 % 2011 58 111 115 123 130 131 131 132 95.0 % 2012 71 104 109 117 121 126 128 97.0 % 2013 70 100 107 113 117 117 92.9 % 2014 62 109 125 128 137 93.2 % 2015 72 110 129 133 86.9 % 2016 88 141 158 84.5 % 2017 120 169 78.6 % 2018 112 52.8 % Total $ 1,397 Unpaid losses and LAE — years 2009 through 2018 226 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) (1 ) Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 225 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 50.5 % 26.4 % 7.5 % 5.8 % 4.7 % 1.7 % 0.5 % (0.1 %) — % (0.5 %) Cumulative 50.5 % 76.9 % 84.4 % 90.2 % 94.9 % 96.6 % 97.1 % 97.0 % 97.0 % 96.5 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). Other specialty (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims (a) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 41 $ 41 $ 41 $ 40 $ 37 $ 37 $ 36 $ 38 $ 33 $ 32 $ 6 — 2010 36 39 40 39 40 40 40 40 40 3 — 2011 39 43 42 43 43 44 44 43 3 — 2012 42 40 39 40 41 39 39 6 — 2013 46 47 46 47 50 53 2 — 2014 58 57 59 59 60 13 — 2015 59 60 63 66 8 — 2016 61 61 65 21 — 2017 63 65 36 — 2018 86 62 — Total $ 549 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (b) 2009 $ 8 $ 12 $ 15 $ 19 $ 22 $ 22 $ 24 $ 26 $ 25 $ 27 84.4 % 2010 8 14 21 24 27 33 35 36 37 92.5 % 2011 12 20 25 28 34 36 37 38 88.4 % 2012 8 17 21 25 28 30 30 76.9 % 2013 7 16 22 34 37 44 83.0 % 2014 13 21 30 36 43 71.7 % 2015 10 26 31 50 75.8 % 2016 9 19 31 47.7 % 2017 10 19 29.2 % 2018 12 14.0 % Total $ 331 Unpaid losses and LAE — years 2009 through 2018 218 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 62 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 280 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 18.7 % 17.0 % 12.6 % 14.1 % 9.3 % 7.6 % 3.4 % 3.7 % (0.3 %) 6.3 % Cumulative 18.7 % 35.7 % 48.3 % 62.4 % 71.7 % 79.3 % 82.7 % 86.4 % 86.1 % 92.4 % (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, 2018 ). Total Specialty Group (Dollars in Millions) Incurred Claims and Allocated LAE, Net of Reinsurance As of December 31, 2018 For the Years Ended (2009–2017 is Supplementary Information and Unaudited) Total IBNR Plus Expected Development on Reported Claims Cumulative Number of Reported Claims Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 1,624 $ 1,607 $ 1,596 $ 1,566 $ 1,552 $ 1,545 $ 1,543 $ 1,539 $ 1,529 $ 1,519 $ 43 222,664 2010 1,724 1,710 1,705 1,690 1,710 1,698 1,698 1,690 1,676 54 216,568 2011 1,840 1,848 1,849 1,871 1,861 1,866 1,859 1,843 67 209,098 2012 1,970 1,952 1,946 1,947 1,955 1,941 1,906 89 218,585 2013 2,036 2,011 2,000 1,996 2,000 1,982 128 221,362 2014 2,083 2,050 2,040 2,038 2,004 186 220,164 2015 2,114 2,047 2,041 2,038 245 227,435 2016 2,117 2,083 2,082 432 220,481 2017 2,375 2,348 737 240,542 2018 2,507 1,123 205,419 Total $ 19,905 Cumulative Paid Claims and Allocated LAE, Net of Reinsurance Accident Year For the Years Ended (2009–2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % (a) 2009 $ 509 $ 871 $ 1,079 $ 1,216 $ 1,308 $ 1,370 $ 1,404 $ 1,424 $ 1,435 $ 1,445 95.1 % 2010 576 1,005 1,220 1,387 1,485 1,536 1,562 1,580 1,595 95.2 % 2011 609 1,181 1,389 1,534 1,629 1,682 1,711 1,734 94.1 % 2012 824 1,214 1,418 1,579 1,675 1,735 1,785 93.7 % 2013 697 1,214 1,443 1,617 1,714 1,774 89.5 % 2014 594 1,174 1,422 1,588 1,705 85.1 % 2015 619 1,129 1,404 1,592 78.1 % 2016 577 1,099 1,350 64.8 % 2017 709 1,250 53.2 % 2018 730 29.1 % Total $ 14,960 Unpaid losses and LAE — years 2009 through 2018 4,945 Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) 561 Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) $ 5,506 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 32.6 % 25.5 % 12.2 % 8.8 % 5.5 % 3.2 % 2.0 % 1.2 % 0.8 % 0.7 % Cumulative 32.6 % 58.1 % 70.3 % 79.1 % 84.6 % 87.8 % 89.8 % 91.0 % 91.8 % 92.5 % (a) Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018 ). |
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 2018 2017 2016 2018 2017 Property and casualty companies $ 546 $ 484 $ 461 $ 2,867 $ 2,729 Life insurance companies 802 286 167 2,701 2,132 |
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. 2018 2017 2016 Direct premiums written $ 6,626 $ 6,310 $ 5,858 Reinsurance assumed 214 192 123 Reinsurance ceded (1,817 ) (1,751 ) (1,595 ) Net written premiums $ 5,023 $ 4,751 $ 4,386 Direct premiums earned $ 6,472 $ 6,112 $ 5,745 Reinsurance assumed 204 157 118 Reinsurance ceded (1,811 ) (1,690 ) (1,535 ) Net earned premiums $ 4,865 $ 4,579 $ 4,328 Reinsurance recoveries $ 1,249 $ 1,379 $ 810 |
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 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): 2018 2017 Expected death and annuitization $ 229 $ 228 Guaranteed withdrawal benefits 472 358 Accrued persistency and premium bonuses 1 3 |
Accounting Policies - Narrative
Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 |
Significant Accounting Policies [Line Items] | |||||
Cumulative effect of accounting change | $ 4 | $ 4 | |||
Stranded amount reclassified from AOCI to retained earnings | $ 0 | ||||
Weighted average common shares adjustment related to stock-based compensation | 1,600,000 | 2,000,000 | 1,600,000 | ||
Anti-dilutive potential common shares related to stock-based compensation plans | 0 | 0 | 400,000 | ||
Maturities of short term investments | 3 months | ||||
Accounting Standards Update 2016-02 | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Cumulative effect of accounting change | 0.50% | ||||
Equity securities | |||||
Significant Accounting Policies [Line Items] | |||||
Available-for-sale securities, Equity securities | 1,600 | $ 1,600 | |||
Equity securities, trading at fair value | 62 | $ 62 | |||
Equity securities | Accounting Standards Update 2016-01 | |||||
Significant Accounting Policies [Line Items] | |||||
Cumulative effect of accounting change | $ (221) | ||||
Tax Cuts and Jobs Act of 2017 | Accounting Standards Update 2018-02 | |||||
Significant Accounting Policies [Line Items] | |||||
Stranded amount reclassified from AOCI to retained earnings | $ 145 | ||||
Limited partnerships and similar investments | Accounting Standards Update 2016-01 | |||||
Significant Accounting Policies [Line Items] | |||||
Cumulative effect of accounting change | $ (4) | ||||
Equity securities still owned | Equity securities | Accounting Standards Update 2016-01 | |||||
Significant Accounting Policies [Line Items] | |||||
Net holding gains (losses) on equity securities | $ (257) |
Acquisitions and Sale of Busi_3
Acquisitions and Sale of Businesses - Narrative on acquisitions of subsidiaries (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 10, 2016 | Nov. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisitions [Line Items] | ||||||||
Payments to acquire subsidiaries | $ 36 | $ 0 | $ 0 | |||||
Goodwill acquired during period | $ 8 | 8 | ||||||
Payments to acquire additional interest in subsidiaries | 0 | 0 | 315 | |||||
Income tax expense (benefit) | 122 | 247 | 119 | |||||
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 | |||||||
ABA Insurance Services | ||||||||
Business Acquisitions [Line Items] | ||||||||
Payments to acquire subsidiaries | $ 30 | |||||||
Contingent consideration | $ 3 | $ 3 | ||||||
Contingent consideration term | 4 years | |||||||
Finite-lived intangible assets acquired | 25 | |||||||
Finite-lived intangible asset useful life | 9 years | |||||||
Goodwill acquired during period | $ 8 | |||||||
AFG | ||||||||
Business Acquisitions [Line Items] | ||||||||
Income tax expense (benefit) | $ (56) | $ 122 | $ 247 | $ 119 | ||||
AFG | National Interstate | ||||||||
Business Acquisitions [Line Items] | ||||||||
Reduction to capital surplus | $ (137) | |||||||
Income tax expense (benefit) | $ (66) |
Acquisitions and Sale of Busi_4
Acquisitions and Sale of Businesses - Narrative on sale of businesses (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Sale of Businesses | |||||
Sale of redeemable noncontrolling interests | $ (3) | ||||
Income tax expense (benefit) | $ 122 | 247 | $ 119 | ||
Neon Capital Limited | |||||
Sale of Businesses | |||||
Sale of redeemable noncontrolling interests | $ (3) | ||||
Income tax expense (benefit) | (56) | $ (111) | (48) | ||
AFG | |||||
Sale of Businesses | |||||
Income tax expense (benefit) | $ (56) | $ 122 | $ 247 | $ 119 |
Acquisitions and Sale of Busi_5
Acquisitions and Sale of Businesses - Allocation of the purchase price of subsidiary (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Business Acquisitions [Line Items] | ||||||
Total purchase price | $ 36 | $ 0 | $ 0 | |||
Goodwill | $ 207 | $ 199 | $ 199 | $ 199 | ||
ABA Insurance Services | ||||||
Business Acquisitions [Line Items] | ||||||
Total purchase price | $ 30 | |||||
Tangible assets acquired | 28 | |||||
Liabilities acquired | 26 | |||||
Net tangible assets acquire, at fair value | 2 | |||||
Excess purchase price over net tangible assets acquired | 28 | |||||
Intangible assets acquired | [1] | 25 | ||||
Deferred tax on intangible assets acquired | [1] | (5) | ||||
Goodwill | $ 8 | |||||
[1] | Included in Other assets in AFG’s Balance Sheet. |
Segments of Operations - Narrat
Segments of Operations - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||||||
Number of segments | segment | 3 | ||||||
Revenue derived from sales of property and casualty insurance outside of the United States | 7.00% | 5.00% | 4.00% | ||||
Property and casualty insurance | Real estate investment | |||||||
Segment Reporting Information [Line Items] | |||||||
Pretax income from the sale of real estate properties included in other income | $ 13 | $ 32 | |||||
Property and casualty insurance | Other lines | |||||||
Segment Reporting Information [Line Items] | |||||||
Special charges to increase asbestos and environmental reserves | $ 18 | $ 89 | $ 18 | $ 89 | 36 | ||
Favorable reserve development related to certain lines of business within subsidiaries in connection with a reinsurance to close agreement | 18 | ||||||
Special charges related to the exit of certain lines of business within subsidiaries | 65 | ||||||
Other | |||||||
Segment Reporting Information [Line Items] | |||||||
Special charges to increase asbestos and environmental reserves | $ 9 | 24 | $ 5 | ||||
Make-whole premium, settlement of interest rate swap and write off of deferred debt issuance cost included in the loss on the retirement of debt | $ 40 | $ 51 |
Segments of Operations - Assets
Segments of Operations - Assets by segment and sub-segment (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total assets | $ 63,456 | $ 60,658 | $ 55,072 | |
Property and casualty insurance | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | [1] | 17,681 | 17,171 | 15,574 |
Annuity | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | 39,952 | 37,179 | 33,409 | |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | $ 5,823 | $ 6,308 | $ 6,089 | |
[1] | Not allocable to sub-segments. |
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | $ 4,865 | $ 4,579 | $ 4,328 | |||||||||
Net investment income | 2,094 | 1,831 | 1,696 | |||||||||
Other income | 199 | 206 | 224 | |||||||||
Revenues before realized gains (losses) | 7,416 | 6,860 | 6,477 | |||||||||
Realized gains (losses) on securities | (266) | 5 | 19 | |||||||||
Realized gains on subsidiaries | 0 | 0 | 2 | |||||||||
Total revenues | $ 1,690 | $ 2,008 | $ 1,833 | $ 1,619 | $ 1,808 | $ 1,835 | $ 1,646 | $ 1,576 | 7,150 | 6,865 | 6,498 | |
Property and casualty insurance | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | 4,865 | 4,579 | 4,328 | |||||||||
Net investment income | 438 | 362 | 350 | |||||||||
Other income | [1] | 10 | 28 | 51 | ||||||||
Revenues before realized gains (losses) | 5,313 | 4,969 | 4,729 | |||||||||
Annuity | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net investment income | 1,638 | 1,458 | 1,356 | |||||||||
Other income | 107 | 103 | 103 | |||||||||
Revenues before realized gains (losses) | 1,745 | 1,561 | 1,459 | |||||||||
Other | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues before realized gains (losses) | 358 | 330 | 289 | |||||||||
Property and transportation | Property and casualty insurance | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | 1,729 | 1,711 | 1,662 | |||||||||
Specialty casualty | Property and casualty insurance | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | 2,403 | 2,186 | 2,006 | |||||||||
Specialty financial | Property and casualty insurance | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | 598 | 576 | 557 | |||||||||
Other specialty | Property and casualty insurance | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total premiums earned | $ 135 | $ 106 | $ 103 | |||||||||
[1] | Includes income of $32 million (before noncontrolling interest) from the sale of an apartment property in 2016. |
Segments of Operations - Earnin
Segments of Operations - Earnings before income taxes by segment and sub-segment (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Segment Reporting Information [Line Items] | ||||
Earnings before realized gains (losses) and income taxes | $ 905 | $ 719 | $ 766 | |
Realized gains (losses) on securities | (266) | 5 | 19 | |
Realized gains on subsidiaries | 0 | 0 | 2 | |
Earnings before income taxes | 639 | 724 | 787 | |
Property and casualty insurance | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | 302 | 242 | 236 | |
Investment and other income, net | [1] | 407 | 349 | 341 |
Earnings before realized gains (losses) and income taxes | 709 | 591 | 577 | |
Annuity | ||||
Segment Reporting Information [Line Items] | ||||
Earnings before realized gains (losses) and income taxes | 361 | 380 | 368 | |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Earnings before realized gains (losses) and income taxes | [2] | (165) | (252) | (179) |
Property and transportation | Property and casualty insurance | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | 120 | 154 | 166 | |
Specialty casualty | Property and casualty insurance | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | 141 | 104 | 78 | |
Specialty financial | Property and casualty insurance | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | 66 | 61 | 84 | |
Other specialty | Property and casualty insurance | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | (5) | (2) | 9 | |
Other lines | Property and casualty insurance | ||||
Segment Reporting Information [Line Items] | ||||
Property and casualty insurance underwriting | [3] | $ (20) | $ (75) | $ (101) |
[1] | Includes income of $32 million (before noncontrolling interest) from the sale of an apartment property in 2016. | |||
[2] | Primarily holding company interest and expenses, including losses on retirement of debt of $51 million in 2017 and special charges to increase A&E reserves related to AFG’s former railroad and manufacturing operations ($9 million in 2018, $24 million in 2017 and $5 million in 2016). | |||
[3] | Includes special charges to increase asbestos and environmental (“A&E”) reserves of $18 million, $89 million and $36 million in 2018, 2017 and 2016, respectively. Also includes $18 million in favorable development related to the Neon exited lines recorded in connection with a reinsurance to close transaction in 2017 and a charge of $65 million related to Neon exited lines in 2016. |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($)basispointsecurityprofessional | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
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 | 7.00% | |||
Percentage of level 3 assets that were priced using non-binding broker quotes | 69.00% | |||
Level 3 assets that were priced using non-binding broker quotes | $ 2,410 | |||
Percent of spreads between 400 and 700 basis points | 80.00% | |||
Fair value of equity securities transferred into level 3 | $ 270 | $ 289 | $ 139 | |
Life contingent annuities | 232 | 206 | ||
Fixed-indexed and variable-indexed annuities (embedded derivative) | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Fair value of derivatives in annuity benefits accumulated measured using a discounted cash flow approach | $ 2,720 | |||
Fixed-indexed and variable-indexed annuities (embedded derivative) | Minimum | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Unobservable input surrenders used in Level 3 fair value determination | 3.00% | |||
Fixed-indexed and variable-indexed annuities (embedded derivative) | Maximum | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Unobservable input surrenders used in Level 3 fair value determination | 23.00% | |||
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 | 7.00% | |||
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 | 11.00% | |||
Not Designated as Hedging Instrument | Annuity benefits | Fixed-indexed and variable-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 | $ (44) | (25) | (17) | |
Level 3 | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Internally developed level 3 assets | 1,050 | |||
Fixed maturities | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Fair value of equity securities transferred into level 3 | 240 | 289 | 124 | |
Equity securities | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Fair value of equity securities transferred into level 3 | $ 29 | 30 | $ 0 | $ 15 |
Third party pricing model | Fixed maturities | Level 3 | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Internally developed level 3 assets | $ 590 | |||
Securities priced using third-party model | security | 100 | |||
Basis points credit spread applied by management using third party model | basispoint | 585 | |||
Third party pricing model | Fixed maturities | Level 3 | Minimum | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Basis points credit spread applied by management using third party model | basispoint | 131 | |||
Third party pricing model | Fixed maturities | Level 3 | Maximum | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Basis points credit spread applied by management using third party model | basispoint | 2,966 | |||
Maximum | Third party pricing model | Fixed maturities | Level 3 | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Basis points credit spread applied by management using third party model | basispoint | 700 | |||
Minimum | Third party pricing model | Fixed maturities | Level 3 | ||||
Fair Value Measurements (Textual) [Abstract] | ||||
Basis points credit spread applied by management using third party model | basispoint | 400 |
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, 2018 | Dec. 31, 2017 | |
Assets: | |||
Available for sale (AFS) fixed maturities | $ 41,997 | $ 38,379 | |
Trading fixed maturities | 105 | 348 | |
Equity securities, at fair value | 1,814 | 1,662 | |
Assets of managed investment entities (MIE) | 4,700 | 4,902 | |
Variable annuity assets (separate accounts) | [1] | 557 | 644 |
Derivatives including equity index call options and other assets | 184 | 701 | |
Total assets accounted for at fair value | 49,373 | 46,636 | |
Liabilities: | |||
Liabilities of managed investment entities | 4,512 | 4,687 | |
Total liabilities accounted for at fair value | 7,281 | 7,264 | |
Derivatives in annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 2,720 | 2,542 | |
Other liabilities — derivatives | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 49 | 35 | |
Fixed maturities | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 41,997 | 38,379 | |
Trading fixed maturities | 105 | 348 | |
U.S. Government and government agencies | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 233 | 242 | |
States, municipalities and political subdivisions | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 6,939 | 7,123 | |
Foreign government | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 142 | 127 | |
Residential MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 2,744 | 3,227 | |
Commercial MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 920 | 962 | |
Asset-backed securities | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 9,811 | 7,962 | |
Corporate and other | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 21,208 | 18,736 | |
Equity securities | |||
Assets: | |||
Equity securities, at fair value | 1,814 | 1,662 | |
Other assets — derivatives | |||
Assets: | |||
Derivatives including equity index call options and other assets | 16 | 0 | |
Level 1 | |||
Assets: | |||
Assets of managed investment entities (MIE) | 203 | 307 | |
Variable annuity assets (separate accounts) | [1] | 0 | 0 |
Total assets accounted for at fair value | 1,791 | 1,914 | |
Liabilities: | |||
Liabilities of managed investment entities | 195 | 293 | |
Total liabilities accounted for at fair value | 195 | 293 | |
Level 1 | Derivatives in annuity benefits accumulated | |||
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 | 169 | 152 | |
Trading fixed maturities | 9 | 44 | |
Level 1 | U.S. Government and government agencies | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 141 | 122 | |
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 | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 0 | 0 | |
Level 1 | Corporate and other | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 28 | 30 | |
Level 1 | Equity securities | |||
Assets: | |||
Equity securities, at fair value | 1,410 | 1,411 | |
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) | 4,476 | 4,572 | |
Variable annuity assets (separate accounts) | [1] | 557 | 644 |
Total assets accounted for at fair value | 44,061 | 42,432 | |
Liabilities: | |||
Liabilities of managed investment entities | 4,297 | 4,372 | |
Total liabilities accounted for at fair value | 4,346 | 4,407 | |
Level 2 | Derivatives in annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 0 | 0 | |
Level 2 | Other liabilities — derivatives | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 49 | 35 | |
Level 2 | Fixed maturities | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 38,664 | 36,125 | |
Trading fixed maturities | 96 | 304 | |
Level 2 | U.S. Government and government agencies | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 83 | 112 | |
Level 2 | States, municipalities and political subdivisions | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 6,880 | 6,975 | |
Level 2 | Foreign government | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 142 | 127 | |
Level 2 | Residential MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 2,547 | 3,105 | |
Level 2 | Commercial MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 864 | 926 | |
Level 2 | Asset-backed securities | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 8,964 | 7,218 | |
Level 2 | Corporate and other | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 19,184 | 17,662 | |
Level 2 | Equity securities | |||
Assets: | |||
Equity securities, at fair value | 68 | 86 | |
Level 2 | Other assets — derivatives | |||
Assets: | |||
Derivatives including equity index call options and other assets | 16 | 0 | |
Level 3 | |||
Assets: | |||
Assets of managed investment entities (MIE) | 21 | 23 | |
Variable annuity assets (separate accounts) | [1] | 0 | 0 |
Total assets accounted for at fair value | 3,521 | 2,290 | |
Liabilities: | |||
Liabilities of managed investment entities | 20 | 22 | |
Total liabilities accounted for at fair value | 2,740 | 2,564 | |
Level 3 | Derivatives in annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated, long-term debt, and other liabilities | 2,720 | 2,542 | |
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 | 3,164 | 2,102 | |
Trading fixed maturities | 0 | 0 | |
Level 3 | U.S. Government and government agencies | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 9 | 8 | |
Level 3 | States, municipalities and political subdivisions | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 59 | 148 | |
Level 3 | Foreign government | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 0 | 0 | |
Level 3 | Residential MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 197 | 122 | |
Level 3 | Commercial MBS | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 56 | 36 | |
Level 3 | Asset-backed securities | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 847 | 744 | |
Level 3 | Corporate and other | |||
Assets: | |||
Available for sale (AFS) fixed maturities | 1,996 | 1,044 | |
Level 3 | Equity securities | |||
Assets: | |||
Equity securities, at fair value | 336 | 165 | |
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 | 184 | 701 | |
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 | 184 | 701 | |
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, 2018USD ($)stock | Dec. 31, 2017USD ($)stock | Dec. 31, 2016USD ($)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 | 2 | 4 | 6 |
Fair value of assets transferred from Level 2 to Level 1 | $ | $ 5 | $ 23 | $ 35 |
Number of stocks transferred from Level 1 to Level 2 | stock | 2 | 2 | 7 |
Fair value of assets transferred from Level 1 to Level 2 | $ | $ 6 | $ 11 | $ 28 |
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 | 0 | 0 | 3 |
Fair value of assets transferred from Level 2 to Level 1 | $ | $ 0 | $ 0 | $ 0 |
Number of stocks transferred from Level 1 to Level 2 | stock | 0 | 1 | 2 |
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, 2018 | |
Unobservable inputs used by management in determining fair value of embedded derivatives | |
Risk margin for uncertainty in cash flows | 0.73% |
Minimum | |
Unobservable inputs used by management in determining fair value of embedded derivatives | |
Fair Value Input Adjustment for Insurance Subsidiary’s Credit Risk | 0.60% |
Surrenders | 3.00% |
Partial surrenders | 2.00% |
Annuitizations | 0.10% |
Deaths | 1.50% |
Budgeted option costs | 2.60% |
Maximum | |
Unobservable inputs used by management in determining fair value of embedded derivatives | |
Fair Value Input Adjustment for Insurance Subsidiary’s Credit Risk | 2.10% |
Surrenders | 23.00% |
Partial surrenders | 9.00% |
Annuitizations | 1.00% |
Deaths | 9.50% |
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 | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | $ 2,290 | $ 2,290 | $ 1,762 | $ 1,636 |
Total realized/unrealized gains (losses) included in Net earnings | (21) | (39) | (35) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (39) | 17 | 21 | |
Purchases and issuances | 1,828 | 1,079 | 347 | |
Sales and settlements | (482) | (437) | (217) | |
Transfer into Level 3 | 270 | 289 | 139 | |
Transfer out of Level 3 | (325) | (381) | (129) | |
Financial assets, Ending Balance | 3,521 | 2,290 | 1,762 | |
Fixed maturities | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 2,102 | 2,102 | 1,559 | 1,470 |
Total realized/unrealized gains (losses) included in Net earnings | (22) | (7) | (14) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (39) | 7 | (14) | |
Purchases and issuances | 1,667 | 1,032 | 291 | |
Sales and settlements | (476) | (421) | (189) | |
Transfer into Level 3 | 240 | 289 | 124 | |
Transfer out of Level 3 | (308) | (357) | (109) | |
Financial assets, Ending Balance | 3,164 | 2,102 | 1,559 | |
U.S. government agency | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 8 | 8 | 8 | 15 |
Total realized/unrealized gains (losses) included in Net earnings | 0 | 0 | (8) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 1 | |
Purchases and issuances | 0 | 0 | 0 | |
Sales and settlements | 0 | 0 | 0 | |
Transfer into Level 3 | 1 | 0 | 0 | |
Transfer out of Level 3 | 0 | 0 | 0 | |
Financial assets, Ending Balance | 9 | 8 | 8 | |
State and municipal | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 148 | 148 | 140 | 89 |
Total realized/unrealized gains (losses) included in Net earnings | 0 | 0 | 0 | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (2) | 2 | (4) | |
Purchases and issuances | 0 | 0 | 57 | |
Sales and settlements | (3) | (2) | (2) | |
Transfer into Level 3 | 0 | 10 | 0 | |
Transfer out of Level 3 | (84) | (2) | 0 | |
Financial assets, Ending Balance | 59 | 148 | 140 | |
Residential MBS | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 122 | 122 | 190 | 224 |
Total realized/unrealized gains (losses) included in Net earnings | (9) | (4) | (4) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (4) | 2 | (2) | |
Purchases and issuances | 0 | 1 | 8 | |
Sales and settlements | (21) | (40) | (28) | |
Transfer into Level 3 | 130 | 44 | 34 | |
Transfer out of Level 3 | (21) | (71) | (42) | |
Financial assets, Ending Balance | 197 | 122 | 190 | |
Commercial MBS | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 36 | 36 | 25 | 39 |
Total realized/unrealized gains (losses) included in Net earnings | 0 | 2 | (1) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 | |
Purchases and issuances | 20 | 15 | 0 | |
Sales and settlements | 0 | (10) | (7) | |
Transfer into Level 3 | 0 | 4 | 0 | |
Transfer out of Level 3 | 0 | 0 | (6) | |
Financial assets, Ending Balance | 56 | 36 | 25 | |
Asset-backed securities | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 744 | 744 | 484 | 470 |
Total realized/unrealized gains (losses) included in Net earnings | (3) | 0 | (1) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (15) | 1 | 1 | |
Purchases and issuances | 426 | 410 | 50 | |
Sales and settlements | (248) | (132) | (52) | |
Transfer into Level 3 | 82 | 202 | 60 | |
Transfer out of Level 3 | (139) | (221) | (44) | |
Financial assets, Ending Balance | 847 | 744 | 484 | |
Corporate and other | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 1,044 | 1,044 | 712 | 633 |
Total realized/unrealized gains (losses) included in Net earnings | (10) | (5) | 0 | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (18) | 2 | (10) | |
Purchases and issuances | 1,221 | 606 | 176 | |
Sales and settlements | (204) | (237) | (100) | |
Transfer into Level 3 | 27 | 29 | 30 | |
Transfer out of Level 3 | (64) | (63) | (17) | |
Financial assets, Ending Balance | 1,996 | 1,044 | 712 | |
Equity securities | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 165 | 165 | 174 | 140 |
Total realized/unrealized gains (losses) included in Net earnings | 9 | (21) | (12) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 10 | 35 | |
Purchases and issuances | 155 | 38 | 44 | |
Sales and settlements | (6) | (16) | (28) | |
Transfer into Level 3 | 29 | 30 | 0 | 15 |
Transfer out of Level 3 | (17) | (20) | (20) | |
Financial assets, Ending Balance | 336 | 165 | 174 | |
Assets of MIE | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | $ 23 | 23 | 29 | 26 |
Total realized/unrealized gains (losses) included in Net earnings | (8) | (11) | (9) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 | |
Purchases and issuances | 6 | 9 | 12 | |
Sales and settlements | 0 | 0 | 0 | |
Transfer into Level 3 | 0 | 0 | 0 | |
Transfer out of Level 3 | 0 | (4) | 0 | |
Financial assets, Ending Balance | $ 21 | $ 23 | $ 29 |
Fair Value Measurements - Cha_2
Fair Value Measurements - Changes in balances of Level 3 financial liabilities carried at fair value (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Financial liabilities, Beginning Balance | $ (2,542) | [1] | $ (1,759) | [2] | $ (1,369) | |
Total realized/unrealized gains (losses) included in Net earnings | 204 | (589) | (211) | |||
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 | |||
Purchases and issuances | (545) | (300) | (277) | |||
Sales and settlements | 163 | 106 | 98 | |||
Transfer into Level 3 | 0 | 0 | 0 | |||
Transfer out of Level 3 | 0 | 0 | 0 | |||
Financial liabilities, Ending Balance | (2,720) | [3] | (2,542) | [1] | (1,759) | [2] |
Embedded derivatives | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Financial liabilities, Beginning Balance | (2,542) | (1,759) | (1,369) | |||
Total realized/unrealized gains (losses) included in Net earnings | 204 | [4] | (589) | [5] | (211) | [6] |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 | |||
Purchases and issuances | (545) | (300) | (277) | |||
Sales and settlements | 163 | 106 | 98 | |||
Transfer into Level 3 | 0 | 0 | 0 | |||
Transfer out of Level 3 | 0 | 0 | 0 | |||
Financial liabilities, Ending Balance | $ (2,720) | $ (2,542) | $ (1,759) | |||
[1] | As previously discussed, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets. | |||||
[2] | As previously discussed, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets. | |||||
[3] | As previously discussed, these tables exclude the portion of MIE liabilities allocated to Level 3, which are derived from the fair value of the MIE assets. | |||||
[4] | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $44 million in 2018. | |||||
[5] | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $25 million in 2017. | |||||
[6] | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016. |
Fair Value Measurements - The c
Fair Value Measurements - The carrying value and fair value of financial instruments (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | |
Financial assets: | |||
Mortgage loans | $ 1,068 | $ 1,125 | |
Policy loans | 174 | 184 | |
Financial liabilities: | |||
Long-term debt | 1,302 | 1,301 | |
Level 1 | |||
Financial assets: | |||
Cash and cash equivalents | 1,515 | 2,338 | |
Mortgage loans | 0 | 0 | |
Policy loans | 0 | 0 | |
Total financial assets not accounted for at fair value | 1,515 | 2,338 | |
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 | 1,228 | 1,351 | |
Total financial liabilities not accounted for at fair value | 1,228 | 1,351 | |
Level 3 | |||
Financial assets: | |||
Cash and cash equivalents | 0 | 0 | |
Mortgage loans | 1,056 | 1,119 | |
Policy loans | 174 | 184 | |
Total financial assets not accounted for at fair value | 1,230 | 1,303 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 34,765 | 32,461 |
Long-term debt | 3 | 3 | |
Total financial liabilities not accounted for at fair value | 34,768 | 32,464 | |
Carrying Value | |||
Financial assets: | |||
Cash and cash equivalents | 1,515 | 2,338 | |
Mortgage loans | 1,068 | 1,125 | |
Policy loans | 174 | 184 | |
Total financial assets not accounted for at fair value | 2,757 | 3,647 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 36,384 | 33,110 |
Long-term debt | 1,302 | 1,301 | |
Total financial liabilities not accounted for at fair value | 37,686 | 34,411 | |
Fair Value | |||
Financial assets: | |||
Cash and cash equivalents | 1,515 | 2,338 | |
Mortgage loans | 1,056 | 1,119 | |
Policy loans | 174 | 184 | |
Total financial assets not accounted for at fair value | 2,745 | 3,641 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 34,765 | 32,461 |
Long-term debt | 1,231 | 1,354 | |
Total financial liabilities not accounted for at fair value | $ 35,996 | $ 33,815 | |
[1] | Excludes $232 million and $206 million of life contingent annuities in the payout phase at December 31, 2018 and 2017, respectively. |
Investments - Narrative (Detail
Investments - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)security | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
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 | 92.00% | ||
Percentage (based on fair value) of available for sale fixed maturities that are in an unrealized loss position and rated investment grade | 96.00% | ||
Other than temporary impairment charges | $ 19 | $ 73 | $ 116 |
Average life of ABS | 4 years 6 months | ||
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 | $ 140 | 158 | |
Fixed maturities, Gross Unrealized, Losses | (9) | (6) | |
Other than temporary impairment charges | 6 | 1 | 3 |
Securities with non-credit other-than-temporary impairment charges | |||
Investment [Line Items] | |||
Gross Unrealized, Gains | 119 | 137 | |
Gross Unrealized, Losses | (4) | (4) | |
Fixed maturities | |||
Investment [Line Items] | |||
Fixed maturities, Gross Unrealized, Losses | $ (603) | (82) | |
Number of available for sale securities in an unrealized loss position | security | 2,324 | ||
Other than temporary impairment charges | $ 26 | 20 | 38 |
Available-for-sale Securities, Gross Realized Gains | 22 | 43 | 55 |
Available-for-sale Securities, Gross Realized Losses | (14) | (20) | (10) |
Fixed maturities excluding residential MBS | |||
Investment [Line Items] | |||
Other than temporary impairment charges | 20 | 19 | 35 |
Other investments | |||
Investment [Line Items] | |||
Other than temporary impairment charges | 4 | ||
Equity securities | |||
Investment [Line Items] | |||
Other than temporary impairment charges | 0 | 64 | 93 |
Available-for-sale Securities, Gross Realized Gains | 87 | 110 | |
Available-for-sale Securities, Gross Realized Losses | (17) | (4) | |
Equity securities | Available-for-sale securities | |||
Investment [Line Items] | |||
Other than temporary impairment charges | $ 64 | $ 93 | |
Aircraft financing | Fixed maturities excluding residential MBS | |||
Investment [Line Items] | |||
Other than temporary impairment charges | $ 14 |
Investments - Available for sal
Investments - Available for sale fixed maturities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | $ 41,837 | $ 37,038 |
Available for sale (AFS) fixed maturities | 41,997 | 38,379 |
Total fixed maturities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 41,837 | 37,038 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 763 | 1,423 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (603) | (82) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 160 | 1,341 |
Available for sale (AFS) fixed maturities | 41,997 | 38,379 |
U.S. Government and government agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 235 | 244 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 1 | 1 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (3) | (3) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | (2) | (2) |
Available for sale (AFS) fixed maturities | 233 | 242 |
States, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 6,825 | 6,887 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 169 | 254 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (55) | (18) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 114 | 236 |
Available for sale (AFS) fixed maturities | 6,939 | 7,123 |
Foreign government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 140 | 124 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 2 | 3 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | 0 | 0 |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 2 | 3 |
Available for sale (AFS) fixed maturities | 142 | 127 |
Residential MBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 2,476 | 2,884 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 277 | 349 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (9) | (6) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 268 | 343 |
Available for sale (AFS) fixed maturities | 2,744 | 3,227 |
Commercial MBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 905 | 927 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 17 | 36 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (2) | (1) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 15 | 35 |
Available for sale (AFS) fixed maturities | 920 | 962 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 9,781 | 7,836 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 130 | 142 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (100) | (16) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 30 | 126 |
Available for sale (AFS) fixed maturities | 9,811 | 7,962 |
Corporate and other | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 21,475 | 18,136 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 167 | 638 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (434) | (38) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | (267) | 600 |
Available for sale (AFS) fixed maturities | $ 21,208 | $ 18,736 |
Investments - Equity securities
Investments - Equity securities reported at fair value (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities | $ 1,814 | $ 1,662 |
Common stocks | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities, at cost | 1,241 | |
Equity securities | 1,148 | |
Equity securities, fair value in excess of cost | (93) | |
Perpetual preferred stocks | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities, at cost | 705 | |
Equity securities | 666 | |
Equity securities, fair value in excess of cost | (39) | |
Equity securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities, at cost | 1,946 | |
Equity securities | 1,814 | |
Equity securities, fair value in excess of cost | $ (132) |
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, 2018 | Dec. 31, 2017 |
Fixed maturities | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (411) | $ (37) |
Fair Value - Less than twelve months | $ 17,766 | $ 4,295 |
Fair Value as % of Cost - Less than twelve months | 98.00% | 99.00% |
Unrealized Loss - Twelve months or more | $ (192) | $ (45) |
Fair Value - Twelve months or more | $ 3,902 | $ 1,574 |
Fair Value as % of Cost - Twelve months or more | 95.00% | 97.00% |
U.S. Government and government agencies | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ 0 | $ 0 |
Fair Value - Less than twelve months | $ 41 | $ 55 |
Fair Value as % of Cost - Less than twelve months | 100.00% | 100.00% |
Unrealized Loss - Twelve months or more | $ (3) | $ (3) |
Fair Value - Twelve months or more | $ 120 | $ 123 |
Fair Value as % of Cost - Twelve months or more | 98.00% | 98.00% |
States, municipalities and political subdivisions | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (23) | $ (8) |
Fair Value - Less than twelve months | $ 1,497 | $ 825 |
Fair Value as % of Cost - Less than twelve months | 98.00% | 99.00% |
Unrealized Loss - Twelve months or more | $ (32) | $ (10) |
Fair Value - Twelve months or more | $ 902 | $ 431 |
Fair Value as % of Cost - Twelve months or more | 97.00% | 98.00% |
Foreign government | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ 0 | $ 0 |
Fair Value - Less than twelve months | $ 18 | $ 4 |
Fair Value as % of Cost - Less than twelve months | 100.00% | 100.00% |
Unrealized Loss - Twelve months or more | $ 0 | $ 0 |
Fair Value - Twelve months or more | $ 4 | $ 0 |
Fair Value as % of Cost - Twelve months or more | 100.00% | 0.00% |
Residential MBS | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (4) | $ (1) |
Fair Value - Less than twelve months | $ 279 | $ 118 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 99.00% |
Unrealized Loss - Twelve months or more | $ (5) | $ (5) |
Fair Value - Twelve months or more | $ 139 | $ 118 |
Fair Value as % of Cost - Twelve months or more | 97.00% | 96.00% |
Commercial MBS | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (1) | $ (1) |
Fair Value - Less than twelve months | $ 147 | $ 67 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 99.00% |
Unrealized Loss - Twelve months or more | $ (1) | $ 0 |
Fair Value - Twelve months or more | $ 30 | $ 0 |
Fair Value as % of Cost - Twelve months or more | 97.00% | 0.00% |
Asset-backed securities | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (77) | $ (7) |
Fair Value - Less than twelve months | $ 5,406 | $ 1,195 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 99.00% |
Unrealized Loss - Twelve months or more | $ (23) | $ (9) |
Fair Value - Twelve months or more | $ 629 | $ 299 |
Fair Value as % of Cost - Twelve months or more | 96.00% | 97.00% |
Corporate and other | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (306) | $ (20) |
Fair Value - Less than twelve months | $ 10,378 | $ 2,031 |
Fair Value as % of Cost - Less than twelve months | 97.00% | 99.00% |
Unrealized Loss - Twelve months or more | $ (128) | $ (18) |
Fair Value - Twelve months or more | $ 2,078 | $ 603 |
Fair Value as % of Cost - Twelve months or more | 94.00% | 97.00% |
Equity securities | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (22) | |
Fair Value - Less than twelve months | $ 158 | |
Fair Value as % of Cost - Less than twelve months | 88.00% | |
Unrealized Loss - Twelve months or more | $ (1) | |
Fair Value - Twelve months or more | $ 13 | |
Fair Value as % of Cost - Twelve months or more | 93.00% | |
Common stocks | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (22) | |
Fair Value - Less than twelve months | $ 117 | |
Fair Value as % of Cost - Less than twelve months | 84.00% | |
Unrealized Loss - Twelve months or more | $ 0 | |
Fair Value - Twelve months or more | $ 0 | |
Fair Value as % of Cost - Twelve months or more | 0.00% | |
Perpetual preferred stocks | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ 0 | |
Fair Value - Less than twelve months | $ 41 | |
Fair Value as % of Cost - Less than twelve months | 100.00% | |
Unrealized Loss - Twelve months or more | $ (1) | |
Fair Value - Twelve months or more | $ 13 | |
Fair Value as % of Cost - Twelve months or more | 93.00% |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | |||
Balance at January 1 | $ 145 | $ 153 | $ 160 |
Additional credit impairments on: | |||
Previously impaired securities | 1 | 1 | 2 |
Securities without prior impairments | 1 | 3 | 1 |
Reductions due to sales or redemptions | (5) | (12) | (10) |
Balance at December 31 | $ 142 | $ 145 | $ 153 |
Investments - Scheduled maturit
Investments - Scheduled maturities of available for sale fixed maturities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Percent, Fiscal Year Maturity [Abstract] | ||
Average life of ABS | 4 years 6 months | |
Average life of MBS | 4 years 6 months | |
Securities With Non-Credit Other Than Temporary Impairment Charges [Member] | ||
Fair Value Percent, Fiscal Year Maturity [Abstract] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | $ (4) | $ (4) |
Fixed maturities | ||
Amortized Cost Basis, Fiscal Year Maturity [Abstract] | ||
One year or less | 1,310 | |
After one year through five years | 8,521 | |
After five years through ten years | 14,235 | |
After ten years | 4,609 | |
Fixed maturities amortized cost, Subtotal | 28,675 | |
ABS (average life of approximately 4.5 years) | 9,781 | |
MBS (average life of approximately 4.5 years) | 3,381 | |
Amortized Cost | 41,837 | |
Fair Value, Fiscal Year Maturity [Abstract] | ||
One year or less | 1,318 | |
After one year through five years | 8,554 | |
After five years through ten years | 14,044 | |
After ten years | 4,606 | |
Fixed maturities fair value, Subtotal | 28,522 | |
ABS (average life of approximately 4.5 years) | 9,811 | |
MBS (average life of approximately 4.5 years) | 3,664 | |
Fair Value | $ 41,997 | |
Fair Value Percent, Fiscal Year Maturity [Abstract] | ||
One year or less | 3.00% | |
After one year through five years | 20.00% | |
After five years through ten years | 34.00% | |
After ten years | 11.00% | |
Fixed maturities fair value, Subtotal, Percent | 68.00% | |
ABS (average life of approximately 4.5 years) | 23.00% | |
MBS (average life of approximately 4.5 years) | 9.00% | |
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, 2018 | Dec. 31, 2017 | |
Unrealized gain on: | |||
Pretax | $ 105 | $ 1,063 | |
Deferred Tax | (22) | (223) | |
Net | 83 | 840 | |
Total investments | |||
Unrealized gain on: | |||
Pretax | 1,620 | ||
Deferred Tax | (340) | ||
Net | 1,280 | ||
Total fixed maturities | |||
Unrealized gain on: | |||
Pretax | 160 | 1,341 | |
Deferred Tax | (34) | (282) | |
Net | 126 | 1,059 | |
Fixed maturities — annuity segment | |||
Unrealized gain on: | |||
Pretax | [1] | 101 | 1,082 |
Deferred Tax | [1] | (21) | (227) |
Net | [1] | 80 | 855 |
Fixed maturities — all other | |||
Unrealized gain on: | |||
Pretax | 59 | 259 | |
Deferred Tax | (13) | (55) | |
Net | 46 | 204 | |
Equity securities | |||
Unrealized gain on: | |||
Pretax | [2] | 279 | |
Deferred Tax | [2] | (58) | |
Net | [2] | 221 | |
Deferred policy acquisition costs — annuity segment | |||
Unrealized gain on: | |||
Pretax | (42) | (433) | |
Deferred Tax | 9 | 91 | |
Net | (33) | (342) | |
Annuity benefits accumulated | |||
Unrealized gain on: | |||
Pretax | (14) | (137) | |
Deferred Tax | 3 | 29 | |
Net | (11) | (108) | |
Unearned revenue | |||
Unrealized gain on: | |||
Pretax | 1 | 13 | |
Deferred Tax | 0 | (3) | |
Net | $ 1 | $ 10 | |
[1] | Net unrealized gains on fixed maturity investments supporting AFG’s annuity benefits accumulated. | ||
[2] | As discussed in Note A — “Accounting Policies — Investments,” effective January 1, 2018, all equity securities other than those accounted for under the equity method are carried at fair value through net earnings. |
Investments - Schedule of sourc
Investments - Schedule of sources of net investment income (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Net Investment Income [Line Items] | ||||
Gross investment income | $ 2,116 | $ 1,852 | $ 1,716 | |
Investment expenses | (22) | (21) | (20) | |
Net investment income | 2,094 | 1,831 | 1,696 | |
Fixed maturities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 1,742 | 1,607 | 1,510 | |
Equity in earnings of partnerships and similar investments | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 161 | 64 | 44 | |
Other | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 112 | 102 | 81 | |
Investment income | Equity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 79 | 73 | 77 | |
Accounting Standards Update 2016-01 | Equity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | [1] | $ 22 | $ 6 | $ 4 |
[1] | As discussed in Note A — “Accounting Policies — Investments,” AFG adopted guidance in January 2018 that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. Although the change in the fair value of the majority of AFG’s equity securities is recorded in realized gains (losses) on securities, AFG records holding gains and losses in net investment income on equity securities classified as “trading” under the previous guidance and on a small portfolio of limited partnership and similar investments that do not qualify for the equity method of accounting. |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | $ (247) | $ 78 | $ 135 | |
Realized - impairments | (19) | (73) | (116) | |
Total realized gains (losses) on securities | (266) | 5 | 19 | |
Net of tax | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | (195) | 51 | 85 | |
Realized - impairments | (15) | (48) | (72) | |
Total realized gains (losses) on securities | (210) | 3 | 13 | |
Change in unrealized | (536) | 436 | 72 | |
Total pretax | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | (247) | 78 | 135 | |
Realized - impairments | (19) | (73) | (116) | |
Total realized gains (losses) on securities | (266) | 5 | 19 | |
Change in unrealized | (679) | 441 | 105 | |
Fixed maturities | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | 6 | 17 | 36 | |
Realized - impairments | (26) | (20) | (38) | |
Total realized gains (losses) on securities | (20) | (3) | (2) | |
Change in unrealized | (1,181) | 532 | 90 | |
Equity securities | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | (265) | 70 | 106 | |
Realized - impairments | 0 | (64) | (93) | |
Total realized gains (losses) on securities | (265) | 6 | 13 | |
Change in unrealized | 0 | 128 | 67 | |
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 | 1 | (6) | ||
Realized - impairments | 0 | (4) | ||
Total realized gains (losses) on securities | 1 | (10) | ||
Change in unrealized | 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 | [1] | 11 | (3) | (7) |
Realized - impairments | [1] | 7 | 15 | 15 |
Total realized gains (losses) on securities | [1] | 18 | 12 | 8 |
Change in unrealized | [1] | 502 | (219) | (52) |
Total tax effects | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | 52 | (27) | (48) | |
Realized - impairments | 4 | 25 | 41 | |
Total realized gains (losses) on securities | 56 | (2) | (7) | |
Change in unrealized | 143 | (5) | (37) | |
Effects Of Tax Cuts And Jobs Act Of 2017 | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | 0 | 0 | ||
Realized - impairments | 0 | 0 | ||
Total realized gains (losses) on securities | 0 | 0 | ||
Change in unrealized | 0 | 149 | ||
Other tax effects | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | 52 | (27) | ||
Realized - impairments | 4 | 25 | ||
Total realized gains (losses) on securities | 56 | (2) | ||
Change in unrealized | $ 143 | $ (154) | ||
Noncontrolling interests | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | (2) | |||
Realized - impairments | 3 | |||
Total realized gains (losses) on securities | 1 | |||
Change in unrealized | $ 4 | |||
[1] | Primarily adjustments to deferred policy acquisition costs and reserves related to the annuity business. |
Investments - Holding gains (lo
Investments - Holding gains (losses) on equity securities still held (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Holding Gains (Losses) on Equity Securities Still Held [Line Items] | ||||
Realized gains (losses) on securities | $ (266) | $ 5 | $ 19 | |
Gross investment income | 2,116 | 1,852 | 1,716 | |
Equity securities | ||||
Holding Gains (Losses) on Equity Securities Still Held [Line Items] | ||||
Realized gains (losses) on securities | (265) | $ 6 | $ 13 | |
Accounting Standards Update 2016-01 | Equity securities still owned | Equity securities | ||||
Holding Gains (Losses) on Equity Securities Still Held [Line Items] | ||||
Net holding gains (losses) on equity securities | (257) | |||
Accounting Standards Update 2016-01 | Realized gains (losses) on securities | Equity securities still owned | Equity securities | ||||
Holding Gains (Losses) on Equity Securities Still Held [Line Items] | ||||
Realized gains (losses) on securities | (279) | |||
Net holding gains (losses) on equity securities | $ (228) | (279) | ||
Accounting Standards Update 2016-01 | Investment income | Equity securities still owned | Equity securities | ||||
Holding Gains (Losses) on Equity Securities Still Held [Line Items] | ||||
Gross investment income | $ 22 |
Investments - Gross realized ga
Investments - Gross realized gains and losses on available for sale fixed maturity security investment transactions (Details) - Fixed maturities - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Gross realized gains and losses on the sale of available for sale fixed maturity security investments | |||
Gross gains | $ 22 | $ 43 | $ 55 |
Gross losses | $ (14) | $ (20) | $ (10) |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)swap | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Carrying value of collateral received to support purchased call options | $ 103,000,000 | $ 389,000,000 | |
Not Designated as Hedging Instrument | Fixed-indexed and variable-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 | (44,000,000) | (25,000,000) | $ (17,000,000) |
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Notional amount of derivative instrument outstanding | $ 2,350,000,000 | 1,580,000,000 | |
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 | 16 | ||
Number of interest rate swaps entered into during the period | swap | 6 | ||
Gain (loss) reclassified from AOCI into net investment income | $ (3,000,000) | 6,000,000 | 7,000,000 |
Gain (loss) on cash flow hedge ineffectiveness recorded in Net Earnings | 0 | 0 | $ 0 |
Collateral receivable supporting interest rate swaps | 135,000,000 | 70,000,000 | |
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | Other assets | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net derivatives, at fair value | 16,000,000 | ||
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | Other assets | 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 | Other liabilities | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net derivatives, at fair value | (46,000,000) | $ (31,000,000) | |
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 | $ 911,000,000 |
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, 2018 | Dec. 31, 2017 |
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | $ 293 | $ 810 |
Derivative liability, at fair value | 2,723 | 2,546 |
MBS with embedded derivatives | Fixed maturities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | 109 | 105 |
Public company warrants | Equity securities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | 0 | 4 |
Fixed-indexed and variable-indexed annuities (embedded derivative) | Annuity benefits accumulated | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative liability, at fair value | 2,720 | 2,542 |
Equity index call options | Equity index call options | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | 184 | 701 |
Equity index put options | Other liabilities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative liability, at fair value | 1 | 0 |
Reinsurance contract (embedded derivative) | Other liabilities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative liability, at fair value | $ 2 | $ 4 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ (103) | $ (103) | $ (80) | |
MBS with embedded derivatives | Realized gains (losses) on securities | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (7) | (6) | (9) | |
Public company warrants | Realized gains (losses) on securities | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (3) | 0 | 0 | |
Fixed-indexed and variable-indexed annuities (embedded derivative) | Annuity benefits | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | [1] | 204 | (589) | (211) |
Equity index call options | Annuity benefits | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (298) | 494 | 141 | |
Equity index put options | Annuity benefits | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (1) | 0 | 0 | |
Reinsurance contract (embedded derivative) | Net investment income | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ 2 | $ (2) | $ (1) | |
[1] | The change in fair value of the embedded derivative includes losses related to unlocking of actuarial assumptions of $44 million in 2018, $25 million in 2017 and $17 million in 2016. |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | ||
Accumulated amortization of present value of future profits | $ 148 | $ 141 |
Approximate annual rate of decrease in present value of future profits during next five years | 12.50% |
Deferred Policy Acquisition C_4
Deferred Policy Acquisition Costs - Progression of deferred policy acquisition costs (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
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 | $ 1,216 | $ 1,239 | $ 1,184 | |
Deferred policy acquisition costs and present value of future profits, additions | 940 | 817 | 774 | |
Deferred policy acquisition costs and present value of future profits, periodic amortization | (908) | (744) | (722) | |
Deferred policy acquisition costs and present value of future profits, annuity unlocking | 29 | 41 | 29 | |
Deferred policy acquisition costs and present value of future profits, change included in realized gains | 15 | 10 | 8 | |
Deferred policy acquisition costs and present value of future profits, foreign currency translation | (2) | 0 | (3) | |
Deferred policy acquisition costs and present value of future profits, other | 10 | |||
Deferred policy acquisition costs and present value of future profits, change in unrealized | 392 | (157) | (31) | |
Deferred policy acquisition costs and present value of future profits, ending balance | 1,682 | 1,216 | 1,239 | |
Property and casualty insurance | ||||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||||
Deferred policy acquisition costs, beginning balance | 270 | 238 | 226 | |
Deferred policy acquisition costs, additions | 675 | 588 | 535 | |
Deferred policy acquisition costs, periodic amortization | (644) | (556) | (520) | |
Deferred policy acquisition costs, foreign currency translation | (2) | 0 | (3) | |
Deferred policy acquisition costs, ending balance | 299 | 270 | 238 | |
Annuity and Run-off Long-term Care and Life | ||||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||||
Deferred policy acquisition costs, beginning balance | 1,217 | 1,110 | 1,018 | |
Deferred policy acquisition costs, additions | 263 | 225 | 230 | |
Deferred policy acquisition costs, periodic amortization | (238) | (161) | (169) | |
Deferred policy acquisition costs, annuity unlocking | 29 | 34 | 25 | |
Deferred policy acquisition costs, change included in realized gains | 14 | 9 | 6 | |
Deferred policy acquisition costs, ending balance | 1,285 | 1,217 | 1,110 | |
Movement in Deferred Sales Inducements [Roll Forward] | ||||
Deferred sales inducements, beginning balance | 102 | 110 | 119 | |
Deferred sales inducements, additions | 2 | 4 | 9 | |
Deferred sales inducements, periodic amortization | (19) | (19) | (24) | |
Deferred sales inducements, annuity unlocking | 0 | 6 | 4 | |
Deferred sales inducements, change included in realized gains | 1 | 1 | 2 | |
Deferred sales inducements, ending balance | 86 | 102 | 110 | |
Movement in Present Value of Future Insurance Profits [Roll Forward] | ||||
Present value of future profits, beginning balance | 49 | 46 | 55 | |
Present value of future profits, periodic amortization | (7) | (8) | (9) | |
Present value of future profits, annuity unlocking | 0 | 1 | 0 | |
Present value of future profits, other | 10 | |||
Present value of future profits, ending balance | 42 | 49 | 46 | |
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 | [1] | (422) | (265) | (234) |
Unrealized investment gains (losses), change in unrealized | [1] | 392 | (157) | (31) |
Unrealized investment gains (losses), ending balance | [1] | (30) | (422) | (265) |
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 | 946 | 1,001 | 958 | |
Deferred policy acquisition costs and present value of future profits, additions | 265 | 229 | 239 | |
Deferred policy acquisition costs and present value of future profits, periodic amortization | (264) | (188) | (202) | |
Deferred policy acquisition costs and present value of future profits, annuity unlocking | 29 | 41 | 29 | |
Deferred policy acquisition costs and present value of future profits, change included in realized gains | 15 | 10 | 8 | |
Deferred policy acquisition costs and present value of future profits, other | 10 | |||
Deferred policy acquisition costs and present value of future profits, change in unrealized | 392 | (157) | (31) | |
Deferred policy acquisition costs and present value of future profits, ending balance | 1,383 | 946 | 1,001 | |
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 | 1,368 | 1,266 | 1,192 | |
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 | $ 1,413 | $ 1,368 | $ 1,266 | |
[1] | Adjustments to DPAC related to net unrealized gains/losses on securities and cash flow hedges. |
Managed Investment Entities - N
Managed Investment Entities - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)collateralizedloanobligation | Dec. 31, 2017USD ($)collateralizedloanobligation | Dec. 31, 2016USD ($)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 | 60.90% | ||
Number of collateralized loan obligation entities | collateralizedloanobligation | 15 | ||
Number of collateralized loan obligation entities formed during the period | collateralizedloanobligation | 1 | 2 | 2 |
Face amount of managed investment entities liabilities purchased by subsidiaries after issuance date | $ 7 | $ 71 | $ 24 |
Amount paid by subsidiaries to purchase managed investment entities liabilities after issuance date | 7 | 71 | 17 |
Proceeds received by subsidiaries related to sales and redemptions of managed investment entities liabilities | $ 45 | $ 103 | 115 |
Number of collateralized loan obligation entities that were substantially liquidated during the period | collateralizedloanobligation | 1 | 2 | |
Difference between aggregate unpaid principal balance and fair value of CLOs' fixed maturity investments | $ 232 | $ 55 | |
Difference between aggregate unpaid principal balance and fair value of CLOs' debt | 241 | 118 | |
Carrying amount of CLO loans in default | 1 | ||
Aggregate unpaid principal balance of CLO loans in default | 0 | 8 | |
Variable interest entity, primary beneficiary | |||
Variable Interest Entity [Line Items] | |||
Aggregate fair value of investment in collateralized loan obligations | 188 | 215 | 216 |
New collateralized loan obligation entities | |||
Variable Interest Entity [Line Items] | |||
Face value of liabilities issued by managed investment entities on issuance date | 463 | 865 | 866 |
Face amount of managed investment entities liabilities purchased by subsidiaries at issuance date | 31 | $ 48 | $ 64 |
Subordinated debt obligations | Variable interest entity, primary beneficiary | |||
Variable Interest Entity [Line Items] | |||
Aggregate fair value of investment in collateralized loan obligations | $ 125 |
Managed Investment Entities - S
Managed Investment Entities - Selected financial information related to CLOs (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Gains (losses) on change in fair value of assets/liabilities: | ||||
Assets | [1] | $ (189) | $ (8) | $ 131 |
Liabilities | [1] | 168 | 20 | (116) |
Management fees paid to AFG | 16 | 18 | 17 | |
CLO earnings (losses) attributable to AFG Shareholders | [2] | 7 | 23 | 37 |
Variable interest entity, primary beneficiary | ||||
Variable Interest Entity [Line Items] | ||||
Investment in CLO tranches | $ 188 | $ 215 | $ 216 | |
[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 Intangible_2
Goodwill and Other Intangibles - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill acquired during period | $ 8 | $ 8 | ||
Amortizable intangible assets related to property and casualty insurance acquisitions | 54 | 54 | $ 26 | |
Accumulated amortization | 39 | 39 | 30 | |
Amortization of intangible assets | $ 9 | $ 8 | $ 8 | |
Weighted average useful life of finite-lived intangible assets acquired | 7 years | |||
Future amortization of intangibles in next year | 12 | $ 12 | ||
Future amortization of intangibles in year two | 12 | 12 | ||
Future amortization of intangibles in year three | 6 | 6 | ||
Future amortization of intangibles in year four | 4 | 4 | ||
Future amortization of intangibles in year five | 4 | 4 | ||
Future amortization of intangibles after year five | $ 16 | $ 16 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Changes in the carrying value of goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in the carrying value of goodwill by reporting segment | |||||
Goodwill, Beginning balance | $ 207 | $ 207 | $ 199 | $ 199 | $ 199 |
Goodwill, acquisition of subsidiary | 8 | 8 | |||
Goodwill, Ending balance | 207 | 207 | |||
Property and Casualty | |||||
Changes in the carrying value of goodwill by reporting segment | |||||
Goodwill, Beginning balance | 176 | 176 | 168 | 168 | 168 |
Goodwill, acquisition of subsidiary | 8 | ||||
Goodwill, Ending balance | 176 | 176 | |||
Annuity | |||||
Changes in the carrying value of goodwill by reporting segment | |||||
Goodwill, Beginning balance | 31 | 31 | $ 31 | $ 31 | $ 31 |
Goodwill, acquisition of subsidiary | 0 | ||||
Goodwill, Ending balance | $ 31 | $ 31 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 11, 2017 | Nov. 30, 2017 | Aug. 31, 2017 | Jun. 30, 2017 | Nov. 10, 2016 | Aug. 31, 2016 | Jun. 30, 2015 | |
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Scheduled principal payments on debt in next year | $ 0 | ||||||||||
Scheduled principal payments on debt in year two | 0 | ||||||||||
Scheduled principal payments on debt in year three | 0 | ||||||||||
Scheduled principal payments on debt in year four | 0 | ||||||||||
Scheduled principal payments on debt in year five | 0 | ||||||||||
Principal | $ 1,318,000,000 | 1,318,000,000 | $ 1,318,000,000 | ||||||||
Cash interest payments on long-term debt | 59,000,000 | 85,000,000 | $ 75,000,000 | ||||||||
AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
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 | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Cash interest received on long-term debt affiliated with interest rate swap | 2,000,000 | $ 3,000,000 | |||||||||
Interest rate swaps | Fair Value Hedge | Designated as Hedging Instrument | LIBOR | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Basis spread on variable interest rate | 8.099% | ||||||||||
Senior Notes | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | 1,018,000,000 | $ 1,018,000,000 | 1,018,000,000 | ||||||||
Senior Notes | 4.50% Senior Notes due June 2047 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Senior Notes, aggregate principal amount | $ 240,000,000 | $ 350,000,000 | |||||||||
Senior Notes, issuance price as a percentage of par value | 102.374% | 99.46% | |||||||||
Principal | 590,000,000 | $ 590,000,000 | 590,000,000 | ||||||||
Interest rate on debt instruments | 4.50% | 4.50% | 4.50% | ||||||||
Senior Notes | 3.50% Senior Notes due August 2026 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Senior Notes, aggregate principal amount | $ 125,000,000 | $ 300,000,000 | |||||||||
Senior Notes, issuance price as a percentage of par value | 99.698% | 99.608% | |||||||||
Principal | 425,000,000 | $ 425,000,000 | 425,000,000 | ||||||||
Interest rate on debt instruments | 3.50% | 3.50% | 3.50% | ||||||||
Senior Notes | 9-7/8% Senior Notes due June 2019 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Senior Notes, amount of the original debt instrument that was redeemed | $ 350,000,000 | ||||||||||
Senior Notes, amount of the original debt instrument that was redeemed plus a make-whole premium | $ 388,000,000 | ||||||||||
Interest rate on debt instruments | 9.875% | 9.875% | |||||||||
Senior Notes | 6-3/8% Senior Notes due June 2042 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Senior Notes, amount of the original debt instrument that was redeemed | $ 230,000,000 | ||||||||||
Interest rate on debt instruments | 6.375% | ||||||||||
Senior Notes | 5-3/4% Senior Notes due August 2042 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Senior Notes, amount of the original debt instrument that was redeemed | $ 125,000,000 | ||||||||||
Interest rate on debt instruments | 5.75% | ||||||||||
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] | |||||||||||
Principal | 150,000,000 | $ 150,000,000 | 150,000,000 | ||||||||
Interest rate on debt instruments | 6.25% | ||||||||||
Subordinated Debt | 6% Subordinated Debentures due November 2055 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | 150,000,000 | $ 150,000,000 | $ 150,000,000 | ||||||||
Interest rate on debt instruments | 6.00% | ||||||||||
Revolving Credit Facility | National Interstate | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | $ 18,000,000 | ||||||||||
Revolving Credit Facility | Line of Credit | National Interstate | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Principal | $ 6,000,000 | ||||||||||
Make-whole premium | Senior Notes | 9-7/8% Senior Notes due June 2019 | AFG | |||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||||||
Make-whole premium included in the loss on the retirement of debt | $ (38,000,000) |
Long-Term Debt - Schedule of lo
Long-Term Debt - Schedule of long-term debt (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of Carrying value of long-term debt | ||
Principal | $ 1,318 | $ 1,318 |
Discount and Issue Costs | (16) | (17) |
Carrying Value | 1,302 | 1,301 |
AFG | ||
Summary of Carrying value of long-term debt | ||
Carrying Value | 1,302 | 1,301 |
Senior Notes | AFG | ||
Summary of Carrying value of long-term debt | ||
Principal | 1,018 | 1,018 |
Discount and Issue Costs | (6) | (7) |
Carrying Value | 1,012 | 1,011 |
Senior Notes | 4.50% Senior Notes due June 2047 | AFG | ||
Summary of Carrying value of long-term debt | ||
Principal | 590 | 590 |
Discount and Issue Costs | (2) | (2) |
Carrying Value | 588 | 588 |
Senior Notes | 3.50% Senior Notes due August 2026 | AFG | ||
Summary of Carrying value of long-term debt | ||
Principal | 425 | 425 |
Discount and Issue Costs | (4) | (5) |
Carrying Value | 421 | 420 |
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 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
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 | $ 57 | $ 65 | $ 38 | ||||
Cash received from the exercise of stock options | 29 | 34 | 32 | ||||
Tax benefit related to exercise of stock options | 9 | 18 | 11 | ||||
Total compensation expense related to stock incentive plans | 23 | 30 | 28 | ||||
Tax benefit related to compensation costs | 13 | 27 | 19 | ||||
Net of tax unrealized gains (losses) related to credit-only impaired securities | $ 68 | $ 58 | 68 | $ 52 | |||
Impact of the U.S. corporate tax rate change on AOCI | 4 | $ 4 | |||||
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) | 7,000,000 | ||||||
Common Stock options issued under stock incentive plan (shares) | 0 | 0 | 0 | ||||
Annual Equity Bonus Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Other benefit plans, shares issued (shares) | 45,804 | 47,826 | |||||
Common Stock issued, fair value per share (USD per share) | $ 115.49 | $ 96.13 | |||||
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 | $ 3 | ||||||
Weighted average period of cost expected to be recognized | 1 year | ||||||
Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted Common Stock vested during period, fair value | $ 10 | $ 14 | $ 10 | ||||
Unrecognized compensation expense related to equity-based awards that have yet to vest | $ 35 | ||||||
Weighted average period of cost expected to be recognized | 2 years 6 months | ||||||
Accounting Standards Update 2018-02 | Tax Cuts and Jobs Act of 2017 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | $ 145 | ||||||
Equity securities | Accounting Standards Update 2016-01 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Impact of the U.S. corporate tax rate change on AOCI | $ (221) |
Shareholders' Equity - Preferre
Shareholders' Equity - Preferred stock authorized for issuance (Details) | Dec. 31, 2018$ / 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, 2018$ / 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, 2018 | shares | 759,035 |
Granted | shares | 200,625 |
Vested | shares | (86,177) |
Forfeited | shares | (7,553) |
Outstanding at December 31, 2018 | shares | 865,930 |
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 | $ 73.40 |
Average grant date fair value, Granted | $ / shares | 112.86 |
Average grant date fair value, Vested | $ / shares | 56.89 |
Average grant date fair value, Forfeited | $ / shares | 87.47 |
Average grant date fair value, Outstanding, Ending balance | $ / shares | $ 84.06 |
Shareholders' Equity - Data for
Shareholders' Equity - Data for stock options issued under the stock incentive plans (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at January 1, 2018 | shares | 3,467,340 |
Exercised | shares | (778,270) |
Forfeited/Cancelled | shares | (21,628) |
Outstanding at December 31, 2018 | shares | 2,667,442 |
Options exercisable at December 31, 2018 | shares | 2,253,003 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Average exercise price, Beginning balance | $ / shares | $ 45.80 |
Average exercise price, Exercised | $ / shares | 37.66 |
Average exercise price, Forfeited/Cancelled | $ / shares | 42.10 |
Average exercise price, Ending balance | $ / shares | 48.20 |
Average exercise price, Options exercisable | $ / shares | $ 45.95 |
Average remaining contractual term, Options outstanding | 4 years 2 months 12 days |
Average remaining contractual term, Options exercisable | 3 years 10 months 24 days |
Aggregate intrinsic value, Options outstanding | $ | $ 113 |
Aggregate intrinsic value, Options exercisable | $ | $ 100 |
Shareholders' Equity - Progress
Shareholders' Equity - Progression of the components of accumulated other comprehensive income (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | ||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
AOCI beginning balance | $ 813 | ||||||||
Other comprehensive income (loss), net of tax | (544) | $ 296 | $ 67 | ||||||
Cumulative effect of accounting change | $ 4 | 4 | |||||||
Other comprehensive income (loss), net of tax, acquisition of noncontrolling interest | (315) | ||||||||
AOCI ending balance | 813 | 48 | 813 | ||||||
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 | (689) | 456 | 124 | ||||||
Other comprehensive income (loss), unrealized holding gains on securities arising during the period, tax | 145 | (159) | (44) | ||||||
Other comprehensive income (loss), unrealized holding gains on securities arising during the period, net of tax | (544) | 297 | 80 | ||||||
Reclassification from accumulated other comprehensive income, pretax | [1] | 10 | (15) | (19) | |||||
Reclassification from accumulated other comprehensive income, tax | [1] | (2) | 5 | 7 | |||||
Reclassification from accumulated other comprehensive income, net of tax | 8 | (10) | (12) | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Other comprehensive income (loss), pretax | (679) | 441 | 105 | ||||||
Other comprehensive income (loss), tax | 143 | (154) | (37) | ||||||
Other comprehensive income (loss), net of tax | (536) | 287 | 68 | ||||||
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 | 0 | 0 | (4) | ||||||
Reclassification from accumulated other comprehensive income, net of tax | [1] | 0 | 0 | (1) | |||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Other comprehensive income (loss), net of tax | 0 | 0 | (5) | ||||||
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 | (544) | 297 | 76 | ||||||
Reclassification from accumulated other comprehensive income, net of tax | 8 | (10) | (13) | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
AOCI beginning balance | 840 | [2] | 404 | [2] | 332 | ||||
Other comprehensive income (loss), net of tax | (536) | 287 | 63 | ||||||
Cumulative effect of accounting change | [3] | $ (221) | |||||||
Other comprehensive income (loss), net of tax, acquisition of noncontrolling interest | [3] | 9 | |||||||
AOCI ending balance | [2] | 840 | 83 | 840 | 404 | ||||
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 | 2 | (6) | (12) | ||||||
Other comprehensive income (loss), tax | 0 | 2 | 4 | ||||||
Other comprehensive income (loss), net of tax | 2 | (4) | (8) | ||||||
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 | 0 | ||||||
Accumulated net gain (loss) from cash flow hedges attributable to parent | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
AOCI beginning balance | (13) | (7) | 1 | ||||||
Other comprehensive income (loss), net of tax | 2 | (4) | (8) | ||||||
Cumulative effect of accounting change | [3] | 0 | |||||||
AOCI ending balance | (13) | (11) | (13) | (7) | |||||
Accumulated foreign currency adjustment including portion attributable to noncontrolling interest | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Other comprehensive income (loss), pretax | (9) | 9 | 6 | ||||||
Other comprehensive income (loss), tax | (1) | 3 | 1 | ||||||
Other comprehensive income (loss), net of tax | (10) | 12 | 7 | ||||||
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 | (6) | (15) | (22) | ||||||
Other comprehensive income (loss), net of tax | (10) | 12 | 7 | ||||||
Cumulative effect of accounting change | [3] | 0 | |||||||
AOCI ending balance | (6) | (16) | (6) | (15) | |||||
Accumulated defined benefit plans adjustment including portion attributable to noncontrolling interest | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Other comprehensive income (loss), pretax | 0 | 1 | 0 | ||||||
Other comprehensive income (loss), tax | 0 | 0 | 0 | ||||||
Other comprehensive income (loss), net of tax | 0 | 1 | 0 | ||||||
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 | (8) | (7) | (7) | ||||||
Other comprehensive income (loss), net of tax | 0 | 1 | 0 | ||||||
Cumulative effect of accounting change | [3] | 0 | |||||||
AOCI ending balance | (8) | (8) | (8) | (7) | |||||
AOCI including portion attributable to noncontrolling interest | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Other comprehensive income (loss), pretax | (686) | 445 | 99 | ||||||
Other comprehensive income (loss), tax | 142 | (149) | (32) | ||||||
Other comprehensive income (loss), net of tax | (544) | 296 | 67 | ||||||
AOCI attributable to noncontrolling interest | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Other comprehensive income (loss), net of tax | 0 | 0 | (5) | ||||||
AOCI attributable to parent | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
AOCI beginning balance | 813 | 375 | 304 | ||||||
Other comprehensive income (loss), net of tax | (544) | 296 | 62 | ||||||
Cumulative effect of accounting change | (221) | (221) | $ (221) | [3] | |||||
Other comprehensive income (loss), net of tax, acquisition of noncontrolling interest | [3] | 9 | |||||||
AOCI ending balance | 813 | $ 48 | $ 813 | $ 375 | |||||
Tax Cuts and Jobs Act of 2017 | Accumulated net investment gain (loss) attributable to parent | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | [3] | 149 | |||||||
Tax Cuts and Jobs Act of 2017 | Accumulated net gain (loss) from cash flow hedges attributable to parent | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | [3] | (2) | |||||||
Tax Cuts and Jobs Act of 2017 | Accumulated defined benefit plans adjustment attributable to parent | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | [3] | (2) | |||||||
Tax Cuts and Jobs Act of 2017 | AOCI attributable to parent | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | [3] | 142 | |||||||
Redeemable noncontrolling interest | Tax Cuts and Jobs Act of 2017 | Accumulated foreign currency adjustment attributable to parent | |||||||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||||||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | [3] | $ (3) | |||||||
[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 attributable to noncontrolling interests | ||||||||
[2] | Includes net unrealized gains of $58 million at December 31, 2018 compared to net unrealized gains of $68 million and $52 million at December 31, 2017 and 2016, related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings. | ||||||||
[3] | On January 1, 2018, AFG adopted new guidance that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At the date of adoption, the $221 million net unrealized gain on equity securities classified as available for sale (with unrealized holding gains and losses reported in AOCI) under the prior guidance was reclassified from AOCI to retained earnings as the cumulative effect of an accounting change. Other also includes the December 2017 reclassification of $145 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings (see Note A — “Accounting Policies — Income Taxes”), the impact on AOCI of the December 2017 sale of redeemable noncontrolling interests in Neon and the November 2016 acquisition of the noncontrolling interest in NATL (see Note B — “Acquisitions and Sale of Businesses”). |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) £ in Millions, $ in Millions | Jan. 01, 2018 | Jan. 31, 2008USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2018GBP (£) | |
Income Tax Reconciliation [Line Items] | |||||||||||
Statutory rate of income taxes | 21.00% | 35.00% | 35.00% | ||||||||
Payments to acquire additional interest in subsidiaries | $ 0 | $ 0 | $ 315 | ||||||||
Impact of foreign operations included in the provision for income taxes | (2) | 21 | 5 | ||||||||
Decrease in the valuation allowance related to the change in the U.S. corporate tax rate | 11 | (7) | 52 | ||||||||
Income tax expense (benefit) | 122 | 247 | 119 | ||||||||
Decrease in net deferred tax assets resulting from the changes in the Tax Cuts and Jobs Act of 2017 | 0 | $ 83 | $ 0 | ||||||||
Effective tax rate excluding the charge related to the exit of certain lines of business within subsidiaries and impact of the change in the U.S. corporate tax rate | 31.00% | ||||||||||
Effective tax rate excluding the charge related to the exit of certain lines of business within subsidiaries, acquisition of the noncontrolling interest, and restructuring of subsidiaries | 35.00% | ||||||||||
Income (losses) subject to tax in foreign jurisdictions | (69) | $ (58) | $ (160) | ||||||||
Operating loss carryforwards, valuation allowance | 23 | ||||||||||
Cash payments for income taxes | $ 156 | 194 | 308 | ||||||||
Limitation on the use of tax credit carryforwards | 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. Approximately $19 million of AFG’s SRLY NOLs expired unutilized at December 31, 2018. | ||||||||||
Tax Cuts and Jobs Act implementation complete | true | ||||||||||
AFG | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Income tax expense (benefit) | $ (56) | $ 122 | 247 | 119 | |||||||
National Interstate | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Income tax expense (benefit) | $ (66) | ||||||||||
Neon Capital Limited | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Income tax expense (benefit) | (56) | (111) | (48) | ||||||||
Increase (Decrease) in current taxes payable | (20) | $ (29) | |||||||||
Charge for valuation allowance | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Charge for valuation allowance against deferred tax assets | 93 | ||||||||||
Maximum | AFG | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Unrecognized tax benefits that would impact the effective tax rate | 1 | 1 | 1 | ||||||||
Interest included in tax provision | 1 | 1 | 1 | ||||||||
Decrease in related accrued interest (are less than in 2017 and 2016) | 1 | 1 | |||||||||
Amount of expense for penalties related to a tax position | 1 | 1 | 1 | ||||||||
Income tax penalties accrued | 1 | 1 | 1 | ||||||||
Amount unutilized | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Operating loss carryforwards | 19 | ||||||||||
Tax Cuts and Jobs Act of 2017 | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Statutory rate of income taxes | 21.00% | ||||||||||
Decrease in net deferred tax assets resulting from the changes in the Tax Cuts and Jobs Act of 2017 | $ 83 | ||||||||||
Tax Cuts and Jobs Act of 2017 | Neon Capital Limited | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Decrease in the valuation allowance related to the change in the U.S. corporate tax rate | (61) | ||||||||||
United Kingdom | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Operating loss carryforwards | [1] | $ 215 | £ 168 | ||||||||
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 | ||||||||||
Tax payments due to resolved 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 | ||||||||||
Foreign underwriting losses | |||||||||||
Income Tax Reconciliation [Line Items] | |||||||||||
Impact of foreign operations included in the provision for income taxes | $ 14 | ||||||||||
[1] | £168 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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Earnings before income taxes (“EBT”) | $ 639 | $ 724 | $ 787 |
Income taxes at statutory rate | 134 | 253 | 275 |
Effect of tax exempt interest | (13) | (23) | (24) |
Effect of adjustments to prior year taxes | (8) | (4) | (2) |
Effect of stock-based compensation | (8) | (16) | (9) |
Effect of dividends received deduction | (4) | (8) | (7) |
Effect of employee stock ownership plan dividend paid deduction | (3) | (5) | (2) |
Effect of foreign operations | (2) | 21 | 5 |
Effect of change in valuation allowance (excluding change in tax rate) | 11 | (7) | 52 |
Effect of nondeductible expenses | 7 | 6 | 7 |
Effect of Neon restructuring | 0 | (56) | (111) |
Effective of change in U.S. corporate tax rate | 0 | 83 | 0 |
Effect of acquisition of noncontrolling interest | 0 | 0 | (66) |
Effect of subsidiaries not in AFG's tax return | 0 | 0 | 3 |
Effect of other income tax reconciliation | 8 | 3 | (2) |
Provision for income taxes as shown in the Statement of Earnings | $ 122 | $ 247 | $ 119 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Income taxes at statutory rate as a percentage of EBT | 21.00% | 35.00% | 35.00% |
Effect of tax exempt interest as a percentage of EBT | (2.00%) | (3.00%) | (3.00%) |
Effective Income Tax Rate Reconciliation, Prior Year Income Taxes, Percent | (1.00%) | (1.00%) | 0.00% |
Effect of stock-based compensation as a percentage of EBT | (1.00%) | (2.00%) | (1.00%) |
Effect of dividend received deduction as a percentage of EBT | (1.00%) | (1.00%) | (1.00%) |
Effect of employee stock ownership plan dividend paid deduction as a percentage of EBT | (1.00%) | (1.00%) | (0.00%) |
Effect of foreign operations as a percentage of EBT | 0.00% | 3.00% | 0.00% |
Effect of change in valuation allowance (excluding change in tax rate) as a percentage of EBT | 2.00% | (1.00%) | 7.00% |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Percent | 1.00% | 1.00% | 1.00% |
Effect of Neon restructuring as a percentage of EBT | 0.00% | (8.00%) | (14.00%) |
Effective of change in U.S. corporate tax rate as a percentage of EBT | 0.00% | 11.00% | 0.00% |
Effect of acquisition of noncontrolling interest as a percentage of EBT | 0.00% | 0.00% | (8.00%) |
Effect of subsidiaries not in AFG's tax return as a percentage of EBT | 0.00% | 0.00% | 0.00% |
Effect of other income tax reconciliation as a percentage of EBT | 1.00% | 1.00% | (1.00%) |
Provision for income taxes as shown in the Statement of Earnings as a percentage of EBT | 19.00% | 34.00% | 15.00% |
Income Taxes - Total income tax
Income Taxes - Total income tax provision (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current taxes: | |||
Federal | $ 196 | $ 153 | $ 299 |
State | 8 | 6 | 12 |
Deferred taxes: | |||
Federal | (82) | 5 | (192) |
Impact of change in U.S. corporate tax rate | 0 | 83 | 0 |
Total Federal deferred taxes | (82) | 88 | (192) |
Provision for income taxes as shown in the Statement of Earnings | $ 122 | $ 247 | $ 119 |
Income Taxes - Operating and ca
Income Taxes - Operating and capital loss carryforwards available (Details) - Dec. 31, 2018 £ in Millions, $ in Millions | USD ($) | GBP (£) | |
U.S. | Expiring 2019 - 2022 | |||
Operating and capital loss carryforwards [Line Items] | |||
Operating loss carryforwards | $ 112 | ||
United Kingdom | |||
Operating and capital loss carryforwards [Line Items] | |||
Operating loss carryforwards | [1] | $ 215 | £ 168 |
[1] | £168 million |
Income Taxes - Significant comp
Income Taxes - Significant components of deferred tax assets and liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Federal net operating loss carryforwards | $ 23 | $ 27 |
Foreign underwriting losses | 93 | 80 |
Capital loss carryforwards | 0 | 32 |
Insurance claims and reserves | 743 | 694 |
Employee benefits | 88 | 84 |
Other, net | 44 | 45 |
Total deferred tax assets before valuation allowance | 991 | 962 |
Valuation allowance against deferred tax assets | (119) | (109) |
Total deferred tax assets | 872 | 853 |
Deferred tax liabilities: | ||
Investment securities | (70) | (341) |
Deferred policy acquisition costs | (291) | (202) |
Insurance claims and reserves transition liability | (110) | (128) |
Real estate, property and equipment | (36) | (35) |
Total deferred tax liabilities | (507) | (706) |
Net deferred tax asset (liability) | 365 | 147 |
Excluding Unrealized Gains | ||
Deferred tax assets: | ||
Federal net operating loss carryforwards | 23 | 27 |
Foreign underwriting losses | 93 | 80 |
Capital loss carryforwards | 0 | 32 |
Insurance claims and reserves | 740 | 665 |
Employee benefits | 88 | 84 |
Other, net | 44 | 48 |
Total deferred tax assets before valuation allowance | 988 | 936 |
Valuation allowance against deferred tax assets | (119) | (109) |
Total deferred tax assets | 869 | 827 |
Deferred tax liabilities: | ||
Investment securities | (36) | (1) |
Deferred policy acquisition costs | (300) | (293) |
Insurance claims and reserves transition liability | (110) | (128) |
Real estate, property and equipment | (36) | (35) |
Total deferred tax liabilities | (482) | (457) |
Net deferred tax asset (liability) | 387 | 370 |
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 | 3 | 29 |
Employee benefits | 0 | 0 |
Other, net | 0 | (3) |
Total deferred tax assets before valuation allowance | 3 | 26 |
Valuation allowance against deferred tax assets | 0 | 0 |
Total deferred tax assets | 3 | 26 |
Deferred tax liabilities: | ||
Investment securities | (34) | (340) |
Deferred policy acquisition costs | 9 | 91 |
Insurance claims and reserves transition liability | 0 | 0 |
Real estate, property and equipment | 0 | 0 |
Total deferred tax liabilities | (25) | (249) |
Net deferred tax asset (liability) | $ (22) | $ (223) |
Income Taxes - Progression of t
Income Taxes - Progression of the liability for uncertain tax positions, excluding interest and penalties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Progression of the liability for uncertain tax positions, excluding interest and penalties | |||
Balance at January 1 | $ 0 | $ 1 | $ 1 |
Additions for tax positions of prior years | 0 | 0 | 0 |
Reductions for tax positions of prior years | 0 | 0 | 0 |
Additions for tax positions of current year | 0 | 0 | 0 |
Settlements | 0 | (1) | 0 |
Balance at December 31 | $ 0 | $ 0 | $ 1 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) - USD ($) $ in Millions | Dec. 24, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | ||||||||
Reinsurance recoverables on asbestos and environmental reserves, net of allowance | $ 2,942 | $ 2,957 | $ 2,302 | $ 2,201 | ||||
Property and Casualty Group | ||||||||
Loss Contingencies [Line Items] | ||||||||
Increase in asbestos and environmental reserves | $ 18 | $ 89 | $ 36 | |||||
Liability for asbestos and environmental reserves | 524 | |||||||
Former railroad and manufacturing operations | ||||||||
Loss Contingencies [Line Items] | ||||||||
Increase in asbestos and environmental reserves | $ 9 | $ 24 | $ 5 | |||||
American Premier and its subsidiaries | ||||||||
Loss Contingencies [Line Items] | ||||||||
Liability for environmental and other claims | 83 | |||||||
GAFRI | ||||||||
Loss Contingencies [Line Items] | ||||||||
Liability for environmental and other claims | 8 | |||||||
Run-off long-term care and life | ||||||||
Loss Contingencies [Line Items] | ||||||||
Contingent capital support agreement amount | $ 35 | |||||||
Contingent capital support agreement term | 5 years | |||||||
A&E reserves | Property and Casualty Group | ||||||||
Loss Contingencies [Line Items] | ||||||||
Reinsurance recoverables on asbestos and environmental reserves, net of allowance | $ 129 |
Quarterly Operating Results (_3
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Statement of Earnings | |||||||||||
Revenues | $ 1,690 | $ 2,008 | $ 1,833 | $ 1,619 | $ 1,808 | $ 1,835 | $ 1,646 | $ 1,576 | $ 7,150 | $ 6,865 | $ 6,498 |
Net earnings, including noncontrolling interests | (35) | 203 | 208 | 141 | 166 | 11 | 145 | 155 | 517 | 477 | 668 |
Net earnings (losses) attributable to shareholders | $ (29) | $ 204 | $ 210 | $ 145 | $ 166 | $ 11 | $ 145 | $ 153 | $ 530 | $ 475 | $ 649 |
Earnings Attributable to Shareholders per Common Share: | |||||||||||
Basic (USD per share) | $ (0.33) | $ 2.30 | $ 2.36 | $ 1.64 | $ 1.88 | $ 0.13 | $ 1.64 | $ 1.76 | $ 5.95 | $ 5.40 | $ 7.47 |
Diluted (USD per share) | $ (0.33) | $ 2.26 | $ 2.31 | $ 1.60 | $ 1.84 | $ 0.13 | $ 1.61 | $ 1.72 | $ 5.85 | $ 5.28 | $ 7.33 |
Average number of Common Shares: | |||||||||||
Basic (shares) | 89.3 | 89.1 | 89 | 88.6 | 88.2 | 88.1 | 87.8 | 87.2 | 89 | 87.8 | 86.9 |
Diluted (shares) | 89.3 | 90.7 | 90.7 | 90.4 | 90.1 | 90 | 89.8 | 89.3 | 90.6 | 89.8 | 88.5 |
Quarterly Operating Results (_4
Quarterly Operating Results (Unaudited) - Realized gains, favorable (adverse) prior year development of the liability for losses and LAE and the impact of derivatives related to Fixed-indexed annuities (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Realized gains (losses) and favorable (adverse) development on unpaid loss and loss adjustment expenses | ||||||||||
Realized Gains (Losses) on Securities and Subsidiaries | $ (15) | $ 1 | $ 8 | $ 2 | $ 6 | $ (12) | $ 8 | $ 3 | $ (4) | $ 5 |
Prior Year Development Favorable (Adverse) | 61 | 31 | 44 | 56 | 66 | (52) | 22 | 28 | 192 | 64 |
Impact of derivatives related to FIAs | (47) | (2) | 3 | 13 | $ (11) | $ (4) | $ (16) | $ (2) | (33) | $ (33) |
Equity securities | Accounting Standards Update 2016-01 | ||||||||||
Realized gains (losses) and favorable (adverse) development on unpaid loss and loss adjustment expenses | ||||||||||
Realized Gains (Losses) on Securities and Subsidiaries | $ (223) | $ 33 | $ 23 | $ (95) | $ (262) |
Quarterly Operating Results (_5
Quarterly Operating Results (Unaudited) - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
S&P 500 Index increase (decrease) during period | (14.00%) | ||||||||||
Pretax catastrophe losses | $ 107 | $ 103 | $ 140 | ||||||||
Income tax expense (benefit) | 122 | 247 | $ 119 | ||||||||
Property and casualty insurance | Other lines | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Special charges to increase asbestos and environmental reserves | $ 18 | 89 | 18 | 89 | 36 | ||||||
Favorable reserve development related to certain lines of business within subsidiaries in connection with a reinsurance to close agreement | 18 | ||||||||||
Property and casualty insurance | Real estate investment | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Pretax income from the sale of real estate properties included in other income | $ 13 | 32 | |||||||||
Annuity | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
S&P 500 impact on annuity earnings before income taxes beyond the impact of derivatives | $ (30) | ||||||||||
Other | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Special charges to increase asbestos and environmental reserves | 9 | 24 | 5 | ||||||||
Write off of deferred debt issuance cost due to the retirement of debt | 4 | $ 7 | |||||||||
Make-whole premium, settlement of interest rate swap and write off of deferred debt issuance cost included in the loss on the retirement of debt | $ 40 | 51 | |||||||||
Other | Former railroad and manufacturing operations | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Special charges to increase asbestos and environmental reserves | $ 9 | $ 24 | |||||||||
Neon Capital Limited | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Income tax expense (benefit) | (56) | $ (111) | (48) | ||||||||
Neon Capital Limited | Property and casualty insurance | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Favorable reserve development related to certain lines of business within subsidiaries in connection with a reinsurance to close agreement | 42 | ||||||||||
Neon Capital Limited | Property and casualty insurance | Other lines | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Favorable reserve development related to certain lines of business within subsidiaries in connection with a reinsurance to close agreement | 18 | ||||||||||
Neon Capital Limited | Neon Capital Limited | Current lines | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Favorable reserve development related to certain lines of business within subsidiaries in connection with a reinsurance to close agreement | 24 | ||||||||||
AFG | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Income tax expense (benefit) | (56) | 122 | $ 247 | $ 119 | |||||||
Annuity benefits | Annuity | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Charges resulting from updating (unlocking) actuarial assumptions | 4 | $ 27 | $ 3 | ||||||||
Equity securities | Accounting Standards Update 2016-01 | Equity securities still owned | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Net holding gains (losses) on equity securities | (257) | ||||||||||
Equity securities | Accounting Standards Update 2016-01 | Equity securities still owned | Realized gains (losses) on securities | |||||||||||
Quarterly Operating Results (Unaudited) [Line Items] | |||||||||||
Net holding gains (losses) on equity securities | $ (228) | $ (279) |
Insurance - Narrative (Details)
Insurance - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Insurance [Line Items] | ||||||||
Carrying value of cash and securities owned by U.S.-based insurance subsidiaries on deposit | $ 1,060 | $ 1,060 | ||||||
Carrying value of cash and securities owned by insurance subsidiaries on deposit in support of underwriting activities at Lloyd's | 118 | 118 | ||||||
Undrawn letters of credit | 296 | 296 | ||||||
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 | 13 | $ 15 | $ 13 | $ 15 | ||||
Long-term care insurance reserves, net of reinsurance recoverables | 45 | 39 | 45 | 39 | ||||
Investment in Federal Home Loan Bank capital stock | 47 | 47 | ||||||
Advances from Federal Home Loan Bank | 1,100 | $ 1,100 | ||||||
Proceeds from Federal Home Loan Bank Advance, Investing Activities | 225 | |||||||
Description of variable rate basis | LIBOR | |||||||
Repayments of advances from Federal Home Loan Bank due in next twelve months | 445 | $ 445 | ||||||
Repayments of advances from Federal Home Loan Bank due in year two | 40 | 40 | ||||||
Repayments of advances from Federal Home Loan Bank due in year three | 611 | 611 | ||||||
Fair value of fixed maturity investments held as collateral by the Federal Home Loan Bank | 1,280 | 1,280 | ||||||
Interest on advances from Federal Home Loan Bank | 20 | 14 | $ 8 | |||||
Maximum amount of dividends available to be paid by insurance subsidiaries to AFG without prior approval of regulatory authorities | 1,300 | 1,300 | ||||||
Dividends on common stock | (397) | (421) | (187) | |||||
Aggregate guaranteed minimum death benefit value on variable annuity polices in force | 35 | 15 | $ 35 | 15 | ||||
Minimum | LIBOR | ||||||||
Insurance [Line Items] | ||||||||
FHLB advances, basis spread on variable rate | 0.15% | |||||||
Maximum | ||||||||
Insurance [Line Items] | ||||||||
Dividends payments without violating the most restrictive debt covenants, minimum | 2,000 | $ 2,000 | ||||||
Maximum | LIBOR | ||||||||
Insurance [Line Items] | ||||||||
FHLB advances, basis spread on variable rate | 0.24% | |||||||
Average | LIBOR | ||||||||
Insurance [Line Items] | ||||||||
FHLB advances, basis spread on variable rate | 2.68% | |||||||
FHLB, advances, refinanced terms | ||||||||
Insurance [Line Items] | ||||||||
Advances from Federal Home Loan Bank | 40 | 831 | $ 40 | 831 | ||||
Catastrophe Bonds | ||||||||
Insurance [Line Items] | ||||||||
Catastrophe reinsurance coverage, excess retention percentage | 95.00% | |||||||
Catastrophe reinsurance coverage, excess retention amount | $ 200 | |||||||
Catastrophe reinsurance coverage, retention amount | 104 | |||||||
Catastrophe reinsurance coverage, annual cost | 11 | |||||||
Life insurance | ||||||||
Insurance [Line Items] | ||||||||
Increased statutory surplus resulting from reinsurance treaty | 2,701 | 2,132 | 2,701 | 2,132 | ||||
Life insurance in force, ceded premiums | 7,690 | 8,320 | 7,690 | 8,320 | ||||
Life insurance in force, direct premiums | 10,820 | 12,050 | 10,820 | 12,050 | ||||
Reinsurance ceded | 22 | 28 | 31 | |||||
Reinsurance recoveries | 38 | 35 | 41 | |||||
Variable annuities | Maximum | ||||||||
Insurance [Line Items] | ||||||||
Death benefits paid in excess of the variable annuity account balances (are less than in 2016, 2017 and 2018) | 1 | 1 | 1 | |||||
Property and casualty insurance | Other lines | ||||||||
Insurance [Line Items] | ||||||||
Special charges to increase asbestos and environmental reserves | $ 18 | $ 89 | 18 | 89 | 36 | |||
Favorable reserve development related to certain lines of business within subsidiaries in connection with a reinsurance to close agreement | $ 18 | |||||||
Special charges related to the exit of certain lines of business within subsidiaries | 65 | |||||||
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 | |||||||
Neon Capital Limited | Property and casualty insurance | ||||||||
Insurance [Line Items] | ||||||||
Favorable reserve development related to certain lines of business within subsidiaries in connection with a reinsurance to close agreement | 42 | |||||||
Neon Capital Limited | Property and casualty insurance | Other lines | ||||||||
Insurance [Line Items] | ||||||||
Favorable reserve development related to certain lines of business within subsidiaries in connection with a reinsurance to close agreement | 18 | |||||||
Special charges related to the exit of certain lines of business within subsidiaries | $ 65 | |||||||
Neon Capital Limited | Property and casualty insurance | Other lines | Reinsurance to close agreement | ||||||||
Insurance [Line Items] | ||||||||
Favorable reserve development related to certain lines of business within subsidiaries in connection with a reinsurance to close agreement | 18 | |||||||
Neon Capital Limited | Neon Capital Limited | Current lines | ||||||||
Insurance [Line Items] | ||||||||
Favorable reserve development related to certain lines of business within subsidiaries in connection with a reinsurance to close agreement | $ 24 | |||||||
Great American Life Insurance Company | Life insurance | ||||||||
Insurance [Line Items] | ||||||||
Increased statutory surplus resulting from reinsurance treaty | $ 510 | $ 510 |
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Analysis of changes in the liability for losses and loss adjustment expenses, net of reinsurance | ||||||||||||||
Balance at beginning of period | $ 9,678 | $ 8,563 | $ 9,678 | $ 8,563 | $ 8,127 | |||||||||
Less reinsurance recoverables, net of allowance | $ 2,942 | $ 2,957 | 2,942 | 2,957 | 2,302 | $ 2,201 | ||||||||
Net liability at beginning of period | 6,721 | 6,261 | 6,721 | 6,261 | 5,926 | |||||||||
Liability for losses and loss adjustment expenses, period increase (decrease) [Abstract] | ||||||||||||||
Provision for losses and LAE occurring in the current year | 3,195 | 3,019 | 2,730 | |||||||||||
Net increase (decrease) in the provision for claims of prior years: | ||||||||||||||
Provision for claims of prior years related to special A&E charges, Neon exited lines development and other | (61) | $ (31) | $ (44) | $ (56) | (66) | $ 52 | $ (22) | $ (28) | (192) | (64) | ||||
Total losses and LAE incurred | 3,003 | 2,955 | 2,762 | |||||||||||
Payments for losses and LAE of: | ||||||||||||||
Current year | (963) | (942) | (841) | |||||||||||
Prior years | (1,639) | (1,586) | (1,512) | |||||||||||
Total payments | (2,602) | (2,528) | (2,353) | |||||||||||
Reserves of businesses disposed | (319) | [1] | 0 | (40) | [1] | |||||||||
Foreign currency translation and other | (4) | 33 | (34) | |||||||||||
Net liability at end of period | 6,799 | 6,721 | 6,799 | 6,721 | 6,261 | |||||||||
Add back reinsurance recoverables, net of allowance | 2,942 | 2,957 | 2,942 | 2,957 | 2,302 | |||||||||
Gross unpaid losses and LAE included in the balance sheet | $ 9,741 | $ 9,678 | 9,741 | 9,678 | 8,563 | |||||||||
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, Neon exited lines development and other | 18 | 89 | 36 | |||||||||||
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, Neon exited lines development and other | 0 | (18) | 57 | |||||||||||
Other | ||||||||||||||
Net increase (decrease) in the provision for claims of prior years: | ||||||||||||||
Provision for claims of prior years related to special A&E charges, Neon exited lines development and other | $ (210) | $ (135) | $ (61) | |||||||||||
[1] | Reflects the reinsurance to close transactions at Neon (discussed below). |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Total reserves, net of reinsurance | $ 6,799 | $ 6,721 | $ 6,261 | $ 5,926 |
Add back reinsurance recoverables, net of allowance | (2,942) | (2,957) | (2,302) | (2,201) |
Gross unpaid losses and LAE included in the balance sheet | 9,741 | $ 9,678 | $ 8,563 | $ 8,127 |
Property and casualty insurance | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Specialty unpaid losses and LAE, net of reinsurance | 5,506 | |||
Other unpaid losses and LAE, net of reinsurance | 1,293 | |||
Unallocated LAE | 335 | |||
Total reserves, net of reinsurance | 6,799 | |||
Add back reinsurance recoverables, net of allowance | 2,942 | |||
Gross unpaid losses and LAE included in the balance sheet | 9,741 | |||
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 | 268 | |||
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 | 395 | |||
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 | 30 | |||
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 | 1,117 | |||
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 | 3,884 | |||
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 | 225 | |||
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 | 280 | |||
Neon Capital Limited | 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 | $ 265 |
Insurance - Short-duration insu
Insurance - Short-duration insurance contracts, claims development (Details) - Property and casualty insurance $ in Millions | Dec. 31, 2018USD ($)claim | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2009USD ($) | |
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 19,905 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | 14,960 | ||||||||||
Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) | 561 | ||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | 5,506 | ||||||||||
Accident Year 2009 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 1,519 | $ 1,529 | $ 1,539 | $ 1,543 | $ 1,545 | $ 1,552 | $ 1,566 | $ 1,596 | $ 1,607 | $ 1,624 | |
Total IBNR Plus Expected Development on Reported Claims | $ 43 | ||||||||||
Cumulative Number of Reported Claims | claim | 222,664 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,445 | 1,435 | 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] | 95.10% | |||||||||
Accident Year 2010 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,676 | 1,690 | 1,698 | 1,698 | 1,710 | 1,690 | 1,705 | 1,710 | 1,724 | ||
Total IBNR Plus Expected Development on Reported Claims | $ 54 | ||||||||||
Cumulative Number of Reported Claims | claim | 216,568 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,595 | 1,580 | 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] | 95.20% | |||||||||
Accident Year 2011 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,843 | 1,859 | 1,866 | 1,861 | 1,871 | 1,849 | 1,848 | 1,840 | |||
Total IBNR Plus Expected Development on Reported Claims | $ 67 | ||||||||||
Cumulative Number of Reported Claims | claim | 209,098 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,734 | 1,711 | 1,682 | 1,629 | 1,534 | 1,389 | 1,181 | 609 | |||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 94.10% | |||||||||
Accident Year 2012 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,906 | 1,941 | 1,955 | 1,947 | 1,946 | 1,952 | 1,970 | ||||
Total IBNR Plus Expected Development on Reported Claims | $ 89 | ||||||||||
Cumulative Number of Reported Claims | claim | 218,585 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,785 | 1,735 | 1,675 | 1,579 | 1,418 | 1,214 | 824 | ||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 93.70% | |||||||||
Accident Year 2013 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,982 | 2,000 | 1,996 | 2,000 | 2,011 | 2,036 | |||||
Total IBNR Plus Expected Development on Reported Claims | $ 128 | ||||||||||
Cumulative Number of Reported Claims | claim | 221,362 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,774 | 1,714 | 1,617 | 1,443 | 1,214 | 697 | |||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 89.50% | |||||||||
Accident Year 2014 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 2,004 | 2,038 | 2,040 | 2,050 | 2,083 | ||||||
Total IBNR Plus Expected Development on Reported Claims | $ 186 | ||||||||||
Cumulative Number of Reported Claims | claim | 220,164 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,705 | 1,588 | 1,422 | 1,174 | 594 | ||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 85.10% | |||||||||
Accident Year 2015 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 2,038 | 2,041 | 2,047 | 2,114 | |||||||
Total IBNR Plus Expected Development on Reported Claims | $ 245 | ||||||||||
Cumulative Number of Reported Claims | claim | 227,435 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,592 | 1,404 | 1,129 | 619 | |||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 78.10% | |||||||||
Accident Year 2016 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 2,082 | 2,083 | 2,117 | ||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 432 | ||||||||||
Cumulative Number of Reported Claims | claim | 220,481 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,350 | 1,099 | 577 | ||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 64.80% | |||||||||
Accident Year 2017 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 2,348 | 2,375 | |||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 737 | ||||||||||
Cumulative Number of Reported Claims | claim | 240,542 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 1,250 | 709 | |||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 53.20% | |||||||||
Accident Year 2018 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 2,507 | ||||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 1,123 | ||||||||||
Cumulative Number of Reported Claims | claim | 205,419 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 730 | ||||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [1] | 29.10% | |||||||||
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) | $ 4,945 | ||||||||||
Property and transportation | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 7,957 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | 6,863 | ||||||||||
Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) | 23 | ||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | 1,117 | ||||||||||
Property and transportation | Accident Year 2009 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 490 | 491 | 491 | 491 | 494 | 494 | 498 | 505 | 487 | 503 | |
Total IBNR Plus Expected Development on Reported Claims | $ 2 | ||||||||||
Cumulative Number of Reported Claims | claim | 138,248 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 485 | 484 | 481 | 480 | 476 | 462 | 440 | 397 | 333 | 219 | |
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 99.00% | |||||||||
Property and transportation | Accident Year 2010 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 657 | 659 | 661 | 657 | 656 | 654 | 646 | 640 | 680 | ||
Total IBNR Plus Expected Development on Reported Claims | $ 3 | ||||||||||
Cumulative Number of Reported Claims | claim | 138,235 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 650 | 648 | 643 | 638 | 627 | 597 | 536 | 487 | 316 | ||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 98.90% | |||||||||
Property and transportation | Accident Year 2011 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 850 | 853 | 856 | 844 | 833 | 819 | 803 | 816 | |||
Total IBNR Plus Expected Development on Reported Claims | $ 6 | ||||||||||
Cumulative Number of Reported Claims | claim | 139,345 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 839 | 836 | 828 | 810 | 777 | 732 | 670 | 367 | |||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 98.70% | |||||||||
Property and transportation | Accident Year 2012 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 897 | 900 | 905 | 892 | 880 | 866 | 875 | ||||
Total IBNR Plus Expected Development on Reported Claims | $ 13 | ||||||||||
Cumulative Number of Reported Claims | claim | 145,636 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 892 | 866 | 852 | 826 | 780 | 715 | 574 | ||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 99.40% | |||||||||
Property and transportation | Accident Year 2013 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 890 | 890 | 890 | 884 | 881 | 894 | |||||
Total IBNR Plus Expected Development on Reported Claims | $ 18 | ||||||||||
Cumulative Number of Reported Claims | claim | 141,293 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 859 | 843 | 814 | 769 | 710 | 440 | |||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 96.50% | |||||||||
Property and transportation | Accident Year 2014 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 831 | 834 | 831 | 842 | 856 | ||||||
Total IBNR Plus Expected Development on Reported Claims | $ 25 | ||||||||||
Cumulative Number of Reported Claims | claim | 136,259 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 784 | 756 | 702 | 638 | 332 | ||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 94.30% | |||||||||
Property and transportation | Accident Year 2015 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 789 | 789 | 794 | 831 | |||||||
Total IBNR Plus Expected Development on Reported Claims | $ 36 | ||||||||||
Cumulative Number of Reported Claims | claim | 134,484 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 717 | 675 | 587 | 361 | |||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 90.90% | |||||||||
Property and transportation | Accident Year 2016 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 733 | 730 | 762 | ||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 74 | ||||||||||
Cumulative Number of Reported Claims | claim | 122,623 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 590 | 528 | 296 | ||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 80.50% | |||||||||
Property and transportation | Accident Year 2017 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 868 | 904 | |||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 128 | ||||||||||
Cumulative Number of Reported Claims | claim | 140,963 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 648 | 383 | |||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 74.70% | |||||||||
Property and transportation | Accident Year 2018 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 952 | ||||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 277 | ||||||||||
Cumulative Number of Reported Claims | claim | 119,817 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 399 | ||||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [2] | 41.90% | |||||||||
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) | $ 1,094 | ||||||||||
Specialty casualty | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 9,776 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | 6,369 | ||||||||||
Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) | 477 | ||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | 3,884 | ||||||||||
Specialty casualty | Accident Year 2009 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 811 | 820 | 824 | 829 | 828 | 833 | 844 | 864 | 887 | 888 | |
Total IBNR Plus Expected Development on Reported Claims | $ 34 | ||||||||||
Cumulative Number of Reported Claims | claim | 56,985 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 748 | 740 | 731 | 715 | 691 | 653 | 591 | 510 | 381 | 170 | |
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 92.20% | |||||||||
Specialty casualty | Accident Year 2010 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 853 | 864 | 867 | 868 | 879 | 865 | 887 | 886 | 870 | ||
Total IBNR Plus Expected Development on Reported Claims | $ 47 | ||||||||||
Cumulative Number of Reported Claims | claim | 56,411 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 782 | 770 | 756 | 735 | 699 | 644 | 559 | 411 | 191 | ||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 91.70% | |||||||||
Specialty casualty | Accident Year 2011 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 811 | 819 | 822 | 827 | 842 | 833 | 845 | 847 | |||
Total IBNR Plus Expected Development on Reported Claims | $ 52 | ||||||||||
Cumulative Number of Reported Claims | claim | 53,385 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 725 | 707 | 687 | 655 | 606 | 517 | 380 | 172 | |||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 89.40% | |||||||||
Specialty casualty | Accident Year 2012 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 838 | 867 | 872 | 876 | 876 | 883 | 890 | ||||
Total IBNR Plus Expected Development on Reported Claims | $ 64 | ||||||||||
Cumulative Number of Reported Claims | claim | 51,885 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 735 | 713 | 674 | 611 | 508 | 378 | 171 | ||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 87.70% | |||||||||
Specialty casualty | Accident Year 2013 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 913 | 933 | 928 | 933 | 938 | 956 | |||||
Total IBNR Plus Expected Development on Reported Claims | $ 99 | ||||||||||
Cumulative Number of Reported Claims | claim | 51,620 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 754 | 717 | 656 | 545 | 388 | 180 | |||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 82.60% | |||||||||
Specialty casualty | Accident Year 2014 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 966 | 992 | 994 | 994 | 1,023 | ||||||
Total IBNR Plus Expected Development on Reported Claims | $ 139 | ||||||||||
Cumulative Number of Reported Claims | claim | 54,494 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 741 | 668 | 565 | 406 | 187 | ||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 76.70% | |||||||||
Specialty casualty | Accident Year 2015 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,030 | 1,031 | 1,033 | 1,068 | |||||||
Total IBNR Plus Expected Development on Reported Claims | $ 185 | ||||||||||
Cumulative Number of Reported Claims | claim | 55,468 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 692 | 569 | 406 | 176 | |||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 67.20% | |||||||||
Specialty casualty | Accident Year 2016 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,097 | 1,108 | 1,115 | ||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 313 | ||||||||||
Cumulative Number of Reported Claims | claim | 53,038 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 571 | 411 | 184 | ||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 52.10% | |||||||||
Specialty casualty | Accident Year 2017 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,200 | 1,196 | |||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 539 | ||||||||||
Cumulative Number of Reported Claims | claim | 52,658 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 414 | 196 | |||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 34.50% | |||||||||
Specialty casualty | Accident Year 2018 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 1,257 | ||||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 705 | ||||||||||
Cumulative Number of Reported Claims | claim | 48,996 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 207 | ||||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [3] | 16.50% | |||||||||
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) | $ 3,407 | ||||||||||
Specialty financial | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 1,623 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | 1,397 | ||||||||||
Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) | (1) | ||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | 225 | ||||||||||
Specialty financial | Accident Year 2009 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 186 | 185 | 186 | 187 | 186 | 188 | 184 | 186 | 192 | 192 | |
Total IBNR Plus Expected Development on Reported Claims | $ 1 | ||||||||||
Cumulative Number of Reported Claims | claim | 27,431 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 185 | 186 | 186 | 185 | 181 | 171 | 166 | 157 | 145 | 112 | |
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 99.50% | |||||||||
Specialty financial | Accident Year 2010 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 126 | 127 | 130 | 133 | 135 | 132 | 132 | 145 | 138 | ||
Total IBNR Plus Expected Development on Reported Claims | $ 1 | ||||||||||
Cumulative Number of Reported Claims | claim | 21,922 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 126 | 126 | 128 | 130 | 132 | 122 | 104 | 93 | 61 | ||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 100.00% | |||||||||
Specialty financial | Accident Year 2011 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 139 | 143 | 144 | 147 | 153 | 155 | 157 | 138 | |||
Total IBNR Plus Expected Development on Reported Claims | $ 6 | ||||||||||
Cumulative Number of Reported Claims | claim | 16,368 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 132 | 131 | 131 | 130 | 123 | 115 | 111 | 58 | |||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 95.00% | |||||||||
Specialty financial | Accident Year 2012 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 132 | 135 | 137 | 139 | 151 | 163 | 163 | ||||
Total IBNR Plus Expected Development on Reported Claims | $ 6 | ||||||||||
Cumulative Number of Reported Claims | claim | 21,064 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 128 | 126 | 121 | 117 | 109 | 104 | 71 | ||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 97.00% | |||||||||
Specialty financial | Accident Year 2013 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 126 | 127 | 131 | 137 | 145 | 140 | |||||
Total IBNR Plus Expected Development on Reported Claims | $ 9 | ||||||||||
Cumulative Number of Reported Claims | claim | 28,449 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 117 | 117 | 113 | 107 | 100 | 70 | |||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 92.90% | |||||||||
Specialty financial | Accident Year 2014 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 147 | 153 | 156 | 157 | 146 | ||||||
Total IBNR Plus Expected Development on Reported Claims | $ 9 | ||||||||||
Cumulative Number of Reported Claims | claim | 29,411 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 137 | 128 | 125 | 109 | 62 | ||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 93.20% | |||||||||
Specialty financial | Accident Year 2015 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 153 | 158 | 160 | 156 | |||||||
Total IBNR Plus Expected Development on Reported Claims | $ 16 | ||||||||||
Cumulative Number of Reported Claims | claim | 37,483 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 133 | 129 | 110 | 72 | |||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 86.90% | |||||||||
Specialty financial | Accident Year 2016 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 187 | 184 | 179 | ||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 24 | ||||||||||
Cumulative Number of Reported Claims | claim | 44,820 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 158 | 141 | 88 | ||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 84.50% | |||||||||
Specialty financial | Accident Year 2017 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 215 | 212 | |||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 34 | ||||||||||
Cumulative Number of Reported Claims | claim | 46,921 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 169 | 120 | |||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 78.60% | |||||||||
Specialty financial | Accident Year 2018 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 212 | ||||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 79 | ||||||||||
Cumulative Number of Reported Claims | claim | 36,606 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 112 | ||||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [4] | 52.80% | |||||||||
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) | $ 226 | ||||||||||
Other specialty | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 549 | ||||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | 331 | ||||||||||
Unpaid losses and LAE — 11th year and prior (excluding unallocated LAE) | 62 | ||||||||||
Unpaid losses and LAE, net of reinsurance (excluding unallocated LAE) | 280 | ||||||||||
Other specialty | Accident Year 2009 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | 32 | 33 | 38 | 36 | 37 | 37 | 40 | 41 | 41 | 41 | |
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 | $ 27 | 25 | 26 | 24 | 22 | 22 | 19 | 15 | 12 | $ 8 | |
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 84.40% | |||||||||
Other specialty | Accident Year 2010 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 40 | 40 | 40 | 40 | 40 | 39 | 40 | 39 | 36 | ||
Total IBNR Plus Expected Development on Reported Claims | $ 3 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 37 | 36 | 35 | 33 | 27 | 24 | 21 | 14 | $ 8 | ||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 92.50% | |||||||||
Other specialty | Accident Year 2011 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 43 | 44 | 44 | 43 | 43 | 42 | 43 | 39 | |||
Total IBNR Plus Expected Development on Reported Claims | $ 3 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 38 | 37 | 36 | 34 | 28 | 25 | 20 | $ 12 | |||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 88.40% | |||||||||
Other specialty | Accident Year 2012 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 39 | 39 | 41 | 40 | 39 | 40 | 42 | ||||
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 | $ 30 | 30 | 28 | 25 | 21 | 17 | $ 8 | ||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 76.90% | |||||||||
Other specialty | Accident Year 2013 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 53 | 50 | 47 | 46 | 47 | 46 | |||||
Total IBNR Plus Expected Development on Reported Claims | $ 2 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 44 | 37 | 34 | 22 | 16 | $ 7 | |||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 83.00% | |||||||||
Other specialty | Accident Year 2014 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 60 | 59 | 59 | 57 | 58 | ||||||
Total IBNR Plus Expected Development on Reported Claims | $ 13 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 43 | 36 | 30 | 21 | $ 13 | ||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 71.70% | |||||||||
Other specialty | Accident Year 2015 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 66 | 63 | 60 | 59 | |||||||
Total IBNR Plus Expected Development on Reported Claims | $ 8 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 50 | 31 | 26 | $ 10 | |||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 75.80% | |||||||||
Other specialty | Accident Year 2016 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 65 | 61 | 61 | ||||||||
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 | $ 31 | 19 | $ 9 | ||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 47.70% | |||||||||
Other specialty | Accident Year 2017 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 65 | 63 | |||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 36 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 19 | $ 10 | |||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 29.20% | |||||||||
Other specialty | Accident Year 2018 | |||||||||||
Claims Development [Line Items] | |||||||||||
Incurred Claims and Allocated LAE, Net of Reinsurance | $ 86 | ||||||||||
Total IBNR Plus Expected Development on Reported Claims | $ 62 | ||||||||||
Cumulative Number of Reported Claims | claim | [5] | 0 | |||||||||
Cumulative Paid Claims and Allocated LAE, Net of Reinsurance | $ 12 | ||||||||||
Cumulative Percentage Paid of Incurred Claims and Allocated LAE, Net of Reinsurance | [6] | 14.00% | |||||||||
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) | $ 218 | ||||||||||
[1] | Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018). | ||||||||||
[2] | Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018). | ||||||||||
[3] | Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018). | ||||||||||
[4] | Represents the cumulative percentage paid of incurred claims and allocated LAE (net of reinsurance, as estimated at December 31, 2018). | ||||||||||
[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, 2018). |
Insurance - Short-duration in_2
Insurance - Short-duration insurance contracts, historical claims duration (Details) - Property and casualty insurance | Dec. 31, 2018 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Line Items] | |
Year 1 | 32.60% |
Year 2 | 25.50% |
Year 3 | 12.20% |
Year 4 | 8.80% |
Year 5 | 5.50% |
Year 6 | 3.20% |
Year 7 | 2.00% |
Year 8 | 1.20% |
Year 9 | 0.80% |
Year 10 | 0.70% |
Year 1, Cumulative | 32.60% |
Year 2, Cumulative | 58.10% |
Year 3, Cumulative | 70.30% |
Year 4, Cumulative | 79.10% |
Year 5, Cumulative | 84.60% |
Year 6, Cumulative | 87.80% |
Year 7, Cumulative | 89.80% |
Year 8, Cumulative | 91.00% |
Year 9, Cumulative | 91.80% |
Year 10, Cumulative | 92.50% |
Property and transportation | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Line Items] | |
Year 1 | 46.20% |
Year 2 | 28.70% |
Year 3 | 8.60% |
Year 4 | 6.50% |
Year 5 | 3.70% |
Year 6 | 2.00% |
Year 7 | 1.40% |
Year 8 | 0.40% |
Year 9 | 0.50% |
Year 10 | 0.20% |
Year 1, Cumulative | 46.20% |
Year 2, Cumulative | 74.90% |
Year 3, Cumulative | 83.50% |
Year 4, Cumulative | 90.00% |
Year 5, Cumulative | 93.70% |
Year 6, Cumulative | 95.70% |
Year 7, Cumulative | 97.10% |
Year 8, Cumulative | 97.50% |
Year 9, Cumulative | 98.00% |
Year 10, Cumulative | 98.20% |
Specialty casualty | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Line Items] | |
Year 1 | 19.10% |
Year 2 | 23.20% |
Year 3 | 16.20% |
Year 4 | 11.10% |
Year 5 | 7.00% |
Year 6 | 4.30% |
Year 7 | 2.60% |
Year 8 | 1.90% |
Year 9 | 1.30% |
Year 10 | 1.00% |
Year 1, Cumulative | 19.10% |
Year 2, Cumulative | 42.30% |
Year 3, Cumulative | 58.50% |
Year 4, Cumulative | 69.60% |
Year 5, Cumulative | 76.60% |
Year 6, Cumulative | 80.90% |
Year 7, Cumulative | 83.50% |
Year 8, Cumulative | 85.40% |
Year 9, Cumulative | 86.70% |
Year 10, Cumulative | 87.70% |
Specialty financial | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Line Items] | |
Year 1 | 50.50% |
Year 2 | 26.40% |
Year 3 | 7.50% |
Year 4 | 5.80% |
Year 5 | 4.70% |
Year 6 | 1.70% |
Year 7 | 0.50% |
Year 8 | (0.10%) |
Year 9 | 0.00% |
Year 10 | (0.50%) |
Year 1, Cumulative | 50.50% |
Year 2, Cumulative | 76.90% |
Year 3, Cumulative | 84.40% |
Year 4, Cumulative | 90.20% |
Year 5, Cumulative | 94.90% |
Year 6, Cumulative | 96.60% |
Year 7, Cumulative | 97.10% |
Year 8, Cumulative | 97.00% |
Year 9, Cumulative | 97.00% |
Year 10, Cumulative | 96.50% |
Other specialty | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Line Items] | |
Year 1 | 18.70% |
Year 2 | 17.00% |
Year 3 | 12.60% |
Year 4 | 14.10% |
Year 5 | 9.30% |
Year 6 | 7.60% |
Year 7 | 3.40% |
Year 8 | 3.70% |
Year 9 | (0.30%) |
Year 10 | 6.30% |
Year 1, Cumulative | 18.70% |
Year 2, Cumulative | 35.70% |
Year 3, Cumulative | 48.30% |
Year 4, Cumulative | 62.40% |
Year 5, Cumulative | 71.70% |
Year 6, Cumulative | 79.30% |
Year 7, Cumulative | 82.70% |
Year 8, Cumulative | 86.40% |
Year 9, Cumulative | 86.10% |
Year 10, Cumulative | 92.40% |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property and casualty companies | |||
Statutory information | |||
Net Earnings | $ 546 | $ 484 | $ 461 |
Capital and Surplus | 2,867 | 2,729 | |
Life insurance companies | |||
Statutory information | |||
Net Earnings | 802 | 286 | $ 167 |
Capital and Surplus | $ 2,701 | $ 2,132 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effects of Reinsurance [Line Items] | |||
Direct premiums written | $ 6,626 | $ 6,310 | $ 5,858 |
Reinsurance assumed | 214 | 192 | 123 |
Reinsurance ceded | (1,817) | (1,751) | (1,595) |
Net written premiums | 5,023 | 4,751 | 4,386 |
Direct premiums earned | 6,472 | 6,112 | 5,745 |
Reinsurance assumed | 204 | 157 | 118 |
Reinsurance ceded | (1,811) | (1,690) | (1,535) |
Net earned premiums | 4,865 | 4,579 | 4,328 |
Reinsurance recoveries | $ 1,249 | $ 1,379 | $ 810 |
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, 2018 | Dec. 31, 2017 |
Insurance [Abstract] | ||
Expected death and annuitization | $ 229 | $ 228 |
Guaranteed withdrawal benefits | 472 | 358 |
Accrued persistency and premium bonuses | $ 1 | $ 3 |
Additional Information - Narrat
Additional Information - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for reinsurance recoverables [Line Items] | |||
Total rental expense | $ 70 | $ 69 | $ 67 |
Operating lease future minimum payments due in next year | 65 | ||
Operating lease future minimum payments due in year two | 57 | ||
Operating lease future minimum payments due in year three | 50 | ||
Operating lease future minimum payments due in year four | 40 | ||
Operating lease future minimum payments due in year five | 35 | ||
Operating lease future minimum payments due after year five | 79 | ||
Commitments to fund limited partnerships | 949 | ||
Retirement and employee savings plan expense | 37 | 45 | 43 |
Allowance for reinsurance recoverables | |||
Allowance for reinsurance recoverables [Line Items] | |||
Aggregate allowance for losses on reinsurance recoverables | 18 | 20 | |
Net expense reduction against the allowance for losses on reinsurance recoverables | (2) | ||
Reinsurance recoverable write-offs | $ 2 | ||
Maximum | Allowance for reinsurance recoverables | |||
Allowance for reinsurance recoverables [Line Items] | |||
Net expense reduction against the allowance for losses on reinsurance recoverables | $ (1) | $ (1) |
Condensed Financial Informati_2
Condensed Financial Information of Parent Company - Condensed Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets: | |||||
Cash and cash equivalents | $ 1,515 | $ 2,338 | $ 2,107 | $ 1,220 | |
Other investments | 267 | 312 | |||
Other assets | 1,529 | 1,504 | |||
Total assets | 63,456 | 60,658 | 55,072 | ||
Liabilities and Equity: | |||||
Long-term debt | 1,302 | 1,301 | |||
Other liabilities | 1,774 | 1,887 | |||
Shareholders’ equity | 4,970 | 5,330 | |||
Total liabilities and equity | 63,456 | 60,658 | |||
AFG | |||||
Assets: | |||||
Cash and cash equivalents | 158 | 299 | $ 197 | $ 189 | |
Investment in securities | 65 | 70 | |||
Investment in subsidiaries | [1] | 6,155 | 6,310 | ||
Other investments | 2 | 2 | |||
Other assets | 68 | 141 | |||
Total assets | 6,448 | 6,822 | |||
Liabilities and Equity: | |||||
Long-term debt | 1,302 | 1,301 | |||
Other liabilities | 176 | 191 | |||
Shareholders’ equity | 4,970 | 5,330 | |||
Total liabilities and equity | $ 6,448 | $ 6,822 | |||
[1] | Investment in subsidiaries includes intercompany receivables and payables. |
Condensed Financial Informati_3
Condensed Financial Information of Parent Company - Condensed Statement of Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||||||||||
Total revenues | $ 1,690 | $ 2,008 | $ 1,833 | $ 1,619 | $ 1,808 | $ 1,835 | $ 1,646 | $ 1,576 | $ 7,150 | $ 6,865 | $ 6,498 |
Costs and Expenses: | |||||||||||
Interest charges on other borrowings | 62 | 85 | 77 | ||||||||
Other expenses | 353 | 422 | 353 | ||||||||
Total costs and expenses | 6,511 | 6,141 | 5,711 | ||||||||
Earnings before income taxes | 639 | 724 | 787 | ||||||||
Provision for income taxes | 122 | 247 | 119 | ||||||||
Net Earnings Attributable to Shareholders | $ (29) | $ 204 | $ 210 | $ 145 | 166 | $ 11 | $ 145 | $ 153 | 530 | 475 | 649 |
AFG | |||||||||||
Revenues: | |||||||||||
Dividends from subsidiaries | 261 | 681 | 643 | ||||||||
Equity in undistributed earnings of subsidiaries | 529 | 264 | 286 | ||||||||
Investment and other income | 2 | 13 | 7 | ||||||||
Total revenues | 792 | 958 | 936 | ||||||||
Costs and Expenses: | |||||||||||
Interest charges on intercompany borrowings | 8 | 9 | 9 | ||||||||
Interest charges on other borrowings | 62 | 85 | 77 | ||||||||
Other expenses | 70 | 142 | 82 | ||||||||
Total costs and expenses | 140 | 236 | 168 | ||||||||
Earnings before income taxes | 652 | 722 | 768 | ||||||||
Provision for income taxes | $ (56) | 122 | 247 | 119 | |||||||
Net Earnings Attributable to Shareholders | $ 530 | $ 475 | $ 649 |
Condensed Financial Informati_4
Condensed Financial Information of Parent Company - Condensed Statement of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Other Comprehensive Income [Abstract] | |||||||||||
Net earnings (losses) attributable to shareholders | $ (29) | $ 204 | $ 210 | $ 145 | $ 166 | $ 11 | $ 145 | $ 153 | $ 530 | $ 475 | $ 649 |
Comprehensive income (loss) attributable to shareholders | (14) | 771 | 711 | ||||||||
AFG | |||||||||||
Statement of Other Comprehensive Income [Abstract] | |||||||||||
Net earnings (losses) attributable to shareholders | 530 | 475 | 649 | ||||||||
Other comprehensive income (loss), net of tax | (544) | 296 | 62 | ||||||||
Comprehensive income (loss) attributable to shareholders | $ (14) | $ 771 | $ 711 |
Condensed Financial Informati_5
Condensed Financial Information of Parent Company - Condensed Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities: | |||||||||||
Net earnings (losses) attributable to shareholders | $ (29) | $ 204 | $ 210 | $ 145 | $ 166 | $ 11 | $ 145 | $ 153 | $ 530 | $ 475 | $ 649 |
Adjustments: | |||||||||||
Net cash provided by operating activities | 2,083 | 1,804 | 1,150 | ||||||||
Investing Activities: | |||||||||||
Payments for (proceeds from) other investing activities | 30 | 2 | (83) | ||||||||
Net cash used in investing activities | (5,350) | (3,292) | (2,981) | ||||||||
Financing Activities: | |||||||||||
Additional long-term borrowings | 0 | 712 | 302 | ||||||||
Reductions of long-term debt | 0 | (745) | (18) | ||||||||
Issuances of Common Stock | 33 | 37 | 35 | ||||||||
Repurchases of Common Stock | (6) | 0 | (133) | ||||||||
Cash dividends paid on Common Stock | (394) | (417) | (185) | ||||||||
Proceeds from (payments for) other financing activities | 0 | (4) | (13) | ||||||||
Net cash provided by (used in) financing activities | 2,444 | 1,719 | 2,718 | ||||||||
Net Change in Cash and Cash Equivalents | (823) | 231 | 887 | ||||||||
Cash and cash equivalents at beginning of year | 2,338 | 2,107 | 2,338 | 2,107 | 1,220 | ||||||
Cash and cash equivalents at end of year | 1,515 | 2,338 | 1,515 | 2,338 | 2,107 | ||||||
AFG | |||||||||||
Operating Activities: | |||||||||||
Net earnings (losses) attributable to shareholders | 530 | 475 | 649 | ||||||||
Adjustments: | |||||||||||
Equity in net earnings of subsidiaries | (637) | (575) | (638) | ||||||||
Dividends from subsidiaries | 238 | 580 | 611 | ||||||||
Other operating activities, net | 84 | 98 | (67) | ||||||||
Net cash provided by operating activities | 215 | 578 | 555 | ||||||||
Investing Activities: | |||||||||||
Capital contributions to subsidiaries | (11) | (93) | (560) | ||||||||
Returns of capital from subsidiaries | 23 | 30 | 0 | ||||||||
Purchases of investments, property and equipment | (5) | (2) | (1) | ||||||||
Proceeds from maturities and redemptions of investments | 3 | 2 | 1 | ||||||||
Net cash used in investing activities | 10 | (63) | (560) | ||||||||
Financing Activities: | |||||||||||
Additional long-term borrowings | 0 | 712 | 296 | ||||||||
Reductions of long-term debt | 0 | (745) | 0 | ||||||||
Issuances of Common Stock | 34 | 37 | 35 | ||||||||
Repurchases of Common Stock | (6) | 0 | (133) | ||||||||
Cash dividends paid on Common Stock | (394) | (417) | (185) | ||||||||
Net cash provided by (used in) financing activities | (366) | (413) | 13 | ||||||||
Net Change in Cash and Cash Equivalents | (141) | 102 | 8 | ||||||||
Cash and cash equivalents at beginning of year | $ 299 | $ 197 | 299 | 197 | 189 | ||||||
Cash and cash equivalents at end of year | $ 158 | $ 299 | $ 158 | $ 299 | $ 197 |
Supplementary Insurance Infor_2
Supplementary Insurance Information - Table (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | $ 1,682 | $ 1,216 | $ 1,239 |
Reserves for future policy benefits, claims and unpaid losses and LAE | 46,992 | 43,652 | 39,161 |
Unearned premiums | 2,595 | 2,410 | 2,171 |
Net earned premiums | 4,889 | 4,601 | 4,352 |
Net investment income | 2,094 | 1,831 | 1,696 |
Benefits, claims, losses and settlement expenses | 4,041 | 3,873 | 3,595 |
Amortization of deferred policy acquisition costs | 860 | 690 | 673 |
Other operating expenses | 1,610 | 1,578 | 1,443 |
Net written premiums (excluding life) | 5,026 | 4,754 | 4,389 |
Property and casualty insurance | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 299 | 270 | 238 |
Reserves for future policy benefits, claims and unpaid losses and LAE | 9,741 | 9,678 | 8,563 |
Unearned premiums | 2,595 | 2,410 | 2,171 |
Net earned premiums | 4,865 | 4,579 | 4,328 |
Net investment income | 438 | 362 | 350 |
Benefits, claims, losses and settlement expenses | 3,003 | 2,955 | 2,762 |
Amortization of deferred policy acquisition costs | 644 | 556 | 520 |
Other operating expenses | 957 | 867 | 870 |
Net written premiums (excluding life) | 5,023 | 4,751 | 4,386 |
Annuity | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 1,360 | 920 | 981 |
Reserves for future policy benefits, claims and unpaid losses and LAE | 36,616 | 33,316 | 29,907 |
Net investment income | 1,638 | 1,458 | 1,356 |
Benefits, claims, losses and settlement expenses | 998 | 892 | 800 |
Amortization of deferred policy acquisition costs | 212 | 130 | 149 |
Other operating expenses | 174 | 159 | 142 |
Other | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 23 | 26 | 20 |
Reserves for future policy benefits, claims and unpaid losses and LAE | 635 | 658 | 691 |
Net earned premiums | 24 | 22 | 24 |
Net investment income | 18 | 11 | (10) |
Benefits, claims, losses and settlement expenses | 40 | 26 | 33 |
Amortization of deferred policy acquisition costs | 4 | 4 | 4 |
Other operating expenses | 479 | 552 | 431 |
Net written premiums (excluding life) | $ 3 | $ 3 | $ 3 |