Insurance (Tables)

12 Months Ended

Dec. 31, 2012

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, net of reinsurance (and grossed up), over the past three years (in millions):

	2012			2011			2010
Balance at beginning of period	$	4,282		$	4,164		$	3,899
Provision for losses and LAE occurring in the current year	1,903			1,813			1,615
Net decrease in provision for claims of prior years	(30		)	(69		)	(158		)
Total losses and LAE incurred	1,873			1,744			1,457
Payments for losses and LAE of:
Current year	(841		)	(652		)	(360		)
Prior years	(1,185		)	(969		)	(1,116		)
Total payments	(2,026		)	(1,621		)	(1,476		)
Reserves of businesses acquired	—			—			287
Foreign — currency translation and other	—			(5		)	(3		)
Balance at end of period	4,129			4,282			4,164
Add back reinsurance recoverables, net of allowance	2,716			2,238			2,249
Gross unpaid losses and LAE included in the Balance Sheet	$	6,845		$	6,520		$	6,413

Net investment income of insurance group

The following table shows (in millions) investment income earned and investment expenses incurred by AFG’s insurance group.

	2012			2011			2010
Insurance group investment income:
Fixed maturities	$	1,215		$	1,142		$	1,112
Equity securities	31			26			11
Other	60			65			61
Total investment income	1,306			1,233			1,184
Insurance group investment expenses (*)	(31		)	(34		)	(25		)
Net investment income	$	1,275		$	1,199		$	1,159

(*) Included primarily in “Other operating and general expenses” in the Statement of Earnings.

Statutory information

Net earnings (loss) and policyholders’ surplus on a statutory basis for the insurance subsidiaries were as follows (in millions):

	Net Earnings (Loss)						Policyholders’ Surplus
	2012		2011		2010		2012		2011
Property and casualty companies	$	221	$	375	$	624	$	2,015	$	1,976
Life insurance companies	171		190		213		1,343		1,225

Reinsurance information

	2012			2011			2010
Direct premiums written	$	4,283		$	4,061		$	3,542
Reinsurance assumed	38			45			47
Reinsurance ceded	(1,372		)	(1,336		)	(1,181		)
Net written premiums	$	2,949		$	2,770		$	2,408
Direct premiums earned	$	4,120		$	4,062		$	3,653
Reinsurance assumed	36			41			45
Reinsurance ceded	(1,309		)	(1,344		)	(1,148		)
Net earned premiums	$	2,847		$	2,759		$	2,550
Reinsurance recoveries	$	1,743		$	770		$	395