Segments of Operations

AFG manages its business as four segments: (i) Property and casualty insurance, (ii) Annuity, (iii) Run-off long-term care and life and (iv) Other, which includes holding company costs.

AFG reports its property and casualty insurance business in the following Specialty sub-segments: (i) Property and transportation, which includes physical damage and liability coverage for buses, trucks and recreational vehicles, inland and ocean marine, agricultural-related products and other property coverages, (ii) Specialty casualty, which includes primarily excess and surplus, general liability, executive liability, professional liability, umbrella and excess liability, specialty coverage in targeted markets, customized programs for small to mid-sized businesses and workers’ compensation insurance, and (iii) Specialty financial, which includes risk management insurance programs for leasing and financing institutions (including collateral and lender-placed mortgage property insurance), surety and fidelity products and trade credit insurance. Premiums and underwriting profit included under Other specialty represent business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty sub-segments and amortization of deferred gains on retroactive reinsurance transactions related to the sales of businesses in prior years. AFG’s annuity business markets traditional fixed and fixed-indexed annuities in the retail, financial institutions and education markets. AFG’s reportable segments and their components were determined based primarily upon similar economic characteristics, products and services.

The following tables (in millions) show AFG’s revenues and earnings before income taxes by segment and sub-segment.



	Three months ended June 30,					Six months ended June 30,
	2017		2016			2017		2016
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	357	$	365		$	699	$	704
Specialty casualty	537		497			1,045		999
Specialty financial	146		139			293		271
Other specialty	25		26			50		51
Total premiums earned	1,065		1,027			2,087		2,025
Net investment income	96		89			182		172
Other income (a)	4		40			20		43
Total property and casualty insurance	1,165		1,156			2,289		2,240
Annuity:
Net investment income	360		344			707		659
Other income	26		24			53		50
Total annuity	386		368			760		709
Run-off long-term care and life	11		12			23		24
Other	76		59			139		115
Total revenues before realized gains (losses)	1,638		1,595			3,211		3,088
Realized gains (losses) on securities	8		(16		)	11		(34		)
Realized gains on subsidiaries	—		2			—		2
Total revenues	$	1,646	$	1,581		$	3,222	$	3,056



Earnings Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	21		$	15		$	64		$	47
Specialty casualty	29			23			44			52
Specialty financial	23			22			45			45
Other specialty	—			3			(1		)	5
Other lines (b)	(1		)	(66		)	(2		)	(65		)
Total underwriting	72			(3		)	150			84
Investment and other income, net (a)	91			115			184			190
Total property and casualty insurance	163			112			334			274
Annuity	85			76			181			129
Run-off long-term care and life	2			—			2			(1		)
Other (c)	(53		)	(38		)	(100		)	(78		)
Total earnings before realized gains (losses) and income taxes	197			150			417			324
Realized gains (losses) on securities	8			(16		)	11			(34		)
Realized gains on subsidiaries	—			2			—			2
Total earnings before income taxes	$	205		$	136		$	428		$	292


(a)	Includes pretax income of $13 million (before noncontrolling interest) from the sale of a hotel in the first quarter of 2017 and pretax income of $32 million (before noncontrolling interest) from the sale of an apartment property in the second quarter of 2016.


(b)	Includes a $65 million special charge related to the exit of certain lines of business with AFG’s Lloyd’s-based insurer, Neon, in the second quarter of 2016.


(c)	Includes holding company interest and expenses, including a $7 million loss on retirement of debt in the second quarter of 2017.