Insurance (Tables)

9 Months Ended

Sep. 30, 2017

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 during the first nine months of 2017 and 2016 (in millions):

	Nine months ended September 30,
	2017			2016
Balance at beginning of year	$	8,563		$	8,127
Less reinsurance recoverables, net of allowance	2,302			2,201
Net liability at beginning of year	6,261			5,926
Provision for losses and LAE occurring in the current period	2,237			2,011
Net increase (decrease) in the provision for claims of prior years:
Special A&E charges	89			36
Neon exited lines charge	—			57
Other	(87		)	(71		)
Total losses and LAE incurred	2,239			2,033
Payments for losses and LAE of:
Current year	(530		)	(463		)
Prior years	(1,272		)	(1,206		)
Total payments	(1,802		)	(1,669		)
Foreign currency translation and other	32			(3		)
Net liability at end of period	6,730			6,287
Add back reinsurance recoverables, net of allowance	2,833			2,374
Gross unpaid losses and LAE included in the balance sheet at end of period	$	9,563		$	8,661

Reinsurance retention policy

The following table presents (by type of coverage) the amount of each loss above the specified retention covered by treaty reinsurance programs in AFG’s property and casualty insurance operations (in millions) as of October 1, 2017:

			Reinsurance Coverage						AFG
	Primary		Coverage		AFG Participation (a)				Maximum
	Retention		Amount		%		$		Loss (b)
U.S.-based operations:
California Workers’ Compensation	$	2	$	148	1	%	$	1	$	3
Other Workers’ Compensation	3		37		—	%	—		3
Commercial Umbrella	1		49		13	%	6		7
Property — General	5		45		—	%	—		5
Property — Catastrophe	15		85		5	%	4		19
Neon Lloyd’s Syndicate	15		210		—	%	—		15
Riverfront Re Ltd. catastrophe bond (c)	100		200		5	%	10		N/A

(a) Includes the participation of AFG’s internal reinsurance program.

(b) Maximum loss for claims up to reinsurance coverage limit.

(c) Includes aggregate coverage. See description below.