Derivatives (Tables)

12 Months Ended

Dec. 31, 2019

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, 2019				December 31, 2018
Derivative	Balance Sheet Line	Asset		Liability		Asset		Liability
MBS with embedded derivatives	Fixed maturities	$	102	$	—	$	109	$	—
Public company warrants	Equity securities	—		—		—		—
Fixed-indexed and variable-indexed annuities (embedded derivative)	Annuity benefits accumulated	—		3,730		—		2,720
Equity index call options	Equity index call options	924		—		184		—
Equity index put options	Other liabilities	—		1		—		1
Reinsurance contract (embedded derivative)	Other liabilities	—		4		—		2
		$	1,026	$	3,735	$	293	$	2,723

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 2019, 2018 and 2017 (in millions):

Derivative	Statement of Earnings Line	2019			2018			2017
MBS with embedded derivatives	Realized gains (losses) on securities	$	10		$	(7	)	$	(6	)
Public company warrants	Realized gains (losses) on securities	(1		)	(3		)	—
Fixed-indexed and variable-indexed annuities (embedded derivative) (*)	Annuity benefits	(919		)	204			(589		)
Equity index call options	Annuity benefits	804			(298		)	494
Equity index put options	Annuity benefits	2			(1		)	—
Reinsurance contracts (embedded derivative)	Net investment income	(2		)	2			(2		)
		$	(106	)	$	(103	)	$	(103	)

(*)

The change in fair value of the embedded derivative includes a favorable adjustment related to unlocking of actuarial assumptions of $181 million in 2019 and losses of $44 million in 2018 and $25 million in 2017.