Acquisitions and Sale of Businesses (Tables)

12 Months Ended

Dec. 31, 2020

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, 2018
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.

Disposal Groups, Including Discontinued Operations

The gain on the sale of Neon, which was recorded in AFG’s financial statements as of December 31, 2020, is shown below (in millions):

Sale proceeds, net of expenses	$	3
Assets of businesses to be sold:
Cash and investments	$	453
Recoverables from reinsurers	224
Prepaid reinsurance premiums	8
Agents’ balances and premiums receivable	42
Other assets	60
Total assets	787
Liabilities of businesses to be sold:
Unpaid losses and loss adjustment expenses	640
Unearned premiums	49
Payable to reinsurers	19
Other liabilities	92
Total liabilities	800
Reclassify accumulated other comprehensive income	(7)
Net liabilities of businesses sold	$	(20)
Pretax gain on subsidiaries recorded in 2020	$	23

Revenues, costs and expenses, and earnings before income taxes for the subsidiaries sold were (in millions):

	Year ended December 31,
	2020		2019		2018
Net earned premiums	$	200	$	384	$	306
Loss and loss adjustment expenses	218		225		204
Commissions and other underwriting expenses	117		195		165
Underwriting loss	(135)		(36)		(63)
Net investment income (loss)	(5)		6		10
Other income and expenses, net	(5)		(10)		(5)
Loss before income taxes and noncontrolling interests	$	(145)	$	(40)	$	(58)

The impact of Neon exited lines on AFG’s net earnings for the year ended December 31, 2020 is shown below (in millions):

Underwriting loss	$	(135)
Net investment income (loss)	(5)
Other income and expenses, net	(5)
Loss before income taxes and noncontrolling interests	(145)
Pretax gain on sale of subsidiaries	23
Total pretax loss from Neon exited lines	(122)
Tax benefit related to sale of subsidiaries	72
Less: Net loss attributable to noncontrolling interests	(11)
Net loss from Neon exited lines attributable to shareholders	$	(39)