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Investments (Tables)
 12 Months Ended
Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Available for sale fixed maturities and equity securities
Available for sale fixed maturities at December 31 consisted of the following (in millions):
Amortized
Cost		Allowance for Expected Credit LossesGross UnrealizedNet
Unrealized		Fair
Value
GainsLosses
December 31, 2020
Fixed maturities:
U.S. Government and government agencies$231 $— $11 $— $11 $242 
States municipalities and political subdivisions5,249 — 486 (2)484 5,733 
Foreign government203 — 8 — 8 211 
Residential MBS2,812 3 251 (5)246 3,055 
Commercial MBS748 — 43 (1)42 790 
Collateralized loan obligations4,556 13 27 (17)10 4,553 
Other asset-backed securities7,138 18 169 (66)103 7,223 
Corporate and other19,471 6 1,962 (27)1,935 21,400 
Total fixed maturities$40,408 $40 $2,957 $(118)$2,839 $43,207 
December 31, 2019
Fixed maturities:
U.S. Government and government agencies$199 $— $10 $— $10 $209 
States municipalities and political subdivisions6,604 — 363 (4)359 6,963 
Foreign government170 — 3 (1)2 172 
Residential MBS2,900 — 265 (5)260 3,160 
Commercial MBS896 — 31 — 31 927 
Collateralized loan obligations4,307 — 10 (37)(27)4,280 
Other asset-backed securities6,992 — 156 (20)136 7,128 
Corporate and other22,456 — 1,231 (21)1,210 23,666 
Total fixed maturities$44,524 $— $2,069 $(88)$1,981 $46,505 
Equity securities reported at fair value
Equity securities, which are reported at fair value with holding gains and losses recognized in net earnings, consisted of the following at December 31 (in millions):
20202019
Fair ValueFair Value
Actualover (under)Actualover (under)
CostFair ValueCostCostFair ValueCost
Common stocks$939 $922 $(17)$1,164 $1,283 $119 
Perpetual preferred stocks702 741 39 640 654 14 
Total equity securities carried at fair value
$1,641 $1,663 $22 $1,804 $1,937 $133 
Gross unrealized losses on securities by investment category and length of time that have been in a continuous unrealized loss position
The following tables show gross unrealized losses (dollars in millions) on available for sale fixed maturities by investment category and length of time that individual securities have been in a continuous unrealized loss position at the following balance sheet dates.
  
Less Than Twelve MonthsTwelve Months or More
Unrealized
Loss		Fair
Value		Fair Value as
% of Cost		Unrealized
Loss		Fair
Value		Fair Value as
% of Cost
December 31, 2020
Fixed maturities:
U.S. Government and government agencies
$— $23 100 %$— $— — %
States, municipalities and political subdivisions
(2)117 98 %— 11 100 %
Foreign government— 7 100 %— — — %
Residential MBS(4)210 98 %(1)30 97 %
Commercial MBS(1)39 98 %— 9 100 %
Collateralized loan obligations(3)673 100 %(14)1,599 99 %
Other asset-backed securities(45)1,440 97 %(21)388 95 %
Corporate and other(22)858 98 %(5)124 96 %
Total fixed maturities$(77)$3,367 98 %$(41)$2,161 98 %
December 31, 2019
Fixed maturities:
U.S. Government and government agencies
$— $16 100 %$— $11 100 %
States, municipalities and political subdivisions
(3)254 99 %(1)82 99 %
Foreign government(1)70 99 %— — — %
Residential MBS(4)509 99 %(1)69 99 %
Commercial MBS— 17 100 %— — — %
Collateralized loan obligations(11)1,284 99 %(26)1,728 99 %
Other asset-backed securities(12)1,211 99 %(8)123 94 %
Corporate and other(13)1,100 99 %(8)211 96 %
Total fixed maturities$(44)$4,461 99 %$(44)$2,224 98 %
Roll forward of allowance for credit losses on fixed maturity securities A progression of the allowance for expected credit losses on fixed maturity securities is shown below (in millions):
Structured securities (*)Corporate and otherTotal
Balance at January 1$— $— $— 
Impact of adoption of new accounting policy— — — 
Initial allowance for purchased securities with credit deterioration1 — 1 
Provision for expected credit losses on securities with no previous allowance40 28 68 
Additions (reductions) to previously recognized expected credit losses(6)(16)(22)
Reductions due to sales or redemptions(1)(6)(7)
Balance at December 31$34 $6 $40 
(*)Includes mortgage-backed securities, collateralized loan obligations and other asset-backed securities.
Available for sale fixed maturity securities by contractual maturity date
The table below sets forth the scheduled maturities of available for sale fixed maturities as of December 31, 2020 (dollars in millions). Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.
  
AmortizedFair Value
Cost, net (*)Amount%
Maturity
One year or less$2,735 $2,762 6 %
After one year through five years10,344 11,149 26 %
After five years through ten years9,298 10,570 25 %
After ten years2,771 3,105 7 %
25,148 27,586 64 %
Collateralized loan obligations and other ABS (average life of approximately 3-1/2 years)11,663 11,776 27 %
MBS (average life of approximately 3-1/2 years)3,557 3,845 9 %
Total$40,368 $43,207 100 %
(*)Amortized cost, net of allowance for expected credit losses.
Components of the net unrealized gain on securities, included in Accumulated Other Comprehensive Income
The following table shows (in millions) the components of the net unrealized gain on securities that is included in AOCI in AFG’s Balance Sheet.
PretaxDeferred TaxNet
December 31, 2020
Net unrealized gain on:
Fixed maturities — annuity segment (*)$2,323 $(488)$1,835 
Fixed maturities — all other516 (108)408 
Total fixed maturities2,839 (596)2,243 
Deferred policy acquisition costs — annuity segment
(934)196 (738)
Annuity benefits accumulated(324)68 (256)
Life, accident and health reserves(3)— (3)
Unearned revenue11 (2)9 
Total net unrealized gain on marketable securities
$1,589 $(334)$1,255 
December 31, 2019
Net unrealized gain on:
Fixed maturities — annuity segment (*)$1,611 $(338)$1,273 
Fixed maturities — all other370 (78)292 
Total fixed maturities1,981 (416)1,565 
Deferred policy acquisition costs — annuity segment
(681)143 (538)
Annuity benefits accumulated(219)46 (173)
Life, accident and health reserves(1)— (1)
Unearned revenue11 (2)9 
Total net unrealized gain on marketable securities
$1,091 $(229)$862 
(*)Net unrealized gains on fixed maturity investments supporting AFG’s annuity benefits accumulated.
Net investment income earned and investment expenses incurred The following table shows (in millions) investment income earned and investment expenses incurred.
202020192018
Investment income:
Fixed maturities$1,880 $1,915 $1,742 
Equity securities:
Dividends
63 85 79 
Change in fair value (a) (b)24 39 22 
Equity in earnings of partnerships and similar investments
98 154 161 
Other96 132 112 
Gross investment income2,161 2,325 2,116 
Investment expenses(29)(22)(22)
Net investment income (b)$2,132 $2,303 $2,094 
(a)Although the change in the fair value of the majority of AFG’s equity securities is recorded in realized gains (losses) on securities, AFG records holding gains and losses in net investment income on equity securities classified as “trading” under previous guidance and on a small portfolio of limited partnership and similar investments that do not qualify for the equity method of accounting.
(b)Net investment income in 2020 includes losses of $5 million on investments held by the companies that comprise the Neon exited lines due primarily to the $7 million loss recorded in first quarter of 2020 on equity securities that are carried at fair value through net investment income.
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments
Realized gains (losses) and changes in unrealized appreciation (depreciation) included in AOCI related to fixed maturity securities are summarized as follows (in millions):
20202019
Realized gains (losses)Realized gains (losses)
Before ImpairmentsImpairment (Allowance)TotalChange in UnrealizedBefore ImpairmentsImpairmentsTotalChange in Unrealized
Fixed maturities (a)$468 $(46)$422 $858 $26 $(29)$(3)$1,821 
Equity securities(96)— (96)— 277 — 277 — 
Mortgage loans and other investments4 — 4 — 3 — 3 — 
Other (b)(52)11 (41)(360)— 10 10 (835)
Total pretax324 (35)289 498 306 (19)287 986 
Tax effects(68)7 (61)(105)(64)4 (60)(207)
Net of tax$256 $(28)$228 $393 $242 $(15)$227 $779 
2018
Realized gains (losses)
Before ImpairmentsImpairmentsTotalChange in Unrealized
Fixed maturities$6 $(26)$(20)$(1,181)
Equity securities(265)— (265)— 
Mortgage loans and other investments1 — 1 — 
Other (b)11 7 18 502 
Total pretax(247)(19)(266)(679)
Tax effects52 4 56 143 
Net of tax$(195)$(15)$(210)$(536)
(a)Includes realized gains of $415 million on investments disposed of in AFG’s 2020 annuity block reinsurance transaction. See Note P — Insurance.
(b)Primarily adjustments to deferred policy acquisition costs and reserves related to the annuity business.
Holding gains (losses) on equity securities still held AFG recorded net holding gains (losses) on equity securities during 2020, 2019 and 2018 on securities that were still owned at December 31 of each year presented as follows (in millions):
202020192018
Included in realized gains (losses)$(70)$169 $(279)
Included in net investment income24 38 22 
$(46)$207 $(257)
Gross realized gains and losses on available for sale fixed maturity and equity security investments
Gross realized gains and losses (excluding impairment charges and mark-to-market of derivatives) on available for sale fixed maturity investment transactions consisted of the following (in millions):
202020192018
Gross gains$526 $35 $22 
Gross losses(55)(19)(14)