Segment Reporting

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Reporting Disclosure

3.    SEGMENT INFORMATION

The Company reports its results of operations in three segments: Legacy Financial Guarantee Insurance, Specialty Property and Casualty Insurance and Insurance Distribution, separate from Corporate and Other, which is consistent with the manner in which the Company's chief operating decision maker ("CODM") reviews the business to assess performance and allocate resources. See Note 1. Background and Business Description for a description of each of the Company's business segments.

The following tables summarize the components of the Company’s total revenues and expenses, pretax income (loss) and total assets by reportable business segment. Information provided below for “Corporate and Other” primarily relates to the operations of AFG, which will include investment income on its investment portfolio and costs to maintain the operations of AFG, including public company reporting, capital management and business development costs for the acquisition and development of new business initiatives.

	Legacy Financial Guarantee Insurance		Specialty Property & Casualty Insurance		Insurance Distribution		Corporate & Other		Consolidated (2)
Three Months Ended September 30, 2022
Revenues:
Net premiums earned	$	7	$	4					$	11
Net investment income	9		—				$	1	11
Net gains on derivative contracts	37						—		37
Commission income					$	7			7
Other (1)	13		1		—		—		14
Total revenues (2)	67		6		7		1		80
Expenses:
Loss and loss expenses (benefit)	(356)		3						(353)
Operating expenses (3)	20		4		1		6		32
Depreciation expense (3)	—		—		—		—		—
Intangible amortization	5				1				6
Sub-producer commissions (3)					4				4
Interest expense	49								49
Total expenses (2)	(282)		7		6		6		(262)
Pretax income (loss)	$	349	$	(1)	$	1	$	(6)	$	342
Total assets (2)	$	8,902	$	259	$	94	$	157	$	9,412
Nine Months Ended September 30, 2022
Revenues:
Net premiums earned	$	31	$	8					$	39
Net investment income (loss)	(9)		1				$	2	(6)
Net gains on derivative contracts	123						1		124
Net realized gains on extinguishment of debt	57								57
Commission income					$	22			22
Other (1)	48		2		—		—		50
Total revenues (2)	250		11		22		2		286
Expenses:
Loss and loss expenses (benefit)	(347)		5						(341)
Operating expenses (3)	64		11		4		11		90
Depreciation expense (3)	1		—		—		—		1
Intangible amortization	32				2				34
Sub-producer commissions (3)					13				13
Interest expense	138								138
Total expenses (2)	(112)		16		19		11		(66)
Pretax income (loss)	$	362	$	(5)	$	3	$	(8)	$	352

	Legacy Financial Guarantee Insurance		Specialty Property & Casualty Insurance		Insurance Distribution		Corporate & Other		Consolidated (2)
Three Months Ended September 30, 2021
Revenues:
Net premiums earned	$	11	$	—					$	11
Net investment income	21		—				$	—	21
Net gains (losses) on derivative contracts	5								5
Net realized gains on extinguishment of debt	—								—
Commission income					$	7			7
Other (1)	7		—		—		—		7
Total revenues (2)	44		—		7		—		51
Expenses:
Loss and loss expenses (benefit)	(55)		—						(55)
Operating expenses (3)	18		2		1		6		28
Depreciation expense (3)	—		—		—		—		—
Intangible amortization	10				1				11
Sub-producer commissions (3)					4				4
Interest expense	44								44
Total expenses	17		2		6		6		32
Pretax income (loss) (2)	$	27	$	(2)	$	1	$	(6)	$	19
Total assets (2)	$	11,837	$	113	$	96	$	183	$	12,228
Nine Months Ended September 30, 2021
Revenues:
Net premiums earned	$	36	$	—					$	36
Net investment income	111		1				$	—	112
Net gains on derivative contracts	19								19
Net realized gains on extinguishment of debt	33								33
Commission income					$	20			20
Other revenues (1)	5		—		—		4		9
Total revenues (2)	204		1		20		4		229
Expenses:
Loss and loss expenses (benefit)	(73)		—						(73)
Operating expenses (3)	56		5		4		17		82
Depreciation expense (3)	1		—		—		—		1
Intangible amortization	42				2				44
Sub-producer commissions (3)					11				11
Interest expense	144								144
Total expenses	169		5		17		17		208
Pretax income (loss) (2)	$	35	$	(4)	$	3	$	(12)	$	21

(1)Other revenues include the following line items on the Consolidated Statements of Total Comprehensive Income: Net investment gains (losses), including impairments, income (loss) on variable interest entities and other income (expense).

(2)Inter-segment revenues and inter-segment pre-tax income (loss) amounts are insignificant and are not presented separately. Total assets noted in the Corporate and Other Column is net of AFG's investment in surplus notes issued by the Legacy Financial Guarantee Segment with fair values of $69 and $103 at September 30, 2022 and 2021.

(3)The Consolidated Statements of Comprehensive Income presents the sum of these items as Operating Expenses.