View Filing Data

Print Document View Excel Document

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2012	Nov. 01, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	AMERICAN FINANCIAL GROUP INC
Entity Central Index Key	0001042046
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		90,234,106

Consolidated Balance Sheet (Unaudited) - USD ($) $ in Millions	Sep. 30, 2012	Dec. 31, 2011
Assets:
Cash and cash equivalents	$ 1,626	$ 1,324
Investments:
Fixed maturities, available for sale at fair value (amortized cost - $21,760 and $20,562)	23,746	21,807
Fixed maturities, trading at fair value	309	440
Equity securities, at fair value (cost - $825 and $744)	1,031	928
Mortgage loans	566	401
Policy loans	229	252
Real estate and other investments	530	425
Total cash and investments	28,037	25,577
Recoverables from reinsurers	3,865	2,942
Prepaid reinsurance premiums	587	409
Agents' balances and premiums receivable	750	565
Deferred policy acquisition costs	621	901
Assets of managed investment entities	3,102	3,058
Other receivables	1,168	895
Variable annuity assets (separate accounts)	577	548
Other assets	741	757
Goodwill	185	186
Total assets	39,633	35,838
Liabilities and Equity:
Unpaid losses and loss adjustment expenses	7,277	6,520
Unearned premiums	1,821	1,484
Annuity benefits accumulated	17,245	15,420
Life, accident and health reserves	1,699	1,727
Payable to reinsurers	656	475
Liabilities of managed investment entities	2,753	2,787
Long-term debt	966	934
Variable annuity liabilities (separate accounts)	577	548
Other liabilities	1,675	1,386
Total liabilities	34,669	31,281
Shareholders' equity:
Common Stock, no par value - 200,000,000 shares authorized - 90,846,962 and 97,846,402 shares outstanding	91	98
Capital surplus	1,071	1,121
Retained earnings:
Appropriated - managed investment entities	109	173
Unappropriated	2,577	2,439
Accumulated other comprehensive income, net of tax	931	580
Total shareholders' equity	4,779	4,411
Noncontrolling interests	185	146
Total equity	4,964	4,557
Total liabilities and equity	$ 39,633	$ 35,838

Consolidated Balance Sheet (Unaudited) (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2012	Dec. 31, 2011
Statement of Financial Position [Abstract]
Fixed maturities, available for sale at amortized cost	$ 21,760	$ 20,562
Equity securities, at cost	$ 825	$ 744
Common Stock, par value
Common Stock, shares authorized	200,000,000	200,000,000
Common Stock, shares outstanding	90,846,962	97,846,402

Consolidated Statement of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues:
Property and casualty insurance premiums	$ 848	$ 835	$ 2,091	$ 2,043
Life, accident and health premiums	80	107	290	324
Investment income	327	310	981	916
Realized gains (losses) on:
Securities	85	8	145	27
Subsidiaries	156		155	(3)
Income (loss) of managed investment entities:
Investment income	31	27	92	78
Gain (loss) on change in fair value of assets/liabilities	(13)	1	(63)	(54)
Other income	49	47	135	136
Total revenues	1,563	1,335	3,826	3,467
Costs and Expenses:
Property and casualty insurance losses and loss adjustment expenses	610	549	1,317	1,303
Property and casualty insurance commissions and other underwriting expenses	254	228	697	648
Annuity benefits	140	142	417	383
Life, accident and health benefits	68	90	244	275
Annuity and supplemental insurance acquisition expenses	47	46	142	145
Interest charges on borrowed money	22	21	64	63
Expenses of managed investment entities	19	17	58	53
Other operating and general expenses	118	86	320	279
Total costs and expenses	1,278	1,179	3,259	3,149
Operating earnings before income taxes	285	156	567	318
Provision for income taxes	74	48	184	126
Net earnings, including noncontrolling interests	211	108	383	192
Less: Net earnings (loss) attributable to noncontrolling interests	(15)	11	(55)	(41)
Net Earnings Attributable to Shareholders	$ 226	$ 97	$ 438	$ 233
Earnings Attributable to Shareholders per Common Share:
Basic	$ 2.43	$ 0.97	$ 4.58	$ 2.27
Diluted	$ 2.39	$ 0.95	$ 4.50	$ 2.23
Average number of Common Shares:
Basic	92.9	99.7	95.7	102.3
Diluted	94.6	101.3	97.4	104.1
Cash dividends per Common Share	$ 0.175	$ 0.1625	$ 0.525	$ 0.4875
Supplemental disclosure of Realized gains (losses) on securities:
Realized gains before impairments	$ 93	$ 18	$ 164	$ 68
Losses on securities with impairment	(8)	(6)	(20)	(23)
Non-credit portion recognized in other comprehensive income (loss)		(4)	1	(18)
Impairment charges recognized in earnings	(8)	(10)	(19)	(41)
Total realized gains on securities	$ 85	$ 8	$ 145	$ 27

Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Statement of Other Comprehensive Income [Abstract]
Net earnings, including noncontrolling interests	$ 211	$ 108	$ 383	$ 192
Net unrealized gains (losses) on securities:
Unrealized holding gains (losses) on securities arising during the period	228	(1)	464	135
Reclassification adjustment for realized gains included in net earnings	(56)	(14)	(96)	(34)
Reclassification adjustment for unrealized gains of subsidiaries sold	(18)		(18)
Total net unrealized gains (losses) on securities	154	(15)	350	101
Foreign currency translation adjustments	10	(14)	9	(9)
Pension and other postretirement plans adjustments			1	1
Other comprehensive income (loss), net of tax	164	(29)	360	93
Total comprehensive income, net of tax	375	79	743	285
Less: Comprehensive income (loss) attributable to noncontrolling interests	(10)	12	(47)	(38)
Comprehensive income attributable to shareholders	$ 385	$ 67	$ 790	$ 323

Consolidated Statement of Changes in Equity (Unaudited) - USD ($) $ in Millions	Total	Common Shares	Common Stock and Capital Surplus	Retained Earnings Approp.	Retained Earnings Unapprop.	Accumulated Other Comprehensive Inc. (Loss)	Total	Noncontrolling Interests
Cumulative effect of accounting change	$ (139)				$ (155)	$ 16	$ (139)
Balance shares, as previously reported at Dec. 31, 2010		105,168,366
Balance, as previously reported at Dec. 31, 2010	4,620		$ 1,271	$ 197	2,523	479	4,470	$ 150
Beginning Balance, shares at Dec. 31, 2010		105,168,366
Beginning Balance at Dec. 31, 2010	4,481		1,271	197	2,368	495	4,331	150
Net earnings	192				233		233	(41)
Other comprehensive income	93					90	90	3
Allocation of losses of managed investment entities	0			(47)			(47)	47
Dividends on Common Stock	(50)				(50)		(50)
Shares issued:
Exercise of stock options, shares		758,075
Exercise of stock options	19		19				19
Other benefit plans, shares		371,392
Other benefit plans	8		8				8
Dividend reinvestment plan, shares		11,686
Stock-based compensation expense	10		10				10
Shares acquired and retired, shares		(7,803,286)
Shares acquired and retired	(263)		(95)		(168)		(263)
Other	(4)							(4)
Ending Balance, shares at Sep. 30, 2011		98,506,233
Ending Balance at Sep. 30, 2011	$ 4,486		1,213	150	2,383	585	4,331	155
Beginning Balance, shares at Dec. 31, 2011	97,846,402	97,846,402
Beginning Balance at Dec. 31, 2011	$ 4,557		1,219	173	2,439	580	4,411	146
Net earnings	383				438		438	(55)
Other comprehensive income	360					352	352	8
Allocation of losses of managed investment entities	0			(64)			(64)	64
Dividends on Common Stock	(50)				(50)		(50)
Shares issued:
Exercise of stock options, shares		1,009,714
Exercise of stock options	27		27				27
Other benefit plans, shares		291,610
Other benefit plans	6		6				6
Dividend reinvestment plan, shares		11,697
Stock-based compensation expense	15		15				15
Shares exchanged - benefit plans, shares		(23,685)
Shares acquired and retired, shares		(8,288,776)
Shares acquired and retired	(315)		(105)		(210)		(315)
Other	$ (19)				(40)	(1)	(41)	22
Ending Balance, shares at Sep. 30, 2012	90,846,962	90,846,962
Ending Balance at Sep. 30, 2012	$ 4,964		$ 1,162	$ 109	$ 2,577	$ 931	$ 4,779	$ 185

Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Operating Activities:
Net earnings, including noncontrolling interests	$ 383	$ 192
Adjustments:
Depreciation and amortization	118	131
Annuity benefits	417	383
Realized gains on investing activities	(299)	(23)
Net (purchases) sales of trading securities	27	(44)
Deferred annuity and life policy acquisition costs	(177)	(187)
Change in:
Reinsurance and other receivables	(1,387)	(519)
Other assets	6	(99)
Insurance claims and reserves	1,275	347
Payable to reinsurers	181	331
Other liabilities	(56)	153
Managed investment entities' assets/liabilities	(13)	(22)
Other operating activities, net	12	18
Net cash provided by operating activities	487	661
Investing Activities:
Purchases of fixed maturities	(3,240)	(4,062)
Purchases of equity securities	(231)	(365)
Purchases of mortgage loans	(178)	(132)
Purchases of real estate, property and equipment	(61)	(82)
Proceeds from maturities and redemptions of fixed maturities	1,617	1,455
Proceeds from repayments of mortgage loans	10	227
Proceeds from sales of fixed maturities	495	865
Proceeds from sales of equity securities	235	88
Proceeds from sales of real estate, property and equipment	4	4
Proceeds from sales of subsidiaries	302
Cash and cash equivalents of businesses sold	(34)
Managed investment entities:
Purchases of investments	(1,246)	(1,085)
Proceeds from sales and redemptions of investments	1,429	1,170
Other investing activities, net	(40)	(14)
Net cash used in investing activities	(938)	(1,931)
Financing Activities:
Annuity receipts	2,433	2,468
Annuity surrenders, benefits and withdrawals	(1,127)	(971)
Additional long-term borrowings	344	2
Reductions of long-term debt	(323)	(17)
Issuances of managed investment entities' liabilities	456
Retirement of managed investment entities' liabilities	(704)	(60)
Issuances of Common Stock	27	19
Repurchases of Common Stock	(315)	(263)
Cash dividends paid on Common Stock	(50)	(50)
Other financing activities, net	12	34
Net cash provided by financing activities	753	1,162
Net Change in Cash and Cash Equivalents	302	(108)
Cash and cash equivalents at beginning of period	1,324	1,099
Cash and cash equivalents at end of period	$ 1,626	$ 991

Accounting Policies

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Accounting Policies

A. Accounting Policies

Basis of Presentation The accompanying consolidated financial statements for American Financial Group, Inc. (“AFG”) and its subsidiaries are unaudited; however, management believes that all adjustments (consisting only of normal recurring accruals unless otherwise disclosed herein) necessary for fair presentation have been made. The results of operations for interim periods are not necessarily indicative of results to be expected for the year. The financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes necessary to be in conformity with U.S. generally accepted accounting principles.

Certain reclassifications have been made to prior periods to conform to the current year’s presentation. All significant intercompany balances and transactions have been eliminated. The results of operations of companies since their formation or acquisition are included in the consolidated financial statements. Events or transactions occurring subsequent to September 30, 2012, and prior to the filing date of this Form 10-Q, have been evaluated for potential recognition or disclosure herein.

The preparation of the financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates.

Accounting Standards Adopted in 2012 Effective January 1, 2012, AFG retrospectively adopted Accounting Standards Update (“ASU”) 2010-26 that addresses which costs related to issuing or renewing insurance contracts qualify for deferral. To qualify for deferral, the guidance specifies that a cost must be directly related to the successful acquisition of an insurance contract. The financial statements for prior periods have been adjusted to reflect the adoption of the new standard.

The impact of adoption on amounts previously reported is shown in the table below (in millions, except per share data):



	December 31, 2011
Deferred policy acquisition costs
As previously reported	$	1,105
As adjusted	901

Net deferred tax liability (included in other liabilities)
As previously reported	$	203
As adjusted	133

Shareholders’ equity
As previously reported	$	4,545
As adjusted	4,411



	2011
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Total Year
Net earnings attributable to shareholders
As previously reported	$	83	$	55	$	96	$	109	$	343
As adjusted	88		48		97		109		342

Diluted earnings per Common Share
As previously reported	$	0.79	$	0.52	$	0.94	$	1.10	$	3.33
As adjusted	0.83		0.46		0.95		1.09		3.32

Effective January 1, 2012, AFG retrospectively adopted ASU 2011-05, which eliminates the option to report other comprehensive income in the Statement of Changes in Equity. As permitted by the standard, comprehensive income is presented herein in a separate statement immediately following the Statement of Earnings. This new presentation does not change the measurement of net earnings, other comprehensive income or earnings per share, and accordingly, had no impact on AFG’s results of operations or financial position.

Effective January 1, 2012, AFG adopted ASU 2011-04, which clarifies the application of existing fair value measurement and amends certain disclosure requirements. Disclosures required by the guidance are included in Note D. The impact of adoption was not material to AFG’s results of operations or financial position.

Fair Value Measurements Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The standards establish a hierarchy of valuation techniques based on whether the assumptions that market participants would use in pricing the asset or liability (“inputs”) are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect AFG’s assumptions about the assumptions market participants would use in pricing the asset or liability. AFG did not have any significant nonrecurring fair value measurements of nonfinancial assets and liabilities in the first nine months of 2012 or 2011.

Investments Fixed maturity and equity securities classified as “available for sale” are reported at fair value with unrealized gains and losses included in accumulated other comprehensive income in AFG’s Balance Sheet. Fixed maturity and equity securities classified as “trading” are reported at fair value with changes in unrealized holding gains or losses during the period included in investment income. Mortgage and policy loans are carried primarily at the aggregate unpaid balance.

Premiums and discounts on fixed maturity securities are amortized using the interest method; mortgage-backed securities (“MBS”) are amortized over a period based on estimated future principal payments, including prepayments. Prepayment assumptions are reviewed periodically and adjusted to reflect actual prepayments and changes in expectations.

Gains or losses on securities are determined on the specific identification basis. When a decline in the value of a specific investment is considered to be other-than-temporary at the balance sheet date, a provision for impairment is charged to earnings (included in realized gains (losses)) and the cost basis of that investment is reduced. If management can assert that it does not intend to sell an impaired fixed maturity security and it is not more likely than not that it will have to sell the security before recovery of its amortized cost basis, then the other-than-temporary impairment is separated into two components: 1) the amount related to credit losses (recorded in earnings) and 2) the amount related to all other factors (recorded in other comprehensive income). The credit-related portion of an other-than-temporary impairment is measured by comparing a security’s amortized cost to the present value of its current expected cash flows discounted at its effective yield prior to the impairment charge. Both components are shown in the Statement of Earnings. If management intends to sell an impaired security, or it is more likely than not that it will be required to sell the security before recovery, an impairment charge to earnings is recorded to reduce the amortized cost of that security to fair value.

Derivatives Derivatives included in AFG’s Balance Sheet are recorded at fair value and consist primarily of (i) components of certain fixed maturity securities (primarily interest-only MBS) and (ii) the equity-based component of certain annuity products (included in annuity benefits accumulated) and related call options (included in other investments) designed to be consistent with the characteristics of the liabilities and used to mitigate the risk embedded in those annuity products. Changes in the fair value of derivatives are included in earnings.

Goodwill Goodwill represents the excess of cost of subsidiaries over AFG’s equity in their underlying net assets. Goodwill is not amortized, but is subject to an impairment test at least annually. Under guidance adopted in 2011, an entity is only required to complete the quantitative annual goodwill impairment test on a reporting unit if the entity determines (through qualitative analysis) that it is more likely than not that the reporting unit’s fair value is less than its carrying amount.

Reinsurance Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policies. AFG’s property and casualty insurance subsidiaries report as assets (a) the estimated reinsurance recoverable on paid and unpaid losses, including an estimate for losses incurred but not reported, and (b) amounts paid to reinsurers applicable to the unexpired terms of policies in force. Payable to reinsurers includes ceded premiums due to reinsurers as well as ceded premiums retained by AFG’s property and casualty insurance subsidiaries under contracts to fund ceded losses as they become due. AFG’s insurance subsidiaries also assume reinsurance from other companies. Earnings on reinsurance assumed is recognized based on information received from ceding companies.

Certain annuity and supplemental insurance subsidiaries cede life insurance policies to a third party on a funds withheld basis whereby the subsidiaries retain the assets (securities) associated with the reinsurance contracts. Interest is credited to the reinsurer based on the actual investment performance of the retained assets. These reinsurance contracts are considered to contain embedded derivatives (that must be adjusted to fair value) because the yield on the payables is based on specific blocks of the ceding companies’ assets, rather than the overall creditworthiness of the ceding company. AFG determined that changes in the fair value of the underlying portfolios of fixed maturity securities is an appropriate measure of the value of the embedded derivative. The securities related to these transactions are classified as “trading.” The adjustment to fair value on the embedded derivatives offsets the investment income recorded on the adjustment to fair value of the related trading portfolios.

Deferred Policy Acquisition Costs (“DPAC”) Policy acquisition costs (principally commissions, premium taxes and certain underwriting and policy issuance costs) directly related to the successful acquisition or renewal of an insurance contract are deferred. DPAC also includes capitalized costs associated with sales inducements offered to fixed annuity policyholders such as enhanced interest rates and premium and persistency bonuses. As discussed previously under “Accounting Standards Adopted in 2012,” AFG’s accounting for DPAC changed effective January 1, 2012, and amounts previously reported have been adjusted retrospectively.

For the property and casualty companies, DPAC is limited based upon recoverability without any consideration for anticipated investment income and is charged against income ratably over the terms of the related policies. A premium deficiency is recognized if the sum of expected claims costs, claims adjustment expenses and unamortized acquisition costs exceed the related unearned premiums. A premium deficiency is first recognized by charging any unamortized acquisition costs to expense to the extent required to eliminate the deficiency. If the premium deficiency is greater than unamortized acquisition costs, a liability is accrued for the excess deficiency and reported with unpaid losses and loss adjustment expenses.

DPAC related to annuities is deferred to the extent deemed recoverable and amortized, with interest, in relation to the present value of actual and expected gross profits on the policies. Expected gross profits consist principally of estimated future investment margin (estimated future net investment income less interest credited on policyholder funds) and surrender, mortality, and other life and variable annuity policy charges, less death and annuitization benefits in excess of account balances and estimated future policy administration expenses. To the extent that realized gains and losses result in adjustments to the amortization of DPAC related to annuities, such adjustments are reflected as components of realized gains (losses).

DPAC related to annuities is also adjusted, net of tax, for the change in amortization that would have been recorded if the unrealized gains (losses) from securities had actually been realized. This adjustment is included in unrealized gains (losses) on marketable securities, a component of accumulated other comprehensive income in AFG’s Balance Sheet.

DPAC related to traditional life and health insurance is amortized over the expected premium paying period of the related policies, in proportion to the ratio of annual premium revenues to total anticipated premium revenues.

DPAC includes the present value of future profits on business in force of annuity and supplemental insurance companies acquired (“PVFP”). PVFP represents the portion of the costs to acquire companies that is allocated to the value of the right to receive future cash flows from insurance contracts existing at the date of acquisition. PVFP is amortized with interest in relation to expected gross profits of the acquired policies for annuities and universal life products and in relation to the premium paying period for traditional life and health insurance products.

Managed Investment Entities A company is considered the primary beneficiary of, and therefore must consolidate, a variable interest entity (“VIE”) based primarily on its ability to direct the activities of the VIE that most significantly impact that entity’s economic performance and the obligation to absorb losses of, or receive benefits from, the entity that could potentially be significant to the VIE.

AFG manages, and has investments in, collateralized loan obligations (“CLOs”) that are VIEs (see Note H — “Managed Investment Entities”). Both the management fees (payment of which is subordinate to other obligations of the CLOs) and the investments in the CLOs are considered variable interests. AFG has determined that it is the primary beneficiary of the CLOs because (i) its role as asset manager gives it the power to direct the activities that most significantly impact the economic performance of the CLOs and (ii) it has exposure to CLO losses (through its investments in the CLO debt tranches) and the right to receive benefits (through its subordinated management fees and returns on its investments), both of which could potentially be significant to the CLOs.

Because AFG has no right to use the CLO assets and no obligation to pay the CLO liabilities, the assets and liabilities of the CLOs are shown separately in AFG’s Balance Sheet. AFG has elected the fair value option for reporting on the CLO assets and liabilities to improve the transparency of financial reporting related to the CLOs. The excess of fair value of the CLOs’ assets over the fair value of the liabilities is recorded in AFG’s Balance Sheet as appropriated retained earnings — managed investment entities, representing amounts that ultimately will inure to the benefit of the CLO debt holders.

The net gain or loss from accounting for the CLO assets and liabilities at fair value is separately presented in AFG’s Statement of Earnings. CLO earnings attributable to AFG’s shareholders represent the change in fair value of AFG’s investments in the CLOs (including distributions) and management fees earned. All other CLO earnings (losses) are not attributable to AFG’s shareholders and will ultimately inure to the benefit of the other CLO debt holders. As a result, such CLO earnings (losses) are included in net earnings (loss) attributable to noncontrolling interests in AFG’s Statement of Earnings and in appropriated retained earnings — managed investment entities in the Balance Sheet. As the CLOs approach maturity (2016 to 2022), it is expected that losses attributable to noncontrolling interests will reduce appropriated retained earnings towards zero as the fair values of the assets and liabilities converge and the CLO assets are used to pay the CLO debt.

At September 30, 2012, assets and liabilities of managed investment entities include $308 million in assets and $267 million in liabilities of a temporary warehousing entity that was established in connection with the formation of a new CLO. All warehoused assets were transferred to the new CLO and the liabilities were repaid when the CLO formation was completed and the CLO issued its securities in October 2012.

Unpaid Losses and Loss Adjustment Expenses The net liabilities stated for unpaid claims and for expenses of investigation and adjustment of unpaid claims are based upon (a) the accumulation of case estimates for losses reported prior to the close of the accounting period on direct business written; (b) estimates received from ceding reinsurers and insurance pools and associations; (c) estimates of unreported losses (including possible development on known claims) based on past experience; (d) estimates based on experience of expenses for investigating and adjusting claims; and (e) the current state of the law and coverage litigation. Establishing reserves for asbestos, environmental and other mass tort claims involves considerably more judgment than other types of claims due to, among other things, inconsistent court decisions, an increase in bankruptcy filings as a result of asbestos-related liabilities, novel theories of coverage, and judicial interpretations that often expand theories of recovery and broaden the scope of coverage.

Loss reserve liabilities are subject to the impact of changes in claim amounts and frequency and other factors. Changes in estimates of the liabilities for losses and loss adjustment expenses are reflected in the Statement of Earnings in the period in which determined. Despite the variability inherent in such estimates, management believes that the liabilities for unpaid losses and loss adjustment expenses are adequate.

Annuity Benefits Accumulated Annuity receipts and benefit payments are recorded as increases or decreases in annuity benefits accumulated rather than as revenue and expense. Increases in this liability for interest credited are charged to expense and decreases for surrender charges are credited to other income.

For certain products, annuity benefits accumulated also includes reserves for accrued persistency and premium bonuses and excess benefits expected to be paid on future deaths and annuitizations (“EDAR”). The liability for EDAR is accrued for and modified using assumptions consistent with those used in determining DPAC and DPAC amortization, except that amounts are determined in relation to the present value of total expected assessments. Total expected assessments consist principally of estimated future investment margin, surrender, mortality, and other life and variable annuity policy charges, and unearned revenues once they are recognized as income.

Annuity benefits accumulated also includes amounts advanced from the Federal Home Loan Bank of Cincinnati.

Life, Accident and Health Reserves Liabilities for future policy benefits under traditional life, accident and health policies are computed using the net level premium method. Computations are based on the original projections of investment yields, mortality, morbidity and surrenders and include provisions for unfavorable deviations. Claim reserves and liabilities established for accident and health claims are modified as necessary to reflect actual experience and developing trends.

Variable Annuity Assets and Liabilities Separate accounts related to variable annuities represent the fair value of deposits invested in underlying investment funds on which AFG earns a fee. Investment funds are selected and may be changed only by the policyholder, who retains all investment risk.

AFG’s variable annuity contracts contain a guaranteed minimum death benefit (“GMDB”) to be paid if the policyholder dies before the annuity payout period commences. In periods of declining equity markets, the GMDB may exceed the value of the policyholder’s account. A GMDB liability is established for future excess death benefits using assumptions together with a range of reasonably possible scenarios for investment fund performance that are consistent with DPAC capitalization and amortization assumptions.

Premium Recognition Property and casualty premiums are earned generally over the terms of the policies on a pro rata basis. Unearned premiums represent that portion of premiums written which is applicable to the unexpired terms of policies in force. On reinsurance assumed from other insurance companies or written through various underwriting organizations, unearned premiums are based on information received from such companies and organizations. For traditional life, accident and health products, premiums are recognized as revenue when legally collectible from policyholders. For interest-sensitive life and universal life products, premiums are recorded in a policyholder account, which is reflected as a liability. Revenue is recognized as amounts are assessed against the policyholder account for mortality coverage and contract expenses.

Noncontrolling Interests For Balance Sheet purposes, noncontrolling interests represents the interests of shareholders other than AFG in consolidated entities. In the Statement of Earnings, net earnings and losses attributable to noncontrolling interests represents such shareholders’ interest in the earnings and losses of those entities.

Income Taxes Deferred income taxes are calculated using the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases and are measured using enacted tax rates. A valuation allowance is established to reduce total deferred tax assets to an amount that will more likely than not be realized.

AFG records a liability for the inherent uncertainty in quantifying its income tax provisions. Related interest and penalties are recognized as a component of tax expense.

Stock-Based Compensation All share-based grants are recognized as compensation expense on a straight-line basis over their vesting periods based on their calculated fair value at the date of grant. AFG uses the Black-Scholes pricing model to measure the fair value of employee stock options. See Note K - “Shareholders’ Equity” for further information.

Benefit Plans AFG provides retirement benefits to qualified employees of participating companies through the AFG 401(k) Retirement and Savings Plan, a defined contribution plan. AFG makes all contributions to the retirement fund portion of the plan and matches a percentage of employee contributions to the savings fund. Company contributions are expensed in the year for which they are declared. AFG and many of its subsidiaries provide health care and life insurance benefits to eligible retirees. AFG also provides postemployment benefits to former or inactive employees (primarily those on disability) who were not deemed retired under other company plans. The projected future cost of providing these benefits is expensed over the period employees earn such benefits.

Earnings Per Share Basic earnings per share is calculated using the weighted average number of shares of common stock outstanding during the period. The calculation of diluted earnings per share includes adjustments to weighted average common shares related to stock-based compensation plans: third quarter 2012 and 2011 – 1.7 million and 1.6 million; first nine months of 2012 and 2011 – 1.7 million and 1.8 million, respectively.

AFG’s weighted average diluted shares outstanding excludes the following anti-dilutive potential common shares related to stock compensation plans: third quarter 2012 and 2011 – 1.9 million and 2.6 million; first nine months of 2012 and 2011 – 1.8 million and 2.3 million, respectively. Adjustments to net earnings attributable to shareholders in the calculation of diluted earnings per share were nominal in the 2012 and 2011 periods.

Statement of Cash Flows For cash flow purposes, “investing activities” are defined as making and collecting loans and acquiring and disposing of debt or equity instruments and property and equipment. “Financing activities” include obtaining resources from owners and providing them with a return on their investments, borrowing money and repaying amounts borrowed. Annuity receipts, benefits and withdrawals are also reflected as financing activities. All other activities are considered “operating.” Short-term investments having original maturities of three months or less when purchased are considered to be cash equivalents for purposes of the financial statements.

Aquisitions and Sales of Subsidiaries

9 Months Ended

Sep. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

Sale of Operations

B. Acquisitions and Sales of Subsidiaries

On August 31, 2012, AFG completed the sale of its Medicare supplement and critical illness businesses, which included Loyal American Life Insurance Company and four other insurance companies, to Cigna Corporation for $307 million in cash. AFG realized a gain of $155 million on the sale (subject to post-closing adjustments). Since the transaction includes the ongoing cessions of certain business to Cigna, the operations being sold are not reported as discontinued operations. Following the sale, AFG’s supplemental insurance operations consist solely of its run-off long-term care business.

The impact of the August 2012 sale of the Medicare supplement and critical illness businesses on AFG’s financial statements is shown below (in millions):



Sale proceeds	$	307
Expenses	(12		)
Net proceeds	$	295

Assets of businesses sold:
Cash and investments	$	217
Deferred policy acquisition costs	108
Other assets	31
Total assets	356
Liabilities of businesses sold:
Life, accident and health reserves	209
Other liabilities	7
Total liabilities	216
Net assets of businesses sold	$	140

Gain on sale of subsidiaries	$	155

Summarized Statement of Earnings information for the Medicare supplement and critical illness businesses through the sale date is shown below (in millions):



	Three months ended				Nine months ended
	September 30,				September 30,
	2012 (*)		2011		2012 (*)		2011
Total revenues	$	53	$	80	$	212	$	244
Total costs and expenses	43		69		184		223
Operating earnings before income taxes	$	10	$	11	$	28	$	21

(*) Reflects revenues and expenses through the end of August 2012.

During the third quarter of 2012, AFG acquired the outstanding 28% of Marketform, its London-based Lloyd’s property and casualty insurance operation, that it did not already own for $17 million and sold an additional small annuity and supplemental insurance company for $7 million.

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 45
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 43-48
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Segments of Operations

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Segments of Operations

C. Segments of Operations

AFG manages its business as three segments: (i) property and casualty insurance, (ii) annuity and supplemental insurance and (iii) other, which includes holding company costs and amounts attributable to the noncontrolling interests of the managed investment entities.

AFG reports its property and casualty insurance business in the following Specialty sub-segments: (i) Property and transportation, which includes physical damage and liability coverage for buses, trucks and recreational vehicles, inland and ocean marine, agricultural-related products and other property coverages, (ii) Specialty casualty, which includes primarily excess and surplus, general liability, executive liability, umbrella and excess liability, customized programs for small to mid-sized businesses and workers’ compensation, and (iii) Specialty financial, which includes risk management insurance programs for lending and leasing institutions (including collateral and mortgage protection insurance), surety and fidelity products and trade credit insurance. AFG’s annuity business markets traditional fixed and fixed-indexed annuities in the education, bank and individual markets. Following the sale of its Medicare supplement and critical illness businesses in August 2012 (see Note B — “Acquisitions and Sales of Subsidiaries”), AFG’s remaining supplemental insurance operations consist solely of its run-off blocks of long-term care and life insurance business.

AFG’s reportable segments and their components were determined based primarily upon similar economic characteristics, products and services.The following tables (in millions) show AFG’s revenues and operating earnings before income taxes by significant business segment and sub-segment.



	Three months ended					Nine months ended
	September 30,					September 30,
	2012		2011			2012		2011
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	487	$	500		$	1,040	$	1,029
Specialty casualty	243		216			699		651
Specialty financial	100		101			301		313
Other	18		18			51		50
Total premiums earned	848		835			2,091		2,043
Investment income	69		73			210		223
Realized gains	44		15			88		47
Other income	16		20			47		55
Total property and casualty insurance	977		943			2,436		2,368
Annuity and supplemental insurance:
Investment income	270		236			789		694
Life, accident and health premiums	80		107			290		324
Realized gains (losses) on securities	41		(8		)	57		(22		)
Realized gains (losses) on subsidiaries	156		—			155		(2		)
Other income	30		27			84		79
Total annuity and supplemental insurance	577		362			1,375		1,073
Other	9		30			15		26
Total revenues	$	1,563	$	1,335		$	3,826	$	3,467



	Three months ended						Nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Operating Earnings (Losses) Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	—		$	5		$	33		$	38
Specialty casualty	8			20			45			38
Specialty financial	1			24			28			52
Other	7			9			10			14
Other lines (a)	(32		)	—			(39		)	(50		)
Total underwriting	(16		)	58			77			92
Investment and other income, net	58			65			174			205
Realized gains	44			15			88			47
Total property and casualty insurance	86			138			339			344
Annuity and supplemental insurance:
Operations (b)	81			47			224			157
Realized gains (losses) on securities	41			(8		)	57			(22		)
Realized gains (losses) on subsidiaries	156			—			155			(2		)
Total annuity and supplemental insurance	278			39			436			133
Other (c)	(79		)	(21		)	(208		)	(159		)
Total operating earnings before income taxes	$	285		$	156		$	567		$	318


(a)	Includes third quarter 2012 and second quarter 2011 special charges of $31 million and $50 million, respectively, to increase asbestos and environmental reserves.


(b)	Includes earnings from the Medicare supplement and critical illness operations, which were sold in August 2012, of $10 million and $11 million for the third quarter and $28 million and $21 million for the first nine months of 2012 and 2011, respectively.

(c)

Includes holding company expenses and earnings (losses) of managed investment entities attributable to noncontrolling interests of ($18) million and $8 million for the third quarter and ($64) million and ($47) million for the first nine months of 2012 and 2011, respectively. Holding company expenses for the third quarter of 2012 include an $8 million loss on retirement of debt and a $15 million charge for a labor matter related to AFG’s former railroad operations.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures

D. Fair Value Measurements

Accounting standards for measuring fair value are based on inputs used in estimating fair value. The three levels of the hierarchy are as follows:

Level 1 — Quoted prices for identical assets or liabilities in active markets (markets in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis). AFG’s Level 1 financial instruments consist primarily of publicly traded equity securities and highly liquid government bonds for which quoted market prices in active markets are available and short-term investments of managed investment entities.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar assets or liabilities in inactive markets (markets in which there are few transactions, the prices are not current, price quotations vary substantially over time or among market makers, or in which little information is released publicly); and valuations based on other significant inputs that are observable in active markets. AFG’s Level 2 financial instruments include separate account assets, corporate and municipal fixed maturity securities, mortgage-backed securities (“MBS”) and investments of managed investment entities priced using observable inputs. Level 2 inputs include benchmark yields, reported trades, corroborated broker/dealer quotes, issuer spreads and benchmark securities. When non-binding broker quotes can be corroborated by comparison to similar securities priced using observable inputs, they are classified as Level 2.

Level 3 — Valuations derived from market valuation techniques generally consistent with those used to estimate the fair values of Level 2 financial instruments in which one or more significant inputs are unobservable or when the market for a security exhibits significantly less liquidity relative to markets supporting Level 2 fair value measurements. The unobservable inputs may include management’s own assumptions about the assumptions market participants would use based on the best information available in the circumstances. AFG’s Level 3 is comprised of financial instruments, including liabilities of managed investment entities, whose fair value is estimated based on non-binding broker quotes or internally developed using significant inputs not based on, or corroborated by, observable market information.

AFG’s management is responsible for the valuation process and uses data from outside sources (including nationally recognized pricing services and broker/dealers) in establishing fair value. AFG’s internal investment professionals are a group of approximately 20 analysts whose primary responsibility is to manage AFG’s investment portfolio. These professionals monitor individual investments as well as overall industries and are active in the financial markets on a daily basis. The group is led by AFG’s chief investment officer, who reports directly to one of the Co-CEOs. Valuation techniques utilized by pricing services and prices obtained from external sources are reviewed by AFG’s internal investment professionals who are familiar with the securities being priced and the markets in which they trade to ensure the fair value determination is representative of an exit price. To validate the appropriateness of the prices obtained, these investment managers consider widely published indices (as benchmarks), recent trades, changes in interest rates, general economic conditions and the credit quality of the specific issuers. In addition, the Company communicates directly with the pricing service regarding the methods and assumptions used in pricing, including verifying, on a test basis, the inputs used by the service to value specific securities.

Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions):



	Level 1		Level 2		Level 3		Total
September 30, 2012
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. Government and government agencies	$	198	$	143	$	20	$	361
States, municipalities and political subdivisions	—		4,268		58		4,326
Foreign government	—		264		—		264
Residential MBS	—		3,953		367		4,320
Commercial MBS	—		2,924		21		2,945
All other corporate	4		11,031		495		11,530
Total AFS fixed maturities	202		22,583		961		23,746
Trading fixed maturities	—		308		1		309
Equity securities	883		112		36		1,031
Assets of managed investment entities (“MIE”)	221		2,846		35		3,102
Variable annuity assets (separate accounts) (a)	—		577		—		577
Other investments	—		153		—		153
Total assets accounted for at fair value	$	1,306	$	26,579	$	1,033	$	28,918
Liabilities:
Liabilities of managed investment entities	$	247	$	—	$	2,506	$	2,753
Derivatives in annuity benefits accumulated	—		—		497		497
Other liabilities — derivatives	—		18		—		18
Total liabilities accounted for at fair value	$	247	$	18	$	3,003	$	3,268
December 31, 2011
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. Government and government agencies	$	248	$	134	$	—	$	382
States, municipalities and political subdivisions	—		3,794		83		3,877
Foreign government	—		254		—		254
Residential MBS	—		3,487		361		3,848
Commercial MBS	—		2,821		19		2,840
All other corporate	9		10,078		519		10,606
Total AFS fixed maturities	257		20,568		982		21,807
Trading fixed maturities	—		439		1		440
Equity securities	888		29		11		928
Assets of managed investment entities (“MIE”)	290		2,724		44		3,058
Variable annuity assets (separate accounts) (a)	—		548		—		548
Other investments	—		71		—		71
Total assets accounted for at fair value	$	1,435	$	24,379	$	1,038	$	26,852
Liabilities:
Liabilities of managed investment entities	$	194	$	—	$	2,593	$	2,787
Derivatives in annuity benefits accumulated	—		—		361		361
Other liabilities — derivatives	—		23		—		23
Total liabilities accounted for at fair value	$	194	$	23	$	2,954	$	3,171

(a) Variable annuity liabilities equal the fair value of variable annuity assets.

During the first nine months of 2012, six preferred stocks with an aggregate fair value of $35 million were transferred from Level 1 to Level 2. All of these transfers occurred in the first quarter. The transfers were due to decreases in trade frequency, resulting in lack of available trade data sufficient to warrant classification in Level 1. Approximately 4% of the total assets accounted for at fair value on September 30, 2012, were Level 3 assets. Approximately 90% ($907 million) of the Level 3 assets were priced using non-binding broker quotes, for which there is a lack of transparency as to the inputs used to determine fair value. Details as to the quantitative inputs are neither provided by the brokers nor otherwise reasonably obtainable by AFG. Since internally developed Level 3 asset fair values represent less than one-half of 1% of the total assets measured at fair value and less than 3% of AFG’s shareholders’ equity, changes in unobservable inputs used to determine internally developed fair values would not have a material impact on AFG’s financial position.

The fair values of the liabilities of managed investment entities were determined using primarily non-binding broker quotes, which were reviewed by AFG’s investment professionals. AFG’s investment professionals are familiar with the cash flow models used by the brokers to determine the fair value of these liabilities and review the broker quotes based on their knowledge of the CLO market and the market for the underlying assets. Their review includes consideration of expected reinvestment, default and recovery rates on the assets supporting the CLO liabilities, as well as surveying general CLO liability fair values and analysis provided by third parties.

The only significant Level 3 assets or liabilities carried at fair value in the financial statements that were not measured using broker quotes are the derivatives embedded in AFG’s fixed-indexed annuity liabilities, which are measured using a discounted cash flow approach and had a fair value of $497 million at September 30, 2012. The following table presents information about the unobservable inputs used by management in determining fair value of these embedded derivatives. See Note F — “Derivatives.”



Unobservable Input		Range
Adjustment for insurance subsidiary’s credit risk		0.5% – 2.05% over the risk free rate
Risk margin for uncertainty in cash flows		0.3% reduction in the discount rate
Surrenders		4% – 25% of indexed account value
Partial surrenders		3% – 5% of indexed account value
Annuitizations		1% – 2% of indexed account value
Deaths		1% – 2.5% of indexed account value
Budgeted option costs		2.5% – 4.0% of indexed account value

Increasing the budgeted option cost or risk margin for uncertainty in cash flows assumptions in the table above would increase the fair value of the fixed-indexed annuity embedded derivatives, while increasing any of the other unobservable inputs in the table above would decrease the fair value of the embedded derivatives.

Changes in balances of Level 3 financial assets and liabilities carried at fair value during the third quarter and first nine months of 2012 and 2011 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period.



				Total realized/unrealized gains (losses) included in
	Balance at June 30, 2012			Net income			Other comprehensive income (loss)		Purchases and issuances			Sales and Settlements			Transfer into Level 3		Transfer out of Level 3			Balance at September 30, 2012
AFS fixed maturities:
U.S. government	$	20		$	—		$	—	$	—		$	—		$	—	$	—		$	20
State and municipal	86			—			2		—			(6		)	4		(28		)	58
Residential MBS	320			3			7		15			(11		)	86		(53		)	367
Commercial MBS	20			1			—		—			—			—		—			21
All other corporate	537			2			6		67			(19		)	1		(99		)	495
Trading fixed maturities	1			—			—		—			—			—		—			1
Equity securities	41			—			—		4			—			9		(18		)	36
Assets of MIE	54			—			—		—			(1		)	—		(18		)	35
Liabilities of MIE (*)	(2,429		)	(52		)	—		(97		)	72			—		—			(2,506		)
Embedded derivatives	(444		)	(41		)	—		(19		)	7			—		—			(497		)


(*)	Total realized/unrealized loss included in net income includes losses of $49 million related to liabilities outstanding as of September 30, 2012. See Note H — “Managed Investment Entities.”



				Total realized/unrealized gains (losses) included in
	Balance at June 30, 2011			Net income			Other comprehensive income (loss)			Purchases and Issuances			Sales and Settlements			Transfer into Level 3		Transfer out of Level 3			Balance at September 30, 2011
AFS fixed maturities:
State and municipal	$	84		$	—		$	4		$	—		$	(3	)	$	—	$	(13	)	$	72
Residential MBS	255			1			(5		)	25			(9		)	24		(7		)	284
Commercial MBS	10			—			—			9			—			9		—			28
All other corporate	382			2			12			32			(14		)	46		(24		)	436
Trading fixed maturities	1			—			—			—			—			—		—			1
Equity securities	21			—			(1		)	2			—			2		—			24
Assets of MIE	53			(6		)	—			5			(7		)	—		(5		)	40
Liabilities of MIE (*)	(2,322		)	89			—			—			51			—		—			(2,182		)
Embedded derivatives	(279		)	32			—			(62		)	4			—		—			(305		)


(*)	Total realized/unrealized loss included in net income includes losses of $89 million related to liabilities outstanding as of September 30, 2011. See Note H — “Managed Investment Entities.”



				Total realized/unrealized gains (losses) included in
	Balance at December 31, 2011			Net income			Other comprehensive income (loss)		Purchases and Issuances			Sales and Settlements			Transfer into Level 3		Transfer out of Level 3			Balance at September 30, 2012
AFS fixed maturities:
U.S. government	$	—		$	—		$	—	$	20		$	—		$	—	$	—		$	20
State and municipal	83			—			4		19			(7		)	9		(50		)	58
Residential MBS	361			5			11		86			(29		)	167		(234		)	367
Commercial MBS	19			1			1		—			—			—		—			21
All other corporate	519			9			18		124			(57		)	29		(147		)	495
Trading fixed maturities	1			—			—		—			—			—		—			1
Equity securities	11			—			—		30			—			13		(18		)	36
Assets of MIE	44			—			—		13			(13		)	14		(23		)	35
Liabilities of MIE (*)	(2,593		)	(155		)	—		(463		)	705			—		—			(2,506		)
Embedded derivatives	(361		)	(97		)	—		(57		)	18			—		—			(497		)


(*)	Total realized/unrealized loss included in net income includes losses of $99 million related to liabilities outstanding as of September 30, 2012. See Note H — “Managed Investment Entities.”



				Total realized/unrealized gains (losses) included in
	Balance at December 31, 2010			Net income			Other comprehensive income (loss)			Purchases and Issuances			Sales and Settlements			Transfer into Level 3		Transfer out of Level 3			Balance at September 30, 2011
AFS fixed maturities:
State and municipal	$	20		$	—		$	5		$	53		$	(3	)	$	10	$	(13	)	$	72
Residential MBS	312			2			(8		)	42			(29		)	31		(66		)	284
Commercial MBS	6			—			—			9			—			13		—			28
All other corporate	436			1			17			123			(51		)	70		(160		)	436
Trading fixed maturities	3			—			—			—			—			—		(2		)	1
Equity securities	21			—			1			2			(2		)	2		—			24
Assets of MIE	48			(7		)	—			21			(13		)	8		(17		)	40
Liabilities of MIE (*)	(2,258		)	17			—			—			59			—		—			(2,182		)
Embedded derivatives	(181		)	4			—			(142		)	14			—		—			(305		)


(*)	Total realized/unrealized loss included in net income includes losses of $19 million related to liabilities outstanding as of September 30, 2011. See Note H — “Managed Investment Entities.”

The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements are summarized below (in millions):



	Carrying Value		Fair Value		Level 1		Level 2		Level 3
September 30, 2012
Financial assets:
Cash and cash equivalents	$	1,626	$	1,626	$	1,626	$	—	$	—
Mortgage loans	566		575		—		—		575
Policy loans	229		229		—		—		229
Total financial assets not accounted for at fair value	$	2,421	$	2,430	$	1,626	$	—	$	804
Financial liabilities:
Annuity benefits accumulated (*)	$	17,040	$	17,452	$	—	$	—	$	17,452
Long-term debt	966		1,085		—		976		109
Total financial liabilities not accounted for at fair value	$	18,006	$	18,537	$	—	$	976	$	17,561

(*) Excludes life contingent annuities in the payout phase.

The carrying amount of cash and cash equivalents approximates fair value. Fair values for mortgage loans are estimated by discounting the future contractual cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings. The fair value of policy loans is estimated to approximate carrying value; policy loans have no defined maturity dates and are inseparable from insurance contracts. The fair value of annuity benefits was estimated based on expected cash flows discounted using forward interest rates adjusted for the Company’s credit risk and includes the impact of maintenance expenses and capital costs. Fair values of long-term debt are based primarily on quoted market prices.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Investments

9 Months Ended

Sep. 30, 2012

Investments, Debt and Equity Securities [Abstract]

Investments

E. Investments

Available for sale fixed maturities and equity securities at September 30, 2012, and December 31, 2011, consisted of the following (in millions):



	September 30, 2012									December 31, 2011
	Amortized Cost		Fair Value		Gross Unrealized					Amortized Cost		Fair Value		Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses			Amortized Cost		Fair Value		Gains		Losses
Fixed maturities:
U.S. Government and government agencies	$	345	$	361	$	16	$	—		$	363	$	382	$	19	$	—
States, municipalities and political subdivisions	3,976		4,326		352		(2		)	3,613		3,877		267		(3		)
Foreign government	245		264		19		—			236		254		18		—
Residential MBS	4,100		4,320		294		(74		)	3,858		3,848		170		(180		)
Commercial MBS	2,629		2,945		316		—			2,628		2,840		218		(6		)
All other corporate	10,465		11,530		1,076		(11		)	9,864		10,606		802		(60		)
Total fixed maturities	$	21,760	$	23,746	$	2,073	$	(87	)	$	20,562	$	21,807	$	1,494	$	(249	)
Common stocks	$	633	$	828	$	200	$	(5	)	$	610	$	797	$	207	$	(20	)
Perpetual preferred stocks	$	192	$	203	$	13	$	(2	)	$	134	$	131	$	5	$	(8	)

The non-credit related portion of other-than-temporary impairment charges are included in other comprehensive income. Cumulative charges taken for residential MBS still owned at September 30, 2012 and December 31, 2011, respectively were $228 million and $227 million.

The following tables show gross unrealized losses (in millions) on fixed maturities and equity securities by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2012 and December 31, 2011.



	Less Than Twelve Months							Twelve Months or More
	Unrealized Loss			Fair Value		Fair Value as % of Cost		Unrealized Loss			Fair Value		Fair Value as % of Cost
	Unrealized Loss			Fair Value		Fair Value as % of Cost		Unrealized Loss			Fair Value		Fair Value as % of Cost
September 30, 2012
Fixed maturities:
U.S. Government and government agencies	$	—		$	6	100	%	$	—		$	—	—	%
States, municipalities and political subdivisions	(2		)	126		98	%	—			13		100	%
Foreign government	—			—		—	%	—			—		—	%
Residential MBS	(9		)	314		97	%	(65		)	473		88	%
Commercial MBS	—			5		100	%	—			—		—	%
All other corporate	(4		)	204		98	%	(7		)	133		95	%
Total fixed maturities	$	(15	)	$	655	98	%	$	(72	)	$	619	90	%
Common stocks	$	(5	)	$	50	91	%	$	—		$	—	—	%
Perpetual preferred stocks	$	—		$	—	—	%	$	(2	)	$	25	93	%

December 31, 2011
Fixed maturities:
U.S. Government and government agencies	$	—		$	2	100	%	$	—		$	—	—	%
States, municipalities and political subdivisions	(2		)	120		98	%	(1		)	59		98	%
Foreign government	—			1		100	%	—			—		—	%
Residential MBS	(59		)	1,141		95	%	(121		)	473		80	%
Commercial MBS	(6		)	183		97	%	—			18		100	%
All other corporate	(43		)	940		96	%	(17		)	114		87	%
Total fixed maturities	$	(110	)	$	2,387	96	%	$	(139	)	$	664	83	%
Common stocks	$	(19	)	$	169	90	%	$	(1	)	$	4	80	%
Perpetual preferred stocks	$	(1	)	$	23	96	%	$	(7	)	$	31	82	%

At September 30, 2012, the gross unrealized losses on fixed maturities of $87 million relate to approximately 420 securities. Investment grade securities (as determined by nationally recognized rating agencies) represented approximately 22% of the gross unrealized loss and 50% of the fair value.

AFG analyzes its MBS securities for other-than-temporary impairment each quarter based upon expected future cash flows. Management estimates expected future cash flows based upon its knowledge of the MBS market, cash flow projections (which reflect loan to collateral values, subordination, vintage and geographic concentration) received from independent sources, implied cash flows inherent in security ratings and analysis of historical payment data. For the first nine months of 2012, AFG recorded in earnings $5 million in other-than-temporary impairment charges related to its residential MBS.

A progression of the credit portion of other-than-temporary impairments on fixed maturity securities for which the non-credit portion of an impairment has been recognized in other comprehensive income is shown below (in millions).



	2012		2011
Balance at June 30	$	191	$	171
Additional credit impairments on:
Previously impaired securities	—		8
Securities without prior impairments	—		2
Reductions — disposals	—		(1		)
Balance at September 30	$	191	$	180

Balance at January 1	$	187	$	143
Additional credit impairments on:
Previously impaired securities	4		37
Securities without prior impairments	—		7
Reductions — disposals	—		(7		)
Balance at September 30	$	191	$	180

The table below sets forth the scheduled maturities of available for sale fixed maturities as of September 30, 2012 (in millions). Asset-backed securities and other 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. MBS had an average life of approximately 4 years at September 30, 2012.



	Amortized		Fair Value
	Cost		Amount		%
Maturity
One year or less	$	838	$	857	4	%
After one year through five years	5,320		5,735		24
After five years through ten years	6,529		7,285		31
After ten years	2,344		2,604		11
	15,031		16,481		70
MBS	6,729		7,265		30
Total	$	21,760	$	23,746	100	%

Certain risks are inherent in connection with fixed maturity securities, including loss upon default, price volatility in reaction to changes in interest rates, and general market factors and risks associated with reinvestment of proceeds due to prepayments or redemptions in a period of declining interest rates.

There were no investments in individual issuers that exceeded 10% of Shareholders’ Equity at September 30, 2012 or December 31, 2011.

Net Unrealized Gain on Marketable Securities In addition to adjusting equity securities and fixed maturity securities classified as “available for sale” to fair value, GAAP requires that deferred policy acquisition costs related to annuities and certain other balance sheet amounts be adjusted to the extent that unrealized gains and losses from securities would result in adjustments to those balances had the unrealized gains or losses actually been realized. The following table shows (in millions) the components of the net unrealized gain on securities that is included in Accumulated Other Comprehensive Income in AFG’s Balance Sheet.



	Pretax			Deferred Tax and Amounts Attributable to Noncontrolling Interests			Net
September 30, 2012
Unrealized gain on:
Fixed maturities	$	1,986		$	(709	)	$	1,277
Equity securities	206			(74		)	132
Deferred policy acquisition costs	(764		)	267			(497		)
Annuity benefits and other liabilities	13			(4		)	9
	$	1,441		$	(520	)	$	921
December 31, 2011
Unrealized gain on:
Fixed maturities	$	1,245		$	(444	)	$	801
Equity securities	184			(65		)	119
Deferred policy acquisition costs	(537		)	188			(349		)
Annuity benefits and other liabilities	10			(3		)	7
	$	902		$	(324	)	$	578

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments are summarized as follows (in millions):



	Fixed Maturities			Equity Securities			Mortgage Loans and Other Investments			Other (a)			Tax Effects			Noncon- trolling Interests			Total
Quarter ended September 30, 2012
Realized before impairments	$	20		$	77		$	—		$	(4	)	$	(33	)	$	—		$	60
Realized — impairments	(1		)	(9		)	—			2			3			—			(5		)
Change in unrealized	378			(18		)	—			(122		)	(84		)	(4		)	150
Quarter ended September 30, 2011
Realized before impairments	$	27		$	6		$	(15	)	$	—		$	(6	)	$	—		$	12
Realized — impairments	(12		)	(2		)	—			4			3			—			(7		)
Change in unrealized	172			(75		)	—			(121		)	9			(2		)	(17		)
Nine months ended September 30, 2012
Realized before impairments	$	40		$	133		$	(3	)	$	(6	)	$	(58	)	$	(1	)	$	105
Realized — impairments	(5		)	(19		)	—			5			7			—			(12		)
Change in unrealized	741			22			—			(224		)	(189		)	(7		)	343
Nine months ended September 30, 2011
Realized before impairments	$	51		$	41		$	(22	)	$	(2	)	$	(24	)	$	(1	)	$	43
Realized — impairments	(49		)	(2		)	(4		)	14			14			—			(27		)
Change in unrealized	417			(77		)	—			(185		)	(54		)	(4		)	97


(a)	Primarily adjustments to deferred policy acquisition costs related to annuities.

Realized gains (losses) on securities includes net gains of $1 million in the third quarter and $4 million in the first nine months of 2012 compared to net gains of $3 million in the third quarter and net losses of less than $1 million in the first nine months of 2011 from the mark-to-market of certain MBS, primarily interest-only securities with interest rates that float inversely with short-term rates. Gross realized gains and losses (excluding impairment writedowns and mark-to-market of derivatives) on available for sale fixed maturity and equity security investment transactions included in the Statement of Cash Flows consisted of the following (in millions):



	Nine months ended
	September 30,
	2012			2011
Fixed maturities:
Gross gains	$	37		$	57
Gross losses	(2		)	(5		)
Equity securities:
Gross gains	136			42
Gross losses	(3		)	(1		)

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-Glossary Debt Security
-URI http://asc.fasb.org/extlink&oid=6509901

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6379141&loc=d3e15032-111544

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27290-111563

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-Glossary Equity Security
-URI http://asc.fasb.org/extlink&oid=6511694

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27232-111563

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 320
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27357-111563

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27161-111563

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27405-111563

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 115
-Paragraph 3, 19, 20, 21, 22, 137
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Derivatives

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

F. Derivatives

As discussed under “Derivatives” in Note A, AFG uses derivatives in certain areas of its operations. AFG’s derivatives do not qualify for hedge accounting under GAAP; changes in the fair value of derivatives are included in earnings.

The following derivatives are included in AFG’s Balance Sheet at fair value (in millions):



		September 30, 2012				December 31, 2011
Derivative	Balance Sheet Line	Asset		Liability		Asset		Liability
MBS with embedded derivatives	Fixed maturities	$	96	$	—	$	99	$	—
Interest rate swaptions	Other investments	1		—		5		—
Fixed-indexed annuities (embedded derivative)	Annuity benefits accumulated	—		497		—		361
Equity index call options	Other investments	152		—		66		—
Reinsurance contracts (embedded derivative)	Other liabilities	—		18		—		23
		$	249	$	515	$	170	$	384

The MBS with embedded derivatives consist primarily of interest-only MBS with interest rates that float inversely with short-term rates. AFG records the entire change in the fair value of these securities in earnings. These investments are part of AFG’s overall investment strategy and represent a small component of AFG’s overall investment portfolio.

AFG has entered into $1 billion notional amount of pay-fixed interest rate swaptions (options to enter into pay-fixed/receive floating interest rate swaps at future dates expiring between 2012 and 2015) to mitigate interest rate risk in its annuity operations. AFG paid $29 million to purchase these swaptions, which represents its maximum potential economic loss over the life of the contracts.

AFG’s fixed-indexed annuities, which represented approximately 40% of annuity benefits accumulated at September 30, 2012, provide policyholders with a crediting rate tied, in part, to the performance of an existing stock market index. AFG attempts to mitigate the risk in the index-based component of these products through the purchase of call options on the appropriate index. AFG’s strategy is designed so that an increase in the liabilities, due to an increase in the market index, will be generally offset by unrealized and realized gains on the call options purchased by AFG. Both the index-based component of the annuities and the related call options are considered derivatives.

As discussed under “Reinsurance” in Note A, certain reinsurance contracts in AFG’s annuity and supplemental insurance business are considered to contain embedded derivatives.

The following table summarizes the gain (loss) included in the Statement of Earnings for changes in the fair value of these derivatives for the third quarter and first nine months of 2012 and 2011 (in millions):



		Three months ended						Nine months ended
		September 30,						September 30,
Derivative	Statement of Earnings Line	2012			2011			2012			2011
MBS with embedded derivatives	Realized gains	$	1		$	3		$	4		$	—
Interest rate swaptions	Realized gains	(1		)	(15		)	(4		)	(22		)
Fixed-indexed annuities (embedded derivative)	Annuity benefits	(41		)	32			(97		)	4
Equity index call options	Annuity benefits	30			(50		)	67			(30		)
Reinsurance contracts (embedded derivative)	Investment income	(4		)	(6		)	(7		)	(10		)
		$	(15	)	$	(36	)	$	(37	)	$	(58	)

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624163-113959

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41620-113959

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4D
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624177-113959

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4H
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624258-113959

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4K
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80748-113994

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4J
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708773-113959

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4A
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5618551-113959

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5580258-113959

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 25
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4E
-URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959

Reference 20: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(n))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 45
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Deferred Policy Acquisition Costs

9 Months Ended

Sep. 30, 2012

Deferred Policy Acquisition Costs Disclosures [Abstract]

Deferred Policy Acquisition Costs

G. Deferred Policy Acquisition Costs

Deferred policy acquisition costs consisted of the following (in millions):



	September 30, 2012			December 31, 2011
Property and casualty insurance	$	200		$	189
Annuity and supplemental insurance:
Policy acquisition costs	876			898
Policyholder sales inducements	195			207
Present value of future profits (“PVFP”)	114			144
Impact of unrealized gains and losses on securities	(764		)	(537		)
Total annuity and supplemental	421			712
	$	621		$	901

See Accounting Standards Adopted in 2012 under Note A — “Accounting Policies.”

The PVFP amounts in the table above are net of $169 million and $195 million of accumulated amortization at September 30, 2012 and December 31, 2011, respectively. Annuity and supplemental insurance policy acquisition costs and PVFP decreased $92 million and $16 million, respectively, due to the August 2012 sale of the Medicare supplement and critical illness businesses.

Amortization of deferred acquisition costs for the third quarter and first nine months of 2012 and 2011 were as follows (in millions):



	Three months ended				Nine months ended
	September 30,				September 30,
	2012		2011		2012		2011
Property and casualty insurance	$	111	$	102	$	323	$	310
Annuity and supplemental insurance:
Policy acquisition costs	27		27		86		89
Policyholder sales inducements	8		6		24		20
PVFP	5		5		14		16
Total annuity and supplemental	40		38		124		125
	$	151	$	140	$	447	$	435

Managed Investment Entities

9 Months Ended

Sep. 30, 2012

Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract]

Managed Investment Entities

H. Managed Investment Entities

AFG is the investment manager and its subsidiaries have investments ranging from 7.5% to 51.2% of the most subordinate debt tranche of eight collateralized loan obligation entities or “CLOs,” which, are considered variable interest entities. AFG’s subsidiaries also own portions of the senior debt tranches of certain of these CLOs. Upon formation between 2004 and 2012, these entities issued securities in various senior and subordinate classes and invested the proceeds primarily in secured bank loans, which serve as collateral for the debt securities issued by each particular CLO. None of the collateral was purchased from AFG. AFG’s investments in the subordinate debt tranches of these entities receive residual income from the CLOs only after the CLOs pay operating expenses (including management fees to AFG), interest on and returns of capital to senior levels of debt securities. There are no contractual requirements for AFG to provide additional funding for these entities. AFG has not provided and does not intend to provide any financial support to these entities.

AFG’s maximum exposure to economic loss on its CLOs is limited to its investment in the CLOs, which had an aggregate fair value of $240 million (including $96 million invested in the most subordinate debt tranches) at September 30, 2012, and $98 million at December 31, 2011.

In February 2012, one of the AFG CLOs was substantially liquidated at the instruction of the holder of the majority of the most subordinate debt tranche, as permitted by the CLO indentures. In March 2012, AFG formed a new CLO, which issued $410 million face amount of liabilities (including $39 million face amount purchased by subsidiaries of AFG). In October 2012, AFG formed another new CLO, which issued $450 million face amount of liabilities (including $35 million face amount purchased by subsidiaries of AFG).

The revenues and expenses of the CLOs are separately identified in AFG’s Statement of Earnings, after the elimination of management fees and earnings attributable to shareholders of AFG as measured by the change in the fair value of AFG’s investments in the CLOs. Selected financial information related to the CLOs is shown below (in millions):



	Three months ended						Nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Gains (losses) on change in fair value of assets/liabilities (a):
Assets	$	39		$	(88	)	$	92		$	(71	)
Liabilities	(52		)	89			(155		)	17
Management fees paid to AFG	6			5			14			13
CLO earnings (losses) attributable to:
AFG shareholders (b)	11			(2		)	21			5
Noncontrolling interests (b)	(18		)	8			(64		)	(47		)


(a)	Included in Revenues in AFG’s Statement of Earnings.


(b)	Included in Operating earnings before income taxes in AFG’s Statement of Earnings.

The aggregate unpaid principal balance of the CLOs’ fixed maturity investments exceeded the fair value of the investments by $33 million and $120 million at September 30, 2012 and December 31, 2011. The aggregate unpaid principal balance of the CLOs’ debt exceeded its fair value by $151 million and $306 million at those dates. The CLO assets include $5 million and $2 million in loans (aggregate unpaid principal balance of $12 million and $7 million, respectively) at September 30, 2012 and December 31, 2011, for which the CLOs are not accruing interest because the loans are in default.

Goodwill and Other Intangibles	9 Months Ended
Goodwill and Other Intangibles	Sep. 30, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangibles	I. Goodwill and Other Intangibles Goodwill was $185 million and $186 million at September 30, 2012 and December 31, 2011, respectively. Goodwill decreased $1 million in the third quarter of 2012 due to the sale of a small annuity and supplemental insurance subsidiary. Included in other assets in AFG’s Balance Sheet is $32 million at September 30, 2012 and $41 million at December 31, 2011 in amortizable intangible assets related to property and casualty insurance acquisitions. These amounts are net of accumulated amortization of $57 million and $47 million, respectively. Amortization of these intangibles was $3 million in each of the third quarters of 2012 and 2011 and $10 million and $9 million in the first nine months of 2012 and 2011, respectively. Other assets also include $8 million in non-amortizable intangible assets related to property and casualty insurance acquisitions.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Long-Term Debt

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Long-Term Debt

J. Long-Term Debt

The carrying value of long-term debt consisted of the following (in millions):



	September 30, 2012		December 31, 2011
Direct obligations of AFG:
9-7/8% Senior Notes due June 2019	$	350	$	350
6-3/8% Senior Notes due June 2042	230		—
5-3/4% Senior Notes due August 2042	125		—
7% Senior Notes due September 2050	132		132
7-1/8% Senior Debentures due February 2034	—		115
Other	3		3
	840		600
Subsidiaries:
Obligations of AAG Holding (guaranteed by AFG):
7-1/2% Senior Debentures due November 2033	—		112
7-1/4% Senior Debentures due January 2034	—		86
Notes payable secured by real estate due 2012 through 2016	63		64
Secured borrowings ($16 and $17 guaranteed by AFG)	21		30
National Interstate bank credit facility	22		22
	106		314
Payable to Subsidiary Trusts:
AAG Holding Variable Rate Subordinated Debentures due May 2033	20		20
	$	966	$	934

Scheduled principal payments on debt for the balance of 2012 and the subsequent five years were as follows: 2012 — $25 million; 2013 — $20 million; 2014 — $2 million; 2015 — $14 million; 2016 — $45 million and 2017 — none.

As shown below (in millions), the majority of AFG’s long-term debt is unsecured obligations of the holding company and its subsidiaries:



	September 30, 2012		December 31, 2011
Unsecured obligations	$	882	$	840
Obligations secured by real estate	63		64
Other secured borrowings	21		30
	$	966	$	934

AFG can borrow up to $500 million under its revolving credit facility which expires in August 2013. Amounts borrowed under this agreement bear interest at rates ranging from 1.75% to 3.00% (currently 2%) over LIBOR based on AFG’s credit rating. No amounts were borrowed under this facility at September 30, 2012. AFG expects to replace this credit facility in the fourth quarter of 2012 with a $500 million four-year revolving credit facility with lower interest rates and commitment fees.

In June 2012, AFG issued $230 million in 6-3/8% Senior Notes due 2042 and used the proceeds to redeem the outstanding AAG Holding Company 7-1/2% and 7-1/4% Senior Debentures at par value in July 2012. In August 2012, AFG issued $125 million in 5-3/4% Senior Notes due 2042 and used the proceeds to redeem the outstanding AFG 7-1/8% Senior Debentures at par value in September 2012.

Shareholders' Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Shareholders' Equity

K. Shareholders’ Equity

AFG is authorized to issue 12.5 million shares of Voting Preferred Stock and 12.5 million shares of Nonvoting Preferred Stock, each without par value.

Accumulated Other Comprehensive Income, Net of Tax (“AOCI”) Comprehensive income is defined as all changes in Shareholders’ Equity except those arising from transactions with shareholders. Comprehensive income includes net earnings and other comprehensive income, which consists primarily of changes in net unrealized gains or losses on available for sale securities. The progression of the components of accumulated other comprehensive income follows (in millions):



					Other Comprehensive Income
	AOCI Beginning Balance				Pretax			Tax			Noncontrolling interests			Net			Other (b)			AOCI Ending Balance
Quarter ended September 30, 2012
Net unrealized gains on securities	$	771		(a)	$	238		$	(84	)	$	(4	)	$	150		$	—		$	921		(a)
Foreign currency translation adjustments	9				10			—			(1		)	9			(1		)	17
Pension and other postretirement plans adjustments	(7		)		—			—			—			—			—			(7		)
Total	$	773			$	248		$	(84	)	$	(5	)	$	159		$	(1	)	$	931

Quarter ended September 30, 2011
Net unrealized gains (losses) on securities	$	605			$	(24	)	$	9		$	(2	)	$	(17	)	$	—		$	588
Foreign currency translation adjustments	17				(14		)	—			1			(13		)	—			4
Pension and other postretirement plans adjustments	(7		)		—			—			—			—			—			(7		)
Total	$	615			$	(38	)	$	9		$	(1	)	$	(30	)	$	—		$	585

Nine months ended September 30, 2012
Net unrealized gains on securities	$	578		(a)	$	539		$	(189	)	$	(7	)	$	343		$	—		$	921		(a)
Foreign currency translation adjustments	10				9			—			(1		)	8			(1		)	17
Pension and other postretirement plans adjustments	(8		)		1			—			—			1			—			(7		)
Total	$	580			$	549		$	(189	)	$	(8	)	$	352		$	(1	)	$	931

Nine months ended September 30, 2011
Net unrealized gains on securities	$	491			$	155		$	(54	)	$	(4	)	$	97		$	—		$	588
Foreign currency translation adjustments	12				(9		)	—			1			(8		)	—			4
Pension and other postretirement plans adjustments	(8		)		1			—			—			1			—			(7		)
Total	$	495			$	147		$	(54	)	$	(3	)	$	90		$	—		$	585


(a)	Includes net unrealized gains of $23 million at September 30, 2012 compared to net unrealized losses of $1 million at June 30, 2012 and $16 million at December 31, 2011 related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings.


(b)	Other relates to the third quarter of 2012 acquisition of noncontrolling interest in a subsidiary.

Stock Based Compensation Under AFG’s Stock Incentive Plan, employees of AFG and its subsidiaries are eligible to receive equity awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units and stock awards. In the first nine months of 2012, AFG issued 133,931 shares of restricted Common Stock (fair value of $38.10 per share) and granted stock options for 1.1 million shares of Common Stock (at an average exercise price of $38.10) under the Stock Incentive Plan. In addition, AFG issued 111,270 shares of Common Stock (fair value of $38.38 per share) in the first quarter of 2012 under its Annual Co-CEO Equity Bonus Plan.

AFG uses the Black-Scholes option pricing model to calculate the “fair value” of its option grants. Expected volatility is based on historical volatility over a period equal to the expected term. The expected term was estimated based on historical exercise patterns and post vesting cancellations. The weighted average fair value of options granted during 2012 was $13.02 per share based on the following assumptions: expected dividend yield — 1.8%; expected volatility — 39%; expected term — 7.3 years; risk-free rate — 1.4%.

Total compensation expense related to stock incentive plans of AFG and its subsidiaries was $5 million in each of the third quarters of 2012 and 2011 and $20 million and $16 million in the first nine months of 2012 and 2011, respectively.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Section B
-Paragraph 7, 11A
-Chapter 1
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 20: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 23: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2012
Income Tax Disclosure [Abstract]
Income Taxes	L. Income Taxes Income (losses) attributable to noncontrolling interests related to AFG’s managed investment entities are non-taxable (non-deductible). For the the first nine months of 2012 and 2011, respectively, AFG’s operating earnings before income taxes included $64 million and $47 million of such non-deductible losses, thereby increasing AFG’s effective tax rate. For the third quarter of 2012 and 2011, respectively, operating earnings before income taxes included $18 million of non-deductible losses and $8 million of non-taxable income related to the managed investment entities. AFG was involved in litigation with the IRS regarding the calculation of tax reserves for certain annuity liabilities pursuant to Actuarial Guideline 33. In 2010, the U.S. District Court in Southern Ohio issued a final summary judgment in favor of AFG. The IRS appealed the District Court decision to the Sixth Circuit Court of Appeals, which heard oral arguments on March 7, 2012. On May 4, 2012, the Sixth Circuit Court of Appeals affirmed the summary judgment of the District Court in favor of AFG. On August 2, 2012, the 90 day period for the IRS to seek a discretionary appeal of the Sixth District Court of Appeals decision in this case expired and the decision in favor of AFG became final. As a result, during the third quarter of 2012 AFG recorded net earnings of approximately $28 million, which includes the expected refund of $17 million of tax and interest paid to the IRS in 2005 and 2006 as well as a decrease in the liability for uncertain tax positions. Closure of subsequent tax years previously held in suspense due to this litigation could further reduce the liability for uncertain tax positions by up to $28 million and a $13 million decrease in related interest. Additionally, the IRS issued new guidance during the third quarter of 2012 that brought certainty to the timing of investment deductions, which caused AFG to reduce its liability for uncertain tax positions by $10 million. Because the ultimate recognition of these investment deductions was highly certain, the reduction in this liability resulted in an offsetting increase in AFG’s deferred tax liability, with no overall impact on AFG’s annual effective tax rate. Except as discussed above, there were no material changes to AFG’s liability for uncertain tax positions as discussed in Note L — “Income Taxes,” to AFG’s 2011 Form 10-K.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

+ Details

Contingencies	9 Months Ended
Contingencies	Sep. 30, 2012
Commitments and Contingencies Disclosure [Abstract]
Contingencies	M. Contingencies Except as discussed in Management’s Discussion and Analysis — “Special Asbestos and Environmental Reserve Charges,” there have been no significant changes to the matters discussed and referred to in Note M — “Contingencies” of AFG’s 2011 Form 10-K, which covers property and casualty insurance reserves for claims related to environmental exposures, asbestos and other mass tort claims, as well as environmental and occupational injury and disease claims of former subsidiary railroad and manufacturing operations.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Subsequent Event	9 Months Ended
Subsequent Event	Sep. 30, 2012
Subsequent Events [Abstract]
Subsequent Event	N. Subsequent Event In late October 2012, Superstorm Sandy caused significant property damage in the northeastern United States. While it is too early to estimate the total losses from this storm, models indicate that industry insured losses could approach $20 billion. AFG’s exposure to losses from this storm will be dependent upon the number, size and type of covered losses and will be mitigated by AFG’s use of reinsurance across all lines of potentially impacted business. Considering all of these factors, management expects that AFG’s losses from Superstorm Sandy will be less than 1% of shareholders’ equity.

Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Basis of presentation

Accounting standards adopted in 2012

The impact of adoption on amounts previously reported is shown in the table below (in millions, except per share data):



	December 31, 2011
Deferred policy acquisition costs
As previously reported	$	1,105
As adjusted	901

Net deferred tax liability (included in other liabilities)
As previously reported	$	203
As adjusted	133

Shareholders’ equity
As previously reported	$	4,545
As adjusted	4,411



	2011
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Total Year
Net earnings attributable to shareholders
As previously reported	$	83	$	55	$	96	$	109	$	343
As adjusted	88		48		97		109		342

Diluted earnings per Common Share
As previously reported	$	0.79	$	0.52	$	0.94	$	1.10	$	3.33
As adjusted	0.83		0.46		0.95		1.09		3.32

Fair value measurements

Deferred policy acquisition costs ("DPAC")

Managed investment entities

Unpaid losses and loss adjustment expenses

Annuity benefits accumulated

Annuity benefits accumulated also includes amounts advanced from the Federal Home Loan Bank of Cincinnati.

Life, accident and health reserves

Variable annuity assets and liabilities

Premium recognition

Noncontrolling interests

Income taxes

AFG records a liability for the inherent uncertainty in quantifying its income tax provisions. Related interest and penalties are recognized as a component of tax expense.

Stock-based compensation

Benefit plans

Earnings per share

Statement of cash flows

Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Impact of adoption of new standard

The impact of adoption on amounts previously reported is shown in the table below (in millions, except per share data):



	December 31, 2011
Deferred policy acquisition costs
As previously reported	$	1,105
As adjusted	901

Net deferred tax liability (included in other liabilities)
As previously reported	$	203
As adjusted	133

Shareholders’ equity
As previously reported	$	4,545
As adjusted	4,411



	2011
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Total Year
Net earnings attributable to shareholders
As previously reported	$	83	$	55	$	96	$	109	$	343
As adjusted	88		48		97		109		342

Diluted earnings per Common Share
As previously reported	$	0.79	$	0.52	$	0.94	$	1.10	$	3.33
As adjusted	0.83		0.46		0.95		1.09		3.32

Aquisitions and Sales of Subsidiaries (Tables)

9 Months Ended

Sep. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

Summarized financial information

The impact of the August 2012 sale of the Medicare supplement and critical illness businesses on AFG’s financial statements is shown below (in millions):



Sale proceeds	$	307
Expenses	(12		)
Net proceeds	$	295

Assets of businesses sold:
Cash and investments	$	217
Deferred policy acquisition costs	108
Other assets	31
Total assets	356
Liabilities of businesses sold:
Life, accident and health reserves	209
Other liabilities	7
Total liabilities	216
Net assets of businesses sold	$	140

Gain on sale of subsidiaries	$	155

Summarized Statement of Earnings information for the Medicare supplement and critical illness businesses through the sale date is shown below (in millions):



	Three months ended				Nine months ended
	September 30,				September 30,
	2012 (*)		2011		2012 (*)		2011
Total revenues	$	53	$	80	$	212	$	244
Total costs and expenses	43		69		184		223
Operating earnings before income taxes	$	10	$	11	$	28	$	21

(*) Reflects revenues and expenses through the end of August 2012.

- Definition

Tabular disclosure of disposal groups, which may include the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the classification and carrying value of the assets and liabilities comprising the disposal group, and the segment in which the disposal group was reported. Also may include the amount of adjustments to amounts previously reported in discontinued operations such as resolution of contingencies arising from the disposal transaction or the operations of the component prior to disposal.

+ References + Details

Segments of Operations (Tables)

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Segment Reporting Information, by Segment

The following tables (in millions) show AFG’s revenues and operating earnings before income taxes by significant business segment and sub-segment.



	Three months ended					Nine months ended
	September 30,					September 30,
	2012		2011			2012		2011
Revenues
Property and casualty insurance:
Premiums earned:
Specialty
Property and transportation	$	487	$	500		$	1,040	$	1,029
Specialty casualty	243		216			699		651
Specialty financial	100		101			301		313
Other	18		18			51		50
Total premiums earned	848		835			2,091		2,043
Investment income	69		73			210		223
Realized gains	44		15			88		47
Other income	16		20			47		55
Total property and casualty insurance	977		943			2,436		2,368
Annuity and supplemental insurance:
Investment income	270		236			789		694
Life, accident and health premiums	80		107			290		324
Realized gains (losses) on securities	41		(8		)	57		(22		)
Realized gains (losses) on subsidiaries	156		—			155		(2		)
Other income	30		27			84		79
Total annuity and supplemental insurance	577		362			1,375		1,073
Other	9		30			15		26
Total revenues	$	1,563	$	1,335		$	3,826	$	3,467



	Three months ended						Nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Operating Earnings (Losses) Before Income Taxes
Property and casualty insurance:
Underwriting:
Specialty
Property and transportation	$	—		$	5		$	33		$	38
Specialty casualty	8			20			45			38
Specialty financial	1			24			28			52
Other	7			9			10			14
Other lines (a)	(32		)	—			(39		)	(50		)
Total underwriting	(16		)	58			77			92
Investment and other income, net	58			65			174			205
Realized gains	44			15			88			47
Total property and casualty insurance	86			138			339			344
Annuity and supplemental insurance:
Operations (b)	81			47			224			157
Realized gains (losses) on securities	41			(8		)	57			(22		)
Realized gains (losses) on subsidiaries	156			—			155			(2		)
Total annuity and supplemental insurance	278			39			436			133
Other (c)	(79		)	(21		)	(208		)	(159		)
Total operating earnings before income taxes	$	285		$	156		$	567		$	318


(a)	Includes third quarter 2012 and second quarter 2011 special charges of $31 million and $50 million, respectively, to increase asbestos and environmental reserves.


(b)	Includes earnings from the Medicare supplement and critical illness operations, which were sold in August 2012, of $10 million and $11 million for the third quarter and $28 million and $21 million for the first nine months of 2012 and 2011, respectively.

(c)

- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

+ References + Details

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Assets and liabilities measured at fair value

Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions):



	Level 1		Level 2		Level 3		Total
September 30, 2012
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. Government and government agencies	$	198	$	143	$	20	$	361
States, municipalities and political subdivisions	—		4,268		58		4,326
Foreign government	—		264		—		264
Residential MBS	—		3,953		367		4,320
Commercial MBS	—		2,924		21		2,945
All other corporate	4		11,031		495		11,530
Total AFS fixed maturities	202		22,583		961		23,746
Trading fixed maturities	—		308		1		309
Equity securities	883		112		36		1,031
Assets of managed investment entities (“MIE”)	221		2,846		35		3,102
Variable annuity assets (separate accounts) (a)	—		577		—		577
Other investments	—		153		—		153
Total assets accounted for at fair value	$	1,306	$	26,579	$	1,033	$	28,918
Liabilities:
Liabilities of managed investment entities	$	247	$	—	$	2,506	$	2,753
Derivatives in annuity benefits accumulated	—		—		497		497
Other liabilities — derivatives	—		18		—		18
Total liabilities accounted for at fair value	$	247	$	18	$	3,003	$	3,268
December 31, 2011
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. Government and government agencies	$	248	$	134	$	—	$	382
States, municipalities and political subdivisions	—		3,794		83		3,877
Foreign government	—		254		—		254
Residential MBS	—		3,487		361		3,848
Commercial MBS	—		2,821		19		2,840
All other corporate	9		10,078		519		10,606
Total AFS fixed maturities	257		20,568		982		21,807
Trading fixed maturities	—		439		1		440
Equity securities	888		29		11		928
Assets of managed investment entities (“MIE”)	290		2,724		44		3,058
Variable annuity assets (separate accounts) (a)	—		548		—		548
Other investments	—		71		—		71
Total assets accounted for at fair value	$	1,435	$	24,379	$	1,038	$	26,852
Liabilities:
Liabilities of managed investment entities	$	194	$	—	$	2,593	$	2,787
Derivatives in annuity benefits accumulated	—		—		361		361
Other liabilities — derivatives	—		23		—		23
Total liabilities accounted for at fair value	$	194	$	23	$	2,954	$	3,171

(a) Variable annuity liabilities equal the fair value of variable annuity assets.

Unobservable inputs used by management in determining fair value of embedded derivatives



Unobservable Input		Range
Adjustment for insurance subsidiary’s credit risk		0.5% – 2.05% over the risk free rate
Risk margin for uncertainty in cash flows		0.3% reduction in the discount rate
Surrenders		4% – 25% of indexed account value
Partial surrenders		3% – 5% of indexed account value
Annuitizations		1% – 2% of indexed account value
Deaths		1% – 2.5% of indexed account value
Budgeted option costs		2.5% – 4.0% of indexed account value

Changes in balances of Level 3 financial assets and liabilities



				Total realized/unrealized gains (losses) included in
	Balance at June 30, 2012			Net income			Other comprehensive income (loss)		Purchases and issuances			Sales and Settlements			Transfer into Level 3		Transfer out of Level 3			Balance at September 30, 2012
AFS fixed maturities:
U.S. government	$	20		$	—		$	—	$	—		$	—		$	—	$	—		$	20
State and municipal	86			—			2		—			(6		)	4		(28		)	58
Residential MBS	320			3			7		15			(11		)	86		(53		)	367
Commercial MBS	20			1			—		—			—			—		—			21
All other corporate	537			2			6		67			(19		)	1		(99		)	495
Trading fixed maturities	1			—			—		—			—			—		—			1
Equity securities	41			—			—		4			—			9		(18		)	36
Assets of MIE	54			—			—		—			(1		)	—		(18		)	35
Liabilities of MIE (*)	(2,429		)	(52		)	—		(97		)	72			—		—			(2,506		)
Embedded derivatives	(444		)	(41		)	—		(19		)	7			—		—			(497		)


(*)	Total realized/unrealized loss included in net income includes losses of $49 million related to liabilities outstanding as of September 30, 2012. See Note H — “Managed Investment Entities.”



				Total realized/unrealized gains (losses) included in
	Balance at June 30, 2011			Net income			Other comprehensive income (loss)			Purchases and Issuances			Sales and Settlements			Transfer into Level 3		Transfer out of Level 3			Balance at September 30, 2011
AFS fixed maturities:
State and municipal	$	84		$	—		$	4		$	—		$	(3	)	$	—	$	(13	)	$	72
Residential MBS	255			1			(5		)	25			(9		)	24		(7		)	284
Commercial MBS	10			—			—			9			—			9		—			28
All other corporate	382			2			12			32			(14		)	46		(24		)	436
Trading fixed maturities	1			—			—			—			—			—		—			1
Equity securities	21			—			(1		)	2			—			2		—			24
Assets of MIE	53			(6		)	—			5			(7		)	—		(5		)	40
Liabilities of MIE (*)	(2,322		)	89			—			—			51			—		—			(2,182		)
Embedded derivatives	(279		)	32			—			(62		)	4			—		—			(305		)


(*)	Total realized/unrealized loss included in net income includes losses of $89 million related to liabilities outstanding as of September 30, 2011. See Note H — “Managed Investment Entities.”



				Total realized/unrealized gains (losses) included in
	Balance at December 31, 2011			Net income			Other comprehensive income (loss)		Purchases and Issuances			Sales and Settlements			Transfer into Level 3		Transfer out of Level 3			Balance at September 30, 2012
AFS fixed maturities:
U.S. government	$	—		$	—		$	—	$	20		$	—		$	—	$	—		$	20
State and municipal	83			—			4		19			(7		)	9		(50		)	58
Residential MBS	361			5			11		86			(29		)	167		(234		)	367
Commercial MBS	19			1			1		—			—			—		—			21
All other corporate	519			9			18		124			(57		)	29		(147		)	495
Trading fixed maturities	1			—			—		—			—			—		—			1
Equity securities	11			—			—		30			—			13		(18		)	36
Assets of MIE	44			—			—		13			(13		)	14		(23		)	35
Liabilities of MIE (*)	(2,593		)	(155		)	—		(463		)	705			—		—			(2,506		)
Embedded derivatives	(361		)	(97		)	—		(57		)	18			—		—			(497		)


(*)	Total realized/unrealized loss included in net income includes losses of $99 million related to liabilities outstanding as of September 30, 2012. See Note H — “Managed Investment Entities.”



				Total realized/unrealized gains (losses) included in
	Balance at December 31, 2010			Net income			Other comprehensive income (loss)			Purchases and Issuances			Sales and Settlements			Transfer into Level 3		Transfer out of Level 3			Balance at September 30, 2011
AFS fixed maturities:
State and municipal	$	20		$	—		$	5		$	53		$	(3	)	$	10	$	(13	)	$	72
Residential MBS	312			2			(8		)	42			(29		)	31		(66		)	284
Commercial MBS	6			—			—			9			—			13		—			28
All other corporate	436			1			17			123			(51		)	70		(160		)	436
Trading fixed maturities	3			—			—			—			—			—		(2		)	1
Equity securities	21			—			1			2			(2		)	2		—			24
Assets of MIE	48			(7		)	—			21			(13		)	8		(17		)	40
Liabilities of MIE (*)	(2,258		)	17			—			—			59			—		—			(2,182		)
Embedded derivatives	(181		)	4			—			(142		)	14			—		—			(305		)


(*)	Total realized/unrealized loss included in net income includes losses of $19 million related to liabilities outstanding as of September 30, 2011. See Note H — “Managed Investment Entities.”

Fair value of financial instruments

The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements are summarized below (in millions):



	Carrying Value		Fair Value		Level 1		Level 2		Level 3
September 30, 2012
Financial assets:
Cash and cash equivalents	$	1,626	$	1,626	$	1,626	$	—	$	—
Mortgage loans	566		575		—		—		575
Policy loans	229		229		—		—		229
Total financial assets not accounted for at fair value	$	2,421	$	2,430	$	1,626	$	—	$	804
Financial liabilities:
Annuity benefits accumulated (*)	$	17,040	$	17,452	$	—	$	—	$	17,452
Long-term debt	966		1,085		—		976		109
Total financial liabilities not accounted for at fair value	$	18,006	$	18,537	$	—	$	976	$	17,561

(*) Excludes life contingent annuities in the payout phase.

- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 19
-Subparagraph a, b, c(1), d(1)
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 14
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15
-Subparagraph b-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 18
-Subparagraph c(2), d, e, f
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32
-Subparagraph a, c(1), c(2), c(3), d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Investments (Tables)

9 Months Ended

Sep. 30, 2012

Investments, Debt and Equity Securities [Abstract]

Available for sale fixed maturities and equity securities

Available for sale fixed maturities and equity securities at September 30, 2012, and December 31, 2011, consisted of the following (in millions):



	September 30, 2012									December 31, 2011
	Amortized Cost		Fair Value		Gross Unrealized					Amortized Cost		Fair Value		Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses			Amortized Cost		Fair Value		Gains		Losses
Fixed maturities:
U.S. Government and government agencies	$	345	$	361	$	16	$	—		$	363	$	382	$	19	$	—
States, municipalities and political subdivisions	3,976		4,326		352		(2		)	3,613		3,877		267		(3		)
Foreign government	245		264		19		—			236		254		18		—
Residential MBS	4,100		4,320		294		(74		)	3,858		3,848		170		(180		)
Commercial MBS	2,629		2,945		316		—			2,628		2,840		218		(6		)
All other corporate	10,465		11,530		1,076		(11		)	9,864		10,606		802		(60		)
Total fixed maturities	$	21,760	$	23,746	$	2,073	$	(87	)	$	20,562	$	21,807	$	1,494	$	(249	)
Common stocks	$	633	$	828	$	200	$	(5	)	$	610	$	797	$	207	$	(20	)
Perpetual preferred stocks	$	192	$	203	$	13	$	(2	)	$	134	$	131	$	5	$	(8	)

Available for sale securities in a continuous unrealized loss position



	Less Than Twelve Months							Twelve Months or More
	Unrealized Loss			Fair Value		Fair Value as % of Cost		Unrealized Loss			Fair Value		Fair Value as % of Cost
	Unrealized Loss			Fair Value		Fair Value as % of Cost		Unrealized Loss			Fair Value		Fair Value as % of Cost
September 30, 2012
Fixed maturities:
U.S. Government and government agencies	$	—		$	6	100	%	$	—		$	—	—	%
States, municipalities and political subdivisions	(2		)	126		98	%	—			13		100	%
Foreign government	—			—		—	%	—			—		—	%
Residential MBS	(9		)	314		97	%	(65		)	473		88	%
Commercial MBS	—			5		100	%	—			—		—	%
All other corporate	(4		)	204		98	%	(7		)	133		95	%
Total fixed maturities	$	(15	)	$	655	98	%	$	(72	)	$	619	90	%
Common stocks	$	(5	)	$	50	91	%	$	—		$	—	—	%
Perpetual preferred stocks	$	—		$	—	—	%	$	(2	)	$	25	93	%

December 31, 2011
Fixed maturities:
U.S. Government and government agencies	$	—		$	2	100	%	$	—		$	—	—	%
States, municipalities and political subdivisions	(2		)	120		98	%	(1		)	59		98	%
Foreign government	—			1		100	%	—			—		—	%
Residential MBS	(59		)	1,141		95	%	(121		)	473		80	%
Commercial MBS	(6		)	183		97	%	—			18		100	%
All other corporate	(43		)	940		96	%	(17		)	114		87	%
Total fixed maturities	$	(110	)	$	2,387	96	%	$	(139	)	$	664	83	%
Common stocks	$	(19	)	$	169	90	%	$	(1	)	$	4	80	%
Perpetual preferred stocks	$	(1	)	$	23	96	%	$	(7	)	$	31	82	%

Roll forward of cumulative credit portion of other-than-temporary impairments on fixed maturity securities



	2012		2011
Balance at June 30	$	191	$	171
Additional credit impairments on:
Previously impaired securities	—		8
Securities without prior impairments	—		2
Reductions — disposals	—		(1		)
Balance at September 30	$	191	$	180

Balance at January 1	$	187	$	143
Additional credit impairments on:
Previously impaired securities	4		37
Securities without prior impairments	—		7
Reductions — disposals	—		(7		)
Balance at September 30	$	191	$	180

Available for sale fixed maturity securities by contractual maturity date



	Amortized		Fair Value
	Cost		Amount		%
Maturity
One year or less	$	838	$	857	4	%
After one year through five years	5,320		5,735		24
After five years through ten years	6,529		7,285		31
After ten years	2,344		2,604		11
	15,031		16,481		70
MBS	6,729		7,265		30
Total	$	21,760	$	23,746	100	%

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 Accumulated Other Comprehensive Income in AFG’s Balance Sheet.



	Pretax			Deferred Tax and Amounts Attributable to Noncontrolling Interests			Net
September 30, 2012
Unrealized gain on:
Fixed maturities	$	1,986		$	(709	)	$	1,277
Equity securities	206			(74		)	132
Deferred policy acquisition costs	(764		)	267			(497		)
Annuity benefits and other liabilities	13			(4		)	9
	$	1,441		$	(520	)	$	921
December 31, 2011
Unrealized gain on:
Fixed maturities	$	1,245		$	(444	)	$	801
Equity securities	184			(65		)	119
Deferred policy acquisition costs	(537		)	188			(349		)
Annuity benefits and other liabilities	10			(3		)	7
	$	902		$	(324	)	$	578

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) related to fixed maturity and equity security investments are summarized as follows (in millions):



	Fixed Maturities			Equity Securities			Mortgage Loans and Other Investments			Other (a)			Tax Effects			Noncon- trolling Interests			Total
Quarter ended September 30, 2012
Realized before impairments	$	20		$	77		$	—		$	(4	)	$	(33	)	$	—		$	60
Realized — impairments	(1		)	(9		)	—			2			3			—			(5		)
Change in unrealized	378			(18		)	—			(122		)	(84		)	(4		)	150
Quarter ended September 30, 2011
Realized before impairments	$	27		$	6		$	(15	)	$	—		$	(6	)	$	—		$	12
Realized — impairments	(12		)	(2		)	—			4			3			—			(7		)
Change in unrealized	172			(75		)	—			(121		)	9			(2		)	(17		)
Nine months ended September 30, 2012
Realized before impairments	$	40		$	133		$	(3	)	$	(6	)	$	(58	)	$	(1	)	$	105
Realized — impairments	(5		)	(19		)	—			5			7			—			(12		)
Change in unrealized	741			22			—			(224		)	(189		)	(7		)	343
Nine months ended September 30, 2011
Realized before impairments	$	51		$	41		$	(22	)	$	(2	)	$	(24	)	$	(1	)	$	43
Realized — impairments	(49		)	(2		)	(4		)	14			14			—			(27		)
Change in unrealized	417			(77		)	—			(185		)	(54		)	(4		)	97


(a)	Primarily adjustments to deferred policy acquisition costs related to annuities.

Gross realized gains and losses on available for sale fixed maturity and equity security investments

Gross realized gains and losses (excluding impairment writedowns and mark-to-market of derivatives) on available for sale fixed maturity and equity security investment transactions included in the Statement of Cash Flows consisted of the following (in millions):



	Nine months ended
	September 30,
	2012			2011
Fixed maturities:
Gross gains	$	37		$	57
Gross losses	(2		)	(5		)
Equity securities:
Gross gains	136			42
Gross losses	(3		)	(1		)

- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

+ References + Details

Derivatives (Tables)

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives included in Balance Sheet at fair value

The following derivatives are included in AFG’s Balance Sheet at fair value (in millions):



		September 30, 2012				December 31, 2011
Derivative	Balance Sheet Line	Asset		Liability		Asset		Liability
MBS with embedded derivatives	Fixed maturities	$	96	$	—	$	99	$	—
Interest rate swaptions	Other investments	1		—		5		—
Fixed-indexed annuities (embedded derivative)	Annuity benefits accumulated	—		497		—		361
Equity index call options	Other investments	152		—		66		—
Reinsurance contracts (embedded derivative)	Other liabilities	—		18		—		23
		$	249	$	515	$	170	$	384

Summary of gain (loss) included in the Statement of Earnings for changes in the fair value of derivatives



		Three months ended						Nine months ended
		September 30,						September 30,
Derivative	Statement of Earnings Line	2012			2011			2012			2011
MBS with embedded derivatives	Realized gains	$	1		$	3		$	4		$	—
Interest rate swaptions	Realized gains	(1		)	(15		)	(4		)	(22		)
Fixed-indexed annuities (embedded derivative)	Annuity benefits	(41		)	32			(97		)	4
Equity index call options	Annuity benefits	30			(50		)	67			(30		)
Reinsurance contracts (embedded derivative)	Investment income	(4		)	(6		)	(7		)	(10		)
		$	(15	)	$	(36	)	$	(37	)	$	(58	)

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

+ References + Details

Deferred Policy Acquisition Costs (Tables)

9 Months Ended

Sep. 30, 2012

Deferred Policy Acquisition Costs Disclosures [Abstract]

Deferred Policy Acquisition Costs

Deferred policy acquisition costs consisted of the following (in millions):



	September 30, 2012			December 31, 2011
Property and casualty insurance	$	200		$	189
Annuity and supplemental insurance:
Policy acquisition costs	876			898
Policyholder sales inducements	195			207
Present value of future profits (“PVFP”)	114			144
Impact of unrealized gains and losses on securities	(764		)	(537		)
Total annuity and supplemental	421			712
	$	621		$	901

Summary of amortization of deferred acquisition costs

Amortization of deferred acquisition costs for the third quarter and first nine months of 2012 and 2011 were as follows (in millions):



	Three months ended				Nine months ended
	September 30,				September 30,
	2012		2011		2012		2011
Property and casualty insurance	$	111	$	102	$	323	$	310
Annuity and supplemental insurance:
Policy acquisition costs	27		27		86		89
Policyholder sales inducements	8		6		24		20
PVFP	5		5		14		16
Total annuity and supplemental	40		38		124		125
	$	151	$	140	$	447	$	435

Managed Investment Entities (Tables)

9 Months Ended

Sep. 30, 2012

Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract]

Selected financial information related to collateralized loan obligations

Selected financial information related to the CLOs is shown below (in millions):



	Three months ended						Nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Gains (losses) on change in fair value of assets/liabilities (a):
Assets	$	39		$	(88	)	$	92		$	(71	)
Liabilities	(52		)	89			(155		)	17
Management fees paid to AFG	6			5			14			13
CLO earnings (losses) attributable to:
AFG shareholders (b)	11			(2		)	21			5
Noncontrolling interests (b)	(18		)	8			(64		)	(47		)


(a)	Included in Revenues in AFG’s Statement of Earnings.


(b)	Included in Operating earnings before income taxes in AFG’s Statement of Earnings.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=7880789&loc=d3e5747-111685

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=7880789&loc=SL6228884-111685

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=7880789&loc=d3e5728-111685

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Variable Interest Entity
-URI http://asc.fasb.org/extlink&oid=6528138

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=7880789&loc=d3e5710-111685

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 5A
-URI http://asc.fasb.org/extlink&oid=7880789&loc=SL6759159-111685

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 140
-Paragraph 35
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 46R
-Paragraph 2, 14, 15, 16, 23, 24, 25, 26
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 167
-Paragraph 24
-Appendix D

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS140-4/FIN46(R)-8
-Paragraph C4
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 167
-Paragraph 22B
-Appendix D

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 167
-Paragraph 23A
-Appendix D

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 167
-Paragraph 22E
-Appendix D

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 46R
-Paragraph 4
-Subparagraph g
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Schedule of long-term debt instruments

The carrying value of long-term debt consisted of the following (in millions):



	September 30, 2012		December 31, 2011
Direct obligations of AFG:
9-7/8% Senior Notes due June 2019	$	350	$	350
6-3/8% Senior Notes due June 2042	230		—
5-3/4% Senior Notes due August 2042	125		—
7% Senior Notes due September 2050	132		132
7-1/8% Senior Debentures due February 2034	—		115
Other	3		3
	840		600
Subsidiaries:
Obligations of AAG Holding (guaranteed by AFG):
7-1/2% Senior Debentures due November 2033	—		112
7-1/4% Senior Debentures due January 2034	—		86
Notes payable secured by real estate due 2012 through 2016	63		64
Secured borrowings ($16 and $17 guaranteed by AFG)	21		30
National Interstate bank credit facility	22		22
	106		314
Payable to Subsidiary Trusts:
AAG Holding Variable Rate Subordinated Debentures due May 2033	20		20
	$	966	$	934

Summary of secured and unsecured long-term debt



	September 30, 2012		December 31, 2011
Unsecured obligations	$	882	$	840
Obligations secured by real estate	63		64
Other secured borrowings	21		30
	$	966	$	934

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6479336&loc=d3e64711-112823

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6584090&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28541-108399

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21521-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 22
-Article 5

+ Details

Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Components of accumulated other comprehensive income (loss)

The progression of the components of accumulated other comprehensive income follows (in millions):



					Other Comprehensive Income
	AOCI Beginning Balance				Pretax			Tax			Noncontrolling interests			Net			Other (b)			AOCI Ending Balance
Quarter ended September 30, 2012
Net unrealized gains on securities	$	771		(a)	$	238		$	(84	)	$	(4	)	$	150		$	—		$	921		(a)
Foreign currency translation adjustments	9				10			—			(1		)	9			(1		)	17
Pension and other postretirement plans adjustments	(7		)		—			—			—			—			—			(7		)
Total	$	773			$	248		$	(84	)	$	(5	)	$	159		$	(1	)	$	931

Quarter ended September 30, 2011
Net unrealized gains (losses) on securities	$	605			$	(24	)	$	9		$	(2	)	$	(17	)	$	—		$	588
Foreign currency translation adjustments	17				(14		)	—			1			(13		)	—			4
Pension and other postretirement plans adjustments	(7		)		—			—			—			—			—			(7		)
Total	$	615			$	(38	)	$	9		$	(1	)	$	(30	)	$	—		$	585

Nine months ended September 30, 2012
Net unrealized gains on securities	$	578		(a)	$	539		$	(189	)	$	(7	)	$	343		$	—		$	921		(a)
Foreign currency translation adjustments	10				9			—			(1		)	8			(1		)	17
Pension and other postretirement plans adjustments	(8		)		1			—			—			1			—			(7		)
Total	$	580			$	549		$	(189	)	$	(8	)	$	352		$	(1	)	$	931

Nine months ended September 30, 2011
Net unrealized gains on securities	$	491			$	155		$	(54	)	$	(4	)	$	97		$	—		$	588
Foreign currency translation adjustments	12				(9		)	—			1			(8		)	—			4
Pension and other postretirement plans adjustments	(8		)		1			—			—			1			—			(7		)
Total	$	495			$	147		$	(54	)	$	(3	)	$	90		$	—		$	585


(a)	Includes net unrealized gains of $23 million at September 30, 2012 compared to net unrealized losses of $1 million at June 30, 2012 and $16 million at December 31, 2011 related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings.


(b)	Other relates to the third quarter of 2012 acquisition of noncontrolling interest in a subsidiary.

Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended					9 Months Ended		12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Accounting Standards Adopted in 2012
Deferred policy acquisition costs	$ 621	$ 901				$ 621		$ 901
Shareholders' equity	4,779	4,411				4,779		4,411
Net earnings attributable to shareholders	$ 226		$ 97			$ 438	$ 233
Diluted earnings per Common Share	$ 2.39		$ 0.95			$ 4.50	$ 2.23
As previously reported [Member]
Accounting Standards Adopted in 2012
Deferred policy acquisition costs		1,105						1,105
Net deferred tax liability (included in other liabilities)		203						203
Shareholders' equity		4,545						4,545
Net earnings attributable to shareholders		$ 109	$ 96	$ 55	$ 83			$ 343
Diluted earnings per Common Share		$ 1.10	$ 0.94	$ 0.52	$ 0.79			$ 3.33
As adjusted [Member]
Accounting Standards Adopted in 2012
Deferred policy acquisition costs		$ 901						$ 901
Net deferred tax liability (included in other liabilities)		133						133
Shareholders' equity		4,411						4,411
Net earnings attributable to shareholders		$ 109	$ 97	$ 48	$ 88			$ 342
Diluted earnings per Common Share		$ 1.09	$ 0.95	$ 0.46	$ 0.83			$ 3.32

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Net Income
-URI http://asc.fasb.org/extlink&oid=6518256

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6943989&loc=d3e3602-108585

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.19)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 225
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.18)
-URI http://asc.fasb.org/extlink&oid=6880815&loc=d3e20235-122688

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.22)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Other Comprehensive Income
-URI http://asc.fasb.org/extlink&oid=6519514

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e565-108580

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 10, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph A7
-Appendix A

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 87-21
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 19
-Article 5

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 28, 29, 30
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph 20
-Article 9

+ Details

Accounting Policies (Details Textual) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Variable Interest Entity [Line Items]
Assets	$ 3,102		$ 3,102		$ 3,058
Liabilities	$ 2,753		$ 2,753		$ 2,787
Accounting Policies (Textual) [Abstract]
Weighted average common shares adjustment related to stock-based compensation	1.7	1.6	1.7	1.8
Anti-dilutive potential common shares related to stock-based compensation plans	1.9	2.6	1.8	2.3
Maturities of short term investments			3 months
New Collateralized Loan Obligation Entity Formed In October Two Thousand Twelve [Member]
Variable Interest Entity [Line Items]
Assets	$ 308		$ 308
Liabilities	$ 267		$ 267

- Definition

Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Antidilution
-URI http://asc.fasb.org/extlink&oid=6505113

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Diluted Earnings Per Share
-URI http://asc.fasb.org/extlink&oid=6510752

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Contingent Stock Agreement
-URI http://asc.fasb.org/extlink&oid=6508534

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 40
-Subparagraph c
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 13, 14
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 07-4
-Paragraph 4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 171
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Aquisitions and Sales of Subsidiaries (Details) - Medicare supplement and critical illness businesses [Member] - USD ($)
$ in Millions

1 Months Ended

3 Months Ended

9 Months Ended

Aug. 31, 2012

Sep. 30, 2012

Sep. 30, 2011

Sep. 30, 2012

Sep. 30, 2011

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Sale proceeds

$ 307

Expenses

(12)

Net proceeds

295

Assets of businesses sold:

Cash and investments

217

Deferred policy acquisition costs

108

Other assets

Total assets

356

Liabilities of businesses sold:

Life, accident and health reserves

209

Other liabilities

Total liabilities

216

Net assets of businesses sold

140

Gain on sale of subsidiaries

$ 155

Total revenues

$ 53

^[1]

$ 80

$ 212

^[1]

$ 244

Total costs and expenses

^[1]

184

^[1]

223

Operating earnings before income taxes

$ 10

$ 11

$ 28

$ 21

[1]	Reflects revenues and expenses through the end of August 2012.

Aquisitions and Sales of Subsidiaries (Details Textual) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Aug. 31, 2012	Sep. 30, 2012
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Percentage of interest acquired in a subsidiary		28.00%
Purchase of interest not already owned in a subsidiary		$ 17
Medicare supplement and critical illness businesses [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale proceeds	$ 307
Pretax gain on sale of subsidiaries	$ 155
Small Annuity and Supplemental Insurance Company [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale proceeds		$ 7

Segments of Operations (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Segments of Operations (Details) - USD ($) $ in Millions	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues by significant business segment and sub-segment
Total premiums earned	$ 848	$ 835	$ 2,091	$ 2,043
Investment income	327	310	981	916
Life, accident and health premiums	80	107	290	324
Realized gains (losses) on securities	85	8	145	27
Realized gains (losses) on subsidiaries	156		155	(3)
Other income	49	47	135	136
Total revenues	1,563	1,335	3,826	3,467
Property and Casualty Insurance [Member]
Revenues by significant business segment and sub-segment
Investment income	69	73	210	223
Realized gains	44	15	88	47
Other income	16	20	47	55
Total revenues	977	943	2,436	2,368
Annuity and Supplemental Insurance [Member]
Revenues by significant business segment and sub-segment
Investment income	270	236	789	694
Life, accident and health premiums	80	107	290	324
Realized gains (losses) on securities	41	(8)	57	(22)
Realized gains (losses) on subsidiaries	156		155	(2)
Other income	30	27	84	79
Total revenues	577	362	1,375	1,073
Other Segment [Member]
Revenues by significant business segment and sub-segment
Total revenues	9	30	15	26
Specialty Property and transportation [Member]
Revenues by significant business segment and sub-segment
Total premiums earned	487	500	1,040	1,029
Specialty casualty [Member]
Revenues by significant business segment and sub-segment
Total premiums earned	243	216	699	651
Specialty financial [Member]
Revenues by significant business segment and sub-segment
Total premiums earned	100	101	301	313
Specialty Other [Member]
Revenues by significant business segment and sub-segment
Total premiums earned	$ 18	$ 18	$ 51	$ 50

Segments of Operations (Details 1) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2012

Sep. 30, 2011

Sep. 30, 2012

Sep. 30, 2011

Operating earnings before income taxes by significant business segment and sub-segment

Realized gains (losses) on securities

$ 85

$ 8

$ 145

$ 27

Realized gains (losses) on subsidiaries

156

155

(3)

Operating earnings before income taxes

285

156

567

318

Property and Casualty Insurance [Member]

Operating earnings before income taxes by significant business segment and sub-segment

Property and casualty insurance underwriting income (loss)

(16)

Investment and other income, net

174

205

Realized gains

Operating earnings before income taxes

138

339

344

Annuity and Supplemental Insurance [Member]

Operating earnings before income taxes by significant business segment and sub-segment

Operations

^[1]

224

157

Realized gains (losses) on securities

(8)

(22)

Realized gains (losses) on subsidiaries

156

155

(2)

Operating earnings before income taxes

278

436

133

Other Segment [Member]

Operating earnings before income taxes by significant business segment and sub-segment

Operating earnings before income taxes

^[2]

(79)

(21)

(208)

(159)

Specialty Property and transportation [Member]

Operating earnings before income taxes by significant business segment and sub-segment

Property and casualty insurance underwriting income (loss)

Specialty casualty [Member]

Operating earnings before income taxes by significant business segment and sub-segment

Property and casualty insurance underwriting income (loss)

Specialty financial [Member]

Operating earnings before income taxes by significant business segment and sub-segment

Property and casualty insurance underwriting income (loss)

Specialty Other [Member]

Operating earnings before income taxes by significant business segment and sub-segment

Property and casualty insurance underwriting income (loss)

Other Lines [Member]

Operating earnings before income taxes by significant business segment and sub-segment

Property and casualty insurance underwriting income (loss)

^[3]

$ (32)

$ (39)

$ (50)

[1]	Includes earnings from the Medicare supplement and critical illness operations, which were sold in August 2012, of $10 million and $11 million for the third quarter and $28 million and $21 million for the first nine months of 2012 and 2011, respectively.
[2]	Includes holding company expenses and earnings (losses) of managed investment entities attributable to noncontrolling interests of ($18) million and $8 million for the third quarter and ($64) million and ($47) million for the first nine months of 2012 and 2011, respectively. Holding company expenses for the third quarter of 2012 include an $8 million loss on retirement of debt and a $15 million charge for a labor matter related to AFG’s former railroad operations.
[3]	Includes third quarter 2012 and second quarter 2011 special charges of $31 million and $50 million, respectively, to increase asbestos and environmental reserves.

Segments of Operations (Details Textual) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2012

Sep. 30, 2011

Jun. 30, 2011

Sep. 30, 2012

Sep. 30, 2011

Segments of Operations (Textual) [Abstract]

Earnings (losses) of managed investment entities attributable to noncontrolling interests

^[1]

$ (18)

$ 8

$ (64)

$ (47)

Property and Casualty Insurance [Member]

Segments of Operations (Textual) [Abstract]

Special charges to increase asbestos and environmental reserves

$ 50

Other Segment [Member]

Segments of Operations (Textual) [Abstract]

Earnings (losses) of managed investment entities attributable to noncontrolling interests

(18)

(64)

(47)

Loss on retirement of debt

(8)

Charge for a labor matter related to former operations

Medicare supplement and critical illness operations [Member]

Segments of Operations (Textual) [Abstract]

Earnings from Medicare supplement and critical illness operations

$ 10

$ 11

$ 28

$ 21

[1]	Included in Operating earnings before income taxes in AFG’s Statement of Earnings.

Fair Value Measurements (Details) - USD ($)
$ in Millions

Sep. 30, 2012

Dec. 31, 2011

Assets:

Trading fixed maturities

$ 309

$ 440

Assets of managed investment entities (MIE)

3,102

3,058

Total assets accounted for at fair value

28,918

26,852

Liabilities:

Liabilities of managed investment entities

2,753

2,787

Derivatives in annuity benefits accumulated

497

361

Derivative liability, at fair value

Total liabilities accounted for at fair value

3,268

3,171

Level 1 [Member]

Assets:

Trading fixed maturities

Assets of managed investment entities (MIE)

221

290

Total assets accounted for at fair value

1,306

1,435

Liabilities:

Liabilities of managed investment entities

247

194

Derivatives in annuity benefits accumulated

Derivative liability, at fair value

Total liabilities accounted for at fair value

247

194

Level 2 [Member]

Assets:

Trading fixed maturities

308

439

Assets of managed investment entities (MIE)

2,846

2,724

Total assets accounted for at fair value

26,579

24,379

Liabilities:

Liabilities of managed investment entities

Derivatives in annuity benefits accumulated

Derivative liability, at fair value

Total liabilities accounted for at fair value

Level 3 [Member]

Assets:

Trading fixed maturities

Assets of managed investment entities (MIE)

Total assets accounted for at fair value

1,033

1,038

Liabilities:

Liabilities of managed investment entities

2,506

2,593

Derivatives in annuity benefits accumulated

497

361

Derivative liability, at fair value

Total liabilities accounted for at fair value

3,003

2,954

Fixed Maturity [Member]

Assets:

Total AFS securities

23,746

21,807

Fixed Maturity [Member] | Level 1 [Member]

Assets:

Total AFS securities

202

257

Fixed Maturity [Member] | Level 2 [Member]

Assets:

Total AFS securities

22,583

20,568

Fixed Maturity [Member] | Level 3 [Member]

Assets:

Total AFS securities

961

982

U.S. Government and government agencies [Member]

Assets:

Total AFS securities

361

382

U.S. Government and government agencies [Member] | Level 1 [Member]

Assets:

Total AFS securities

198

248

U.S. Government and government agencies [Member] | Level 2 [Member]

Assets:

Total AFS securities

143

134

U.S. Government and government agencies [Member] | Level 3 [Member]

Assets:

Total AFS securities

States, municipalities and political subdivisions [Member]

Assets:

Total AFS securities

4,326

3,877

States, municipalities and political subdivisions [Member] | Level 1 [Member]

Assets:

Total AFS securities

States, municipalities and political subdivisions [Member] | Level 2 [Member]

Assets:

Total AFS securities

4,268

3,794

States, municipalities and political subdivisions [Member] | Level 3 [Member]

Assets:

Total AFS securities

Foreign government [Member]

Assets:

Total AFS securities

264

254

Foreign government [Member] | Level 1 [Member]

Assets:

Total AFS securities

Foreign government [Member] | Level 2 [Member]

Assets:

Total AFS securities

264

254

Foreign government [Member] | Level 3 [Member]

Assets:

Total AFS securities

Residential Mortgage Backed Securities [Member]

Assets:

Total AFS securities

4,320

3,848

Residential Mortgage Backed Securities [Member] | Level 1 [Member]

Assets:

Total AFS securities

Residential Mortgage Backed Securities [Member] | Level 2 [Member]

Assets:

Total AFS securities

3,953

3,487

Residential Mortgage Backed Securities [Member] | Level 3 [Member]

Assets:

Total AFS securities

367

361

Commercial Mortgage Backed Securities [Member]

Assets:

Total AFS securities

2,945

2,840

Commercial Mortgage Backed Securities [Member] | Level 1 [Member]

Assets:

Total AFS securities

Commercial Mortgage Backed Securities [Member] | Level 2 [Member]

Assets:

Total AFS securities

2,924

2,821

Commercial Mortgage Backed Securities [Member] | Level 3 [Member]

Assets:

Total AFS securities

All other corporate [Member]

Assets:

Total AFS securities

11,530

10,606

All other corporate [Member] | Level 1 [Member]

Assets:

Total AFS securities

All other corporate [Member] | Level 2 [Member]

Assets:

Total AFS securities

11,031

10,078

All other corporate [Member] | Level 3 [Member]

Assets:

Total AFS securities

495

519

Equity securities [Member]

Assets:

Total AFS securities

1,031

928

Equity securities [Member] | Level 1 [Member]

Assets:

Total AFS securities

883

888

Equity securities [Member] | Level 2 [Member]

Assets:

Total AFS securities

112

Equity securities [Member] | Level 3 [Member]

Assets:

Total AFS securities

Variable Annuity Assets (separate accounts) [Member]

Assets:

Variable annuity assets

^[1]

577

548

Variable Annuity Assets (separate accounts) [Member] | Level 1 [Member]

Assets:

Variable annuity assets

^[1]

Variable Annuity Assets (separate accounts) [Member] | Level 2 [Member]

Assets:

Variable annuity assets

^[1]

577

548

Variable Annuity Assets (separate accounts) [Member] | Level 3 [Member]

Assets:

Variable annuity assets

^[1]

Other Investments [Member]

Assets:

Other Investments

153

Other Investments [Member] | Level 1 [Member]

Assets:

Other Investments

Other Investments [Member] | Level 2 [Member]

Assets:

Other Investments

153

Other Investments [Member] | Level 3 [Member]

Assets:

Other Investments

$ 0

[1]	Variable annuity liabilities equal the fair value of variable annuity assets.

Fair Value Measurements (Details 1) - Embedded derivatives [Member]	9 Months Ended
	Sep. 30, 2012
Unobservable inputs used by management in determining fair value of embedded derivatives
Risk margin for uncertainty in cash flows	0.30%
Minimum [Member]
Unobservable inputs used by management in determining fair value of embedded derivatives
Adjustment for insurance subsidiary's credit risk	0.50%
Surrenders	4.00%
Partial surrenders	3.00%
Annuitizations	1.00%
Deaths	1.00%
Budgeted option costs	2.50%
Maximum [Member]
Unobservable inputs used by management in determining fair value of embedded derivatives
Adjustment for insurance subsidiary's credit risk	2.05%
Surrenders	25.00%
Partial surrenders	5.00%
Annuitizations	2.00%
Deaths	2.50%
Budgeted option costs	4.00%

Fair Value Measurements (Details 2) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Fair Value Measurements (Details 2) - USD ($) $ in Millions	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
US Treasury and Government [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Financial assets, Beginning Balance	$ 20
Purchases and issuances			$ 20
Financial assets, Ending Balance	20		20
States, municipalities and political subdivisions [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Financial assets, Beginning Balance	86	$ 84	83	$ 20
Total realized/unrealized Gains (losses) included in other comprehensive income (loss)	2	4	4	5
Purchases and issuances	0	0	19	53
Sales and Settlements	(6)	(3)	(7)	(3)
Transfer into Level 3	4	0	9	10
Transfer out of Level 3	(28)	(13)	(50)	(13)
Financial assets, Ending Balance	58	72	58	72
Residential Mortgage Backed Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Financial assets, Beginning Balance	320	255	361	312
Total realized/unrealized gains (losses) included in Net income	3	1	5	2
Total realized/unrealized Gains (losses) included in other comprehensive income (loss)	7	(5)	11	(8)
Purchases and issuances	15	25	86	42
Sales and Settlements	(11)	(9)	(29)	(29)
Transfer into Level 3	86	24	167	31
Transfer out of Level 3	(53)	(7)	(234)	(66)
Financial assets, Ending Balance	367	284	367	284
Commercial Mortgage Backed Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Financial assets, Beginning Balance	20	10	19	6
Total realized/unrealized gains (losses) included in Net income	1		1
Total realized/unrealized Gains (losses) included in other comprehensive income (loss)			1
Purchases and issuances		9		9
Transfer into Level 3		9		13
Transfer out of Level 3	0
Financial assets, Ending Balance	21	28	21	28
All other corporate [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Financial assets, Beginning Balance	537	382	519	436
Total realized/unrealized gains (losses) included in Net income	2	2	9	1
Total realized/unrealized Gains (losses) included in other comprehensive income (loss)	6	12	18	17
Purchases and issuances	67	32	124	123
Sales and Settlements	(19)	(14)	(57)	(51)
Transfer into Level 3	1	46	29	70
Transfer out of Level 3	(99)	(24)	(147)	(160)
Financial assets, Ending Balance	495	436	495	436
Trading fixed maturities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Financial assets, Beginning Balance	1	1	1	3
Transfer out of Level 3				(2)
Financial assets, Ending Balance	1	1	1	1
Equity securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Financial assets, Beginning Balance	41	21	11	21
Total realized/unrealized Gains (losses) included in other comprehensive income (loss)		(1)		1
Purchases and issuances	4	2	30	2
Sales and Settlements				(2)
Transfer into Level 3	9	2	13	2
Transfer out of Level 3	(18)		(18)
Financial assets, Ending Balance	36	24	36	24
Assets of Managed Investment Entities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Financial assets, Beginning Balance	54	53	44	48
Total realized/unrealized gains (losses) included in Net income		(6)		(7)
Purchases and issuances	0	5	13	21
Sales and Settlements	(1)	(7)	(13)	(13)
Transfer into Level 3		0	14	8
Transfer out of Level 3	(18)	(5)	(23)	(17)
Financial assets, Ending Balance	$ 35	$ 40	$ 35	$ 40

Fair Value Measurements (Details 3) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2012

Sep. 30, 2011

Sep. 30, 2012

Sep. 30, 2011

Liabilities of Managed Investment Entities [Member]

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]

Financial liabilities, Beginning Balance

$ (2,429)

^[1]

$ (2,322)

^[2]

$ (2,593)

^[3]

$ (2,258)

^[4]

Total realized/unrealized gains (losses) included in Net income

(52)

^[1]

^[2]

(155)

^[3]

^[4]

Purchases and issuances

(97)

^[1]

(463)

^[3]

Sales and Settlements

^[1]

^[2]

705

^[3]

^[4]

Financial liabilities, Ending Balance

(2,506)

^[1],[3]

(2,182)

^[2],[4]

(2,506)

^[1],[3]

(2,182)

^[2],[4]

Embedded derivatives [Member]

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]

Financial liabilities, Beginning Balance

(444)

(279)

(361)

(181)

Total realized/unrealized gains (losses) included in Net income

(41)

(97)

Purchases and issuances

(19)

(62)

(57)

(142)

Sales and Settlements

Financial liabilities, Ending Balance

$ (497)

$ (305)

$ (497)

$ (305)

[1]	Total realized/unrealized loss included in net income includes losses of $49 million related to liabilities outstanding as of September 30, 2012. See Note H — “Managed Investment Entities.”
[2]	Total realized/unrealized loss included in net income includes losses of $89 million related to liabilities outstanding as of September 30, 2011. See Note H — “Managed Investment Entities.”
[3]	Total realized/unrealized loss included in net income includes losses of $99 million related to liabilities outstanding as of September 30, 2012. See Note H — “Managed Investment Entities.”
[4]	Total realized/unrealized loss included in net income includes losses of $19 million related to liabilities outstanding as of September 30, 2011. See Note H — “Managed Investment Entities.”

Fair Value Measurements (Details 4) - USD ($)
$ in Millions

Sep. 30, 2012

Dec. 31, 2011

Sep. 30, 2011

Dec. 31, 2010

Financial assets:

Cash and cash equivalents

$ 1,626

$ 1,324

$ 991

$ 1,099

Mortgage loans

566

401

Policy loans

229

252

Financial liabilities:

Long-term debt

966

$ 934

Level 1 [Member]

Financial assets:

Cash and cash equivalents

1,626

Total financial assets not accounted for at fair value

1,626

Level 2 [Member]

Financial liabilities:

Long-term debt

976

Total financial liabilities not accounted for at fair value

976

Level 3 [Member]

Financial assets:

Mortgage loans

575

Policy loans

229

Total financial assets not accounted for at fair value

804

Financial liabilities:

Annuity benefits accumulated

^[1]

17,452

Long-term debt

109

Total financial liabilities not accounted for at fair value

17,561

Carrying Value [Member]

Financial assets:

Cash and cash equivalents

1,626

Mortgage loans

566

Policy loans

229

Total financial assets not accounted for at fair value

2,421

Financial liabilities:

Annuity benefits accumulated

^[1]

17,040

Long-term debt

966

Total financial liabilities not accounted for at fair value

18,006

Fair Value [Member]

Financial assets:

Cash and cash equivalents

1,626

Mortgage loans

575

Policy loans

229

Total financial assets not accounted for at fair value

2,430

Financial liabilities:

Annuity benefits accumulated

^[1]

17,452

Long-term debt

1,085

Total financial liabilities not accounted for at fair value

$ 18,537

[1]	Excludes life contingent annuities in the payout phase.

Fair Value Measurements (Details Textual) $ in Millions	3 Months Ended		9 Months Ended
Fair Value Measurements (Details Textual) $ in Millions	Sep. 30, 2012 USD ($)	Sep. 30, 2011 USD ($)	Sep. 30, 2012 USD ($) Stock Professional	Sep. 30, 2011 USD ($)	Dec. 31, 2011 USD ($)
Fair Value Measurements (Textual) [Abstract]
AFG's internal investment professionals \| Professional			20
Fair value of assets transferred from Level 1 to Level 2			$ 35
Number of preferred stocks transferred from Level 1 to Level 2 \| Stock			6
Level 3 assets as a percentage of total assets measured at fair value			4.00%
Percentage of level 3 assets that were priced using non-binding broker quotes			90.00%
Percentage of internally developed Level 3 assets to total assets			1.00%
Total realized/unrealized losses included in net income on liabilities still outstanding	$ 49	$ 89	$ 99	$ 19
Level 3 assets that were priced using non-binding broker quotes			$ 907
Percentage of internally developed Level 3 assets to Shareholders' equity			3.00%
Fair value of derivatives in annuity benefits accumulated measured using a discounted cash flow approach	$ 497		$ 497		$ 361

Investments (Details) - USD ($) $ in Millions	Sep. 30, 2012	Dec. 31, 2011
Available for sale fixed maturities and equity securities
Gross Unrealized, Losses	$ (87)
U.S. Government and government agencies [Member]
Available for sale fixed maturities and equity securities
Amortized Cost	345	$ 363
Fair Value	361	382
Gross Unrealized, Gains	16	19
Gross Unrealized, Losses
States, municipalities and political subdivisions [Member]
Available for sale fixed maturities and equity securities
Amortized Cost	3,976	3,613
Fair Value	4,326	3,877
Gross Unrealized, Gains	352	267
Gross Unrealized, Losses	(2)	(3)
Foreign government [Member]
Available for sale fixed maturities and equity securities
Amortized Cost	245	236
Fair Value	264	254
Gross Unrealized, Gains	19	18
Residential Mortgage Backed Securities [Member]
Available for sale fixed maturities and equity securities
Amortized Cost	4,100	3,858
Fair Value	4,320	3,848
Gross Unrealized, Gains	294	170
Gross Unrealized, Losses	(74)	(180)
Commercial Mortgage Backed Securities [Member]
Available for sale fixed maturities and equity securities
Amortized Cost	2,629	2,628
Fair Value	2,945	2,840
Gross Unrealized, Gains	316	218
Gross Unrealized, Losses		(6)
All other corporate [Member]
Available for sale fixed maturities and equity securities
Amortized Cost	10,465	9,864
Fair Value	11,530	10,606
Gross Unrealized, Gains	1,076	802
Gross Unrealized, Losses	(11)	(60)
Fixed maturities [Member]
Available for sale fixed maturities and equity securities
Amortized Cost	21,760	20,562
Fair Value	23,746	21,807
Gross Unrealized, Gains	2,073	1,494
Gross Unrealized, Losses	(87)	(249)
Common stocks [Member]
Available for sale fixed maturities and equity securities
Amortized Cost	633	610
Fair Value	828	797
Gross Unrealized, Gains	200	207
Gross Unrealized, Losses	(5)	(20)
Perpetual preferred stocks [Member]
Available for sale fixed maturities and equity securities
Amortized Cost	192	134
Fair Value	203	131
Gross Unrealized, Gains	13	5
Gross Unrealized, Losses	$ (2)	$ (8)

Investments (Details 1) - USD ($) $ in Millions	Sep. 30, 2012	Dec. 31, 2011
U.S. Government and government agencies [Member]
Available for sale securities in a continuous unrealized loss position
Fair Value - Less than twelve months	$ 6	$ 2
Fair Value as % of Cost - Less than twelve months	100.00%	100.00%
States, municipalities and political subdivisions [Member]
Available for sale securities in a continuous unrealized loss position
Unrealized Loss - Less than twelve months	$ (2)	$ (2)
Fair Value - Less than twelve months	$ 126	$ 120
Fair Value as % of Cost - Less than twelve months	98.00%	98.00%
Unrealized Loss - Twelve months or more	$ 0	$ (1)
Fair Value - Twelve months or more	$ 13	$ 59
Fair Value as % of Cost - Twelve months or more	100.00%	98.00%
Foreign government [Member]
Available for sale securities in a continuous unrealized loss position
Unrealized Loss - Less than twelve months
Fair Value - Less than twelve months		$ 1
Fair Value as % of Cost - Less than twelve months		100.00%
Unrealized Loss - Twelve months or more
Fair Value - Twelve months or more
Fair Value as % of Cost - Twelve months or more
Residential Mortgage Backed Securities [Member]
Available for sale securities in a continuous unrealized loss position
Unrealized Loss - Less than twelve months	$ (9)	$ (59)
Fair Value - Less than twelve months	$ 314	$ 1,141
Fair Value as % of Cost - Less than twelve months	97.00%	95.00%
Unrealized Loss - Twelve months or more	$ (65)	$ (121)
Fair Value - Twelve months or more	$ 473	$ 473
Fair Value as % of Cost - Twelve months or more	88.00%	80.00%
Commercial Mortgage Backed Securities [Member]
Available for sale securities in a continuous unrealized loss position
Unrealized Loss - Less than twelve months		$ (6)
Fair Value - Less than twelve months	$ 5	$ 183
Fair Value as % of Cost - Less than twelve months	100.00%	97.00%
Fair Value - Twelve months or more		$ 18
Fair Value as % of Cost - Twelve months or more		100.00%
All other corporate [Member]
Available for sale securities in a continuous unrealized loss position
Unrealized Loss - Less than twelve months	$ (4)	$ (43)
Fair Value - Less than twelve months	$ 204	$ 940
Fair Value as % of Cost - Less than twelve months	98.00%	96.00%
Unrealized Loss - Twelve months or more	$ (7)	$ (17)
Fair Value - Twelve months or more	$ 133	$ 114
Fair Value as % of Cost - Twelve months or more	95.00%	87.00%
Fixed maturities [Member]
Available for sale securities in a continuous unrealized loss position
Unrealized Loss - Less than twelve months	$ (15)	$ (110)
Fair Value - Less than twelve months	$ 655	$ 2,387
Fair Value as % of Cost - Less than twelve months	98.00%	96.00%
Unrealized Loss - Twelve months or more	$ (72)	$ (139)
Fair Value - Twelve months or more	$ 619	$ 664
Fair Value as % of Cost - Twelve months or more	90.00%	83.00%
Common stocks [Member]
Available for sale securities in a continuous unrealized loss position
Unrealized Loss - Less than twelve months	$ (5)	$ (19)
Fair Value - Less than twelve months	$ 50	$ 169
Fair Value as % of Cost - Less than twelve months	91.00%	90.00%
Unrealized Loss - Twelve months or more	$ 0	$ (1)
Fair Value - Twelve months or more	$ 0	$ 4
Fair Value as % of Cost - Twelve months or more	0.00%	80.00%
Perpetual preferred stocks [Member]
Available for sale securities in a continuous unrealized loss position
Unrealized Loss - Less than twelve months	$ 0	$ (1)
Fair Value - Less than twelve months	$ 0	$ 23
Fair Value as % of Cost - Less than twelve months	0.00%	96.00%
Unrealized Loss - Twelve months or more	$ (2)	$ (7)
Fair Value - Twelve months or more	$ 25	$ 31
Fair Value as % of Cost - Twelve months or more	93.00%	82.00%

Investments (Details 2) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Investments (Details 2) - USD ($) $ in Millions	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
The credit portion of other-than-temporary impairments on fixed maturity securities, non-credit portion of an impairment has been recognized in other comprehensive income (loss)
Beginning Balance	$ 191	$ 171	$ 187	$ 143
Additional credit impairments on:
Previously impaired securities		8	4	37
Securities without prior impairments		2		7
Reductions-disposals		(1)		(7)
Ending Balance	$ 191	$ 180	$ 191	$ 180

Investments (Details 3) $ in Millions	Sep. 30, 2012 USD ($)
The scheduled maturities of available for sale fixed maturities
Fixed maturities amortized cost, One year or less	$ 838
Fixed maturities fair value, One year or less	$ 857
Fixed maturities fair value, One year or less, Percent	4.00%
Fixed maturities amortized cost, After one year through five years	$ 5,320
Fixed maturities fair value, After one year through five years	$ 5,735
Fixed maturities fair value, After one year through five years, Percent	24.00%
Fixed maturities amortized cost, After five years through ten years	$ 6,529
Fixed maturities fair value, After five years through ten years	$ 7,285
Fixed maturities fair value, After five years through ten years, Percent	31.00%
Fixed maturities amortized cost, After ten years	$ 2,344
Fixed maturities fair value, After ten years	$ 2,604
Fixed maturities fair value, After ten years, Percent	11.00%
Fixed maturities amortized cost, Subtotal	$ 15,031
Fixed maturities fair value, Subtotal	$ 16,481
Fixed maturities fair value, Subtotal, Percent	70.00%
Fixed maturities amortized cost, MBS	$ 6,729
Fixed maturities fair value, MBS	$ 7,265
Fixed maturities fair value, MBS, Percent	30.00%
Fixed Maturity [Member]
The scheduled maturities of available for sale fixed maturities
Amortized Cost	$ 21,760
Fair Value	$ 23,746
Fair value, Total, Percent	100.00%

Investments (Details 4) - USD ($)
$ in Millions

Sep. 30, 2012

Jun. 30, 2012

^[1]

Dec. 31, 2011

Sep. 30, 2011

Jun. 30, 2011

Dec. 31, 2010

Unrealized gain on:

Pretax

$ 1,441

$ 902

Deferred Tax and Amounts Attributable to Noncontrolling Interests

(520)

(324)

Net

921

^[1]

$ 771

578

^[1]

$ 588

$ 605

$ 491

Fixed maturities [Member]

Unrealized gain on:

Pretax

1,986

1,245

Deferred Tax and Amounts Attributable to Noncontrolling Interests

(709)

(444)

Net

1,277

801

Equity securities [Member]

Unrealized gain on:

Pretax

206

184

Deferred Tax and Amounts Attributable to Noncontrolling Interests

(74)

(65)

Net

132

119

Deferred policy acquisition costs [Member]

Unrealized gain on:

Pretax

(764)

(537)

Deferred Tax and Amounts Attributable to Noncontrolling Interests

267

188

Net

(497)

(349)

Annuity benefits and other liabilities [Member]

Unrealized gain on:

Pretax

Deferred Tax and Amounts Attributable to Noncontrolling Interests

(4)

(3)

Net

$ 9

$ 7

[1]	Includes net unrealized gains of $23 million at September 30, 2012 compared to net unrealized losses of $1 million at June 30, 2012 and $16 million at December 31, 2011 related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings.

Investments (Details 5) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2012

Sep. 30, 2011

Sep. 30, 2012

Sep. 30, 2011

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments

Realized before impairments

$ 93

$ 18

$ 164

$ 68

Realized - impairments

(8)

(10)

(19)

(41)

Fixed maturities [Member]

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments

Realized before impairments

Realized - impairments

(12)

(5)

(49)

Change in unrealized

378

172

741

417

Equity securities [Member]

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments

Realized before impairments

133

Realized - impairments

(9)

(2)

(19)

(2)

Change in unrealized

(18)

(75)

(77)

Mortgage Loans and Other Investments [Member]

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments

Realized before impairments

(15)

(3)

(22)

Realized - impairments

(4)

Other [Member]

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments

Realized before impairments

^[1]

(4)

(6)

(2)

Realized - impairments

^[1]

Change in unrealized

^[1]

(122)

(121)

(224)

(185)

Tax Effects [Member]

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments

Realized before impairments

(33)

(6)

(58)

(24)

Realized - impairments

Change in unrealized

(84)

(189)

(54)

Noncontrolling Interests [Member]

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments

Realized before impairments

(1)

Change in unrealized

(4)

(2)

(7)

(4)

Marketable Securities [Member]

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments

Realized before impairments

105

Realized - impairments

(5)

(7)

(12)

(27)

Change in unrealized

$ 150

$ (17)

$ 343

$ 97

[1]	Primarily adjustments to deferred policy acquisition costs related to annuities.

Investments (Details 6) - USD ($) $ in Millions	9 Months Ended
Investments (Details 6) - USD ($) $ in Millions	Sep. 30, 2012	Sep. 30, 2011
Fixed maturities [Member]
Gross realized gains and losses on the sale of available for sale fixed maturity and equity security investments
Gross gains	$ 37	$ 57
Gross losses	(2)	(5)
Equity securities [Member]
Gross realized gains and losses on the sale of available for sale fixed maturity and equity security investments
Gross gains	136	42
Gross losses	$ (3)	$ (1)

Investments (Details Textual) $ in Millions	3 Months Ended		9 Months Ended
Investments (Details Textual) $ in Millions	Sep. 30, 2012 USD ($)	Sep. 30, 2011 USD ($)	Sep. 30, 2012 USD ($) Securities	Sep. 30, 2011 USD ($)	Dec. 31, 2011 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Gross unrealized losses on fixed maturities	$ (87)		$ (87)
Other than temporary impairment charges	8	$ 10	$ 19	$ 41
Investments (Textual) [Abstract]
Number of available for sale fixed maturities in an unrealized loss position \| Securities			420
Percentage (based on amount of unrealized loss) of available for sale fixed maturities that are in an unrealized loss position and rated investment grade			22.00%
Percentage (based on fair value) of available for sale fixed maturities that are in an unrealized loss position and rated investment grade			50.00%
Realized gain (loss) from the mark-to-market of certain MBS	1	$ 3	$ 4	$ (1)
Average life of MBS			4 years
Percentage increase in shareholders' equity			10.00%
Residential Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross unrealized losses on fixed maturities	(74)		$ (74)		$ (180)
Non-credit related portion of other-than-temporary impairment charges taken for securities still owned	$ 228		228		$ 227
Other than temporary impairment charges			$ 5

Derivatives (Details) - USD ($) $ in Millions	Sep. 30, 2012	Dec. 31, 2011
Derivatives included in AFG' s Balance Sheet at fair value
Derivative liability, at fair value	$ 18	$ 23
Not Designated as Hedging Instrument [Member]
Derivatives included in AFG' s Balance Sheet at fair value
Derivative asset, at fair value	249	170
Derivative liability, at fair value	515	384
MBS with embedded derivatives [Member] \| Fixed Maturity [Member] \| Not Designated as Hedging Instrument [Member]
Derivatives included in AFG' s Balance Sheet at fair value
Derivative asset, at fair value	96	99
Interest rate swaptions [Member] \| Other Investments [Member] \| Not Designated as Hedging Instrument [Member]
Derivatives included in AFG' s Balance Sheet at fair value
Derivative asset, at fair value	1	5
Fixed-indexed annuities (embedded derivative) [Member] \| Annuity benefits accumulated [Member] \| Not Designated as Hedging Instrument [Member]
Derivatives included in AFG' s Balance Sheet at fair value
Derivative liability, at fair value	497	361
Equity index call options [Member] \| Other Investments [Member] \| Not Designated as Hedging Instrument [Member]
Derivatives included in AFG' s Balance Sheet at fair value
Derivative asset, at fair value	152	66
Reinsurance contracts (embedded derivative) [Member] \| Other Liabilities [Member] \| Not Designated as Hedging Instrument [Member]
Derivatives included in AFG' s Balance Sheet at fair value
Derivative liability, at fair value	$ 18	$ 23

Derivatives (Details 1) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Derivatives (Details 1) - USD ($) $ in Millions	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Summary of gain (loss) included in earnings for changes in the fair value of derivatives
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	$ (15)	$ (36)	$ (37)	$ (58)
MBS with embedded derivatives [Member] \| Realized gains [Member]
Summary of gain (loss) included in earnings for changes in the fair value of derivatives
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	1	3	4	0
Interest rate swaptions [Member] \| Realized gains [Member]
Summary of gain (loss) included in earnings for changes in the fair value of derivatives
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	(1)	(15)	(4)	(22)
Fixed-indexed annuities (embedded derivative) [Member] \| Annuity benefits [Member]
Summary of gain (loss) included in earnings for changes in the fair value of derivatives
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	(41)	32	(97)	4
Equity index call options [Member] \| Annuity benefits [Member]
Summary of gain (loss) included in earnings for changes in the fair value of derivatives
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	30	(50)	67	(30)
Reinsurance contracts (embedded derivative) [Member] \| Investment Income [Member]
Summary of gain (loss) included in earnings for changes in the fair value of derivatives
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	$ (4)	$ (6)	$ (7)	$ (10)

Derivatives (Details Textual) $ in Millions	9 Months Ended
Derivatives (Details Textual) $ in Millions	Sep. 30, 2012 USD ($)
Derivatives (Textual) [Abstract]
Notional amount of pay-fixed interest rate swaptions	$ 1,000
Payments to purchase swaptions	$ 29
Indexed annuities as a percentage of annuity benefits	40.00%

Deferred Policy Acquisition Costs (Details) - USD ($) $ in Millions	Sep. 30, 2012	Dec. 31, 2011
Summary of deferred policy acquisition costs
Amortization of deferred policy acquisition costs	$ 621	$ 901
Property and Casualty Insurance [Member]
Summary of deferred policy acquisition costs
Policy acquisition costs	200	189
Annuity and Supplemental Insurance [Member]
Summary of deferred policy acquisition costs
Policy acquisition costs	876	898
Policyholder sales inducements	195	207
Present value of future profits ("PVFP")	114	144
Impact of unrealized gains and losses on securities	(764)	(537)
Amortization of deferred policy acquisition costs	$ 421	$ 712

Deferred Policy Acquisition Costs (Details 1) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Summary of amortization of deferred policy acquisition costs
Amortization of deferred policy acquisition costs	$ 151	$ 140	$ 447	$ 435
Property and Casualty Insurance [Member]
Summary of amortization of deferred policy acquisition costs
Amortization of policy acquisition costs	111	102	323	310
Annuity and Supplemental Insurance [Member]
Summary of amortization of deferred policy acquisition costs
Amortization of policy acquisition costs	27	27	86	89
Amortization of deferred policyholder sales inducements	8	6	24	20
Amortization of present value of future profits	5	5	14	16
Amortization of deferred policy acquisition costs	$ 40	$ 38	$ 124	$ 125

- Definition

Amount of deferred policy acquisition costs charged to expense in the period, generally in proportion to related revenue earned, estimated gross profits, or over the customer relationship or some other period.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 30
-Section 35
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=7473040&loc=d3e10157-158409

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 20
-Section 45
-Paragraph 2
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=6480726&loc=d3e6691-158385

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.7(a))
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 30
-Section 50
-Paragraph 1
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=6967983&loc=d3e11264-158415

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 97
-Paragraph 22, 23, 24, 25, 26
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph 7
-Article 7

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 18
-Article 12

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 16
-Article 12

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 60
-Paragraph 60
-Subparagraph c
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 95-1
-Paragraph 19, 20, 21, 22, 23
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Deferred Policy Acquisition Costs (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Deferred Policy Acquisition Costs (Textual) [Abstract]
Accumulated amortization of present value of future profits	$ 169	$ 195
Annuity and Supplemental Insurance [Member]
Segment Reporting Information [Line Items]
Increase (decrease) in policy acquisition costs	(92)
Increase (decrease) in present value of future profits	$ (16)

Managed Investment Entities (Details) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2012

Sep. 30, 2011

Sep. 30, 2012

Sep. 30, 2011

Gains (losses) on change in fair value of assets/liabilities (a):

Assets

^[1]

$ 39

$ (88)

$ 92

$ (71)

Liabilities

^[1]

(52)

(155)

Management fees paid to AFG

Collateralized loan obligations' earnings (losses) attributable to:

AFG shareholders

^[2]

(2)

Noncontrolling interests

^[2]

$ (18)

$ 8

$ (64)

$ (47)

[1]	Included in Revenues in AFG’s Statement of Earnings.
[2]	Included in Operating earnings before income taxes in AFG’s Statement of Earnings.

Managed Investment Entities (Details Textual) $ in Millions	9 Months Ended
Managed Investment Entities (Details Textual) $ in Millions	Sep. 30, 2012 USD ($) collateralizedloanobligations	Oct. 31, 2012 USD ($)	Mar. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)
Managed Investment Entities (Textual) [Abstract]
Percentage of investment of most subordinate debt tranche, Minimum	7.50%
Percentage of investment of most subordinate debt tranche, Maximum	51.20%
Number of collateralized loan obligation entities \| collateralizedloanobligations	8
Difference between aggregate unpaid principal balance and fair value of CLOs' fixed maturity investments	$ 33			$ 120
Difference between aggregate unpaid principal balance and fair value of CLOs' debt	151			306
Aggregate unpaid principal balance of CLO loans in default	12			7
Carrying amount of CLO loans in default	5			2
Variable Interest Entity, Primary Beneficiary [Member]
Variable Interest Entity [Line Items]
Aggregate fair value of investment in collateralized loan obligations	240			$ 98
Aggregate fair value of investment in collateralized loan obligations, most subordinate debt tranches	$ 96
New CLO Formed in March 2012 [Member]
Variable Interest Entity [Line Items]
Face amount of liabilities			$ 410
Face amount of liabilities purchased by subsidiaries of AFG			$ 39
New CLO Formed In October 2012 [Member]
Variable Interest Entity [Line Items]
Face amount of liabilities		$ 450
Face amount of liabilities purchased by subsidiaries of AFG		$ 35

Goodwill and Other Intangibles (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 185		$ 185		$ 186
Decrease of Goodwill balance	1
Amortizable intangible assets related to property and casualty insurance acquisitions	32		32		41
Accumulated amortization	57		57		$ 47
Amortization of intangible assets	3	$ 3	10	$ 9
Non-amortizable intangible assets related to insurance licenses	$ 8		$ 8

- Definition

Carrying amount as of the balance sheet date, which is the cumulative amount paid and (if applicable) the fair value of any noncontrolling interest in the acquiree, adjusted for any amortization recognized prior to the adoption of any changes in generally accepted accounting principles (as applicable) and for any impairment charges, in excess of the fair value of net assets acquired in one or more business combination transactions.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6388280&loc=d3e13770-109266

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 142
-Paragraph 45
-Subparagraph e
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 142
-Paragraph 43
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 72
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 142
-Paragraph 45
-Subparagraph e
-Clause 1
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 68
-Subparagraph l
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Long-Term Debt (Details) - USD ($) $ in Millions	Sep. 30, 2012	Dec. 31, 2011
Summary of Carrying value of long-term debt
Long-term debt	$ 966	$ 934
Notes payable secured by real estate due 2012 through 2016	63	64
Secured borrowings ($16 and $17 guaranteed by AFG)	21	30
AFG [Member]
Summary of Carrying value of long-term debt
Other long-term debt	3	3
Long-term debt	840	600
Subsidiaries [Member]
Summary of Carrying value of long-term debt
Long-term debt	106	314
Notes payable secured by real estate due 2012 through 2016	63	64
Secured borrowings ($16 and $17 guaranteed by AFG)	21	30
National Interstate bank credit facility	22	22
9-7/8% Senior Notes due June 2019 [Member] \| AFG [Member]
Summary of Carrying value of long-term debt
Senior Notes	350	350
6-3/8% Senior Notes due June 2042 [Member] \| AFG [Member]
Summary of Carrying value of long-term debt
Senior Notes	230
5-3/4% Senior Notes Due In August 2042 [Member] \| AFG [Member]
Summary of Carrying value of long-term debt
Senior Notes	125
7% Senior Notes due September 2050 [Member] \| AFG [Member]
Summary of Carrying value of long-term debt
Senior Notes	132	132
7-1/8% Senior Debentures due February 2034 [Member] \| AFG [Member]
Summary of Carrying value of long-term debt
Senior Notes		115
7-1/2% Senior Debentures due November 2033 [Member] \| Subsidiaries [Member]
Summary of Carrying value of long-term debt
Senior Notes		112
7-1/4% Senior Debentures due January 2034 [Member] \| Subsidiaries [Member]
Summary of Carrying value of long-term debt
Senior Notes		86
Payable To Subsidiary Trusts [Member]
Summary of Carrying value of long-term debt
AAG Holding Variable Rate Subordinated Debentures due May 2033	$ 20	$ 20

Long-Term Debt (Details 1) - USD ($) $ in Millions	Sep. 30, 2012	Dec. 31, 2011
Summary showing division of total long term debt
Unsecured obligations	$ 882	$ 840
Obligations secured by real estate	63	64
Other secured borrowings	21	30
Long-term Debt	$ 966	$ 934

Long-Term Debt (Details Textual) - USD ($) $ in Millions	1 Months Ended		9 Months Ended
Long-Term Debt (Details Textual) - USD ($) $ in Millions	Aug. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Interest rate on revolving debt facility			2.00%
Secured Borrowings guaranteed by AFG			$ 16	$ 17
Scheduled principal payments on debt in 2012			25
Scheduled principal payments on debt in 2013			20
Scheduled principal payments on debt in 2014			2
Scheduled principal payments on debt in 2015			14
Scheduled principal payments on debt in 2016			45
Scheduled principal payments on debt in 2017			0
AFG's revolving credit line			$ 500
Interest rate range for revolving credit facility			1.75% to 3.00% (currently 2%) over LIBOR
Amount borrowed under AFG revolving credit facility			$ 0
Scenario, Forecast [Member]
Debt Instrument [Line Items]
AFG's revolving credit line			$ 500
Line of credit, term			4 years
Minimum [Member]
Debt Instrument [Line Items]
Interest rate on revolving debt facility			1.75%
Maximum [Member]
Debt Instrument [Line Items]
Interest rate on revolving debt facility			3.00%
9-7/8% Senior Notes due June 2019 [Member]
Debt Instrument [Line Items]
Interest rate on debt instruments			9.875%
6-3/8% Senior Notes due June 2042 [Member]
Debt Instrument [Line Items]
Interest rate on debt instruments			6.375%
6-3/8% Senior Notes due June 2042 [Member] \| AFG [Member]
Debt Instrument [Line Items]
Proceeds from Issuance of Senior Long-term Debt		$ 230
5-3/4% Senior Notes due August 2042 [Member]
Debt Instrument [Line Items]
Interest rate on debt instruments			5.75%
7% Senior Notes due September 2050 [Member]
Debt Instrument [Line Items]
Interest rate on debt instruments			7.00%
7-1/8% Senior Debentures due February 2034 [Member]
Debt Instrument [Line Items]
Interest rate on debt instruments			7.125%
7-1/2% Senior Debentures due November 2033 [Member]
Debt Instrument [Line Items]
Interest rate on debt instruments			7.50%
7-1/4% Senior Debentures due January 2034 [Member]
Debt Instrument [Line Items]
Interest rate on debt instruments			7.25%
5-3/4% Senior Notes Due In August 2042 [Member] \| AFG [Member]
Debt Instrument [Line Items]
Proceeds from Issuance of Senior Long-term Debt	$ 125

Shareholder's Equity (Details) shares in Millions, $ / shares in Millions	Sep. 30, 2012 $ / shares shares
Voting Preferred Stock [Member]
Class of Stock [Line Items]
Preferred Stock, par value \| $ / shares	$ 0
Preferred Stock, shares authorized \| shares	12.5
Nonvoting Preferred Stock [Member]
Class of Stock [Line Items]
Preferred Stock, par value \| $ / shares	$ 0
Preferred Stock, shares authorized \| shares	12.5

Shareholders' Equity (Details 1) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2012

Sep. 30, 2011

Sep. 30, 2012

Sep. 30, 2011

Components of accumulated other comprehensive income

Accumulated other comprehensive income, net unrealized gains on securities, beginning balance

$ 771

^[1]

$ 605

$ 578

^[1]

$ 491

Other comprehensive income, net unrealized gains on securities, pretax

238

(24)

539

155

Other comprehensive income, net unrealized gains on securities, tax

(84)

(189)

(54)

Other comprehensive income, net unrealized gains on securities, noncontrolling interests

(4)

(2)

(7)

(4)

Other comprehensive income, net unrealized gains on securities, net of tax, attributable to parent

150

(17)

343

Accumulated other comprehensive income, net unrealized gains on securities, ending balance

921

^[1]

588

921

^[1]

588

Accumulated other comprehensive income, foreign currency translation adjustments, beginning balance

Other comprehensive income, foreign currency translation adjustments, pretax

(14)

(9)

Other comprehensive income, foreign currency translation adjustments, noncontrolling interests

(1)

Other comprehensive income, foreign currency translation adjustments, net of tax, attributable to parent

(13)

(8)

Other change in accumulated other comprehensive income, foreign currency translation adjustments

^[2]

(1)

Accumulated other comprehensive income, foreign currency translation adjustments, ending balance

Accumulated other comprehensive income, pension and other postretirement plans adjustments, beginning balance

(7)

(8)

Other comprehensive income, pension and other postretirement plans adjustments, pretax

Other comprehensive income, pension and other postretirement plans adjustments, net of tax, attributable to parent

Accumulated other comprehensive income, pension and other postretirement plans adjustments, ending balance

(7)

Accumulated other comprehensive income, total, beginning balance

773

615

580

495

Other comprehensive income, total, pretax

248

(38)

549

147

Other comprehensive income, total, tax

(84)

(189)

(54)

Other comprehensive income, total, noncontrolling interests

(5)

(1)

(8)

(3)

Other comprehensive income, total, net of tax, attributable to parent

159

(30)

352

Other change in accumulated other comprehensive, total

^[2]

(1)

Accumulated other comprehensive income, total, ending balance

$ 931

$ 585

$ 931

$ 585

[1]	Includes net unrealized gains of $23 million at September 30, 2012 compared to net unrealized losses of $1 million at June 30, 2012 and $16 million at December 31, 2011 related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings.
[2]	Other relates to the third quarter of 2012 acquisition of noncontrolling interest in a subsidiary.

Shareholders' Equity (Details Textual) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Mar. 31, 2012	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total compensation expense related to stock incentive plans	$ 5		$ 20	$ 16
Stockholders' Equity (Textual) [Abstract]
Expected dividend yield			1.80%
Expected volatility			39.00%
Expected term (in years)			7 years 3 months 18 days
Risk-free rate			1.40%
Restricted Common Stock, shares issued			133,931
Restricted Common Stock, fair value per share			$ 38.10
Fair value per share of options granted			$ 13.02
Net of tax unrealized gains (losses) related to credit-only impaired securities	$ 23		$ 23		$ (1)	$ (16)
Stock incentive plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock options issued under stock incentive plan			1,100,000
Common Stock options issued under stock incentive plan, average exercise price			$ 38.10
Annual Co-CEO Equity Bonus Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Other benefit plans, shares		111,270
Common Stock issued, fair value per share		$ 38.38

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		24 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2006
Income Taxes (Textual) [Abstract]
Non-deductible losses related to managed investment entities	$ 18		$ 64	$ 47
Tax exempt income related to managed investment entities		$ 8
Decrease in the liability for unrecognized tax benefits	28		28
Decrease in related accrued interest	13		$ 13
Change in AFG's liability for uncertain tax positions	10
Positive Outcome of Litigation [Member]
Gain Contingencies [Line Items]
Period of discretionary appeal			90 days
Tax Litigation Settlement [Member]
Income Taxes (Textual) [Abstract]
Tax litigation settlement	$ 28
Expected refund of tax and interest paid to the IRS					$ 17

Subsequent Event (Details) $ in Billions	1 Months Ended
Subsequent Event (Details) $ in Billions	Oct. 31, 2012 USD ($)
Subsequent Events [Abstract]
Estimated total industry insured losses from catastrophic event	$ 20
Estimated losses from catastrophic event as a percentage of shareholders' equity	1.00%