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What changed in AMERICAN FINANCIAL GROUP INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AMERICAN FINANCIAL GROUP INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+473 added−509 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-23)

Top changes in AMERICAN FINANCIAL GROUP INC's 2024 10-K

473 paragraphs added · 509 removed · 429 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

68 edited+4 added−15 removed52 unchanged
Biggest changeThe following table (in millions) is a progression of the property and casualty group’s A&E reserves. 2023 2022 2021 Reserves at beginning of year $ 385 $ 408 $ 422 Incurred losses and LAE — — — Paid losses and LAE (15) (23) (14) Reserves at end of year, net of reinsurance recoverable 370 385 408 Reinsurance recoverable, net of allowance 128 140 147 Gross reserves at end of year $ 498 $ 525 $ 555 In addition to its ongoing internal monitoring of asbestos and environmental exposures, AFG has historically conducted periodic comprehensive external studies of its asbestos and environmental reserves relating to the run-off operations of its property and casualty insurance segment and its exposures related to former railroad and manufacturing operations and sites with the aid of specialty actuarial, engineering and consulting firms and outside counsel, with an in-depth internal review during all other years. 12 Table of Contents An in-depth internal review of AFG’s A&E reserves was completed in the third quarter of 2023 by AFG’s internal A&E claims specialists in consultation with specialty outside counsel.
Biggest changeThe following table (in millions) is a progression of the property and casualty group’s A&E reserves. 2024 2023 2022 Reserves at beginning of year, net of reinsurance recoverable $ 370 $ 385 $ 408 Incurred losses and LAE — — — Paid losses and LAE (11) (15) (23) Reserves at end of year, net of reinsurance recoverable 359 370 385 Reinsurance recoverable, net of allowance 135 128 140 Gross reserves at end of year $ 494 $ 498 $ 525 AFG annually conducts a comprehensive review of its asbestos and environmental reserves.
Management believes that AFG’s ability to grow book value per share at a double-digit annual rate over time is evidence that the Company’s culture, business model and employee incentive plans create a compelling structure to build long-term value for AFG’s shareholders.
Management believes that AFG’s ability to grow book value per share at a double-digit annual rate over time is evidence that the Company’s culture, business model and employee incentive plans create a structure to build long-term value for AFG’s shareholders.
As highlighted in the illustration below, over the past 25 plus years, AFG has sharpened its focus on the businesses that management knows best. This has been accomplished through organic growth, carefully selected acquisitions, start-ups and dispositions. On July 3, 2023, AFG completed the acquisition of Crop Risk Services (“CRS”) from American International Group (“AIG”).
As highlighted in the illustration below, over the past 25 plus years, AFG has sharpened its focus on the businesses that management knows best. This has been accomplished through organic growth, carefully selected acquisitions, start-ups and dispositions. In July 2023, AFG completed the acquisition of Crop Risk Services (“CRS”) from American International Group.
With the benefit of this direct feedback, management can assess employees’ perspectives on salient issues, thereby informing management’s decisions on which practices should remain unchanged and which should be considered for potential enhancement or revision. AFG’s most recent Employee Survey was conducted in 2022. Employee participation was high, with 92% of the Company’s employees completing the survey.
With the benefit of this direct feedback, management can assess employees’ perspectives on salient issues, thereby informing management’s decisions on which practices should remain unchanged and which should be considered for potential enhancement or revision. AFG’s most recent Employee Survey was conducted in 2024. Employee participation was high, with 92% of the Company’s employees completing the survey.
AFG offers onsite fitness centers at many of its locations, financial incentives for taking care of one’s health and health management programs to increase employees’ engagement with their healthcare providers. AFG also provides six weeks of paid parental leave for employees to care for and bond with their newborn or newly adopted child.
AFG offers onsite fitness centers at many of its locations, financial incentives for taking care of one’s physical and emotional health and health management programs to increase employees’ engagement with their healthcare providers. AFG also provides six weeks of paid parental leave for employees to care for and bond with their newborn or newly adopted child.
In addition, employees have access to professional investment and retirement planning advisors to help prepare for their financial future. Safety and Security AFG prioritizes workplace safety and is dedicated to minimizing employees’ risk of accident or injury. AFG’s obligations and procedures are outlined in our Workplace Safety and Security Policy along with our Safety and Accident Reporting Policy.
In addition, employees have access to professional investment and retirement planning advisors to help prepare for their financial future. Safety and Security AFG prioritizes workplace safety and is dedicated to minimizing employees’ risk of accident or injury. AFG’s obligations and procedures are outlined in its Workplace Safety and Security Policy along with its Safety and Accident Reporting Policy.
Likewise, AFG will withdraw from markets that do not meet its profit objectives or business strategy. 8 Table of Contents 2023 SPECIALTY PROPERTY AND CASUALTY BY SUB-SEGMENT (*) Excludes underwriting profits and losses recorded outside of AFG’s Specialty property and casualty group.
Likewise, AFG will withdraw from markets that do not meet its profit objectives or business strategy. 8 Table of Contents 2024 SPECIALTY PROPERTY AND CASUALTY BY SUB-SEGMENT (*) Excludes underwriting profits and losses recorded outside of AFG’s Specialty property and casualty group.
Approximately 2% of AFG’s direct written premiums in 2023 were derived from non U.S.-based insurers. 2023 2022 2021 2023 2022 2021 California 12.6 % 12.7 % 13.0 % New Jersey 2.5 % 2.3 % 2.4 % Florida 8.9 % 8.2 % 8.7 % Iowa 2.5 % 2.7 % 2.4 % Texas 7.5 % 7.0 % 6.6 % Michigan 2.3 % 2.4 % 2.3 % New York 5.8 % 5.9 % 6.8 % Pennsylvania 2.3 % 2.2 % 2.5 % Illinois 5.4 % 6.2 % 6.2 % North Carolina 2.2 % 2.0 % 2.0 % Georgia 3.4 % 3.2 % 3.3 % Ohio 2.1 % 2.2 % 2.2 % Missouri 2.8 % 2.9 % 2.5 % Other 34.6 % 34.5 % 33.9 % Indiana 2.6 % 2.7 % 2.6 % 100.0 % 100.0 % 100.0 % Kansas 2.5 % 2.9 % 2.6 % 2023 STATUTORY DIRECT WRITTEN PREMIUMS Reinsurance Consistent with standard practice of most insurance companies, AFG reinsures a portion of its property and casualty business with other insurance companies and assumes a relatively small amount of business from other insurers.
Approximately 2% of AFG’s direct written premiums in 2024 were derived from non U.S.-based insurers. 2024 2023 2022 2024 2023 2022 California 12.3 % 12.6 % 12.7 % Kansas 2.5 % 2.5 % 2.9 % Florida 8.2 % 8.9 % 8.2 % Iowa 2.4 % 2.5 % 2.7 % Texas 7.9 % 7.5 % 7.0 % Ohio 2.4 % 2.1 % 2.2 % New York 6.0 % 5.8 % 5.9 % Missouri 2.3 % 2.8 % 2.9 % Illinois 5.5 % 5.4 % 6.2 % Michigan 2.3 % 2.3 % 2.4 % Georgia 3.6 % 3.4 % 3.2 % North Carolina 2.1 % 2.2 % 2.0 % Indiana 2.7 % 2.6 % 2.7 % Other 34.8 % 34.6 % 34.5 % New Jersey 2.5 % 2.5 % 2.3 % 100.0 % 100.0 % 100.0 % Pennsylvania 2.5 % 2.3 % 2.2 % 2024 STATUTORY DIRECT WRITTEN PREMIUMS Reinsurance Consistent with standard practice of most insurance companies, AFG reinsures a portion of its property and casualty business with other insurance companies and assumes a relatively small amount of business from other insurers.
Best Company’s Review & Preview Reports for preceding years. As with other property and casualty insurers, AFG’s operating results can be adversely affected by unpredictable catastrophe losses. Certain natural disasters (hurricanes, severe storms, earthquakes, tornadoes, floods, etc.) and other incidents of major loss (explosions, civil disorder, terrorist events, fires, etc.) are classified as catastrophes by industry associations.
Best Company’s Review & Preview Reports. As with other property and casualty insurers, AFG’s operating results can be adversely affected by unpredictable catastrophe losses. Certain natural disasters (hurricanes, severe storms, earthquakes, tornadoes, floods, etc.) and other incidents of major loss (explosions, civil disorder, terrorist events, fires, etc.) are classified as catastrophes by industry associations.
Statutory information is only prepared for AFG’s U.S.-based subsidiaries, which represented approximately 98% of AFG’s direct written premiums in 2023, and is provided for industry comparisons or where comparable GAAP information is not readily available.
Statutory information is only prepared for AFG’s U.S.-based subsidiaries, which represented approximately 98% of AFG’s direct written premiums in 2024, and is provided for industry comparisons or where comparable GAAP information is not readily available.
For a discussion of these uncertainties, see Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — “Uncertainties — Asbestos and Environmental-related (“A&E”) Insurance Reserves” and Note N — “Contingencies” to the financial statements.
For a discussion of these uncertainties, see Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — “Uncertainties — Asbestos and Environmental-related (“A&E”) Insurance Reserves” and Note M — “Contingencies” to the financial statements.
AFG’s property and casualty insurance operations are conducted through the subsidiaries listed in the following table, which includes independent financial strength ratings and 2023 gross written premiums (in millions) for each major subsidiary. These ratings are generally based on concerns for policyholders and agents and are not directed toward the protection of investors.
AFG’s property and casualty insurance operations are conducted through the subsidiaries listed in the following table, which includes independent financial strength ratings and 2024 gross written premiums (in millions) for each subsidiary. These ratings are generally based on concerns for policyholders and agents and are not directed toward the protection of investors.
To date, the Insurance Data Security 16 Table of Contents Model Law has been adopted by a number of states, including Ohio, where several of AFG’s insurance subsidiaries are domiciled. Certain states are developing or have developed regulations related to privacy and data security.
To date, the Insurance Data Security Model Law has been adopted by a number of states, including Ohio, where several of AFG’s insurance subsidiaries are domiciled. Certain states are developing or have developed regulations related to privacy and data security.
AFG has foreign insurance company subsidiaries domiciled in the United Kingdom, Ireland, Mexico, Bermuda, and the Cayman Islands and branch operations in Canada and Singapore, all of which are subject to regulation by the insurance regulator of such jurisdiction. 17 Table of Contents
AFG has foreign insurance company subsidiaries domiciled in the United Kingdom, Ireland, Mexico, Bermuda, and the Cayman Islands and branch operations in Canada and Singapore, all of which are subject to regulation by the insurance regulator of such jurisdiction.
Losses from these incidents are usually tracked separately from other business of insurers because of their sizable effects on overall operations. Total net losses to AFG’s insurance operations from current accident year catastrophes were $162 million in 2023, $88 million in 2022 and $86 million in 2021 and are included in the table above.
Losses from these incidents are usually tracked separately from other business of insurers because of their sizable effects on overall operations. Total net losses to AFG’s insurance operations from current accident year catastrophes were $180 million in 2024, $162 million in 2023 and $88 million in 2022 and are included in the table above.
Recoverables from the following companies were individually between 5% and 13% of AFG’s total property and casualty reinsurance recoverable (including prepaid reinsurance premiums and net of payables to reinsurers) at December 31, 2023: Everest Reinsurance Company, Hannover Rueck SE, Munich Reinsurance America, Inc., Swiss Reinsurance America Corporation and Transatlantic Reinsurance Company.
Recoverables from the following companies were individually between 5% and 12% of AFG’s total property and casualty reinsurance recoverable (including prepaid reinsurance premiums and net of payables to reinsurers) at December 31, 2024: Everest Reinsurance Company, Hannover Rueck SE, Munich Reinsurance America, Inc., Swiss Reinsurance America Corporation and Transatlantic Reinsurance Company.
Major differences for statutory accounting include charging policy acquisition costs to expense as incurred rather than spreading the costs over the periods covered by the policies; reporting investment grade bonds and redeemable preferred stocks at amortized cost rather than fair value; netting of reinsurance recoverables and prepaid reinsurance premiums against the corresponding liabilities rather than reporting such items separately; and charging to surplus certain GAAP assets, such as furniture and fixtures and agents’ balances over 90 days old. 5 Table of Contents AFG’s statutory combined ratio averaged 90.9% for the period 2014 to 2023 as compared to 98.4% for the property and casualty commercial lines industry over the same period.
Major differences for statutory accounting include charging policy acquisition costs to expense as incurred rather than spreading the costs over the periods covered by the policies; reporting investment grade bonds and redeemable preferred stocks at amortized cost rather than fair value; netting of reinsurance recoverables and prepaid reinsurance premiums against the corresponding liabilities rather than reporting such items separately; and charging to surplus certain GAAP assets, such as furniture and fixtures and agents’ balances over 90 days old. 5 Table of Contents AFG’s statutory combined ratio averaged 90.6% for the period 2015 to 2024 as compared to 98.3% for the property and casualty commercial lines industry over the same period.
Management was encouraged by this strong engagement and by what management viewed as positive overall results, which on the whole reaffirmed management’s belief that employees appreciate the Company’s culture and the 13 Table of Contents opportunities available to them and understand their link to AFG’s strategy and business.
Management was encouraged by this strong engagement and by what management viewed as positive overall results, which on the whole reaffirmed management’s belief that employees appreciate the Company’s culture and the opportunities available to them and understand their link to AFG’s strategy and business.
The Employee Survey enables each participant to provide anonymous feedback in response to questions on a broad scope of issues, including culture, engagement, development, diversity, empowerment and other issues that AFG believes are important measures of long-term employee satisfaction.
The Employee Survey enables each participant to provide anonymous feedback in response to questions on a broad scope of issues, including culture, engagement, development, benefits, resources and other issues that AFG believes are important measures of long-term employee satisfaction.
AFG believes that its strong culture and values, along with the resources, competitive compensation and benefits, training and development and other opportunities afforded its employees, contribute meaningfully to what the Company views as positive retention and recruitment trends over the long-term. The Company’s voluntary turnover rate in 2023 was approximately 7.4%.
AFG believes that its strong culture and values, along with the resources, competitive compensation and benefits, training and development and other opportunities afforded its employees, contribute meaningfully to what the Company views as positive retention and recruitment trends over the long-term. The Company’s voluntary turnover rate in 2024 was 7.1%.
The following table presents (by type of coverage) the amount of each loss above the specified retention covered by treaty reinsurance programs in AFG’s U.S.-based property and casualty insurance operations (in millions) as of January 1, 2024: Reinsurance Coverage AFG Maximum Loss (b) Primary Retention Coverage Amount AFG Participation (a) % $ U.S.-based operations: California Workers’ Compensation $ 2 $ 148 1 % $ 1 $ 3 Summit Workers’ Compensation 5 35 — % — 5 Other Workers’ Compensation 2 48 3 % 1 3 Commercial Umbrella 2 48 13 % 6 8 Property — General 10 40 3 % 1 11 Property — Catastrophe (c) 70 55 — % — 70 (a) Includes the participation of AFG’s internal reinsurance program.
The following table presents (by type of coverage) the amount of each loss above the specified retention covered by treaty reinsurance programs in AFG’s U.S.-based property and casualty insurance operations (in millions) as of January 1, 2025: Reinsurance Coverage AFG Maximum Loss (b) Primary Retention Coverage Amount AFG Participation (a) % $ U.S.-based operations: California Workers’ Compensation $ 2 $ 148 1 % $ 1 $ 3 Summit Workers’ Compensation 6 34 5 % 2 8 Other Workers’ Compensation 2 48 3 % 1 3 Commercial Umbrella 2 48 13 % 6 8 Property — General 10 40 — % — 10 Property — Catastrophe 70 205 — % — 70 (a) Includes the participation of AFG’s internal reinsurance program.
While there is no directly comparable index to AFG’s portfolio, shown below is a widely used benchmark in the financial services industry. 2023 2022 2021 Total return on AFG’s fixed maturities 7.2 % (4.4 %) 1.9 % Barclays Capital U.S.
While there is no directly comparable index to AFG’s portfolio, shown below is a widely used benchmark in the financial services industry. 2024 2023 2022 Total return on AFG’s fixed maturities 6.2 % 7.2 % (4.4 %) Barclays Capital U.S.
AFG’s net exposure to a catastrophic earthquake or windstorm that industry models indicate should statistically occur once in every 500 years (a “500-year event”) is expected to be approximately 2% of AFG’s Shareholders’ Equity. 7 Table of Contents Property and Casualty Insurance Products AFG is focused on growth opportunities in what it believes to be more profitable specialty businesses where AFG personnel are experts in particular lines of business or customer groups.
AFG’s net exposure to a catastrophic earthquake or windstorm that industry models indicate should statistically occur once in every 500 years (a “500-year event”) is expected to be approximately 3% of AFG’s Shareholders’ Equity (less than 8% without the catastrophe bond). 7 Table of Contents Property and Casualty Insurance Products AFG is focused on growth opportunities in what it believes to be more profitable specialty businesses where AFG personnel are experts in particular lines of business or customer groups.
Universal Bond Index 6.2 % (13.0 %) (1.1 %) 15 Table of Contents The following table shows AFG’s available for sale fixed maturity investments by Standard & Poor’s Corporation or comparable rating as of December 31, 2023 (dollars in millions).
Universal Bond Index 2.0 % 6.2 % (13.0 %) The following table shows AFG’s available for sale fixed maturity investments by Standard & Poor’s Corporation or comparable rating as of December 31, 2024 (dollars in millions).
A reconciliation of the liability for losses and LAE reported in the annual statements filed with the state insurance departments in accordance with statutory accounting principles (“SAP”) to the liability reported in the accompanying consolidated financial statements in accordance with GAAP at December 31, 2023 follows (in millions): Liability reported on a SAP basis, net of $101 million of retroactive reinsurance $ 8,412 Reinsurance recoverables, net of allowance 4,288 Other, including reserves of foreign insurers 387 Liability reported on a GAAP basis $ 13,087 Asbestos and Environmental-related (“A&E”) Insurance Reserves AFG’s property and casualty group, like many others in the industry, has A&E claims arising in most cases from general liability policies written more than thirty-five years ago.
A reconciliation of the liability for losses and LAE reported in the annual statements filed with the state insurance departments in accordance with statutory accounting principles (“SAP”) to the liability reported in the accompanying consolidated financial statements in accordance with GAAP at December 31, 2024 follows (in millions): Liability reported on a SAP basis, net of $83 million of retroactive reinsurance $ 8,840 Reinsurance recoverables, net of allowance 4,957 Other, including reserves of foreign insurers 382 Liability reported on a GAAP basis $ 14,179 Asbestos and Environmental-related (“A&E”) Insurance Reserves AFG’s property and casualty group, like many others in the industry, has A&E claims arising in most cases from general liability policies written more than thirty-five years ago.
Under applicable restrictions, the maximum amount of dividends available to AFG in 2024 from its insurance subsidiaries without seeking prior regulatory approval is approximately $944 million. Investment Regulation Investments must comply with applicable laws and regulations that prescribe the kind, quality and concentration of investments.
Under applicable restrictions, the maximum amount of dividends available to AFG in 2025 from its insurance subsidiaries without seeking prior regulatory approval is approximately $1.00 billion. Investment Regulation Investments must comply with applicable laws and regulations that prescribe the kind, quality and concentration of investments.
The table below compares the total return, which includes changes in fair value, on AFG’s fixed maturities held by continuing operations to a comparable public index.
The table below compares the total return, which includes changes in fair value, on AFG’s fixed maturities to a comparable public index.
AFG believes that when employees feel actively engaged with the Company’s mission and strategy, they deliver higher levels of service to its customers and create better results for its business.
AFG believes when employees are engaged and aligned with the Company’s mission and strategy, they deliver higher levels of service to its customers and create better results for its business.
See Note O — “Insurance — Property and Casualty Insurance Reserves” to the financial statements for information on the development of AFG’s liability for unpaid losses and loss adjustment expenses by accident year as well as a progression of the liability on a GAAP basis over the past three years.
See Note N — “Insurance — Insurance Reserves” to the financial statements for information on the development of AFG’s liability for unpaid losses and LAE by accident year as well as a progression of the liability on a GAAP basis over the past three years.
Although the cost of catastrophe reinsurance varies depending on exposure and the level of worldwide loss activity, AFG continues to obtain reinsurance coverage in adequate amounts at acceptable rates. In January 2024, AFG’s property and casualty insurance subsidiaries renewed their catastrophe reinsurance coverages.
In addition, AFG purchases catastrophe reinsurance for its workers’ compensation businesses. Although the cost of catastrophe reinsurance varies depending on exposure and the level of worldwide loss activity, AFG continues to obtain reinsurance coverage in adequate amounts at acceptable rates. In January 2025, AFG’s property and casualty insurance subsidiaries renewed their catastrophe reinsurance coverages.
Premium Distribution The following table shows the net written premiums by sub-segment for AFG’s property and casualty insurance operations for 2023, 2022 and 2021 (in millions): 2023 2022 2021 Property and transportation $ 2,551 $ 2,515 $ 2,157 Specialty casualty 2,944 2,728 2,540 Specialty financial 935 711 658 Other specialty (*) 262 252 218 $ 6,692 $ 6,206 $ 5,573 (*) Premiums assumed by AFG’s internal reinsurance program from the operations that make up AFG’s Specialty property and casualty insurance sub-segments. 9 Table of Contents The geographic distribution of statutory direct written premiums by AFG’s U.S.-based insurers for 2023, 2022 and 2021 is shown below.
Premium Distribution The following table shows the net written premiums by sub-segment for AFG’s property and casualty insurance operations for 2024, 2023 and 2022 (in millions): 2024 2023 2022 Property and transportation $ 2,811 $ 2,551 $ 2,515 Specialty casualty 3,043 2,944 2,728 Specialty financial 1,045 935 711 Other specialty (*) 240 262 252 $ 7,139 $ 6,692 $ 6,206 (*) Premiums assumed by AFG’s internal reinsurance program from the operations that make up AFG’s Specialty property and casualty insurance sub-segments. 9 Table of Contents The geographic distribution of statutory direct written premiums by AFG’s U.S.-based insurers for 2024, 2023 and 2022 is shown below.
The Company believes that its overall average employee tenure, which is nearly 10.5 years, and average tenure of over 18 years for the Company’s approximately 175 most senior leaders, evidences the Company’s relative success in growing careers.
The Company believes that its overall average employee tenure, which is nearly 10.1 years, and average tenure of almost 20 years for the Company’s approximately 200 most senior leaders, evidences the Company’s relative success in growing careers.
Due to the specialty nature of these coverages, competition is based primarily on service to policyholders and agents, specific characteristics of products offered and reputation for claims handling. Financial strength ratings, price, commissions and profit-sharing terms are also important factors.
AFG also competes with self-insurance plans, captive programs and risk retention groups. Due to the specialty nature of these coverages, competition is based primarily on service to policyholders and agents, specific characteristics of products offered and reputation for claims handling. Financial strength ratings, price, commissions and profit-sharing terms are also important factors.
Reinsurance is provided on either a facultative or treaty basis. Facultative reinsurance is generally provided on a risk-by-risk basis. Individual risks are ceded and assumed based on an offer and acceptance of risk by each party to the transaction.
Reinsurance is provided on either a facultative or treaty basis. Facultative reinsurance is generally provided on a risk-by-risk basis. Individual risks are ceded and assumed based on an offer and acceptance of risk by each party to the transaction. AFG purchases facultative reinsurance, both pro rata and excess of loss, depending on the risk and available reinsurance markets.
CRS is a primary crop insurance general agent based in Decatur, Illinois, with crop year 2022 gross written premiums of approximately $1.2 billion and was the seventh largest provider of multi-peril crop insurance in the United States based on 2022 premiums.
CRS is a primary crop insurance general agent based in Decatur, Illinois, and it was the seventh largest provider of multi-peril crop insurance in the United States based on 2022 premiums.
To help inform management on employees’ views and perspectives on key matters, on a triennial basis, AFG has conducted, and now plans to conduct on a biennial basis, an employee engagement survey (“Employee Survey”).
To help inform management on employees’ views and perspectives on key matters, AFG generally conducts an employee engagement survey (“Employee Survey”) on a biennial basis.
Ratings Gross Written Premiums AM Best S&P Insurance Group Great American Insurance A+ A+ $ 7,353 National Interstate A+ not rated 1,112 Summit (Bridgefield Casualty and Bridgefield Employers) A+ A+ 608 Republic Indemnity A+ A+ 218 Mid-Continent Casualty A+ A+ 190 Other 175 $ 9,656 The primary objectives of AFG’s property and casualty insurance operations are to achieve solid underwriting profitability and provide excellent service to its policyholders and agents.
Ratings Gross Written Premiums AM Best S&P Insurance Group Great American Insurance A+ A+ $ 8,142 National Interstate A+ not rated 1,210 Summit (Bridgefield Casualty and Bridgefield Employers) A+ A+ 596 Republic Indemnity A+ A+ 198 Mid-Continent Casualty A+ A+ 193 Other 194 $ 10,533 The primary objectives of AFG’s property and casualty insurance operations are to achieve solid underwriting profitability and provide excellent service to its policyholders and agents.
Property and Casualty Results Performance measures such as underwriting profit or loss and related combined ratios are often used by property and casualty insurers to help users of their financial statements better understand the company’s performance.
(*) The source of the commercial lines industry ratios is ©2025 A.M. Best Company’s Review & Preview Reports. Property and Casualty Results Performance measures such as underwriting profit or loss and related combined ratios are often used by property and casualty insurers to help users of their financial statements better understand the company’s performance.
Competition AFG’s property and casualty insurance businesses compete with other individual insurers, state funds and insurance groups of varying sizes, some of which are mutual insurance companies possessing competitive advantages in that all their profits inure to their policyholders. See Item 1A — Risk Factors. AFG also competes with self-insurance plans, captive programs and risk retention groups.
The property and casualty insurance group writes insurance through several thousand agents and brokers. Competition AFG’s property and casualty insurance businesses compete with other individual insurers, state funds and insurance groups of varying sizes, some of which are mutual insurance companies possessing competitive advantages in that all their profits inure to their policyholders. See Item 1A — Risk Factors.
AFG generally seeks to reduce its exposure to catastrophes through individual risk selection, including minimizing coastal and known fault-line exposures, and through the purchase of reinsurance.
AFG generally seeks to reduce its exposure to catastrophes through individual risk selection, including minimizing coastal and known fault-line exposures, and through the purchase of reinsurance. In addition to traditional reinsurance, AFG has purchased coverage through a catastrophe bond structure.
(Information on AFG’s Internet site is not part of this Form 10-K.) See Note D — “Segments of Operations” to the financial statements for information on AFG’s assets, revenues and earnings before income taxes by segment. 2 Table of Contents Building Long-Term Value for AFG Shareholders AFG allows each of its businesses the autonomy to make decisions related to underwriting, claims and policy servicing.
(Information on or accessible through AFG’s website is not part of this Form 10-K.) See Note C — “Segments of Operations” to the financial statements for information on AFG’s assets, revenues and earnings before income taxes by segment. 2 Table of Contents Top Tier Specialty Property and Casualty Insurer AFG allows each of its businesses the autonomy to make decisions related to underwriting, claims and policy servicing.
The following chart shows the allocation of AFG’s $15.26 billion investment portfolio at December 31, 2023: Investment Portfolio For additional information on AFG’s investments, see Note F — “Investments” to the financial statements and Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — “Investments. ” AFG’s earned yield (net investment income divided by average invested assets) on fixed maturities held by continuing operations was 4.7% for 2023, 3.5% for 2022 and 3.0% for 2021.
Management believes that AFG’s investment expertise has been the driver of strong investment results and effective portfolio risk management over many years. 14 Table of Contents The following chart shows the allocation of AFG’s $15.85 billion investment portfolio at December 31, 2024: Investment Portfolio For additional information on AFG’s investments, see Note E — “Investments” to the financial statements and Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — “Investments. ” AFG’s earned yield (investment income divided by average invested assets) on fixed maturities was 5.0% for 2024, 4.7% for 2023 and 3.5% for 2022.
Some agents and brokers are eligible for a bonus commission based on the overall profitability of policies or volume of business placed with AFG by the broker or agent in a particular year. The property and casualty insurance group writes insurance through several thousand agents and brokers.
Independent agents and brokers generally receive a commission on the sale of each policy. Some agents and brokers are eligible for a bonus commission based on the overall profitability of policies or volume of business placed with AFG by the broker or agent in a particular year.
See Note D — “Segments of Operations” to the financial statements for the reconciliation of AFG’s earnings before income taxes by significant business segment to the statement of earnings. 6 Table of Contents The following table shows the performance of AFG’s property and casualty insurance operations (dollars in millions): 2023 2022 2021 Gross written premiums $ 9,656 $ 9,057 $ 7,946 Ceded reinsurance (2,964) (2,851) (2,373) Net written premiums $ 6,692 $ 6,206 $ 5,573 Net earned premiums $ 6,531 $ 6,085 $ 5,404 Loss and LAE 4,017 3,629 3,157 Underwriting expenses 1,883 1,680 1,514 Underwriting gain $ 631 $ 776 $ 733 GAAP ratios: Loss and LAE ratio 61.6 % 59.7 % 58.5 % Underwriting expense ratio 28.8 % 27.6 % 28.0 % Combined ratio 90.4 % 87.3 % 86.5 % Statutory ratios: Loss and LAE ratio 60.3 % 57.3 % 55.9 % Underwriting expense ratio 30.2 % 29.7 % 29.6 % Combined ratio 90.5 % 87.0 % 85.5 % Industry statutory combined ratio (*) All lines 102.2 % 104.0 % 100.0 % Commercial lines 94.0 % 98.4 % 95.9 % (*) The sources of the industry ratios are ©2024 Conning, Inc., as published in Conning’s Property-Casualty Forecast & Analysis by Line of Insurance 2023Q4 edition and ©2023 A.M.
See Note C — “Segments of Operations” to the financial statements for the reconciliation of AFG’s earnings before income taxes by significant business segment to the statement of earnings. 6 Table of Contents The following table shows the performance of AFG’s property and casualty insurance operations (dollars in millions): 2024 2023 2022 Gross written premiums $ 10,533 $ 9,656 $ 9,057 Ceded reinsurance (3,394) (2,964) (2,851) Net written premiums $ 7,139 $ 6,692 $ 6,206 Net earned premiums $ 7,036 $ 6,531 $ 6,085 Loss and LAE 4,455 4,017 3,629 Underwriting expenses 1,961 1,883 1,680 Underwriting gain $ 620 $ 631 $ 776 GAAP ratios: Loss and LAE ratio 63.3 % 61.6 % 59.7 % Underwriting expense ratio 27.9 % 28.8 % 27.6 % Combined ratio 91.2 % 90.4 % 87.3 % Statutory ratios: Loss and LAE ratio 61.3 % 60.3 % 57.3 % Underwriting expense ratio 29.6 % 30.2 % 29.7 % Combined ratio 90.9 % 90.5 % 87.0 % Industry statutory combined ratio (*) All lines 98.9 % 101.9 % 103.1 % Commercial lines 97.0 % 96.5 % 95.4 % (*) The source of the industry ratios is ©2025 A.M.
For AFG’s U.S.-based operations, the Company placed $55 million of coverage in excess of a $70 million per event primary retention in the traditional reinsurance markets.
For AFG’s U.S.-based operations, the Company placed $205 million of coverage in excess of a $70 million per event primary retention in the traditional reinsurance markets. In addition to traditional reinsurance, AFG has historically purchased coverage through a catastrophe bond structure.
In accordance with industry practices, such adjustments are reflected in current year operations. Generally, reserves for reinsurance assumed and involuntary pools and associations are reflected in AFG’s results at the amounts reported by those entities.
These estimates are subject to the effects of changes in claim amounts and frequency and are periodically reviewed and adjusted as additional information becomes known. In accordance with industry practices, such adjustments are reflected in current year operations. Generally, reserves for reinsurance assumed and involuntary pools and associations are reflected in AFG’s results at the amounts reported by those entities.
AFG is also subject to other federal laws, such as the Terrorism Risk Insurance Act (“TRIA”), the Nonadmitted and Reinsurance Reform Act (“NRRA”), the U.S. Foreign Corrupt Practices Act (“FCPA”), and the rules and regulations of the Office of Foreign Assets Control (“OFAC”).
For instance, privacy laws, such as the Gramm-Leach-Bliley Act and the Fair Credit Reporting Act, affect AFG’s day-to-day operations. AFG is also subject to other federal laws, such as the Terrorism Risk Insurance Act, the Nonadmitted and Reinsurance Reform Act, the U.S. Foreign Corrupt Practices Act and the rules and regulations of the Office of Foreign Assets Control.
Board and Committee Oversight Our Board of Directors or its Committees discuss with our Co-CEOs and other senior management members, including directly with the Chief Administrative Officer and Chief Human Resources Officer, a range of human capital management issues, including succession planning and development, compensation, benefits, labor trends, including recruitment and retention, engagement, diversity, equity and inclusion and employee feedback. 14 Table of Contents Corporate Social Responsibility Report Please refer to the Company’s Corporate Social Responsibility Report located on AFG’s website for more information regarding human capital programs and initiatives.
Board and Committee Oversight Our Board of Directors or its Committees discuss with our Co-CEOs and other senior management members, including directly with the Chief Administrative Officer and Chief Human Resources Officer, a range of human capital management issues, including succession planning and development, compensation, benefits, labor trends, including recruitment and retention, engagement and employee feedback.
During both 2023 and 2022, AFG reinsured 50% 11 Table of Contents of its crop premiums not reinsured by the FCIC in the private market and purchased stop loss protection coverage for the remaining portion of the business. In 2024, AFG expects to continue to reinsure 50% of the premiums not reinsured by the FCIC in the private market.
This quota share provides for a ceding commission to AFG and a profit-sharing provision. During both 2024 and 2023, AFG reinsured 50% of its crop premiums not reinsured by the FCIC in the private market and purchased stop loss protection coverage for the remaining portion of the business.
SEC filings, news releases, AFG’s Code of Ethics applicable to directors, officers and employees, AFG’s Corporate Social Responsibility Report and other information may be accessed free of charge through AFG’s Internet site at: www.AFGinc.com.
AFG’s address is 301 East Fourth Street, Cincinnati, Ohio 45202; its phone number is (513) 579-2121. SEC filings, news releases, AFG’s Code of Ethics applicable to directors, officers and employees, AFG’s Corporate Social Responsibility Report and other information may be accessed free of charge through AFG’s website at: www.AFGinc.com.
At December 31, 2023, 97% (based on statutory carrying value of $10.54 billion) of AFG’s fixed maturity investments held by its insurance companies had a National Association of Insurance Commissioners (“NAIC”) designation of 1 or 2 (the highest of the six designations) based not only on the probability of loss but also on the severity of loss.
At December 31, 2024, 96% (based on statutory carrying value of $10.46 billion) of AFG’s fixed maturity investments held by its insurance companies had a National Association of Insurance Commissioners (“NAIC”) designation of 1 or 2 (the highest of the six designations) based not only on the probability of loss but also on the severity of loss. 15 Table of Contents Regulation AFG’s insurance company subsidiaries are subject to U.S. and international regulation in the jurisdictions where they do business.
The 2023 internal review identified no new trends and recent claims activity was generally consistent with AFG’s expectations resulting from AFG’s in-depth internal reviews in 2022 and 2021 and most recent external study in 2020. As a result, the 2023 review resulted in no net change to AFG’s property and casualty insurance segment’s asbestos and environmental reserves.
The 2024 internal review identified no new trends and recent claims activity was generally consistent with AFG’s expectations resulting from AFG’s in-depth internal reviews in 12 Table of Contents 2023 and 2022 and most recent external study in 2020.
The members of the Great American Insurance Group have been in business for over 150 years. Management believes that approximately 55% of the 2023 gross written premiums in AFG’s Specialty property and casualty group are produced by “top 10” ranked businesses. AFG’s address is 301 East Fourth Street, Cincinnati, Ohio 45202; its phone number is (513) 579-2121.
The members of the Great American Insurance Group have been in business for over 150 years. Management believes that over 55% of the 2024 gross written premiums in AFG’s Specialty property and casualty group are produced by businesses that rank in the “top 10” amongst competitors based on gross written premiums.
Employees and Engagement As of December 31, 2023, the Company had approximately 8,500 employees, of which approximately 7,700 were employed at Great American Insurance Group, and approximately 49% of AFG’s workforce were women.
Attraction and Engagement As of December 31, 2024, the Company had approximately 8,700 employees (none of which were covered by collective bargaining agreements), including approximately 7,800 employed at Great American Insurance Group.
In addition to the coverage shown above, AFG reinsures its multi-peril crop insurance (“MPCI”) business through the Federal Crop Insurance Corporation (“FCIC”) based on the Standard Reinsurance Agreement (“SRA”). AFG can elect the desired retention of risk on a state-by-state, county, crop or plan basis according to the SRA. The SRA also includes an additional fixed percentage quota share cede.
AFG can elect the desired retention of risk on a state-by-state, county, crop or plan basis according to the SRA. The SRA also includes an additional fixed percentage quota share cede. AFG typically reinsures 10% to 20% of MPCI gross written premiums with the FCIC. AFG also purchases quota share reinsurance on its crop business in the private market.
The collectability of a reinsurance balance is based upon the financial condition of a reinsurer as well as individual claim considerations.
These amounts are net of allowances of approximately $11 million for expected credit losses on reinsurance recoverables. The collectability of a reinsurance balance is based upon the financial condition of a reinsurer as well as individual claim considerations.
In general, these laws and regulations permit investments in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate and certain other investments, subject to specified limits and certain other qualifications.
In general, these laws and regulations permit investments in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate and certain other investments, subject to specified limits and certain other qualifications. 16 Table of Contents Federal Regulation Although the federal government and its regulatory agencies generally do not directly regulate the business of insurance, federal legislation and administrative rules adopted apply to AFG’s business.
By way of example, some of the Employee Survey results included the following: • 94% of employees agreed that “the people in my work group are committed to delivering high-quality products and services”; • 95% of employees agreed that “I understand how my job contributes to the organization’s strategy and goals”; and • 92% of employees agreed that “I would recommend the organization as a good place to work”.
By way of example, some of the Employee Survey results included the following: • 94% of employees agreed that “the organization provides high quality products and services”; • 94% of employees agreed that “I understand how my job contributes to the organization’s strategy and goals”; • 95% of employees agreed that “I understand the results expected of me in my job”; and • 93% of employees agreed that “I am treated with respect as an individual”. 13 Table of Contents The results of the Employee Survey are reviewed and discussed by AFG management.
Investing in Employees Training and Development AFG offers training programs designed to encourage people to build careers in insurance and develop professional skills that positively impact employees’ careers as well as AFG’s customers and business. These include tuition reimbursement programs, monetary incentives and extensive personal and professional learning opportunities.
Those results serve as an important source of information for management in shaping decisions that impact the Company’s employees. Investing in Employees Training and Development AFG offers training programs designed to encourage people to build careers in insurance and develop professional skills that positively impact employees’ careers as well as AFG’s customers and business.
Professional development is one of many reasons why AFG believes average employee tenure exceeds industry averages. Compensation and Benefits AFG provides a competitive benefits package that includes an extensive wellness program and paid time away from work for employees to maintain a healthy work-life balance.
These include tuition reimbursement programs, monetary incentives and extensive personal and professional learning opportunities. Compensation and Benefits AFG provides a competitive benefits package that includes an extensive wellness program and paid time away from work for employees to maintain a healthy work-life balance.
In May 2021, AFG completed the sale of its Annuity business to Massachusetts Mutual Life Insurance Company for $3.57 billion in cash. 3 Table of Contents Timeline of Selected Start-ups, Acquisitions and Dispositions 4 Table of Contents Property and Casualty Insurance Segment General AFG’s property and casualty insurance operations provide a wide range of commercial coverages through approximately 35 insurance businesses (at December 31, 2023) that make up the Great American Insurance Group.
As a result of the acquisition, AFG remained the fifth ranked writer of U.S. crop insurance and the largest U.S. owned participant in the United States multi-peril crop insurance program. 3 Table of Contents Timeline of Selected Start-ups, Acquisitions and Dispositions 4 Table of Contents Property and Casualty Insurance Segment General AFG’s property and casualty insurance operations provide a wide range of commercial coverages through 36 insurance businesses (at December 31, 2024) that make up the Great American Insurance Group.
Marketing The property and casualty insurance group directs its sales efforts primarily through independent insurance agents and brokers, although small portions are written through employee agents. Independent agents and brokers generally receive a commission on the sale of each policy.
As a result, the 2024 review resulted in no net change to AFG’s property and casualty insurance segment’s asbestos and environmental reserves. Marketing The property and casualty insurance group directs its sales efforts primarily through independent insurance agents and brokers, although small portions are written through employee agents.
Amortized Cost, net (*) Fair Value Amount % S&P or comparable rating AAA, AA, A $ 7,806 $ 7,529 73 % BBB 2,300 2,225 21 % Total investment grade 10,106 9,754 94 % BB 211 207 2 % B 78 73 1 % CCC, CC, C 40 41 — % D 3 4 — % Total non-investment grade 332 325 3 % Not rated 302 298 3 % Total $ 10,740 $ 10,377 100 % (*) Amortized cost, net of allowance for expected credit losses.
Amortized Cost, net (*) Fair Value Amount % S&P or comparable rating AAA, AA, A $ 7,528 $ 7,294 70 % BBB 2,565 2,537 24 % Total investment grade 10,093 9,831 94 % BB 175 176 2 % B 38 37 — % CCC, CC, C 43 45 1 % D 12 12 — % Total non-investment grade 268 270 3 % Not rated 292 297 3 % Total $ 10,653 $ 10,398 100 % (*) Amortized cost, net of allowance for expected credit losses.
This liability represents estimates of the ultimate net cost of all unpaid losses and LAE and is determined by using case-basis evaluations, actuarial projections and management’s judgment. These estimates are subject to the effects of changes in claim amounts and frequency and are periodically reviewed and adjusted as additional information becomes known.
Loss and Loss Adjustment Expense Reserves The consolidated financial statements include the estimated liability for unpaid losses and LAE of AFG’s insurance subsidiaries. This liability represents estimates of the ultimate net cost of all unpaid losses and LAE and is determined by using case-basis evaluations, actuarial projections and management’s judgment.
None of the information provided on the website is incorporated into, or deemed to be a part of, this Annual Report on Form 10-K or in any other report or document we file with the SEC. Investment Portfolio AFG’s in-house team of investment professionals have followed a consistent strategy over many years and changing economic conditions.
Investment Portfolio AFG’s in-house team of investment professionals have followed a consistent strategy over many years and changing economic conditions.
Reinsurance premiums ceded and assumed are presented in the following table (in millions): 2023 2022 2021 Reinsurance ceded $ 2,964 $ 2,851 $ 2,373 Reinsurance ceded, excluding crop 1,878 1,768 1,665 Reinsurance assumed — including involuntary pools and associations 347 283 246 Loss and Loss Adjustment Expense Reserves The consolidated financial statements include the estimated liability for unpaid losses and LAE of AFG’s insurance subsidiaries.
Reinsurance premiums ceded and assumed are presented in the following table (in millions): 2024 2023 2022 Reinsurance ceded $ 3,394 $ 2,964 $ 2,851 Reinsurance ceded, excluding crop 2,021 1,878 1,768 Reinsurance assumed — including involuntary pools and associations (*) 600 347 283 (*) 2024 includes $217 million related to the acquisition of CRS as a result of premium written by the previous owner and assumed by AFG during the transition.
The balance sheet caption “Recoverables from reinsurers” included approximately $189 million on paid losses and LAE and $4.29 billion on unpaid losses and LAE at December 31, 2023. These amounts are net of allowances of approximately $10 million for expected credit losses on reinsurance recoverables.
In 2025, AFG expects to continue to reinsure 50% of the premiums not reinsured by the FCIC in the private market. 11 Table of Contents The balance sheet caption “Recoverables from reinsurers” included approximately $220 million on paid losses and LAE and $4.96 billion on unpaid losses and LAE at December 31, 2024.
Catastrophe Reinsurance AFG has taken steps to limit its exposure to wind and earthquake losses through individual risk selection, including minimizing coastal and known fault-line exposures, and purchasing catastrophe reinsurance. In addition, AFG purchases catastrophe reinsurance for its workers’ compensation businesses.
Treaty reinsurance provides for risks meeting prescribed criteria to be automatically ceded and assumed according to contract provisions. 10 Table of Contents Catastrophe Reinsurance AFG has taken steps to limit its exposure to catastrophes (including those resulting from hurricanes, windstorms, tornadoes, floods, hailstorms, earthquakes, explosions, fires and acts of terrorism and civil unrest) through individual risk selection, including minimizing coastal and known fault-line exposures, and purchasing catastrophe reinsurance.
Removed
As a result of the acquisition, AFG will remain the fifth ranked writer of U.S. crop insurance and the largest U.S. owned participant in the United States multi-peril crop insurance program.
Added
AFG’s most recent such coverage expired on January 7, 2025 and management expects to place a new catastrophe bond or purchase other reinsurance protection during the second quarter of 2025 that attaches at $275 million.
Removed
(*) The sources of the commercial lines industry ratios are ©2024 Conning, Inc., as published in Conning’s Property-Casualty Forecast & Analysis by Line of Insurance 2023Q4 edition and ©2023 A.M. Best Company’s Review & Preview Reports for preceding years.
Added
AFG’s most recent such coverage expired on January 7, 2025 and management expects to place a new catastrophe bond or purchase other reinsurance protection during the second quarter of 2025 that attaches at $275 million.
Removed
AFG purchases facultative reinsurance, both pro rata and excess of loss, depending on the risk and available 10 Table of Contents reinsurance markets. Treaty reinsurance provides for risks meeting prescribed criteria to be automatically ceded and assumed according to contract provisions.
Added
(b) Maximum loss per event for claims up to reinsurance coverage limit. In addition to the coverage shown above, AFG reinsures its multi-peril crop insurance (“MPCI”) business through the Federal Crop Insurance Corporation (“FCIC”) based on the Standard Reinsurance Agreement (“SRA”).
Removed
In addition to traditional reinsurance, AFG has catastrophe coverage through a catastrophe bond structure with Riverfront Re Ltd., which provides coverage of up to 94% of $323 million for catastrophe losses in excess of $127 million through December 31, 2024.
Added
In connection with these reviews, AFG engages with outside counsel and, as appropriate, engineering and consulting firms and specialty actuarial firms. An in-depth internal review of AFG’s A&E reserves was completed in the third quarter of 2024 by AFG’s internal A&E claims specialists in consultation with specialty outside counsel.
Removed
(b) Maximum loss per event for claims up to reinsurance coverage limit. (c) Although AFG’s maximum potential loss per event is generally $70 million, there are certain unlikely scenarios where AFG’s exposure could be as high as $73 million.
Removed
AFG typically reinsures 10% to 20% of MPCI gross written premiums with the FCIC. AFG also purchases quota share reinsurance on its crop business in the private market. This quota share provides for a ceding commission to AFG and a profit-sharing provision.
Removed
Over the past few years, the focus of AFG’s asbestos claims litigation has shifted to smaller companies and companies with ancillary exposures. AFG’s insureds with these exposures have been the driver of the property and casualty segment’s asbestos reserve increases in recent years.
Removed
The results of the Employee Survey are reviewed and discussed by AFG management. Those results serve as an important source of information for management in shaping decisions that impact the Company’s employees.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRISKS RELATED TO TECHNOLOGY, DATA SECURITY AND PRIVACY AFG may experience difficulties with technology or data security, which could have an adverse effect on its business or reputation. AFG uses computer systems and services, which may include or utilize AI applications, to store, retrieve, evaluate and utilize company and customer data and information.
Biggest changeIf AFG cannot obtain adequate capital or sources of credit on favorable terms, or at all, its business, operating results and financial condition could be adversely affected. RISKS RELATED TO TECHNOLOGY, DATA SECURITY AND PRIVACY AFG or third parties may experience difficulties with technology or data security, which could have an adverse effect on AFG’s business or reputation.
Operational risk and losses can result from, among other things, fraud, errors, failure to document transactions properly, failure to obtain proper internal authorization, failure to comply with regulatory requirements, information technology failures or external events. AFG continues to enhance its operating procedures and internal controls to effectively support its business and its regulatory and reporting requirements.
Operational risk and losses can result from, among other things, fraud, errors, failure to document transactions properly, failure to obtain proper internal authorization, failure to comply with regulatory requirements, information technology failures or other internal or external events. AFG continues to enhance its operating procedures and internal controls to effectively support its business and its regulatory and reporting requirements.
Weather conditions, including too much moisture (flooding or excessive rain), not enough moisture (droughts), and the level of crop prices in the commodities market heavily impact AFG’s crop insurance business. These factors are inherently unpredictable and could result in significant volatility in the results of the crop insurance business from one year to the next.
Weather conditions, including too much moisture (flooding or excessive rain), not enough moisture (droughts), and the level of crop yields and prices in the commodities market heavily impact AFG’s crop insurance business. These factors are inherently unpredictable and could result in significant volatility in the results of the crop insurance business from one year to the next.
In addition, third party funding of litigation has continued to grow, which may increase the number of claims and result in higher jury awards. If AFG has not established adequate reserves to cover future claims, AFG’s results of operations and financial condition could be materially adversely affected.
In addition, third party funding of litigation has continued to grow, which may increase the number of claims and result in higher jury awards and settlements. If AFG has not established adequate reserves to cover future claims, AFG’s results of operations and financial condition could be materially adversely affected.
While the federal government’s role in regulating insurance companies is currently limited, the Dodd-Frank Act established a Federal Insurance Office (“FIO”) within the U.S. Department of Treasury to collect data on the insurance industry, recommend changes to the state system of insurance regulation and preempt certain state insurance laws.
While the federal government’s role in regulating insurance companies is currently limited, the Dodd-Frank Act established a Federal Insurance Office within the U.S. Department of Treasury to collect data on the insurance industry, recommend changes to the state system of insurance regulation and preempt certain state insurance laws.
Catastrophes can be caused by unpredictable natural events such as hurricanes, windstorms, severe storms, tornadoes, floods, hailstorms, earthquakes, explosions and fire, and by other events, such as terrorist attacks and civil unrest, as well as pandemics and other similar outbreaks in many parts of the world.
Catastrophes can be caused by unpredictable natural events such as hurricanes, windstorms, severe storms, tornadoes, floods, hailstorms, earthquakes, explosions and fire, and by other events, such as war, terrorist attacks and civil unrest, as well as pandemics and other similar outbreaks in many parts of the world.
These issues may adversely affect AFG’s business, including by extending coverage beyond underwriting intent or by increasing the number, size or types of claims as a result of, among other things, plaintiffs targeting property and casualty insurers in purported class action litigation relating to claims-handling and other practices; increased claims due to third party funding of litigation; and social inflation and legal system abuse influencing trends like more frequent claims, judgments that are unfavorable for insurers and an increase in “nuclear verdicts” leading to higher jury awards.
These issues may adversely affect AFG’s business, including by extending coverage beyond contractual terms, underwriting intent or by increasing the number, size or types of claims as a result of, among other things, plaintiffs targeting property and casualty insurers in purported class action litigation relating to claims-handling and other practices; increased claims due to third party funding of litigation; and social inflation and legal system abuse influencing trends like more frequent claims, judgments that are unfavorable for insurers and an increase in “nuclear verdicts” leading to higher jury awards.
In addition, any increase in the frequency or severity of catastrophic events may result in losses exceeding AFG’s reinsurance protection or may result in substantial volatility in or materially impact AFG’s results of operations or financial condition. Volatility in crop prices, as a result of weather conditions or other events, could adversely impact AFG’s results of operations.
In addition, any increase in the frequency or severity of catastrophic events may result in losses exceeding AFG’s reinsurance protection or may result in substantial volatility in or materially impact AFG’s results of operations or financial condition. Volatility in crop prices or yields, as a result of weather conditions or other events, could adversely impact AFG’s results of operations.
Changes in interest rates may materially adversely affect the performance of some of its investments, including by materially reducing the fair value of and net investment income from fixed maturities and increasing unrealized losses in AFG’s investment portfolio.
Changes in interest rates may materially adversely affect the performance of some of AFG’s investments, including by materially reducing the fair value of and net investment income from fixed maturities and increasing unrealized losses in AFG’s investment portfolio.
AFG’s business, financial condition, results of operations and liquidity could also be adversely affected if judicial or legislative developments cause AFG’s ultimate liabilities to increase from current expectations. AFG is subject to comprehensive regulation, and its ability to earn profits may be restricted by these regulations.
AFG’s business, financial condition, results of operations and liquidity could also be adversely affected if judicial, legislative or other anticipated developments cause AFG’s ultimate liabilities to increase from current expectations. AFG is subject to comprehensive regulation, and its ability to earn profits may be restricted by these regulations.
AFG cannot predict or eliminate its exposure to events of war, terrorism, political unrest or geopolitical uncertainty, and to the extent that losses from such events occur, AFG’s financial condition and results of operations could be materially adversely affected. AFG’s international operations expose it to investment, political and economic risks, including foreign currency and credit risk.
AFG cannot predict or eliminate its exposure to events of war, terrorism, political unrest 18 Table of Contents or geopolitical uncertainty, and to the extent that losses from such events occur, AFG’s financial condition and results of operations could be materially adversely affected. AFG’s international operations expose it to investment, political and economic risks, including foreign currency and credit risk.
AFG uses the modeled outputs and related analyses to assist in decision-making 20 Table of Contents in areas such as underwriting, claims, reserving, reinsurance and catastrophe risk. The modeled outputs and related analyses are subject to various assumptions, uncertainties, model errors and the inherent limitations of any statistical analysis, including the use of historical internal and industry data.
AFG uses the modeled outputs and related analyses to assist in decision-making in areas such as underwriting, claims, reserving, reinsurance and catastrophe risk. The modeled outputs and related analyses are subject to various assumptions, uncertainties, model errors and the inherent limitations of any statistical analysis, including the use of historical internal and industry data.
Any one of these factors could cause AFG’s actual results to vary materially from recent results or from anticipated future results. Additional risks and uncertainties not currently known to AFG or that AFG currently deems to be immaterial also may materially adversely affect AFG’s business, financial condition or results of operations.
Any one of these factors, or multiple factors in combination, could cause AFG’s actual results to vary materially from recent results or from anticipated future results. Additional risks and uncertainties not currently known to AFG or that AFG currently deems to be immaterial also may materially adversely affect AFG’s business, financial condition or results of operations.
Well-capitalized new entrants to the property and casualty insurance industry, or existing competitors that receive substantial infusions of capital or access to third-party capital, provide increasing competition, which may adversely impact 19 Table of Contents AFG’s business and profitability.
Well-capitalized new entrants to the property and casualty insurance industry, or existing competitors that receive substantial infusions of capital or access to third-party capital, provide increasing competition, which may adversely impact AFG’s business and profitability.
The compromise of personal, confidential or proprietary information could also subject AFG to legal liability or regulatory action under evolving cyber-security, data protection and privacy laws and regulations enacted by the U.S. federal and state governments, Canada, the European Union (the “EU”) or other jurisdictions or by various regulatory organizations or exchanges.
The compromise of personal, confidential or proprietary information could also subject AFG to legal liability or regulatory action under evolving cyber-security, data protection and privacy laws and regulations enacted by the U.S. federal and state governments, Canada, the EU or other jurisdictions or by various regulatory organizations or exchanges.
In addition, as industry practices and legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge.
As industry practices and legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge.
Increases in the amount of capital or reserves that AFG’s larger insurance subsidiaries are required to hold could reduce the amount of future dividends such subsidiaries are able to distribute to the holding company or require capital contributions.
Increases in the amount of capital or reserves that AFG’s larger insurance subsidiaries are required to hold could reduce the amount of future dividends such subsidiaries are able to 24 Table of Contents distribute to the holding company or require capital contributions.
Businesses in the United States and in other countries have increasingly become the targets of “cyberattacks,” “ransomware,” “phishing,” “hacking” or similar illegal or unauthorized intrusions into computer systems and networks.
Businesses in the United States and in other countries have increasingly become the targets of “cyber-attacks,” “ransomware,” “phishing,” “hacking” or similar illegal or unauthorized intrusions into computer systems and networks.
If any disruption or security breach results in a loss or damage to AFG’s data, or inappropriate disclosure of AFG’s confidential information or that of others, it could damage AFG’s reputation, affect its relationships with customers and clients, lead to claims against AFG, result in regulatory action and harm AFG’s business.
If any disruption or security breach results in a loss or damage to AFG’s data, or inappropriate disclosure of AFG’s confidential information or that of others, it could damage AFG’s reputation, affect its relationships with customers, clients, business partners and regulators, lead to claims against AFG, result in regulatory action and harm AFG’s 22 Table of Contents business.
If AFG does not effectively develop, implement and monitor these relationships, third-party providers do not perform as anticipated, technological or other problems are incurred with a transition, or outsourcing relationships relevant to AFG’s business process functions are 22 Table of Contents terminated, AFG may not realize expected productivity improvements or cost efficiencies and may experience operational difficulties, increased costs and a loss of business.
If AFG does not effectively develop, implement and monitor these relationships, third-party providers do not perform as anticipated, technological or other problems are incurred, or outsourcing relationships relevant to AFG’s business process functions are terminated or interrupted, AFG may not realize expected productivity improvements or cost efficiencies and may experience operational difficulties, increased costs and a loss of business.
Both state and federal regulators in the U.S., as well as regulators in foreign jurisdictions, including the EU (whether under its regulatory framework proposed in April 2021 or otherwise), continue to evaluate and assess potential laws and regulations to limit and restrict companies’ use of AI, and enact new and expanding bases of liability for businesses 24 Table of Contents utilizing AI.
Both state and federal regulators in the U.S., as well as regulators in foreign jurisdictions, including the EU (whether under its regulatory framework proposed in April 2021 or otherwise), have enacted and will continue to evaluate and assess potential laws and regulations to limit and restrict companies’ use of AI, and enact new and expanding bases of liability for businesses utilizing AI.
AFG is also subject to credit risk with respect to its reinsurers, as AFG will remain liable to its insureds regardless of whether a reinsurer is able to meet its obligations under agreements covering the reinsurance ceded. As of December 31, 2023, AFG has $4.48 billion of recoverables from reinsurers on its balance sheet.
AFG is also subject to credit risk with respect to its reinsurers, as AFG will remain liable to its insureds regardless of whether a reinsurer is able to meet its obligations under agreements covering the reinsurance ceded. As of December 31, 2024, AFG has $5.18 billion of recoverables from reinsurers on its balance sheet.
Variability is introduced by changes in claims handling procedures, the impact of general and wage inflation on loss cost trends, increasing litigation and erosion of causation and coverage defenses for insurance claims, legislative actions, evolving mass tort issues and varying judgments and viewpoints of the individuals involved in the estimation process, among others.
Variability is introduced by changes in claims handling procedures, the impact of general and wage inflation (including impacts on medical costs and property and transportation vehicle parts and values) on loss cost trends, increasing litigation and erosion of causation and coverage defenses for insurance claims, legislative actions, evolving mass tort issues and varying judgments and viewpoints of the individuals involved in the estimation process, among others.
AFG and certain of its third-party vendors collect and store sensitive data in the ordinary course of AFG’s business, including personal identification information of its employees and that of its customers, vendors, investors and other third parties and may include health information.
AFG and its business partners collect and store sensitive data in the ordinary course of AFG’s and their business, including personal identification information of our and their employees and customers, vendors, investors and other third parties and may include health information.
Changing weather patterns and climate change have added to the unpredictability, frequency and severity of weather-related catastrophes and other losses, such as wildfires or flooding, incurred by the industry in recent years.
Changing weather patterns, whether as a result of global climate change caused by human activities or otherwise, have added to the unpredictability, frequency and severity of weather-related catastrophes and other losses, such as wildfires or flooding, incurred by the industry in recent years.
For example, on August 16, 2022, the U.S. government enacted the Inflation Reduction Act (“IRA”) which, among other changes, created a new corporate alternative minimum tax (“AMT”) based on adjusted financial statement income and imposes a 1% excise tax on corporate stock repurchases. These provisions became effective January 1, 2023.
For example, on August 16, 2022, the U.S. government enacted the Inflation Reduction Act (“IRA”) which, among other changes, created a new corporate alternative minimum tax (“CAMT”) based on adjusted financial statement income and imposed a 1% excise tax on corporate stock repurchases.
Some of AFG’s competitors offer a wider variety of products or higher commissions. AFG also faces credit risk with respect to its independent agents, as they may not pay all the premiums owed to AFG and it may be difficult or impossible to recover such amounts.
AFG also faces credit risk with respect to its independent agents, as they may not pay all the premiums owed to AFG and it may be difficult or impossible to recover such amounts.
New accounting rules or changes to existing accounting standards could adversely impact AFG’s reported results of operations. As a U.S.-based SEC registrant, AFG prepares its financial statements in accordance with GAAP, as promulgated by the Financial Accounting Standards Board, subject to the accounting-related rules and interpretations of the SEC.
As a U.S.-based SEC registrant, AFG prepares its financial statements in accordance with GAAP, as promulgated by the Financial Accounting Standards Board, subject to the accounting-related rules and interpretations of the SEC.
Like others in the insurance industry, AFG experiences cyber-attacks and other attempts to gain unauthorized access to its systems on a regular basis and anticipates continuing to be subject to such attempts.
The sophistication of cybersecurity threats, including through the use of AI, continues to increase and proliferate. Like others in the insurance industry, AFG experiences cyber-attacks and other attempts to gain unauthorized access to its systems on a regular basis and anticipates continuing to be subject to such attempts.
Any changes in federal income tax laws, including changes to the IRA or the Tax Cuts and Jobs Act of 2017, could adversely affect the federal income taxation of AFG’s ongoing operations and have a material adverse impact on its financial condition and results of operations.
Any changes in federal income tax laws could adversely affect the federal income taxation of AFG’s ongoing operations and have a material adverse impact on its financial condition and results of operations. New accounting rules or changes to existing accounting standards could adversely impact AFG’s reported results of operations.
AFG has invested, and intends to continue to invest in, alternative investments, such as limited partnerships and subordinate tranches of collateralized loan obligations for which changes in value are reported in net earnings.
AFG’s alternative investments may be illiquid and volatile in terms of value and returns, which could negatively affect AFG’s investment income and liquidity. AFG has invested, and intends to continue to invest in, alternative investments, such as limited partnerships and subordinate tranches of collateralized loan obligations for which changes in value are reported in net earnings.
Limited availability of credit, deteriorations of the domestic or global equity, debt, mortgage and real estate markets; declines in consumer confidence and consumer spending; increases in prices or in the rate of inflation; periods of high unemployment; persistently low or rapidly increasing interest rates; disruptive geopolitical events and other events outside of AFG’s control, such as a major epidemic or another pandemic (including a renewed surge of COVID-19 or any variants of the virus), could contribute to increased volatility and diminished expectations for the economy and the financial markets, including the value of AFG’s investment portfolio and the market for its stock. 21 Table of Contents AFG’s alternative investments may be illiquid and volatile in terms of value and returns, which could negatively affect AFG’s investment income and liquidity.
Limited availability of credit, deteriorations of the domestic or global equity, debt, mortgage and real estate markets; declines in consumer confidence and consumer spending; increases in prices or in the rate of inflation; periods of high unemployment; persistently low or rapidly increasing interest rates; disruptive actions or policies by the U.S. or foreign governments; disruptive geopolitical events and other events outside of AFG’s control, such as a major epidemic or another pandemic, could contribute to increased volatility and diminished expectations for the economy and the financial markets, including the value of AFG’s investment portfolio and the market for its stock.
These factors could produce results that would have a negative impact on AFG’s results of operations and financial condition. 18 Table of Contents AFG’s success will depend on its ability to maintain and enhance effective operating procedures and manage risks on an enterprise-wide basis.
As a result, AFG’s premium levels, renewal rates, expense ratio and other items could be materially adversely impacted. These factors could produce results that would have a negative impact on AFG’s results of operations and financial condition. AFG’s success will depend on its ability to maintain and enhance effective operating procedures and manage risks on an enterprise-wide basis.
For example, California recently adopted two new climate-related bills, which require companies doing business in California that meet certain revenue thresholds to publicly disclose certain greenhouse gas emissions data and climate-related financial risk reports, and compliance with such requirements will require significant effort and resources.
The Company may be subject to increasing regulation imposing mandatory disclosure of sustainability and climate-related data. For example, in October 2023, California adopted climate-related bills that require companies doing business in California that meet certain revenue thresholds to publicly disclose certain greenhouse gas emissions data and climate-related financial risk reports. Compliance with such requirements will require significant effort and resources.
If AFG is unable to hire qualified candidates or retain its key personnel, AFG may be unable to execute its business strategies and may suffer material adverse consequences to its business, operations and financial condition.
Competition for employees may increase AFG’s expenses and may result in the company not being able to hire key employees or retain them. If AFG is unable to hire qualified candidates or retain its key personnel, AFG may be unable to execute its business strategies and may suffer material adverse consequences to its business, operations and financial condition.
AFG is involved in routine legal proceedings incidental to its insurance operations and litigation related to asbestos and environmental claims from its historical operations. Litigation by nature is unpredictable, and the outcome of any case is uncertain and could result in liabilities that vary from the amounts AFG has currently recorded.
Litigation by nature is unpredictable, and the outcome of any case is uncertain and could result in liabilities that vary from the amounts AFG has currently recorded.
Systems failures or outages could compromise AFG’s ability to perform business functions in a timely manner, which could harm its ability to conduct business and hurt its relationships with business partners and customers.
AFG uses computer systems and services, which may include or utilize AI applications, to store, retrieve, evaluate and utilize company and customer data and information. Systems failures or outages could compromise AFG’s ability to perform business functions in a timely manner, which could harm its ability to conduct business and hurt its relationships with business partners and customers.
Claimants continue to assert new and novel theories of recovery and expand the right to sue, judicial interpretations continue to evolve, and from time to time, there is proposed state and federal legislation regarding mass tort claim liability, which would also affect AFG’s exposure.
Claimants continue to assert new and novel theories of recovery and make efforts to expand the right to sue, judicial interpretations continue to evolve, and from time to time, there may be unfavorable changes to state and federal legislation regarding mass tort claim liability and claims 20 Table of Contents administration.
AFG’s crop results could also be negatively impacted by pests and plant disease. A large decline in the commodity prices of one or more of the major crops that AFG insures could have a material adverse effect on AFG’s results of operations or financial condition.
A large decline in the commodity prices of one or more of the major crops that AFG insures could have a material adverse effect on AFG’s results of operations or financial condition. AFG’s results of operations and revenues may fluctuate as a result of many factors, including cyclical changes in the insurance industry.
The collectability of recoverables from reinsurers is subject to uncertainty arising from a number of factors, including a reinsurers’ financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract and changes in market conditions. 23 Table of Contents REGULATORY AND LEGAL RISKS AFG may suffer losses from litigation, including from effects of emerging claim and coverage issues which could materially and adversely affect AFG’s financial condition and business operations.
The collectability of recoverables from reinsurers is subject to uncertainty arising from a number of factors, including a reinsurers’ financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract and changes in market conditions.
While AFG can borrow up to $450 million under its revolving credit facility (“2023 Credit Facility”), AFG’s access to funds through the 2023 Credit Facility is dependent on the ability of its banks to meet their funding commitments.
While AFG can borrow up to $450 million under its revolving credit facility, AFG’s access to funds through its credit facility is dependent on the ability of its banks to meet their funding commitments. There were no borrowings outstanding under the credit facility or any other parent company short-term borrowing arrangements during 21 Table of Contents 2024.
Some of AFG’s competitors have more capital and greater resources than AFG and may offer a broader range of products, lower prices or better terms than AFG offers. If competition limits AFG’s ability to write new or renewal business at adequate rates, its results of operations will be adversely affected.
Some of AFG’s competitors have more capital and greater resources than AFG and may offer a broader range of products, lower prices or better terms than AFG offers.
AFG’s revenues could be adversely affected if it is not able to attract and retain independent agents. AFG’s reliance on the independent agency market makes it vulnerable to a reduction in the amount of business written by agents. Many of AFG’s competitors also rely significantly on the independent agency market.
AFG’s reliance on the independent agency market makes it vulnerable to a reduction in the amount of business written by agents. Many of AFG’s competitors also rely significantly on the independent agency market. Some of AFG’s competitors offer a wider variety of products or higher commissions.
GENERAL RISK FACTORS Certain shareholders exercise substantial control over AFG’s affairs, which may impede a change of control transaction. Carl H. Lindner III and S. Craig Lindner are each Co-Chief Executive Officers and Directors of AFG. Together, Carl H. Lindner III and S. Craig Lindner beneficially own 11.9% of AFG’s outstanding Common Stock as of February 1, 2024.
GENERAL RISK FACTORS Certain shareholders exercise substantial control over AFG’s affairs, which may impede a change of control transaction. As of December 31, 2024, Carl H. Lindner III and S.
On December 20, 2019, the President of the United States signed the Terrorism Risk Insurance Program Reauthorization Act of 2019 (“TRIP"), extending the program through December 31, 2027. Although TRIP provides benefits in the event of certain acts of terrorism, those benefits are subject to a deductible and to other limitations.
On December 20, 2019, the President of the United States signed the Terrorism Risk Insurance Program Reauthorization Act of 2019 (“TRIP"), extending the program through December 31, 2027.
Such influence could prevent an acquisition of AFG at a price and upon terms that other shareholders may find attractive. 25 Table of Contents AFG’s business and operations may be negatively impacted by its and its business partners’ failure to recruit and retain key employees The expertise and experience of AFG’s employees is a critical component of the company’s success.
AFG’s business and operations may be negatively impacted by its and its business partners’ failure to recruit and retain key employees. The expertise and experience of AFG’s employees is a critical component of the Company’s success. The continuation of such success depends, in large part, on AFG’s ability to attract and retain key individuals.
The continuation of such success depends, in large part, on AFG’s ability to attract and retain key individuals. There can be intense competition for qualified candidates in the activities that AFG conducts and in the markets that it serves, both within the insurance industry and from businesses outside the industry.
There can be intense competition for qualified candidates in the activities that AFG conducts and in the markets that it serves, both within the insurance industry and from businesses outside the industry. This is particularly acute in certain specialized positions and areas of expertise, such as underwriting, data and analytics and AI-related and technology fields.
These changing weather patterns, whether as a result of global climate change caused by human activities or otherwise, make it more difficult for AFG to predict and model catastrophic events, reducing AFG’s ability to accurately price its exposure to such events and mitigate its risks.
For example, in September 2024, Hurricane Helene caused significant damage in non-coastal areas, where such impacts may not have historically been expected. Changing weather 17 Table of Contents patterns also make it more difficult for AFG to predict and model catastrophic events, reducing AFG’s ability to accurately price its exposure to such events and mitigate its risks.
Other members of the Lindner family own, directly or through trusts, a significant number of additional shares of AFG Common Stock. As a result, the Lindner family has the ability to exercise significant influence over AFG’s management and over matters requiring shareholder approval.
As a result, the Lindner family and AFG’s employees have the ability to exercise significant influence over AFG and over matters requiring shareholder approval. Such influence could prevent an acquisition of AFG at a price and upon terms that other shareholders may find attractive.
AFG purchases catastrophe reinsurance as protection against catastrophe losses.
AFG purchases catastrophe reinsurance to mitigate the impact of catastrophe losses.
Removed
AFG’s results of operations and revenues may fluctuate as a result of many factors, including cyclical changes in the insurance industry.
Added
AFG’s crop results could also be negatively impacted by pests and plant disease. In addition, government policies, action, or regulation, whether by the United States or foreign governments, could directly or indirectly impact commodity prices.
Removed
As a result, AFG’s premium levels, renewal rates, expense ratio and other items could be materially adversely impacted.
Added
Although TRIP provides benefits in the event of certain acts of terrorism, those benefits are subject to a deductible and to other limitations, which could ultimately leave AFG subject to material adverse financial impacts.
Removed
There were no borrowings outstanding under the 2023 Credit Facility (or its prior bank credit line) or any other parent company short-term borrowing arrangements during 2023. If AFG cannot obtain adequate capital or sources of credit on favorable terms, or at all, its business, operating results and financial condition could be adversely affected.
Added
If competition limits AFG’s ability to write new or renewal business at adequate rates, its results of operations will be adversely affected. 19 Table of Contents AFG’s revenues could be adversely affected if it is not able to attract and retain independent agents.
Removed
Environmental, Social, and Governance standards (“ESG”) and sustainability have become major topics that encompass a wide range of issues, including climate change and other environmental risks.
Added
Third parties with which AFG conducts business have also experienced, and may experience in the future, similar illegal or unauthorized intrusions into their computer systems and networks, which could adversely affect AFG’s ability to conduct business, its results of operations and reputation, in addition to exposing it to legal liability or regulatory action.
Removed
Any AMT incurred, under this provision, would be treated as a timing difference and generate a deferred tax asset that would be carried forward to offset regular tax liability in the future.
Added
REGULATORY AND LEGAL RISKS AFG may suffer losses from litigation, including from effects of emerging claim and coverage issues which could materially and adversely affect AFG’s financial condition and business operations. AFG is involved in routine legal proceedings incidental to its insurance operations and litigation related to asbestos and environmental claims from its historical operations.
Removed
Any excise tax incurred on corporate stock repurchases will generally be recognized as part of the cost basis of the stock acquired and not reported as part of income tax expense. As additional guidance is provided, AFG will continue to evaluate the impact that the new law will have on AFG’s financial results.
Added
New technology, including AI, could also create unforeseen exposures or coverage issues under policies written by AFG, as well as increase and aggravate claims fraud and 23 Table of Contents cybercrime.
Removed
This is particularly acute in certain specialized positions and areas of expertise, such as underwriting, data and analytics and AI-related and technology fields. Competition for employees may increase AFG’s expenses and may result in the company not being able to hire key employees or retain them.
Added
Many of the key individual tax provisions from the 2017 Tax Cuts and Jobs Act are set to expire on December 31, 2025. Legislation to extend or modify the provisions is expected to be addressed by the U.S. Congress in 2025 and such legislation could include provisions that impact the taxation of corporations on their domestic and foreign income.
Added
Craig Lindner (each of whom are Co-Chief Executive Officers and Directors of AFG) and members of their respective families, directly or indirectly through trusts or other entities, together with employees of the Company, collectively owned approximately 24% of AFG’s outstanding Common Stock.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAFG’s cybersecurity program is directed by its EISG leadership team that is headed by the AFG CISO and three divisional vice presidents that report to the CISO. This leadership group has collectively over 70 years of cybersecurity work 27 Table of Contents experience, over 90 years of Information Technology (“IT”) experience and over 20 years of IT audit experience.
Biggest changeAFG’s cybersecurity program is directed by its EISG leadership team that is headed by the AFG CISO and three divisional officers who report to the CISO. This leadership group has collectively over 70 years of cybersecurity work experience, over 90 years of Information Technology (“IT”) experience and over 20 years of IT audit experience.
AFG has adopted the National Institute of Standards and Technology (“NIST”) framework which provides a comprehensive method for developing a flexible, repeatable, performance-based and cost-effective approach to identifying and managing cybersecurity risks. The Company uses the framework to assess and improve its security posture.
AFG has adopted the National Institute of Standards and Technology (“NIST”) Cybersecurity framework which provides a comprehensive method for developing a flexible, repeatable, performance-based and cost-effective approach to identifying and managing cybersecurity risks. The Company uses the framework to assess and improve its security posture.
AFG utilizes a variety of techniques to provide for the availability of critical data and systems, maintain regulatory compliance, manage its material risks from cybersecurity threats and to protect against, detect, and respond to cybersecurity incidents including, but not limited to, the following: • Conducts regular phishing testing of all employees and all members of the Board of Directors; • Utilizes full-desk encryption on all Company laptops and desktops; • Maintains a defense in depth security control strategy that is tested against high risk threats such as ransomware and other trending attack vectors; • Performs annual security awareness training and other routinely scheduled educational programming for employees; • Validates compliance with internal data security controls through the use of security monitoring utilities and internal and external audits; • Performs self-assessments measured against industry-leading cybersecurity frameworks for standards, guidelines and best practices, including the NIST cybersecurity framework; • Regularly scans external websites and internal applications; 26 Table of Contents • Engages an external third-party to conduct an annual penetration test consisting of advanced adversarial attacks against company systems and from which findings are investigated, ranked by risk level and tracked through appropriate mediation levels; • Utilizes user protections including stringent password requirements, two-factor authentication, and timed logoffs; • Conducts regular network and endpoint monitoring; • Performs regular tabletop exercises, utilizing a third-party data security firm as a facilitator, to simulate a response to a cybersecurity incident where the Company uses the findings to improve its processes and technologies; and • Purchases information security risk insurance from a third-party insurer that provides protection against the potential losses arising from a cybersecurity incident.
AFG utilizes a variety of techniques to provide for the availability of critical data and systems, maintain regulatory compliance, manage its material risks from cybersecurity threats and to protect against, detect, and respond to cybersecurity incidents including, but not limited to, the following: • Conducts regular phishing testing of all employees and all members of the Board of Directors; • Utilizes full-desk encryption on all Company laptops and desktops; • Maintains a defense in depth security control strategy that is tested against high risk threats such as ransomware and other trending attack vectors; • Performs annual security awareness training and other routinely scheduled educational programming for employees; • Validates compliance with internal data security controls through the use of security monitoring utilities and internal and external audits; • Performs self-assessments measured against industry-leading cybersecurity frameworks for standards, guidelines and best practices, including the NIST cybersecurity framework; • Regularly scans external websites and internal applications; • Engages an external third-party to conduct an annual penetration test consisting of advanced adversarial attacks against company systems and from which findings are investigated, ranked by risk level and tracked through appropriate mediation levels; • Utilizes user protections including stringent password requirements, two-factor authentication, and timed logoffs; • Conducts regular network and endpoint monitoring; • Performs regular tabletop exercises, utilizing a third-party data security firm as a facilitator, to simulate a response to a cybersecurity incident where the Company uses the findings to improve its processes and technologies; and • Purchases information security risk insurance from a third-party insurer that provides protection against the potential losses arising from a cybersecurity incident.
AFG describes whether and how risks from identified cybersecurity threats are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition in its risk factor disclosures at Item 1A of this Annual Report on Form 10-K, which disclosures are incorporated by reference in this Item 1C.
AFG describes whether and how risks from identified cybersecurity threats are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition in its risk factor disclosures in Item 1A of this Annual Report on Form 10-K, which disclosures are incorporated by reference in this Item 1C.
At least annually, the full Board of Directors receives and at least quarterly, the Audit Committee receives an overview from the Chief Information Security Officer (“CISO”) or another senior member of the EISG of the Company’s cybersecurity threat risk management and strategy processes covering topics such as data security posture, results from third-party assessments, progress towards predetermined risk-mitigation-related goals, incident response planning and material cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks.
At least annually, the full Board of Directors receives and at least quarterly, the Audit Committee receives an overview from the Chief Information Security Officer (“CISO”) or another senior member of the EISG of the Company’s cybersecurity threat risk management and 26 Table of Contents strategy processes covering topics such as data security posture, results from third-party assessments, progress towards predetermined risk-mitigation-related goals, incident response planning and material cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks.
Item 1C. Cybersecurity Risk Management and Strategy AFG recognizes the importance of assessing, identifying and managing material risks associated with cybersecurity threats as defined by the Securities and Exchange Commission. Like all businesses, AFG is a target for “cyberattacks,” “ransomware,” “phishing,” “hacking” and similar illegal or unauthorized intrusions into computer systems and networks.
Item 1C. Cybersecurity Risk Management and Strategy AFG recognizes the importance of assessing, identifying and managing material risks associated with cybersecurity threats as defined by the Securities and Exchange Commission. Like all businesses, AFG is a target for “cyber-attacks,” “ransomware,” “phishing,” “hacking” and similar illegal or unauthorized intrusions into computer systems and networks.
The AFG Enterprise Risk Committee (“ERC”), consisting of AFG’s Chief Administrative Officer and Chief Human Resources Officer, AFG’s Chief Financial Officer, AFG’s General Counsel and Great American Insurance Company’s President, oversees the ERM process including risk identification, risk impact and mitigation strategies. Each member of the ERC directly reports to AFG’s Co-CEOs.
The AFG Enterprise Risk Committee (“ERC”), consisting of AFG’s Chief Administrative Officer and Chief Human Resources Officer, AFG’s Chief Financial Officer, AFG’s General Counsel and Great American’s President, oversees the ERM process including risk identification, risk impact and mitigation strategies. Each member of the ERC directly reports to AFG’s Co-CEOs.
The AFG CISO leads and facilitates the SIRP team, which also includes AFG’s Chief Administrative Officer and Chief Human Resources Officer, AFG’s Chief Financial Officer, AFG’s Chief Information Officer, AFG’s General Counsel and Great American Insurance Group’s President and its General Counsel.
The AFG CISO leads and facilitates the SIRP team, which also includes AFG’s Chief Administrative Officer and Chief Human Resources Officer, AFG’s Chief Financial Officer, AFG’s Chief Information Officer, AFG’s General Counsel and Great American’s President and its General Counsel.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperty and casualty subsidiaries own and occupy approximately 90% of the 281,000 square feet of rentable office space on 17.5 acres of land in Richfield, Ohio and 100% of the 135,000 square feet of rentable office space on 1.3 acres of land in Lakeland, Florida.
Biggest changeProperty and casualty subsidiaries own and occupy approximately 90% of the 281,000 square feet of rentable office space on 17.5 acres of land in Richfield, Ohio and 100% of the 135,000 square feet of rentable office space on 1.3 acres of land in Lakeland, Florida. 27 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAmerican Premier is a party or named as a potentially responsible party in a number of proceedings and claims by regulatory agencies and private parties under various environmental protection laws, including the Comprehensive Environmental Response, Compensation and Liability Act, seeking to impose responsibility on American Premier for hazardous waste or discharge remediation costs at certain railroad sites formerly owned by its predecessor, Penn Central Transportation Company (“PCTC”), and at certain other sites where hazardous waste or discharge allegedly generated by PCTC’s railroad operations and American Premier’s former manufacturing operations is present.
Biggest changeAPU is a party or named as a potentially responsible party in a number of proceedings and claims by regulatory agencies and private parties under various environmental protection laws, including the Comprehensive Environmental Response, Compensation and Liability Act, seeking to impose responsibility on APU for hazardous waste or discharge remediation costs at certain railroad sites formerly owned by its predecessor, Penn Central Transportation Company (“PCTC”), and at certain other sites where hazardous waste or discharge allegedly generated by PCTC’s railroad operations and APU’s former manufacturing operations is present.
It is difficult to estimate American Premier’s liability for remediation costs at these sites for a number of reasons, including the number and financial resources of other potentially responsible parties involved at a given site, the varying availability of evidence by which to allocate responsibility among such parties, the wide range of costs for possible remediation alternatives, changing technology and the period of time over which these matters develop.
It is difficult to estimate APU’s liability for remediation costs at these sites for a number of reasons, including the number and financial resources of other potentially responsible parties involved at a given site, the varying availability of evidence by which to allocate responsibility among such parties, the wide range of costs for possible remediation alternatives, changing technology and the period of time over which these matters develop.
(including its subsidiaries, “American Premier”), are parties to litigation and receive claims alleging injuries and damages from asbestos, environmental and other substances and workplace hazards and have established loss accruals for such potential liabilities.
(including its subsidiaries, “APU”), are parties to litigation and receive claims alleging injuries and damages from asbestos, environmental and other substances and workplace hazards and have established loss accruals for such potential liabilities.
Nevertheless, American Premier believes that its accruals for potential environmental liabilities are adequate to cover the probable amount of such liabilities, based on American Premier’s estimates of remediation costs and related expenses and its estimates of the portions of such costs that will be borne by other parties.
Nevertheless, APU believes that its accruals for potential environmental liabilities are adequate to cover the probable amount of such liabilities, based on APU’s estimates of remediation costs and related expenses and its estimates of the portions of such costs that will be borne by other parties.
Such estimates are based on information currently available to American Premier and are subject to future change as additional information becomes available.
Such estimates are based on information currently available to APU and are subject to future change as additional information becomes available.
Except for the following, management believes that none of the litigation meets the threshold for disclosure under this Item. AFG’s insurance company subsidiaries and its 100%-owned subsidiary, American Premier Underwriters, Inc.
Except for the following, management believes that none of the litigation meets the threshold for disclosure under this Item. AFG’s insurance company subsidiaries and its 100%-owned subsidiary, APU Consolidated, Inc.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(b) Represents the remaining shares that may be repurchased until December 31, 2025 under the Plans authorized by AFG’s Board of Directors in October 2020 and May 2021.
Biggest changeIssuer Purchases of Equity Securities AFG did not repurchase any shares of its Common Stock during 2024. As of December 31, 2024, there are 5,729,010 remaining shares that may be repurchased until December 31, 2025 under the Plans authorized by AFG’s Board of Directors in October 2020 and May 2021.
The graph assumes that an initial investment of $100 was made on December 31, 2018 and all dividends were reinvested. The stock price performance presented below is not intended to be indicative of future price performance.
The graph assumes that an initial investment of $100 was made on December 31, 2019 and all dividends were reinvested. The stock price performance presented below is not intended to be indicative of future price performance.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities AFG Common Stock is listed and traded on the New York Stock Exchange under the symbol AFG. There were approximately 4,400 shareholders of record of AFG Common Stock at February 1, 2024.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities AFG Common Stock is listed and traded on the New York Stock Exchange under the symbol AFG. There were approximately 4,300 shareholders of record of AFG Common Stock at February 1, 2025.
(b) The S&P 500 Property & Casualty Insurance Index included the following companies at December 31, 2023 (weighted by market capitalization): The Allstate Corporation, Arch Capital Group Ltd., Chubb Limited, Cincinnati Financial Corporation, The Hartford Financial Services Group, Inc., Loews Corporation, The Progressive Corporation, The Travelers Companies, Inc. and W.R. Berkley Corporation.
(b) The S&P 500 Property & Casualty Insurance Index included the following companies at December 31, 2024 (weighted by market capitalization): The Allstate Corporation, Arch Capital Group Ltd., Assurant, Inc., Chubb Limited, Cincinnati Financial Corporation, Erie Indemnity Company, The Hartford Financial Services Group, Inc., Loews Corporation, The Progressive Corporation, The Travelers Companies, Inc. and W.R. Berkley Corporation.
As of December 31, 2018 2019 2020 2021 2022 2023 AFG $ 100 $ 127 $ 107 $ 207 $ 230 $ 213 S&P 500 Index 100 131 156 200 164 207 S&P 500 P&C Index (b) 100 126 134 157 187 207 (a) Cumulative total shareholder return measures the performance of a company’s stock (or an index) over time and is calculated as the change in the stock price plus cumulative dividends (assuming dividends are reinvested) over a specific period of time divided by the stock price at the beginning of the time period.
As of December 31, 2019 2020 2021 2022 2023 2024 AFG $ 100 $ 84 $ 163 $ 181 $ 168 $ 207 S&P 500 Index 100 118 152 125 157 197 S&P 500 P&C Index (b) 100 106 125 149 164 222 (a) Cumulative total shareholder return measures the performance of a company’s stock (or an index) over time and is calculated as the change in the stock price plus cumulative dividends (assuming dividends are reinvested) over a specific period of time divided by the stock price at the beginning of the time period.
AFG acquired 56,629 shares of its Common Stock (at an average of $131.98 per share) in the first nine months of 2023, 7,363 shares (at an average of $112.70 per share) in October 2023 and 68 shares (at $109.84 per share) in November 2023 in connection with its stock incentive plans. 29 Table of Contents Stock Performance Graph The following graph compares the performance of AFG Common Stock during the five year period from December 31, 2018 through December 31, 2023 with the performance of (i) the S&P 500 Composite Stock Index (“S&P 500 Index”) and (ii) the S&P 500 Property & Casualty Insurance Index.
AFG acquired 53,362 shares of its Common Stock (at an average of $126.33 per share) in the first nine months of 2024, 150 shares (at an average of $133.14 per share) in October 2024 and 61 shares (at $136.62 per share) in December 2024 in connection with its stock incentive plans. 28 Table of Contents Stock Performance Graph The following graph compares the performance of AFG Common Stock during the five year period from December 31, 2019 through December 31, 2024 with the performance of (i) the S&P 500 Composite Stock Index (“S&P 500 Index”) and (ii) the S&P 500 Property & Casualty Insurance Index.
Removed
Issuer Purchases of Equity Securities AFG repurchased shares of its Common Stock during 2023 as follows: Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (b) First quarter 199,762 $ 119.01 199,762 7,401,792 Second quarter 374,958 115.17 374,958 7,026,834 Third quarter 755,111 112.28 755,111 6,271,723 Fourth quarter: October 361,946 110.49 361,946 5,909,777 November 170,100 109.37 170,100 5,739,677 December 10,667 115.25 10,667 5,729,010 Total 1,872,544 $ 112.98 (a) 1,872,544 (a) AFG declared special dividends totaling $5.50 per share of its Common Stock in 2023.
Removed
Adjusted for the special dividends, the average price paid per share was $111.56 for 2023. In addition, at December 31, 2023, AFG has a $2 million payable related to the excise tax on share repurchases that was enacted January 1, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe components of AFG’s property and casualty losses and LAE amounts and ratio are detailed below (dollars in millions): Year ended December 31, Amount Ratio Change in Ratio 2023 2022 2021 2023 2022 2021 2023 - 2022 2022 - 2021 Property and transportation Current year, excluding COVID-19 related and catastrophe losses $ 1,774 $ 1,785 $ 1,448 70.5 % 71.6 % 67.2 % (1.1 %) 4.4 % Prior accident years development (84) (92) (103) (3.3 %) (3.7 %) (4.8 %) 0.4 % 1.1 % Current year COVID-19 related losses — — — — % — % — % — % — % Current year catastrophe losses including the impact of net reinstatement premiums 51 42 49 2.0 % 1.9 % 2.7 % 0.1 % (0.8 %) Property and transportation losses and LAE and ratio $ 1,741 $ 1,735 $ 1,394 69.2 % 69.8 % 65.1 % (0.6 %) 4.7 % Specialty casualty Current year, excluding COVID-19 related and catastrophe losses $ 1,814 $ 1,632 $ 1,521 62.9 % 61.4 % 63.1 % 1.5 % (1.7 %) Prior accident years development (110) (190) (140) (3.8 %) (7.2 %) (5.8 %) 3.4 % (1.4 %) Current year COVID-19 related losses — — 9 — % — % 0.4 % — % (0.4 %) Current year catastrophe losses including the impact of net reinstatement premiums 35 11 9 1.2 % 0.5 % 0.4 % 0.7 % 0.1 % Specialty casualty losses and LAE and ratio $ 1,739 $ 1,453 $ 1,399 60.3 % 54.7 % 58.1 % 5.6 % (3.4 %) Specialty financial Current year, excluding COVID-19 related and catastrophe losses $ 311 $ 252 $ 231 35.8 % 36.0 % 36.0 % (0.2 %) — % Prior accident years development (32) (47) (51) (3.7 %) (6.8 %) (8.0 %) 3.1 % 1.2 % Current year COVID-19 related losses — — 7 — % — % 1.1 % — % (1.1 %) Current year catastrophe losses including the impact of net reinstatement premiums 49 33 26 5.7 % 4.9 % 4.1 % 0.8 % 0.8 % Specialty financial losses and LAE and ratio $ 328 $ 238 $ 213 37.8 % 34.1 % 33.2 % 3.7 % 0.9 % Total Specialty Current year, excluding COVID-19 related and catastrophe losses $ 4,079 $ 3,826 $ 3,334 62.4 % 62.8 % 61.6 % (0.4 %) 1.2 % Prior accident years development (226) (289) (283) (3.4 %) (4.7 %) (5.2 %) 1.3 % 0.5 % Current year COVID-19 related losses — — 16 — % — % 0.3 % — % (0.3 %) Current year catastrophe losses including the impact of net reinstatement premiums 162 88 86 2.5 % 1.5 % 1.7 % 1.0 % (0.2 %) Total Specialty losses and LAE and ratio $ 4,015 $ 3,625 $ 3,153 61.5 % 59.6 % 58.4 % 1.9 % 1.2 % Aggregate — including exited lines Current year, excluding COVID-19 related and catastrophe losses $ 4,079 $ 3,826 $ 3,334 62.4 % 62.8 % 61.6 % (0.4 %) 1.2 % Prior accident years development (224) (285) (279) (3.4 %) (4.7 %) (5.2 %) 1.3 % 0.5 % Current year COVID-19 related losses — — 16 — % — % 0.3 % — % (0.3 %) Current year catastrophe losses including the impact of net reinstatement premiums 162 88 86 2.6 % 1.6 % 1.8 % 1.0 % (0.2 %) Aggregate losses and LAE and ratio $ 4,017 $ 3,629 $ 3,157 61.6 % 59.7 % 58.5 % 1.9 % 1.2 % Current accident year losses and LAE, excluding COVID-19 related and catastrophe losses The current accident year loss and LAE ratio, excluding COVID-19 related and catastrophe losses for AFG’s Specialty property and casualty insurance operations was 62.4% in 2023, 62.8% in 2022 and 61.6% in 2021. 72 Table of Contents Property and transportation The 1.1 percentage points decrease in the loss and LAE ratio for the current year, excluding COVID-19 related and catastrophe losses in 2023 compared to 2022 is due primarily to the impact of elevated large loss activity in the property and inland marine business in 2022 and improved results in certain transportation businesses, partially offset by lower profit in the crop business.
Biggest changeThe components of AFG’s property and casualty losses and LAE amounts and ratio are detailed below (dollars in millions): Year ended December 31, Amount Ratio Change in Ratio 2024 2023 2022 2024 2023 2022 2024 - 2023 2023 - 2022 Property and transportation Current year, excluding catastrophe losses $ 1,982 $ 1,774 $ 1,785 71.0 % 70.5 % 71.6 % 0.5 % (1.1 %) Prior accident years development (94) (84) (92) (3.4 %) (3.3 %) (3.7 %) (0.1 %) 0.4 % Current year catastrophe losses including the impact of net reinstatement premiums 64 51 42 2.3 % 2.0 % 1.9 % 0.3 % 0.1 % Property and transportation losses and LAE and ratio $ 1,952 $ 1,741 $ 1,735 69.9 % 69.2 % 69.8 % 0.7 % (0.6 %) Specialty casualty Current year, excluding catastrophe losses $ 1,832 $ 1,814 $ 1,632 61.7 % 62.9 % 61.4 % (1.2 %) 1.5 % Prior accident years development (10) (110) (190) (0.4 %) (3.8 %) (7.2 %) 3.4 % 3.4 % Current year catastrophe losses including the impact of net reinstatement premiums 31 35 11 1.1 % 1.2 % 0.5 % (0.1 %) 0.7 % Specialty casualty losses and LAE and ratio $ 1,853 $ 1,739 $ 1,453 62.4 % 60.3 % 54.7 % 2.1 % 5.6 % Specialty financial Current year, excluding catastrophe losses $ 359 $ 311 $ 252 34.9 % 35.8 % 36.0 % (0.9 %) (0.2 %) Prior accident years development (11) (32) (47) (1.1 %) (3.7 %) (6.8 %) 2.6 % 3.1 % Current year catastrophe losses including the impact of net reinstatement premiums 81 49 33 7.8 % 5.7 % 4.9 % 2.1 % 0.8 % Specialty financial losses and LAE and ratio $ 429 $ 328 $ 238 41.6 % 37.8 % 34.1 % 3.8 % 3.7 % Total Specialty Current year, excluding catastrophe losses $ 4,339 $ 4,079 $ 3,826 61.7 % 62.4 % 62.8 % (0.7 %) (0.4 %) Prior accident years development (70) (226) (289) (1.0 %) (3.4 %) (4.7 %) 2.4 % 1.3 % Current year catastrophe losses including the impact of net reinstatement premiums 180 162 88 2.6 % 2.5 % 1.5 % 0.1 % 1.0 % Total Specialty losses and LAE and ratio $ 4,449 $ 4,015 $ 3,625 63.3 % 61.5 % 59.6 % 1.8 % 1.9 % Aggregate — including exited lines Current year, excluding catastrophe losses $ 4,339 $ 4,079 $ 3,826 61.7 % 62.4 % 62.8 % (0.7 %) (0.4 %) Prior accident years development (64) (224) (285) (0.9 %) (3.4 %) (4.7 %) 2.5 % 1.3 % Current year catastrophe losses including the impact of net reinstatement premiums 180 162 88 2.5 % 2.6 % 1.6 % (0.1 %) 1.0 % Aggregate losses and LAE and ratio $ 4,455 $ 4,017 $ 3,629 63.3 % 61.6 % 59.7 % 1.7 % 1.9 % Current accident year losses and LAE, excluding catastrophe losses The current accident year loss and LAE ratio, excluding catastrophe losses for AFG’s Specialty property and casualty insurance operations was 61.7% in 2024, 62.4% in 2023 and 62.8% in 2022.
AFG’s net earnings, determined in accordance with GAAP, include certain items that may not be indicative of its ongoing core operations.
AFG’s net earnings, determined in accordance with GAAP, include certain items that may not be indicative of its ongoing core operations.
Other specialty The amounts shown as reinsurance premiums ceded represent business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty property and casualty insurance sub-segments.
Other specialty The amounts shown as reinsurance premiums ceded represent business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty property and casualty insurance sub-segments.
Other specialty This group reported an underwriting loss of $36 million in 2023 compared to $42 million in 2022, a decrease of $6 million (14%), reflecting lower losses in the business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty sub-segments.
This group reported an underwriting loss of $36 million in 2023 compared to $42 million in 2022, a decrease of $6 million (14%), reflecting lower losses in the business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty sub-segments.
Property and transportation Net favorable reserve development of $84 million in 2023 reflects lower than anticipated losses in the crop business, lower than expected claim frequency and severity across the transportation businesses and lower than anticipated claim frequency in the property and inland marine and ocean marine businesses and in the Singapore operations.
Net favorable reserve development of $84 million in 2023 reflects lower than anticipated losses in the crop business, lower than expected claim frequency and severity across the transportation businesses and lower than anticipated claim frequency in the property and inland marine and ocean marine businesses and in the Singapore operations.
Catastrophe losses AFG generally seeks to reduce its exposure to catastrophes (whether resulting from climate change or otherwise) through individual risk selection, including minimizing coastal and known fault-line exposures, and the purchase of reinsurance.
Catastrophe losses AFG generally seeks to reduce its exposure to catastrophes (whether resulting from climate change or otherwise) through individual risk selection, including minimizing coastal and known fault-line exposures, and the purchase of reinsurance.
Holding Company and Other — P&C Fees and Related Expenses Summit, a workers’ compensation insurance subsidiary, collects fees from a small group of unaffiliated insurers for providing underwriting, policy administration and claims services. In addition, certain of AFG’s property and casualty insurance businesses collect fees from customers for ancillary services such as workplace safety programs and premium financing.
Holding Company and Other — P&C Fees and Related Expenses Summit, a workers’ compensation insurance subsidiary, collects fees from a small group of unaffiliated insurers for providing underwriting, policy administration and claims services. In addition, certain of AFG’s property and casualty insurance businesses collect fees from customers for ancillary services such as workplace safety programs and premium financing.
Holding Company and Other — Other Expenses Excluding the non-core special A&E charge and the non-core gain (loss) on retirement of debt discussed below, AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded other expenses of $162 million in 2023 compared to $143 million in 2022, an increase of $19 million (13%) reflecting the favorable impact of poor stock market performance in 2022 on expenses related to deferred compensation obligations to employees that are tied to stock market performance.
Excluding the non-core special A&E charge and the non-core gain (loss) on retirement of debt discussed below, AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded other expenses of $162 million in 2023 compared to $143 million in 2022, an increase of $19 million (13%) reflecting the favorable impact of poor stock market performance in 2022 on expenses related to deferred compensation obligations to employees that are tied to stock market performance.
AFG’s ongoing operations continue to generate significant excess capital for future returns of capital to shareholders in the form of regular and special cash dividends and through opportunistic share repurchases or to be deployed into its property and casualty businesses as management identifies the potential for profitable organic growth, and opportunities to expand through acquisitions of established businesses or start-ups that meet target return thresholds.
AFG’s operations continue to generate significant excess capital for future returns of capital to shareholders in the form of regular and special cash dividends and through opportunistic share repurchases or to be deployed into its property and casualty businesses as management identifies the potential for profitable organic growth, and opportunities to expand through acquisitions of established businesses or start-ups that meet target return thresholds.
Specialty financial Commissions and other underwriting expenses as a percentage of net earned premiums decreased 0.1 percentage points in 2023 compared to 2022 reflecting the impact on the ratio of growth in earned premiums in the financial institutions and innovative markets businesses, partially offset by higher expenses related to certain technology initiatives and the impact of lower profit-based commissions to agents and lower reinstatement premiums recorded in 2022 as a result of losses from Hurricane Ian.
Commissions and other underwriting expenses as a percentage of net earned premiums decreased 0.1 percentage points in 2023 compared to 2022 reflecting the impact on the ratio of growth in earned premiums in the financial institutions and innovative markets businesses, partially offset by higher expenses related to certain technology initiatives and the impact of lower profit-based commissions to agents and lower reinstatement premiums recorded in 2022 as a result of losses from Hurricane Ian.
ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and is required to be applied prospectively with the option of retrospective application. As of December 31, 2023, AFG has not adopted ASU 2023-09. Management is evaluating the impact of the standard to the income tax disclosures.
ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and is required to be applied prospectively with the option of retrospective application. As of December 31, 2024, AFG has not adopted ASU 2023-09. Management is evaluating the impact of the standard to AFG’s income tax disclosures.
Property and transportation Gross written premiums increased $86 million (2%) in 2023 compared to 2022 reflecting the impact of increased rates, retentions and exposures in the transportation and ocean marine businesses and slightly higher crop premium related to the CRS acquisition in the fourth quarter of 2023.
Gross written premiums increased $86 million (2%) in 2023 compared to 2022 reflecting the impact of increased rates, retentions and exposures in the transportation and ocean marine businesses and slightly higher crop premium related to the CRS acquisition in the fourth quarter of 2023.
Property and transportation Net favorable reserve development of $12 million in the fourth quarter of 2023 reflects lower than anticipated losses in the crop business and lower than expected claim frequency in the ocean marine and property and inland marine businesses.
Net favorable reserve development of $12 million in the fourth quarter of 2023 reflects lower than anticipated losses in the crop business and lower than expected claim frequency in the ocean marine and property and inland marine businesses.
Specialty financial Net favorable reserve development of $8 million in the fourth quarter of 2023 reflects lower than anticipated claim frequency and severity in the fidelity business and lower than expected claim frequency in the financial institutions and trade credit businesses.
Net favorable reserve development of $8 million in the fourth quarter of 2023 reflects lower than anticipated claim frequency and severity in the fidelity business and lower than expected claim frequency in the financial institutions and trade credit businesses.
Specialty financial Gross written premiums increased $260 million (29%) in 2023 compared to 2022 due primarily to growth in the financial institutions business. Average renewal rates increased approximately 5% for this group in 2023.
Gross written premiums increased $260 million (29%) in 2023 compared to 2022 due primarily to growth in the financial institutions business. Average renewal rates for this group increased approximately 5% in 2023.
Because this ratio can be significantly impacted by a number of factors such as loss payout variability, caution should be exercised in attempting to determine reserve adequacy based simply on the survival ratio. At December 31, 2023, the property and casualty insurance segment’s three-year survival ratios compare favorably with industry survival ratios published by A.M.
Because this ratio can be significantly impacted by a number of factors such as loss payout variability, caution should be exercised in attempting to determine reserve adequacy based simply on the survival ratio. At December 31, 2024, the property and casualty insurance segment’s three-year survival ratios compare favorably with industry survival ratios published by A.M.
Approximately 47% of AFG’s net asbestos reserves relate to policies written directly by AFG subsidiaries. Claims from these policies generally are product-oriented claims with only a limited amount of non-products exposures and are dominated by small to mid-sized commercial entities that are mostly regional policyholders with few national target defendants.
Approximately 48% of AFG’s net asbestos reserves relate to policies written directly by AFG subsidiaries. Claims from these policies generally are product-oriented claims with only a limited amount of non-products exposures and are dominated by small to mid-sized commercial entities that are mostly regional policyholders with few national target defendants.
(b) Elimination of the change in fair value of AFG’s investments in the CLOs, including $12 million in distributions recorded as interest expense by the CLOs. (c) Elimination of management fees earned by AFG. RESULTS OF OPERATIONS General AFG’s net earnings, determined in accordance with GAAP, include certain items that may not be indicative of its ongoing core operations.
(b) Elimination of the change in fair value of AFG’s investments in the CLOs, including $18 million in distributions recorded as interest expense by the CLOs. (c) Elimination of management fees earned by AFG. RESULTS OF OPERATIONS General AFG’s net earnings, determined in accordance with GAAP, include certain items that may not be indicative of its ongoing core operations.
The following tables for the three months ended December 31, 2023 and 2022 identify such items by segment and reconcile net earnings to core net operating earnings, a non-GAAP financial measure that AFG believes is a useful tool for investors and analysts in analyzing ongoing operating trends (in millions): Other P&C Consol.
The following tables for the three months ended December 31, 2024 and 2023 identify such items by segment and reconcile net earnings to core net operating earnings, a non-GAAP financial measure that AFG believes is a useful tool for investors and analysts in analyzing ongoing operating trends (in millions): Other P&C Consol.
The following tables for the years ended December 31, 2023, 2022 and 2021 identify such items by segment and reconcile net earnings to core net operating earnings, a non-GAAP financial measure that AFG believes is a useful tool for investors and analysts in analyzing ongoing operating trends (in millions): Other P&C Consol.
The following tables for the years ended December 31, 2024, 2023 and 2022 identify such items by segment and reconcile net earnings to core net operating earnings, a non-GAAP financial measure that AFG believes is a useful tool for investors and analysts in analyzing ongoing operating trends (in millions): Other P&C Consol.
The following table demonstrates the sensitivity of such fair values to reasonably likely changes in interest rates by illustrating the estimated effect on AFG’s fixed maturity portfolio that an immediate increase of 100 basis points in the interest rate yield curve would have had at December 31, 2023 (dollars in millions).
The following table demonstrates the sensitivity of such fair values to reasonably likely changes in interest rates by illustrating the estimated effect on AFG’s fixed maturity portfolio that an immediate increase of 100 basis points in the interest rate yield curve would have had at December 31, 2024 (dollars in millions).
Based on its analysis of the factors listed above, management believes AFG will recover its cost basis (net of any allowance) in the fixed maturity securities with unrealized losses and that AFG has the ability to hold the securities until they recover in value and had no intent to sell them at December 31, 2023.
Based on its analysis of the factors listed above, management believes AFG will recover its cost basis (net of any allowance) in the fixed maturity securities with unrealized losses and that AFG has the ability to hold the securities until they recover in value and had no intent to sell them at December 31, 2024.
Although the cost of certain reinsurance programs may increase, management believes that AFG will be able to maintain adequate reinsurance coverage at acceptable rates without a material adverse effect on AFG’s results of operations. AFG’s gross and net combined ratios are shown in the table below.
Although the cost of certain reinsurance programs may 40 Table of Contents increase, management believes that AFG will be able to maintain adequate reinsurance coverage at acceptable rates without a material adverse effect on AFG’s results of operations. AFG’s gross and net combined ratios are shown in the table below.
Specialty casualty Gross written premiums increased $253 million (6%) in 2023 compared to 2022 due primarily to increased exposures from payroll growth and new business in the workers’ compensation businesses, new business opportunities, strong policy retention and rate increases in several of the targeted markets businesses and increased exposures and higher renewal rates in the excess and surplus and excess liability businesses.
Gross written premiums increased $253 million (6%) in 2023 compared to 2022 due primarily to increased exposures from payroll growth and new business in the workers’ compensation businesses, new business opportunities, strong policy retention and rate increases in several of the targeted markets businesses and increased exposures and higher renewal rates in the excess and surplus and excess liability businesses.
Specialty casualty Net favorable reserve development of $110 million in 2023 reflects lower than anticipated claim severity in the workers’ compensation businesses, lower than expected claim frequency in the executive liability and environmental businesses and favorable reserve development related to COVID-19 losses across several businesses, partially offset by higher than anticipated claim severity in the public sector business and higher than expected claim frequency and severity in the excess liability and general liability businesses.
Net favorable reserve development of $110 million in 2023 reflects lower than anticipated claim severity in the workers’ compensation businesses, lower than expected claim frequency in the executive liability and environmental businesses and favorable reserve development related to COVID-19 losses across several businesses, partially offset by higher than anticipated claim severity in the public sector business and higher than expected claim frequency and severity in the excess liability and general liability businesses.
The following table shows (in millions) the breakdown of AFG’s property and casualty insurance reserves between case reserves, IBNR reserves and LAE reserves (estimated amounts required to adjust, record and settle claims, other than the claim payments themselves) at December 31, 2023 and gross written premiums for the year ended December 31, 2023.
The following table shows (in millions) the breakdown of AFG’s property and casualty insurance reserves between case reserves, IBNR reserves and LAE reserves (estimated amounts required to adjust, record and settle claims, other than the claim payments themselves) at December 31, 2024 and gross written premiums for the year ended December 31, 2024.
The following table shows (dollars in millions) what the impact on AFG’s net earnings would be on the more significant lines of business if the December 31, 2023, reserves (net of reinsurance) were to develop at the same rate as the average development of the most recent five years. 5-yr.
The following table shows (dollars in millions) what the impact on AFG’s net earnings would be on the more significant lines of business if the December 31, 2024, reserves (net of reinsurance) were to develop at the same rate as the average development of the most recent five years. 5-yr.
The management fees are eliminated in consolidation — see the other income line in the Consolidate MIEs column under “Results of Operations — Segmented Statement of Earnings.” Excluding amounts eliminated in consolidation, AFG recorded other income outside of its property and casualty insurance segment of $1 million and $2 million in the fourth quarter of 2023 and the fourth quarter of 2022, respectively.
The management fees are eliminated in consolidation — see the other income line in the Consolidate MIEs column under “Results of Operations — Segmented Statement of Earnings.” Excluding amounts eliminated in consolidation, AFG recorded other income outside of its property and casualty insurance segment of $2 million and $1 million in the fourth quarter of 2024 and the fourth quarter of 2023, respectively.
Specialty casualty Commissions and other underwriting expenses as a percentage of net earned premiums increased 0.2 percentage points in 2023 compared to 2022 reflecting higher expenses related to certain technology initiatives, partially offset by the impact on the ratio of growth in earned premiums in the workers’ compensation businesses.
Commissions and other underwriting expenses as a percentage of net earned premiums increased 0.2 percentage points in 2023 compared to 2022 reflecting higher expenses related to certain technology initiatives, partially offset by the impact on the ratio of growth in earned premiums in the workers’ compensation businesses.
Holding Company and Other — Special A&E Charge As a result of the in-depth internal reviews of A&E exposures discussed under “Uncertainties — Asbestos and Environmental-related (“A&E”) Insurance Reserves,” AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded a pretax non-core special charge of $15 million in 2023 and minor charges in 2022 and 2021 (included in AFG’s core operating earnings) to increase liabilities related to the A&E exposures of AFG’s former railroad and manufacturing operations.
Holding Company and Other — Special A&E Charges As a result of the in-depth internal reviews of A&E exposures discussed under “Uncertainties — Asbestos and Environmental-related (“A&E”) Insurance Reserves,” AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded pretax non-core special charges of $14 million in 2024, $15 million in 2023 and a minor charge in 2022 (included in AFG’s core operating earnings) to increase liabilities related to the A&E exposures of AFG’s former railroad and manufacturing operations.
Realized Gain (Loss) on Subsidiaries In the third quarter of 2023, AFG recorded a realized loss on subsidiary of $4 million, consisting of a $26 million goodwill impairment charge, partially offset by a $22 million reduction in the fair value of a contingent consideration liability, both related to AFG’s investment in Verikai.
In the third quarter of 2023, AFG recorded a realized loss on subsidiary of $4 million, consisting of a $26 million goodwill impairment charge, partially offset by a $22 million reduction in the fair value of a contingent consideration liability, both related to AFG’s investment in Verikai.
Specialty casualty Net favorable reserve development of $37 million in the fourth quarter of 2023 reflects lower than anticipated claim severity in the workers’ compensation businesses, partially offset by higher than anticipated claim severity in the excess and surplus business and higher than expected claim frequency and severity in the excess liability and general liability businesses.
Net favorable reserve development of $37 million in the fourth quarter of 2023 reflects lower than anticipated claim severity in the workers’ compensation businesses, partially offset by higher than anticipated claim severity in the excess and surplus business and higher than expected claim frequency and severity in the excess liability and general liability businesses.
Specialty financial The 0.2 percentage points decrease in the loss and LAE ratio for the current year, excluding COVID-19 related and catastrophe losses in 2023 compared to 2022 reflects lower claim frequency and growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment, partially offset by higher claim severity in the innovative markets business.
The 0.2 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2023 compared to 2022 reflects lower claim frequency and growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment, partially offset by higher claim severity in the innovative markets business.
Holding Company and Other — Gain (Loss) on Retirement of Debt During the first six months of 2023, AFG repurchased $23 million principal amount of its senior notes, which resulted in a $2 million pretax non-core gain and recorded a $1 million pretax non-core loss related to the write-off of debt issue costs associated with its previous revolving credit facility, which was replaced in June 2023.
Holding Company and Other — Gain (Loss) on Retirement of Debt During 2023, AFG repurchased $23 million principal amount of its senior notes, which resulted in a $2 million pretax non-core gain and recorded a $1 million pretax non-core loss related to the write-off of debt issue costs associated with its previous revolving credit facility, which was replaced in June 2023.
The expenses related to providing such services are embedded in property and casualty underwriting expenses. Consistent with internal management reporting, these fees and the related expenses are netted and recorded as a reduction of loss adjustment and other underwriting expenses in AFG’s segmented results.
The expenses related to providing such services are embedded in underwriting expenses. Consistent with internal management reporting, these fees and the related expenses are netted and recorded as a reduction of loss adjustment and other underwriting expenses in AFG’s segmented results.
However, future results could vary due to an unexpected change in the underlying cost trends. This unexpected change could arise from a variety of sources including a general increase in economic inflation, social inflation, new medical technologies, or other factors such as those listed below in connection with AFG’s largest lines of business.
However, future results could vary due to an unexpected change in the underlying cost trends. This unexpected change could arise from a variety of sources including a general increase in economic inflation, social inflation, new medical technologies, or other factors such as those listed below in connection with AFG’s largest lines of 38 Table of Contents business.
See Item 1 — Business — “Property and Casualty Insurance Segment — Reinsurance” for more information on AFG’s reinsurance programs. For additional information on the effect of reinsurance on AFG’s historical results of operations see Note O — “Insurance — Reinsurance” to the financial statements.
See Item 1 — Business — “Property and Casualty Insurance Segment — Reinsurance” for more information on AFG’s reinsurance programs. For additional information on the effect of reinsurance on AFG’s historical results of operations see Note N — “Insurance — Reinsurance” to the financial statements.
MIEs Holding Co., other and unallocated Total Non-core reclass GAAP Total Year ended December 31, 2023 Revenues: Property and casualty insurance net earned premiums $ 6,531 $ — $ — $ 6,531 $ — $ 6,531 Net investment income 729 (27) 40 742 — 742 Realized gains (losses) on: Securities — — — — (36) (36) Subsidiary — — — — (4) (4) Income of MIEs: Investment income — 421 — 421 — 421 Gain (loss) on change in fair value of assets/liabilities — 27 — 27 — 27 Other income 16 (16) 146 146 — 146 Total revenues 7,276 405 186 7,867 (40) 7,827 Costs and Expenses: Property and casualty insurance: Losses and loss adjustment expenses 4,017 — 16 4,033 — 4,033 Commissions and other underwriting expenses 1,883 — 52 1,935 — 1,935 Interest charges on borrowed money — — 76 76 — 76 Expenses of MIEs — 405 — 405 — 405 Other expenses 72 — 219 291 14 305 Total costs and expenses 5,972 405 363 6,740 14 6,754 Earnings from continuing operations before income taxes 1,304 — (177) 1,127 (54) 1,073 Provision for income taxes 265 — (33) 232 (11) 221 Core Net Operating Earnings 1,039 — (144) 895 Non-core earnings (loss) (*): Realized gains (losses) on securities, net of tax — — (28) (28) 28 — Realized loss on subsidiary (4) — — (4) 4 — Special A&E charge, net of tax — — (12) (12) 12 — Gain on retirement of debt, net of tax — — 1 1 (1) — Net Earnings $ 1,035 $ — $ (183) $ 852 $ — $ 852 64 Table of Contents Other P&C Consol.
MIEs Holding Co., other and unallocated Total Non-core reclass GAAP Total Year ended December 31, 2023 Revenues: Net earned premiums $ 6,531 $ — $ — $ 6,531 $ — $ 6,531 Net investment income 729 (27) 40 742 — 742 Realized gains (losses) on: Securities — — — — (36) (36) Subsidiary — — — — (4) (4) Income of MIEs: Investment income — 421 — 421 — 421 Gain (loss) on change in fair value of assets/liabilities — 27 — 27 — 27 Other income 16 (16) 146 146 — 146 Total revenues 7,276 405 186 7,867 (40) 7,827 Costs and Expenses: Losses and loss adjustment expenses 4,017 — 16 4,033 — 4,033 Commissions and other underwriting expenses 1,883 — 52 1,935 — 1,935 Interest charges on borrowed money — — 76 76 — 76 Expenses of MIEs — 405 — 405 — 405 Other expenses 72 — 219 291 14 305 Total costs and expenses 5,972 405 363 6,740 14 6,754 Earnings before income taxes 1,304 — (177) 1,127 (54) 1,073 Provision for income taxes 265 — (33) 232 (11) 221 Core Net Operating Earnings 1,039 — (144) 895 Non-core earnings (loss) (*): Realized gains (losses) on securities, net of tax — — (28) (28) 28 — Realized loss on subsidiary (4) — — (4) 4 — Special A&E charge, net of tax — — (12) (12) 12 — Gain on retirement of debt, net of tax — — 1 1 (1) — Net Earnings $ 1,035 $ — $ (183) $ 852 $ — $ 852 63 Table of Contents Other P&C Consol.
For information on AFG’s realized gains (losses) on securities, see “Results of Operations — Realized Gains (Losses) on Securities.” Uncertainties As more fully explained in the following paragraphs, management believes that the areas posing the greatest risk of material loss are the adequacy of its insurance reserves and contingencies arising out of its former railroad and manufacturing operations.
For information on AFG’s realized gains (losses) on securities, see “Results of Operations — Realized Gains (Losses) on Securities.” 37 Table of Contents Uncertainties As more fully explained in the following paragraphs, management believes that the areas posing the greatest risk of material loss are the adequacy of its insurance reserves and contingencies arising out of its former railroad and manufacturing operations.
Some of the important variables affecting estimation of loss reserves for other liability — occurrence include: • Litigious climate • Unpredictability of judicial decisions regarding coverage issues • Magnitude of jury awards • Outside counsel costs • Timing of claims reporting AFG recorded adverse prior year reserve development of $96 million in 2023, $109 million in 2022 and $39 million in 2021 related to its other liability — occurrence coverage due primarily to continued claim severity increases in excess and umbrella liability coverages.
Some of the important variables affecting estimation of loss reserves for other liability — occurrence include: • Litigious climate • Unpredictability of judicial decisions regarding coverage issues • Magnitude of jury awards • Outside counsel costs • Timing of claims reporting AFG recorded adverse prior year reserve development of $210 million in 2024, $96 million in 2023 and $109 million in 2022 related to its other liability — occurrence coverage due primarily to continued claim severity increases in excess and umbrella liability coverages.
Property and Casualty Insurance Segment — Results of Operations AFG’s property and casualty insurance operations contributed $1.30 billion in GAAP pretax earnings in 2023 compared to $1.42 billion in 2022, a decrease of $119 million (8%). Property and casualty core pretax earnings were $1.30 billion in 2023 compared to $1.42 billion in 2022, a decrease of $115 million (8%).
AFG’s property and casualty insurance operations contributed $1.30 billion in GAAP pretax earnings in 2023 compared to $1.42 billion in 2022, a decrease of $119 million (8%). Property and casualty core pretax earnings were $1.30 billion in 2023 compared to $1.42 billion in 2022, a decrease of $115 million (8%).
Some of the important variables affecting estimation of loss reserves for commercial auto/truck liability/medical are similar to other liability — occurrence and include: • Magnitude of jury awards • Unpredictability of judicial decisions regarding coverage issues • Litigious climate and trends • Change in frequency of severe accidents • Health care costs and utilization of medical services by injured parties AFG recorded adverse prior year reserve development of $29 million in 2023, $32 million in 2022 and $7 million in 2021 for this line of business due to higher than anticipated severity.
Some of the important variables affecting estimation of loss reserves for commercial auto/truck liability/medical are similar to other liability — occurrence and include: • Magnitude of jury awards • Unpredictability of judicial decisions regarding coverage issues • Litigious climate and trends • Change in frequency of severe accidents • Health care costs and utilization of medical services by injured parties AFG recorded adverse prior year reserve development of $36 million in 2024, $29 million in 2023 and $32 million in 2022 for this line of business due to higher than anticipated claim severity.
Amounts borrowed under this agreement bear interest at rates ranging from 1.00% to 1.75% (based on AFG’s credit rating, currently 1.25%) over a SOFR-based floating rate. There were no borrowings under AFG’s credit facilities, or under any other parent company short-term borrowing arrangements, during 2023 or 2022.
Amounts borrowed under this agreement bear interest at rates ranging from 1.00% to 1.75% (based on AFG’s credit rating, currently 1.25%) over a SOFR-based floating rate. There were no borrowings under AFG’s credit facility, or under any other parent company short-term borrowing arrangements, during 2024 or 2023.
AFG recorded net catastrophe losses of $162 million in 2023 (before $3 million in net reinstatement premiums) primarily from February and March storms across much of the United States in the first quarter and storms in multiple regions of the United States in the second, third and fourth quarters.
Catastrophe losses of $162 million in 2023 (before $3 million in net reinstatement premiums) resulted primarily from February and March storms across much of the United States in the first quarter and storms in multiple regions of the United States in the second, third and fourth quarters.
The $9 million (11%) decrease in interest expense in 2023 compared to 2022 and the $9 million (10%) decrease in interest expense in 2022 compared to 2021 is due primarily to the retirement of AFG’s $425 million principal amount of 3.50% Senior Notes during the first six months of 2022.
The $9 million (11%) decrease in interest expense in 2024 and 2023 compared to 2022 is due primarily to the retirement of AFG’s $425 million principal amount of 3.50% Senior Notes during the first six months of 2022.
Some of the important variables affecting estimation of loss reserves for workers’ compensation include: • Legislative actions and regulatory and legal interpretations • Future medical cost inflation • Economic conditions • Frequency of reopening claims previously closed • Advances in medical equipment and processes • Pace and intensity of employee rehabilitation • Changes in the use of pharmaceutical drugs • Changes in mortality trends for permanently injured workers Approximately 26% and 25% of AFG’s workers’ compensation reserves at December 31, 2023 relate to policies written in Florida and California, respectively.
Some of the important variables affecting estimation of loss reserves for workers’ compensation include: • Legislative actions and regulatory and legal interpretations • Future medical cost inflation • Economic conditions • Frequency of reopening claims previously closed • Advances in medical equipment and processes • Pace and intensity of employee rehabilitation • Changes in the use of pharmaceutical drugs • Changes in mortality trends for permanently injured workers Approximately 23% and 24% of AFG’s workers’ compensation reserves at December 31, 2024 relate to policies written in Florida and California, respectively.
Nonetheless, changes in statutory accounting rules, significant declines in the fair value of the insurance subsidiaries’ investment portfolios or significant ratings downgrades on these investments, could create a need for additional capital.
Nonetheless, changes in statutory accounting rules, changes in rating agency measures, significant declines in the fair value of the insurance subsidiaries’ investment portfolios or significant ratings downgrades on these investments, could create a need for additional capital.
Aggregate Aggregate net prior accident years reserve development for AFG’s property and casualty insurance segment includes net adverse reserve development of $1 million in the fourth quarter of 2023 and net favorable reserve development of $1 million in the fourth quarter of 2022 related to business outside of the Specialty group that AFG no longer writes.
Aggregate Aggregate net prior accident years reserve development for AFG’s property and casualty insurance segment includes net adverse reserve development of $2 million in the fourth quarter of 2024 and $1 million in the fourth quarter of 2023 related to business outside of the Specialty group that AFG no longer writes.
Aggregate Aggregate net prior accident years reserve development for AFG’s property and casualty insurance segment includes net adverse reserve development of $2 million in 2023 and $4 million in both 2022 and 2021 related to business outside the Specialty group that AFG no longer writes.
Aggregate Aggregate net prior accident years reserve development for AFG’s property and casualty insurance segment includes net adverse reserve development of $6 million in 2024, $2 million in 2023 and $4 million in 2022 related to business outside the Specialty group that AFG no longer writes.
AFG’s fixed maturity portfolio includes securities (the majority of which are AAA-rated) with a carrying value of approximately $600 million that have minimal exposure to office commercial real estate. 37 Table of Contents Summarized information for the unrealized gains and losses recorded in AFG’s Balance Sheet at December 31, 2023, is shown in the following table (dollars in millions).
AFG’s fixed maturity portfolio includes securities (the majority of which are AAA-rated) with a carrying value of approximately $450 million that have minimal exposure to office commercial real estate. Summarized information for the unrealized gains and losses recorded in AFG’s Balance Sheet at December 31, 2024, is shown in the following table (dollars in millions).
The process used to determine the total reserve for liabilities involves estimating the ultimate incurred losses and LAE, adjusted for amounts already paid on the claims. The IBNR reserve is derived by estimating the ultimate unpaid reserve 39 Table of Contents liability and subtracting case reserves for loss and LAE.
The process used to determine the total reserve for liabilities involves estimating the ultimate incurred losses and LAE, adjusted for amounts already paid on the claims. The IBNR reserve is derived by estimating the ultimate unpaid reserve liability and subtracting case reserves for loss and LAE.
AFG recorded favorable prior year reserve development of $33 million in 2023, $24 million in 2022 and $2 million in 2021 on its D&O business as claim frequency and severity were less than expected across several prior accident years.
AFG recorded favorable prior year reserve development of $15 million in 2024, $33 million in 2023 and $24 million in 2022 on its D&O business as claim frequency and severity were less than expected across several prior accident years.
The decrease in GAAP and core pretax earnings reflects lower underwriting profit and lower investment income from AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs), partially offset by higher investment income outside of alternative investments in 2023 compared to 2022.
The increase in GAAP and core pretax earnings in 2024 compared to 2023 reflects higher investment income outside of alternative investments, partially offset by lower investment income from AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs) and lower underwriting profit.
Specialty casualty The 1.5 percentage points increase in the loss and LAE ratio for the current year, excluding COVID-19 related and catastrophe losses in 2023 compared to 2022 reflects anticipated medical cost inflation and the impact of pressure on rates in the workers’ compensation businesses and higher claim severity in certain liability coverages.
The 1.5 percentage points increase in the loss and LAE ratio for the current year, excluding catastrophe losses in 2023 compared to 2022 reflects anticipated medical cost inflation and the impact of pressure on rates in the workers’ compensation businesses and higher claim severity in certain liability coverages.
For a discussion of the uncertainties in determining the ultimate liability, see Note N — “Contingencies” to the financial statements. MANAGED INVESTMENT ENTITIES Accounting standards require AFG to consolidate its investments in collateralized loan obligation (“CLO”) entities that it manages and owns an interest in (in the form of debt).
For a discussion of the uncertainties in determining the ultimate liability, see Note M — “Contingencies” to the financial statements. 43 Table of Contents MANAGED INVESTMENT ENTITIES Accounting standards require AFG to consolidate its investments in collateralized loan obligation (“CLO”) entities that it manages and owns an interest in (in the form of debt).
Management views this fee income, net of the $14 million in both the fourth quarter of 2023 and the fourth quarter of 2022 in expenses incurred to generate such fees, as a reduction in the cost of underwriting its property and casualty insurance policies.
Management views this fee income, net of the $15 million in the fourth quarter of 2024 and $14 million in the fourth quarter of 2023 in expenses incurred to generate such fees, as a reduction in the cost of underwriting its property and casualty insurance policies.
Management views this fee income, net of the $57 million in 2023, $51 million in 2022 and $47 million in 2021, in expenses incurred to generate such fees, as a reduction in the cost of underwriting its property and casualty insurance policies.
Management views this fee income, net of the $60 million in 2024, $57 million in 2023 and $51 million in 2022, in expenses incurred to generate such fees, as a reduction in the cost of underwriting its property and casualty insurance policies.
See Note O — “Insurance — Property and Casualty Insurance Reserves” to the financial statements for a discussion of the factors considered and actuarial methods used in determining management’s best estimate of the ultimate liability for unpaid losses and LAE.
See Note N — “Insurance — Insurance Reserves” to the financial statements for a discussion of the factors considered and actuarial methods used in determining management’s best estimate of the ultimate liability for unpaid losses and LAE.
See “Liquidity and Capital Resources — Uncertainties” for a discussion of insurance reserves, recoverables from reinsurers and contingencies related to American Premier’s former operations and “Liquidity and Capital Resources — Investments” for a discussion of the allowance for credit losses (impairments) on investments.
See “Liquidity and Capital Resources — Uncertainties” for a discussion of insurance reserves, recoverables from reinsurers and contingencies related to APU Consolidated’s former operations and “Liquidity and Capital Resources — Investments” for a discussion of the allowance for credit losses (impairments) on investments.
Holding Company and Other — Other Income Other income in the table above includes $4 million in the fourth quarter of 2023 and $5 million in the fourth quarter of 2022, in management fees paid to AFG by the AFG-managed CLOs (AFG’s consolidated managed investment entities).
Holding Company and Other — Other Income Other income in the table above includes $4 million in both the fourth quarter of 2024 and the fourth quarter of 2023, in management fees paid to AFG by the AFG-managed CLOs (AFG’s consolidated managed investment entities).
Significant long-term debt and common stock transactions are discussed above under “Parent Holding Company Liquidity.” Parent holding company net cash used in financing activities was $901 million in 2023 compared to $1.68 billion in 2022 and $2.63 billion in 2021.
Significant long-term debt and common stock transactions are discussed above under “Parent Holding Company Liquidity.” Parent holding company net cash used in financing activities was $769 million in 2024 compared to $901 million in 2023 and $1.68 billion in 2022.
Holding Company and Other — Interest Charges on Borrowed Money AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded interest expense of $76 million in 2023, $85 million in 2022 and $94 million in 2021.
Holding Company and Other — Interest Charges on Borrowed Money AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded interest expense of $76 million in both 2024 and 2023 and $85 million in 2022.
Total charges recorded to increase liabilities for A&E exposures of AFG’s former railroad and manufacturing operations (included in other expenses) were $22 million in 2023, $17 million in 2022 and $9 million in 2021.
Total charges recorded to increase liabilities for A&E exposures of AFG’s former railroad and manufacturing operations (included in other expenses) were $24 million in 2024, $22 million in 2023, and $17 million in 2022.
(b) Elimination of the change in fair value of AFG’s investments in the CLOs, including $11 million and $5 million in the fourth quarter of 2023 and 2022, respectively, in distributions recorded as interest expense by the CLOs. (c) Elimination of management fees earned by AFG. 47 Table of Contents CONDENSED CONSOLIDATING STATEMENT OF EARNINGS - CONTINUED Before CLO Consol.
(b) Elimination of the change in fair value of AFG’s investments in the CLOs, including $12 million and $11 million in the fourth quarter of 2024 and 2023, respectively, in distributions recorded as interest expense by the CLOs. (c) Elimination of management fees earned by AFG. 45 Table of Contents CONDENSED CONSOLIDATING STATEMENT OF EARNINGS - CONTINUED Before CLO Consol.
The 2023 charge reflects changes in the scope and costs of investigation and an increase in estimated remediation costs at a limited number of sites. AFG has also increased its reserve for asbestos and toxic substance exposures arising out of these operations.
The 2024 and 2023 charges reflect changes in the scope and costs of investigation and an increase in estimated remediation costs at a limited number of sites. AFG has also increased its reserve for asbestos and toxic substance exposures arising out of these operations.
For AFG’s fixed maturity portfolio, approximately 89% was priced using pricing services at December 31, 2023 and 5% was priced using non-binding broker quotes. When prices obtained for the same security vary, AFG’s internal investment professionals select the price they believe is most indicative of an exit price.
For AFG’s fixed maturity portfolio, approximately 88% was priced using pricing services at December 31, 2024 and 4% was priced using non-binding broker quotes. When prices obtained for the same security vary, AFG’s internal investment professionals select the price they believe is most indicative of an exit price.
(b) Elimination of the change in fair value of AFG’s investments in the CLOs, including $29 million and $18 million in 2023 and 2022, respectively, in distributions recorded as interest expense by the CLOs. (c) Elimination of management fees earned by AFG. 48 Table of Contents CONDENSED CONSOLIDATING STATEMENT OF EARNINGS - CONTINUED Before CLO Consol.
(b) Elimination of the change in fair value of AFG’s investments in the CLOs, including $37 million and $29 million in 2024 and 2023, respectively, in distributions recorded as interest expense by the CLOs. (c) Elimination of management fees earned by AFG. 46 Table of Contents CONDENSED CONSOLIDATING STATEMENT OF EARNINGS - CONTINUED Before CLO Consol.
AFG’s investment portfolio at December 31, 2023, contained $10.38 billion in fixed maturity securities classified as available for sale and carried at fair value with unrealized gains and losses included in accumulated other comprehensive income (loss) and $57 million in fixed maturities classified as trading with holding gains and losses included in net investment income.
AFG’s investment portfolio at December 31, 2024, contained $10.40 billion in fixed maturity securities classified as available for sale and carried at fair value with unrealized gains and losses included in accumulated other comprehensive income (loss) and $76 million in fixed maturities classified as trading with holding gains and losses included in net investment income.
Property and casualty reserves for unpaid losses and loss adjustment expenses were $13.09 billion at December 31, 2023 and include case reserves and claims incurred but not reported (“IBNR”). The ultimate amount to be paid to settle reserves is an estimate, subject to significant uncertainty.
Property and casualty reserves for unpaid losses and loss adjustment expenses were $14.18 billion at December 31, 2024 and include case reserves and claims incurred but not reported (“IBNR”). The ultimate amount to be paid to settle reserves is an estimate, subject to significant uncertainty.
AFG recorded favorable prior year reserve development of $116 million in 2023, $189 million in 2022 and $169 million in 2021, related to its workers’ compensation coverage due to lower than anticipated medical severity. 41 Table of Contents Other Liability — Claims Made This long-tail line of business consists mostly of directors’ and officers’ liability (“D&O”).
AFG recorded favorable prior year reserve development of $128 million in 2024, $116 million in 2023 and $189 million in 2022, related to its workers’ compensation coverage due to lower than anticipated medical severity. Other Liability — Claims Made This long-tail line of business consists mostly of directors’ and officers’ liability (“D&O”).
The following is a reconciliation of income taxes at the statutory rate to the provision for income taxes as shown in the segmented statement of earnings (dollars in millions): Three months ended December 31, 2023 2022 Amount % of EBT Amount % of EBT Earnings before income taxes (“EBT”) $ 335 $ 346 Income taxes at statutory rate $ 70 21 % $ 73 21 % Effect of: Change in valuation allowance — — % (10) (3 %) Employee stock ownership plan dividend paid deduction (2) (1 %) (1) — % Stock-based compensation — — % (1) — % Tax exempt interest (1) — % (1) — % Dividend received deduction (1) — % (1) — % Nondeductible expenses 3 1 % 3 1 % Foreign operations — — % 1 — % Other 3 — % 7 1 % Provision for income taxes $ 72 21 % $ 70 20 % See Note M — “Income Taxes” to the financial statements for an analysis of items affecting AFG’s effective tax rate. 63 Table of Contents RESULTS OF OPERATIONS — YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021 Segmented Statement of Earnings Subsequent to the sale of its annuity operations, AFG reports its continuing operations as two segments: (i) Property and casualty insurance (“P&C”) and (ii) Other, which includes holding company costs and income and expenses related to the managed investment entities (“MIEs”).
The following is a reconciliation of income taxes at the statutory rate to the provision for income taxes as shown in the segmented statement of earnings (dollars in millions): Three months ended December 31, 2024 2023 Amount % of EBT Amount % of EBT Earnings before income taxes (“EBT”) $ 320 $ 335 Income taxes at statutory rate $ 67 21 % $ 70 21 % Effect of: Tax exempt interest (2) (1 %) (1) — % Employee stock ownership plan dividend paid deduction (2) (1 %) (2) (1 %) Stock-based compensation (1) — % — — % Change in valuation allowance (1) — % — — % Dividend received deduction — — % (1) — % Nondeductible expenses 1 — % 3 1 % Foreign operations 1 — % — — % Other 2 1 % 3 — % Provision for income taxes $ 65 20 % $ 72 21 % See Note L — “Income Taxes” to the financial statements for an analysis of items affecting AFG’s effective tax rate. 61 Table of Contents RESULTS OF OPERATIONS — YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022 Segmented Statement of Earnings AFG reports its operations as two segments: (i) Property and casualty insurance (“P&C”) and (ii) Other, which includes holding company costs and income and expenses related to the managed investment entities (“MIEs”).
Cash flows from operating, investing and financing activities as detailed in AFG’s Consolidated Statement of Cash Flows are shown below (in millions): Year ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 1,970 $ 1,153 $ 1,714 Net cash provided by (used in) investing activities 414 (1,051) (436) Net cash used in financing activities (2,031) (1,361) (1,957) Net change in cash and cash equivalents $ 353 $ (1,259) $ (679) Net Cash Provided by Operating Activities AFG’s property and casualty insurance operations typically produce positive net operating cash flows as premiums collected and investment income exceed policy acquisition costs, claims payments and operating expenses.
Cash flows from operating, investing and financing activities as detailed in AFG’s Consolidated Statement of Cash Flows are shown below (in millions): Year ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 1,152 $ 1,970 $ 1,153 Net cash provided by (used in) investing activities 95 414 (1,051) Net cash used in financing activities (1,066) (2,031) (1,361) Net change in cash and cash equivalents $ 181 $ 353 $ (1,259) Net Cash Provided by Operating Activities AFG’s property and casualty insurance operations typically produce positive net operating cash flows as premiums collected and investment income exceed policy acquisition costs, claims payments and operating expenses.
In addition, AFG’s investment portfolio includes $571 million in equity securities carried at fair value with holding gains and losses included in realized gains (losses) on securities and $447 million in equity securities carried at fair value with holding gains and losses included in net investment income.
In addition, AFG’s investment portfolio includes $522 million in equity securities carried at fair value with holding gains and losses included in realized gains (losses) on securities and $229 million in equity securities carried at fair value with holding gains and losses included in net investment income.
The decrease in 2023 compared to 2022 and the increase in 2022 compared to 2021 is due primarily to income from the sale of real estate in 2022.
The decrease in 2024 and 2023 compared to 2022 is due primarily to income from the sale of real estate in 2022.
In addition, AFG’s property and casualty insurance businesses earned $34 million in fees as compensation for providing services during the second half of 2023 related to the administration of crop insurance business generated by CRS for its former owner prior to the acquisition date and $7 million in fees from AFG’s disposed annuity operations in both 2022 and 2021 as compensation for certain services provided under a transition services agreement.
In addition, AFG’s property and casualty insurance businesses earned $11 million in 2024 and $34 million in 2023 in fees as compensation for providing services related to the administration of crop insurance business generated by CRS for its former owner prior to AFG’s acquisition of CRS and $7 million in 2022 in fees from AFG’s disposed annuity operations as compensation for certain services provided under a transition services agreement.
Aggregate Aggregate underwriting results for AFG’s property and casualty insurance segment include adverse prior year reserve development of $2 million in 2023 and $4 million in both 2022 and 2021, related to business outside of the Specialty group that AFG no longer writes. 71 Table of Contents Losses and Loss Adjustment Expenses AFG’s overall loss and LAE ratio was 61.6%, 59.7% and 58.5% in 2023, 2022 and 2021, respectively.
Aggregate Aggregate underwriting results for AFG’s property and casualty insurance segment include adverse prior year reserve development of $6 million in 2024, $2 million in 2023 and $4 million in 2022, related to business outside of the Specialty group that AFG no longer writes. 69 Table of Contents Losses and Loss Adjustment Expenses AFG’s overall loss and LAE ratio was 63.3%, 61.6% and 59.7% in 2024, 2023 and 2022, respectively.
The net adverse reserve development reflects $4 million, $44 million and $16 million in 2023, 2022 and 2021, respectively, of net adverse development associated with AFG’s internal reinsurance program. The net adverse reserve development in 2022 and 2021 relates primarily to social inflation exposed business assumed from the Specialty casualty sub-segment.
The net adverse reserve development reflects $50 million, $4 million and $44 million in 2024, 2023 and 2022, respectively, of net adverse development associated with AFG’s internal reinsurance program, primarily related to social inflation exposed business assumed from the Specialty casualty sub-segment.
The management fees are eliminated in consolidation — see the other income line in the Consolidated MIEs column under “Results of Operations — Segmented Statement of Earnings.” Excluding amounts eliminated in consolidation, AFG recorded other income outside of its property and casualty insurance segment of $5 million in 2023, $16 million in 2022 and $6 million in 2021.
The management fees are eliminated in consolidation — see the other income line in the Consolidated MIEs column under “Results of 75 Table of Contents Operations — Segmented Statement of Earnings.” Excluding amounts eliminated in consolidation, AFG recorded other income outside of its property and casualty insurance segment of $5 million in both 2024 and 2023 and $16 million in 2022.
During 2022, AFG repurchased 89,368 shares of its Common Stock for $11 million and paid special cash dividends totaling $1.02 billion ($2.00 per share in March, $8.00 per share in May and $2.00 per share in November).
During 2022, AFG repurchased 89,368 shares of its Common Stock for $11 million and paid special cash dividends totaling $1.02 billion ($2.00 per share in March, $8.00 per share in May and $2.00 per share in November). In 2022, AFG repurchased $472 million principal amount of its senior notes for $477 million cash.
These developments are fluid and could result in piecemeal state-by-state solutions. • The manner by which bankruptcy courts are addressing asbestos liabilities is in flux. • AFG’s insureds may make claims alleging significant non-products exposures.
These developments are fluid and could result in piecemeal state-by-state solutions. • The manner by which bankruptcy courts are addressing asbestos liabilities is in flux. • AFG’s insureds may make claims alleging significant non-products exposures. AFG tracks its A&E claims by policyholder.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeLong-Term Debt The following table shows scheduled principal payments on fixed-rate long-term debt of AFG and its subsidiaries and related weighted average interest rates for each of the subsequent five years and for all years thereafter (dollars in millions): December 31, 2023 December 31, 2022 Scheduled Principal Payments Rate Scheduled Principal Payments Rate 2024 $ — — % 2023 $ — — % 2025 — — % 2024 — — % 2026 — — % 2025 — — % 2027 — — % 2026 — — % 2028 — — % 2027 — — % Thereafter 1,498 4.9 % Thereafter 1,521 4.9 % Total $ 1,498 4.9 % Total $ 1,521 4.9 % Fair Value $ 1,345 Fair Value $ 1,302 82 Table of Contents
Biggest changeLong-Term Debt The following table shows scheduled principal payments on fixed-rate long-term debt of AFG and its subsidiaries and related weighted average interest rates for each of the subsequent five years and for all years thereafter (dollars in millions): December 31, 2024 December 31, 2023 Scheduled Principal Payments Rate Scheduled Principal Payments Rate 2025 $ — — % 2024 $ — — % 2026 — — % 2025 — — % 2027 — — % 2026 — — % 2028 — — % 2027 — — % 2029 — — % 2028 — — % Thereafter 1,498 4.9 % Thereafter 1,498 4.9 % Total $ 1,498 4.9 % Total $ 1,498 4.9 % Fair Value $ 1,276 Fair Value $ 1,345 78 Table of Contents
Effects of increases or decreases from the 100 basis points illustrated would be approximately proportional. 2023 2022 Fair value of fixed maturity portfolio $ 10,434 $ 10,127 Percentage impact on fair value of 100 bps increase in interest rates (3.0 %) (3.0 %) Pretax impact on fair value of fixed maturity portfolio $ (313) $ (304) Equity Price Risk AFG’s equity securities are reported at fair value with holding gains and losses recognized in net earnings.
Effects of increases or decreases from the 100 basis points illustrated would be approximately proportional. 2024 2023 Fair value of fixed maturity portfolio $ 10,474 $ 10,434 Percentage impact on fair value of 100 bps increase in interest rates (3.0 %) (3.0 %) Pretax impact on fair value of fixed maturity portfolio $ (314) $ (313) Equity Price Risk AFG’s equity securities are reported at fair value with holding gains and losses recognized in net earnings.
At December 31, 2023 and 2022, the fair value of AFG’s equity securities totaled $1.02 billion and $1.01 billion, respectively. These investments are exposed to price risk, which is the potential loss arising from decreases in fair value.
At December 31, 2024 and 2023, the fair value of AFG’s equity securities totaled $751 million and $1.02 billion, respectively. These investments are exposed to price risk, which is the potential loss arising from decreases in fair value.

Other AFGB 10-K year-over-year comparisons