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What changed in AMERICAN FINANCIAL GROUP INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AMERICAN FINANCIAL GROUP INC's 2024 and 2025 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 2025 report.

+442 added−455 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-25)

Top changes in AMERICAN FINANCIAL GROUP INC's 2025 10-K

442 paragraphs added · 455 removed · 394 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

52 edited+5 added−6 removed66 unchanged
Biggest changeApproximately 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.
Biggest changeApproximately 2% of AFG’s direct written premiums in 2025 were derived from non U.S.-based insurers. 2025 2024 2023 2025 2024 2023 California 12.1 % 12.3 % 12.6 % New Jersey 2.6 % 2.5 % 2.5 % Texas 8.3 % 7.9 % 7.5 % Ohio 2.5 % 2.4 % 2.1 % Florida 8.0 % 8.2 % 8.9 % Michigan 2.3 % 2.3 % 2.3 % Illinois 5.7 % 5.5 % 5.4 % Kansas 2.3 % 2.5 % 2.5 % New York 5.3 % 6.0 % 5.8 % Missouri 2.2 % 2.3 % 2.8 % Georgia 3.4 % 3.6 % 3.4 % North Carolina 2.1 % 2.1 % 2.2 % Indiana 2.7 % 2.7 % 2.6 % Other 35.1 % 34.8 % 34.6 % Iowa 2.7 % 2.4 % 2.5 % 100.0 % 100.0 % 100.0 % Pennsylvania 2.7 % 2.5 % 2.3 % 2025 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.
The Company helps employees succeed by cultivating specialized knowledge and offering professional education and leadership development in a service-oriented culture. AFG respects human rights, appreciates diversity and inclusion and values the unique perspective each employee brings to the workplace.
The Company helps employees succeed by cultivating specialized knowledge and offering professional education and leadership development in a service-oriented culture. AFG respects human rights, appreciates inclusion and values the unique perspective each employee brings to the workplace.
(*) 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.
(*) The source of the commercial lines industry ratios is ©2026 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.
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.
AFG’s property and casualty insurance operations are conducted through the subsidiaries listed in the following table, which includes independent financial strength ratings and 2025 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.
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.
Board and Committee Oversight AFG’s Board of Directors or its Committees discuss with its 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.
Lease and Loan Services Coverage for insurance risk management programs for lending and leasing institutions, including equipment leasing and collateral and lender-placed mortgage property insurance. Trade Credit Export and domestic trade credit insurance products for global trade and related financing activities. Management believes specialization is the key element to the underwriting success of these business units.
Lender Services Coverage for insurance risk management programs for lending and leasing institutions, including equipment leasing and collateral and lender-placed mortgage property insurance. Trade Credit Export and domestic trade credit insurance products for global trade and related financing activities. Management believes specialization is the key element to the underwriting success of these business units.
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.
The members of the Great American Insurance Group have been in business for over 150 years. Management believes that over 55% of the 2025 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.
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.
As a result, the 2025 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.
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.
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 2025 by AFG’s internal A&E claims specialists in consultation with specialty outside counsel.
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 2025 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 2024 and 2023 and most recent external study in 2020.
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.
To date, the Insurance Data Security Model Law has been enacted 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.
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.
Statutory information is only prepared for AFG’s U.S.-based subsidiaries, which represented approximately 98% of AFG’s direct written premiums in 2025, and is provided for industry comparisons or where comparable GAAP information is not readily available.
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.
These amounts are net of allowances of approximately $10 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.
Specialty Casualty Excess and Surplus Liability, umbrella and excess coverage for unique, volatile or hard-to-place risks, using rates and forms that generally do not have to be approved by state insurance regulators. Executive and Professional Liability Coverage for directors and officers of businesses and non-profit organizations, errors and omissions, cyber and mergers and acquisitions.
Specialty Casualty Excess and Surplus Liability, umbrella and excess coverage for unique, volatile or hard-to-place risks, using rates and forms that generally do not have to be approved by state insurance regulators. Executive and Professional Liability Coverage for directors and officers of businesses and non-profit organizations and for errors and omissions.
General Liability Coverage for contractor-related businesses, energy development and production risks and environmental liability risks. Targeted Programs Coverage (primarily liability and property) for social service agencies, leisure, entertainment and non-profit organizations, customized solutions for other targeted markets and alternative risk programs using agency captives. Umbrella and Excess Liability Coverage in excess of primary layers.
General Liability Coverage for contractor-related businesses, energy development and production risks, mergers and acquisitions liability and environmental liability risks. Targeted Markets Coverage (primarily liability and property) for social service agencies, leisure, entertainment and non-profit organizations, cyber, customized solutions for other targeted markets and alternative risk programs using agency captives. Umbrella and Excess Liability Coverage in excess of primary layers.
Cybersecurity Regulations Numerous states have enacted new insurance laws that require certain regulated entities to implement and maintain comprehensive information security programs to safeguard the personal information of insureds.
Cybersecurity Regulations Numerous states have enacted laws that require certain regulated entities to implement and maintain comprehensive information security programs to safeguard the personal information of insureds.
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.
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 fully collateralized catastrophe bond.
Commercial Automobile Coverage for vehicles (such as buses and trucks) in a broad range of businesses, including the moving and storage and transportation industries, alternative risk transfer programs, a specialized physical damage product for the trucking industry and other specialty transportation niches.
Transportation-related Coverage for vehicles (such as buses and trucks) in a broad range of businesses, including the moving and storage and transportation industries, alternative risk transfer programs, a specialized physical damage product for the trucking industry and other specialty transportation niches.
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.
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 90.5% for the period 2016 to 2025 as compared to 98.1% for the property and casualty commercial lines industry over the same period.
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.
At December 31, 2025, 97% (based on statutory carrying value of $10.78 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.
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.
Under applicable restrictions, the maximum amount of dividends available to AFG in 2026 from its insurance subsidiaries without seeking prior regulatory approval is approximately $1.08 billion. Investment Regulation Investments must comply with applicable laws and regulations that prescribe the kind, quality and concentration of investments.
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.
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 less than 3% 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.
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.
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 $17.18 billion investment portfolio at December 31, 2025: 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 5.1% for 2025, 5.0% for 2024 and 4.7% for 2023.
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.
Losses from these incidents are usually tracked separately from other business of insurers because of their sizable effects on overall operations. Total losses (net of reinsurance) to AFG’s insurance operations from current accident year catastrophes were $137 million in 2025, $180 million in 2024 and $162 million in 2023 and are included in the table above.
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.
Attraction and Engagement As of December 31, 2025, the Company had approximately 8,500 employees (none of which were covered by collective bargaining agreements), including approximately 7,700 employed at Great American Insurance Group.
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%.
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 2025 was 8.3%.
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.
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, 2026: Reinsurance Coverage AFG Maximum Loss (b) Primary Retention Coverage Amount AFG Participation (a) % $ U.S.-based operations: Republic Workers’ Compensation $ 2 $ 148 1 % $ 1 $ 3 Summit Workers’ Compensation 6 34 3 % 1 7 Other Workers’ Compensation 2 48 3 % 1 3 Commercial Umbrella — 25 25 % 6 6 Property — General 10 40 — % — 10 Property — Catastrophe 70 205 — % — 70 (a) Includes the participation of AFG’s internal reinsurance program.
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.
Reinsurance premiums ceded and assumed are presented in the following table (in millions): 2025 2024 2023 Reinsurance ceded $ 3,584 $ 3,394 $ 2,964 Reinsurance ceded, excluding crop 2,196 2,021 1,878 Reinsurance assumed — including involuntary pools and associations (*) 352 600 347 (*) 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.
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.
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): 2025 2024 2023 Gross written premiums $ 10,694 $ 10,533 $ 9,656 Ceded reinsurance (3,584) (3,394) (2,964) Net written premiums $ 7,110 $ 7,139 $ 6,692 Net earned premiums $ 7,046 $ 7,036 $ 6,531 Loss and LAE 4,388 4,455 4,017 Underwriting expenses 2,029 1,961 1,883 Underwriting gain $ 629 $ 620 $ 631 GAAP ratios: Loss and LAE ratio 62.2 % 63.3 % 61.6 % Underwriting expense ratio 28.8 % 27.9 % 28.8 % Combined ratio 91.0 % 91.2 % 90.4 % Statutory ratios: Loss and LAE ratio 61.0 % 61.3 % 60.3 % Underwriting expense ratio 30.3 % 29.6 % 30.2 % Combined ratio 91.3 % 90.9 % 90.5 % Industry statutory combined ratio (*) All lines 95.0 % 97.1 % 101.9 % Commercial lines 95.8 % 96.5 % 96.5 % (*) The source of the industry ratios is ©2026 A.M.
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.
While there is no directly comparable index to AFG’s portfolio, shown below is a widely used benchmark in the financial services industry. 2025 2024 2023 Total return on AFG’s fixed maturities 7.5 % 6.2 % 7.2 % Bloomberg U.S.
The 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.
The following table (in millions) is a progression of the property and casualty group’s A&E reserves. 2025 2024 2023 Reserves at beginning of year, net of reinsurance recoverable $ 359 $ 370 $ 385 Incurred losses and LAE — — — Paid losses and LAE (12) (11) (15) Reserves at end of year, net of reinsurance recoverable 347 359 370 Reinsurance recoverable, net of allowance 113 135 128 Gross reserves at end of year $ 460 $ 494 $ 498 AFG annually conducts a comprehensive review of its asbestos and environmental reserves.
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.
Likewise, AFG will withdraw from markets that do not meet its profit objectives or business strategy. 8 Table of Contents 2025 SPECIALTY PROPERTY AND CASUALTY BY SUB-SEGMENT (*) Excludes underwriting losses recorded outside of AFG’s Specialty P&C group that AFG no longer writes.
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.
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, 2025 follows (in millions): Liability reported on a SAP basis, net of $67 million of retroactive reinsurance $ 9,458 Reinsurance recoverables, net of allowance 5,306 Other, including reserves of foreign insurers 330 Liability reported on a GAAP basis $ 15,094 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.
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.
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 2026, AFG’s property and casualty insurance subsidiaries renewed their catastrophe reinsurance coverages.
AFG strives to attract diverse and exceptional people who can grow within AFG by fostering a workplace culture that inspires and rewards people and by developing a workforce that can help the Company meet its current and future goals.
AFG strives to attract exceptional people with a wide range of attributes, perspectives and experience who can grow within AFG by fostering a workplace culture that inspires and rewards people and by developing a workforce that can help the Company meet its current and future goals.
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.
Ratings Gross Written Premiums AM Best S&P Insurance Group Great American Insurance A+ A+ $ 8,211 National Interstate A+ not rated 1,256 Summit (Bridgefield Casualty and Bridgefield Employers) A+ A+ 599 Republic Indemnity A+ A+ 188 Mid-Continent Casualty A+ A+ 206 Other 234 $ 10,694 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.
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.
Recoverables from the following companies were individually between 9% and 11% of AFG’s total property and casualty reinsurance recoverable (including prepaid reinsurance premiums and net of payables to reinsurers) at December 31, 2025: Everest Reinsurance Company, Hannover Rueck SE and Swiss Reinsurance America Corporation. No other reinsurers exceeded 5% of AFG’s property and casualty reinsurance recoverable.
(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”).
(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”). The SRA provides a risk-sharing framework between the government and approved insurance providers.
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).
Universal Bond Index 7.6 % 2.0 % 6.2 % The following table shows AFG’s available for sale fixed maturity investments by S&P or comparable rating as of December 31, 2025 (dollars in millions).
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.
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.
Various transactions between insurance subsidiaries and their parents and affiliates must receive prior approval of the applicable insurance regulatory authorities and be disclosed. U.S. Regulation Holding Company Statutes AFG is subject to state statutes governing insurance holding company systems.
Such regulatory agencies perform periodic examinations of the insurance subsidiaries’ financial condition and their practices in the marketplace. In addition, various transactions between insurance subsidiaries and their parents and affiliates must receive prior approval of the applicable insurance regulatory authorities and be disclosed. U.S. Regulation Holding Company Statutes AFG is subject to state statutes governing insurance holding company systems.
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.
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.
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.
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.
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.
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. In addition, AFG purchases catastrophe reinsurance for its workers’ compensation businesses.
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.
In general, these laws and regulations permit investments in federal, state and 16 Table of Contents 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.
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.
Premium Distribution The following table shows the net written premiums by sub-segment for AFG’s property and casualty insurance operations for 2025, 2024 and 2023 (in millions): 2025 2024 2023 Property and transportation $ 2,771 $ 2,846 $ 2,586 Specialty casualty 3,247 3,246 3,169 Specialty financial 1,092 1,047 937 $ 7,110 $ 7,139 $ 6,692 9 Table of Contents The geographic distribution of statutory direct written premiums by AFG’s U.S.-based insurers for 2025, 2024 and 2023 is shown below.
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.
This has been accomplished through organic growth, carefully selected acquisitions, start-ups and dispositions. 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, 2025) that make up the Great American Insurance Group.
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.
The Company believes that its overall average employee tenure, which is 10 years, and average tenure of 20 years for the Company’s approximately 200 most senior leaders, evidences the Company’s relative success in growing careers. To help inform management of employees’ views and perspectives on key matters, AFG generally conducts an employee engagement survey (“Employee Survey”) on a biennial basis.
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.
For the portion of business retained under the SRA, AFG utilizes private-market quota share and excess of loss reinsurance arrangements to manage crop insurance exposure. 11 Table of Contents The balance sheet caption “Recoverables from reinsurers” included approximately $222 million on paid losses and LAE and $5.31 billion on unpaid losses and LAE at December 31, 2025.
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.
Under this framework, AFG can elect the desired retention of risk on a state-by-state, county, crop or plan basis. The SRA also provides for a fixed quota share cession to the FCIC.
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.
As highlighted in the illustration below, over the past 25 plus years, AFG has sharpened its focus on the businesses that management knows best.
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.
Amortized Cost, net (*) Fair Value Amount % S&P or comparable rating AAA, AA, A $ 8,251 $ 8,177 74 % BBB 2,420 2,453 22 % Total investment grade 10,671 10,630 96 % BB 126 129 1 % B 23 22 — % CCC, CC, C 29 30 1 % D — — — % Total non-investment grade 178 181 2 % Not rated 231 241 2 % Total $ 11,080 $ 11,052 100 % (*) Amortized cost, net of allowance for expected credit losses.
Removed
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.
Added
Historically, AFG reported the results of its internal reinsurance facility (that assumes business from several of AFG’s Specialty property and casualty businesses) in an Other Specialty sub-segment. Beginning in 2025, the internal reinsurance results are included within the same sub-segments as the ceding businesses to align with senior management’s evolving view of the program.
Removed
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.
Added
The overall results for AFG’s Specialty property and casualty insurance operations are not impacted by this change. Information from prior periods has been recast for consistent presentation.
Removed
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.
Added
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.
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No other reinsurers exceeded 5% of AFG’s property and casualty reinsurance recoverable.
Added
Through a combination of traditional reinsurance and a fully collateralized catastrophe bond structure with Riverfront Re Ltd., AFG has additional coverage of $350 million for catastrophe losses in excess of $275 million through December 31, 2028.
Removed
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.
Added
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. For instance, privacy laws, such as the Gramm-Leach-Bliley Act and the Fair Credit Reporting Act, affect AFG’s day-to-day operations.
Removed
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe price of AFG Common Stock may fluctuate significantly, which may make it difficult for holders to resell common stock when they want or at a price they find attractive. The price of AFG Common Stock, which is listed on the NYSE, constantly changes.
Biggest changeIf 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. 25 Table of Contents The price of AFG Common Stock may fluctuate significantly, which may make it difficult for holders to resell Common Stock when they want or at a price they find attractive.
In addition, claims for catastrophic events, or an unusual frequency of smaller losses in a particular period, such as from lower severity convective storms, could expose AFG to large losses, cause substantial volatility in its results of operations and could have a material adverse effect on its ability to write new business if AFG is not able to adequately assess and reserve for the increased frequency and severity of catastrophes resulting from these environmental factors.
In addition, claims for catastrophic events, or an unusual frequency of smaller losses in a particular period, such as from lower severity convective storms, could expose AFG to large losses, cause substantial volatility in its results of operations and could have a material adverse effect on its ability to renew business or write new business if AFG is not able to adequately assess and reserve for the increased frequency and severity of catastrophes resulting from these environmental factors.
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.
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, claims, data and analytics and AI and technology-related fields.
Such events are often highly publicized, can result in significant disruptions to information technology systems and the theft of significant amounts of information as well as funds from online financial accounts, and can cause negative publicity and extensive damage to the reputation of the targeted business, in addition to leading to significant expenses associated with investigation, remediation and customer protection measures.
Such events are often highly publicized, can result in significant disruptions to information technology systems and the theft of significant amounts of information as well as funds from online financial accounts, and can cause negative publicity and extensive damage to the reputation of the targeted business, in addition to leading to significant expenses associated with investigation, remediation, customer protection measures and potential litigation.
New accounting rules or changes in accounting standards, particularly those that specifically apply to insurance company operations, may impact AFG’s reported financial results and could cause increased volatility in reported earnings, resulting in other adverse impacts on AFG’s ratings and cost of capital, and decrease the understandability of AFG’s financial results as well as the comparability of AFG’s reported results with other insurers.
New accounting rules or changes in accounting standards, particularly those that specifically apply to insurance company operations, may impact AFG’s reported financial results and could cause increased volatility in reported earnings, result in other adverse impacts on AFG’s ratings and cost of capital, and decrease the understandability of AFG’s financial results as well as the comparability of AFG’s reported results with other insurers.
These events may have a material adverse effect on AFG’s workforce and business operations as well as the workforce and operations of AFG’s customers and independent agents.
These events may have a material adverse effect on AFG’s workforce and business operations as well as the workforce and operations of AFG’s customers, business partners and independent agents.
Any ineffectiveness in AFG’s control or procedures or failure to manage these risks may have an adverse effect on AFG’s results of operations and financial condition. AFG could face unanticipated losses from war, terrorism, political unrest and geopolitical uncertainty which could have a material adverse effect on AFG’s financial condition and results of operations.
Any ineffectiveness in AFG’s controls or procedures or failure to manage these risks may have an adverse effect on AFG’s results of operations and financial condition. AFG could face unanticipated losses from war, terrorism, political unrest and geopolitical uncertainty which could have a material adverse effect on AFG’s financial condition and results of operations.
In addition, potential exposure to losses related to PFAS, whether through AFG’s insurance operations or its former railroad and manufacturing operations, are inherently difficult to forecast or estimate, as many factors could influence potential liability for any such losses.
In addition, potential exposure to losses related to emerging exposures such as PFAS, whether through AFG’s insurance operations or its former railroad and manufacturing operations, are inherently difficult to forecast or estimate, as many factors could influence potential liability for any such losses.
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 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.
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.
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 22 Table of Contents regulatory organizations or exchanges.
Pervasive or significant changes in the judicial environment relating to matters such as trends in the size of jury awards, developments in the law relating to the liability of insurers or tort defendants, and rulings concerning the availability or amount of certain types of damages could cause AFG’s ultimate liabilities to change from current expectations.
Pervasive or significant 23 Table of Contents changes in the judicial environment relating to matters such as trends in the size of jury awards, developments in the law relating to the liability of insurers or tort defendants, and rulings concerning the availability or amount of certain types of damages could cause AFG’s ultimate liabilities to change from current expectations.
AFG is subject to complex and changing laws, regulation and public policy debates relating to climate change which are difficult to predict and quantify and may have an adverse impact on its business.
AFG is subject to complex and changing laws, regulation and public policy debates relating to climate change that are difficult to predict and quantify and may have an adverse impact on its business.
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.
GENERAL RISK FACTORS Certain shareholders exercise substantial control over AFG’s affairs, which may impede a change of control transaction. As of December 31, 2025, Carl H. Lindner III and S.
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.
Variability is introduced by numerous factors, such as 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 has also invested, and intends to continue to invest in, limited partnerships and other entities that AFG does not control. AFG does not have management or operational control over the investees, which may limit AFG’s ability to take actions that could protect or increase the value of the investment.
AFG has also invested, and intends to continue to invest in, limited partnerships and other entities that AFG does not control. AFG does not have management or operational control over the investees, which may limit AFG’s ability to take 21 Table of Contents actions that could protect or increase the value of the investment.
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.
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 administration.
A downgrade out of the “A” category in AFG’s insurers’ claims-paying and financial strength ratings could significantly reduce AFG’s business volumes in certain lines of business, adversely impact AFG’s ability to access the capital markets and increase AFG’s borrowing costs.
A downgrade out of the “A” category in AFG’s insurance subsidiaries’ claims-paying and financial strength ratings could significantly reduce AFG’s business volumes in certain lines of business, adversely impact AFG’s ability to access the capital markets and increase AFG’s borrowing costs.
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.
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, 2025, AFG has $5.53 billion of recoverables from reinsurers on its balance sheet.
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.
The sophistication of cybersecurity threats, including through the use of AI, continues to increase and proliferate, increasing and intensifying the potential risks. 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.
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.
Although TRIP provides benefits in the event of certain acts of 18 Table of Contents terrorism, those benefits are subject to a deductible and to other limitations, which could ultimately leave AFG subject to material adverse financial impacts.
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.
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.
The impact of many of these items on ultimate costs for unpaid losses and LAE is difficult to estimate.
The impact of many of these items on ultimate costs for unpaid losses and LAE is inherently uncertain and difficult to estimate.
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.
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, labor supply shortages or low labor force participation; lower business investment; persistently low, rapidly increasing or volatile 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 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.
These exposures may adversely affect AFG’s business, including by extending coverage beyond contractual terms or underwriting intent, extending or eliminating statutes of limitation, 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 or exposures 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 judgments and settlements.
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.
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 2025.
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 any disruption or security breach suffered by AFG or its business partners results in a loss or damage to AFG’s data, or inappropriate disclosure of AFG’s confidential information or that of others — whether by AFG or its business partners — 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 business.
A downgrade in AFG’s credit ratings could have a material adverse effect on AFG’s financial condition and results of operations and cash flows in a number of ways, including adversely limiting access to capital markets, potentially increasing the cost of debt or increasing borrowing costs under AFG’s current revolving credit facility.
A downgrade in AFG’s credit ratings could have a material adverse effect on AFG’s financial condition and results of operations and cash flows in a number of ways, including adversely limiting access to capital markets, potentially increasing the cost of debt or increasing borrowing costs under AFG’s current revolving credit facility, and subjecting AFG to more restrictive debt and revolving credit facility terms in the future.
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.
Businesses in the United States and in other countries have increasingly become the targets of “cyber-attacks,” “ransomware,” “phishing,” “hacking,” “social engineering” or similar illegal or unauthorized intrusions into computer systems and networks.
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.
In December 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.
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, legislative, social and other environmental conditions change, unexpected and unintended exposures related to claims and coverage may emerge.
Changes in regulations relating to climate change may result in an increase in the cost of doing business or a decrease in premiums in certain lines of business. As a participant in the federal crop insurance program, AFG could also be impacted by regulatory and legislative changes affecting that program.
Changes in regulations relating to climate change may result in an increase in the cost of doing business or a decrease in premiums in certain lines of business. As a participant in the federal crop insurance program, AFG could also be impacted by regulatory, executive and legislative actions or changes that directly or indirectly affect that program.
In addition, broad market and industry fluctuations may materially and adversely affect the trading price or volume of AFG Common Stock, regardless of AFG’s actual operating performance.
In addition, broad market and industry fluctuations may materially and adversely affect the trading price or volume of AFG Common Stock, regardless of AFG’s business, operating performance or financial condition.
Changes in federal or state tort litigation laws or other applicable law could have a similar effect. It is not possible to predict changes in the judicial and legislative environment, including in connection with asbestos and environmental claims.
Changes in the federal or state tort environments or laws could have a similar effect. It is not possible to predict changes in the judicial and legislative environment, including in connection with asbestos and environmental claims.
These and other similar investments may have different, more significant risk characteristics than investments in fixed maturity securities, may be more volatile and may be illiquid due to restrictions on sales, transfers and redemption terms, all of which could negatively affect AFG’s investment income and overall portfolio liquidity.
These and other similar investments may have different, more significant risk characteristics than investments in fixed maturity securities, lack quoted prices, may be subject to changing tax laws and regulatory oversight, may be more volatile and may be illiquid due to restrictions on sales, transfers and redemption terms, all of which could negatively affect AFG’s investment income and overall portfolio liquidity.
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.
AFG and its business partners collect and store sensitive data in the ordinary course of AFG’s and their business, including personally identifiable information of our and their employees and customers, business partners, investors and other third parties and may include health information (collectively, “confidential information”).
However, assurance that AFG can effectively identify, review and monitor all risks or that all its employees will operate within the ERM framework cannot be guaranteed. Assurances that AFG’s ERM framework will result in the Company accurately identifying all risks and accurately limiting its exposures based on its assessments also cannot be guaranteed.
However, AFG cannot assure that it will effectively identify, review and monitor all risks, that all its employees will operate within the ERM framework or that its ERM framework will result in the Company accurately identifying all risks and accurately limiting its exposures based on its assessments.
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.
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, whether experienced by AFG or its business partners.
AFG’s existing competitors, new entrants, technology companies or other third parties may leverage AI to the benefit of their business or operations or may incorporate AI into their products and services more quickly or successfully than AFG, which could make AFG less competitive and negatively impact its results of operations.
AFG’s existing competitors, new market entrants, technology companies or other third parties may adopt or integrate AI into their business, products and services more rapidly or effectively than AFG, which could make the Company less competitive and negatively impact its results of operations.
Such laws and regulations may limit or prevent AFG’s development and use of AI applications, or may eliminate or restrict the confidentiality of our proprietary technology, which could adversely affect AFG’s business, operations and financial results, including by reducing the utility of AFG’s products, increasing AFG’s costs and exposing AFG to litigation or other liabilities.
Such laws and regulations may limit or prevent AFG’s development and use of AI applications, create potential legal and compliance issues or eliminate or restrict the confidentiality of AFG’s proprietary technology, which could adversely affect the Company, including by reducing the utility of AFG’s products, increasing its costs and exposing the Company to litigation or other liabilities.
Further, technology companies or other third parties have created, and may in the future create, technology-enabled business models, processes, platforms or alternate distribution channels that may adversely impact AFG’s competitive position in some parts of its business. AFG may utilize artificial intelligence and machine learning (“AI”) in its business or incorporate AI into its products and services.
Further, technology companies or other third parties have created, and may in the future create, technology-enabled business models, processes, platforms or alternate distribution channels that may adversely impact AFG’s competitive position in some parts of its business.
AFG may also utilize AI to assist with modeled outputs and related analyses, the results of which may be unintentionally deficient, inaccurate or misleading.
AFG may also utilize artificial intelligence or machine learning technologies (“AI”) to assist with modeled outputs and related analyses, the results of which may be unintentionally deficient, arbitrary, inaccurate or misleading.
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.
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.
Existing insurance-related laws and regulations may become more restrictive in the future or new restrictive laws may be enacted; it is not possible to predict the potential effects of these laws and regulations. The costs of compliance or the failure to comply with existing or future regulations could impose significant burdens on AFG.
Existing insurance-related laws and regulations may become more restrictive in the future or new restrictive laws may be enacted; it is not possible to predict the potential effects of these laws and regulations.
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.
Both state and federal regulators in the U.S., as well as regulators in the EU and other foreign jurisdictions, have enacted and will continue to evaluate and assess potential laws and regulations relating to companies’ use of AI, and enact new and expanding bases of liability for businesses utilizing AI.
As a holding company without significant operations of its own, AFG’s principal sources of funds are dividends and other distributions from its insurance company subsidiaries. State insurance laws differ from state to state but may, absent advance regulatory approval, restrict the maximum amount of dividends that may be paid by an insurer to its shareholders in any twelve-month period.
State insurance laws differ from state to state but may, absent advance regulatory approval, restrict the maximum amount of dividends that may be paid by an insurer to its shareholders in any twelve-month period.
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.
Changes in domestic or foreign tax laws or interpretations of such laws could increase AFG’s corporate taxes and reduce earnings. 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.
Reinsurance is subject to the adequacy and counterparty reinsurance risks described below under “The inability to obtain reinsurance or to collect on ceded reinsurance could adversely affect AFG’s results of operations.” A severe catastrophe or a series of catastrophes could result in losses exceeding AFG’s reinsurance protection and may have a material adverse impact on its results of operations or financial condition.
Traditional reinsurance is subject to the adequacy and counterparty reinsurance risks described below under “The inability to obtain reinsurance or to collect on ceded reinsurance could adversely affect AFG’s results of operations.” A severe catastrophe or a series of catastrophes could result in losses exceeding AFG’s reinsurance protection and may have a material adverse impact on its results of operations or financial condition. 17 Table of Contents 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, storms or flooding, incurred by the industry in recent years.
AFG is subject to comprehensive regulation by government agencies in the states and countries where its insurance company subsidiaries are domiciled and where these subsidiaries issue policies and handle claims. Most insurance regulations are designed to protect the interests of AFG’s policyholders and third-party claimants as opposed to its investors.
AFG is subject to comprehensive regulation, and its ability to earn profits may be restricted by these regulations. AFG is subject to comprehensive regulation by government agencies in the states and countries where its insurance company subsidiaries are domiciled and where these subsidiaries issue policies and handle claims.
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.
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.
AFG purchases catastrophe reinsurance to mitigate the impact of catastrophe losses.
AFG purchases traditional catastrophe reinsurance and has issued a fully collateralized catastrophe bond to mitigate the impact of catastrophe losses.
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.
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.
Exposure to mass tort claims could materially adversely affect AFG’s results of operations and financial condition.
Any of these risks or other, unanticipated AI-related risks could materially adversely affect AFG’s business, financial condition or results of operation. 20 Table of Contents Exposure to mass tort claims could materially adversely affect AFG’s results of operations and financial condition.
A reduction in the number of independent agencies marketing AFG’s products, the failure of agencies to successfully market AFG’s products, changes in the strategy or operations of agencies (including agency consolidation), the inability of AFG to collect amounts owed by agencies or the choice of agencies to reduce their writings of AFG products could adversely affect AFG’s revenues and profitability.
A reduction in the number of independent agencies marketing AFG’s products, the failure of agencies to successfully market AFG’s products, disruption to relationships with agencies, changes in the strategy or operations of agencies (including through agency consolidation or the financing of agencies by private equity or other capital providers), the inability of AFG to collect amounts owed by agencies or the choice of agencies to reduce their writings of AFG products could adversely affect AFG’s revenues and profitability. 19 Table of Contents RISKS RELATING TO ESTIMATES, ASSUMPTIONS AND VALUATIONS AFG’s property and casualty reserves may be inadequate, which could have a material adverse effect on AFG’s results of operations.
The ORSA is a confidential internal assessment of the material and relevant risks associated with an insurer’s current business plan and the sufficiency of capital resources to support those risks. AFG operates within an enterprise risk management (“ERM”) framework designed to assess and monitor risks.
AFG must submit an Own Risk and Solvency Assessment Summary Report (“ORSA”) at least annually to its lead state insurance regulator. The ORSA is a confidential internal assessment of the material and relevant risks associated with an insurer’s current business plan and the sufficiency of capital resources to support those 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.
Changing weather 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.
As a holding company, AFG is dependent on the operations of its insurance company subsidiaries to meet its obligations and pay future dividends. AFG is a holding company and a legal entity separate and distinct from its insurance company subsidiaries.
The costs of compliance or the failure to comply with existing or future regulations could impose significant burdens on AFG. 24 Table of Contents As a holding company, AFG is dependent on the operations of its insurance company subsidiaries to meet its obligations and pay future dividends.
Any reduction in the RBC ratios of AFG’s insurance subsidiaries could also adversely affect their financial strength ratings as determined by rating agencies. AFG could be adversely impacted by changes to the U.S. Federal income tax laws. Changes in domestic or foreign tax laws or interpretations of such laws could increase AFG’s corporate taxes and reduce earnings.
Any reduction in the RBC ratios of AFG’s insurance subsidiaries could also adversely affect their financial strength ratings as determined by rating agencies.
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.
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 cybercrime. AFG’s business, financial condition, results of operations and liquidity could also be adversely affected if judicial, legislative or other developments cause AFG’s ultimate liabilities to increase from current expectations.
The NAIC and state legislatures have increased their focus on risks within an insurer’s holding company system that may pose enterprise risk to insurers. AFG must submit an Own Risk and Solvency Assessment Summary Report (“ORSA”) at least annually to its lead state insurance regulator.
AFG continues to enhance its operating procedures and internal controls to effectively support its business and its regulatory and reporting requirements. The NAIC and state legislatures have increased their focus on risks within an insurer’s holding company system that may pose enterprise risk to insurers.
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.
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.
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.
Competition for employees may increase AFG’s expenses and may result in the company not being able to hire or retain key employees.
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.
The Company may be subject to increasing regulation imposing mandatory disclosure of sustainability and climate-related data in the United States and foreign jurisdictions. Compliance with such requirements may require significant effort and resources.
Removed
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.
Added
AFG operates within an enterprise risk management (“ERM”) framework designed to assess and monitor risks.
Removed
The AI used by AFG may not operate properly or as expected, which could cause AFG to write policies it may not have otherwise written, misprice policies, assume greater risks, or overpay customer claims, among other potential negative impacts on its business and operations.
Added
AFG may be exposed to significant risks due to its use or its business partners’ use of AI. AFG uses, and may increasingly rely on, AI technologies in its business operations and may utilize AI in connection with its products and services.
Removed
In addition, if the content, analyses, output or recommendations produced by or with the assistance of AI are unintentionally, or are alleged to be, deficient, inaccurate or misleading, AFG’s business, financial condition and results of operation may be adversely impacted.
Added
AI systems may not perform as intended, may produce flawed, inaccurate, biased, incomplete or otherwise unreliable outputs or analytics, or may be implemented or monitored ineffectively. These issues could cause AFG to write business it would not have otherwise written, misprice policies, assume unintended risks, overpay claims or otherwise experience operational disruptions or financial losses.
Removed
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.
Added
AFG may incur operational, technological, security, reputational, legal and regulatory risks related to its use of AI.
Removed
RISKS RELATING TO ESTIMATES, ASSUMPTIONS AND VALUATIONS AFG’s property and casualty reserves may be inadequate, which could have a material adverse effect on AFG’s results of operations.
Added
Among other causes, these risks may arise from the misuse or inadvertent disclosure of personal data or sensitive or confidential information; AI-related ethical considerations; vulnerabilities that increase exposure to cyber incidents; failures or limitations in oversight, governance or controls relating to AI systems; or potential intellectual property, contractual or other legal issues associated with AI use.
Removed
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.
Added
AFG’s business partners, independent agents or other third parties may also develop or utilize AI in their own operations. If such systems fail, malfunction or are improperly designed or monitored, AFG’s operations could be disrupted or there could be direct or indirect adverse impacts to the Company, including to its relationships and reputation.
Removed
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
Most insurance regulations are designed to protect the interests of AFG’s policyholders and third-party claimants as opposed to its investors. 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.
Added
AFG is a holding company and a legal entity separate and distinct from its insurance company subsidiaries. As a holding company without significant operations of its own, AFG’s principal sources of funds are dividends and other distributions from its insurance company subsidiaries.
Added
A downgrade or change in the measurement of the insurance subsidiaries’ financial strength ratings could adversely impact their business and limit their ability to make dividends or other distributions to AFG, which could materially adversely affect AFG’s financial condition and results of operations. AFG could be adversely impacted by changes to the U.S. Federal income tax laws.
Added
The price of AFG Common Stock, which is listed on the NYSE, constantly changes.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAFG 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.
Biggest changeAFG 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 (“DiD”) 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, which now incorporates assessments of AI-related technologies and processes; • Maintains a Third-Party Risk Management program that includes an overarching approach for evaluating security controls and risks of third-party and cloud vendors, as well as for reviewing contracts to ensure appropriate security provisions are included; • 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. 26 Table of Contents AFG continues to integrate assessing cybersecurity threat risks associated with its use of third-party service providers, generally at the initial engagement or renewal of the relationship.
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.
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.
All members of this leadership team are active in their local cybersecurity communities and national conferences. They speak at local universities, local conferences, national conferences, and have conducted training sessions at international conferences like Black Hat, an internationally recognized cybersecurity event series providing the most technical and relevant information security research.
All members of this leadership team are active in their local cybersecurity communities and national conferences. They speak at local universities, local conferences, national conferences, and have conducted training sessions at international conferences like Black Hat, an internationally recognized cybersecurity event series 27 Table of Contents providing the most technical and relevant information security research.
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.
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,” “social engineering” and similar illegal or unauthorized intrusions into computer systems and networks.
Removed
AFG continues to integrate assessing cybersecurity threat risks associated with its use of third-party service providers, generally at the initial engagement or renewal of the relationship.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
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
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+3 added−1 removed0 unchanged
Biggest changeAFG 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.
Biggest changeIn connection with its stock incentive plan, AFG acquired 43,387 shares of its Common Stock (at an average of $120.73 per share) in the first nine months of 2025 and 118 shares (at $137.21 per share) in December 2025. 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, 2020 through December 31, 2025 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.
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.
The graph assumes that an initial investment of $100 was made on December 31, 2020 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 4,300 shareholders of record of AFG Common Stock at February 1, 2025.
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 4,100 shareholders of record of AFG Common Stock at February 1, 2026.
(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.
(b) The S&P 500 Property & Casualty Insurance Index included the following companies at December 31, 2025 (weighted by market capitalization): The Allstate Corporation, American International Group, Inc., Arch Capital Group Ltd., Assurant, Inc., Chubb Limited, Cincinnati Financial Corporation, Erie Indemnity Company, The Hartford Insurance Group, Inc., Loews Corporation, The Progressive Corporation, The Travelers Companies, Inc. and W.R. Berkley Corporation.
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.
As of December 31, 2020 2021 2022 2023 2024 2025 AFG $ 100 $ 195 $ 216 $ 200 $ 247 $ 261 S&P 500 Index 100 129 105 133 166 196 S&P 500 P&C Index (b) 100 118 140 155 209 229 (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.
Removed
Issuer 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.
Added
Issuer Purchases of Equity Securities AFG repurchased shares of its Common Stock during 2025 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 First quarter 462,398 $ 123.86 462,398 5,266,612 Second quarter 319,736 120.59 319,736 4,946,876 Third quarter 6,000 122.81 6,000 4,940,876 Fourth quarter: October 6,406 $ 129.70 6,406 4,934,470 November 4,858 129.30 4,858 4,929,612 December — — — 5,000,000 (b) Total 799,398 $ 122.63 (a) 799,398 (a) AFG declared special dividends totaling $4.00 per share of its Common Stock in 2025.
Added
Adjusted for the special dividends, the average price paid per share was $119.47 for 2025. In addition, at December 31, 2025, AFG has a $1 million payable related to the excise tax on share repurchases. (b) Represents the remaining shares that may be repurchased until December 31, 2030 under the Plan authorized by AFG’s Board of Directors in December 2025.
Added
In December 2025, AFG’s Board of Directors authorized the repurchase of five million shares and the Plan authorized by AFG’s Board of Directors in May 2021 expired.

Item 7. Management's Discussion & Analysis

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

267 edited+30 added−46 removed87 unchanged
Biggest changeEntries Consolidated As Reported Year ended December 31, 2022 Revenues: Net earned premiums $ 6,085 $ — $ — $ 6,085 Net investment income 707 — 10 (b) 717 Realized gains (losses) on securities (116) — — (116) Income of managed investment entities: Investment income — 268 — 268 Gain (loss) on change in fair value of assets/liabilities — (2) (29) (b) (31) Other income 134 — (17) (c) 117 Total revenues 6,810 266 (36) 7,040 Costs and Expenses: Insurance benefits and expenses 5,347 — — 5,347 Expenses of managed investment entities — 265 (35) (b)(c) 230 Interest charges on borrowed money and other expenses 340 — — 340 Total costs and expenses 5,687 265 (35) 5,917 Earnings before income taxes 1,123 1 (1) 1,123 Provision for income taxes 225 — — 225 Net earnings $ 898 $ 1 $ (1) $ 898 (a) Includes a loss of $10 million representing the change in fair value of AFG’s CLO investments and $17 million of income in CLO management fees earned.
Biggest changeEntries Consolidated As Reported Year ended December 31, 2025 Revenues: Net earned premiums $ 7,046 $ — $ — $ 7,046 Net investment income 750 — (5) (b) 745 Realized gains (losses) on: Securities 10 — — 10 Subsidiaries 1 — — 1 Income of managed investment entities: Investment income — 283 — 283 Gain (loss) on change in fair value of assets/liabilities — 9 (35) (b) (26) Other income 126 — (11) (c) 115 Total revenues 7,933 292 (51) 8,174 Costs and Expenses: Insurance benefits and expenses 6,447 — — 6,447 Expenses of managed investment entities — 288 (47) (b)(c) 241 Interest charges on borrowed money and other expenses 413 — — 413 Total costs and expenses 6,860 288 (47) 7,101 Earnings before income taxes 1,073 4 (4) 1,073 Provision for income taxes 231 — — 231 Net earnings $ 842 $ 4 $ (4) $ 842 Year ended December 31, 2024 Revenues: Net earned premiums $ 7,036 $ — $ — $ 7,036 Net investment income 813 — (33) (b) 780 Realized gains (losses) on securities — — — — Income of managed investment entities: Investment income — 380 — 380 Gain (loss) on change in fair value of assets/liabilities — 12 (8) (b) 4 Other income 137 — (13) (c) 124 Total revenues 7,986 392 (54) 8,324 Costs and Expenses: Insurance benefits and expenses 6,467 — — 6,467 Expenses of managed investment entities — 388 (50) (b)(c) 338 Interest charges on borrowed money and other expenses 395 — — 395 Total costs and expenses 6,862 388 (50) 7,200 Earnings before income taxes 1,124 4 (4) 1,124 Provision for income taxes 237 — — 237 Net earnings $ 887 $ 4 $ (4) $ 887 (a) Includes income of $5 million in 2025 and $33 million in 2024, representing the change in fair value of AFG’s CLO investments and $11 million and $13 million of income in 2025 and 2024, respectively, in CLO management fees earned.
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.
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.
Holding Company and Other — Gain 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.
Specialty financial Gross written premiums increased $113 million (10%) in 2024 compared to 2023. Year-over-year growth in the financial institutions business was partially offset by a decision to pause writing of new intellectual property-related coverage. Average renewal rates increased approximately 6% for this group in 2024.
Gross written premiums increased $113 million (10%) in 2024 compared to 2023. Year-over-year growth in the financial institutions business was partially offset by a decision to pause writing of new intellectual property-related coverage. Average renewal rates for this group increased approximately 6% in 2024.
MIEs Holding Co., other and unallocated Total Non-core reclass GAAP Total Year ended December 31, 2024 Revenues: Net earned premiums $ 7,036 $ — $ — $ 7,036 $ — $ 7,036 Net investment income 784 (33) 29 780 — 780 Realized gains (losses) on securities — — — — — — Income of MIEs: Investment income — 380 — 380 — 380 Gain (loss) on change in fair value of assets/liabilities — 4 — 4 — 4 Other income 8 (13) 129 124 — 124 Total revenues 7,828 338 158 8,324 — 8,324 Costs and Expenses: Losses and loss adjustment expenses 4,455 — 5 4,460 — 4,460 Commissions and other underwriting expenses 1,961 — 46 2,007 — 2,007 Interest charges on borrowed money — — 76 76 — 76 Expenses of MIEs — 338 — 338 — 338 Other expenses 84 — 221 305 14 319 Total costs and expenses 6,500 338 348 7,186 14 7,200 Earnings before income taxes 1,328 — (190) 1,138 (14) 1,124 Provision for income taxes 279 — (43) 236 1 237 Core Net Operating Earnings 1,049 — (147) 902 Non-core earnings (loss) (*): Realized gains (losses) on securities, net of tax — — — — — — Realized loss on subsidiary (4) — — (4) 4 — Special A&E charge, net of tax — — (11) (11) 11 — Net Earnings $ 1,045 $ — $ (158) $ 887 $ — $ 887 62 Table of Contents Other P&C Consol.
MIEs Holding Co., other and unallocated Total Non-core reclass GAAP Total Year ended December 31, 2024 Revenues: Net earned premiums $ 7,036 $ — $ — $ 7,036 $ — $ 7,036 Net investment income 784 (33) 29 780 — 780 Realized gains (losses) on securities — — — — — — Income of MIEs: Investment income — 380 — 380 — 380 Gain (loss) on change in fair value of assets/liabilities — 4 — 4 — 4 Other income 8 (13) 129 124 — 124 Total revenues 7,828 338 158 8,324 — 8,324 Costs and Expenses: Losses and loss adjustment expenses 4,455 — 5 4,460 — 4,460 Commissions and other underwriting expenses 1,961 — 46 2,007 — 2,007 Interest charges on borrowed money — — 76 76 — 76 Expenses of MIEs — 338 — 338 — 338 Other expenses 84 — 221 305 14 319 Total costs and expenses 6,500 338 348 7,186 14 7,200 Earnings before income taxes 1,328 — (190) 1,138 (14) 1,124 Provision for income taxes 279 — (43) 236 1 237 Core Net Operating Earnings 1,049 — (147) 902 Non-core earnings (loss) (*): Realized gains (losses) on securities, net of tax — — — — — — Special A&E charge, net of tax — — (11) (11) 11 — Other (4) — — (4) 4 — Net Earnings $ 1,045 $ — $ (158) $ 887 $ — $ 887 63 Table of Contents Other P&C Consol.
The $132 million decrease in net cash used in financing activities in 2024 as compared to 2023 reflects no repurchases of common stock in 2024 compared to repurchases of common stock of $213 million in 2023, partially offset by higher dividends paid to shareholders (due primarily to special dividends of $6.50 per share in 2024 compared to special dividends of $5.50 per share in 2023).
The $132 million decrease in net cash used in financing activities in 2024 compared to 2023 reflects no repurchases of Common Stock in 2024 compared to repurchases of Common Stock of $213 million in 2023, partially offset by higher dividends paid to shareholders (due primarily to special dividends of $6.50 per share in 2024 compared to special dividends of $5.50 per share in 2023).
Specialty financial Net favorable reserve development of $8 million in the fourth quarter of 2024 reflects lower than anticipated claim frequency and severity in the financial institutions business and lower than expected claim severity in the fidelity business.
Net favorable reserve development of $8 million in the fourth quarter of 2024 reflects lower than anticipated claim frequency and severity in the financial institutions business and lower than expected claim severity in the fidelity business.
While management believes that AFG’s reserves for A&E claims are a reasonable estimate of ultimate liability for such claims, actual results may vary materially from the amounts currently recorded due to the factors listed above. A 1% variation in loss cost trends, caused by any of the factors previously described, would change net earnings by approximately $28 million.
While management believes that AFG’s reserves for A&E claims are a reasonable estimate of ultimate liability for such claims, actual results may vary materially from the amounts currently recorded due to the factors listed above. A 1% variation in loss cost trends, caused by any of the factors previously described, would change net earnings by approximately $26 million.
Investment grade securities generally bear lower yields and lower degrees of risk than those that are unrated and non-investment grade. Management believes that the high-quality investment portfolio should generate a stable and predictable investment return. AFG has approximately $75 million of direct exposure to office commercial real estate through property ownership, mortgages or equity method investments.
Investment grade securities generally bear lower yields and lower degrees of risk than those that are unrated and non-investment grade. Management believes that the high-quality investment portfolio should generate a stable and predictable investment return. AFG has approximately $80 million of direct exposure to office commercial real estate through property ownership, mortgages or equity method investments.
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.
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, 2025, the property and casualty insurance segment’s three-year survival ratios compare favorably with industry survival ratios published by A.M.
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.
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 39 Table of Contents business.
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.
For information on AFG’s realized gains (losses) on securities, see “Results of Operations — Realized Gains (Losses) on Securities.” 38 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.
(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.
(b) Elimination of the change in fair value of AFG’s investments in the CLOs, including $29 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, 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 three months ended December 31, 2025 and 2024 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 tables for the years ended December 31, 2025, 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.
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.
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 2025 or 2024.
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).
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, 2025 (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, 2024.
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, 2025.
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.
Although the cost of certain reinsurance programs may increase, 41 Table of Contents 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.
In addition, special charges related to coverage that AFG no longer writes, such as asbestos and environmental exposures, are excluded from core earnings. 47 Table of Contents The following table (in millions, except per share amounts) identifies non-core items and reconciles net earnings to core net operating earnings, a non-GAAP financial measure.
In addition, special charges related to coverage that AFG no longer writes, such as asbestos and environmental exposures, are excluded from core earnings. 48 Table of Contents The following table (in millions, except per share amounts) identifies non-core items and reconciles net earnings to core net operating earnings, a non-GAAP financial measure.
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).
For a discussion of the uncertainties in determining the ultimate liability, see Note M — “Contingencies” to the financial statements. 44 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).
RESULTS OF OPERATIONS — THREE MONTHS ENDED DECEMBER 31, 2024 AND 2023 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”).
RESULTS OF OPERATIONS — THREE MONTHS ENDED DECEMBER 31, 2025 AND 2024 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”).
AFG’s net cash provided by operating activities is impacted by the level and timing of property and casualty premiums, claim and expense payments and recoveries from reinsurers. Cash flows provided by operating activities also include the activity of AFG’s managed investment entities (collateralized loan obligations (“CLO”)) other than those activities included in investing or financing activities.
AFG’s net cash provided by operating activities is impacted by the level and timing of premiums, claim and expense payments and recoveries from reinsurers. Cash flows provided by operating activities also include the activity of AFG’s managed investment entities (collateralized loan obligations (“CLO”)) other than those activities included in investing or financing activities.
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 (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, 2025 and gross written premiums for the year ended December 31, 2025.
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 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, 2025, 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 $2 million and $1 million in the fourth quarter of 2024 and the fourth quarter of 2023, 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 $1 million and $2 million in the fourth quarter of 2025 and the fourth quarter of 2024, respectively.
Specialty casualty Gross written premiums increased $175 million (4%) in 2024 compared to 2023. The higher-year-over-year premiums resulted primarily from growth in the excess and surplus, excess liability and certain targeted markets businesses as a result of rate increases, new business opportunities and strong policy retention.
Gross written premiums increased $175 million (4%) in 2024 compared to 2023. The higher year-over-year premiums resulted primarily from growth in the excess and surplus, excess liability and certain targeted markets businesses as a result of rate increases, new business opportunities and strong policy retention.
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 $111 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.
For recent accident years, more weight is given to the Bornhuetter-Ferguson method. 39 Table of Contents Workers’ Compensation This long-tail line of business provides coverage to employees who may be injured in the course of employment.
For recent accident years, more weight is given to the Bornhuetter-Ferguson method. 40 Table of Contents Workers’ Compensation This long-tail line of business provides coverage to employees who may be injured in the course of employment.
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 $82 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.
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.
Approximately one-half 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.
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.
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 $175 million in 2025, $210 million in 2024 and $96 million in 2023 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 $1.33 billion in GAAP pretax earnings in 2024 compared to $1.30 billion in 2023, an increase of $28 million (2%). Property and casualty core pretax earnings were $1.33 billion in 2024 compared to $1.30 billion in 2023, an increase of $24 million (2%).
AFG’s property and casualty insurance operations contributed $1.33 billion in GAAP pretax earnings in 2024 compared to $1.30 billion in 2023, an increase of $28 million (2%). Property and casualty core pretax earnings were $1.33 billion in 2024 compared to $1.30 billion in 2023, an increase of $24 million (2%).
This year-over-year premium growth was tempered by the impact of lower year-over-year commodity pricing on winter wheat premiums, coupled with elevated pricing competition and the non-renewal of certain under-performing accounts in the 66 Table of Contents transportation businesses. Excluding crop premium, gross and net written premiums in this group grew by 5% and 4%, respectively.
The year-over-year premium growth was tempered by the impact of lower year-over-year commodity pricing on winter wheat premiums, coupled with elevated pricing competition and the non-renewal of certain under-performing accounts in the transportation businesses. Excluding crop premium, gross and net written premiums in this group grew by 5% and 4%, respectively.
As a result, and consistent with the internal review in the third quarter of 2023, the 2024 review resulted in no net change to AFG’s property and casualty insurance segment’s asbestos and environmental reserves.
As a result, and consistent with the internal review in the third quarter of 2024, the 2025 review resulted in no net change to AFG’s property and casualty insurance segment’s asbestos and environmental reserves.
Fixed income investment funds are generally invested in securities with intermediate-term maturities with an objective of optimizing total return while allowing flexibility to react to changes in market conditions. At December 31, 2024, the average life of AFG’s fixed maturities was about 4.2 years.
Fixed income investment funds are generally invested in securities with intermediate-term maturities with an objective of optimizing total return while allowing flexibility to react to changes in market conditions. At December 31, 2025, the average life of AFG’s fixed maturities was about 4.4 years.
Specialty financial Commissions and other underwriting expenses as a percentage of net earned premiums decreased 4.0 percentage points in 2024 compared to 2023 due primarily to the impact on the ratio of higher earned premiums in the financial institutions business and a change in the mix of business towards products with lower commission rates.
Commissions and other underwriting expenses as a percentage of net earned premiums decreased 4.1 percentage points in 2024 compared to 2023 due primarily to the impact on the ratio of higher earned premiums in the financial institutions business and a change in the mix of business towards products with lower commission rates.
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).
AFG’s fixed maturity portfolio includes securities (the majority of which are AAA-rated) with a carrying value of approximately $280 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, 2025, is shown in the following table (dollars in millions).
Insurance premiums in excess of acquisition expenses and operating costs are invested until they are needed to meet policyholder obligations or made available to the parent company through dividends to cover debt obligations and corporate expenses, and to provide returns to shareholders through share repurchases and dividends.
Insurance premiums in excess of acquisition expenses and operating costs are invested until they are needed to meet policyholder obligations or made available to the parent company through 32 Table of Contents dividends to cover debt obligations and corporate expenses, and to provide returns to shareholders through share repurchases and dividends.
At December 31, 2024, AFG (parent) held approximately $389 million in cash and investments. Management believes that AFG’s cash balances are held at stable banking institutions, although the amounts of many of these deposits are in excess of federally insured balances. AFG can borrow up to $450 million under its revolving credit facility, which expires in June 2028.
At December 31, 2025, AFG (parent) held approximately $529 million in cash and investments. Management believes that AFG’s cash balances are held at stable banking institutions, although the amounts of many of these deposits are in excess of federally insured balances. AFG can borrow up to $450 million under its revolving credit facility, which expires in June 2028.
Specialty financial The 0.9 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2024 compared to 2023 reflects 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 reported losses and lower premiums in the fidelity and surety businesses.
The 0.8 percentage point decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2024 compared to 2023, reflects 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 reported losses and lower premiums in the fidelity and surety businesses.
AFG recorded net catastrophe losses of $180 million in 2024 (before $2 million in net reinstatement premiums) primarily from winter and convective storms in multiple regions of the United States in the first and second quarters, Hurricane Helene in the third quarter and Hurricane Milton in the fourth quarter.
Catastrophe losses of $180 million in 2024 (before $2 million in net reinstatement premiums) resulted primarily from winter and convective storms in multiple regions of the United States in the first and second quarters, Hurricane Helene in the third quarter and Hurricane Milton in the fourth quarter.
AFG’s insurance subsidiaries continue to have capital at or in excess of the levels required by ratings agencies in order to maintain their current ratings, and the parent company does not have any near-term debt maturities. CRITICAL ACCOUNTING POLICIES Significant accounting policies are summarized in Note A — “Accounting Policies” to the financial statements.
AFG’s insurance subsidiaries continue to have capital at or in excess of the levels required by ratings agencies in order to maintain their current ratings, and the parent company does not have any debt maturities until 2030. CRITICAL ACCOUNTING POLICIES Significant accounting policies are summarized in Note A — “Accounting Policies” to the financial statements.
This year-over-year increase reflects higher underwriting profit in the financial institutions business, partially offset by lower profitability resulting from the pause in writing of intellectual property-related coverage. Catastrophe losses were $81 million (7.8 points on the combined ratio) in 2024 compared to catastrophe losses of $49 million (5.7 points) in 2023.
This year-over-year increase reflects higher underwriting profit in the financial institutions business, partially offset by lower profitability resulting from the pause in writing of intellectual property-related coverage. Catastrophe losses were $81 million (7.9 points on the combined ratio) in 2024 compared to catastrophe losses of $50 million (5.7 points) in 2023.
During 2024, AFG paid special cash dividends totaling $545 million ($2.50 per share in February and $4.00 per share in November). During 2023, AFG repurchased 1,872,544 shares of its Common Stock for $213 million and paid special cash dividends totaling $466 million ($4.00 per share in February and $1.50 per share in November).
During 2023, AFG repurchased 1,872,544 shares of its Common Stock for $213 million and paid special cash dividends totaling $466 million ($4.00 per share in February and $1.50 per share in November).
Decreases in market prices could adversely affect the insurance group’s capital, potentially impacting the amount of dividends available or necessitating a capital contribution. Conversely, increases in market prices could have a favorable impact on the group’s dividend-paying capability.
Decreases in market prices could adversely affect the insurance group’s capital, potentially impacting the amount of dividends available or 34 Table of Contents necessitating a capital contribution. Conversely, increases in market prices could have a favorable impact on the group’s dividend-paying capability.
AFG recorded pretax special non-core A&E charges of $14 million in 2024 and $15 million in 2023 to increase liabilities for those operations as a result of the internal reviews. Liabilities for claims and contingencies arising from these former railroad and manufacturing operations totaled $91 million at December 31, 2024.
AFG recorded pretax special non-core A&E charges of $25 million in 2025, $14 million in 2024 and $15 million in 2023 to increase liabilities for those operations as a result of the internal reviews. Liabilities for claims and contingencies arising from these former railroad and manufacturing operations totaled $109 million at December 31, 2025.
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.
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 21% and 25% of AFG’s workers’ compensation reserves at December 31, 2025 relate to policies written in Florida and California, respectively.
AFG’s investment portfolio also includes $2.28 billion in investments accounted for using the equity method (limited partnerships and similar investments).
AFG’s investment portfolio also includes $2.42 billion in investments accounted for using the equity method (limited partnerships and similar investments).
Reinsurance premiums ceded as a percentage of gross written premiums increased 3 percentage points in 2024 compared to 2023 reflecting the impact of higher cessions in the crop business and growth in certain programs in the transportation businesses that cede a larger percentage of premiums than some of the other businesses in the Property and transportation sub-segment.
Reinsurance premiums ceded as a percentage of gross written premiums increased 2 percentage points in 2024 compared to 2023, reflecting the impact of higher cessions in the crop business and growth in certain programs in the transportation businesses which cede a larger percentage of premiums than some of the other businesses in the Property and transportation sub-segment.
Net realized gains on securities of less than $1 million in 2024 and net realized losses on securities of $28 million in 2023 include $19 million of after-tax 48 Table of Contents gains and $2 million of after-tax losses, respectively, from the change in fair value of equity securities that were still held at the balance sheet date.
Net realized gains on securities of less than $1 million in 2024 and net realized losses on securities of $28 million in 2023 include $19 million of after-tax gains and $2 million of after-tax losses, respectively, resulting from the change in fair value of equity securities that were still held at the balance sheet date.
Property and transportation Net favorable reserve development of $94 million in 2024 reflects lower than anticipated losses in the crop business, lower than expected claim severity in the property and inland marine and aviation businesses and lower than anticipated claim frequency and severity in the ocean marine business.
Net favorable reserve development of $96 million in 2024 reflects lower than anticipated losses in the crop business, lower than expected claim severity in the property and inland marine and aviation businesses and lower than anticipated claim frequency and severity in the ocean marine business.
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 $3 million in the fourth quarter of 2025 and $2 million in the fourth quarter of 2024 related to business outside of the Specialty group that AFG no longer writes.
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.
The charges in all periods 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.
Excluding the impact of the managed investment entities, net cash provided by operating activities was $1.23 billion, $1.67 billion and $1.34 billion in 2024, 2023 and 2022, respectively. Net Cash Provided by (Used in) Investing Activities AFG’s investing activities consist primarily of the investment of funds provided by its property and casualty businesses.
Excluding the impact of the managed investment entities, net cash provided by operating activities was $1.46 billion, $1.23 billion and $1.67 billion in 2025, 2024 and 2023, respectively. Net Cash Provided by (Used in) Investing Activities AFG’s investing activities consist primarily of the investment of funds provided by its property and casualty businesses.
Specialty casualty Net adverse reserve development of $36 million in the fourth quarter of 2024 reflects higher than anticipated claim frequency and severity in the umbrella and excess liability businesses and higher than expected claim severity in the social services and general liability businesses, partially offset by lower than expected claim severity in the workers’ compensation businesses.
Net adverse reserve development of $44 million in the fourth quarter of 2024 reflects higher than anticipated claim frequency and severity in the umbrella and excess liability businesses and higher than expected claim severity in the social services and general liability businesses, partially offset by lower than expected claim severity in the workers’ compensation businesses.
Holding Company and Other — Other Expenses Excluding the non-core special A&E charges and the non-core gain 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 $161 million in 2024 compared to $162 million in 2023, a decrease of $1 million (1%).
Holding Company and Other — Other Expenses Excluding the non-core special A&E charges discussed below, AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded other expenses of $161 million in both 2025 and 2024. 75 Table of Contents Excluding the non-core special A&E charges and the non-core gain 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 $161 million in 2024 compared to $162 million in 2023, a decrease of $1 million (1%).
During the 2024 internal review, no new trends were identified and recent claims activity was generally consistent with AFG’s expectations resulting from its in-depth internal reviews in the prior three years, and the most recent external study in 2020.
During the 2025 internal review, no new trends were identified and recent claims activity was generally consistent with AFG’s expectations resulting from its in-depth internal reviews in the prior four years, and the most recent external study in 2020.
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 $22 million in the fourth quarter of 2025 and $15 million in the fourth quarter of 2024 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.
Management views this fee income, net of the $68 million in 2025, $60 million in 2024 and $57 million in 2023, in expenses incurred to generate such fees, as a reduction in the cost of underwriting its property and casualty insurance policies.
The $9 million (22%) increase in interest expense on funds withheld in 2024 compared to 2023 and the $12 million (41%) increase in 2023 compared to 2022 reflects the impact of higher balances and higher interest rates paid on funds withheld.
The $9 million (22%) increase in interest expense on funds withheld in 2024 compared to 2023 reflects the impact of higher balances and higher interest rates paid on funds withheld.
Management’s Discussion and Analysis of Financial Condition and Results of Operations INDEX TO MD&A Page Page Objective 30 Results of Operations 47 Overview 30 General 47 Critical Accounting Policies 31 Results of Operations — Fourth Quarter 49 Liquidity and Capital Resources 31 Segmented Statement of Earnings 49 Ratios 31 Property and Casualty Insurance 50 Condensed Consolidated Cash Flows 32 Holding Company, Other and Unallocated 59 Parent and Subsidiary Liquidity 33 Results of Operations — Full Year 62 Condensed Parent Only Cash Flows 34 Segmented Statement of Earnings 62 Off-Balance Sheet Arrangements 35 Property and Casualty Insurance 64 Investments 35 Holding Company, Other and Unallocated 74 Uncertainties 38 Recent Accounting Standards 77 Managed Investment Entities 44 OBJECTIVE The objective of Management’s Discussion and Analysis is to provide a discussion and analysis of the financial statements and other statistical data that management believes will enhance the understanding of AFG’s financial condition, changes in financial condition and results of operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations INDEX TO MD&A Page Page Objective 31 Results of Operations 48 Overview 31 General 48 Critical Accounting Policies 32 Results of Operations — Fourth Quarter 50 Liquidity and Capital Resources 32 Segmented Statement of Earnings 50 Ratios 32 Property and Casualty Insurance 51 Condensed Consolidated Cash Flows 32 Holding Company, Other and Unallocated 59 Parent and Subsidiary Liquidity 34 Results of Operations — Full Year 62 Condensed Parent Only Cash Flows 35 Segmented Statement of Earnings 62 Off-Balance Sheet Arrangements 35 Property and Casualty Insurance 64 Investments 36 Holding Company, Other and Unallocated 74 Uncertainties 39 Recent Accounting Standards 77 Managed Investment Entities 45 OBJECTIVE The objective of Management’s Discussion and Analysis is to provide a discussion and analysis of the financial statements and other statistical data that management believes will enhance the understanding of AFG’s financial condition, changes in financial condition and results of operations.
Realized gains (losses) on securities consisted of the following (in millions): Three months ended December 31, 2024 2023 Realized gains (losses) before impairment allowances: Disposals $ — $ (2) Change in the fair value of equity securities 3 33 Change in the fair value of derivatives (3) 2 — 33 Change in allowance for impairments on securities (10) (2) Realized gains (losses) on securities $ (10) $ 31 The $3 million net realized gain from the change in the fair value of equity securities in the fourth quarter of 2024 includes gains of $4 million on investments in technology companies.
Realized gains (losses) on securities consisted of the following (in millions): Three months ended December 31, 2025 2024 Realized gains (losses) before impairment allowances: Disposals $ 2 $ — Change in the fair value of equity securities (1) 3 Change in the fair value of derivatives — (3) 1 — Change in allowance for impairments on securities (8) (10) Realized gains (losses) on securities $ (7) $ (10) The $3 million net realized gain from the change in the fair value of equity securities in the fourth quarter of 2024 includes gains of $4 million on investments in technology companies.
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.
Aggregate Aggregate underwriting results for AFG’s property and casualty insurance segment include adverse prior year reserve development of $5 million in 2025, $6 million in 2024 and $2 million in 2023, 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 62.2%, 63.3% and 61.6% in 2025, 2024 and 2023, respectively.
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.
Aggregate Aggregate net prior accident years reserve development for AFG’s property and casualty insurance segment includes net adverse prior year reserve development of $5 million in 2025, $6 million in 2024 and $2 million in 2023 related to business outside the Specialty group that AFG no longer writes.
Holding Company and Other — Other Income Other income in the table above includes $13 million in 2024, $16 million in 2023 and $17 million in 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 $11 million in 2025, $13 million in 2024 and $16 million in 2023, in management fees paid to AFG by the AFG-managed CLOs (AFG’s consolidated managed investment entities).
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.
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 $80 million in 2025 and $76 million in both 2024 and 2023.
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.
Total charges recorded to increase liabilities for A&E exposures of AFG’s former railroad and manufacturing operations (included in other expenses) were $35 million in 2025, $24 million in 2024, and $22 million in 2023.
(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.
(b) Elimination of the change in fair value of AFG’s investments in the CLOs, including $14 million and $12 million in the fourth quarter of 2025 and 2024, 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.
December 31, 2024 2023 Principal amount of long-term debt $ 1,498 $ 1,498 Total capital 6,204 6,075 Ratio of debt to total capital: Including subordinated debt 24.1 % 24.7 % Excluding subordinated debt 13.3 % 13.5 % The ratio of debt to total capital is a non-GAAP measure that management believes is useful for investors, analysts and ratings agencies to evaluate AFG’s financial strength and liquidity and to provide insight into how AFG finances its operations.
December 31, 2025 2024 Principal amount of long-term debt $ 1,848 $ 1,498 Total capital 6,718 6,204 Ratio of debt to total capital: Including subordinated debt 27.5 % 24.1 % Excluding subordinated debt 17.5 % 13.3 % The ratio of debt to total capital is a non-GAAP measure that management believes is useful for investors, analysts and ratings agencies to evaluate AFG’s financial strength and liquidity and to provide insight into how AFG finances its operations.
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.
The decrease in GAAP and core pretax earnings in 2025 compared to 2024 reflects lower net investment income from AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs), partially offset by higher underwriting profit and higher investment income outside of alternative investments.
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.
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 $25 million in 2025, $14 million in 2024 and $15 million in 2023 to increase liabilities related to the A&E exposures of AFG’s former railroad and manufacturing operations.
(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.
(b) Elimination of the change in fair value of AFG’s investments in the CLOs, including $36 million and $37 million in 2025 and 2024, 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.
Effect of 1% Change in Cost Trends Line of business Other liability — occurrence $ 78 Workers’ compensation 69 Other liability — claims made 30 Commercial auto/truck liability/medical 18 The judgments and uncertainties surrounding management’s reserve estimation process and the potential for reasonably possible variability in management’s most recent reserve estimates may also be viewed by looking at how recent historical estimates of reserves have developed.
Effect of 1% Change in Cost Trends Line of business Other liability — occurrence $ 94 Workers’ compensation 68 Other liability — claims made 32 Commercial auto/truck liability/medical 21 The judgments and uncertainties surrounding management’s reserve estimation process and the potential for reasonably possible variability in management’s most recent reserve estimates may also be viewed by looking at how recent historical estimates of reserves have developed.
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.
Property and casualty reserves for unpaid losses and loss adjustment expenses were $15.09 billion at December 31, 2025 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.
Realized Loss on Subsidiaries In the second quarter of 2024, AFG recorded $4 million in net tax expense related to a pending IRS settlement regarding the sale of a subsidiary in a prior year.
In the second quarter of 2024, AFG recorded $4 million in net tax expense related to a pending IRS settlement regarding the sale of a subsidiary in a prior year.
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.
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, 2025 2024 2023 Net cash provided by operating activities $ 1,533 $ 1,152 $ 1,970 Net cash provided by (used in) investing activities (835) 95 414 Net cash used in financing activities (377) (1,066) (2,031) Net change in cash and cash equivalents $ 321 $ 181 $ 353 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.
Reinsurance premiums ceded as a percentage of gross written premiums were comparable in 2024 and 2023 reflecting lower cessions in certain more heavily reinsured products in the social services business, offset by the impact of higher premiums in the excess and surplus and mergers and acquisitions liability businesses, which cede a larger percentage of premiums than some of the other businesses in the Specialty casualty sub-segment and higher cessions in the public sector business.
Reinsurance premiums ceded as a percentage of gross written premiums increased 2 percentage points in 2024 compared to 2023, reflecting the impact of higher premiums in the excess and surplus and mergers and acquisitions liability businesses, which cede a larger percentage of premiums than some of the other businesses in the Specialty casualty sub-segment and higher cessions in the public sector business, partially offset by lower cessions in certain more heavily reinsured products in the social services business.
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.
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 (*) See the reconciliation of core earnings to GAAP net earnings under “Results of Operations — General” for details on the tax impacts of these reconciling items.
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.
In addition, AFG’s investment portfolio includes $567 million in equity securities carried at fair value with holding gains and losses included in realized gains (losses) on securities and $218 million in equity securities carried at fair value with holding gains and losses included in net investment income.

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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, 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
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, 2025 December 31, 2024 Scheduled Principal Payments Rate Scheduled Principal Payments Rate 2026 $ — — % 2025 $ — — % 2027 — — % 2026 — — % 2028 — — % 2027 — — % 2029 — — % 2028 — — % 2030 253 5.3 % 2029 — — % Thereafter 1,595 4.9 % Thereafter 1,498 4.9 % Total $ 1,848 5.0 % Total $ 1,498 4.9 % Fair Value $ 1,609 Fair Value $ 1,276 78 Table of Contents
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.
Effects of increases or decreases from the 100 basis points illustrated would be approximately proportional. 2025 2024 Fair value of fixed maturity portfolio $ 11,143 $ 10,474 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 $ (334) $ (314) Equity Price Risk AFG’s equity securities are reported at fair value with holding gains and losses recognized in net earnings.
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.
At December 31, 2025 and 2024, the fair value of AFG’s equity securities totaled $785 million and $751 million, 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