AMERICAN FINANCIAL GROUP INC - Quarter Report: 2025 June (Form 10-Q)

Total liabilities and shareholders’ equity$ $

AMERICAN FINANCIAL GROUP, INC. 10-Q

AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)

(In Millions, Except Per Share Data)


	Three months ended June 30,		Six months ended June 30,
	2025	2024	2025	2024
Revenues:
Net earned premiums	$	$	$	$
Net investment income

Realized gains (losses) on securities		()

Income of managed investment entities:
Investment income
Gain (loss) on change in fair value of assets/liabilities	()		()
Other income
Total revenues

Costs and Expenses:
Losses and loss adjustment expenses
Commissions and other underwriting expenses
Interest charges on borrowed money
Expenses of managed investment entities
Other expenses
Total costs and expenses
Earnings before income taxes
Provision for income taxes




Net Earnings	$	$	$	$

Earnings per Common Share:


Total basic earnings	$	$	$	$



Total diluted earnings	$	$	$	$
Average number of Common Shares:
Basic
Diluted

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AMERICAN FINANCIAL GROUP, INC. 10-Q

AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

(In Millions)


	Three months ended June 30,		Six months ended June 30,
	2025	2024	2025	2024
Net earnings	$	$	$	$

Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities:
Unrealized holding gains (losses) on securities arising during the period		()		()
Reclassification adjustment for realized (gains) losses included in net earnings
Total net unrealized gains (losses) on securities		()		()
Net unrealized gains (losses) on cash flow hedges:
Unrealized holding gains (losses) on cash flow hedges arising during the period		()		()
Reclassification adjustment for investment income included in net earnings

Total net unrealized gains (losses) on cash flow hedges				()
Foreign currency translation adjustments		()		()




Other comprehensive income (loss), net of tax		()		()



Comprehensive income	$	$	$	$

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AMERICAN FINANCIAL GROUP, INC. 10-Q

AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

(Dollars in Millions)

Shareholders’ Equity

Common Shares

Common Stock and Capital Surplus

Retained Earnings

Accumulated Other Comp. Income (Loss)

Total

Balance at March 31, 2025

()

Net earnings

—

Other comprehensive income

—

Dividends ($ per share)

—

()

—

()

Shares issued:

Exercise of stock options

—

Restricted stock awards

—

Other benefit plans

—

Dividend reinvestment plan

—

Stock-based compensation expense

—

Shares acquired and retired

()

—

()

Shares exchanged — benefit plans

()

—

Forfeitures of restricted stock

()

—

Balance at June 30, 2025

()

Balance at March 31, 2024

()

Net earnings

—

Other comprehensive loss

—

()

Dividends ($ per share)

—

()

—

()

Shares issued:

Exercise of stock options

—

Restricted stock awards

—

Other benefit plans

—

Dividend reinvestment plan

—

Stock-based compensation expense

—

Shares acquired and retired

—

Shares exchanged — benefit plans

()

—

Forfeitures of restricted stock

()

—

Balance at June 30, 2024

()

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AMERICAN FINANCIAL GROUP, INC. 10-Q

AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) — CONTINUED

(Dollars in Millions)

Shareholders’ Equity

Common Shares

Common Stock and Capital Surplus

Retained Earnings

Accumulated Other Comp. Income (Loss)

Total

Balance at December 31, 2024

()

Net earnings

—

Other comprehensive income

—

Dividends ($ per share)

—

()

—

()

Shares issued:

Exercise of stock options

—

Restricted stock awards

—

Other benefit plans

—

Dividend reinvestment plan

—

Stock-based compensation expense

—

Shares acquired and retired

()

—

()

Shares exchanged — benefit plans

()

—

()

Forfeitures of restricted stock

()

—

Balance at June 30, 2025

()

Balance at December 31, 2023

()

Net earnings

—

Other comprehensive loss

—

()

Dividends ($ per share)

—

()

—

()

Shares issued:

Exercise of stock options

—

Restricted stock awards

—

Other benefit plans

—

Dividend reinvestment plan

—

Stock-based compensation expense

—

Shares acquired and retired

—

Shares exchanged — benefit plans

()

—

()

Forfeitures of restricted stock

()

—

Balance at June 30, 2024

()

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AMERICAN FINANCIAL GROUP, INC. 10-Q

AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

(In Millions)


	Six months ended June 30,
	2025	2024
Operating Activities:
Net earnings	$	$
Adjustments:
Depreciation and amortization
Realized (gains) losses on investing activities	()	()
Net purchases of trading securities		()
Change in:
Reinsurance and other receivables
Other assets
Insurance claims and reserves		()
Payable to reinsurers	()	()
Other liabilities		()
Managed investment entities’ assets/liabilities		()
Other operating activities, net	()	()
Net cash provided by operating activities

Investing Activities:
Purchases of:
Fixed maturities	()	()
Equity securities	()	()
Mortgage loans	()	()
Other investments	()	()
Real estate, property and equipment	()	()
Proceeds from:
Maturities and redemptions of fixed maturities
Repayments of mortgage loans
Sales of fixed maturities
Sales of equity securities
Sales of other investments
Sales of real estate, property and equipment
Managed investment entities:
Purchases of investments	()	()
Proceeds from sales and redemptions of investments
Other investing activities, net	()	()
Net cash provided by (used in) investing activities		()

Financing Activities:
Issuances of Common Stock
Repurchases of Common Stock	()
Cash dividends paid on Common Stock	()	()
Issuances of managed investment entities’ liabilities
Retirements of managed investment entities’ liabilities	()	()
Net cash used in financing activities	()	()
Net Change in Cash and Cash Equivalents	()	()
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period	$	$

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO NOTES

Accounting Policies

Goodwill and Other Intangibles

Segments of Operations

Long-Term Debt

Fair Value Measurements

Shareholders’ Equity

Investments

Income Taxes

Derivatives

Contingencies

Managed Investment Entities

Insurance

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

million in assets and $ million in liabilities of temporary warehousing entities that were established to provide AFG the ability to form new CLOs. At closing, all warehoused assets will be transferred to the new CLOs and the liabilities will be repaid.

million lease liability included in other liabilities and a lease right-of-use asset of $ million included in other assets compared to $ million and $ million, respectively, at December 31, 2024.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

; first six months of 2025 — less than million and 2024 — million.

There were anti-dilutive potential common shares for the second quarter or the first six months of 2025 or 2024.

or less when purchased are considered to be cash equivalents for purposes of the financial statements.

segments: Property and casualty insurance and Other, which includes holding company assets and costs.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

Sales of property and casualty insurance outside of the United States represented % of AFG’s revenues in both the second quarter and first six months of 2025 and 2024.

$ Other Total assets$ $

(*)Not allocable to sub-segments.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

$ $ $ Specialty casualty Specialty financial

Total net earned premiums

Net investment income Other income Total property and casualty insurance Other

Total revenues before realized gains (losses)

Realized gains (losses) on securities

() Total revenues$ $ $ $

Earnings Before Income Taxes

Property and casualty insurance:Underwriting:SpecialtyProperty and transportation$ $ $ $ Specialty casualty Specialty financial Other lines()()()()

Total underwriting (a)

Investment and other income, net (b)

Total property and casualty insurance

Other (c)

()()()()

Total earnings before realized gains (losses) and income taxes

Realized gains (losses) on securities

()

Total earnings before income taxes

$ $ $ $

(a)Significant segment expenses, which are losses and loss adjustment expenses and commissions and other underwriting expenses, are shown in the table below by sub-segment.

(b)Includes the amortization of intangibles and other miscellaneous expenses.

(c)Includes the expenses of the managed investment entities, interest charges on borrowed money, salaries, depreciation and other general expenses.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

$ $ $ Losses and loss adjustment expenses Commissions and other underwriting expenses

Underwriting profit

$ $ $ $ Specialty casualty:

Net earned premiums

$ $ $ $ Losses and loss adjustment expenses Commissions and other underwriting expenses

Underwriting profit

$ $ $ $ Specialty financial:

Net earned premiums

$ $ $ $ Losses and loss adjustment expenses Commissions and other underwriting expenses

Underwriting profit

$ $ $ $

Other lines:

Losses and loss adjustment expenses$ $ $ $

Underwriting profit (loss)

$()$()$()$()

Total property and casualty insurance segment:

Net earned premiums

$ $ $ $ Losses and loss adjustment expenses Commissions and other underwriting expenses

Underwriting profit

$ $ $ $

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

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

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

$ $ $ States, municipalities and political subdivisions Foreign government Residential MBS Collateralized loan obligations Other asset-backed securities Corporate and other Total AFS fixed maturities Trading fixed maturities Equity securities Assets of managed investment entities (“MIE”) Other assets — derivatives Total assets accounted for at fair value$ $ $ $ Liabilities:Contingent consideration — acquisitions$ $ $ $ Liabilities of managed investment entities Other liabilities — derivatives Total liabilities accounted for at fair value$ $ $ $ December 31, 2024Assets:Available for sale fixed maturities:U.S. government and government agencies$ $ $ $ States, municipalities and political subdivisions Foreign government Residential MBS Collateralized loan obligations Other asset-backed securities Corporate and other Total AFS fixed maturities Trading fixed maturities Equity securities Assets of managed investment entities Other assets — derivatives Total assets accounted for at fair value$ $ $ $ Liabilities:Contingent consideration — acquisitions$ $ $ $ Liabilities of managed investment entities Other liabilities — derivatives Total liabilities accounted for at fair value$ $ $ $

Approximately % of the total assets carried at fair value at June 30, 2025, were Level 3 assets. Internally developed prices for fixed maturities are estimated using a variety of inputs, including appropriate credit spreads over the treasury yield (of a similar duration), trade information and prices of comparable securities and other security specific features (such as optional early redemption). Internally developed Level 3 asset fair values represent approximately % ($ million) of the total fair value of Level 3 assets at June 30, 2025. Approximately % ($ million) of these internally developed Level 3 assets are priced using a pricing model that uses a discounted cash flow approach to estimate the fair value of fixed maturity securities. The credit spread applied by management is the significant unobservable input of the pricing model. In instances where the security is currently callable at par value and the pricing

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

million) are priced using internal models or inputs from third parties that are not market observable. Management believes that any justifiable changes in unobservable inputs used to determine internally developed fair values would not have resulted in a material change in AFG’s financial position.

Approximately % ($ million) of the Level 3 assets were investments whose prices were determined based on financial information provided by third party asset managers. Approximately % ($ million) of Level 3 assets were priced using non-binding broker quotes or pricing services, for which there is a lack of transparency as to the inputs used to determine fair value.

$ $ $ $ $ $ $ Residential MBS Collateralized loan obligations

Other asset-backed securities

() Corporate and other () Total AFS fixed maturities ()

Trading fixed maturities

Equity securities () Assets of MIE () Total Level 3 assets$ $ $ $ $()$ $()$ Contingent consideration — acquisitions$()$ $ $ $ $ $ $()Total Level 3 liabilities$()$ $ $ $ $ $ $()

Total realized/unrealized
gains (losses) included in

Balance at March 31, 2024

Net
earnings (loss)

Other comprehensive income (loss)

Purchases
and
issuances

Sales and
settlements

Transfer
into
Level 3

Transfer
out of
Level 3

Balance at June 30, 2024

AFS fixed maturities:

State and municipal

Residential MBS

Collateralized loan obligations

Other asset-backed securities

()

Corporate and other

()

Total AFS fixed maturities

()

Trading fixed maturities

Equity securities

()

Assets of MIE

()

Total Level 3 assets

()

Contingent consideration — acquisitions

()

Total Level 3 liabilities

()

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

$ $ $ $ $ $ $ Residential MBS Collateralized loan obligations

Other asset-backed securities

() Corporate and other () () Total AFS fixed maturities () ()

Trading fixed maturities

() Equity securities () Assets of MIE () Total Level 3 assets$ $ $ $ $()$ $()$ Contingent consideration — acquisitions$()$ $ $ $ $ $ $()Total Level 3 liabilities$()$ $ $ $ $ $ $()

Total realized/unrealized
gains (losses) included in

Balance at December 31, 2023

Net
earnings (loss)

Other comprehensive income (loss)

Purchases
and
issuances

Sales and
settlements

Transfer
into
Level 3

Transfer
out of
Level 3

Balance at June 30, 2024

AFS fixed maturities:

State and municipal

Residential MBS

Collateralized loan obligations

Other asset-backed securities

()

Corporate and other

()

Total AFS fixed maturities

()

Trading fixed maturities

Equity securities

()

Assets of MIE

()

Total Level 3 assets

()

Contingent consideration — acquisitions

()

Total Level 3 liabilities

()

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

$ $ $ $ Mortgage loans

Total financial assets not accounted for at fair value

$ $ $ $ $ Long-term debt$ $ $ $ $

Total financial liabilities not accounted for at fair value

$ $ $ $ $ December 31, 2024Financial assets:Cash and cash equivalents$ $ $ $ $ Mortgage loans

Total financial assets not accounted for at fair value

$ $ $ $ $ Long-term debt$ $ $ $ $

Total financial liabilities not accounted for at fair value

$ $ $ $ $

$ $ $()$ $

States, municipalities and political subdivisions

()()

Foreign government

Residential MBS

()()

Collateralized loan obligations

()()

Other asset-backed securities

()()

Corporate and other

() Total fixed maturities$ $ $ $()$()$ December 31, 2024Fixed maturities:U.S. government and government agencies$ $ $ $()$()$

States, municipalities and political subdivisions

()()

Foreign government

()

Residential MBS

()()

Collateralized loan obligations

()()

Other asset-backed securities

()()

Corporate and other

()() Total fixed maturities$ $ $ $()$()$

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

$ $ $ $ $ Perpetual preferred stocks

Total equity securities carried at fair value

$ $ $ $ $ $

$ $()$ $ $ Private equity Private debt Total investments accounted for using the equity method$ $ $()$ $ $

(*)% of the carrying value relates to underlying investments in multi-family properties as of June 30, 2025 and December 31, 2024.

The earnings (losses) from these investments are generally reported on a quarter lag due to the timing required to obtain the necessary information from the funds. AFG regularly reviews and discusses fund performance with the fund managers to corroborate the reasonableness of the underlying reported asset values and to assess whether any events have occurred within the lag period that may materially affect the valuation of these investments.

With respect to partnerships and similar investments, AFG had unfunded commitments of $ million and $ million as of June 30, 2025 and December 31, 2024, respectively.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

$ %$()$ %

States, municipalities and political subdivisions

() %() %Foreign government % %Residential MBS() %() %Collateralized loan obligations %() %Other asset-backed securities() %() %Corporate and other() %() %Total fixed maturities$()$ %$()$ %December 31, 2024Fixed maturities:U.S. government and government agencies$ $ %$()$ %

States, municipalities and political subdivisions

() %() %Foreign government %() %Residential MBS() %() %Collateralized loan obligations %() %Other asset-backed securities() %() %Corporate and other() %() %Total fixed maturities$()$ %$()$ %

At June 30, 2025, the gross unrealized losses on fixed maturities of $ million relate to approximately securities. Investment grade securities (as determined by nationally recognized rating agencies) represented approximately % of the gross unrealized loss and % of the fair value of securities with unrealized losses.

To evaluate fixed maturities for expected credit losses (impairment), management considers whether the unrealized loss is credit-driven or a result of changes in market interest rates, the extent to which fair value is less than cost basis, historical operating, balance sheet and cash flow data from the issuer, third party research, communications with industry specialists and discussions with issuer management.

AFG analyzes its residential MBS for expected credit losses (impairment) each quarter based upon expected future cash flows. Management estimates expected future cash flows based upon its knowledge of the MBS market, cash flow projections (which reflect loan to collateral values, subordination, vintage and geographic concentration) received from independent sources, implied cash flows inherent in security ratings and analysis of historical payment data.

Management believes AFG will recover its cost basis (net of any allowance) in the 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 June 30, 2025.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

$ $ Provision for expected credit losses on securities with no previous allowance

Reductions to previously recognized expected credit losses

() ()

Reductions due to sales or redemptions

()()Balance at June 30, 2025$ $ $ Balance at March 31, 2024$ $ $ Provision for expected credit losses on securities with no previous allowance

Additions (reductions) to previously recognized expected credit losses

Reductions due to sales or redemptions

() ()Balance at June 30, 2024$ $ $ Balance at December 31, 2024$ $ $ Provision for expected credit losses on securities with no previous allowance

Additions (reductions) to previously recognized expected credit losses

()

Reductions due to sales or redemptions

()()Balance at June 30, 2025$ $ $ Balance at December 31, 2023$ $ $ )) )) )) )) ()

(*)The reclassification adjustments affected the following lines in AFG’s Statement of Earnings:

OCI component

Affected line in the statement of earnings

Pretax - Net unrealized gains (losses) on securities

Realized gains (losses) on securities

Pretax - Net unrealized gains (losses) on cash flow hedges

Net investment income

Tax

Provision for income taxes

Stock Incentive Plans Under AFG’s stock incentive plans, employees of AFG and its subsidiaries are eligible to receive equity awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units and stock awards. In the first six months of 2025, AFG issued shares of restricted Common Stock (fair value of $ per share) under the stock incentive plans.

Total compensation expense related to stock incentive plans of AFG and its subsidiaries was $ million in both the second quarter of 2025 and 2024 and $ million in both the first six months of 2025 and 2024, respectively.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions):


	Three months ended June 30,						Six months ended June 30,
	2025			2024			2025			2024
	Amount	% of EBT		Amount	% of EBT		Amount	% of EBT		Amount	% of EBT
Earnings before income taxes (“EBT”)	$			$			$			$

Income taxes at statutory rate	$		%	$		%	$		%	$		%
Effect of:
Employee stock ownership plan dividend paid deduction			%			%	()	(	%)	()		%
Tax exempt interest	()		%	()		%	()	(	%)	()	(	%)
Stock-based compensation			%			%	()		%	()		%

Dividends received deduction	()		%	()		%	()		%	()		%
Nondeductible expenses			%			%			%			%
Adjustment related to sale of subsidiary			%			%			%			%

Foreign operations			%			%			%			%

Other	()	(	%)			%	()		%			%
Provision for income taxes as shown in the statement of earnings	$		%	$		%	$		%	$		%

In the second quarter of 2025, AFG recorded $ million in net tax expense related to a pending state income tax examination regarding the sale of a subsidiary in a prior year. In the second quarter of 2024, AFG recorded $ million in net tax expense related to a pending IRS settlement regarding the sale of a different subsidiary in a prior year.

The One Big Beautiful Bill Act (enacted on July 4, 2025), among other things, extends many of the federal tax provisions of the 2017 Tax Cuts and Jobs Act and contains provisions that will accelerate the timing of certain tax deductions beginning in 2025 with an offsetting impact to deferred taxes and no impact on total income tax expense. While management is still evaluating the full impact of the bill, there was no impact on AFG’s financial statements at June 30, 2025 and the tax provisions of the bill are not expected to be material to AFG’s results of operations in future periods.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

$ Less reinsurance recoverables, net of allowance Net liability at beginning of year Provision for losses and LAE occurring in the current period %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. The ratio is calculated by dividing the principal amount of AFG’s long-term debt by its total capital, which includes long-term debt and shareholders’ equity (excluding accumulated other comprehensive income (loss), net of tax). In addition, maintaining a ratio of debt, excluding subordinated debt and debt secured by real estate (if any), to total capital of 35% or lower is a financial covenant in AFG’s bank credit facility.

Condensed Consolidated Cash Flows

AFG’s principal sources of cash include insurance premiums, income from its investment portfolio and proceeds from the maturities, redemptions and sales of investments. 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. Cash flows from operating, investing and financing activities as detailed in AFG’s Consolidated Statement of Cash Flows are shown below (in millions):


	Six months ended June 30,
	2025		2024
Net cash provided by operating activities	$	533	$	19
Net cash provided by (used in) investing activities	59		(6)
Net cash used in financing activities	(730)		(117)
Net change in cash and cash equivalents	$	(138)	$	(104)

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. 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 changes in the assets and liabilities of the managed investment entities included in operating activities increased cash flows from operating activities by $33 million during the first six months of 2025 and reduced cash flows from operating activities by $239 million in the first six months of 2024, accounting for a $272 million increase in cash flows from operating activities in the 2025 period compared to the 2024 period. As discussed in Note A — “Accounting Policies — Managed Investment Entities” to the financial statements, AFG has no right to use the CLO assets and no obligation to pay the CLO liabilities and such assets and liabilities are shown separately in AFG’s Balance Sheet. Excluding the impact of the managed investment entities, net cash provided by operating activities was $500 million and $258 million in the first six months of 2025 and 2024, respectively.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

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. Investing activities also include the purchase and disposal of managed investment entity investments, which are presented separately in AFG’s Balance Sheet. Net investment activity in the managed investment entities was a $333 million source of cash in the first six months of 2025 compared to $57 million in the first six months of 2024, accounting for a $276 million increase in net cash provided by investing activities in the first six months of 2025 compared to the 2024 period. See Note A — “Accounting Policies — Managed Investment Entities” and Note F — “Managed Investment Entities” to the financial statements. Excluding the activity of the managed investment entities, investing activities were a $274 million use of cash in the first six months of 2025 compared to $63 million in the first six months of 2024.

Net Cash Used in Financing Activities AFG’s financing activities consist primarily of issuances and retirements of long-term debt, issuances and repurchases of common stock and dividend payments. Net cash used in financing activities was $730 million for the first six months of 2025 compared to $117 million in the first six months of 2024, an increase of $613 million. AFG paid cash dividends totaling $301 million in the first six months of 2025 compared to $327 million in the first six months of 2024, a decrease in cash used by financing activities of $26 million. During the first six months of 2025, AFG repurchased $97 million of its Common Stock compared to no repurchases in the comparable 2024 period. Financing activities also include issuances and retirements of managed investment entity liabilities, which are nonrecourse to AFG and presented separately in AFG’s Balance Sheet. Retirements of managed investment entity liabilities exceeded issuances by $339 million in the first six months of 2025 compared to issuances exceeding retirements by $200 million in the first six months of 2024, accounting for a $539 million increase in net cash used in financing activities in the 2025 period compared to the 2024 period. See Note A — “Accounting Policies — Managed Investment Entities” and Note F — “Managed Investment Entities” to the financial statements.

Parent and Subsidiary Liquidity

Parent Holding Company Liquidity Management believes AFG has sufficient resources to meet its liquidity requirements. If funds generated from operations, including dividends, tax payments and borrowings from subsidiaries, are insufficient to meet fixed charges in any period, AFG would be required to utilize parent company cash and investments or to generate cash through borrowings, sales of other assets or similar transactions.

AFG's operations continue to generate significant excess capital for future returns of capital to shareholders in the form of regular and special cash dividends and through opportunistic share repurchases or to be deployed into its property and casualty businesses as management identifies the potential for profitable organic growth, and opportunities to expand through acquisitions of established businesses or start-ups that meet target return thresholds.

During the first six months of 2025, AFG repurchased 782,134 shares of its Common Stock for $97 million and paid a special cash dividend totaling $167 million ($2.00 per share) in March.

During 2024, AFG paid special cash dividends totaling $545 million ($2.50 per share in February and $4.00 per share in November).

AFG may, at any time and from time to time, seek to retire or purchase its outstanding debt through cash purchases or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as management may determine, and will depend on prevailing market conditions, AFG’s liquidity requirements, contractual restrictions and other factors.

At June 30, 2025, AFG (parent) held approximately $349 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. 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 the first six months of 2025.

Under a tax allocation agreement with AFG, all 80% (or more) owned U.S. subsidiaries generally pay taxes to (or recover taxes from) AFG based on each subsidiary’s contribution to amounts due under AFG’s consolidated tax return.

Subsidiary Liquidity The liquidity requirements of AFG’s insurance subsidiaries relate primarily to the policyholder claims and underwriting expenses and payments of dividends and taxes to AFG. Historically, cash flows from premiums

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

and investment income have generally provided more than sufficient funds to meet these requirements. Funds received in excess of cash requirements are generally invested in marketable securities. In addition, the insurance subsidiaries generally hold a significant amount of highly liquid, short duration investments.

AFG believes its insurance subsidiaries maintain sufficient liquidity to pay claims and underwriting expenses. In addition, these subsidiaries have sufficient capital to meet commitments in the event of unforeseen reserve deficiencies, inadequate premium rates or reinsurer insolvencies. Management believes that the capital levels in AFG’s insurance subsidiaries are adequate to maintain its business and rating agency ratings. Nonetheless, changes in statutory accounting rules, changes in rating agency measures, significant declines in the fair value of the insurance subsidiaries’ investment portfolios or significant ratings downgrades on these investments, could create a need for additional capital.

Investments

AFG’s investment portfolio at June 30, 2025, contained $10.49 billion in fixed maturity securities classified as available for sale and carried at fair value with unrealized gains and losses included in accumulated other comprehensive income (loss) and $82 million in fixed maturities classified as trading with holding gains and losses included in net investment income. In addition, AFG’s investment portfolio includes $560 million in equity securities carried at fair value with holding gains and losses included in realized gains (losses) on securities and $240 million in equity securities carried at fair value with holding gains and losses included in net investment income. AFG’s investment portfolio also includes $2.34 billion in investments accounted for using the equity method (limited partnerships and similar investments). Under the equity method, AFG records its share of the earnings or losses of the investee based on when it is reported by the investee in its financial statements rather than in the period in which the investee declares a dividend. AFG’s share of the earnings or losses from equity method investments is included in net investment income and is generally recorded on a quarter lag due to the timing of the receipt of the investee’s financial statements.

Fair values for AFG’s portfolio are determined by AFG’s internal investment professionals using data from nationally recognized pricing services, non-binding broker quotes and other market information. Fair values of equity securities are determined by published closing prices when available. For AFG’s fixed maturity portfolio, approximately 89% was priced using pricing services at June 30, 2025 and 3% was priced using non-binding broker quotes. The remaining 8% are priced internally using a variety of inputs including credit spreads, trade information, prices of comparable securities, estimates of cash flow and other security specific features. When prices obtained for the same security vary, AFG’s internal investment professionals select the price they believe is most indicative of an exit price. For additional information on determination of fair value, see Note C — “Fair Value Measurements” to the financial statements.

The pricing services use a variety of observable inputs to estimate fair value of fixed maturities that do not trade on a daily basis. Based upon information provided by the pricing services, these inputs include, but are not limited to, recent reported trades, benchmark yields, issuer spreads, bids or offers, reference data, and measures of volatility. Included in the pricing of structured securities are estimates of the rate of future prepayments and defaults of principal over the remaining life of the underlying collateral. Due to the lack of transparency in the process that brokers use to develop prices, valuations that are based on brokers’ prices are classified as Level 3 in the GAAP hierarchy unless the price can be corroborated, for example, by comparison to similar securities priced using observable inputs.

Valuation techniques utilized by pricing services and prices obtained from external sources are reviewed by AFG’s internal investment professionals who are familiar with the securities being priced and the markets in which they trade to ensure the fair value determination is representative of an exit price. To validate the appropriateness of the prices obtained, these investment managers consider widely published indices (as benchmarks), recent trades, changes in interest rates, general economic conditions and the credit quality of the specific issuers. In addition, AFG communicates directly with pricing services regarding the methods and assumptions used in pricing, including verifying, on a test basis, the inputs used by the services to value specific securities.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

In general, the fair value of AFG’s fixed maturity investments is inversely correlated to changes in interest rates. 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 June 30, 2025 (dollars in millions). Effects of increases or decreases from the 100 basis points illustrated would be approximately proportional.


Fair value of fixed maturity portfolio	$	10,571
Percentage impact on fair value of 100 bps increase in interest rates	(3.0		%)
Pretax impact on fair value of fixed maturity portfolio	$	(317)

Approximately 95% of the fixed maturities held by AFG at June 30, 2025, were rated “investment grade” (credit rating of AAA to BBB) by nationally recognized rating agencies, 2% were rated “non-investment grade” and 3% were not rated. 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. AFG’s fixed maturity portfolio includes securities (the majority of which are AAA-rated) with a carrying value of approximately $350 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 June 30, 2025, is shown in the following table (dollars in millions). There were $446 million of available for sale fixed maturity securities with no unrealized gains or losses at June 30, 2025.


	Securities With Unrealized Gains			Securities With Unrealized Losses
Available for Sale Fixed Maturities
Fair value of securities	$	5,424		$	4,619
Amortized cost of securities, net of allowance for expected credit losses	$	5,282		$	4,889
Gross unrealized gain (loss)	$	142		$	(270)
Fair value as % of amortized cost	103		%	94		%
Number of security positions	942			1,084
Number individually exceeding $2 million gain or loss	2			33
Concentration of gains (losses) by type or industry (exceeding 5% of unrealized):
Residential mortgage-backed securities	$	32		$	(128)
Other asset-backed securities	25			(47)
Banking	14			(7)
Asset managers	12			(9)
States and municipalities	6			(48)
Percentage rated investment grade	95		%	96		%

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

The table below sets forth the scheduled maturities of AFG’s available for sale fixed maturity securities at June 30, 2025, based on their fair values. Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.


	Securities With Unrealized Gains		Securities With Unrealized Losses
Maturity
One year or less	2	%	11	%
After one year through five years	26	%	20	%
After five years through ten years	17	%	8	%
After ten years	1	%	4	%
	46	%	43	%
CLOs and other asset-backed securities (average life of approximately 3 years)	34	%	33	%
Residential mortgage-backed securities (average life of approximately 6 years)	20	%	24	%
	100	%	100	%

The table below (dollars in millions) summarizes the unrealized gains and losses on fixed maturity securities by dollar amount:


	Aggregate Fair Value		Aggregate Unrealized Gain (Loss)		Fair Value as % of Cost
Fixed Maturities at June 30, 2025
Securities with unrealized gains:
Exceeding $500,000 (53 securities)	$	829	$	48	106	%
$500,000 or less (889 securities)	4,595		94		102	%
	$	5,424	$	142	103	%
Securities with unrealized losses:
Exceeding $500,000 (114 securities)	$	1,339	$	(178)	88	%
$500,000 or less (970 securities)	3,280		(92)		97	%
	$	4,619	$	(270)	94	%

The following table (dollars in millions) summarizes the unrealized losses for all securities with unrealized losses by issuer quality and the length of time those securities have been in an unrealized loss position:


	Aggregate Fair Value		Aggregate Unrealized Loss		Fair Value as % of Cost
Securities with Unrealized Losses at June 30, 2025
Investment grade fixed maturities with losses for:
Less than one year (162 securities)	$	907	$	(9)	99	%
One year or longer (766 securities)	3,532		(250)		93	%
	$	4,439	$	(259)	94	%
Non-investment grade fixed maturities with losses for:
Less than one year (40 securities)	$	58	$	(2)	97	%
One year or longer (116 securities)	122		(9)		93	%
	$	180	$	(11)	94	%

When a decline in the value of a specific investment is considered to be other-than-temporary, an allowance for credit losses (impairment) is charged to earnings (accounted for as a realized loss). The determination of whether unrealized losses are other-than-temporary requires judgment based on subjective as well as objective factors as detailed in AFG’s 2024 Form 10-K under Management’s Discussion and Analysis — “Investments.”

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Based on its analysis, 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 June 30, 2025. Although AFG has the ability to continue holding its fixed maturity investments with unrealized losses, its intent to hold them may change due to deterioration in the issuers’ creditworthiness, decisions to lessen exposure to a particular issuer or industry, asset/liability management decisions, market movements, changes in views about appropriate asset allocation or the desire to offset taxable realized gains. Should AFG’s ability or intent change regarding a particular security, a charge for impairment would likely be required. While it is not possible to accurately predict if or when a specific security will become impaired, increases in the allowance for credit losses could be material to results of operations in future periods. Significant declines in the fair value of AFG’s investment portfolio could have a significant adverse effect on AFG’s liquidity. For information on AFG’s realized gains (losses) on securities, see “Results of Operations — Realized Gains (Losses) on Securities.”

Uncertainties

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. See Management’s Discussion and Analysis — “Uncertainties — Asbestos and Environmental-related (“A&E”) Insurance Reserves” in AFG’s 2024 Form 10–K.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

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). See Note A — “Accounting Policies — Managed Investment Entities” and Note F — “Managed Investment Entities” to the financial statements. The effect of consolidating these entities is shown in the tables below (in millions). The “Before CLO Consolidation” columns include AFG’s investment and earnings in the CLOs on an unconsolidated basis.

CONDENSED CONSOLIDATING BALANCE SHEET


	Before CLO Consolidation		Managed Investment Entities		Consol. Entries			Consolidated As Reported
June 30, 2025
Assets:
Cash and investments	$	16,197	$	—	$	(148)	(*)	$	16,049
Assets of managed investment entities	—		3,833		—			3,833
Other assets	10,787		—		—			10,787
Total assets	$	26,984	$	3,833	$	(148)		$	30,669
Liabilities:
Unpaid losses and loss adjustment expenses and unearned premiums	$	17,860	$	—	$	—		$	17,860
Liabilities of managed investment entities	—		3,803		(118)		(*)	3,685
Long-term debt and other liabilities	4,608		—		—			4,608
Total liabilities	22,468		3,803		(118)			26,153

Shareholders’ equity:
Common Stock and Capital surplus	1,497		30		(30)			1,497
Retained earnings	3,151		—		—			3,151
Accumulated other comprehensive income (loss), net of tax	(132)		—		—			(132)
Total shareholders’ equity	4,516		30		(30)			4,516
Total liabilities and shareholders’ equity	$	26,984	$	3,833	$	(148)		$	30,669

December 31, 2024
Assets:
Cash and investments	$	16,026	$	—	$	(174)	(*)	$	15,852
Assets of managed investment entities	—		4,140		—			4,140
Other assets	10,845		—		(1)		(*)	10,844
Total assets	$	26,871	$	4,140	$	(175)		$	30,836
Liabilities:
Unpaid losses and loss adjustment expenses and unearned premiums	$	17,763	$	—	$	—		$	17,763
Liabilities of managed investment entities	—		4,091		(126)		(*)	3,965
Long-term debt and other liabilities	4,642		—		—			4,642
Total liabilities	22,405		4,091		(126)			26,370

Shareholders’ equity:
Common Stock and Capital surplus	1,495		49		(49)			1,495
Retained earnings	3,211		—		—			3,211
Accumulated other comprehensive income (loss), net of tax	(240)		—		—			(240)
Total shareholders’ equity	4,466		49		(49)			4,466
Total liabilities and shareholders’ equity	$	26,871	$	4,140	$	(175)		$	30,836

(*)Elimination of the fair value of AFG’s investment in CLOs and related accrued interest.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS


	Before CLO Consol. (a)		Managed Investment Entities		Consol. Entries			Consolidated As Reported
Three months ended June 30, 2025
Revenues:
Net earned premiums	$	1,647	$	—	$	—		$	1,647
Net investment income	186		—		(2)		(b)	184

Realized gains (losses) on securities	2		—		—			2
Income of managed investment entities:
Investment income	—		68		—			68
Gain (loss) on change in fair value of assets/liabilities	—		—		(4)		(b)	(4)
Other income	29		—		(2)		(c)	27
Total revenues	1,864		68		(8)			1,924
Costs and Expenses:
Insurance benefits and expenses	1,541		—		—			1,541
Expenses of managed investment entities	—		68		(8)		(b)(c)	60
Interest charges on borrowed money and other expenses	94		—		—			94
Total costs and expenses	1,635		68		(8)			1,695
Earnings before income taxes	229		—		—			229
Provision for income taxes	55		—		—			55
Net earnings	$	174	$	—	$	—		$	174

Three months ended June 30, 2024
Revenues:
Net earned premiums	$	1,585	$	—	$	—		$	1,585
Net investment income	197		—		(9)		(b)	188

Realized gains (losses) on securities	(2)		—		—			(2)

Income of managed investment entities:
Investment income	—		98		—			98
Gain (loss) on change in fair value of assets/liabilities	—		7		(3)		(b)	4
Other income	30		—		(3)		(c)	27
Total revenues	1,810		105		(15)			1,900
Costs and Expenses:
Insurance benefits and expenses	1,443		—		—			1,443
Expenses of managed investment entities	—		102		(12)		(b)(c)	90
Interest charges on borrowed money and other expenses	96		—		—			96
Total costs and expenses	1,539		102		(12)			1,629
Earnings before income taxes	271		3		(3)			271
Provision for income taxes	62		—		—			62
Net earnings	$	209	$	3	$	(3)		$	209

(a)Includes income of $2 million in the second quarter of 2025 and $9 million in the second quarter of 2024, representing the change in fair value of AFG’s CLO investments and $2 million and $3 million of income in the second quarter of 2025 and 2024, respectively, in CLO management fees earned.

(b)Elimination of the change in fair value of AFG’s investments in the CLOs, including $6 million and $9 million in the second quarter of 2025 and 2024, respectively, in distributions recorded as interest expense by the CLOs.

(c)Elimination of management fees earned by AFG.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS


	Before CLO Consol. (a)		Managed Investment Entities		Consol. Entries			Consolidated As Reported
Six months ended June 30, 2025
Revenues:
Net earned premiums	$	3,227	$	—	$	—		$	3,227
Net investment income	361		—		(4)		(b)	357

Realized gains (losses) on securities	5		—		—			5
Income of managed investment entities:
Investment income	—		144		—			144
Gain (loss) on change in fair value of assets/liabilities	—		5		(12)		(b)	(7)
Other income	59		—		(5)		(c)	54
Total revenues	3,652		149		(21)			3,780
Costs and Expenses:
Insurance benefits and expenses	3,036		—		—			3,036
Expenses of managed investment entities	—		147		(19)		(b)(c)	128
Interest charges on borrowed money and other expenses	190		—		—			190
Total costs and expenses	3,226		147		(19)			3,354
Earnings before income taxes	426		2		(2)			426
Provision for income taxes	98		—		—			98


Net earnings	$	328	$	2	$	(2)		$	328

Six months ended June 30, 2024
Revenues:
Net earned premiums	$	3,131	$	—	$	—		$	3,131
Net investment income	409		—		(23)		(b)	386

Realized gains (losses) on securities	12		—		—			12

Income of managed investment entities:
Investment income	—		197		—			197
Gain (loss) on change in fair value of assets/liabilities	—		13		1		(b)	14
Other income	72		—		(6)		(c)	66
Total revenues	3,624		210		(28)			3,806
Costs and Expenses:
Insurance benefits and expenses	2,858		—		—			2,858
Expenses of managed investment entities	—		206		(24)		(b)(c)	182
Interest charges on borrowed money and other expenses	191		—		—			191
Total costs and expenses	3,049		206		(24)			3,231
Earnings before income taxes	575		4		(4)			575
Provision for income taxes	124		—		—			124


Net earnings	$	451	$	4	$	(4)		$	451

(a)Includes income of $4 million in the first six months of 2025 and $23 million in the first six months of 2024, representing the change in fair value of AFG’s CLO investments and $5 million and $6 million of income in the first six months of 2025 and 2024, respectively, in CLO management fees earned.

(b)Elimination of the change in fair value of AFG’s investments in the CLOs, including $14 million and $18 million in the first six months of 2025 and 2024, respectively, in distributions recorded as interest expense by the CLOs.

(c)Elimination of management fees earned by AFG.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

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. Core net operating earnings excludes realized gains (losses) on securities because such gains and losses are influenced significantly by financial markets, interest rates and the timing of sales. In addition, special charges related to coverage that AFG no longer writes, such as asbestos and environmental exposures, are excluded from core earnings.

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. AFG believes core net operating earnings is a useful tool for investors and analysts in analyzing ongoing operating trends and for management to evaluate financial performance against historical results because it believes this provides a more comparable measure of its continuing business.


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Components of net earnings:
Core operating earnings before income taxes	$	227	$	273	$	421	$	563
Pretax non-core item:
Realized gains (losses) on securities	2		(2)		5		12




Earnings before income taxes	229		271		426		575
Provision for income taxes:
Core operating earnings	48		58		90		117
Non-core items:
Realized gains (losses) on securities	—		—		1		3
Other (*)	7		4		7		4



Total provision for income taxes	55		62		98		124
Net earnings	$	174	$	209	$	328	$	451

Net earnings:
Core net operating earnings	$	179	$	215	$	331	$	446
Realized gains (losses) on securities	2		(2)		4		9
Other (*)	(7)		(4)		(7)		(4)



Net earnings	$	174	$	209	$	328	$	451

Diluted per share amounts:
Core net operating earnings	$	2.14	$	2.56	$	3.96	$	5.32
Realized gains (losses) on securities	0.02		(0.02)		0.05		0.11
Other (*)	(0.09)		(0.05)		(0.09)		(0.05)



Net earnings	$	2.07	$	2.49	$	3.92	$	5.38

(*)Adjustments to income tax expense related to sales of subsidiaries in prior years.

Net earnings were $174 million in the second quarter of 2025 compared to $209 million in the second quarter of 2024 reflecting lower core net operating earnings, which decreased $36 million compared to the second quarter of 2024 reflecting lower underwriting profit and lower net investment income from AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs), partially offset by higher investment income outside of alternative investments. Net realized gains on securities in the second quarter of 2025 and 2024 include after-tax gains of $7 million and after-tax losses of $2 million, respectively, resulting from the change in fair value of equity securities that were still held at the balance sheet date.

Net earnings were $328 million in the first six months of 2025 compared to $451 million in the first six months of 2024 reflecting lower core net operating earnings, which decreased $115 million compared to the first six months of 2024 reflecting lower underwriting profit and lower net investment income from AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs), partially offset by higher investment income outside of alternative investments. Net realized gains on securities in the first six months of 2025 and 2024 include after-tax gains of

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

$12 million and $14 million, respectively, resulting from the change in fair value of equity securities that were still held at the balance sheet date.

RESULTS OF OPERATIONS — THREE MONTHS ENDED JUNE 30, 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 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 June 30, 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. MIEs		Holding Co., other and unallocated		Total		Non-core reclass		GAAP Total
Three months ended June 30, 2025
Revenues:
Net earned premiums	$	1,647	$	—	$	—	$	1,647	$	—	$	1,647
Net investment income	179		(2)		7		184		—		184
Realized gains (losses) on securities	—		—		—		—		2		2
Income of MIEs:
Investment income	—		68		—		68		—		68
Gain (loss) on change in fair value of assets/liabilities	—		(4)		—		(4)		—		(4)
Other income	—		(2)		29		27		—		27
Total revenues	1,826		60		36		1,922		2		1,924

Costs and Expenses:
Losses and loss adjustment expenses	1,007		—		—		1,007		—		1,007
Commissions and other underwriting expenses	527		—		7		534		—		534
Interest charges on borrowed money	—		—		19		19		—		19
Expenses of MIEs	—		60		—		60		—		60
Other expenses	19		—		56		75		—		75
Total costs and expenses	1,553		60		82		1,695		—		1,695
Earnings before income taxes	273		—		(46)		227		2		229
Provision for income taxes	55		—		(7)		48		7		55
Core Net Operating Earnings	218		—		(39)		179
Non-core earnings (loss) (*):
Realized gains (losses) on securities, net of tax	—		—		2		2		(2)		—
Other	—		—		(7)		(7)		7		—

Net Earnings	$	218	$	—	$	(44)	$	174	$	—	$	174

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued


			Other
	P&C		Consol. MIEs		Holding Co., other and unallocated		Total		Non-core reclass		GAAP Total
Three months ended June 30, 2024
Revenues:
Net earned premiums	$	1,585	$	—	$	—	$	1,585	$	—	$	1,585
Net investment income	189		(9)		8		188		—		188

Realized gains (losses) on securities	—		—		—		—		(2)		(2)

Income of MIEs:
Investment income	—		98		—		98		—		98
Gain (loss) on change in fair value of assets/liabilities	—		4		—		4		—		4
Other income	2		(3)		28		27		—		27
Total revenues	1,776		90		36		1,902		(2)		1,900

Costs and Expenses:
Losses and loss adjustment expenses	937		—		—		937		—		937
Commissions and other underwriting expenses	498		—		8		506		—		506
Interest charges on borrowed money	—		—		19		19		—		19
Expenses of MIEs	—		90		—		90		—		90
Other expenses	22		—		55		77		—		77
Total costs and expenses	1,457		90		82		1,629		—		1,629
Earnings before income taxes	319		—		(46)		273		(2)		271
Provision for income taxes	67		—		(9)		58		4		62
Core Net Operating Earnings	252		—		(37)		215
Non-core earnings (loss) (*):
Realized gains (losses) on securities, net of tax	—		—		(2)		(2)		2		—
Other	(4)		—		—		(4)		4		—


Net Earnings	$	248	$	—	$	(39)	$	209	$	—	$	209

(*)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.

Property and Casualty Insurance Segment — Results of Operations

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. Underwriting profitability is measured by the combined ratio, which is a sum of the ratios of losses and loss adjustment expenses, and commissions and other underwriting expenses to premiums. A combined ratio under 100% indicates an underwriting profit. The combined ratio does not reflect net investment income, other income, other expenses or federal income taxes.

AFG’s property and casualty insurance operations contributed $273 million in pretax earnings in the second quarter of 2025 compared to $319 million in the second quarter of 2024, a decrease of $46 million (14%). The decrease in pretax earnings reflects lower underwriting profit and lower investment income from AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs), partially offset by higher investment income outside of alternative investments in the second quarter of 2025 compared to the second quarter of 2024.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

The following table details AFG’s earnings before income taxes from its property and casualty insurance operations for the three months ended June 30, 2025 and 2024 (dollars in millions):


	Three months ended June 30,
	2025			2024			% Change
Gross written premiums	$	2,653		$	2,406		10	%
Reinsurance premiums ceded	(850)			(714)			19	%
Net written premiums	1,803			1,692			7	%
Change in unearned premiums	(156)			(107)			46	%
Net earned premiums	1,647			1,585			4	%
Loss and loss adjustment expenses	1,007			937			7	%
Commissions and other underwriting expenses	527			498			6	%
Underwriting gain	113			150			(25	%)

Net investment income	179			189			(5	%)
Other income and expenses, net	(19)			(20)			(5	%)



	Three months ended June 30,
	2025			2024			Change
Combined Ratios:
Specialty lines
Loss and LAE ratio	61.1		%	59.1		%	2.0	%
Underwriting expense ratio	32.0		%	31.4		%	0.6	%
Combined ratio	93.1		%	90.5		%	2.6	%

Aggregate — including exited lines
Loss and LAE ratio	61.1		%	59.1		%	2.0	%
Underwriting expense ratio	32.0		%	31.4		%	0.6	%
Combined ratio	93.1		%	90.5		%	2.6	%

AFG reports the underwriting performance of its Specialty property and casualty insurance business in the following sub-segments: (i) Property and transportation, (ii) Specialty casualty and (iii) Specialty financial.

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. 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.

To understand the overall profitability of particular lines, the timing of claims payments and the related impact of investment income must be considered. Certain “short-tail” lines of business (primarily property coverages) generally have quick loss payouts, which reduce the time funds are held, thereby limiting investment income earned thereon. In contrast, “long-tail” lines of business (primarily liability coverages and workers’ compensation) generally have payouts that are either structured over many years or take many years to settle, thereby significantly increasing investment income earned on related premiums received.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Gross Written Premiums

Gross written premiums (“GWP”) for AFG’s property and casualty insurance segment were $2.65 billion for the second quarter of 2025 compared to $2.41 billion for the second quarter of 2024, an increase of $247 million (10%). Detail of gross written premiums is shown below (dollars in millions):


	Three months ended June 30,
	2025				2024
	GWP		%		GWP		%		% Change
Property and transportation	$	1,247	47	%	$	1,084	45	%	15	%
Specialty casualty	1,062		40	%	1,023		43	%	4	%
Specialty financial	344		13	%	299		12	%	15	%

	$	2,653	100	%	$	2,406	100	%	10	%

Reinsurance Premiums Ceded

Reinsurance premiums ceded (“Ceded”) for AFG’s property and casualty insurance segment were 32% of gross written premiums for the second quarter of 2025 compared to 30% for the second quarter of 2024, an increase of 2 percentage points. Detail of reinsurance premiums ceded is shown below (dollars in millions):


	Three months ended June 30,
	2025				2024				Change in
	Ceded		% of GWP		Ceded		% of GWP		% of GWP
Property and transportation	$	(488)	39	%	$	(394)	36	%	3	%
Specialty casualty	(297)		28	%	(270)		26	%	2	%
Specialty financial	(65)		19	%	(50)		17	%	2	%

	$	(850)	32	%	$	(714)	30	%	2	%

Net Written Premiums

Net written premiums (“NWP”) for AFG’s property and casualty insurance segment were $1.80 billion for the second quarter of 2025 compared to $1.69 billion for the second quarter of 2024, an increase of $111 million (7%). Detail of net written premiums is shown below (dollars in millions):


	Three months ended June 30,
	2025				2024
	NWP		%		NWP		%		% Change
Property and transportation	$	759	42	%	$	690	41	%	10	%
Specialty casualty	765		42	%	753		44	%	2	%
Specialty financial	279		16	%	249		15	%	12	%

	$	1,803	100	%	$	1,692	100	%	7	%

Net Earned Premiums

Net earned premiums (“NEP”) for AFG’s property and casualty insurance segment were $1.65 billion for the second quarter of 2025 compared to $1.59 billion for the second quarter of 2024, an increase of $62 million (4%). Detail of net earned premiums is shown below (dollars in millions):


	Three months ended June 30,
	2025				2024
	NEP		%		NEP		%		% Change
Property and transportation	$	576	35	%	$	552	35	%	4	%
Specialty casualty	799		48	%	791		50	%	1	%
Specialty financial	272		17	%	242		15	%	12	%

	$	1,647	100	%	$	1,585	100	%	4	%

Gross written premiums for the second quarter of 2025 increased $247 million (10%) compared to the second quarter of 2024. Earlier reporting of crop acreage by insureds impacted the timing of the recording of crop premiums and contributed to the year-over-year increase, particularly when compared to later reporting of acreage in the previous year. Excluding

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

the crop business, gross written premiums increased 6% compared to the second quarter of 2024 as a result of year-over-year premium growth from new business opportunities, a good renewal rate environment, and increased exposures. Overall average renewal rates increased approximately 6% in the second quarter of 2025. Excluding the workers’ compensation businesses, renewal rates increased approximately 7%.

Property and transportation Gross written premiums increased $163 million (15%) in the second quarter of 2025 compared to the second quarter of 2024. This increase was primarily the result of earlier reporting of crop acreage in the second quarter of 2025 compared to 2024, which impacts the timing of crop premiums. Excluding the crop business, gross written premiums for this group increased 6% compared to the second quarter of 2024, reflecting increased exposures, new business opportunities and a favorable rate environment in the transportation businesses. Average renewal rates increased approximately 8% for this group in the second quarter of 2025. Reinsurance premiums ceded as a percentage of gross written premiums increased 3 percentage points in the second quarter of 2025 compared to the second quarter of 2024, reflecting higher premiums in the crop business and growth in alternative risk transfer products in the transportation businesses, both of which cede a higher percentage of premiums than some of the other businesses in the Property and transportation sub-segment.

Specialty casualty Gross written premiums increased $39 million (4%) in the second quarter of 2025 compared to the second quarter of 2024, reflecting higher year-over-year premiums in the mergers and acquisitions liability business and growth across a variety of other businesses in the Specialty casualty sub-segment resulting from new business opportunities, higher rates and strong policy retention. These items were partially offset by lower premiums due to a challenging market in the directors’ and officers’ liability business as well as the continued non-renewal of certain housing and daycare accounts in the social services businesses. Average renewal rates increased approximately 6% for this group in the second quarter of 2025. Excluding the workers’ compensation businesses, renewal rates for this group increased approximately 8%. Reinsurance premiums ceded as a percentage of gross written premiums increased 2 percentage points in the second quarter of 2025 compared to the second quarter of 2024, reflecting higher cessions and higher reinsurance costs in the excess liability business and growth in the mergers and acquisitions liability business, which cedes a larger percentage of premiums than some of the other businesses in the Specialty casualty sub-segment.

Specialty financial Gross written premiums increased $45 million (15%) in the second quarter of 2025 compared to the second quarter of 2024 due primarily to growth in the financial institutions business. Reinsurance premiums ceded as a percentage of gross written premiums increased 2 percentage points in the second quarter of 2025 compared to the second quarter of 2024, reflecting higher cessions in the financial institutions business.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Combined Ratio

The table below (dollars in millions) details the components of the combined ratio for AFG’s property and casualty insurance segment:


	Three months ended June 30,						Three months ended June 30,
	2025		2024		Change		2025		2024
Property and transportation
Loss and LAE ratio	67.2	%	63.7	%	3.5	%
Underwriting expense ratio	28.0	%	29.0	%	(1.0	%)
Combined ratio	95.2	%	92.7	%	2.5	%
Underwriting profit							$	27	$	40

Specialty casualty
Loss and LAE ratio	64.5	%	61.0	%	3.5	%
Underwriting expense ratio	29.4	%	28.1	%	1.3	%
Combined ratio	93.9	%	89.1	%	4.8	%
Underwriting profit							$	49	$	86

Specialty financial
Loss and LAE ratio	38.1	%	42.1	%	(4.0	%)
Underwriting expense ratio	48.0	%	47.6	%	0.4	%
Combined ratio	86.1	%	89.7	%	(3.6	%)
Underwriting profit							$	38	$	25

Total Specialty
Loss and LAE ratio	61.1	%	59.1	%	2.0	%
Underwriting expense ratio	32.0	%	31.4	%	0.6	%
Combined ratio	93.1	%	90.5	%	2.6	%
Underwriting profit							$	114	$	151

Aggregate — including exited lines
Loss and LAE ratio	61.1	%	59.1	%	2.0	%
Underwriting expense ratio	32.0	%	31.4	%	0.6	%
Combined ratio	93.1	%	90.5	%	2.6	%
Underwriting profit							$	113	$	150

The Specialty property and casualty insurance operations generated an underwriting profit of $114 million in the second quarter of 2025 compared to $151 million in the second quarter of 2024, a decrease of $37 million (25%). Higher year-over-year underwriting profit in the Specialty financial sub-segment was more than offset by lower underwriting profit in the Property and transportation and Specialty casualty sub-segments. Overall catastrophe losses were $38 million (2.3 points on the combined ratio) in the second quarter of 2025 compared to catastrophe losses of $36 million (2.3 points) in the second quarter of 2024.

Property and transportation Underwriting profit for this group was $27 million for the second quarter of 2025 compared to $40 million for the second quarter of 2024, a decrease of $13 million (33%), reflecting the impact of particularly strong crop results in the second quarter of 2024. Catastrophe losses were $12 million (2.0 points on the combined ratio) in the second quarter of 2025 compared to $13 million (2.4 points) in the second quarter of 2024.

Specialty casualty Underwriting profit for this group was $49 million for the second quarter of 2025 compared to $86 million for the second quarter of 2024, a decrease of $37 million (43%), reflecting lower underwriting profit in the excess and surplus and social services businesses. Catastrophe losses were $7 million (0.9 points on the combined ratio) in the second quarter of 2025 compared to catastrophe losses of $5 million (0.6 points) in the second quarter of 2024.

Specialty financial Underwriting profit for this group was $38 million for the second quarter of 2025 compared to $25 million in the second quarter of 2024, an increase of $13 million (52%). This increase was due primarily to higher

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

year-over-year underwriting profitability in the financial institutions and surety businesses. Catastrophe losses were $19 million (7.3 points on the combined ratio) in the second quarter of 2025 compared to $18 million (7.2 points) in the second quarter of 2024.

Aggregate Aggregate underwriting results for AFG’s property and casualty insurance segment includes adverse prior year reserve development of $1 million in both the second quarter of 2025 and the second quarter of 2024 related to business outside of the Specialty group that AFG no longer writes.

Losses and Loss Adjustment Expenses

AFG’s overall loss and LAE ratio was 61.1% for the second quarter of 2025 compared to 59.1% for the second quarter of 2024, an increase of 2.0 percentage points. The components of AFG’s property and casualty losses and LAE amounts and ratio are detailed below (dollars in millions):


	Three months ended June 30,
	Amount				Ratio				Change in
	2025		2024		2025		2024		Ratio
Property and transportation
Current year, excluding catastrophe losses	$	388	$	372	67.4	%	67.6	%	(0.2	%)
Prior accident years development	(13)		(34)		(2.2	%)	(6.3	%)	4.1	%
Current year catastrophe losses including the impact of net reinstatement premiums	12		13		2.0	%	2.4	%	(0.4	%)
Property and transportation losses and LAE and ratio	$	387	$	351	67.2	%	63.7	%	3.5	%

Specialty casualty
Current year, excluding catastrophe losses	$	499	$	480	62.4	%	60.6	%	1.8	%
Prior accident years development	10		(2)		1.2	%	(0.2	%)	1.4	%
Current year catastrophe losses including the impact of net reinstatement premiums	7		5		0.9	%	0.6	%	0.3	%
Specialty casualty losses and LAE and ratio	$	516	$	483	64.5	%	61.0	%	3.5	%

Specialty financial
Current year, excluding catastrophe losses	$	93	$	84	34.0	%	34.8	%	(0.8	%)
Prior accident years development	(9)		—		(3.2	%)	0.1	%	(3.3	%)
Current year catastrophe losses including the impact of net reinstatement premiums	19		18		7.3	%	7.2	%	0.1	%
Specialty financial losses and LAE and ratio	$	103	$	102	38.1	%	42.1	%	(4.0	%)

Total Specialty
Current year, excluding catastrophe losses	$	980	$	936	59.5	%	59.1	%	0.4	%
Prior accident years development	(12)		(36)		(0.7	%)	(2.3	%)	1.6	%
Current year catastrophe losses including the impact of net reinstatement premiums	38		36		2.3	%	2.3	%	—	%
Total Specialty losses and LAE and ratio	$	1,006	$	936	61.1	%	59.1	%	2.0	%

Aggregate — including exited lines
Current year, excluding catastrophe losses	$	980	$	936	59.5	%	59.1	%	0.4	%
Prior accident years development	(11)		(35)		(0.7	%)	(2.2	%)	1.5	%
Current year catastrophe losses including the impact of net reinstatement premiums	38		36		2.3	%	2.2	%	0.1	%
Aggregate losses and LAE and ratio	$	1,007	$	937	61.1	%	59.1	%	2.0	%

Current accident year losses and LAE, excluding catastrophe losses

The current accident year loss and LAE ratio, excluding catastrophe losses, for AFG’s Specialty property and casualty insurance operations was 59.5% for the second quarter of 2025 compared to 59.1% for the second quarter of 2024, an increase of 0.4 percentage points.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Property and transportation The 0.2 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects growth in the property and inland marine business, which has a lower loss and LAE ratio than some of the other businesses in the Property and transportation sub-segment, partially offset by higher losses in the aviation business.

Specialty casualty The 1.8 percentage points increase in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects higher claim severity in the excess and surplus and social services businesses, partially offset by improved results in the workers’ compensation businesses.

Specialty financial The 0.8 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects improved results and growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment.

Net prior year reserve development

AFG’s Specialty property and casualty insurance operations recorded net favorable reserve development related to prior accident years of $12 million in the second quarter of 2025 compared to $36 million in the second quarter of 2024, a decrease of $24 million (67%).

Property and transportation Net favorable reserve development of $13 million in the second quarter of 2025 reflects lower than anticipated severity in the aviation, agribusiness and ocean marine businesses. Net favorable reserve development of $34 million in the second quarter of 2024 reflects lower than anticipated losses in the crop business and lower than expected claim severity in the property and inland marine business.

Specialty casualty Net adverse reserve development of $10 million in the second quarter of 2025 reflects higher than anticipated claim severity in the excess and surplus and social services businesses, partially offset by lower than anticipated claim severity in the workers’ compensation businesses. Net favorable reserve development of $2 million in the second quarter of 2024 reflects lower than anticipated claim severity in the workers’ compensation businesses and lower than expected claim frequency in the executive liability business, partially offset by higher than anticipated claim severity in the excess and surplus businesses.

Specialty financial Net favorable reserve development of $9 million in the second quarter of 2025 reflects lower than expected claim frequency in the financial institutions business and lower than anticipated claim severity in the surety and trade credit businesses. Net reserve development of less than $1 million in the second quarter of 2024 reflects lower than anticipated claim frequency in the trade credit and fidelity businesses and lower than expected claim frequency and severity in the financial institutions business, offset by higher than anticipated claim severity in certain other businesses.

Aggregate Aggregate net prior accident years reserve development for AFG’s property and casualty insurance segment includes net adverse reserve development of $1 million in both the second quarter of 2025 and the second quarter of 2024 related to business outside of the Specialty group that AFG no longer writes.

Catastrophe losses

AFG generally seeks to reduce its exposure to catastrophes (whether resulting from climate change or otherwise) through individual risk selection, including minimizing coastal and known fault-line exposures, and the purchase of reinsurance. AFG currently has comprehensive property catastrophe reinsurance coverage in place (including a $70 million per occurrence net retention) for losses up to $625 million in the vast majority of circumstances. This coverage consists of a combination of $245 million from traditional reinsurance and $310 million of coverage through a fully collateralized catastrophe bond. Based on data available at December 31, 2024, management estimates that AFG’s exposure to a catastrophic earthquake or windstorm that industry models indicate should statistically occur once in every 500 years is just over 2% of AFG’s Shareholders’ Equity.

Catastrophe losses of $38 million in the second quarter of 2025 and $36 million in the second quarter of 2024 resulted primarily from storms in multiple regions of the United States.

Commissions and Other Underwriting Expenses

AFG’s property and casualty commissions and other underwriting expenses (“U/W Exp”) were $527 million in the second quarter of 2025 compared to $498 million for the second quarter of 2024, an increase of $29 million (6%). AFG’s underwriting expense ratio, calculated as commissions and other underwriting expenses divided by net premiums earned, was 32.0% for the second quarter of 2025 compared to 31.4% for the second quarter of 2024, an increase of

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

0.6 percentage points. Detail of AFG’s property and casualty commissions and other underwriting expenses and underwriting expense ratios is shown below (dollars in millions):


	Three months ended June 30,
	2025				2024				Change in
	U/W Exp		% of NEP		U/W Exp		% of NEP		% of NEP
Property and transportation	$	162	28.0	%	$	161	29.0	%	(1.0	%)
Specialty casualty	234		29.4	%	222		28.1	%	1.3	%
Specialty financial	131		48.0	%	115		47.6	%	0.4	%



	$	527	32.0	%	$	498	31.4	%	0.6	%

Property and transportation Commissions and other underwriting expenses as a percentage of net earned premiums decreased 1.0 percentage points in the second quarter of 2025 compared to the second quarter of 2024. The decrease reflects the impact of higher earned premiums in the crop operations on the ratio (which has a lower commissions and other underwriting expense ratio compared to some of the other businesses in the Property and transportation sub-segment), partially offset by higher costs for software and other expenses associated with certain initiatives in IT security, customer experience and data analytics.

Specialty casualty Commissions and other underwriting expenses as a percentage of net earned premiums increased 1.3 percentage points in the second quarter of 2025 compared to the second quarter of 2024 reflecting higher costs for software and other expenses associated with certain initiatives in IT security, customer experience and data analytics and an increase in average commission rates in the excess and surplus business resulting from changes in reinsurance treaties.

Specialty financial Commissions and other underwriting expenses as a percentage of net earned premiums increased 0.4 percentage points in the second quarter of 2025 compared to the second quarter of 2024 due primarily to higher costs for software and other expenses associated with certain initiatives in IT security, customer experience and data analytics, partially offset by the impact of higher earned premiums in the financial institutions business on the ratio and lower average commission rates in certain businesses.

Property and Casualty Net Investment Income

Net investment income in AFG’s property and casualty insurance operations was $179 million in the second quarter of 2025 compared to $189 million in the second quarter of 2024, a decrease of $10 million (5%). The average invested assets and overall yield earned on investments held by AFG’s property and casualty insurance operations are provided below (dollars in millions):


	Three months ended June 30,
	2025			2024			Change			% Change
Net investment income:
Net investment income, excluding alternative investments	$	171		$	156		$	15		10	%
Alternative investments	8			33			(25)			(76	%)
Total net investment income	$	179		$	189		$	(10)		(5	%)

Average invested assets (at amortized cost)	$	15,921		$	15,346		$	575		4	%

Yield on fixed maturities (before investment expenses)	5.24		%	5.04		%	0.20		%

Yield (net investment income as a % of average invested assets)	4.50		%	4.93		%	(0.43		%)

The decrease in the property and casualty insurance segment’s net investment income for the second quarter of 2025 compared to the second quarter of 2024 reflects the impact of lower returns on AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs), partially offset by the impact of higher balances of invested assets and higher returns on fixed maturity investments. The property and casualty insurance segment’s overall yield on investments (net investment income as a percentage of average invested assets) was 4.50% for the second quarter of 2025 compared to 4.93% for the second quarter of 2024, a decrease of 0.43 percentage points. The annualized return earned on alternative investments was 1.2% in the second quarter of 2025 compared to 5.1% in the comparable prior year period. The impact on rental rates and occupancy from a surge in new apartment supply in certain otherwise

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

strong markets reduced the fair value of certain multi-family investments and tempered the performance of AFG’s alternative investment portfolio in the second quarter of 2025.

Property and Casualty Other Income and Expenses, Net

Other income and expenses, net for AFG’s property and casualty insurance operations was a net expense of $19 million for the second quarter of 2025 compared to $20 million for the second quarter of 2024, a decrease of $1 million (5%). The table below details the items included in other income and expenses, net for AFG’s property and casualty insurance operations (in millions):


	Three months ended June 30,
	2025		2024
Other income	$	—	$	2
Other expenses:
Amortization of intangibles	5		4
Interest expense on funds withheld	12		13
Other	2		5
Total other expenses	19		22
Other income and expenses, net	$	(19)	$	(20)

Holding Company, Other and Unallocated — Results of Operations

AFG’s net pretax loss outside of its property and casualty insurance segment (excluding realized gains and losses) totaled $46 million in both the second quarter of 2025 and the second quarter of 2024.

The following table details AFG’s loss before income taxes from operations outside of its property and casualty insurance segment for the three months ended June 30, 2025 and 2024 (dollars in millions):


	Three months ended June 30,
	2025		2024		% Change
Revenues:
Net investment income	$	7	$	8	(13	%)
Other income — P&C fees	23		24		(4	%)
Other income	6		4		50	%
Total revenues	36		36		—	%

Costs and Expenses:
Property and casualty insurance — loss adjustment and underwriting expenses	7		8		(13	%)
Other expense — expenses associated with P&C fees	16		16		—	%
Other expenses	40		39		3	%
Costs and expenses, excluding interest charges on borrowed money	63		63		—	%
Loss before income taxes, excluding realized gains and losses and interest charges on borrowed money	(27)		(27)		—	%
Interest charges on borrowed money	19		19		—	%



Loss before income taxes, excluding realized gains and losses	$	(46)	$	(46)	—	%

Holding Company and Other — Net Investment Income

AFG recorded net investment income on investments held outside of its property and casualty insurance segment of $7 million in the second quarter of 2025 compared to $8 million in the second quarter of 2024, a decrease of $1 million (13%), reflecting a decrease in average investments.

Holding Company and Other — P&C Fees and Related Expenses

Summit, a workers’ compensation insurance subsidiary, collects fees from a small group of unaffiliated insurers for providing underwriting, policy administration and claims services. In addition, certain of AFG’s property and casualty insurance businesses collect fees from customers for ancillary services such as workplace safety programs and premium financing. In the second quarter of 2025, AFG collected $23 million in fees for these services compared to $24 million in the second quarter of 2024. Management views this fee income, net of the $16 million in both the second quarter of 2025 and the second quarter of 2024 in expenses incurred to generate such fees, as a reduction in the cost of underwriting its

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

property and casualty insurance policies. The expenses related to providing such services are embedded in property and casualty underwriting expenses. Consistent with internal management reporting, these fees and the related expenses are netted and recorded as a reduction of commissions and other underwriting expenses in AFG’s segmented results.

Holding Company and Other — Other Income

Other income in the table above includes $2 million in the second quarter of 2025 and $3 million in the second quarter of 2024 in management fees paid to AFG by the AFG-managed CLOs (AFG’s consolidated managed investment entities). 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 $4 million in the second quarter of 2025 compared to $1 million in the second quarter of 2024, an increase of $3 million (300%), reflecting income from the sale of certain real estate assets.

Holding Company and Other — Other Expenses

AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded other expenses of $40 million in the second quarter of 2025 compared to $39 million in the second quarter of 2024, an increase of $1 million (3%).

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 $19 million in both the second quarter of 2025 and the second quarter of 2024.

Realized Gains (Losses) on Securities

AFG’s realized gains (losses) on securities were net gains of $2 million in the second quarter of 2025 compared to net losses of $2 million in the second quarter of 2024, a change of $4 million (200%). Realized gains (losses) on securities consisted of the following (in millions):


	Three months ended June 30,
	2025		2024
Realized gains (losses) before impairment allowances:
Disposals	$	(8)	$	(1)
Change in the fair value of equity securities	10		(1)
Change in the fair value of derivatives	—		—
	2		(2)

Change in allowance for impairments on securities	—		—
Realized gains (losses) on securities	$	2	$	(2)

The $10 million net realized gain from the change in the fair value of equity securities in the second quarter of 2025 includes gains of $10 million on investments in manufacturing companies and $6 million on investments in banks and financing companies, partially offset by losses of $2 million on investments in energy companies, $2 million on investments in media companies and $2 million on investments in natural gas companies. The $1 million net realized loss from the change in the fair value of equity securities in the second quarter of 2024 includes losses of $4 million on investments in media companies, partially offset by gains of $3 million on investments in healthcare companies.

Consolidated Income Taxes

AFG’s consolidated provision for income taxes was $55 million for the second quarter of 2025 compared to $62 million for the second quarter of 2024, a decrease of $7 million (11%). See Note J — “Income Taxes” to the financial statements for an analysis of items affecting AFG’s effective tax rate.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

RESULTS OF OPERATIONS — SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Segmented Statement of Earnings

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 six months ended June 30, 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. MIEs		Holding Co., other and unallocated		Total		Non-core reclass		GAAP Total
Six months ended June 30, 2025
Revenues:
Net earned premiums	$	3,227	$	—	$	—	$	3,227	$	—	$	3,227
Net investment income	349		(4)		12		357		—		357
Realized gains (losses) on securities	—		—		—		—		5		5
Income of MIEs:
Investment income	—		144		—		144		—		144
Gain (loss) on change in fair value of assets/liabilities	—		(7)		—		(7)		—		(7)
Other income	3		(5)		56		54		—		54
Total revenues	3,579		128		68		3,775		5		3,780

Costs and Expenses:
Losses and loss adjustment expenses	1,972		—		—		1,972		—		1,972
Commissions and other underwriting expenses	1,048		—		16		1,064		—		1,064
Interest charges on borrowed money	—		—		38		38		—		38
Expenses of MIEs	—		128		—		128		—		128
Other expenses	40		—		112		152		—		152
Total costs and expenses	3,060		128		166		3,354		—		3,354
Earnings before income taxes	519		—		(98)		421		5		426
Provision for income taxes	108		—		(18)		90		8		98
Core Net Operating Earnings	411		—		(80)		331
Non-core earnings (loss) (*):
Realized gains (losses) on securities, net of tax	—		—		4		4		(4)		—
Other	—		—		(7)		(7)		7		—

Net Earnings	$	411	$	—	$	(83)	$	328	$	—	$	328

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued


			Other
	P&C		Consol. MIEs		Holding Co., other and unallocated		Total		Non-core reclass		GAAP Total
Six months ended June 30, 2024
Revenues:
Net earned premiums	$	3,131	$	—	$	—	$	3,131	$	—	$	3,131
Net investment income	394		(23)		15		386		—		386

Realized gains (losses) on securities	—		—		—		—		12		12

Income of MIEs:
Investment income	—		197		—		197		—		197
Gain (loss) on change in fair value of assets/liabilities	—		14		—		14		—		14
Other income	4		(6)		68		66		—		66
Total revenues	3,529		182		83		3,794		12		3,806

Costs and Expenses:
Losses and loss adjustment expenses	1,844		—		5		1,849		—		1,849
Commissions and other underwriting expenses	984		—		25		1,009		—		1,009
Interest charges on borrowed money	—		—		38		38		—		38
Expenses of MIEs	—		182		—		182		—		182
Other expenses	42		—		111		153		—		153
Total costs and expenses	2,870		182		179		3,231		—		3,231
Earnings before income taxes	659		—		(96)		563		12		575
Provision for income taxes	137		—		(20)		117		7		124
Core Net Operating Earnings	522		—		(76)		446
Non-core earnings (loss) (*):
Realized gains (losses) on securities, net of tax	—		—		9		9		(9)		—
Other	(4)		—		—		(4)		4		—


Net Earnings	$	518	$	—	$	(67)	$	451	$	—	$	451

(*)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.

Property and Casualty Insurance Segment — Results of Operations

AFG’s property and casualty insurance operations contributed $519 million in pretax earnings in the first six months of 2025 compared to $659 million in the first six months of 2024, a decrease of $140 million (21%). The decrease in pretax earnings reflects lower underwriting profit and lower investment income from AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs), partially offset by higher investment income outside of alternative investments in the first six months of 2025 compared to the first six months of 2024.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

The following table details AFG’s earnings before income taxes from its property and casualty insurance operations for the six months ended June 30, 2025 and 2024 (dollars in millions):


	Six months ended June 30,
	2025			2024			% Change
Gross written premiums	$	4,944		$	4,742		4	%
Reinsurance premiums ceded	(1,530)			(1,416)			8	%
Net written premiums	3,414			3,326			3	%
Change in unearned premiums	(187)			(195)			(4	%)
Net earned premiums	3,227			3,131			3	%
Loss and loss adjustment expenses	1,972			1,844			7	%
Commissions and other underwriting expenses	1,048			984			7	%
Underwriting gain	207			303			(32	%)

Net investment income	349			394			(11	%)
Other income and expenses, net	(37)			(38)			(3	%)


Earnings before income taxes	$	519		$	659		(21	%)

	Six months ended June 30,
	2025			2024			Change
Combined Ratios:
Specialty lines
Loss and LAE ratio	61.1		%	58.8		%	2.3	%
Underwriting expense ratio	32.5		%	31.4		%	1.1	%
Combined ratio	93.6		%	90.2		%	3.4	%

Aggregate — including exited lines
Loss and LAE ratio	61.1		%	58.9		%	2.2	%
Underwriting expense ratio	32.5		%	31.4		%	1.1	%
Combined ratio	93.6		%	90.3		%	3.3	%

Gross Written Premiums

Gross written premiums (“GWP”) for AFG’s property and casualty insurance segment were $4.94 billion for the first six months of 2025 compared to $4.74 billion for the first six months of 2024, an increase of $202 million (4%). Detail of AFG’s property and casualty gross written premiums is shown below (dollars in millions):


	Six months ended June 30,
	2025				2024
	GWP		%		GWP		%		% Change
Property and transportation	$	2,144	43	%	$	2,043	43	%	5	%
Specialty casualty	2,130		43	%	2,120		45	%	—	%
Specialty financial	670		14	%	579		12	%	16	%



	$	4,944	100	%	$	4,742	100	%	4	%

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Reinsurance Premiums Ceded

Reinsurance premiums ceded (“Ceded”) for AFG’s property and casualty insurance segment were 31% of gross written premiums in the first six months of 2025 compared to 30% of gross written premiums for the first six months of 2024, an increase of 1 percentage point. Detail of AFG’s property and casualty reinsurance premiums ceded is shown below (dollars in millions):


	Six months ended June 30,
	2025				2024				Change in
	Ceded		% of GWP		Ceded		% of GWP		% of GWP
Property and transportation	$	(822)	38	%	$	(756)	37	%	1	%
Specialty casualty	(593)		28	%	(564)		27	%	1	%
Specialty financial	(115)		17	%	(96)		17	%	—	%



	$	(1,530)	31	%	$	(1,416)	30	%	1	%

Net Written Premiums

Net written premiums (“NWP”) for AFG’s property and casualty insurance segment were $3.41 billion for the first six months of 2025 compared to $3.33 billion for the first six months of 2024, an increase of $88 million (3%). Detail of AFG’s property and casualty net written premiums is shown below (dollars in millions):


	Six months ended June 30,
	2025				2024
	NWP		%		NWP		%		% Change
Property and transportation	$	1,322	39	%	$	1,287	39	%	3	%
Specialty casualty	1,537		45	%	1,556		47	%	(1	%)
Specialty financial	555		16	%	483		14	%	15	%



	$	3,414	100	%	$	3,326	100	%	3	%

Net Earned Premiums

Net earned premiums (“NEP”) for AFG’s property and casualty insurance segment were $3.23 billion for the first six months of 2025 compared to $3.13 billion for the first six months of 2024, an increase of $96 million (3%). Detail of AFG’s property and casualty net earned premiums is shown below (dollars in millions):


	Six months ended June 30,
	2025				2024
	NEP		%		NEP		%		% Change
Property and transportation	$	1,076	33	%	$	1,072	34	%	—	%
Specialty casualty	1,593		50	%	1,574		50	%	1	%
Specialty financial	558		17	%	485		16	%	15	%



	$	3,227	100	%	$	3,131	100	%	3	%

Gross written premiums for the first six months of 2025 increased $202 million (4%) compared to the first six months of 2024. Earlier reporting of crop acreage by insureds impacted the timing of the recording of crop premiums and contributed to the year-over-year increase. The Specialty property and casualty insurance operations continue to achieve year-over-year premium growth as a result of new business opportunities, a good renewal rate environment and increased exposures. Overall average renewal rates increased approximately 6% in the first six months of 2025. Excluding the workers’ compensation businesses, renewal pricing increased approximately 7%.

Property and transportation Gross written premiums increased $101 million (5%) in the first six months of 2025 compared to the first six months of 2024. This increase was primarily the result of earlier reporting of crop acreage in the second quarter of 2025 compared to 2024, which impacts the timing of crop premiums. In addition, increased exposures, new business opportunities and a favorable rate environment contributed to growth in the transportation businesses. Average renewal rates increased approximately 7% for this group in the first six months of 2025. Reinsurance premiums ceded as a percentage of gross written premiums increased 1 percentage point in the first six months of 2025 compared to the first six months of 2024 reflecting growth in the alternative risk transfer products in the transportation businesses and higher premiums in the crop business, which cede a higher percentage of premiums than some of the other businesses in the Property and transportation sub-segment.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Specialty casualty Gross written premiums increased $10 million in the first six months of 2025 compared to the first six months of 2024, reflecting higher year-over-year premiums in the mergers and acquisitions liability business and growth across several other businesses in the Specialty casualty sub-segment resulting from new business opportunities, higher rates and strong policy retention. These items were partially offset by lower premiums due to a challenging market in the directors’ and officers’ liability business as well as the continued non-renewal of certain housing and daycare accounts in the social services businesses. Average renewal rates increased approximately 6% for this group in the first six months of 2025. Excluding overall rate decreases in the workers’ compensation businesses, renewal rates for this group increased approximately 9%. Reinsurance premiums ceded as a percentage of gross written premiums increased 1 percentage point in the first six months of 2025 compared to the first six months of 2024 reflecting higher cessions, higher reinsurance costs and higher reinstatement premiums paid to reinsurers in the excess liability business and growth in the mergers and acquisitions liability business, which cedes a larger percentage of premiums than some of the other businesses in the Specialty casualty sub-segment.

Specialty financial Gross written premiums increased $91 million (16%) in the first six months of 2025 compared to the first six months of 2024 due primarily to growth in the financial institutions business. Average renewal rates increased approximately 1% for this group in the first six months of 2025. Reinsurance premiums ceded as a percentage of gross written premiums were comparable in the first six months of 2025 and the first six months of 2024.

Combined Ratio

The table below (dollars in millions) details the components of the combined ratio and underwriting profit for AFG’s property and casualty insurance segment:


	Six months ended June 30,						Six months ended June 30,
	2025		2024		Change		2025		2024
Property and transportation
Loss and LAE ratio	64.9	%	61.2	%	3.7	%
Underwriting expense ratio	29.1	%	29.4	%	(0.3	%)
Combined ratio	94.0	%	90.6	%	3.4	%
Underwriting profit							$	64	$	100

Specialty casualty
Loss and LAE ratio	66.1	%	62.6	%	3.5	%
Underwriting expense ratio	29.7	%	28.1	%	1.6	%
Combined ratio	95.8	%	90.7	%	5.1	%
Underwriting profit							$	69	$	147

Specialty financial
Loss and LAE ratio	39.6	%	41.3	%	(1.7	%)
Underwriting expense ratio	46.9	%	46.8	%	0.1	%
Combined ratio	86.5	%	88.1	%	(1.6	%)
Underwriting profit							$	75	$	58

Total Specialty
Loss and LAE ratio	61.1	%	58.8	%	2.3	%
Underwriting expense ratio	32.5	%	31.4	%	1.1	%
Combined ratio	93.6	%	90.2	%	3.4	%
Underwriting profit							$	208	$	305

Aggregate — including exited lines
Loss and LAE ratio	61.1	%	58.9	%	2.2	%
Underwriting expense ratio	32.5	%	31.4	%	1.1	%
Combined ratio	93.6	%	90.3	%	3.3	%
Underwriting profit							$	207	$	303

The Specialty property and casualty insurance operations generated an underwriting profit of $208 million for the first six months of 2025 compared to $305 million for the first six months of 2024, a decrease of $97 million (32%). Higher year-over-year underwriting profit in the Specialty financial sub-segment was more than offset by lower underwriting profit in the

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Property and transportation and Specialty casualty sub-segments. Overall catastrophe losses were $110 million (3.4 points on the combined ratio) in the first six months of 2025 compared to catastrophe losses of $71 million (2.3 points), including $1 million in net reinstatement premiums in the first six months of 2024.

Property and transportation Underwriting profit for this group was $64 million for the first six months of 2025 compared to $100 million for the first six months of 2024, a decrease of $36 million (36%). This decrease was due primarily to the impact of particularly strong crop insurance business results in the first six months of 2024 and lower year-over-year underwriting profit in the property and inland marine business. Catastrophe losses were $22 million (2.1 points on the combined ratio) in the first six months of 2025 compared to $22 million (2.0 points) in the first six months of 2024.

Specialty casualty Underwriting profit for this group was $69 million for the first six months of 2025 compared to $147 million for the first six months of 2024, a decrease of $78 million (53%), reflecting lower underwriting profit in the directors’ and officers’ liability, excess and surplus and workers’ compensation businesses as well as higher catastrophe losses. Catastrophe losses were $34 million (2.1 points on the combined ratio) in the first six months of 2025 compared to catastrophe losses of $24 million (1.5 points), including $1 million in net reinstatement premiums in the first six months of 2024.

Specialty financial Underwriting profit for this group was $75 million for the first six months of 2025 compared to $58 million for the first six months of 2024, an increase of $17 million (29%). Favorable prior year reserve development and improved accident year results were partially offset by higher year-over-year catastrophe losses. Catastrophe losses were $54 million (9.7 points on the combined ratio) in the first six months of 2025 compared to $25 million (5.2 points) in the first six months of 2024.

Aggregate Aggregate underwriting results for AFG’s property and casualty insurance segment includes adverse prior year reserve development of $1 million in the first six months of 2025 and $2 million in the first six months of 2024 related to business outside of the Specialty group that AFG no longer writes.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Losses and Loss Adjustment Expenses

AFG’s overall loss and LAE ratio was 61.1% for the first six months of 2025 compared to 58.9% for the first six months of 2024, an increase of 2.2 percentage points. The components of AFG’s property and casualty losses and LAE amounts and ratio are detailed below (dollars in millions):


	Six months ended June 30,
	Amount				Ratio				Change in
	2025		2024		2025		2024		Ratio
Property and transportation
Current year, excluding catastrophe losses	$	708	$	715	65.8	%	66.7	%	(0.9	%)
Prior accident years development	(32)		(80)		(3.0	%)	(7.5	%)	4.5	%
Current year catastrophe losses including the impact of net reinstatement premiums	22		22		2.1	%	2.0	%	0.1	%
Property and transportation losses and LAE and ratio	$	698	$	657	64.9	%	61.2	%	3.7	%

Specialty casualty
Current year, excluding catastrophe losses	$	996	$	975	62.6	%	61.9	%	0.7	%
Prior accident years development	22		(13)		1.4	%	(0.8	%)	2.2	%
Current year catastrophe losses including the impact of net reinstatement premiums	34		23		2.1	%	1.5	%	0.6	%
Specialty casualty losses and LAE and ratio	$	1,052	$	985	66.1	%	62.6	%	3.5	%

Specialty financial
Current year, excluding catastrophe losses	$	189	$	169	33.8	%	34.8	%	(1.0	%)
Prior accident years development	(22)		6		(3.9	%)	1.3	%	(5.2	%)
Current year catastrophe losses including the impact of net reinstatement premiums	54		25		9.7	%	5.2	%	4.5	%
Specialty financial losses and LAE and ratio	$	221	$	200	39.6	%	41.3	%	(1.7	%)

Total Specialty
Current year, excluding catastrophe losses	$	1,893	$	1,859	58.7	%	59.3	%	(0.6	%)
Prior accident years development	(32)		(87)		(1.0	%)	(2.8	%)	1.8	%
Current year catastrophe losses including the impact of net reinstatement premiums	110		70		3.4	%	2.3	%	1.1	%
Total Specialty losses and LAE and ratio	$	1,971	$	1,842	61.1	%	58.8	%	2.3	%

Aggregate — including exited lines
Current year, excluding catastrophe losses	$	1,893	$	1,859	58.7	%	59.3	%	(0.6	%)
Prior accident years development	(31)		(85)		(1.0	%)	(2.7	%)	1.7	%
Current year catastrophe losses including the impact of net reinstatement premiums	110		70		3.4	%	2.3	%	1.1	%
Aggregate losses and LAE and ratio	$	1,972	$	1,844	61.1	%	58.9	%	2.2	%

Current accident year losses and LAE, excluding catastrophe losses

The current accident year loss and LAE ratio, excluding catastrophe losses, for AFG’s Specialty property and casualty insurance operations was 58.7% for the first six months of 2025 compared to 59.3% for the first six months of 2024, a decrease of 0.6 percentage points.

Property and transportation The 0.9 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects improved results and growth in the property and inland marine and ocean marine businesses, which have lower loss and LAE ratios than some of the other businesses in the Property and transportation sub-segment and the impact of a large property loss in the first quarter of 2024, partially offset by higher claim severity in the aviation business.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Specialty casualty The 0.7 percentage points increase in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects higher claim severity in the excess and surplus and social services businesses, partially offset by improved results in the workers’ compensation businesses.

Specialty financial The 1.0 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects improved results and growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment.

Net prior year reserve development

AFG’s Specialty property and casualty insurance operations recorded net favorable reserve development related to prior accident years of $32 million in the first six months of 2025 compared to $87 million in the first six months of 2024, a decrease of $55 million (63%).

Property and transportation Net favorable reserve development of $32 million in the first six months of 2025 reflects lower than anticipated losses in the crop business, lower than anticipated claim severity in the aviation and agribusiness operations and lower than expected claim frequency in the property and inland marine business. Net favorable reserve development of $80 million in the first six months of 2024 reflects lower than anticipated losses in the crop business and lower than expected claim severity in the property and inland marine business.

Specialty casualty Net adverse reserve development of $22 million in the first six months of 2025 reflects higher than anticipated claim severity in the excess and surplus and social services businesses, partially offset by lower than anticipated claim severity in the workers’ compensation businesses. Net favorable reserve development of $13 million in the first six months of 2024 reflects lower than anticipated claim severity in the workers’ compensation businesses and lower than expected claim frequency in the executive liability business, partially offset by higher than anticipated claim severity in the excess and surplus businesses and higher than expected claim frequency and severity in the social services business.

Specialty financial Net favorable reserve development of $22 million in the first six months of 2025 reflects lower than anticipated claim frequency in the financial institutions business and lower than expected claim severity in the trade credit, surety and fidelity businesses. Net adverse reserve development of $6 million in the first six months of 2024 reflects higher than anticipated claim severity in the innovative markets and surety businesses, partially offset by lower than anticipated claim frequency in the fidelity and trade credit businesses and lower than expected claim frequency and severity in the financial institutions business.

Aggregate Aggregate net prior accident years reserve development for AFG’s property and casualty insurance segment includes net adverse reserve development of $1 million in the first six months of 2025 and $2 million in the first six months of 2024 related to business outside the Specialty group that AFG no longer writes.

Catastrophe losses

Catastrophe losses of $110 million in the first six months of 2025 resulted primarily from California wildfires and storms in multiple regions of the United States. Catastrophe losses of $70 million in the first six months of 2024 (before $1 million in net reinstatement premiums) resulted primarily from storms in multiple regions of the United States.

Commissions and Other Underwriting Expenses

AFG’s property and casualty commissions and other underwriting expenses (“U/W Exp”) were $1.05 billion in the first six months of 2025 compared to $984 million for the first six months of 2024, an increase of $64 million (7%). AFG’s underwriting expense ratio was 32.5% for the first six months of 2025 compared to 31.4% for the first six months of 2024, an increase of 1.1 percentage points. Detail of AFG’s property and casualty commissions and other underwriting expenses and underwriting expense ratios is shown below (dollars in millions):


	Six months ended June 30,
	2025				2024				Change in
	U/W Exp		% of NEP		U/W Exp		% of NEP		% of NEP
Property and transportation	$	314	29.1	%	$	315	29.4	%	(0.3	%)
Specialty casualty	472		29.7	%	442		28.1	%	1.6	%
Specialty financial	262		46.9	%	227		46.8	%	0.1	%



	$	1,048	32.5	%	$	984	31.4	%	1.1	%

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Property and transportation Commissions and other underwriting expenses as a percentage of net earned premiums decreased 0.3 percentage points in the first six months of 2025 compared to the first six months of 2024 reflecting changes in the mix of business, partially offset by higher costs for software and other expenses associated with certain initiatives in IT security, customer experience and data analytics.

Specialty casualty Commissions and other underwriting expenses as a percentage of net earned premiums increased 1.6 percentage points in the first six months of 2025 compared to the first six months of 2024 reflecting higher costs for software and other expenses associated with certain initiatives in IT security, customer experience and data analytics and an increase in average commission rates in the excess and surplus business resulting from changes in reinsurance treaties.

Specialty financial Commissions and other underwriting expenses as a percentage of net earned premiums increased 0.1 percentage points in the first six months of 2025 compared to the first six months of 2024 reflecting higher costs for software and other expenses associated with certain initiatives in IT security, customer experience and data analytics, partially offset by the impact of higher earned premiums in the financial institutions business on the ratio and a change in the mix of business towards products with lower commission rates.

Property and Casualty Net Investment Income

Net investment income in AFG’s property and casualty insurance operations was $349 million in the first six months of 2025 compared to $394 million in the first six months of 2024, a decrease of $45 million (11%). The average invested assets and overall yield earned on investments held by AFG’s property and casualty insurance operations are provided below (dollars in millions):


	Six months ended June 30,
	2025			2024			Change			% Change
Net investment income:
Net investment income, excluding alternative investments	$	329		$	305		$	24		8	%
Alternative investments	20			89			(69)			(78	%)
Total net investment income	$	349		$	394		$	(45)		(11	%)

Average invested assets (at amortized cost)	$	15,894		$	15,321		$	573		4	%

Yield on fixed maturities (before investment expenses)	5.19		%	4.99		%	0.20		%

Yield (net investment income as a % of average invested assets)	4.39		%	5.14		%	(0.75		%)

The decrease in the property and casualty insurance segment’s net investment income for the first six months of 2025 compared to the first six months of 2024 reflects the impact of lower returns on AFG’s alternative investments portfolio (partnerships and similar investments and AFG-managed CLOs), partially offset by higher balances of invested assets and higher returns on fixed maturity investments. The property and casualty insurance segment’s overall yield on investments (net investment income as a percentage of average invested assets) was 4.39% for the first six months of 2025 compared to 5.14% for the first six months of 2024, a decrease of 0.75 percentage points. The annualized return earned on alternative investments (partnerships and similar investments and AFG-managed CLOs) was 1.5% in the first six months of 2025 compared to 7.0% in the prior year period.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

Property and Casualty Other Income and Expenses, Net

Other income and expenses, net for AFG’s property and casualty insurance operations was a net expense of $37 million for the first six months of 2025 compared to $38 million for the first six months of 2024, a decrease of $1 million (3%). The table below details the items included in other income and expenses, net for AFG’s property and casualty insurance operations (in millions):


	Six months ended June 30,
	2025		2024
Other income	$	3	$	4
Other expenses:
Amortization of intangibles	10		9
Interest expense on funds withheld	23		25
Other	7		8
Total other expenses	40		42
Other income and expenses, net	$	(37)	$	(38)

Holding Company, Other and Unallocated — Results of Operations

AFG’s net pretax loss outside of its property and casualty insurance segment (excluding realized gains and losses) totaled $98 million in the first six months of 2025 compared to $96 million in the first six months of 2024, an increase of $2 million (2%).

The following table details AFG’s loss before income taxes from operations outside of its property and casualty insurance segment for the six months ended June 30, 2025 and 2024 (dollars in millions):


	Six months ended June 30,
	2025		2024		% Change
Revenues:
Net investment income	$	12	$	15	(20	%)
Other income — P&C fees	48		60		(20	%)
Other income	8		8		—	%
Total revenues	68		83		(18	%)

Costs and Expenses:
Property and casualty insurance — loss adjustment and underwriting expenses	16		30		(47	%)
Other expense — expenses associated with P&C fees	32		30		7	%
Other expenses	80		81		(1	%)
Costs and expenses, excluding interest charges on borrowed money	128		141		(9	%)
Loss before income taxes, excluding realized gains and losses and interest charges on borrowed money	(60)		(58)		3	%
Interest charges on borrowed money	38		38		—	%



Loss before income taxes, excluding realized gains and losses	$	(98)	$	(96)	2	%

Holding Company and Other — Net Investment Income

AFG recorded net investment income on investments held outside of its property and casualty insurance segment of $12 million in the first six months of 2025 compared to $15 million in the first six months of 2024, a decrease of $3 million (20%) reflecting the impact of lower average investment balances.

Holding Company and Other — P&C Fees and Related Expenses

Summit, a workers’ compensation insurance subsidiary, collects fees from a small group of unaffiliated insurers for providing underwriting, policy administration and claims services. In addition, certain of AFG’s property and casualty insurance businesses collect fees from customers for ancillary services such as workplace safety programs and premium financing. In the first six months of 2025, AFG collected $48 million in fees for these services compared to $49 million in the first six months of 2024. Management views this fee income, net of the $32 million in the first six months of 2025 and $30 million in the first six months of 2024 in expenses incurred to generate such fees, as a reduction in the cost of underwriting its property and casualty insurance policies. In addition, AFG’s property and casualty insurance businesses earned $11 million during the first six months of 2024 in fees as compensation for providing services related to the

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

administration of crop insurance business generated by CRS for its former owner prior to the acquisition date. The expenses related to providing such services are embedded in property and casualty underwriting expenses. Consistent with internal management reporting, these fees and the related expenses are netted and recorded as a reduction of commissions and other underwriting expenses in AFG’s segmented results.

Holding Company and Other — Other Income

Other income in the table above includes $5 million and $6 million in the first six months of 2025 and the first six months of 2024, respectively, in management fees paid to AFG by the AFG-managed CLOs (AFG’s consolidated managed investment entities). 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 $3 million in the first six months of 2025 compared to $2 million in the first six months of 2024, an increase of $1 million (50%).

Holding Company and Other — Other Expenses

AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded other expenses of $80 million in the first six months of 2025 compared to $81 million in the first six months of 2024, a decrease of $1 million (1%).

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 $38 million in both the first six months of 2025 and the first six months of 2024.

Realized Gains (Losses) on Securities

AFG’s realized gains (losses) on securities were net gains of $5 million in the first six months of 2025 compared to $12 million in the first six months of 2024, a decrease of $7 million (58%). Realized gains (losses) on securities consisted of the following (in millions):


	Six months ended June 30,
	2025		2024
Realized gains (losses) before impairment allowances:
Disposals	$	(8)	$	(4)
Change in the fair value of equity securities	19		19
Change in the fair value of derivatives	1		(1)
	12		14

Change in allowance for impairments on securities	(7)		(2)
Realized gains (losses) on securities	$	5	$	12

The $19 million net realized gain from the change in the fair value of equity securities in the first six months of 2025 includes gains of $10 million on investments in manufacturing companies, $6 million on investments in banks and financing companies and $3 million on investments in media companies. The $19 million net realized gain from the change in the fair value of equity securities in the first six months of 2024 includes gains of $13 million on investments in banks and financing companies, $5 million on investments in natural gas companies and $4 million on investments in healthcare companies, partially offset by losses of $4 million on investments in media companies.

Consolidated Income Taxes

AFG’s consolidated provision for income taxes was $98 million for the first six months of 2025 compared to $124 million for the first six months of 2024, a decrease of $26 million (21%). See Note J — “Income Taxes” to the financial statements for an analysis of items affecting AFG’s effective tax rate.

RECENTLY ADOPTED ACCOUNTING STANDARDS

See Note B — “Segments of Operations” to the financial statements for accounting guidance adopted in the fourth quarter of 2024, which requires enhanced disclosures about significant segment expenses and a description of the composition of other segment expenses by business segment. The title and position of the chief operating decision maker (“CODM”) and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources is also required to be disclosed.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

ACCOUNTING STANDARDS TO BE ADOPTED

In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Improvements to Income Tax Disclosures. ASU 2023-09 is intended to improve income tax disclosures by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation presented in both dollar and percentage terms; (ii) the disaggregation of income taxes paid (net of refunds received), income (loss) before income taxes and income taxes by jurisdiction (federal, state and foreign taxes); and (iii) further disaggregation of income taxes paid by any individual jurisdiction equal to or exceeding five percent of total income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and is required to be applied prospectively with the option of retrospective application. As of June 30, 2025, AFG has not adopted ASU 2023-09. Management is evaluating the impact of the standard to AFG’s income tax disclosures. Since ASU 2023-09 only requires additional disclosure, the adoption of this guidance will not have an impact on AFG’s results of operations or financial condition.

In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires additional information and disaggregation of specified expense categories in the notes to financial statements. ASU 2024-04 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted and applied either prospectively or retrospectively. As of June 30, 2025, AFG has not adopted ASU 2024-03. Management is evaluating the impact of the standard to AFG’s income statement expense disclosures. Since ASU 2024-03 only requires additional disclosures, the adoption of this guidance will not have an impact on AFG’s results of operations or financial condition.

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk

As of June 30, 2025, there were no material changes to the information provided in Item 7A — Quantitative and Qualitative Disclosures about Market Risk of AFG’s 2024 Form 10-K.

Consistent with the discussion in Item 2 — Management’s Discussion and Analysis — “Investments,” the following table demonstrates the sensitivity of the fair value of AFG’s fixed maturity portfolio 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 June 30, 2025 (based on the duration of the portfolio, dollars in millions). Effects of increases or decreases from the 100 basis points illustrated would be approximately proportional.


Fair value of fixed maturity portfolio	$	10,571
Percentage impact on fair value of 100 bps increase in interest rates	(3.0		%)
Pretax impact on fair value of fixed maturity portfolio	$	(317)

ITEM 4. Controls and Procedures

AFG’s management, with participation of its Co-Chief Executive Officers and its Chief Financial Officer, has evaluated AFG’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15) as of the end of the period covered by this report. Based on that evaluation, AFG’s Co-CEOs and CFO concluded that the controls and procedures are effective. There have been no changes in AFG’s internal control over financial reporting during the second fiscal quarter of 2025 that materially affected, or are reasonably likely to materially affect, AFG’s internal control over financial reporting.

In the ordinary course of business, AFG and its subsidiaries routinely enhance their information systems by either upgrading current systems or implementing new systems. There have been no changes in AFG’s business processes and procedures during the second fiscal quarter of 2025 that have materially affected, or are reasonably likely to materially affect, AFG’s internal control over financial reporting.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

PART II

OTHER INFORMATION

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

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:
April	158,899	$	118.75	158,899	5,107,713
May	94,152	122.04		94,152	5,013,561
June	66,685	122.93		66,685	4,946,876




Total	782,134	$	122.53	782,134

(*)Represents the remaining shares that may be repurchased until December 31, 2025 under the Plan authorized by AFG’s Board of Directors in May 2021.

In connection with its stock incentive plans, AFG acquired 42,809 shares (at an average of $120.66 per share) in the first quarter of 2025 and 141 shares (at $124.75 per share) in June 2025.

ITEM 5. Other Information

During the three months ended June 30, 2025, none of the Company’s directors or officers , or modified a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.

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AMERICAN FINANCIAL GROUP, INC. 10-Q

ITEM 6. Exhibits


Number						Exhibit Description
31(a)						Certification of Co-Chief Executive Officer pursuant to section 302(a) of the Sarbanes-Oxley Act of 2002.
31(b)						Certification of Co-Chief Executive Officer pursuant to section 302(a) of the Sarbanes-Oxley Act of 2002.
31(c)						Certification of Chief Financial Officer pursuant to section 302(a) of the Sarbanes-Oxley Act of 2002.
32						Certification of Co-Chief Executive Officers and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	American Financial Group, Inc.

August 7, 2025	By:	/s/ Brian S. Hertzman
		Brian S. Hertzman
		Senior Vice President and Chief Financial Officer

AMERICAN FINANCIAL GROUP INC - Quarter Report: 2025 June (Form 10-Q)

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