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

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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 SharesCommon Stock and Capital SurplusRetained EarningsAccumulated 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 March 31, 2025 $ $ $()$ 
Balance at December 31, 2023 $ $ $()$ 
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 March 31, 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)
               )          
Three months ended March 31,
20252024
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  
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()()
 
 
 
 
 $ 
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AMERICAN FINANCIAL GROUP, INC. 10-Q
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
C.    

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    Commercial 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”)    )  $ 
(*)% of the carrying value relates to underlying investments in multi-family properties as of March 31, 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 March 31, 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()  %()  %Commercial 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()  %()  %Commercial MBS   %   %Collateralized loan obligations   %()  %Other asset-backed securities()  %()  %Corporate and other()  %()  %Total fixed maturities$()$  %$()$  %

At March 31, 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 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 March 31, 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   
Additions to previously recognized expected credit losses
   
Reductions due to sales or redemptions
   Balance at March 31, 2025$ $ $ Balance at December 31, 2023$ $ $ )      ) $ 
(*)The change in the fair value of fixed maturities classified as trading and derivatives embedded in convertible fixed maturities related to limited partnerships and similar investments.
 %)()( %)  %  %  %  %   %$  %

K.    


L.    

 $ Less reinsurance recoverables, net of allowance  Net liability at beginning of year  Provision for losses and LAE occurring in the current period  
Net decrease in the provision for claims of prior years
()()Total losses and LAE incurred  Payments for losses and LAE of:Current year()()Prior years()()Total payments()()Foreign currency translation and other() Net liability at end of period  Add back reinsurance recoverables, net of allowance  Gross unpaid losses and LAE included in the balance sheet at end of period$ $ 

The net decrease in the provision for claims of prior years during the first three months of 2025 reflects (i) lower than anticipated losses in the crop business and lower than anticipated claim frequency and severity in the trucking business (within the Property and transportation sub-segment), (ii) lower than anticipated claim severity in the workers’ compensation businesses (within the Specialty casualty sub-segment) and (iii) lower than anticipated claim frequency and severity in the financial institutions business (within the Specialty financial sub-segment). This favorable development was
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AMERICAN FINANCIAL GROUP, INC. 10-Q
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
, 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
 
NumberExhibit Description
101.INSXBRL 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.SCHInline XBRL Taxonomy Extension Schema Document.
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover 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.
May 8, 2025By: /s/ Brian S. Hertzman
 Brian S. Hertzman
 Senior Vice President and Chief Financial Officer
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