AMERICAN FINANCIAL GROUP INC
For the period ended Dec 31, 2024. Filed Feb 25, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 25, 2025
AFG$154.55-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-23.
0001042046-24-000009
GeneralSegmented Statement of EarningsProperty and Casualty InsuranceHolding Company, Other and UnallocatedSegmented Statement of EarningsProperty and Casualty InsuranceHolding Company, Other and UnallocatedReal Estate Entities Acquired from the Annuity OperationsDiscontinued Annuity OperationsRecent Accounting StandardsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-25.
0001042046-25-000011
GeneralSegmented Statement of EarningsProperty and Casualty InsuranceHolding Company, Other and UnallocatedSegmented Statement of EarningsProperty and Casualty InsuranceHolding Company, Other and UnallocatedRecent Accounting StandardsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 221 previous paragraphs and 210 current paragraphs.
75 unchanged; 96 reworded; 36 added; 44 removed; 6 previous and 3 current paragraphs rearranged.
Tables are not compared: 33 previous and 32 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
Net earnings were $887 million for the full-year of 2024 compared to $852 million in 2023 reflecting the impact of net realized losses on securities in 2023 and higher core net operating earnings. Core net operating earnings for 2024 increased $7 million compared to 2023. Higher investment income outside of alternative investments was partially offset by lower returns on AFG’s alternative investment portfolio and lower underwriting profit. Net realized gains on securities of less than $1 million in 2024 and net realized losses on securities of $28 million in 2023 include $19 million of after-tax gains and $2 million of after-tax losses, respectively, from the change in fair value of equity securities that were still held at the balance sheet date.
Current report
Gross written premiums for the fourth quarter of 2024 increased $51 million (3%) compared to the fourth quarter of 2023 driven primarily by new business opportunities, a good renewal rate environment and increased exposures. Overall average renewal rates increased approximately 7% in the fourth quarter of 2024. Excluding overall rate decreases in the workers’ compensation businesses, renewal rates increased approximately 8%.
Current report
Specialty casualty Gross written premiums increased $57 million (5%) in the fourth quarter of 2024 compared to the fourth quarter of 2023. The primary drivers of growth were new business opportunities and favorable renewal pricing in several of the targeted markets businesses and in the excess and surplus business. The mergers and acquisitions liability business also benefited from an increase in mergers and acquisition activity. This growth was tempered by lower year-over-year workers’ compensation premiums. Average renewal rates for this group increased approximately 8% in the fourth quarter of 2024. Excluding rate decreases in the workers’ compensation businesses, renewal rates for this group increased approximately 11%. Reinsurance premiums ceded as a percentage of gross written premiums increased 1 percentage point for the fourth quarter of 2024 compared to the fourth quarter of 2023 reflecting higher premiums in the excess and surplus and mergers and acquisitions liability businesses, which cede a larger percentage of premiums than some of the other businesses in the Specialty casualty sub-segment as well as higher cessions in the public sector business, partially offset by lower cessions in certain more heavily reinsured products in the social services business.
Current report
The Specialty property and casualty insurance operations generated an underwriting profit of $204 million in the fourth quarter of 2024 compared to $212 million in the fourth quarter of 2023, a decrease of $8 million (4%). Higher underwriting profit in the Property and transportation and Specialty financial sub-segments was more than offset by lower year-over-year underwriting profit in the Specialty casualty sub-segment, which was impacted by net adverse prior year reserve development in certain social inflation exposed businesses. Overall catastrophe losses were $21 million (1.1 points on the combined ratio), including $1 million in net reinstatement premiums in the fourth quarter of 2024 compared to catastrophe losses of $25 million (1.4 points), including $1 million in net reinstatement premiums in the fourth quarter of 2023.
Current report
Property and transportation The 1.7 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects improved profitability in the crop, ocean marine and property and inland marine businesses, partially offset by higher claim severity in the commercial auto business.
Current report
Specialty financial The 1.4 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment.
Current report
Property and transportation Commissions and other underwriting expenses as a percentage of net earned premiums decreased 1.4 percentage points in the fourth quarter of 2024 compared to the fourth quarter of 2023. The decrease reflects the impact on the ratio of higher earned premiums, including in the crop business which has a lower commissions and other underwriting expense ratio than some of the other businesses in the Property and transportation sub-segment, and lower average commission rates in the transportation businesses due to a change in the mix of business.
Current report
Specialty casualty Commissions and other underwriting expenses as a percentage of net earned premiums decreased 1.6 percentage points in the fourth quarter of 2024 compared to the fourth quarter of 2023 reflecting a change in the mix of business towards products with lower commission rates.
Current report
AFG’s net pretax loss outside of its property and casualty insurance segment (excluding realized gains and losses) totaled $48 million in the fourth quarter of 2024 compared to $53 million in the fourth quarter of 2023, a decrease of $5 million (9%).
Current report
The $10 million change in allowance for impairments on securities in the fourth quarter of 2024 relates primarily to an allowance taken on fixed maturities from a single issuer in the retail sector.
Current report
Property and transportation Gross written premiums increased $589 million (14%) in 2024 compared to 2023. Year-over-year premium growth resulted from additional crop premium associated with the CRS acquisition as well as new business opportunities, a favorable rate environment and increased exposures in the commercial auto businesses. This year-over-year premium growth was tempered by the impact of lower year-over-year commodity pricing on winter wheat premiums, coupled with elevated pricing competition and the non-renewal of certain under-performing accounts in the transportation businesses. Excluding crop premium, gross and net written premiums in this group grew by 5% and 4%, respectively. Average renewal rates increased approximately 8% for this group in 2024. Reinsurance premiums ceded as a percentage of gross written premiums increased 3 percentage points in 2024 compared to 2023 reflecting the impact of higher cessions in the crop business and growth in certain programs in the transportation businesses that cede a larger percentage of premiums than some of the other businesses in the Property and transportation sub-segment.
Current report
Specialty casualty Gross written premiums increased $175 million (4%) in 2024 compared to 2023. The higher-year-over-year premiums resulted primarily from growth in the excess and surplus, excess liability and certain targeted markets businesses as a result of rate increases, new business opportunities and strong policy retention. The mergers and acquisitions liability business also benefited from an increase in mergers and acquisition activity. This growth was tempered by lower year-over-year workers’ compensation premiums. Average renewal rates increased approximately 6% for this group in 2024. Excluding overall rate decreases in the workers’ compensation businesses, renewal rates for this group increased approximately 9% in 2024. Reinsurance premiums ceded as a percentage of gross written premiums were comparable in 2024 and 2023 reflecting lower cessions in certain more heavily reinsured products in the social services business, offset by the impact of higher premiums in the excess and surplus and mergers and acquisitions liability businesses, which cede a larger percentage of premiums than some of the other businesses in the Specialty casualty sub-segment and higher cessions in the public sector business.
Current report
Specialty financial Gross written premiums increased $113 million (10%) in 2024 compared to 2023. Year-over-year growth in the financial institutions business was partially offset by a decision to pause writing of new intellectual property-related coverage. Average renewal rates increased approximately 6% for this group in 2024. Reinsurance premiums ceded as a percentage of gross written premiums decreased 1 percentage point in 2024 compared to 2023 reflecting lower gross written premiums in the innovative markets business, which cedes a larger percentage of premiums than some of the other businesses in the Specialty financial sub-segment, partially offset by the impact of higher reinstatement premiums paid to reinsurers in the fidelity and surety businesses.
Current report
The Specialty property and casualty insurance operations generated an underwriting profit of $626 million in 2024 compared to $633 million in 2023, a decrease of $7 million (1%). Higher underwriting profit in the Property and transportation and Specialty financial sub-segments was more than offset by lower underwriting profit in the Specialty casualty sub-segment and higher losses in the business assumed by AFG’s internal reinsurance program. Overall catastrophe losses were $182 million (2.6 points on the combined ratio), including $2 million in net reinstatement premiums, for 2024 compared to catastrophe losses of $165 million (2.5 points), including $3 million in net reinstatement premiums, for 2023.
Current report
Property and transportation Underwriting profit for this group was $211 million in 2024 compared to $184 million in 2023, an increase of $27 million (15%). Higher year-over-year underwriting profit in the property and inland marine and crop insurance operations was partially offset by lower underwriting profitability in the transportation businesses. Catastrophe losses were $65 million (2.3 points on the combined ratio), including $1 million in net reinstatement premiums, in 2024 compared to catastrophe losses of $53 million (2.0 points), including $2 million in net reinstatement premiums, in 2023.
Current report
Specialty casualty Underwriting profit for this group was $340 million in 2024 compared to $375 million in 2023, a decrease of $35 million (9%). Higher year-over-year underwriting profit in the targeted markets businesses was more than offset by lower levels of favorable prior year reserve development in the executive liability business and social inflation driven adverse development in the umbrella and excess business. Catastrophe losses were $32 million (1.1 points on the combined ratio), including $1 million in net reinstatement premiums, in 2024 compared to catastrophe losses of $36 million (1.2 points), including $1 million in net reinstatement premiums, in 2023.
Current report
Specialty financial Underwriting profit for this group was $134 million in 2024 compared to $110 million in 2023, an increase of $24 million (22%). This year-over-year increase reflects higher underwriting profit in the financial institutions business, partially offset by lower profitability resulting from the pause in writing of intellectual property-related coverage. Catastrophe losses were $81 million (7.8 points on the combined ratio) in 2024 compared to catastrophe losses of $49 million (5.7 points) in 2023.
Current report
Other specialty This group reported an underwriting loss of $59 million in 2024 compared to $36 million in 2023, an increase of $23 million (64%), reflecting higher losses in the business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty sub-segments. Catastrophe losses were $4 million in 2024 compared to $27 million in 2023.
Current report
Property and transportation The 0.5 percentage points increase in the loss and LAE ratio for the current year, excluding catastrophe losses in 2024 compared to 2023 reflects growth in the crop business, which has a higher loss and LAE ratio than some of the other businesses in the Property and transportation sub-segment and higher reported claim severity in the commercial auto business, partially offset by the impact of improved profitability in the property and inland marine business.
Current report
Specialty casualty The 1.2 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2024 compared to 2023 reflects improved results in the workers’ compensation and targeted markets businesses, partially offset by higher claim severity in the excess and surplus business.
Current report
Specialty financial The 0.9 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2024 compared to 2023 reflects growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment, partially offset by higher reported losses and lower premiums in the fidelity and surety businesses.
Current report
Property and transportation Net favorable reserve development of $94 million in 2024 reflects lower than anticipated losses in the crop business, lower than expected claim severity in the property and inland marine and aviation businesses and lower than anticipated claim frequency and severity in the ocean marine business.
Current report
Specialty casualty Net favorable reserve development of $10 million in 2024 reflects lower than anticipated claim severity in the workers’ compensation businesses and lower than expected claim frequency and severity in the executive liability business, partially offset by higher than anticipated claim frequency and severity in the umbrella and excess liability and social services businesses and higher than expected claim severity in the public sector and general liability businesses.
Current report
Specialty financial Net favorable reserve development of $11 million in 2024 reflects lower than anticipated claim frequency and severity in the financial institutions and fidelity businesses and lower than expected claim frequency in the trade credit business, partially offset by higher than anticipated claim severity in the innovative markets and surety businesses.
Current report
AFG’s property and casualty commissions and other underwriting expenses (“U/W Exp”) were $1.96 billion in 2024 compared to $1.88 billion in 2023, an increase of $78 million (4%). AFG’s underwriting expense ratio was 27.9% in 2024 compared to 28.8% in 2023, a decrease of 0.9 percentage points.
Current report
Property and transportation Commissions and other underwriting expenses as a percentage of net earned premiums decreased 1.1 percentage points in 2024 compared to 2023 reflecting the impact on the ratio of higher earned premiums, including in the crop business which has a lower commissions and other underwriting expense ratio compared to some of the other businesses in the Property and transportation sub-segment and lower average commission rates in the transportation businesses due to a change in the mix of business.
Current report
Specialty casualty Commissions and other underwriting expenses as a percentage of net earned premiums decreased 0.6 percentage points in 2024 compared to 2023 reflecting a change in the mix of business towards products with lower commission rates, partially offset by lower ceding commissions received in the workers’ compensation businesses.
Current report
Specialty financial Commissions and other underwriting expenses as a percentage of net earned premiums decreased 4.0 percentage points in 2024 compared to 2023 due primarily to the impact on the ratio of higher earned premiums in the financial institutions business and a change in the mix of business towards products with lower commission rates.
Current report
AFG’s net GAAP pretax loss outside of its property and casualty insurance segment (excluding realized gains and losses) totaled $204 million in 2024 compared to $191 million in 2023, an increase of $13 million (7%). AFG’s net core pretax loss outside of its property and casualty insurance segment (excluding realized gains and losses) totaled $190 million in 2024 compared to $177 million in 2023, an increase of $13 million (7%).
Current report
Excluding the non-core special A&E charges and the non-core gain on retirement of debt discussed below, AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded other expenses of $161 million in 2024 compared to $162 million in 2023, a decrease of $1 million (1%).
Current report
The $32 million net realized gain from the change in the fair value of equity securities in 2024 includes gains of $21 million on investments in banks and financing companies, $8 million on investments in natural gas companies and $5 million on investments in technology companies, partially offset by losses of $6 million on investments in energy companies.
Current report
The $27 million change in allowance for impairments on securities in 2024 relates primarily to allowances taken on corporate bonds from a single issuer in the financial sector and fixed maturities from a single issuer in the retail sector.
Current report
In the second quarter of 2024, AFG recorded $4 million in net tax expense related to a pending IRS settlement regarding the sale of a subsidiary in a prior year.
Removed paragraphs (44)
Previous report
In May 2021, AFG sold its Annuity business to MassMutual. Through the effective date of the sale, the results of its annuity segment and run-off life and long-term care operations are reported as discontinued operations.
Previous report
AFG recorded $914 million in non-core net earnings from the discontinued annuity operations in 2021, which includes a $656 million after-tax gain on the sale. See“Discontinued Annuity Operations”below for details of the impact of the discontinued annuity operations on AFG’s net earnings for 2021.
Previous report
In December 2020, AFG sold GAI Holding Bermuda and its subsidiaries, the legal entities that owned AFG’s Lloyd’s Managing Agency, Neon Underwriting Ltd., thereby exiting the Lloyd’s of London Insurance market. In 2021, AFG recognized a non-core after-tax gain of $3 million related to contingent consideration received from the sale of Neon.
Previous report
Net earnings were $898 million for the full-year of 2022 compared to $2.00 billion in 2021 reflecting net earnings from the discontinued annuity operations in 2021 and net realized losses on securities in 2022 compared to net realized gains on securities in 2021. The discontinued annuity operations includes an after-tax gain on the sale of the annuity subsidiaries of $656 million in 2021. Core net operating earnings were comparable in 2022 and 2021 as higher underwriting profit and higher investment income outside of alternative investments were offset by lower returns on AFG’s alternative investment portfolio compared to the very strong performance of this portfolio in 2021. Realized gains (losses) on securities in 2022 and 2021 resulted primarily from the change in fair value of equity securities that were still held at the balance sheet date.
Previous report
Specialty casualty Gross written premiums increased $62 million (6%) in the fourth quarter of 2023 compared to the fourth quarter of 2022. New business opportunities and increased exposures in the excess and surplus operations and increased exposures from payroll growth in the workers’ compensation businesses led to higher year-over-year premiums, with nearly all of the businesses in this group reporting growth in the quarter. This growth was partially offset by lower premiums in the executive liability business. Average renewal rates for this group increased approximately 4% in the fourth quarter of 2023. Excluding rate decreases in the workers’ compensation business, renewal rates for this group increased approximately 7%. Reinsurance premiums ceded as a percentage of gross written premiums were comparable in the fourth quarters of 2023 and 2022.
Previous report
The Specialty property and casualty insurance operations generated an underwriting profit of $212 million in the fourth quarter of 2023 compared to $217 million in the fourth quarter of 2022, a decrease of $5 million (2%). Higher underwriting profit in the Specialty financial sub-segment was more than offset by lower underwriting profits in the Specialty casualty and Property and transportation sub-segments. Overall catastrophe losses were $25 million (1.4 points on the combined ratio), including $1 million in net reinstatement premiums in the fourth quarter of 2023 compared to catastrophe losses of $11 million (0.9 points), including a $13 million favorable impact in the fourth quarter of 2022 from lower than previously estimated reinstatement premiums related to Hurricane Ian.
Previous report
Property and transportation The 2.4 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses, is due primarily to the impact of lower claim severity in the property and inland marine and certain transportation businesses, partially offset by lower profitability in the crop business.
Previous report
Specialty financial The 0.2 percentage points increase in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects an increase in claim severity in the innovative markets business, partially offset by lower claim frequency and growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment.
Previous report
Specialty casualty Commissions and other underwriting expenses as a percentage of net earned premiums decreased 0.9 percentage points in the fourth quarter of 2023 compared to the fourth quarter of 2022 reflecting the impact on the ratio of growth in earned premiums in the workers’ compensation businesses, partially offset by higher expenses related to certain technology initiatives.
Previous report
AFG’s net GAAP pretax loss outside of its property and casualty insurance segment (excluding realized gains and losses) totaled $53 million in the fourth quarter of 2023 compared to $44 million in the fourth quarter of 2022, an increase of $9 million (20%). AFG’s net core pretax loss outside of its property and casualty insurance segment (excluding realized gains and losses) totaled $53 million for the fourth quarter of 2023 compared to $45 million for the fourth quarter of 2022, an increase of $8 million (18%).
Previous report
Gross written premiums increased $797 million (24%) in 2022 compared to 2021 reflecting the impact of higher commodity futures prices on the crop insurance business. Excluding crop, gross and net written premiums grew 11% and 10%, respectively, reflecting new business opportunities, increased exposures and rate increases. Average renewal rates increased approximately 6% for this group in 2022. Reinsurance premiums ceded as a percentage of gross written premiums increased 4 percentage points in 2022 compared to 2021 reflecting growth in crop insurance products with higher cessions and higher cessions in the ocean marine business.
Previous report
Gross written premiums increased $225 million (6%) in 2022 compared to 2021 due primarily to increased exposures in the excess and surplus businesses, rate increases and new business opportunities in the targeted markets businesses and increased exposures resulting from payroll growth and new business in the workers’ compensation businesses. This premium growth was partially offset by lower year-over-year premiums in the mergers and acquisitions liability business. Average renewal rates increased approximately 5% for this group in 2022. Excluding overall rate decreases in the workers’ compensation businesses, renewal rates for this group increased approximately 7% in 2022. Reinsurance premiums ceded as a percentage of gross written premiums decreased 1 percentage point in 2022 compared to 2021 reflecting lower cessions in the excess and surplus and excess liability businesses and lower gross written premiums in the mergers and acquisitions liability business, which cedes a larger percentage of premiums than the other businesses in the Specialty casualty sub-segment.
Previous report
Gross written premiums increased $89 million (11%) in 2022 compared to 2021 due primarily to higher premiums in the financial institutions business related to lender-placed mortgage protection insurance, rate increases and new business opportunities in the fidelity business and new business opportunities in the innovative markets and commercial equipment leasing businesses. Average renewal rates for this group increased approximately 5% in 2022. Reinsurance premiums ceded as a percentage of gross written premiums increased 2 percentage points in 2022 compared to 2021 reflecting the impact of reinstatement premiums related to Hurricane Ian and higher cessions in the innovative markets business.
Previous report
The Specialty property and casualty insurance operations generated an underwriting profit of $780 million in 2022 compared to $737 million in 2021, an increase of $43 million (6%), reflecting higher underwriting profits in the Specialty casualty and Specialty financial sub-segments, partially offset by lower underwriting profit in the Property and transportation sub-segment. Underwriting results for the Specialty property and casualty insurance operations include $16 million in COVID-19 related losses (0.3 points on the combined ratio) in 2021. Overall catastrophe losses were $93 million (1.5 points on the combined ratio), including $5 million in net reinstatement premiums, for 2022 compared to catastrophe losses of $98 million (1.7 points), including $12 million in net reinstatement premiums, for 2021.
Previous report
Underwriting profit for this group was $208 million in 2022 compared to $279 million in 2021, a decrease of $71 million (25%), reflecting lower year-over-year profitability in the crop operations compared to the very strong results in 2021 and lower underwriting profit in the transportation businesses, primarily the result of lower favorable prior year reserve development. Catastrophe losses were $45 million (1.9 points on the combined ratio), including $3 million in net reinstatement premiums, in 2022 compared to catastrophe losses of $58 million (2.7 points), including $9 million in net reinstatement premiums, in 2021.
Previous report
Underwriting profit for this group was $500 million in 2022 compared to $377 million in 2021, an increase of $123 million (33%). This increase reflects higher year-over-year underwriting profits in the workers’ compensation, excess and surplus, executive liability and mergers and acquisitions liability businesses. COVID-19 related losses were $9 million (0.4 points on the combined ratio) in 2021. Catastrophe losses were $11 million (0.5 points on the combined ratio) in 2022 compared to catastrophe losses of $10 million (0.4 points), including $1 million in net reinstatement premiums, in 2021.
Previous report
Underwriting profit for this group was $114 million in 2022 compared to $96 million in 2021, an increase of $18 million (19%) due primarily to higher year-over-year underwriting profits in the trade credit and financial institutions businesses. COVID-19 related losses were $7 million (1.1 points on the combined ratio) in 2021. Catastrophe losses were $36 million (4.9 points on the combined ratio), including $3 million in net reinstatement premiums, in 2022 compared to catastrophe losses of $28 million (4.1 points), including $2 million in net reinstatement premiums, in 2021.
Previous report
This group reported an underwriting loss of $42 million in 2022 compared to $15 million in 2021, an increase of $27 million (180%). This increase reflects higher losses in the business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty sub-segments (primarily losses from social inflation exposed operations in the Specialty casualty sub-segment) in 2022 compared to 2021.
Previous report
The 4.4 percentage points increase in the loss and LAE ratio for the current year, excluding COVID-19 related and catastrophe losses in 2022 compared to 2021 is due primarily to lower profitability in the crop insurance business compared to the very strong results recorded in 2021. Excluding crop, the loss and LAE ratio for the current year, excluding catastrophe losses was comparable in 2022 and 2021.
Previous report
The 1.7 percentage points decrease in the loss and LAE ratio for the current year, excluding COVID-19 related and catastrophe losses in 2022 compared to 2021 reflects favorable trends in workers’ compensation and the impact of higher rates in the executive liability, excess and surplus and excess liability businesses.
Previous report
The loss and LAE ratio for the current year, excluding COVID-19 related and catastrophe losses in 2022 is unchanged compared to the 2021 period.
Previous report
Net favorable reserve development of $103 million in 2021 reflects lower than anticipated claim frequency and severity in the transportation businesses, lower than expected losses in the crop business, lower than expected claim severity in the ocean marine business and lower than expected claim frequency in the aviation business.
Previous report
Net favorable reserve development of $140 million in 2021 reflects lower than anticipated claim severity in the workers’ compensation businesses, partially offset by higher than anticipated claim severity in the general liability and targeted markets businesses.
Previous report
Net favorable reserve development of $51 million in 2021 reflects lower than anticipated claim frequency in the surety and trade credit businesses and lower than expected claim frequency and severity in the financial institutions business.
Previous report
AFG’s Specialty property and casualty insurance operations released prior accident year COVID-19 reserves of $20 million in 2023 based on improved loss experience across several businesses. In 2022, AFG’s Specialty property and casualty insurance operations released $19 million of prior accident year COVID-19 reserves based on improved loss experience in the trade credit and workers’ compensation businesses. In 2021, AFG’s Specialty property and casualty insurance operations recorded $16 million in reserve charges related to COVID-19 primarily related to the workers’ compensation and trade credit businesses, and recorded favorable development of approximately $19 million of accident year 2020 reserves primarily based on loss experience in the trade credit and executive liability businesses. Given the uncertainties surrounding the ultimate number and scope of claims relating to the pandemic, approximately 28% of the $55 million in cumulative COVID-19 related losses are held as incurred but not reported reserves at December 31, 2023.
Previous report
AFG’s property and casualty U/W Exp were $1.68 billion in 2022 compared to $1.51 billion in 2021, an increase of $166 million (11%). AFG’s underwriting expense ratio was 27.6% in 2022 compared to 28.0% in 2021, a decrease of 0.4 percentage points.
Previous report
Commissions and other underwriting expenses as a percentage of net earned premiums were comparable in 2022 and 2021.
Previous report
Commissions and other underwriting expenses as a percentage of net earned premiums increased 0.3 percentage points in 2022 compared to 2021 reflecting higher underwriting expenses in the workers’ compensation businesses.
Previous report
Commissions and other underwriting expenses as a percentage of net earned premiums decreased 2.3 percentage points in 2022 compared to 2021 reflecting lower profit-based commissions to agents in 2022 compared to 2021, and lower underwriting expenses in the international operations.
Previous report
AFG’s net GAAP pretax loss outside of its property and casualty insurance segment (excluding realized gains and losses) totaled $180 million in 2022 compared to $219 million in 2021, a decrease of $39 million (18%). AFG’s net core pretax loss outside of its property and casualty insurance segment (excluding realized gains and losses) totaled $171 million in 2022 compared to $208 million in 2021, a decrease of $37 million (18%).
Previous report
Excluding the non-core loss on retirement of debt and the non-core loss on pension settlement discussed below, AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded other expenses of $143 million in 2022 compared to $172 million in 2021, a decrease of $29 million (17%). This decrease reflects lower holding company expenses related to deferred compensation obligations to employees that are tied to stock market performance, partially offset by higher charges (included in AFG’s core operating earnings) to increase the liabilities related to the A&E exposures of AFG’s former railroad and manufacturing operations.
Previous report
Holding Company and Other — Loss on Pension Settlement
Previous report
In the second quarter of 2021, AFG settled pension liabilities related to a small former manufacturing operation resulting in a pretax non-core loss of $11 million.
Previous report
The $110 million net realized gain from the change in the fair value of equity securities in 2021 includes gains of $29 million on investments in energy and natural gas companies, $18 million on investments in banks and financing companies, $17 million on investments in media companies, $14 million on investments in healthcare companies and $9 million on investments in capital goods companies.
Previous report
Realized Gain (Loss) on Subsidiaries
Previous report
In 2021, AFG recognized a pretax gain on sale of subsidiary of $4 million related to contingent consideration received on the sale of Neon.
Previous report
Consolidated Income Taxes on Continuing Operations
Previous report
Real Estate Entities Acquired from the Annuity Operations
Previous report
The results of AFG’s disposed annuity businesses are reported as discontinued operations. Prior to the completion of the sale, AFG’s property and casualty insurance operations acquired certain real estate-related partnerships and AFG parent acquired certain directly owned real estate from those operations. GAAP pretax earnings from continuing operations includes the earnings from these entities through the May 31, 2021 effective date of the sale and certain other expenses that were retained from the annuity operations. The retained real estate entities contributed $51 million in GAAP pretax earnings through the May 31, 2021 effective date of the sale.
Showing the first 40 of 44 passages. Open the source sections for the rest.
Reworded paragraphs (96)
Previous wording
AFG’s net earnings, determined in accordance with GAAP, include certain items that may not be indicative of its ongoing core operations. In addition to discontinued 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.
Current wording
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.
Previous wording
Net earnings were $263 million in the fourth quarter of 2023 compared to $276 million in the fourth quarter of 2022 reflecting lower core net operating earnings partially offset by higher net realized gains on securities in the fourth quarter of 2023 compared to the fourth quarter of 2022. Core net operating earnings for the fourth quarter of 2023 decreased $17 million compared to the fourth quarter of 2022 due primarily to lower returns on AFG’s alternative investment portfolio in the fourth quarter of 2023 compared to the fourth quarter of 2022 and lower underwriting profit, partially offset by higher investment income outside of alternative investments. Net realized gains on securities of $25 million and $21 million in the fourth quarter of 2023 and 2022, respectively, resulted primarily from the change in fair value of equity securities that were still held at the balance sheet date.
Current wording
Net earnings were $255 million in the fourth quarter of 2024 compared to $263 million in the fourth quarter of 2023 reflecting net realized losses on securities in the fourth quarter of 2024 compared to net realized gains on securities in the fourth quarter of 2023, partially offset by higher core net operating earnings. Core net operating earnings for the fourth quarter of 2024 increased $24 million compared to the fourth quarter of 2023 reflecting higher net investment income, including improved returns on alternative investments, partially offset by lower underwriting profit. Net realized losses on securities of $7 million in the fourth quarter of 2024 and net realized gains on securities of $25 million in the fourth quarter of 2023 include $1 million of after-tax losses and $22 million of after-tax gains, respectively, from the change in fair value of equity securities that were still held at the balance sheet date.
Previous wording
Subsequent to the sale of its annuity operations, 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”).
Current wording
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”).
Previous wording
AFG’s property and casualty insurance operations contributed $357 million in pretax earnings in the fourth quarter of 2023 compared to $363 million in the fourth quarter of 2022, a decrease of $6 million (2%). Lower underwriting profits in the Specialty casualty and Property and transportation sub-segments and lower investment income from alternative investments were partially offset by higher underwriting profit in the Specialty financial sub-segment and higher net investment income outside of alternative investments.
Current wording
AFG’s property and casualty insurance operations contributed $378 million in pretax earnings in the fourth quarter of 2024 compared to $357 million in the fourth quarter of 2023, an increase of $21 million (6%) as a result of higher net investment income which was partially offset by lower underwriting profit.
Previous wording
Starting in 1986, AFG’s statutory combined ratio has been better than the U.S. industry average for 36 of the 38 years. Management believes that AFG’s insurance operations have performed better than the industry as a result of its specialty niche focus, product line diversification, stringent underwriting discipline and alignment of compensation incentives.
Current wording
AFG’s statutory combined ratio has been better than the U.S. industry average for 37 of the most recent 39 years. Management believes that AFG’s insurance operations have performed better than the industry as a result of its specialty niche focus, product line diversification, stringent underwriting discipline and alignment of compensation incentives.
Previous wording
Gross written premiums (“GWP”) for AFG’s property and casualty insurance segment were $1.99 billion for the fourth quarter of 2023 compared to $1.85 billion for the fourth quarter of 2022, an increase of $147 million (8%). Detail of AFG’s property and casualty gross written premiums is shown below (dollars in millions):
Current wording
Gross written premiums (“GWP”) for AFG’s property and casualty insurance segment were $2.04 billion for the fourth quarter of 2024 compared to $1.99 billion for the fourth quarter of 2023, an increase of $51 million (3%). Detail of AFG’s property and casualty gross written premiums is shown below (dollars in millions):
Previous wording
Reinsurance premiums ceded (“Ceded”) for AFG’s property and casualty insurance segment were 27% of gross written premiums for both the fourth quarter of 2023 and the fourth quarter of 2022. Detail of AFG’s property and casualty reinsurance premiums ceded is shown below (dollars in millions):
Current wording
Reinsurance premiums ceded (“Ceded”) for AFG’s property and casualty insurance segment were 29% of gross written premiums for the fourth quarter of 2024 compared to 27% of gross written premiums for the fourth quarter of 2023, an increase of 2 percentage points. Detail of AFG’s property and casualty reinsurance premiums ceded is shown below (dollars in millions):
Previous wording
Net written premiums (“NWP”) for AFG’s property and casualty insurance segment were $1.45 billion for the fourth quarter of 2023 compared to $1.34 billion for the fourth quarter of 2022, an increase of $107 million (8%). Detail of AFG’s property and casualty net written premiums is shown below (dollars in millions):
Current wording
Net written premiums (“NWP”) for AFG’s property and casualty insurance segment were $1.46 billion for the fourth quarter of 2024 compared to $1.45 billion for the fourth quarter of 2023, an increase of $15 million (1%). Detail of AFG’s property and casualty net written premiums is shown below (dollars in millions):
Previous wording
Net earned premiums (“NEP”) for AFG’s property and casualty insurance segment were $1.73 billion for the fourth quarter of 2023 compared to $1.62 billion for the fourth quarter of 2022, an increase of $109 million (7%). Detail of AFG’s property and casualty net earned premiums is shown below (dollars in millions):
Current wording
Net earned premiums (“NEP”) for AFG’s property and casualty insurance segment were $1.85 billion for the fourth quarter of 2024 compared to $1.73 billion for the fourth quarter of 2023, an increase of $118 million (7%). Detail of AFG’s property and casualty net earned premiums is shown below (dollars in millions):
Previous wording
Property and transportation Gross written premiums increased $22 million (4%) in the fourth quarter of 2023 compared to the fourth quarter of 2022. This increase was due primarily to slightly higher crop premium related to the CRS acquisition, which was partially offset by the timing of renewals in several of the transportation businesses. Average renewal rates increased 7% for this group in the fourth quarter of 2023. Reinsurance premiums ceded as a percentage of gross written premiums increased 2 percentage points for the fourth quarter of 2023 compared to the fourth quarter of 2022 reflecting growth in alternative risk transfer products in the transportation businesses and higher premiums in the crop operations, both of which cede a higher percentage of premiums than some of the other businesses in the Property and transportation sub-segment.
Current wording
Property and transportation Gross written premiums decreased $38 million (6%) in the fourth quarter of 2024 compared to the fourth quarter of 2023. This decrease was due primarily to the impact of lower year-over-year commodity pricing on winter wheat premiums, coupled with elevated pricing competition and the non-renewal of certain under-performing accounts in the transportation businesses. Average renewal rates increased 7% for this group in the fourth quarter of 2024. Reinsurance premiums ceded as a percentage of gross written premiums were comparable in the fourth quarter of 2024 and the fourth quarter of 2023 reflecting higher cessions in the crop business offset by the impact of lower cessions in certain transportation businesses.
Previous wording
Specialty financial Gross written premiums increased $63 million (27%) in the fourth quarter of 2023 compared to the fourth quarter of 2022 due primarily to growth in the financial institutions business. Average renewal rates for this group increased approximately 9% in the fourth quarter of 2023. Reinsurance premiums ceded as a percentage of gross written premiums increased 1 percentage point in the fourth quarter of 2023 compared to the fourth quarter of 2022 reflecting the favorable impact of lower than previously estimated reinstatement premiums related to Hurricane Ian recorded in the fourth quarter of 2022.
Current wording
Specialty financial Gross written premiums increased $32 million (11%) in the fourth quarter of 2024 compared to the fourth quarter of 2023 due primarily to growth in the financial institutions business. Average renewal rates for this group increased approximately 3% in the fourth quarter of 2024. Reinsurance premiums ceded as a percentage of gross written premiums decreased 1 percentage point in the fourth quarter of 2024 compared to the fourth quarter of 2023 reflecting the impact of lower gross written premiums in the innovative markets business, which cedes a larger percentage of premiums than some of the other businesses in the Specialty financial sub-segment.
Previous wording
Other specialty The amounts shown as reinsurance premiums ceded represent business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty property and casualty insurance sub-segments. Reinsurance premiums assumed increased $8 million (13%) in the fourth quarter of 2023 compared to the fourth quarter of 2022 reflecting an increase in premiums retained, primarily from businesses in the Specialty casualty sub-segment.
Current wording
Other specialty The amounts shown as reinsurance premiums ceded represent business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty property and casualty insurance sub-segments. Reinsurance premiums assumed decreased $12 million (17%) in the fourth quarter of 2024 compared to the fourth quarter of 2023 reflecting a decrease in premiums retained, primarily from businesses in the Specialty casualty sub-segment.
Previous wording
Property and transportation Underwriting profit for this group was $67 million for the fourth quarter of 2023 compared to $68 million in the fourth quarter of 2022, a decrease of $1 million (1%). Below average underwriting profitability in the crop insurance operations was largely offset by higher year-over-year underwriting profits in the property and inland marine and the non-crop agricultural businesses. Catastrophe losses for this group were $5 million (0.6 points on the combined ratio), including $2 million in net reinstatement premiums in the fourth quarter of 2023 compared to catastrophe losses of $7 million (1.0 points), including a $1 million favorable impact from lower than previously estimated net reinstatement premiums in the fourth quarter of 2022.
Current wording
Property and transportation Underwriting profit for this group was $82 million for the fourth quarter of 2024 compared to $67 million in the fourth quarter of 2023, an increase of $15 million (22%), reflecting higher year-over-year underwriting profitability in the crop insurance operations. Catastrophe losses for this group were $10 million (1.3 points on the combined ratio), including $1 million in net reinstatement premiums in the fourth quarter of 2024 compared to catastrophe losses of $5 million (0.6 points), including $2 million in net reinstatement premiums in the fourth quarter of 2023.
Previous wording
Specialty casualty Underwriting profit for this group was $114 million for the fourth quarter of 2023 compared to $128 million in the fourth quarter of 2022, a decrease of $14 million (11%). Higher year-over-year underwriting profits in the workers’ compensation and executive liability businesses were more than offset by lower underwriting profit in the excess and surplus business. Catastrophe losses were $8 million (1.1 points on the combined ratio), including a $1 million favorable impact from lower than previously estimated net reinstatement premiums in the fourth quarter of 2023 compared to catastrophe losses of $7 million (1.1 points), including a $1 million favorable impact from net reinstatement premiums in the fourth quarter of 2022.
Current wording
Specialty casualty Underwriting profit for this group was $82 million for the fourth quarter of 2024 compared to $114 million in the fourth quarter of 2023, a decrease of $32 million (28%). Higher year-over-year underwriting profit in the targeted markets businesses was more than offset by lower underwriting profit in the excess liability, workers’ compensation and executive liability businesses. Catastrophe losses, including the impact of lower than previously estimated losses from Hurricane Helene, had a favorable impact of $5 million (0.8 points on the combined ratio) compared to catastrophe losses of $8 million (1.1 points), including a $1 million favorable impact from lower than previously estimated net reinstatement premiums in the fourth quarter of 2023.
Previous wording
Specialty financial Underwriting profit for this group was $45 million for the fourth quarter of 2023 compared to $33 million in the fourth quarter of 2022, an increase of $12 million (36%). This increase reflects higher year-over-year underwriting profit in the financial institutions business. Catastrophe losses were $4 million (2.0 points on the combined ratio) in the fourth quarter of 2023 compared to a favorable impact of $3 million (1.9 points), including a $10 million favorable impact from the change in estimated reinstatement premiums related to Hurricane Ian in the fourth quarter of 2022.
Current wording
Specialty financial Underwriting profit for this group was $54 million for the fourth quarter of 2024 compared to $45 million in the fourth quarter of 2023, an increase of $9 million (20%). This year-over-year increase reflects higher underwriting profit in the financial institutions business. Catastrophe losses were $17 million (6.2 points on the combined ratio) in the fourth quarter of 2024 compared to $4 million (2.0 points) in the fourth quarter of 2023.
Previous wording
Other specialty This group reported an underwriting loss of $14 million for the fourth quarter of 2023 compared to $12 million in the fourth quarter of 2022, an increase of $2 million (17%), reflecting higher losses in the business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty sub-segments in the fourth quarter of 2023 compared to the fourth quarter of 2022. This group reported catastrophe losses of $8 million in the fourth quarter of 2023 compared to less than $1 million in the fourth quarter of 2022.
Current wording
Other specialty This group reported an underwriting loss of $14 million for the fourth quarter of 2024 and the fourth quarter of 2023, reflecting losses in the business assumed by AFG’s internal reinsurance program from the operations that make up AFG’s other Specialty sub-segments. Favorable changes in estimated losses from Hurricane Helene resulted in a favorable impact of $1 million from catastrophe losses in the fourth quarter of 2024 compared to catastrophe losses of $8 million in the fourth quarter of 2023.
Previous wording
Aggregate Aggregate underwriting results for AFG’s property and casualty insurance segment include adverse prior year reserve development of $1 million in the fourth quarter of 2023 and net favorable prior year reserve development of $1 million in the fourth quarter of 2022 related to business outside of the Specialty group that AFG no longer writes.
Current wording
Aggregate Aggregate underwriting results for AFG’s property and casualty insurance segment include adverse prior year reserve development of $2 million in the fourth quarter of 2024 and $1 million in the fourth quarter of 2023 related to business outside of the Specialty group that AFG no longer writes.
Previous wording
AFG’s overall loss and LAE ratio was 60.8% for the fourth quarter of 2023 compared to 60.7% for the fourth quarter of 2022, an increase of 0.1 percentage points. The components of AFG’s property and casualty losses and LAE amounts and ratio are detailed below (dollars in millions):
Current wording
AFG’s overall loss and LAE ratio was 63.8% for the fourth quarter of 2024 compared to 60.8% for the fourth quarter of 2023, an increase of 3.0 percentage points. The components of AFG’s property and casualty losses and LAE amounts and ratio are detailed below (dollars in millions):
Previous wording
The current accident year loss and LAE ratio, excluding catastrophe losses for AFG’s Specialty property and casualty insurance operations was 62.6% for the fourth quarter of 2023 compared to 63.5% in the fourth quarter of 2022, a decrease of 0.9 percentage points.
Current wording
The current accident year loss and LAE ratio, excluding catastrophe losses for AFG’s Specialty property and casualty insurance operations was 60.8% for the fourth quarter of 2024 compared to 62.6% in the fourth quarter of 2023, a decrease of 1.8 percentage points.
Previous wording
Specialty casualty The 1.9 percentage points increase in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects anticipated medical cost inflation and the impact of pressure on rates in the workers’ compensation businesses and higher claim severity in certain liability coverages, partially offset by lower claim frequency in the executive liability business.
Current wording
Specialty casualty The 1.9 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses, reflects growth in certain programs in the social services business that have a lower loss and LAE ratio than some of the other businesses in the Specialty casualty sub-segment and improved results in the workers’
Previous wording
AFG’s Specialty property and casualty insurance operations recorded net favorable reserve development related to prior accident years of $57 million in the fourth quarter of 2023 compared to $58 million in the fourth quarter of 2022, a decrease of $1 million (2%).
Current wording
AFG’s Specialty property and casualty insurance operations recorded net adverse reserve development related to prior accident years of $34 million in the fourth quarter of 2024 compared to net favorable reserve development related to prior accident years of $57 million in the fourth quarter of 2023, a change of $91 million (160%).
Previous wording
Property and transportation Net favorable reserve development of $12 million in the fourth quarter of 2023 reflects lower than anticipated losses in the crop business and lower than expected claim frequency in the ocean marine and property and inland marine businesses. Net favorable reserve development of $13 million in the fourth quarter of 2022 reflects lower than expected claim severity in the ocean marine, aviation and property and inland marine businesses and lower than anticipated claim frequency in the trucking business.
Current wording
Property and transportation Net favorable reserve development of $3 million in the fourth quarter of 2024 reflects lower than anticipated losses in the crop business and lower than expected claim severity in the aviation business, partially offset by higher than anticipated claim severity in the commercial auto business. Net favorable reserve development of $12 million in the fourth quarter of 2023 reflects lower than anticipated losses in the crop business and lower than expected claim frequency in the ocean marine and property and inland marine businesses.
Previous wording
Specialty casualty Net favorable reserve development of $37 million in the fourth quarter of 2023 reflects lower than anticipated claim severity in the workers’ compensation businesses, partially offset by higher than anticipated claim severity in the excess and surplus business and higher than expected claim frequency and severity in the excess liability and general liability businesses. Net favorable reserve development of $50 million in the fourth quarter of 2022 reflects lower than anticipated claim frequency and severity in the workers’ compensation and excess and surplus businesses and lower than expected claim frequency in the executive liability business.
Current wording
Specialty casualty Net adverse reserve development of $36 million in the fourth quarter of 2024 reflects higher than anticipated claim frequency and severity in the umbrella and excess liability businesses and higher than expected claim severity in the social services and general liability businesses, partially offset by lower than expected claim severity in the workers’ compensation businesses. Net favorable reserve development of $37 million in the fourth quarter of 2023 reflects lower than anticipated claim severity in the workers’ compensation businesses, partially offset by higher than anticipated claim severity in the excess and surplus business and higher than expected claim frequency and severity in the excess liability and general liability businesses.
Previous wording
Specialty financial Net favorable reserve development of $8 million in the fourth quarter of 2023 reflects lower than anticipated claim frequency and severity in the fidelity business and lower than expected claim frequency in the financial institutions and trade credit businesses. Net favorable reserve development of $8 million in the fourth quarter of 2022 reflects lower than anticipated claim frequency in the trade credit and financial institutions businesses.
Current wording
Specialty financial Net favorable reserve development of $8 million in the fourth quarter of 2024 reflects lower than anticipated claim frequency and severity in the financial institutions business and lower than expected claim severity in the fidelity business. Net favorable reserve development of $8 million in the fourth quarter of 2023 reflects lower than anticipated claim frequency and severity in the fidelity business and lower than expected claim frequency in the financial institutions and trade credit businesses.
Previous wording
Other specialty In addition to the development discussed above, total Specialty prior year reserve development includes net adverse reserve development of less than $1 million in the fourth quarter of 2023 and $13 million in the fourth quarter of 2022. The fourth quarter of 2022 reflects net adverse reserve development associated with AFG’s internal reinsurance program (primarily from social inflation exposed casualty businesses) and, to a lesser extent, both periods reflect the amortization of the deferred gain on the retroactive reinsurance transaction entered into in connection with the sale of a business in 1998.
Current wording
Other specialty In addition to the development discussed above, total Specialty prior year reserve development includes net adverse reserve development of $9 million in the fourth quarter of 2024 and less than $1 million in the fourth quarter of 2023 primarily associated with AFG’s internal reinsurance program. The net adverse reserve development in 2024 is primarily related to social inflation exposed business assumed from the Specialty casualty sub-segment.
Previous wording
Aggregate Aggregate net prior accident years reserve development for AFG’s property and casualty insurance segment includes net adverse reserve development of $1 million in the fourth quarter of 2023 and net favorable reserve development of $1 million in the fourth quarter of 2022 related to business outside of the Specialty group that AFG no longer writes.
Current wording
Aggregate Aggregate net prior accident years reserve development for AFG’s property and casualty insurance segment includes net adverse reserve development of $2 million in the fourth quarter of 2024 and $1 million in the fourth quarter of 2023 related to business outside of the Specialty group that AFG no longer writes.
Previous wording
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. Based on data available at December 31, 2023, AFG’s exposure to a catastrophic earthquake or windstorm that industry models indicate should statistically occur once in every 100, 250 or 500 years as a percentage of AFG’s Shareholders’ Equity is shown below:
Current wording
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. Based on data available at December 31, 2024 (including the expected placement of a catastrophe bond structure or additional other reinsurance protection in the second quarter of 2025), AFG’s exposure to a catastrophic earthquake or windstorm that industry models indicate should statistically occur once in every 100, 250 or 500 years as a percentage of AFG’s Shareholders’ Equity is shown below:
Previous wording
Catastrophe losses of $24 million (before net reinstatement premiums) in the fourth quarter of 2023 resulted primarily from storms in multiple regions of the United States. Catastrophe losses of $24 million (before net reinstatement premiums) in the fourth quarter of 2022 resulted primarily from Winter Storm Elliott.
Current wording
Catastrophe losses of $20 million (before $1 million in net reinstatement premiums) in the fourth quarter of 2024 resulted primarily from Hurricane Milton. Catastrophe losses of $24 million (before $1 million in net reinstatement premiums) in the fourth quarter of 2023 resulted primarily from storms in multiple regions of the United States.
Previous wording
AFG’s property and casualty commissions and other underwriting expenses (“U/W Exp”) were $468 million in the fourth quarter of 2023 compared to $419 million for the fourth quarter of 2022, an increase of $49 million (12%). AFG’s underwriting expense ratio, calculated as commissions and other underwriting expenses divided by net premiums earned, was 27.0% for the fourth quarter of 2023 compared to 25.8% for the fourth quarter of 2022, an increase of 1.2 percentage points. Detail of AFG’s property and casualty commissions and other underwriting expenses and underwriting expense ratios is shown below (dollars in millions):
Current wording
AFG’s property and casualty commissions and other underwriting expenses (“U/W Exp”) were $467 million in the fourth quarter of 2024 compared to $468 million for the fourth quarter of 2023, a decrease of $1 million. AFG’s underwriting expense ratio, calculated as commissions and other underwriting expenses divided by net premiums earned, was 25.3% for the fourth quarter of 2024 compared to 27.0% for the fourth quarter of 2023, a decrease of 1.7 percentage points. Detail of AFG’s property and casualty commissions and other underwriting expenses and underwriting expense ratios is shown below (dollars in millions):
Previous wording
Specialty financial Commissions and other underwriting expenses as a percentage of net earned premiums decreased 2.8 percentage points in the fourth quarter of 2023 compared to the fourth quarter of 2022 reflecting the impact on the ratio of growth in earned premiums in the financial institutions, surety and innovative markets businesses and lower contingent commissions paid to agents in the innovative markets business, partially offset by the impact of an increase in net earned premiums in the fourth quarter of 2022 due to lower than previously estimated reinstatement premiums related to Hurricane Ian and higher expenses related to certain technology initiatives.
Current wording
Specialty financial Commissions and other underwriting expenses as a percentage of net earned premiums decreased 3.9 percentage points in the fourth quarter of 2024 compared to the fourth quarter of 2023 reflecting the impact on the ratio of higher earned premiums in the financial institutions business and a change in the mix of business towards products with lower commission rates.
Previous wording
Net investment income in AFG’s property and casualty insurance operations was $161 million in the fourth quarter of 2023 compared to $159 million in the fourth quarter of 2022, an increase of $2 million (1%). 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):
Current wording
Net investment income in AFG’s property and casualty insurance operations was $195 million in the fourth quarter of 2024 compared to $161 million in the fourth quarter of 2023, an increase of $34 million (21%). 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):
Previous wording
The increase in the property and casualty insurance segment’s net investment income for the fourth quarter of 2023 compared to the fourth quarter of 2022 reflects the impact of higher yields on fixed maturity investments and higher balances of invested assets, partially offset by lower returns on AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs). The property and casualty insurance segment’s overall yield on investments (net investment income as a percentage of average invested assets) was 4.23% for the fourth quarter of 2023 compared to 4.45% for the fourth quarter of 2022, a decrease of 0.22 percentage points reflecting lower returns on alternative investments, partially offset by higher yields on fixed maturity investments. The annualized return earned on alternative investments was 0.8% in the fourth quarter of 2023 compared to 5.3% in the prior year period.
Current wording
The increase in the property and casualty insurance segment’s net investment income for the fourth quarter of 2024 compared to the fourth quarter of 2023 reflects the impact of higher balances of invested assets, higher returns on fixed maturity investments and higher returns on AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs). The property and casualty insurance segment’s overall yield on investments (net investment income as a percentage of average invested assets) was 4.96% for the fourth quarter of 2024 compared to 4.23% for the fourth quarter of 2023, an increase of 0.73 percentage points. The annualized return earned on alternative investments was 4.9% in the fourth quarter of 2024 compared to 0.8% in the comparable prior year period.
Previous wording
Other income and expenses, net for AFG’s property and casualty insurance operations was a net expense of $15 million for the fourth quarter of 2023 compared to $14 million for the fourth quarter of 2022, an increase of $1 million (7%). The table below details the items included in other income and expenses, net for AFG’s property and casualty insurance operations (in millions):
Current wording
Other income and expenses, net for AFG’s property and casualty insurance operations was a net expense of $19 million for the fourth quarter of 2024 compared to $15 million for the fourth quarter of 2023, an increase of $4 million (27%). The table below details the items included in other income and expenses, net for AFG’s property and casualty insurance operations (in millions):
Previous wording
The following table details AFG’s GAAP and core loss before income taxes from operations outside of its property and casualty insurance segment for the three months ended December 31, 2023 and 2022 (dollars in millions):
Current wording
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 December 31, 2024 and 2023 (dollars in millions):
Previous wording
AFG recorded net investment income on investments held outside of its property and casualty insurance segment of $7 million in the fourth quarter of 2023 compared to $9 million in the fourth quarter of 2022, a decrease of $2 million (22%), reflecting the impact of lower average investment balances, partially offset by the impact of higher interest rates on cash and fixed maturity investments.
Current wording
AFG recorded net investment income on investments held outside of its property and casualty insurance segment of $7 million in both the fourth quarter of 2024 and the fourth quarter of 2023.
Previous wording
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 fourth quarter of 2023, AFG collected $23 million in fees for these services compared to $22 million in the fourth quarter of 2022. Management views this fee income, net of the $14 million in both the fourth quarter of 2023 and the fourth quarter of 2022 in expenses incurred to generate such fees, as a reduction in the cost of underwriting its property and casualty insurance policies. In addition, AFG’s property and casualty insurance businesses earned $19 million in fees as compensation for providing services during the fourth quarter of 2023 related to the administration of crop insurance business generated by CRS for its former owner prior to the acquisition date and collected less than $1 million in fees from AFG’s disposed annuity operations during the fourth quarter of 2022 as compensation for certain services provided under a transition services agreement. The expenses related to providing such services are embedded in property and casualty underwriting expenses. Consistent with internal management reporting, these fees and the related expenses are netted and recorded as a reduction of loss adjustment and other underwriting expenses in AFG’s segmented results.
Current wording
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 fourth quarter of 2024, AFG collected $28 million in fees for these services compared to $23 million in the fourth quarter of 2023. Management views this fee income, net of the $15 million in the fourth quarter of 2024 and $14 million in the fourth quarter of 2023 in expenses incurred to generate such fees, as a reduction in the cost of underwriting its property and casualty insurance policies. In addition, AFG’s property and casualty insurance businesses earned $19 million in fees during the fourth quarter of 2023 as compensation for providing services related to the administration of crop insurance business generated by CRS for its former owner prior to AFG’s acquisition of CRS. The expenses related to providing such services are embedded in underwriting expenses. Consistent with internal management reporting, these fees and the related expenses are netted and recorded as a reduction of loss adjustment and other underwriting expenses in AFG’s segmented results.
Previous wording
Other income in the table above includes $4 million in the fourth quarter of 2023 and $5 million in the fourth quarter of 2022, in management fees paid to AFG by the AFG-managed CLOs (AFG’s consolidated managed investment entities). The management fees are eliminated in consolidation — see the other income line in the Consolidate MIEs column under“Results of Operations — Segmented Statement of Earnings.” Excluding amounts eliminated in consolidation, AFG recorded other income outside of its property and casualty insurance segment of $1 million and $2 million in the fourth quarter of 2023 and the fourth quarter of 2022, respectively.
Current wording
Other income in the table above includes $4 million in both the fourth quarter of 2024 and the fourth quarter of 2023, in management fees paid to AFG by the AFG-managed CLOs (AFG’s consolidated managed investment entities). The management fees are eliminated in consolidation — see the other income line in the Consolidate MIEs column under“Results of Operations — Segmented Statement of Earnings.” Excluding amounts eliminated in consolidation, AFG recorded other income outside of its property and casualty insurance segment of $2 million and $1 million in the fourth quarter of 2024 and the fourth quarter of 2023, respectively.
Previous wording
Excluding the non-core gain on retirement of debt discussed below, AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded other expenses of $46 million in the fourth quarter of 2023 compared to $41 million in the fourth quarter of 2022, an increase of $5 million (12%). This increase is due primarily to the impact of higher holding company expenses related to deferred compensation obligations to employees that are tied to stock market performance and higher aircraft related expenses in the fourth quarter of 2023 compared to the fourth quarter of 2022.
Current wording
AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded other expenses of $42 million in the fourth quarter of 2024 compared to $46 million in the fourth quarter of 2023, a decrease of $4 million (9%). This decrease is due primarily to lower aircraft related expenses in the fourth quarter of 2024 compared to the fourth quarter of 2023.
Previous wording
AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded interest expense of $19 million in the fourth quarter of 2023 compared to $20 million in the fourth quarter of 2022, a decrease of $1 million (5%).
Current wording
AFG’s holding companies and other operations outside of its property and casualty insurance segment recorded interest expense of $19 million in both the fourth quarter of 2024 and the fourth quarter of 2023.
Previous wording
AFG’s realized gains (losses) on securities were net gains of $31 million in the fourth quarter of 2023 compared to $27 million in the fourth quarter of 2022, an increase of $4 million (15%). Realized gains (losses) on securities consisted of the following (in millions):
Current wording
AFG’s realized gains (losses) on securities were net losses of $10 million in the fourth quarter of 2024 compared to net gains of $31 million in the fourth quarter of 2023, a change of $41 million (132%). Realized gains (losses) on securities consisted of the following (in millions):
Showing the first 40 of 96 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
compensation businesses, partially offset by higher claim severity in the excess and surplus business and the impact of pressure on rates in the executive liability business.
Current report — wording carried from elsewhere
Other income in the table above includes $13 million in 2024, $16 million in 2023 and $17 million in 2022, in management fees paid to AFG by the AFG-managed CLOs (AFG’s consolidated managed investment entities). The management fees are eliminated in consolidation — see the other income line in the Consolidated MIEs column under“Results of
Current report — wording carried from elsewhere
See Note C — “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.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Gross written premiums for the fourth quarter of 2023 increased $147 million (8%) compared to the fourth quarter of 2022 reflecting a combination of new business opportunities, increased exposures and a good renewal rate environment. Overall average renewal rates increased approximately 6% in the fourth quarter of 2023. Excluding overall rate decreases in the workers’ compensation businesses, renewal rates increased approximately 7%.
Previous report — wording carried elsewhere
Property and transportation Commissions and other underwriting expenses as a percentage of net earned premiums increased 3.1 percentage points in the fourth quarter of 2023 compared to the fourth quarter of 2022 reflecting the impact of lower profit-based ceding commissions related to below average profitability in the crop operations, the impact on the ratio of lower earned premiums in the crop operations (which has a lower commissions and other underwriting expense ratio than some of the other businesses in the Property and transportation sub-segment) and higher expenses related to certain technology initiatives.
Previous report — wording carried elsewhere
The $4 million (50%) increase in interest expense on funds withheld in 2023 compared to 2022 reflects the impact of higher interest rates.
Previous report — wording carried elsewhere
(*)Excludes a pretax non-core gain on retirement of debt of $1 million in the fourth quarter of 2022.
Previous report — wording carried elsewhere
Holding Company and Other — Gain on Retirement of Debt
Previous report — wording carried elsewhere
During the fourth quarter of 2022, AFG retired $38 million principal amount of its senior notes, which resulted in a $1 million pretax gain.