AMERICAN FINANCIAL GROUP INC

Property and Casualty Insurance Segment — Results of Operations

AFG’s property and casualty insurance operations contributed $1.29 billion in GAAP pretax earnings in 2025 compared to $1.33 billion in 2024, a decrease of $40 million (3%). Property and casualty core pretax earnings were $1.29 billion in 2025 compared to $1.33 billion in 2024, a decrease of $41 million (3%). The decrease in GAAP and core pretax earnings in 2025 compared to 2024 reflects lower net investment income from AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs), partially offset by higher underwriting profit and higher investment income outside of alternative investments.

AFG’s property and casualty insurance operations contributed $1.33 billion in GAAP pretax earnings in 2024 compared to $1.30 billion in 2023, an increase of $28 million (2%). Property and casualty core pretax earnings were $1.33 billion in 2024 compared to $1.30 billion in 2023, an increase of $24 million (2%). The increase in GAAP and core pretax earnings in 2024 compared to 2023 reflects higher investment income outside of alternative investments, partially offset by lower investment income from AFG’s alternative investment portfolio and lower underwriting profit.

The following table details AFG’s GAAP and core earnings before income taxes from its property and casualty insurance operations for the years ended December 31, 2025, 2024 and 2023 (dollars in millions):

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.

Gross Written Premiums

Gross written premiums (“GWP”) for AFG’s property and casualty insurance segment were $10.69 billion in 2025 compared to $10.53 billion in 2024, an increase of $161 million (2%). GWP increased $877 million (9%) in 2024 compared to 2023. Detail of AFG’s property and casualty gross written premiums is shown below (dollars in millions):

Reinsurance Premiums Ceded

Reinsurance premiums ceded (“Ceded”) for AFG’s property and casualty insurance segment were 34% of gross written premiums for the year ended December 31, 2025, 32% for year ended December 31, 2024 and 31% December 31, 2023, an increase of 2 percentage points for 2025 compared to 2024 and an increase of 1 percentage point for 2024 compared to 2023. Detail of AFG’s property and casualty reinsurance premiums ceded is shown below (dollars in millions):

Net Written Premiums

Net written premiums (“NWP”) for AFG’s property and casualty insurance segment were $7.11 billion in 2025 compared to $7.14 billion in 2024, a decrease of $29 million. NWP increased $447 million (7%) in 2024 compared to 2023. Detail of AFG’s property and casualty net written premiums is shown below (dollars in millions):

Net Earned Premiums

Net earned premiums (“NEP”) for AFG’s property and casualty insurance segment were $7.05 billion in 2025 compared to $7.04 billion in 2024, an increase of $10 million. NEP increased $505 million (8%) in 2024 compared to 2023. Detail of AFG’s property and casualty net earned premiums is shown below (dollars in millions):

Gross written premiums increased $161 million (2%) in 2025 compared to 2024. 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 5% in 2025. Excluding the workers’ compensation businesses, renewal pricing increased approximately 6%.

The $877 million (9%) increase in gross written premiums in 2024 compared to 2023 reflects growth in each of the Specialty property and casualty sub-segments as a result of additional crop premiums from the CRS acquisition in the Property and transportation sub-segment and new business opportunities, increased exposures and a good renewal rate environment. Overall average renewal rates increased approximately 7% in 2024. Excluding the workers’ compensation businesses, renewal pricing increased approximately 8%.

Property and transportation Gross written premiums decreased $4 million in 2025 compared to 2024. This decrease was primarily the result of the impact of lower commodity prices on crop insurance premiums, partially offset by growth in the transportation businesses as a result of increased exposures, new business opportunities and a favorable rate environment. Average renewal rates increased approximately 7% for this group in 2025. Reinsurance premiums ceded as a percentage of gross written premiums increased 1 percentage point in 2025 compared to 2024, reflecting growth in certain programs in the transportation businesses which cede a higher percentage of premiums than some of the other businesses in the Property and transportation sub-segment and higher cessions in the crop and aviation businesses.

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. The year-over-year premium growth was tempered by the impact of lower year-over-year commodity pricing on winter wheat premiums, coupled with elevated pricing competition and the non-renewal of certain under-performing accounts in the transportation businesses. Excluding crop premium, gross and net written premiums in this group grew by 5% and 4%, respectively. Average renewal rates increased approximately 8% for this group in 2024. Reinsurance premiums ceded as a percentage of gross written premiums increased 2 percentage points in 2024 compared to 2023, reflecting the impact of higher cessions in the crop business and growth in certain programs in the transportation businesses which cede a larger percentage of premiums than some of the other businesses in the Property and transportation sub-segment.

Specialty casualty Gross written premiums increased $77 million (2%) in 2025 compared to 2024. The higher-year-over-year premiums resulted primarily from the mergers and acquisitions liability business and growth across several of the targeted markets businesses resulting from new business opportunities, higher rates and strong policy retention and growth in the workers’ compensation businesses. These items were partially offset by lower premiums in the excess and surplus businesses and 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 2025. Excluding workers’ compensation businesses, renewal rates for this group increased approximately 8% in 2025. Reinsurance premiums ceded as a percentage of gross written premiums increased 1 percentage point in 2025 compared to 2024, reflecting higher cessions and higher reinsurance costs in the excess liability business and growth in the public sector and mergers and acquisitions liability businesses, both of which cede a larger percentage of premiums than some of the other businesses in the Specialty casualty sub-segment.

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 increased 2 percentage points in 2024 compared to 2023, reflecting the impact of higher premiums in the excess and surplus and mergers and acquisitions liability businesses, which cede a larger percentage of premiums than some of the other businesses in the Specialty casualty sub-segment and higher cessions in the public sector business, partially offset by lower cessions in certain more heavily reinsured products in the social services business.

Specialty financial Gross written premiums increased $88 million (7%) in 2025 compared to 2024 due primarily to growth in the financial institutions business and AFG’s European operations. Average renewal rates decreased approximately 1% for this group in 2025. Reinsurance premiums ceded as a percentage of gross written premiums increased 2 percentage points in 2025 compared to 2024, reflecting higher cessions of catastrophe exposed business in the financial institutions business, partially offset by the impact of lower reinstatement premiums paid to reinsurers in the fidelity and surety businesses.

Gross written premiums increased $113 million (10%) in 2024 compared to 2023. Year-over-year growth in the financial institutions business was partially offset by a decision to pause writing of new intellectual property-related coverage. Average renewal rates for this group increased approximately 6% in 2024. 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.

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 for 2025, 2024 and 2023:

The Specialty property and casualty insurance operations generated an underwriting profit of $634 million in 2025 compared to $626 million in 2024, an increase of $8 million (1%). Higher underwriting profit in the Property and transportation and Specialty financial sub-segments was partially offset by lower underwriting profit in the Specialty casualty sub-segment. Overall catastrophe losses were $137 million (2.0 points on the combined ratio) for 2025 compared to catastrophe losses of $182 million (2.6 points), including $2 million in net reinstatement premiums, for 2024.

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. 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.

Property and transportation Underwriting profit for this group was $335 million in 2025 compared to $214 million in 2024, an increase of $121 million (57%) reflecting higher underwriting profitability in the crop insurance operations which benefitted from record yields for corn and soybeans and favorable commodity pricing trends throughout the growing season, partially offset by lower year-over-year underwriting profit in the property and inland marine business and transportation businesses. Catastrophe losses were $26 million (1.0 points on the combined ratio) in 2025 compared to catastrophe losses of $66 million (2.3 points), including $1 million in net reinstatement premiums, in 2024.

Underwriting profit for this group was $214 million in 2024 compared to $174 million in 2023, an increase of $40 million (23%). 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 $66 million (2.3 points on the combined ratio), including $1 million in net reinstatement premiums, in 2024 compared to catastrophe losses of $56 million (2.1 points), including $2 million in net reinstatement premiums, in 2023.

Specialty casualty Underwriting profit for this group was $129 million in 2025 compared to $279 million in 2024, a decrease of $150 million (54%), reflecting lower underwriting profit in the directors’ and officers’ liability, excess and surplus, mergers and acquisitions liability and workers’ compensation businesses. Catastrophe losses were $39 million (1.3 points on the combined ratio) in 2025 compared to catastrophe losses of $35 million (1.0 point), including $1 million in net reinstatement premiums, in 2024.

Underwriting profit for this group was $279 million in 2024 compared to $348 million in 2023, a decrease of $69 million (20%). 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 $35 million (1.0 point on the combined ratio), including $1 million in net reinstatement premiums, in 2024 compared to catastrophe losses of $59 million (1.9 points), including $1 million in net reinstatement premiums, in 2023.

Specialty financial Underwriting profit for this group was $170 million in 2025 compared to $133 million in 2024, an increase of $37 million (28%). This year-over-year increase reflects higher underwriting profit in the surety, fidelity and financial institutions businesses. Catastrophe losses were $72 million (6.6 points on the combined ratio) in 2025 compared to catastrophe losses of $81 million (7.9 points) in 2024.

Underwriting profit for this group was $133 million in 2024 compared to $111 million in 2023, an increase of $22 million (20%). This year-over-year increase reflects higher underwriting profit in the financial institutions business, partially offset by lower profitability resulting from the pause in writing of intellectual property-related coverage. Catastrophe losses were $81 million (7.9 points on the combined ratio) in 2024 compared to catastrophe losses of $50 million (5.7 points) in 2023.

Aggregate Aggregate underwriting results for AFG’s property and casualty insurance segment include adverse prior year reserve development of $5 million in 2025, $6 million in 2024 and $2 million in 2023, related to business outside of the Specialty group that AFG no longer writes.

Losses and Loss Adjustment Expenses

AFG’s overall loss and LAE ratio was 62.2%, 63.3% and 61.6% in 2025, 2024 and 2023, respectively. The components of AFG’s property and casualty losses and LAE amounts and ratio are detailed below (dollars in millions):

Current accident year losses and LAE, excluding catastrophe losses

The current accident year loss and LAE ratio, excluding catastrophe losses for AFG’s Specialty property and casualty insurance operations was 61.4% in 2025, 61.7% in 2024 and 62.4% in 2023.

Property and transportation The 2.5 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2025 compared to 2024, reflects very strong earnings in the crop business and growth and improved results 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 claim severity in the aviation business.

The 0.3 percentage point 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.

Specialty casualty The 2.8 percentage points increase in the loss and LAE ratio for the current year, excluding catastrophe losses in 2025 compared to 2024, reflects higher than anticipated claim severity in the excess and surplus and social services businesses.

The 1.0 percentage point 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.

Specialty financial The 1.8 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2025 compared to 2024, reflects improved results in the surety and fidelity businesses and growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment, partially offset by growth in AFG’s European operations, which has a higher loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment.

The 0.8 percentage point decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2024 compared to 2023, reflects growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment, partially offset by higher reported losses and lower premiums in the fidelity and surety businesses.

Net prior year reserve development

AFG’s Specialty property and casualty insurance operations recorded net favorable reserve development related to prior accident years of $86 million in 2025, $70 million in 2024 and $226 million in 2023, an increase of $16 million (23%) in 2025 compared to 2024 and a decrease of $156 million (69%) in 2024 compared to 2023.

Property and transportation Net favorable reserve development of $63 million in 2025 reflects lower than anticipated losses in the crop business, lower than expected claim severity in the aviation and ocean marine businesses and lower than anticipated claim frequency and severity in the property and inland marine business.

Net favorable reserve development of $96 million in 2024 reflects lower than anticipated losses in the crop business, lower than expected claim severity in the property and inland marine and aviation businesses and lower than anticipated claim frequency and severity in the ocean marine business.

Net favorable reserve development of $82 million in 2023 reflects lower than anticipated losses in the crop business, lower than expected claim frequency and severity across the transportation businesses and lower than anticipated claim frequency in the property and inland marine and ocean marine businesses and in the Singapore operations.

Specialty casualty Net adverse reserve development of $20 million in 2025 reflects higher than expected claim severity in the excess and surplus, social services, excess liability, public sector and general liability businesses, partially offset by lower than anticipated claim severity in the workers’ compensation and executive liability businesses.

Net adverse reserve development of $37 million in 2024 reflects 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, partially offset by lower than anticipated claim severity in the workers’ compensation businesses and lower than expected claim frequency and severity in the executive liability business.

Net favorable reserve development of $111 million in 2023 reflects lower than anticipated claim severity in the workers’ compensation businesses, lower than expected claim frequency in the executive liability and environmental businesses and favorable reserve development related to COVID-19 losses across several businesses, partially offset by higher than anticipated claim severity in the public sector business and higher than expected claim frequency and severity in the excess liability and general liability businesses.

Specialty financial Net favorable reserve development of $43 million in 2025 reflects lower than anticipated claim frequency in the financial institutions business and lower than expected claim severity in the surety, fidelity and trade credit businesses.

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.

Net favorable reserve development of $33 million in 2023 reflects lower than anticipated claim frequency in the trade credit, financial institutions and surety businesses and lower than expected claim frequency and severity in the fidelity business.

Aggregate Aggregate net prior accident years reserve development for AFG’s property and casualty insurance segment includes net adverse prior year reserve development of $5 million in 2025, $6 million in 2024 and $2 million in 2023 related to business outside the Specialty group that AFG no longer writes.

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 recorded net catastrophe losses of $137 million in 2025 primarily from California wildfires and storms in multiple regions of the United States.

Catastrophe losses of $180 million in 2024 (before $2 million in net reinstatement premiums) resulted primarily from winter and convective storms in multiple regions of the United States in the first and second quarters, Hurricane Helene in the third quarter and Hurricane Milton in the fourth quarter.

Catastrophe losses of $162 million in 2023 (before $3 million in net reinstatement premiums) resulted primarily from February and March storms across much of the United States in the first quarter and storms in multiple regions of the United States in the second, third and fourth quarters.

Commissions and Other Underwriting Expenses

AFG’s property and casualty commissions and other underwriting expenses (“U/W Exp”) were $2.03 billion in 2025 compared to $1.96 billion in 2024, an increase of $68 million (3%). AFG’s underwriting expense ratio was 28.8% in 2025 compared to 27.9% in 2024, an increase of 0.9 percentage points.

AFG’s property and casualty 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.

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

Property and transportation Commissions and other underwriting expenses as a percentage of net earned premiums decreased 1.9 percentage points in 2025 compared to 2024 reflecting higher ceding commissions from reinsurers resulting from very strong crop insurance results, partially offset by higher costs for software and other expenses associated with certain initiatives in IT security, customer experience and data analytics.

Commissions and other underwriting expenses as a percentage of net earned premiums decreased 1.0 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.

Specialty casualty Commissions and other underwriting expenses as a percentage of net earned premiums increased 2.3 percentage points in 2025 compared to 2024 reflecting an increase in average commission rates in certain excess and surplus businesses resulting from changes in reinsurance treaties, higher costs for software and other expenses associated with certain initiatives in IT security, customer experience and data analytics and changes in the mix of business.

Commissions and other underwriting expenses as a percentage of net earned premiums decreased 0.5 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.

Specialty financial Commissions and other underwriting expenses as a percentage of net earned premiums increased 3.1 percentage points in 2025 compared to 2024 reflecting higher profit-based commissions to agents in the financial institutions business and higher costs for software and other expenses associated with certain initiatives in IT security, customer experience and data analytics, partially offset by a change in the mix of business towards products with lower commission rates.

Commissions and other underwriting expenses as a percentage of net earned premiums decreased 4.1 percentage points in 2024 compared to 2023 due primarily to the impact on the ratio of higher earned premiums in the financial institutions business and a change in the mix of business towards products with lower commission rates.

Property and Casualty Net Investment Income

Net investment income in AFG’s property and casualty insurance operations was $725 million in 2025 compared to $784 million in 2024, a decrease of $59 million (8%). Net investment income in AFG’s property and casualty insurance operations was $784 million in 2024 compared to $729 million in 2023, an increase of $55 million (8%). 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):

The decrease in the property and casualty insurance segment’s net investment income in 2025 compared to 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 income investments. The property and casualty insurance segment’s overall yield on investments (net investment income as a percentage of average invested assets) was 4.49% in 2025 compared to 5.06% in 2024, a decrease of 0.57 percentage points. The annualized return earned on alternative investments was 2.5% in 2025 compared to 6.1% in 2024.

The increase in net investment income in 2024 compared to 2023 reflects the impact of higher balances of invested assets and higher returns on fixed maturity investments, partially offset by lower returns on AFG’s alternative investments portfolio. The property and casualty insurance segment’s overall yield on investments was 5.06% in 2024 compared to 4.94% in 2023, an increase of 0.12 percentage points. The annualized return earned on alternative investments was 6.1% in 2024 compared to 7.0% in 2023.

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 $67 million in 2025, $76 million in 2024 and $56 million in 2023, an improvement of $9 million (12%) in 2025 compared to 2024 and an increase of $20 million (36%) in 2024 compared to 2023. The table below details the items included in other income and expenses, net for AFG’s property and casualty insurance operations (in millions):

(*)Includes $7 million in 2025 and $9 million of expenses in 2024 and 2023 related to certain technology initiatives.

The increase in other income in 2025 compared to 2024 and the decrease in other income in 2024 compared to 2023 reflects death benefits received on a company-owned life insurance policy in 2025 and 2023. The $5 million (10%) decrease in interest expense on funds withheld in 2025 compared to 2024 reflects the impact of lower balances and lower interest rates paid on funds withheld.

The higher amortization of intangibles in 2024 compared to 2023 reflects the acquisition of CRS in July 2023. The $9 million (22%) increase in interest expense on funds withheld in 2024 compared to 2023 reflects the impact of higher balances and higher interest rates paid on funds withheld.