Company: AFGC
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001042046-25-000024
Chunk: 181

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 181
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 of 2024 reflecting higher costs for software and other expenses associated with certain initiatives in IT security, customer experience and data analytics and an increase in average commission rates in the excess and surplus business resulting from changes in reinsurance treaties.

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

Property and Casualty Net Investment Income

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

Six months ended June 30,20252024Change% ChangeNet investment income:Net investment income, excluding alternative investments$329 $305 $24 8%Alternative investments20 89 (69)(78%)Total net investment income$349 $394 $(45)(11%)Average invested assets (at amortized cost)$15,894 $15,321 $573 4%Yield on fixed maturities (before investment expenses)5.19%4.99%0.20%Yield (net investment income as a % of average invested assets)4.39%5.14%(0.75%)

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