Company: AFGC
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001042046-25-000011
Chunk: 175

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 175
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 understand the company’s performance. Underwriting profitability is measured by the combined ratio, which is a sum of the ratios of losses and loss adjustment expenses, and commissions and other underwriting expenses to premiums. A combined ratio under 100% indicates an underwriting profit. The combined ratio does not reflect net investment income, other income, other expenses or federal income taxes.

AFG’s property and casualty insurance operations contributed $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.

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

Three months ended December 31,20242023% ChangeGross written premiums$2,043 $1,992 3 %Reinsurance premiums ceded(583)(547)7 %Net written premiums1,460 1,445 1 %Change in unearned premiums390 287 36 %Net earned premiums1,850 1,732 7 %Loss and loss adjustment expenses1,181 1,053 12 %Commissions and other underwriting expenses467 468 — %Underwriting gain202 211 (4 %)Net investment income195 161 21 %Other income and expenses, net(19)(15)27 %Earnings before income taxes$378 $357 6 %Three months ended December 31,Combined Ratios:20242023ChangeSpecialty linesLoss and LAE ratio63.7 %60.7 %3.0 %Underwriting expense ratio25.3 %27.0 %(1.7 %)Combined ratio89.0 %87.7 %1.3 %Aggregate — including exited linesLoss and LAE ratio63.8 %60.8 %3.0 %Underwriting expense ratio25.3 %27.0 %(1.7 %)Combined ratio89.1 %87.8 %1.3 %

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