Company: AFGC
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001042046-25-000035
Chunk: 115

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 115
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Table of ContentsAMERICAN FINANCIAL GROUP, INC. 10-QManagement’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

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 third quarter of 2025 and $2 million in the third quarter of 2024 related to business outside of 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 currently has comprehensive property catastrophe reinsurance coverage in place (including a $70 million per occurrence net retention) for losses up to $625 million in the vast majority of circumstances. This coverage consists of a combination of $245 million from traditional reinsurance and $310 million of coverage through a fully collateralized catastrophe bond. Based on data available at December 31, 2024, management estimates that AFG’s exposure to a catastrophic earthquake or windstorm that industry models indicate should statistically occur once in every 500 years is just over 2% of AFG’s Shareholders’ Equity.

Catastrophe losses of $23 million in the third quarter of 2025 resulted primarily from storms in multiple regions of the United States. Catastrophe losses of $90 million in the third quarter of 2024 resulted primarily from Hurricane Helene.

Commissions and Other Underwriting Expenses

AFG’s property and casualty commissions and other underwriting expenses (“U/W Exp”) were $520 million in the third quarter of 2025 compared to $510 million for the third quarter of 2024, an increase of $10 million (2%). AFG’s underwriting expense ratio, calculated as commissions and other underwriting expenses divided by net premiums earned, was 25.8% for the third quarter of 2025 compared to 24.8% for the third quarter of 2024, an increase of 1.0 percentage points. Detail of AFG’s property and casualty commissions and other underwriting expenses and underwriting expense ratios is shown below (dollars in millions):

Three months ended September 30,20252024Change inU/W Exp% of NEPU/W Exp% of NEP% of NEPProperty and transportation$152 16.3%$