Company: AFGC
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001042046-25-000035
Chunk: 152

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 2
Chunk 152
---
 of ContentsAMERICAN FINANCIAL GROUP, INC. 10-QManagement’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

pricing services regarding the methods and assumptions used in pricing, including verifying, on a test basis, the inputs used by the services to value specific securities.

In general, the fair value of AFG’s fixed maturity investments is inversely correlated to changes in interest rates. The following table demonstrates the sensitivity of such fair values to reasonably likely changes in interest rates by illustrating the estimated effect on AFG’s fixed maturity portfolio that an immediate increase of 100 basis points in the interest rate yield curve would have had at September 30, 2025 (dollars in millions). Effects of increases or decreases from the 100 basis points illustrated would be approximately proportional.

Fair value of fixed maturity portfolio$10,598 Percentage impact on fair value of 100 bps increase in interest rates(3.0%)Pretax impact on fair value of fixed maturity portfolio$(318)

Approximately 96% of the fixed maturities held by AFG at September 30, 2025, were rated “investment grade” (credit rating of AAA to BBB) by nationally recognized rating agencies, 2% were rated “non-investment grade” and 2% were not rated. Investment grade securities generally bear lower yields and lower degrees of risk than those that are unrated and non-investment grade. Management believes that the high-quality investment portfolio should generate a stable and predictable investment return.

AFG has approximately $80 million of direct exposure to office commercial real estate through property ownership, mortgages or equity method investments. AFG’s fixed maturity portfolio includes securities (the majority of which are AAA-rated) with a carrying value of approximately $320 million that have minimal exposure to office commercial real estate.

Summarized information for the unrealized gains and losses recorded in AFG’s Balance Sheet at September 30, 2025, is shown in the following table (dollars in millions). There were $507 million of available for sale fixed maturity securities with no unrealized gains or losses at September 30, 2025.

SecuritiesWithUnrealizedGainsSecuritiesWithUnrealizedLossesAvailable for Sale Fixed MaturitiesFair value of securities$6,044 $3,967 Amortized cost of securities, net of allowance for expected credit losses$5,877 $4,188 Gross unrealized gain (loss)$167