Company: AFGC
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001042046-25-000011
Chunk: 186

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 186
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9 percentage points in the fourth quarter of 2024 compared to the fourth quarter of 2023 reflecting 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 $195 million in the fourth quarter of 2024 compared to $161 million in the fourth quarter of 2023, an increase of $34 million (21%). 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):

Three months ended December 31,%20242023ChangeChangeNet investment income:Net investment income, excluding alternative investments$162 $156 $6 4 %Alternative investments33 5 28 560 %Total net investment income$195 $161 $34 21 %Average invested assets (at amortized cost)$15,718 $15,227 $491 3 %Yield (net investment income as a % of average invested assets)4.96 %4.23 %0.73 %Tax equivalent yield (*)5.03 %4.31 %0.72 %

(*)Adjusts the yield on equity securities and tax-exempt bonds to the fully taxable equivalent yield.

The increase in the property and casualty insurance segment’s net investment income for the fourth quarter of 2024 compared to the fourth quarter of 2023 reflects the impact of higher balances of invested assets, higher returns on fixed maturity investments and higher returns on AFG’s alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs). The property and casualty insurance segment’s overall yield on investments (net investment income as a percentage of average invested assets) was 4.96% for the fourth quarter of 2024 compared to 4.23% for the 

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fourth quarter of 2023, an increase of 0.73 percentage points. The annualized return earned on alternative investments was 4.9% in the fourth quarter of 2024 compared to 0.8% in the comparable prior year period.

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 $19 million for the fourth quarter of 2024 compared to $