Company: AFGC
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001042046-25-000035
Chunk: 114

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 114
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 fidelity business and lower than expected claim frequency in the financial institutions business.

Asbestos and environmental reserves   During the third quarter of 2025, AFG completed an in-depth internal review of its asbestos and environmental exposures relating to the run-off operations of its property and casualty insurance segment and its exposures related to former railroad and manufacturing operations and sites. AFG annually conducts a comprehensive review of its asbestos and environmental reserves. In connection with its annual reviews, AFG engages with outside counsel and, as appropriate, engineering and consulting firms and specialty actuarial firms.

During the 2025 internal review, no new trends were identified and recent claims activity was generally consistent with AFG’s expectations resulting from its in-depth internal reviews in the prior four years, and the most recent external study in 2020. As a result, and consistent with the internal review in the third quarter of 2024, the 2025 review resulted in no net change to AFG’s property and casualty insurance segment’s asbestos and environmental reserves. See Management’s Discussion and Analysis — “Uncertainties — Asbestos and Environmental-related (“A&E”) Insurance Reserves” in AFG’s 2024 Form 10-K.

At September 30, 2025, the property and casualty insurance segment’s insurance reserves include A&E reserves of $353 million, net of reinsurance recoverables. At September 30, 2025, the property and casualty insurance segment’s three-year survival ratios compare favorably with industry survival ratios published by AM Best (as of December 31, 2024, and adjusted for several large industry portfolio transfers) as detailed in the following table:Property and Casualty Insurance ReservesThree-Year Survival Ratio (Times Paid Losses)AsbestosEnvironmentalTotal A&EAFG (9/30/2025)22.638.527.4Industry (12/31/2024)8.77.58.4

In addition, the 2025 and 2024 internal reviews encompassed reserves for asbestos and environmental exposures of AFG’s former railroad and manufacturing operations. For a discussion of the $25 million and $14 million pretax non-core special charge increases in AFG’s liabilities for those operations recorded in the third quarter of 2025 and the third quarter of 2024, respectively, see “Special A&E Charges” under “Results of Operations — Holding Company, Other and Unallocated,” for the quarters ended September 30, 2025 and 2024.

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