Company: AFGC
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001042046-25-000020
Chunk: 52

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 52
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15,366 Liabilities:Contingent consideration — acquisitions$— $— $2 $2 Liabilities of managed investment entities402 3,553 10 3,965 Other liabilities — derivatives— 18 — 18 Total liabilities accounted for at fair value$402 $3,571 $12 $3,985 Approximately 7% of the total assets carried at fair value at March 31, 2025, were Level 3 assets. Internally developed prices for fixed maturities are estimated using a variety of inputs, including appropriate credit spreads over the treasury yield (of a similar duration), trade information and prices of comparable securities and other security specific features (such as optional early redemption). Internally developed Level 3 asset fair values represent approximately 84% ($904 million) of the total fair value of Level 3 assets at March 31, 2025. Approximately 68% ($618 million) of these internally developed Level 3 assets are priced using a pricing model that uses a discounted cash flow approach to estimate the fair value of fixed maturity securities. The credit spread applied by management is the significant 

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Table of ContentsAMERICAN FINANCIAL GROUP, INC. 10-QNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

unobservable input of the pricing model. In instances where the security is currently callable at par value and the pricing model suggests a higher price, management caps the fair value at par value. The remainder of the internally developed Level 3 investments ($286 million) are priced using internal models or inputs from third parties that are not market observable. Management believes that any justifiable changes in unobservable inputs used to determine internally developed fair values would not have resulted in a material change in AFG’s financial position.Approximately 11% ($116 million) of the Level 3 assets were investments whose prices were determined based on financial information provided by third party asset managers. Approximately 5% ($50 million) of Level 3 assets were priced using non-binding broker quotes or pricing services, for which there is a lack of transparency as to the inputs used to determine fair value.Changes in balances of Level 3 financial assets and liabilities carried at fair value during the first three months of 2025 and 2024 are presented below (in millions). The transfers into and out of Level 3 were due to changes