Company: AFGC
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001042046-25-000024
Chunk: 137

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 137
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 the operations of its subsidiaries, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses.

AFG reported net earnings of $174 million ($2.07 per share, diluted) for the second quarter of 2025 compared to $209 million ($2.49 per share, diluted) for the second quarter of 2024 and $328 million ($3.92 per share, diluted) for the first six months of 2025 compared to $451 million ($5.38 per share, diluted) for the first six months of 2024. The decline in the 2025 periods reflects lower underwriting profit and lower net investment income from AFG’s alternative investment portfolio, partially offset by the favorable impact on net investment income of higher average balances of investments and higher yields on fixed maturity investments.

Outlook

Management expects premium growth in many of AFG’s business units and continued strong underwriting results in the ongoing generally favorable property and casualty insurance market. In addition, management anticipates the elevated interest rate environment (since early 2022) will continue to have a positive impact on investment income on fixed maturity investments in 2025.

AFG’s financial condition, results of operations and cash flows are impacted by the economic, legal and regulatory environment. Economic inflation, social inflation, supply chain disruption and other economic conditions may impact premium levels, loss cost trends and investment returns.

Management believes that AFG’s strong financial position and current liquidity and capital at its subsidiaries will give AFG the flexibility to continue to effectively address and respond to anticipated and unanticipated challenges. AFG’s insurance subsidiaries continue to have capital at or in excess of the levels required by ratings agencies in order to maintain their current ratings, and the parent company does not have any debt maturities until 2030.

CRITICAL ACCOUNTING POLICIES

Significant accounting policies are summarized in Note A — “Accounting Policies” to the financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that can have a significant effect on amounts reported in the financial statements. As more information becomes known, these estimates and assumptions change and, thus, impact amounts reported in the future. The areas where management believes the degree of judgment required to determine amounts recorded in the financial statements is most significant are as follows:

•the valuation of investments, including the determination of impairment allowances,

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Table of ContentsAMERICAN FINANCIAL GROUP, INC. 10-Q