Company: AFGC
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001042046-25-000011
Chunk: 206

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 206
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 ratio than some of the other businesses in the Property and transportation sub-segment and higher reported claim severity in the commercial auto business, partially offset by the impact of improved profitability in the property and inland marine business.

The 1.1 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2023 compared to 2022 is due primarily to the impact of elevated large loss activity in the property and inland marine business in 2022 and improved results in certain transportation businesses, partially offset by lower profit in the crop business.

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Specialty casualty   The 1.2 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2024 compared to 2023 reflects improved results in the workers’ compensation and targeted markets businesses, partially offset by higher claim severity in the excess and surplus business.

The 1.5 percentage points increase in the loss and LAE ratio for the current year, excluding catastrophe losses in 2023 compared to 2022 reflects anticipated medical cost inflation and the impact of pressure on rates in the workers’ compensation businesses and higher claim severity in certain liability coverages.

Specialty financial   The 0.9 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2024 compared to 2023 reflects growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment, partially offset by higher reported losses and lower premiums in the fidelity and surety businesses.

The 0.2 percentage points decrease in the loss and LAE ratio for the current year, excluding catastrophe losses in 2023 compared to 2022 reflects lower claim frequency and growth in the financial institutions business, which has a lower loss and LAE ratio than some of the other businesses in the Specialty financial sub-segment, partially offset by higher claim severity in the innovative markets business.

Net prior year reserve development

AFG’s Specialty property and casualty insurance operations recorded net favorable reserve development related to prior accident years of $70 million in 2024 compared to $226 million in 2023 and $289 million in 2022, a decrease of $156 million (69%) and $63 million (22%), respectively.

Property and transportation   Net favorable reserve development of $94 million in 2024 reflects lower than anticipated losses in the crop business, lower than expected claim severity