Company: AFGC
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001042046-25-000011
Chunk: 214

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 214
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G recorded net investment income on investments held outside of its property and casualty insurance segment of $29 million, $40 million and $24 million in 2024, 2023 and 2022, respectively. The $11 million (28%) decrease in 2024 compared to 2023 reflects the impact of lower average investment balances. The $16 million (67%) increase in 2023 compared to 2022 reflects the impact of a small portfolio of securities held at the holding company that were carried at fair value through net investment income. These securities, all of which were sold in 2022, declined in value by $7 million in 2022. Excluding the change in fair value of these equity securities, net investment income outside of AFG’s property and casualty insurance segment increased $9 million in 2023 compared to 2022 reflecting the impact of higher interest rates on cash and fixed maturity investments, partially offset by lower average investment balances.

Holding Company and Other — P&C Fees and Related Expenses

Summit, a workers’ compensation insurance subsidiary, collects fees from a small group of unaffiliated insurers for providing underwriting, policy administration and claims services. In addition, certain of AFG’s property and casualty insurance businesses collect fees from customers for ancillary services such as workplace safety programs and premium financing. In 2024, AFG collected $100 million in fees for these services compared to $91 million in 2023 and $82 million in 2022. Management views this fee income, net of the $60 million in 2024, $57 million in 2023 and $51 million in 2022, in expenses incurred to generate such fees, as a reduction in the cost of underwriting its property and casualty insurance policies. In addition, AFG’s property and casualty insurance businesses earned $11 million in 2024 and $34 million in 2023 in fees as compensation for providing services related to the administration of crop insurance business generated by CRS for its former owner prior to AFG’s acquisition of CRS and $7 million in 2022 in fees from AFG’s disposed annuity operations as compensation for certain services provided under a transition services agreement. The expenses related to providing such services are embedded in underwriting expenses. Consistent with internal management reporting, these fees and the related expenses are netted and recorded as a reduction of loss adjustment and other underwriting expenses in AFG’s