AMERICAN FINANCIAL GROUP INC

Financial Condition

AFG is organized as a holding company with almost all of its operations being conducted by subsidiaries. AFG, however, has continuing cash needs for administrative expenses, the payment of principal and interest on borrowings, shareholder dividends and taxes. Therefore, certain analyses are most meaningfully presented on a parent only basis while others are best done on a total enterprise basis. In addition, because its businesses are financial in nature, AFG does not prepare its consolidated financial statements using a current-noncurrent format. Consequently, certain traditional ratios and financial analysis tests are not meaningful.

Through 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 $299 million ($3.58 per share, diluted) for the fourth quarter of 2025 compared to $255 million ($3.03 per share, diluted) for the fourth quarter of 2024, reflecting higher underwriting profit, partially offset by lower net investment income from AFG’s alternative investment portfolio.

Full year 2025 net earnings were $842 million ($10.08 per share, diluted) compared to $887 million ($10.57 per share, diluted) in 2024. Higher underwriting profit and the favorable impact of higher yields and average balances on net investment income from fixed income investments were more than offset by lower net investment income from alternative investments.

Outlook

Management expects overall premium growth and strong underwriting results in the current property and casualty insurance market. In addition, management anticipates improved returns on alternative investments relative to the 2.5% earned in 2025 will have a positive impact on net investment income beginning in the second half of 2026.

AFG’s financial condition, results of operations and cash flows are impacted by the economic, legal and regulatory environment. Economic inflation, social inflation and other economic conditions may impact premium levels, loss cost trends and investment returns. For a more comprehensive list of risks, see“Item 1A — Risk Factors.”

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.