Investments (Tables)

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Available for sale fixed maturities and equity securities

Available for sale fixed maturities at December 31 consisted of the following (in millions):

	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized				Net Unrealized		Fair Value
					Gains		Losses
December 31, 2023
Fixed maturities:
U.S. Government and government agencies	$	243	$	—	$	1	$	(8)	$	(7)	$	236
States, municipalities and political subdivisions	1,014		—		8		(38)		(30)		984
Foreign government	236		—		1		(7)		(6)		230
Residential MBS	1,788		1		26		(155)		(129)		1,658
Commercial MBS	75		—		—		(1)		(1)		74
Collateralized loan obligations	1,709		3		9		(28)		(19)		1,687
Other asset-backed securities	2,477		5		10		(120)		(110)		2,362
Corporate and other	3,210		3		52		(113)		(61)		3,146
Total fixed maturities	$	10,752	$	12	$	107	$	(470)	$	(363)	$	10,377
December 31, 2022
Fixed maturities:
U.S. Government and government agencies	$	233	$	—	$	—	$	(14)	$	(14)	$	219
States, municipalities and political subdivisions	1,234		—		3		(51)		(48)		1,186
Foreign government	240		—		—		(14)		(14)		226
Residential MBS	1,757		2		23		(180)		(157)		1,598
Commercial MBS	88		—		—		(3)		(3)		85
Collateralized loan obligations	1,988		1		1		(67)		(66)		1,921
Other asset-backed securities	2,435		7		1		(184)		(183)		2,245
Corporate and other	2,761		1		11		(156)		(145)		2,615
Total fixed maturities	$	10,736	$	11	$	39	$	(669)	$	(630)	$	10,095

Equity securities reported at fair value

Equity securities which are reported at fair value with holding gains and losses recognized in net earnings, consisted of the following at December 31 (in millions):

	2023						2022
	Actual Cost		Fair Value		Fair Value Over (Under) Cost		Actual Cost		Fair Value		Fair Value Over (Under) Cost
Common stocks	$	512	$	586	$	74	$	556	$	553	$	(3)
Perpetual preferred stocks	422		432		10		436		457		21
Total equity securities carried at fair value	$	934	$	1,018	$	84	$	992	$	1,010	$	18

Equity method investments

The following table shows the carrying value and net investment income from investments accounted for using the equity method held by AFG’s continuing operations (in millions):

	Carrying Value				Net Investment Income
	December 31, 2023		December 31, 2022		2023		2022		2021
Real estate-related investments (*)	$	1,320	$	1,229	$	85	$	233	$	226
Private equity	457		438		9		32		100
Private debt	37		33		5		2		(5)
Total investments accounted for using the equity method	$	1,814	$	1,700	$	99	$	267	$	321

(*)92% of the carrying value relates to underlying investments in multi-family housing properties at both December 31, 2023 and December 31, 2022.

Gross unrealized losses on securities by investment category and length of time that have been in a continuous unrealized loss position

The following table shows gross unrealized losses (dollars in millions) on available for sale fixed maturities by investment category and length of time that individual securities have been in a continuous unrealized loss position at the following balance sheet dates.

	Less Than Twelve Months						Twelve Months or More
	Unrealized Loss		Fair Value		Fair Value as % of Cost		Unrealized Loss		Fair Value		Fair Value as % of Cost
December 31, 2023
Fixed maturities:
U.S. Government and government agencies	$	—	$	11	100	%	$	(8)	$	191	96	%
States, municipalities and political subdivisions	(1)		76		99	%	(37)		526		93	%
Foreign government	—		—		—	%	(7)		207		97	%
Residential MBS	(1)		42		98	%	(154)		1,089		88	%
Commercial MBS	—		—		—	%	(1)		61		98	%
Collateralized loan obligations	—		25		100	%	(28)		807		97	%
Other asset-backed securities	(1)		151		99	%	(119)		1,663		93	%
Corporate and other	(4)		123		97	%	(109)		1,455		93	%
Total fixed maturities	$	(7)	$	428	98	%	$	(463)	$	5,999	93	%
December 31, 2022
Fixed maturities:
U.S. Government and government agencies	$	(4)	$	111	97	%	$	(10)	$	107	91	%
States, municipalities and political subdivisions	(50)		967		95	%	(1)		15		94	%
Foreign government	(5)		90		95	%	(9)		134		94	%
Residential MBS	(115)		1,078		90	%	(65)		315		83	%
Commercial MBS	(2)		44		96	%	(1)		33		97	%
Collateralized loan obligations	(44)		1,224		97	%	(23)		587		96	%
Other asset-backed securities	(100)		1,361		93	%	(84)		740		90	%
Corporate and other	(105)		1,665		94	%	(51)		413		89	%
Total fixed maturities	$	(425)	$	6,540	94	%	$	(244)	$	2,344	91	%

Roll forward of allowance for credit losses on fixed maturity securities

A progression of the allowance for expected credit losses on available for sale fixed maturity securities held by AFG’s continuing operations is shown below (in millions):

	Structured securities (*)		Corporate and other		Total
Balance at December 31, 2020	$	10	$	2	$	12
Provision for expected credit losses on securities with no previous allowance	—		1		1
Reductions to previously recognized expected credit losses	(2)		—		(2)
Reductions due to sales or redemptions	—		(2)		(2)
Balance at December 31, 2021	8		1		9
Provision for expected credit losses on securities with no previous allowance	4		1		5
Reductions to previously recognized expected credit losses	(2)		—		(2)
Reductions due to sales or redemptions	—		(1)		(1)
Balance at December 31, 2022	10		1		11
Provision for expected credit losses on securities with no previous allowance	1		8		9
Additions (reductions) to previously recognized expected credit losses	2		(1)		1
Reductions due to sales or redemptions	(4)		(5)		(9)
Balance at December 31, 2023	$	9	$	3	$	12

(*)Includes mortgage-backed securities, collateralized loan obligations and other asset-backed securities.

Available for sale fixed maturity securities by contractual maturity date

The table below sets forth the scheduled maturities of AFG’s available for sale fixed maturities as of December 31, 2023 (dollars in millions). Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.

	Amortized Cost, net (*)		Fair Value
			Amount		%
Maturity
One year or less	$	531	$	521	5	%
After one year through five years	2,744		2,663		26	%
After five years through ten years	1,147		1,143		11	%
After ten years	278		269		2	%
	4,700		4,596		44	%
Collateralized loan obligations and other ABS (average life of approximately 3 years)	4,178		4,049		39	%
MBS (average life of approximately 6.5 years)	1,862		1,732		17	%
Total	$	10,740	$	10,377	100	%

(*)Amortized cost, net of allowance for expected credit losses.

Net investment income earned and investment expenses incurred

The following table shows (in millions) investment income earned and investment expenses incurred in AFG’s continuing operations.

	2023		2022		2021
Investment income:
Fixed maturities:
Interest and amortization	$	502	$	376	$	290
Change in fair value (a)	(3)		—		—
Equity securities:
Dividends	34		39		30
Change in fair value (b)	36		(2)		61
Equity in earnings of partnerships and similar investments	99		267		321
Other	90		53		40
Gross investment income	758		733		742
Investment expenses	(16)		(16)		(12)
Net investment income	$	742	$	717	$	730

(a)The change in the fair value of fixed maturities classified as trading and derivatives embedded in convertible fixed maturities related to limited partnerships and similar investments.

(b)Although the change in the fair value of the majority of AFG’s equity securities is recorded in realized gains (losses) on securities, AFG records holding gains and losses on limited partnerships and similar investments that do not qualify for equity method accounting and related equity investments in net investment income.

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments

Realized gains (losses) and changes in unrealized appreciation (depreciation) from continuing operations included in AOCI related to fixed maturity securities are summarized as follows (in millions):

	2023								2022
	Realized gains (losses)								Realized gains (losses)
	Before Impairments		Impairment Allowance		Total		Change in Unrealized		Before Impairments		Impairment Allowance		Total		Change in Unrealized
Fixed maturities	$	(35)	$	(10)	$	(45)	$	267	$	(27)	$	(3)	$	(30)	$	(803)
Equity securities	10		—		10		—		(96)		—		(96)		—
Mortgage loans and other investments	—		(1)		(1)		—		10		—		10		—
Total pretax	(25)		(11)		(36)		267		(113)		(3)		(116)		(803)
Tax effects	5		3		8		(57)		23		1		24		170
Net of tax	$	(20)	$	(8)	$	(28)	$	210	$	(90)	$	(2)	$	(92)	$	(633)

	2021
	Realized gains (losses)
	Before Impairments		Impairment Allowance		Total		Change in Unrealized
Fixed maturities	$	(1)	$	1	$	—	$	(111)
Equity securities	110		—		110		—
Mortgage loans and other investments	—		—		—		—
Total pretax	109		1		110		(111)
Tax effects	(23)		—		(23)		23
Net of tax	$	86	$	1	$	87	$	(88)

Holding gains (losses) on equity securities still held

AFG recorded net holding gains (losses) on equity securities from continuing operations during 2023, 2022 and 2021 on securities that were still owned at December 31 of each year presented as follows (in millions):

	2023		2022		2021
Included in realized gains (losses)	$	(2)	$	(95)	$	65
Included in net investment income	36		5		54
	$	34	$	(90)	$	119

Gross realized gains and losses on available for sale fixed maturity and equity security investments

Gross realized gains and losses (excluding changes in impairment allowance and mark-to-market of derivatives) on available for sale fixed maturity investment transactions from continuing operations consisted of the following (in millions):

	2023		2022		2021
Gross gains	$	5	$	3	$	7
Gross losses	(38)		(18)		(1)