Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Reconciliation of income taxes at the statutory rate and income taxes shown in the Statement of Earnings

The following is a reconciliation of income taxes on continuing operations at the statutory rate of 21% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions):


	2023				2022				2021
	Amount		% of EBT		Amount		% of EBT		Amount		% of EBT
Earnings from continuing operations before income taxes (“EBT”)	$	1,073			$	1,123			$	1,335

Income taxes at statutory rate	$	225	21	%	$	236	21	%	$	280	21	%
Effect of:
Employee stock ownership plan dividend paid deduction	(5)		(1	%)	(8)		(1	%)	(16)		(1	%)
Tax exempt interest	(5)		(1	%)	(6)		(1	%)	(8)		(1	%)
Adjustment to prior year taxes	(5)		—	%	(3)		—	%	(1)		—	%
Stock-based compensation	(2)		—	%	(5)		—	%	(13)		(1	%)
Change in valuation allowance	(2)		—	%	(9)		(1	%)	(4)		—	%
Dividend received deduction	(2)		—	%	(2)		—	%	(2)		—	%
Nondeductible expenses	11		1	%	8		1	%	8		1	%
Foreign operations	6		1	%	7		1	%	—		—	%
Other	—		—	%	7		—	%	10		—	%
Provision for income taxes as shown in the statement of earnings	$	221	21	%	$	225	20	%	$	254	19	%

Components of income tax provision (credit)

The total income tax provision of continuing operations consists of (in millions):


	2023		2022		2021
Current taxes:
Federal	$	176	$	192	$	162
State	9		10		7
Foreign	(1)		1		1
Deferred taxes:
Federal	37		22		84
Provision for income taxes	$	221	$	225	$	254

Summary of operating loss carryforwards

For income tax purposes, AFG and its subsidiaries had the following carryforwards available at December 31, 2023 (in millions):


	Expiring	Amount
Operating Loss – U.S.	2024 - 2041	$	10
Operating Loss – United Kingdom	indefinite	38		(*)

(*)£30 million

Components of deferred tax assets and liabilities

The significant components of deferred tax assets and liabilities included in AFG’s Balance Sheet at December 31 were as follows (in millions):


	2023		2022
Deferred tax assets:
Federal net operating loss carryforwards	$	2	$	2
Foreign underwriting losses	10		10

Insurance claims and reserves	269		255
Employee benefits	111		108
Other, net	25		24
Total deferred tax assets before valuation allowance	417		399
Valuation allowance against deferred tax assets	(14)		(16)
Total deferred tax assets	403		383
Deferred tax liabilities:
Investment securities	(177)		(52)
Deferred policy acquisition costs	(70)		(66)
Insurance claims and reserves transition liability	(8)		(12)
Real estate, property and equipment	(12)		(23)
Total deferred tax liabilities	(267)		(153)
Net deferred tax asset	$	136	$	230