Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

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 at the statutory rate of 21% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions):


	2024				2023				2022
	Amount		% of EBT		Amount		% of EBT		Amount		% of EBT
Earnings before income taxes (“EBT”)	$	1,124			$	1,073			$	1,123

Income taxes at statutory rate	$	236	21	%	$	225	21	%	$	236	21	%
Effect of:
Employee stock ownership plan dividend paid deduction	(5)		(1	%)	(5)		(1	%)	(8)		(1	%)
Tax exempt interest	(5)		(1	%)	(5)		(1	%)	(6)		(1	%)
Stock-based compensation	(3)		—	%	(2)		—	%	(5)		—	%
Change in valuation allowance	(3)		—	%	(2)		—	%	(9)		(1	%)
Dividend received deduction	(1)		—	%	(2)		—	%	(2)		—	%
Nondeductible expenses	7		1	%	11		1	%	8		1	%
Adjustment related to sale of subsidiary (*)	4		1	%	—		—	%	—		—	%
Adjustment to prior year taxes	1		—	%	(5)		—	%	(3)		—	%
Foreign operations	2		—	%	6		1	%	7		1	%
Other	4		—	%	—		—	%	7		—	%
Provision for income taxes as shown in the statement of earnings	$	237	21	%	$	221	21	%	$	225	20	%

Components of income tax provision (credit)

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


	2024		2023		2022
Current taxes:
Federal	$	218	$	176	$	192
State	11		9		10
Foreign	—		(1)		1
Deferred taxes:
Federal	8		37		22
Provision for income taxes	$	237	$	221	$	225

Summary of operating loss carryforwards

For income tax purposes, AFG and its subsidiaries had the following carryforwards available at December 31, 2024 (in millions):


	Expiring	Amount
Operating Loss – U.S.	2025 - 2041	$	8
Operating Loss – United Kingdom	indefinite	35		(*)

(*)£28 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):


	2024		2023
Deferred tax assets:
Federal net operating loss carryforwards	$	2	$	2
Foreign underwriting losses	10		10

Insurance claims and reserves	283		269
Employee benefits	114		111
Lease liabilities	45		38
Other, net	20		23
Total deferred tax assets before valuation allowance	474		453
Valuation allowance against deferred tax assets	(11)		(14)
Total deferred tax assets	463		439
Deferred tax liabilities:
Investment securities	(233)		(177)
Deferred policy acquisition costs	(73)		(70)
Insurance claims and reserves transition liability	(4)		(8)
Lease right of use assets	(42)		(36)
Real estate, property and equipment	(7)		(12)
Total deferred tax liabilities	(359)		(303)
Net deferred tax asset	$	104	$	136