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Investments
 3 Months Ended
Mar. 31, 2025
Investments, Debt and Equity Securities [Abstract]  
Investments Investments
Available for sale fixed maturities at March 31, 2025 and December 31, 2024, consisted of the following (in millions):
Amortized
Cost		Allowance for Expected Credit LossesGross UnrealizedNet
Unrealized		Fair
Value
GainsLosses
March 31, 2025
Fixed maturities:
U.S. government and government agencies$182 $— $1 $(3)$(2)$180 
States, municipalities and political subdivisions
921 — 5 (51)(46)875 
Foreign government
237 — 4 — 4 241 
Residential MBS
2,223 1 29 (133)(104)2,118 
Commercial MBS
41 — — — — 41 
Collateralized loan obligations
1,250 4 6 (11)(5)1,241 
Other asset-backed securities
2,420 6 22 (55)(33)2,381 
Corporate and other
3,514 30 55 (48)7 3,491 
Total fixed maturities$10,788 $41 $122 $(301)$(179)$10,568 
December 31, 2024
Fixed maturities:
U.S. government and government agencies$176 $— $— $(3)$(3)$173 
States, municipalities and political subdivisions
905 — 3 (49)(46)859 
Foreign government
236 — 2 (1)1 237 
Residential MBS
2,122 1 22 (154)(132)1,989 
Commercial MBS
51 — — — — 51 
Collateralized loan obligations
1,243 4 10 (12)(2)1,237 
Other asset-backed securities
2,412 6 19 (69)(50)2,356 
Corporate and other
3,542 23 42 (65)(23)3,496 
Total fixed maturities$10,687 $34 $98 $(353)$(255)$10,398 
Equity securities which are reported at fair value with holding gains and losses recognized in net earnings, consisted of the following at March 31, 2025 and December 31, 2024 (in millions):
March 31, 2025December 31, 2024
Actual Cost
Fair Value
Fair Value Over Cost
Actual Cost
Fair Value
Fair Value Over Cost
Common stocks$312 $341 $29 $304 $336 $32 
Perpetual preferred stocks391 429 38 380 415 35 
Total equity securities carried at fair value
$703 $770 $67 $684 $751 $67 

The following table summarizes investments accounted for using the equity method, by strategy (in millions):
Net Investment Income
Carrying ValueThree months ended March 31,
March 31, 2025December 31, 202420252024
Real estate-related investments (*)$1,429 $1,392 $17 $(6)
Private equity815 804 (6)30 
Private debt82 81 2 1 
Total investments accounted for using the equity method$2,326 $2,277 $13 $25 
(*)88% of the carrying value relates to underlying investments in multi-family properties as of March 31, 2025 and December 31, 2024.

The earnings (losses) from these investments are generally reported on a quarter lag due to the timing required to obtain the necessary information from the funds. AFG regularly reviews and discusses fund performance with the fund managers to corroborate the reasonableness of the underlying reported asset values and to assess whether any events have occurred within the lag period that may materially affect the valuation of these investments.

With respect to partnerships and similar investments, AFG had unfunded commitments of $481 million and $457 million as of March 31, 2025 and December 31, 2024, respectively.
The following table shows gross unrealized losses (dollars in millions) on available for sale fixed maturities by investment category and length of time that individual securities have been in a continuous unrealized loss position at the following balance sheet dates.
Less Than Twelve MonthsTwelve Months or More
Unrealized
Loss		Fair
Value		Fair Value as
% of Cost		Unrealized
Loss		Fair
Value		Fair Value as
% of Cost
March 31, 2025
Fixed maturities:
U.S. government and government agencies$— $20 100 %$(3)$90 97 %
States, municipalities and political subdivisions
(5)158 97 %(46)479 91 %
Foreign government— 2 100 %— 51 100 %
Residential MBS(2)285 99 %(131)920 88 %
Commercial MBS— 9 100 %— 8 100 %
Collateralized loan obligations(1)292 100 %(10)243 96 %
Other asset-backed securities(3)323 99 %(52)1,034 95 %
Corporate and other(6)385 98 %(42)1,070 96 %
Total fixed maturities$(17)$1,474 99 %$(284)$3,895 93 %
December 31, 2024
Fixed maturities:
U.S. government and government agencies$— $35 100 %$(3)$105 97 %
States, municipalities and political subdivisions
(5)256 98 %(44)470 91 %
Foreign government— 98 100 %(1)50 98 %
Residential MBS(6)452 99 %(148)916 86 %
Commercial MBS— 14 100 %— 16 100 %
Collateralized loan obligations— — — %(12)247 95 %
Other asset-backed securities(4)318 99 %(65)1,201 95 %
Corporate and other(10)605 98 %(55)1,151 95 %
Total fixed maturities$(25)$1,778 99 %$(328)$4,156 93 %

At March 31, 2025, the gross unrealized losses on fixed maturities of $301 million relate to approximately 1,200 securities. Investment grade securities (as determined by nationally recognized rating agencies) represented approximately 96% of the gross unrealized loss and 96% of the fair value of securities with unrealized losses.

To evaluate fixed maturities for expected credit losses (impairment), management considers whether the unrealized loss is credit-driven or a result of changes in market interest rates, the extent to which fair value is less than cost basis, historical operating, balance sheet and cash flow data from the issuer, third party research, communications with industry specialists and discussions with issuer management.

AFG analyzes its MBS for expected credit losses (impairment) each quarter based upon expected future cash flows. Management estimates expected future cash flows based upon its knowledge of the MBS market, cash flow projections (which reflect loan to collateral values, subordination, vintage and geographic concentration) received from independent sources, implied cash flows inherent in security ratings and analysis of historical payment data.

Management believes AFG will recover its cost basis (net of any allowance) in the securities with unrealized losses and that AFG has the ability to hold the securities until they recover in value and had no intent to sell them at March 31, 2025.
A progression of the allowance for expected credit losses on available for sale fixed maturity securities is shown below (in millions):
Structured
Securities (*)		Corporate and OtherTotal
Balance at December 31, 2024$11 $23 $34 
Provision for expected credit losses on securities with no previous allowance— 2 2 
Additions to previously recognized expected credit losses
— 5 5 
Reductions due to sales or redemptions
— — — 
Balance at March 31, 2025$11 $30 $41 
Balance at December 31, 2023$9 $3 $12 
Provision for expected credit losses on securities with no previous allowance1 — 1 
Additions to previously recognized expected credit losses
1 — 1 
Reductions due to sales or redemptions
— (3)(3)
Balance at March 31, 2024$11 $— $11 
(*)Includes MBS, CLOs and other asset-backed securities (“ABS”).

In the first three months of 2025 and 2024, AFG did not purchase any securities with expected credit losses.

The table below sets forth the scheduled maturities of AFG’s available for sale fixed maturities as of March 31, 2025 (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.
AmortizedFair Value
Cost, net (*)Amount%
Maturity
One year or less$715 $700 7 %
After one year through five years2,547 2,533 24 %
After five years through ten years1,331 1,337 13 %
After ten years231 217 2 %
4,824 4,787 46 %
CLOs and other ABS (average life of approximately 3 years)
3,660 3,622 34 %
MBS (average life of approximately 6 years)
2,263 2,159 20 %
Total$10,747 $10,568 100 %
(*)Amortized cost, net of allowance for expected credit losses.

Certain risks are inherent in fixed maturity securities, including loss upon default, price volatility in reaction to changes in interest rates, and general market factors and risks associated with reinvestment of proceeds due to prepayments or redemptions in a period of declining interest rates.
There were no investments in individual issuers that exceeded 10% of shareholders’ equity at March 31, 2025 or December 31, 2024.
Net Investment Income   The following table shows investment income earned and investment expenses incurred (in millions):
Three months ended March 31,
20252024
Investment income:
Fixed maturities:
Interest and amortization$140 $134 
Change in fair value (*)
(5)— 
Equity securities:
Dividends6 7 
Change in fair value
— 16 
Equity in earnings of partnerships and similar investments13 25 
Cash and cash equivalents
13 12 
Other13 10 
Gross investment income180 204 
Investment expenses(7)(6)
Net investment income$173 $198 
(*)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.
Realized gains (losses) and changes in unrealized appreciation (depreciation) included in AOCI related to fixed maturity securities are summarized as follows (in millions):
Three months ended March 31, 2025Three months ended March 31, 2024
Realized gains (losses)Realized gains (losses)
Before ImpairmentsImpairment AllowanceTotalChange in UnrealizedBefore ImpairmentsImpairment AllowanceTotalChange in Unrealized
Fixed maturities$1 $(7)$(6)$76 $(4)$(2)$(6)$11 
Equity securities9 — 9 — 20 — 20 — 
Mortgage loans and other investments
— — — — — — — — 
Total pretax10 (7)3 76 16 (2)14 11 
Tax effects(2)1 (1)(15)(3)— (3)(2)
Net of tax
$8 $(6)$2 $61 $13 $(2)$11 $9 

All equity securities are carried at fair value through net earnings. AFG recorded net holding gains (losses) on equity securities during the first three months of 2025 and 2024 on securities that were still owned at March 31, 2025 and March 31, 2024 as follows (in millions):
Three months ended March 31,
20252024
Included in realized gains (losses)$7 $19 
Included in net investment income(1)16 
$6 $35 

Gross realized gains and losses (excluding changes in impairment allowance and mark-to-market of derivatives) on available for sale fixed maturity investment transactions consisted of the following (in millions):
Three months ended March 31,
20252024
Gross gains$— $— 
Gross losses— (3)