8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2017

AMERICAN FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Ohio	1-13653	31-1544320
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
301 East Fourth Street, Cincinnati, OH		45202
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code 513-579-2121

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Section 2 - Financial Information

Item 2.02 Results Of Operations And Financial Condition.

Reference is made to the press release of American Financial Group, Inc. (the “Company”) relating to the announcement of the Company’s results of operations for the second quarter of 2017 and the availability of the Investor Supplement on the Company’s website. The press release was issued on August 1, 2017. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and a copy of the Investor Supplement is attached as Exhibit 99.2 and are incorporated herein by reference.

The information contained herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (the “Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of business acquired. Not applicable.

(b) Pro forma financial information. Not applicable.

(c) Shell company transactions. Not applicable

(d) Exhibits

Exhibit No.	Description
99.1	Earnings Release dated August 1, 2017, reporting American Financial Group Inc. results for the quarter ended June 30, 2017.
99.2	Investor Supplement – Second Quarter 2017

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AMERICAN FINANCIAL GROUP, INC.
Date: August 2, 2017
	By:	/s/ Karl J. Grafe
		Karl J. Grafe
		Vice President

2

EX-99.1

Exhibit 99.1

American Financial Group, Inc. Announces Second Quarter Results

• Net earnings per share of $1.61, a second quarter record for AFG

• Core net operating earnings $1.61 per share, an increase of 26% from the prior year period and a second quarter record for AFG

• Second quarter annualized ROE of 12.3%; annualized core operating ROE of 12.3%

• Full year 2017 core net operating earnings guidance increased to $6.40 - $6.90 per share

CINCINNATI – August 1, 2017 – American Financial Group, Inc. (NYSE: AFG) today reported 2017 second quarter net earnings attributable to shareholders of $145 million ($1.61 per share) compared to $54 million ($0.62 per share) for the 2016 second quarter. The $1.61 per share is a record for AFG’s second quarter. Net earnings for the quarter include $0.05 per share in after-tax realized gains on securities and expenses of $0.05 per share related to the redemption of AFG’s 6.375% Senior Notes. Comparatively, net earnings in the 2016 second quarter included a charge of $65 million ($0.73 per share) related to the exit of certain lines of business within our Lloyd’s-based insurer Neon, as well as $6 million ($0.07 per share) in after-tax earnings related to other non-core items. Details may be found in the table below. Book value per share was $60.36 per share at June 30, 2017. AFG paid cash dividends of $1.8125 per share during the quarter, which included a $1.50 per share special dividend. Annualized return on equity was 12.3% and 5.1% for the second quarters of 2017 and 2016, respectively.

Core net operating earnings were $145 million ($1.61 per share) for the 2017 second quarter, compared to $113 million ($1.28 per share) in the 2016 second quarter. The $1.61 represents a second quarter record for AFG core earnings per share. The improved results were attributable to higher operating earnings in our Specialty Property and Casualty (“P&C”) Insurance Segment and our Annuity Segment. Book value per share, excluding unrealized gains related to fixed maturities, was $54.97 per share at June 30, 2017. Core net operating earnings for the second quarters of 2017 and 2016 generated annualized returns on equity of 12.3% and 10.5%, respectively.

AFG’s net earnings attributable to shareholders, determined in accordance with U.S. generally accepted accounting principles (“GAAP”), include certain items that may not be indicative of its ongoing core operations. The table below identifies such items and reconciles net earnings attributable to shareholders to core net operating earnings, a non-GAAP financial measure. AFG believes that its core net operating earnings provides management, financial analysts, rating agencies and investors with an understanding of the results from the ongoing operations of the Company by excluding the impact of net realized gains and losses and other special items that are not necessarily indicative of operating trends. AFG’s management uses core net operating earnings to evaluate financial performance against historical results because it believes this provides a more comparable measure of its continuing business. Core net operating earnings is also used by AFG’s management as a basis for strategic planning and forecasting.

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In millions, except per share amounts	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Components of net earnings attributable to shareholders:
Core operating earnings before income taxes	$	204		$	183		$	424		$	357
Pretax non-core items:
Realized gains (losses) on securities		8			(16	)		11			(34	)
Gain on sale of subsidiaries		—			2			—			2
Gain on sale of apartment property		—			32			—			32
Neon exited lines charge		—			(65	)		—			(65	)
Loss on retirement of debt		(7	)		—			(7	)		—
Earnings before income taxes		205			136			428			292
Provision (credit) for income taxes:
Core operating earnings		59			64			126			123
Non-core items		1			9			2			2
Total provision (credit) for income taxes		60			73			128			125
Net earnings, including noncontrolling interests		145			63			300			167
Less net earnings attributable to noncontrolling interests:
Core operating earnings		—			6			2			10
Non-core items		—			3			—			2
Total net earnings attributable to noncontrolling interests		—			9			2			12
Net earnings attributable to shareholders	$	145		$	54		$	298		$	155
Net earnings:
Core net operating earnings(a)		145			113			296			224
Non-core items		—			(59	)		2			(69	)
Net earnings attributable to shareholders	$	145		$	54		$	298		$	155
Components of Earnings Per Share:
Core net operating earnings(a)	$	1.61		$	1.28		$	3.29		$	2.53
Non-core Items:
Realized gains (losses) on securities		0.05			(0.11	)		0.08			(0.22	)
Gain on sale of subsidiaries		—			0.01			—			0.01
Gain on sale of apartment property		—			0.17			—			0.17
Neon exited lines charge					(0.73	)		—			(0.73	)
Loss on retirement of debt		(0.05	)		—			(0.05	)		—
Diluted Earnings Per Share	$	1.61		$	0.62		$	3.32		$	1.76

Footnote (a) is contained in the accompanying Notes to Financial Schedules at the end of this release.

Carl H. Lindner III and S. Craig Lindner, AFG’s Co-Chief Executive Officers, issued this statement: “Strong results in AFG’s Specialty P&C and Annuity Segments produced new second quarter earnings per share records for AFG. In addition, we are pleased to report strong investment results and meaningful growth across our portfolio of businesses.

“AFG had approximately $1.1 billion of excess capital (including parent company cash of approximately $425 million) at June 30, 2017. This is after our payment of the $1.50 per share special dividend in May 2017. In addition to returning capital to shareholders through dividends, our excess capital will be deployed into AFG’s core businesses as we identify potential for healthy, profitable organic growth, and opportunities to expand our specialty niche businesses through acquisitions and start-ups that meet our target return thresholds. In addition, share repurchases, particularly when executed at attractive valuations, are an important and effective component of our capital management strategy; we will continue to make opportunistic share repurchases when it makes sense to do so. We will evaluate our excess capital position again in the second half of 2017 and note that the special cash dividend paid in May does not preclude our consideration of additional actions with respect to our regular quarterly dividend, additional special dividends and opportunistic share repurchases.

“Based on results for the first six months of 2017, we now expect AFG’s core net operating earnings in 2017 to be in the range of $6.40 to $6.90 per share, up from our original estimate of $6.20 to $6.70 per share. Our core earnings per share guidance assumes no change in the corporate tax rate of 35%, and excludes non-core items such as realized gains and losses, as well as other significant items that are not able to be estimated with reasonable precision, or that may not be indicative of ongoing operations.”

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Specialty Property and Casualty Insurance Operations

Operating earnings in AFG’s P&C Insurance Segment were $163 million in the second quarter of 2017, compared to $139 million in the prior year period, an increase of $24 million, or 17%. Higher P&C underwriting profit, higher net investment income and lower other expenses (primarily due to the impact of the noncontrolling interest in National Interstate in the second quarter of 2016) contributed to the improved results.

The Specialty P&C insurance operations generated an underwriting profit of $73 million in the 2017 second quarter, compared to $63 million in the second quarter of 2016, an increase of 16%. Each of our Specialty P&C Groups reported higher year-over-year underwriting profit. The second quarter 2017 combined ratio of 93.2% improved by 0.7 point over the prior year period. Results in the second quarter of 2017 include 2.2 points of favorable prior year reserve development, compared to 2.9 points in the comparable prior year period. Second quarter 2017 results include 1.7 points in catastrophe losses, compared to 2.0 points in the 2016 second quarter.

Gross and net written premiums were up 8% and 7%, respectively, for the second quarter of 2017, when compared to the second quarter of 2016. Pricing across our entire P&C Group was up 1% for the quarter.

The Property and Transportation Group reported an underwriting profit of $21 million in the second quarter of 2017, compared to $15 million in the second quarter of 2016. Higher underwriting profits in our agricultural and property & inland marine businesses were the drivers of the improved results. Catastrophe losses were $11 million for this group during the second quarter of 2017, compared to $12 million in the comparable prior year period.

Gross and net written premiums for the second quarter of 2017 were 7% and 3% higher, respectively, than the comparable 2016 period. The growth is primarily attributable to higher year-over-year premiums in our agricultural and transportation businesses, and growth in our Singapore Branch. This growth was partially offset by lower premiums resulting from an exit from the customs bond business, which was part of our ocean marine operations. Net written premiums were also impacted by lower retentions in National Interstate’s captive business. Overall renewal rates in this group increased 2% on average for the second quarter of 2017, including a 4% increase in National Interstate’s renewal rates.

The Specialty Casualty Group reported an underwriting profit of $29 million in the second quarter of 2017, compared to $23 million in the second quarter of 2016. Improved results in our excess and surplus lines businesses and Neon were partially offset by lower year-over-year profitability in our workers’ compensation and executive liability businesses, primarily due to lower favorable prior year reserve development. Catastrophe losses for this group were $2 million and $3 million in the second quarters of 2017 and 2016, respectively.

Gross and net written premiums for the second quarter of 2017 increased 10% and 12%, respectively, when compared to the second quarter of 2016, with nearly all of the businesses in this group reporting growth. A change in Neon’s mix of business to include a greater concentration in property business was a driver of higher premiums in the second quarter, which is typically when this business is written. Higher premiums in our workers’ compensation business, primarily the result of rate increases in the state of Florida, and higher premiums in our targeted markets businesses were other drivers of the year-over-year growth. Renewal pricing for this group was flat in the second quarter.

The Specialty Financial Group reported underwriting profit of $23 million in the second quarter of 2017, compared to $22 million in the second quarter of 2016. Higher underwriting profitability in our surety business was partially offset by lower underwriting profitability in our financial institutions business, primarily the result of higher catastrophe losses. Catastrophe losses for this group were $5 million and $3 million in the second quarters of 2017 and 2016, respectively. Nearly all of the businesses in this group continued to achieve excellent underwriting margins.

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Gross and net written premiums for the second quarter of 2017 were up 1% and 3%, respectively, when compared to the same 2016 period, primarily as a result of higher premiums in our fidelity and crime business, which were partially offset by lower premiums in our financial institutions business. Pricing in this group was down 2% for the quarter.

Carl Lindner III stated: “Our Specialty P&C Group reported another strong quarter. I am very pleased with overall underwriting margins, solid premium growth, and meaningful improvement reported by several of our businesses. Based on results during the first six months of the year, we continue to estimate growth in net written premium to be between 3% and 7% and continue to expect an overall 2017 calendar year combined ratio in the range of 92% to 94%.”

Further details about AFG’s Specialty P&C operations may be found in the accompanying schedules and in our Quarterly Investor Supplement, which is posted on our website.

Annuity Segment

As shown in the following table, AFG’s Annuity Segment contributed $85 million in pretax operating earnings in the second quarter of 2017 compared to $76 million in the second quarter of 2016. Earnings before the impact of fair value accounting on fixed-indexed annuities (FIAs) were $101 million in the second quarter of 2017 compared to $102 million in the second quarter of 2016.

Components of Annuity Operating Earnings Before Income Taxes

In millions	Three months ended June 30,						Pct. Change	Six months ended June 30,						Pct. Change
	2017			2016				2017			2016
Annuity earnings before fair value accounting for FIAs	$	101		$	102		(1%)	$	199		$	186		7%
Impact of fair value accounting for FIAs		(16	)		(26	)	nm		(18	)		(57	)	nm
Pretax annuity operating earnings	$	85		$	76		12%	$	181		$	129		40%

Annuity Earnings Before Fair Value Accounting for FIAs – AFG’s quarterly average annuity investments and reserves grew approximately 11% and 12%, respectively, year-over-year; the benefit of this growth was offset by the runoff of higher yielding investments.

Impact of Fair Value Accounting for FIAs – Variances from expectations of certain items (such as projected interest rates, option costs and surrenders), as well as changes in the stock market, have an impact on the accounting for FIAs; these accounting adjustments are recognized through AFG’s reported core earnings. Many of these adjustments are not economic in nature, but rather impact the timing of reported results.

In the second quarter of 2017, the benefit of a higher stock market was more than offset by lower interest rates, resulting in a $16 million unfavorable impact to annuity operating earnings. In the second quarter of 2016, medium to long-term interest rates decreased more substantially (30 to 40 basis points), compared to our expectation that they would increase slightly, resulting in a $26 million unfavorable impact on pretax earnings. These impacts are shown in the “Impact of fair value accounting for FIAs” amounts shown in the table above.

Annuity Premiums – AFG’s Annuity Segment reported statutory premiums of $1.3 billion in the second quarter of 2017, compared to $1.1 billion in the second quarter of 2016. Although all major channels reported year-over-year growth, the increase was due primarily to growth in traditional fixed annuity sales in the Financial Institutions channel. AFG’s strong premium production in the first six months of 2017 reflects new products, additional staffing, and increased market share within existing financial institutions.

Page 4

Craig Lindner stated, “I am pleased with the strong operating results achieved by the Annuity Segment during the second quarter. Based on these results, annuity earnings before fair value accounting are now expected to be in the range of $385 to $405 million, up from AFG’s previous guidance of $380 to $400 million. This is the second increase this year of our pre-fair value guidance. However, due to the decrease in market interest rates to date in 2017, our estimate for 2017 pretax annuity operating earnings (after fair value accounting) is now expected to be in the range of $370 to $390 million, compared to our original guidance of $375 million to $395 million.

“In response to 2017’s decline in market interest rates, AFG announced decreases in the crediting rates and rider benefits on the majority of its products in the second quarter of 2017. As a result, AFG has seen a recent slowdown in premiums. We now expect our 2017 annuity premiums to be relatively flat compared to the $4.4 billion reported in 2016.”

Fluctuations in the returns on investments that are required to be marked to market, or large changes in interest rates and/or the stock market, as compared to our expectations, could lead to significant positive or negative impacts on the Annuity Segment’s results.

Department of Labor (DOL) Rule – The DOL Fiduciary Rule became effective on June 9, 2017, although the DOL delayed certain requirements until January 1, 2018. As a result, insurance-only agents are able to continue selling fixed-indexed annuities through the end of 2017, provided the agent acts in the customer’s best interest, makes no misleading statements and receives only reasonable compensation. There is considerable uncertainty as to whether the rule will take effect in its current form on January 1, 2018 or if there will be an additional delay or adjustments to the rule. AFG’s management continues to believe the implementation of the rule in its current form and on the current schedule will impact annuity premiums throughout the remainder of 2017 and into 2018. Nonetheless, management does not believe the new rule will have a material impact on AFG’s results of operations.

More information about premiums and the results of operations for our Annuity Segment may be found in our Quarterly Investor Supplement, which is posted on our website.

Investments

AFG recorded second quarter 2017 net realized gains on securities of $5 million after tax and after deferred acquisition costs (DAC), compared to net realized losses on securities of $10 million in the comparable 2016 period. Unrealized gains on fixed maturities were $481 million after tax and after DAC at June 30, 2017, an increase of $175 million since year-end. Our portfolio continues to be high quality, with 90% of our fixed maturity portfolio rated investment grade and 98% with a National Association of Insurance Commissioners’ designation of NAIC 1 or 2, its highest two categories.

For the six months ended June 30, 2017, P&C net investment income was approximately 6% higher than the comparable 2016 period.

More information about the components of our investment portfolio may be found in our Quarterly Investor Supplement, which is posted on our website.

Loss on Retirement of Debt

On June 26, 2017, AFG redeemed all $230 million principal amount of its outstanding 6.375% Senior Notes due June 2042, at 100% of principal plus accrued and unpaid interest. The redemption resulted in after-tax expenses of $5 million ($0.05 per share) related to unamortized debt issue costs.

Page 5

On July 20, 2017, AFG provided notice of redemption of all of the outstanding 5.75% Senior Notes due August 2042. The 5.75% Senior Notes, which have an outstanding principal balance of $125 million, will be redeemed on August 25, 2017, at 100% of principal plus accrued and unpaid interest, if any, to the redemption date. It is expected that the early redemption of the 5.75% Senior Notes will result in after-tax expenses of $2 million ($0.02 per share) related to unamortized debt issue costs during the third quarter of 2017.

The redemptions of the 6.375% and 5.75% Senior Notes are financed, in part, by the $345 million of net proceeds from the May 2017 offering of $350 million of 4.50% Senior Notes due June 15, 2047. It is expected that the redemption of the 6.375% and 5.75% Senior Notes and the issuance of the 4.50% Senior Notes will result in annual pretax interest savings to AFG of $6 million ($0.04 per share after-tax), beginning in 2018.

About American Financial Group, Inc.

American Financial Group is an insurance holding company, based in Cincinnati, Ohio with assets over $55 billion. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of fixed and fixed-indexed annuities in the retail, financial institutions and education markets. Great American Insurance Group’s roots go back to 1872 with the founding of its flagship company, Great American Insurance Company.

Forward Looking Statements

This press release contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this press release not dealing with historical results are forward-looking and are based on estimates, assumptions and projections. Examples of such forward-looking statements include statements relating to: the Company’s expectations concerning market and other conditions and their effect on future premiums, revenues, earnings, investment activities and the amount and timing of share repurchases; recoverability of asset values; expected losses and the adequacy of reserves for asbestos, environmental pollution and mass tort claims; rate changes; and improved loss experience.

Actual results and/or financial condition could differ materially from those contained in or implied by such forward-looking statements for a variety of reasons including, but not limited to: changes in financial, political and economic conditions, including changes in interest and inflation rates, currency fluctuations and extended economic recessions or expansions in the U.S. and/or abroad; performance of securities markets; new legislation or declines in credit quality or credit ratings that could have a material impact on the valuation of securities in AFG’s investment portfolio; the availability of capital; regulatory actions (including changes in statutory accounting rules); changes in the legal environment affecting AFG or its customers; tax law and accounting changes; levels of natural catastrophes and severe weather, terrorist activities (including any nuclear, biological, chemical or radiological events), incidents of war or losses resulting from civil unrest and other major losses; development of insurance loss reserves and establishment of other reserves, particularly with respect to amounts associated with asbestos and environmental claims; availability of reinsurance and ability of reinsurers to pay their obligations; trends in persistency and mortality; competitive pressures; the ability to obtain adequate rates and policy terms; changes in AFG’s credit ratings or the financial strength ratings assigned by major ratings agencies to AFG’s operating subsidiaries; the impact of the conditions in the international financial markets and the global economy (including those associated with the United Kingdom’s expected withdrawal from the European Union, or “Brexit”) relating to AFG’s international operations; and other factors identified in AFG’s filings with the Securities and Exchange Commission.

The forward-looking statements herein are made only as of the date of this press release. The Company assumes no obligation to publicly update any forward-looking statements.

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Conference Call

The Company will hold a conference call to discuss 2017 second quarter results at 11:30 a.m. (ET) tomorrow, Wednesday, August 2, 2017. Toll-free telephone access will be available by dialing 1-877-459-8719 (international dial-in 424-276-6843). The conference ID for the live call is 51157158. Please dial in five to ten minutes prior to the scheduled start time of the call.

A replay will be available two hours following the completion of the call and will remain available until 11:59 p.m. (ET) on August 9, 2017. To listen to the replay, dial 1-855-859-2056 (international dial-in 404-537-3406) and provide the conference ID 51157158.

The conference call and accompanying webcast slides will also be broadcast live over the Internet. To listen to the call via the Internet, go to the Investor Relations page on AFG’s website, www.AFGinc.com, and follow the instructions at the Webcasts and Presentations link.

The archived webcast will be available immediately after the call via the same link on the Investor Relations page until August 9, 2017 at 11:59 p.m. (ET). An archived audio MP3 file will be available within 24 hours of the call.

Contact:

Diane P. Weidner

Asst. Vice President – Investor Relations

(513) 369-5713

Websites:

www.AFGinc.com

www.GreatAmericanInsuranceGroup.com

# # #

(Financial summaries follow)

This earnings release and AFG’s Quarterly Investor Supplement are available in the Investor Relations section of AFG’s website: www.AFGinc.com.

AFG17-14

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AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES

SUMMARY OF EARNINGS AND SELECTED BALANCE SHEET DATA

(In Millions, Except Per Share Data)

	Three months ended June 30,					Six months ended June 30,
	2017		2016			2017		2016
Revenues
P&C insurance net earned premiums	$	1,065	$	1,027		$	2,087	$	2,025
Life, accident & health net earned premiums		5		6			11		12
Net investment income		460		423			895		834
Realized gains (losses) on:
Securities		8		(16	)		11		(34	)
Subsidiaries		—		2			—		2
Income (loss) of managed investment entities:
Investment income		50		48			101		93
Gain (loss) on change in fair value of assets/liabilities		11		11			11		(2	)
Other income		47		80			106		126
Total revenues		1,646		1,581			3,222		3,056
Costs and expenses
P&C insurance losses & expenses		1,001		1,035			1,949		1,950
Annuity, life, accident & health benefits & expenses		278		274			536		546
Interest charges on borrowed money		23		19			44		37
Expenses of managed investment entities		51		36			92		71
Other expenses		88		81			173		160
Total costs and expenses		1,441		1,445			2,794		2,764
Earnings before income taxes		205		136			428		292
Provision for income taxes(b)		60		73			128		125
Net earnings including noncontrolling interests		145		63			300		167
Less: Net earnings attributable to noncontrolling interests		—		9			2		12
Net earnings attributable to shareholders	$	145	$	54		$	298	$	155
Diluted Earnings per Common Share	$	1.61	$	0.62		$	3.32	$	1.76
Average number of diluted shares		89.8		88.4			89.6		88.4

	June 30, 2017		December 31, 2016
Selected Balance Sheet Data:
Total cash and investments	$	44,779	$	41,433
Long-term debt	$	1,405	$	1,283
Shareholders’ equity(c)	$	5,312	$	4,916
Shareholders’ equity (excluding unrealized gains/losses related to fixed maturities)(c)	$	4,837	$	4,617
Book Value Per Share	$	60.36	$	56.55
Book Value Per Share (excluding unrealized gains/losses related to fixed maturities	$	54.97	$	53.11
Common Shares Outstanding		88.0		86.9

Footnotes (b) and (c) are contained in the accompanying Notes to Financial Schedules at the end of this release.

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AMERICAN FINANCIAL GROUP, INC.

SPECIALTY P&C OPERATIONS

(Dollars in Millions)

	Three months ended June 30,						Pct. Change			Six months ended June 30,						Pct. Change
	2017			2016						2017			2016
Gross written premiums	$	1,503		$	1,398			8	%	$	2,827		$	2,641			7	%
Net written premiums	$	1,130		$	1,056			7	%	$	2,157		$	2,035			6	%
Ratios (GAAP):
Loss & LAE ratio		59.5	%		61.2	%					59.5	%		59.8	%
Underwriting expense ratio		33.7	%		32.7	%					33.2	%		32.9	%
Specialty Combined Ratio		93.2	%		93.9	%					92.7	%		92.7	%
Combined Ratio – P&C Segment		93.4	%		100.3	%					92.8	%		95.9	%
Supplemental Information:(d)
Gross Written Premiums:
Property & Transportation	$	573		$	538			7	%	$	989		$	936			6	%
Specialty Casualty		756			688			10	%		1,500			1,386			8	%
Specialty Financial		174			172			1	%		338			319			6	%
	$	1,503		$	1,398			8	%	$	2,827		$	2,641			7	%
Net Written Premiums:
Property & Transportation	$	393		$	382			3	%	$	717		$	693			3	%
Specialty Casualty		561			503			12	%		1,101			1,022			8	%
Specialty Financial		149			144			3	%		290			269			8	%
Other		27			27			—			49			51			(4	%)
	$	1,130		$	1,056			7	%	$	2,157		$	2,035			6	%
Combined Ratio (GAAP):
Property & Transportation		94.2	%		95.9	%					90.7	%		93.4	%
Specialty Casualty		94.7	%		95.3	%					95.8	%		94.8	%
Specialty Financial		84.4	%		84.4	%					84.8	%		83.5	%
Aggregate Specialty Group		93.2	%		93.9	%					92.7	%		92.7	%

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Reserve Development (Favorable)/Adverse:
Property & Transportation	$	(11	)	$	(12	)	$	(28	)	$	(29	)
Specialty Casualty		(5	)		(10	)		(11	)		(14	)
Specialty Financial		(8	)		(7	)		(17	)		(11	)
Other Specialty		1			(1	)		4			(3	)
Specialty Group Excluding Neon Charge		(23	)		(30	)		(52	)		(57	)
Neon Exited Lines Charge and Other		1			58			2			57
Total Reserve Development	$	(22	)	$	28		$	(50	)	$	—
Points on Combined Ratio:
Property & Transportation		(3.1	)		(3.2	)		(4.0	)		(4.1	)
Specialty Casualty		(0.9	)		(2.0	)		(1.0	)		(1.4	)
Specialty Financial		(5.4	)		(4.6	)		(5.8	)		(4.0	)
Aggregate Specialty Group		(2.2	)		(2.9	)		(2.5	)		(2.8	)
Total P&C Segment		(2.0	)		2.7			(2.4	)		0.1

Footnote (d) is contained in the accompanying Notes to Financial Schedules at the end of this release.

Page 9

AMERICAN FINANCIAL GROUP, INC.

ANNUITY SEGMENT

(Dollars in Millions)

Components of Statutory Premiums

	Three months ended June 30,				Pct. Change			Six months ended June 30,				Pct. Change
	2017		2016					2017		2016
Annuity Premiums:
Financial Institutions	$	715	$	607		18	%	$	1,464	$	1,260		16	%
Retail		496		435		14	%		985		1,001		(2	%)
Education Market		47		45		4	%		92		102		(10	%)
Variable Annuities		8		11		(27	%)		15		20		(25	%)
Total Annuity Premiums	$	1,266	$	1,098		15	%	$	2,556	$	2,383		7	%

Components of Operating Earnings Before Income Taxes

	Three months ended June 30,				Pct. Change			Six months ended June 30,				Pct. Change
	2017		2016					2017		2016
Revenues:
Net investment income	$	360	$	344		5	%	$	707	$	659		7	%
Other income		26		24		8	%		53		50		6	%
Total revenues		386		368		5	%		760		709		7	%
Costs and Expenses:
Annuity benefits		224		223		—			420		451		(7	%)
Acquisition expenses		47		40		18	%		99		74		34	%
Other expenses		30		29		3	%		60		55		9	%
Total costs and expenses		301		292		3	%		579		580		—
Operating earnings before income taxes	$	85	$	76		12	%	$	181	$	129		40	%

Supplemental Annuity Information

	Three months ended June 30,						Pct. Change			Six months ended June 30,						Pct. Change
	2017			2016						2017			2016
Operating earnings before impact of fair value accounting on FIAs	$	101		$	102			(1	%)	$	199		$	186			7	%
Impact of fair value accounting		(16	)		(26	)		nm			(18	)		(57	)		nm
Operating earnings before income taxes	$	85		$	76			12	%	$	181		$	129			40	%
Average fixed annuity reserves*	$	31,212		$	27,861			12	%	$	30,698		$	27,398			12	%
Net interest spread*		2.61	%		2.84	%					2.59	%		2.69	%
Net spread earned before impact of fair value accounting*		1.32	%		1.45	%					1.31	%		1.33	%
Net spread earned after impact of fair value accounting*		1.11	%		1.08	%					1.19	%		0.91	%

* Excludes fixed annuity portion of variable annuity business.

Page 10

AMERICAN FINANCIAL GROUP, INC.

Notes to Financial Schedules

a) Components of core net operating earnings (in millions):

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Core Operating Earnings before Income Taxes:
P&C insurance segment	$	163		$	139		$	332		$	297
Annuity segment, before impact of fair value accounting		101			102			199			186
Impact of fair value accounting		(16	)		(26	)		(18	)		(57	)
Run-off long-term care and life segment		2			—			2			(1	)
Interest and other corporate expenses		(46	)		(38	)		(93	)		(78	)
Core operating earnings before income taxes		204			177			422			347
Related income taxes		59			64			126			123
Core net operating earnings	$	145		$	113		$	296		$	224

b) Excluding the significant tax benefit related to stock-based compensation, AFG’s effective tax rate for the quarter and six months ended June 30, 2017 was 32% and 33%, respectively. Excluding the impact of the Neon Exited Lines Charge that was reported in the second quarter of 2016, AFG’s effective tax rate for the quarter and six months ended June 30, 2016 was 36% and 35%, respectively. AFG maintains a full valuation allowance against the deferred tax benefits associated with losses related to AFG’s specialist Lloyd’s insurance business, Neon.

c) Shareholders’ Equity at June 30, 2017 includes $481 million ($5.46 per share) in unrealized after-tax gains on fixed maturities and $6 million ($0.07 per share) in unrealized after-tax losses on fixed maturity-related cash flow hedges. Shareholders’ Equity at December 31, 2016 includes $306 million ($3.52 per share) in unrealized after-tax gains on fixed maturities and $7 million ($0.08 per share) in unrealized after-tax losses on fixed maturity-related cash flow hedges.

d) Supplemental Notes:

• Property & Transportation includes primarily physical damage and liability coverage for buses, trucks and recreational vehicles, inland and ocean marine, agricultural-related products and other property coverages.

• Specialty Casualty includes primarily excess and surplus, general liability, executive liability, professional liability, umbrella and excess liability, specialty coverages in targeted markets, customized programs for small to mid-sized businesses and workers’ compensation insurance.

• Specialty Financial includes risk management insurance programs for lending and leasing institutions (including equipment leasing and collateral and lender-placed mortgage property insurance), surety and fidelity products and trade credit insurance.

• Other includes an internal reinsurance facility.

Page 11

EX-99.2

Exhibit 99.2

  American Financial Group, Inc. Investor Supplement - Second Quarter 2017   August 1, 2017   American Financial Group, Inc. Corporate Headquarters Great American Insurance Group Tower 301 E Fourth Street Cincinnati, OH 45202 513 579 6739

American Financial Group, Inc.    

Table of Contents - Investor Supplement - Second Quarter 2017    

Section	Page
Table of Contents - Investor Supplement - Second Quarter 2017		2
Financial Highlights		3
Summary of Earnings		4
Earnings Per Share Summary		5
Property and Casualty Insurance Segment
Property and Casualty Insurance - Summary Underwriting Results (GAAP)		6
Specialty - Underwriting Results (GAAP)		7
Property and Transportation - Underwriting Results (GAAP)		8
Specialty Casualty - Underwriting Results (GAAP)		9
Specialty Financial - Underwriting Results (GAAP)		10
Other Specialty - Underwriting Results (GAAP)		11
Annuity Segment
Annuity Earnings (GAAP)		12
Detail of Annuity Benefits Expense (GAAP)		13
Net Spread on Fixed Annuities (GAAP)		14
Annuity Premiums (Statutory)		15
Fixed Annuity Benefits Accumulated (GAAP)		16
Consolidated Balance Sheet / Book Value / Debt
Consolidated Balance Sheet		17
Book Value Per Share and Price / Book Summary		18
Capitalization		19
Additional Supplemental Information		20
Consolidated Investment Supplement
Total Cash and Investments		21
Net Investment Income		22
Fixed Maturities - By Security Type - AFG Consolidated		23
Fixed Maturities - By Security Type Portfolio		24
Fixed Maturities - Credit Rating		25
Mortgage-Backed Securities - AFG Consolidated		26
Mortgage-Backed Securities Portfolio		27
Mortgage-Backed Securities - Credit Rating		28
Appendix
A. Fixed Maturities - Credit Rating by Type		29

Page 2

American Financial Group, Inc.     

Financial Highlights     

(in millions, except per share information)     

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Highlights
Net earnings	$	145		$	153		$	385		$	109		$	54		$	298		$	155
Core net operating earnings		145			151			176			134			113			296			224
Total assets		58,618			57,464			55,072			54,845			52,733			58,618			52,733
Adjusted shareholders’ equity (a)		4,837			4,815			4,617			4,487			4,356			4,837			4,356
Property and Casualty net written premiums		1,130			1,027			1,083			1,268			1,056			2,157			2,035
Annuity statutory premiums		1,266			1,290			1,111			941			1,098			2,556			2,383
Per share data
Diluted earnings per share	$	1.61		$	1.72		$	4.33		$	1.23		$	0.62		$	3.32		$	1.76
Core net operating earnings per share		1.61			1.69			1.98			1.51			1.28			3.29			2.53
Adjusted book value per share (a)		54.97			54.98			53.11			51.68			50.16			54.97			50.16
Cash dividends per common share		1.8125			0.3125			1.3125			0.2800			0.2800			2.1250			0.5600
Financial ratios
Annualized return on equity (b)		12.3	%		13.3	%		34.4	%		9.9	%		5.1	%		12.8	%		7.2	%
Annualized core operating return on equity (b)		12.3	%		13.1	%		15.7	%		12.2	%		10.5	%		12.7	%		10.4	%
Property and Casualty combined ratio - Specialty:
Loss & LAE ratio		59.5	%		59.5	%		63.7	%		62.9	%		61.2	%		59.5	%		59.8	%
Underwriting expense ratio		33.7	%		32.7	%		26.7	%		30.3	%		32.7	%		33.2	%		32.9	%
Combined ratio - Specialty		93.2	%		92.2	%		90.4	%		93.2	%		93.9	%		92.7	%		92.7	%
Net spread on fixed annuities:
Net interest spread		2.61	%		2.58	%		2.70	%		2.85	%		2.84	%		2.59	%		2.69	%
Net spread earned:
Before impact of fair value accounting		1.32	%		1.31	%		1.42	%		1.46	%		1.45	%		1.31	%		1.33	%
Impact of fair value accounting (c)		(0.21	%)		(0.03	%)		0.40	%		0.01	%		(0.37	%)		(0.12	%)		(0.42	%)
After impact of fair value accounting		1.11	%		1.28	%		1.82	%		1.47	%		1.08	%		1.19	%		0.91	%

(a) Excludes unrealized gains related to fixed maturity investments, a reconciliation to the GAAP measure is on page 18.     

(b) Excludes accumulated other comprehensive income.     

(c) Change in fair value of derivatives offset by the estimated related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs.

Page 3

American Financial Group, Inc.

Summary of Earnings

($ in millions)

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Property and Casualty Insurance
Underwriting profit	$	72		$	78		$	110		$	78		$	62		$	150		$	149
Net investment income		96			86			85			93			89			182			172
Other income (expense)		(5	)		5			(15	)		(18	)		(12	)		—			(24	)
Property and Casualty Insurance operating earnings		163			169			180			153			139			332			297
Annuity earnings		85			96			132			107			76			181			129
Run-off Long-Term Care and Life earnings		2			—			2			1			—			2			(1	)
Interest expense of parent holding companies		(23	)		(21	)		(21	)		(19	)		(19	)		(44	)		(37	)
Other expense		(23	)		(26	)		(29	)		(29	)		(19	)		(49	)		(41	)
Pre-tax core operating earnings		204			218			264			213			177			422			347
Income tax expense		59			67			88			79			64			126			123
Core net operating earnings		145			151			176			134			113			296			224
Non-core items, net of tax:
Realized gains (losses) on securities		5			2			32			1			(10	)		7			(20	)
Realized gain (loss) on sale of subsidiaries		—			—			—			—			1			—			1
Gain on sale of hotel and apartment properties		—			—			—			—			15			—			15
Special A&E charges:
Property and Casualty Insurance run-off operations		—			—			—			(23	)		—			—			—
Former Railroad and Manufacturing operations		—			—			—			(3	)		—			—			—
Neon exited lines charge		—			—			—			—			(65	)		—			(65	)
Tax benefit related to National Interstate merger		—			—			66			—			—			—			—
Tax benefit related to Neon restructuring		—			—			111			—			—			—			—
Loss on retirement of debt		(5	)		—			—			—			—			(5	)		—
Net earnings	$	145		$	153		$	385		$	109		$	54		$	298		$	155

Page 4

American Financial Group, Inc.

Earnings Per Share Summary

(in millions, except per share information)

	Three Months Ended													Six Months Ended
	06/30/17			03/31/17		12/31/16		09/30/16			06/30/16			06/30/17			06/30/16
Core net operating earnings	$	145		$	151	$	176	$	134		$	113		$	296		$	224
Net earnings	$	145		$	153	$	385	$	109		$	54		$	298		$	155
Average number of diluted shares		89.799			89.342		88.774		88.461			88.390			89.572			88.443
Diluted earnings per share:
Core net operating earnings per share	$	1.61		$	1.69	$	1.98	$	1.51		$	1.28		$	3.29		$	2.53
Realized gains (losses) on securities		0.05			0.03		0.36		0.02			(0.11	)		0.08			(0.22	)
Realized gain (loss) on sale of subsidiaries		—			—		—		—			0.01			—			0.01
Gain on sale of hotel and apartment properties		—			—		—		—			0.17			—			0.17
Special A&E charges:
Property and Casualty Insurance run-off operations		—			—		—		(0.26	)		—			—			—
Former Railroad and Manufacturing operations		—			—		—		(0.04	)		—			—			—
Neon exited lines charge		—			—		—		—			(0.73	)		—			(0.73	)
Tax benefit related to National Interstate merger		—			—		0.74		—			—			—			—
Tax benefit related to Neon restructuring		—			—		1.25		—			—			—			—
Loss on retirement of debt		(0.05	)		—		—		—			—			(0.05	)		—
Diluted earnings per share	$	1.61		$	1.72	$	4.33	$	1.23		$	0.62		$	3.32		$	1.76

Page 5

American Financial Group, Inc.

Property and Casualty Insurance - Summary Underwriting Results (GAAP)

($ in millions)

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Property and Transportation	$	21		$	43		$	75		$	44		$	15		$	64		$	47
Specialty Casualty		29			15			13			13			23			44			52
Specialty Financial		23			22			20			19			22			45			45
Other Specialty		—			(1	)		2			2			3			(1	)		5
Underwriting profit - Specialty		73			79			110			78			63			152			149
Other core charges, included in loss and LAE		1			1			—			—			1			2			—
Underwriting profit - Core		72			78			110			78			62			150			149
Special A&E charges, included in loss and LAE		—			—			—			(36	)		—			—			—
Neon exited lines charge, included in loss and LAE		—			—			—			—			(57	)		—			(57	)
Neon exited lines charge, included in underwriting expenses		—			—			—			—			(8	)		—			(8	)
Underwriting profit (loss) - Property and Casualty Insurance	$	72		$	78		$	110		$	42		$	(3	)	$	150		$	84
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		18			7			12			14			21			25			29
Total current accident year catastrophe losses	$	18		$	7		$	12		$	14		$	21		$	25		$	29
Prior year loss reserve development (favorable) / adverse	$	(22	)	$	(28	)	$	10		$	22		$	28		$	(50	)	$	—
Combined ratio:
Property and Transportation		94.2	%		87.3	%		83.9	%		91.1	%		95.9	%		90.7	%		93.4	%
Specialty Casualty		94.7	%		97.0	%		97.4	%		97.4	%		95.3	%		95.8	%		94.8	%
Specialty Financial		84.4	%		85.0	%		86.0	%		86.4	%		84.4	%		84.8	%		83.5	%
Other Specialty		98.3	%		105.8	%		94.9	%		91.5	%		89.2	%		102.0	%		89.4	%
Combined ratio - Specialty		93.2	%		92.2	%		90.4	%		93.2	%		93.9	%		92.7	%		92.7	%
Other core charges		0.2	%		0.1	%		0.0	%		0.1	%		0.1	%		0.1	%		0.0	%
Neon exited lines charge, loss and LAE		0.0	%		0.0	%		0.0	%		0.0	%		5.5	%		0.0	%		2.8	%
Neon exited lines charge, underwriting expenses		0.0	%		0.0	%		0.0	%		0.0	%		0.8	%		0.0	%		0.4	%
Special A&E charges		0.0	%		0.0	%		0.0	%		3.0	%		0.0	%		0.0	%		0.0	%
Combined ratio		93.4	%		92.3	%		90.4	%		96.3	%		100.3	%		92.8	%		95.9	%
Combined ratio excl. catastrophe and prior year development		93.7	%		94.3	%		88.4	%		93.1	%		94.8	%		94.0	%		94.1	%
Loss and LAE components - property and casualty insurance
Current accident year, excluding catastrophe loss		60.0	%		61.6	%		61.7	%		62.8	%		62.1	%		60.8	%		61.2	%
Prior accident year loss reserve development		(2.0	%)		(2.7	%)		0.9	%		2.0	%		2.7	%		(2.4	%)		0.1	%
Current accident year catastrophe loss		1.7	%		0.7	%		1.1	%		1.2	%		2.0	%		1.2	%		1.4	%
Loss and LAE ratio		59.7	%		59.6	%		63.7	%		66.0	%		66.8	%		59.6	%		62.7	%

Page 6

American Financial Group, Inc.

Specialty - Underwriting Results (GAAP)

($ in millions)

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Gross written premiums	$	1,503		$	1,324		$	1,441		$	1,899		$	1,398		$	2,827		$	2,641
Ceded reinsurance premiums		(373	)		(297	)		(358	)		(631	)		(342	)		(670	)		(606	)
Net written premiums		1,130			1,027			1,083			1,268			1,056			2,157			2,035
Change in unearned premiums		(65	)		(5	)		61			(109	)		(29	)		(70	)		(10	)
Net earned premiums		1,065			1,022			1,144			1,159			1,027			2,087			2,025
Loss and LAE		634			608			729			729			629			1,242			1,211
Underwriting expense		358			335			305			352			335			693			665
Underwriting profit	$	73		$	79		$	110		$	78		$	63		$	152		$	149
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		18			7			12			14			21			25			29
Total current accident year catastrophe losses	$	18		$	7		$	12		$	14		$	21		$	25		$	29
Prior year loss reserve development (favorable) / adverse	$	(23	)	$	(29	)	$	10		$	(14	)	$	(30	)	$	(52	)	$	(57	)
Combined ratio:
Loss and LAE ratio		59.5	%		59.5	%		63.7	%		62.9	%		61.2	%		59.5	%		59.8	%
Underwriting expense ratio		33.7	%		32.7	%		26.7	%		30.3	%		32.7	%		33.2	%		32.9	%
Combined ratio		93.2	%		92.2	%		90.4	%		93.2	%		93.9	%		92.7	%		92.7	%
Combined ratio excl. catastrophe and prior year development		93.7	%		94.3	%		88.4	%		93.1	%		94.8	%		94.0	%		94.1	%
Loss and LAE components:
Current accident year, excluding catastrophe loss		60.0	%		61.6	%		61.7	%		62.8	%		62.1	%		60.8	%		61.2	%
Prior accident year loss reserve development		(2.2	%)		(2.8	%)		0.9	%		(1.1	%)		(2.9	%)		(2.5	%)		(2.8	%)
Current accident year catastrophe loss		1.7	%		0.7	%		1.1	%		1.2	%		2.0	%		1.2	%		1.4	%
Loss and LAE ratio		59.5	%		59.5	%		63.7	%		62.9	%		61.2	%		59.5	%		59.8	%

Page 7

American Financial Group, Inc.     

Property and Transportation - Underwriting Results (GAAP)

($ in millions)

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Gross written premiums	$	573		$	416		$	577		$	991		$	538		$	989		$	936
Ceded reinsurance premiums		(180	)		(92	)		(183	)		(406	)		(156	)		(272	)		(243	)
Net written premiums		393			324			394			585			382			717			693
Change in unearned premiums		(36	)		18			71			(92	)		(17	)		(18	)		11
Net earned premiums		357			342			465			493			365			699			704
Loss and LAE		232			208			319			339			245			440			456
Underwriting expense		104			91			71			110			105			195			201
Underwriting profit	$	21		$	43		$	75		$	44		$	15		$	64		$	47
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		11			5			6			7			12			16			18
Total current accident year catastrophe losses	$	11		$	5		$	6		$	7		$	12		$	16		$	18
Prior year loss reserve development (favorable) / adverse	$	(11	)	$	(17	)	$	13		$	(5	)	$	(12	)	$	(28	)	$	(29	)
Combined ratio:
Loss and LAE ratio		64.9	%		60.8	%		68.6	%		68.8	%		67.0	%		62.8	%		64.7	%
Underwriting expense ratio		29.3	%		26.5	%		15.3	%		22.3	%		28.9	%		27.9	%		28.7	%
Combined ratio		94.2	%		87.3	%		83.9	%		91.1	%		95.9	%		90.7	%		93.4	%
Combined ratio excl. catastrophe and prior year development		94.3	%		90.7	%		79.7	%		90.7	%		95.8	%		92.5	%		95.0	%
Loss and LAE components:
Current accident year, excluding catastrophe loss		65.0	%		64.2	%		64.4	%		68.4	%		66.9	%		64.6	%		66.3	%
Prior accident year loss reserve development		(3.1	%)		(4.8	%)		3.0	%		(1.2	%)		(3.2	%)		(4.0	%)		(4.1	%)
Current accident year catastrophe loss		3.0	%		1.4	%		1.2	%		1.6	%		3.3	%		2.2	%		2.5	%
Loss and LAE ratio		64.9	%		60.8	%		68.6	%		68.8	%		67.0	%		62.8	%		64.7	%

Page 8

American Financial Group, Inc.

Specialty Casualty - Underwriting Results (GAAP)

($ in millions)

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Gross written premiums	$	756		$	744		$	684		$	722		$	688		$	1,500		$	1,386
Ceded reinsurance premiums		(195	)		(204	)		(174	)		(218	)		(185	)		(399	)		(364	)
Net written premiums		561			540			510			504			503			1,101			1,022
Change in unearned premiums		(24	)		(32	)		—			(7	)		(6	)		(56	)		(23	)
Net earned premiums		537			508			510			497			497			1,045			999
Loss and LAE		339			331			348			330			329			670			642
Underwriting expense		169			162			149			154			145			331			305
Underwriting profit	$	29		$	15		$	13		$	13		$	23		$	44		$	52
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		2			1			4			2			3			3			4
Total current accident year catastrophe losses	$	2		$	1		$	4		$	2		$	3		$	3		$	4
Prior year loss reserve development (favorable) / adverse	$	(5	)	$	(6	)	$	3		$	(2	)	$	(10	)	$	(11	)	$	(14	)
Combined ratio:
Loss and LAE ratio		63.1	%		65.2	%		68.2	%		66.5	%		66.1	%		64.1	%		64.2	%
Underwriting expense ratio		31.6	%		31.8	%		29.2	%		30.9	%		29.2	%		31.7	%		30.6	%
Combined ratio		94.7	%		97.0	%		97.4	%		97.4	%		95.3	%		95.8	%		94.8	%
Combined ratio excl. catastrophe and prior year development		95.2	%		97.9	%		96.1	%		97.4	%		96.6	%		96.5	%		95.8	%
Loss and LAE components:
Current accident year, excluding catastrophe loss		63.6	%		66.1	%		66.9	%		66.5	%		67.4	%		64.8	%		65.2	%
Prior accident year loss reserve development		(0.9	%)		(1.1	%)		0.5	%		(0.3	%)		(2.0	%)		(1.0	%)		(1.4	%)
Current accident year catastrophe loss		0.4	%		0.2	%		0.8	%		0.3	%		0.7	%		0.3	%		0.4	%
Loss and LAE ratio		63.1	%		65.2	%		68.2	%		66.5	%		66.1	%		64.1	%		64.2	%

Page 9

American Financial Group, Inc.

Specialty Financial - Underwriting Results (GAAP)

($ in millions)

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Gross written premiums	$	174		$	164		$	180		$	186		$	172		$	338		$	319
Ceded reinsurance premiums		(25	)		(23	)		(26	)		(37	)		(28	)		(48	)		(50	)
Net written premiums		149			141			154			149			144			290			269
Change in unearned premiums		(3	)		6			(13	)		(4	)		(5	)		3			2
Net earned premiums		146			147			141			145			139			293			271
Loss and LAE		49			52			46			45			42			101			87
Underwriting expense		74			73			75			81			75			147			139
Underwriting profit	$	23		$	22		$	20		$	19		$	22		$	45		$	45
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		5			1			2			5			3			6			4
Total current accident year catastrophe losses	$	5		$	1		$	2		$	5		$	3		$	6		$	4
Prior year loss reserve development (favorable) / adverse	$	(8	)	$	(9	)	$	(6	)	$	(6	)	$	(7	)	$	(17	)	$	(11	)
Combined ratio:
Loss and LAE ratio		33.1	%		35.6	%		32.4	%		31.6	%		30.1	%		34.4	%		32.0	%
Underwriting expense ratio		51.3	%		49.4	%		53.6	%		54.8	%		54.3	%		50.4	%		51.5	%
Combined ratio		84.4	%		85.0	%		86.0	%		86.4	%		84.4	%		84.8	%		83.5	%
Combined ratio excl. catastrophe and prior year development		86.5	%		90.6	%		88.8	%		87.0	%		87.0	%		88.6	%		85.9	%
Loss and LAE components:
Current accident year, excluding catastrophe loss		35.2	%		41.2	%		35.2	%		32.2	%		32.7	%		38.2	%		34.4	%
Prior accident year loss reserve development		(5.4	%)		(6.4	%)		(4.5	%)		(3.9	%)		(4.6	%)		(5.8	%)		(4.0	%)
Current accident year catastrophe loss		3.3	%		0.8	%		1.7	%		3.3	%		2.0	%		2.0	%		1.6	%
Loss and LAE ratio		33.1	%		35.6	%		32.4	%		31.6	%		30.1	%		34.4	%		32.0	%

Page 10

American Financial Group, Inc.

Other Specialty - Underwriting Results (GAAP)

($ in millions)

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Gross written premiums	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Ceded reinsurance premiums		27			22			25			30			27			49			51
Net written premiums		27			22			25			30			27			49			51
Change in unearned premiums		(2	)		3			3			(6	)		(1	)		1			—
Net earned premiums		25			25			28			24			26			50			51
Loss and LAE		14			17			16			15			13			31			26
Underwriting expense		11			9			10			7			10			20			20
Underwriting profit	$	—		$	(1	)	$	2		$	2		$	3		$	(1	)	$	5
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		—			—			—			—			3			—			3
Total current accident year catastrophe losses	$	—		$	—		$	—		$	—		$	3		$	—		$	3
Prior year loss reserve development (favorable) / adverse	$	1		$	3		$	—		$	(1	)	$	(1	)	$	4		$	(3	)
Combined ratio:
Loss and LAE ratio		62.0	%		68.0	%		59.5	%		55.2	%		52.5	%		64.9	%		52.3	%
Underwriting expense ratio		36.3	%		37.8	%		35.4	%		36.3	%		36.7	%		37.1	%		37.1	%
Combined ratio		98.3	%		105.8	%		94.9	%		91.5	%		89.2	%		102.0	%		89.4	%
Combined ratio excl. catastrophe and prior year development		93.5	%		93.4	%		93.7	%		95.1	%		86.4	%		93.5	%		91.1	%

Page 11

American Financial Group, Inc.

Annuity Earnings (GAAP)

($ in millions)

	Three Months Ended													Six Months Ended
	06/30/17			03/31/17			12/31/16		09/30/16		06/30/16			06/30/17			06/30/16
Net investment income	$	360		$	347		$	346	$	351	$	344		$	707		$	659
Guaranteed withdrawal benefit fees		14			14			14		14		13			28			25
Policy charges and other miscellaneous income		12			13			13		12		11			25			25
Total revenues		386			374			373		377		368			760			709
Annuity benefits expense		224			196			160		189		223			420			451
Acquisition expenses		47			52			54		53		40			99			74
Other expenses		30			30			27		28		29			60			55
Total costs and expenses		301			278			241		270		292			579			580
Annuity earnings before income taxes	$	85		$	96		$	132	$	107	$	76		$	181		$	129
Detail of Annuity earnings before income taxes
Earnings before income taxes and impact of fair value accounting	$	101		$	98		$	103	$	106	$	102		$	199		$	186
Impact of fair value accounting (a)		(16	)		(2	)		29		1		(26	)		(18	)		(57	)
Annuity earnings before income taxes	$	85		$	96		$	132	$	107	$	76		$	181		$	129

(a) Change in fair value of derivatives offset by the estimated related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs.

Page 12

American Financial Group, Inc.

Detail of Annuity Benefits Expense (GAAP)

($ in millions)

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Detail of annuity benefits expense:
Interest credited - fixed	$	157		$	152		$	148		$	145		$	142		$	309		$	281
Interest credited - fixed component of variable annuities		2			1			1			1			2			3			3
Change in expected death and annuitization reserve		4			4			4			5			4			8			9
Amortization of sales inducements		4			6			7			6			6			10			11
Guaranteed withdrawal benefit reserve		17			16			20			18			15			33			31
Change in other benefit reserves		9			11			11			10			8			20			13
Unlockings (a)		—			—			23			—			—			—			—
Subtotal before impact of fair value accounting		193			190			214			185			177			383			348
Embedded derivative mark-to-market (b)		112			147			6			109			62			259			79
Equity option mark-to-market		(81	)		(141	)		(60	)		(105	)		(16	)		(222	)		24
Subtotal impact of fair value accounting		31			6			(54	)		4			46			37			103
Total annuity benefits expense	$	224		$	196		$	160		$	189		$	223		$	420		$	451

(a) Includes unlockings for fixed indexed annuity embedded derivative reserves, sales inducement asset and other reserves. Does not include unlocking income of $24 million in 2016 for deferred policy acquisition costs and unearned revenue reserves. These unlockings are included in acquisition expenses and other income. In total, AFG recorded an unlocking expense reduction of $1 million in 2016.

(b) Excludes unlocking impact of $17 million in 2016.

Page 13

American Financial Group, Inc.     

Net Spread on Fixed Annuities (GAAP)     

($ in millions)     

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Average fixed annuity investments (at amortized cost)	$	30,988		$	30,055		$	29,192		$	28,548		$	27,964		$	30,522		$	27,575
Average annuity benefits accumulated		31,212			30,183			29,250			28,538			27,861			30,698			27,398
Investments in excess of annuity benefits accumulated	$	(224	)	$	(128	)	$	(58	)	$	10		$	103		$	(176	)	$	177
As % of average annuity benefits accumulated (except as noted)
Net investment income (as % of investments)		4.62	%		4.59	%		4.72	%		4.88	%		4.88	%		4.60	%		4.74	%
Interest credited		(2.01	%)		(2.01	%)		(2.02	%)		(2.03	%)		(2.04	%)		(2.01	%)		(2.05	%)
Net interest spread on fixed annuities		2.61	%		2.58	%		2.70	%		2.85	%		2.84	%		2.59	%		2.69	%
Policy charges and other miscellaneous income		0.12	%		0.14	%		0.15	%		0.14	%		0.13	%		0.13	%		0.15	%
Other annuity benefit expenses, net		(0.27	%)		(0.31	%)		(0.38	%)		(0.36	%)		(0.30	%)		(0.29	%)		(0.28	%)
Acquisition expenses		(0.58	%)		(0.67	%)		(1.06	%)		(0.72	%)		(0.55	%)		(0.62	%)		(0.51	%)
Other expenses		(0.38	%)		(0.38	%)		(0.35	%)		(0.39	%)		(0.38	%)		(0.38	%)		(0.38	%)
Change in fair value of derivatives		(0.39	%)		(0.08	%)		0.73	%		(0.05	%)		(0.66	%)		(0.24	%)		(0.76	%)
Unlockings		0.00	%		0.00	%		0.03	%		0.00	%		0.00	%		0.00	%		0.00	%
Net spread earned on fixed annuities		1.11	%		1.28	%		1.82	%		1.47	%		1.08	%		1.19	%		0.91	%
Average annuity benefits accumulated	$	31,212		$	30,183		$	29,250		$	28,538		$	27,861		$	30,698		$	27,398
Net spread earned on fixed annuities		1.11	%		1.28	%		1.82	%		1.47	%		1.08	%		1.19	%		0.91	%
Earnings on fixed annuity benefits accumulated	$	87		$	96		$	133		$	105		$	75		$	183		$	125
Investments in excess of annuity benefits accumulated	$	(224	)	$	(128	)	$	(58	)	$	10		$	103		$	(176	)	$	177
Net investment income (as % of investments)		4.62	%		4.59	%		4.72	%		4.88	%		4.88	%		4.60	%		4.74	%
Earnings on investments in excess of annuity benefits accumulated	$	(3	)	$	(1	)	$	—		$	—		$	1		$	(4	)	$	4
Variable annuity earnings		1			1			(1	)		2			—			2			—
Earnings before income taxes - core	$	85		$	96		$	132		$	107		$	76		$	181		$	129
Detail of net spread earned on fixed annuities - core
Net spread earned core - before impact of fair value accounting		1.32	%		1.31	%		1.42	%		1.46	%		1.45	%		1.31	%		1.33	%
Change in fair value of derivatives		(0.39	%)		(0.08	%)		0.73	%		(0.05	%)		(0.66	%)		(0.24	%)		(0.76	%)
Estimated net offsets to deferred sales inducements and deferred policy acquisition costs		0.18	%		0.05	%		(0.33	%)		0.06	%		0.29	%		0.12	%		0.34	%
Net spread earned core - after impact of fair value accounting		1.11	%		1.28	%		1.82	%		1.47	%		1.08	%		1.19	%		0.91	%

Page 14

American Financial Group, Inc.

Annuity Premiums (Statutory)

($ in millions)

	Three Months Ended										Six Months Ended
	06/30/17		03/31/17		12/31/16		09/30/16		06/30/16		06/30/17		06/30/16
Retail single premium annuities - indexed	$	474	$	469	$	415	$	340	$	413	$	943	$	959
Retail single premium annuities - fixed		22		20		22		18		22		42		42
Financial institutions single premium annuities - indexed		500		487		474		435		507		987		1,041
Financial institutions single premium annuities - fixed		215		262		152		97		100		477		219
Education market - fixed and indexed annuities		47		45		40		42		45		92		102
Subtotal fixed annuity premiums		1,258		1,283		1,103		932		1,087		2,541		2,363
Variable annuities		8		7		8		9		11		15		20
Total annuity premiums	$	1,266	$	1,290	$	1,111	$	941	$	1,098	$	2,556	$	2,383

Page 15

American Financial Group, Inc.

Fixed Annuity Benefits Accumulated (GAAP)

($ in millions)

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Beginning fixed annuity reserves	$	30,719		$	29,647		$	28,853		$	28,222		$	27,499		$	29,647		$	26,371
Premiums		1,258			1,283			1,103			932			1,087			2,541			2,363
Federal Home Loan Bank advances		—			—			—			—			—			—			150
Surrenders, benefits and other withdrawals		(571	)		(539	)		(524	)		(586	)		(596	)		(1,110	)		(1,079	)
Interest and other annuity benefit expenses:
Interest credited		157			152			148			145			142			309			281
Embedded derivative mark-to-market		112			147			6			109			62			259			79
Change in other benefit reserves		29			29			34			31			28			58			57
Unlockings		—			—			27			—			—			—			—
Ending fixed annuity reserves	$	31,704		$	30,719		$	29,647		$	28,853		$	28,222		$	31,704		$	28,222
Reconciliation to annuity benefits accumulated:
Ending fixed annuity reserves	$	31,704		$	30,719		$	29,647		$	28,853		$	28,222		$	31,704		$	28,222
Impact of unrealized investment gains on reserves		128			100			76			180			188			128			188
Fixed component of variable annuities		182			183			184			189			186			182			186
Annuity benefits accumulated per balance sheet	$	32,014		$	31,002		$	29,907		$	29,222		$	28,596		$	32,014		$	28,596
Annualized surrenders and other withdrawals as a % of beginning reserves		7.4	%		7.3	%		7.3	%		8.3	%		8.7	%		7.5	%		8.2	%

Page 16

American Financial Group, Inc.     

Consolidated Balance Sheet     

($ in millions)     

	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			03/31/16
Assets:
Total cash and investments	$	44,779		$	43,350		$	41,433		$	41,805		$	40,639		$	39,437
Recoverables from reinsurers		2,839			2,735			2,737			2,814			2,576			2,561
Prepaid reinsurance premiums		587			533			539			634			521			475
Agents’ balances and premiums receivable		1,124			989			997			1,029			992			936
Deferred policy acquisition costs		1,156			1,205			1,239			867			881			1,055
Assets of managed investment entities		4,873			5,331			4,765			4,312			4,410			3,906
Other receivables		923			875			908			1,391			788			693
Variable annuity assets (separate accounts)		620			614			600			606			595			595
Other assets		1,518			1,633			1,655			1,188			1,132			1,181
Goodwill		199			199			199			199			199			199
Total assets	$	58,618		$	57,464		$	55,072		$	54,845		$	52,733		$	51,038
Liabilities and Equity:
Unpaid losses and loss adjustment expenses	$	8,730		$	8,621		$	8,563		$	8,661		$	8,203		$	8,108
Unearned premiums		2,294			2,174			2,171			2,328			2,109			2,051
Annuity benefits accumulated		32,014			31,002			29,907			29,222			28,596			27,812
Life, accident and health reserves		676			687			691			700			702			708
Payable to reinsurers		681			621			634			835			588			501
Liabilities of managed investment entities		4,685			5,101			4,549			4,067			4,192			3,656
Long-term debt		1,405			1,283			1,283			1,300			998			998
Variable annuity liabilities (separate accounts)		620			614			600			606			595			595
Other liabilities		2,201			2,166			1,755			1,768			1,557			1,672
Total liabilities	$	53,306		$	52,269		$	50,153		$	49,487		$	47,540		$	46,101
Shareholders’ equity:
Common stock	$	88		$	88		$	87		$	87		$	87		$	87
Capital surplus		1,158			1,138			1,111			1,242			1,228			1,218
Unappropriated retained earnings		3,451			3,466			3,343			3,079			3,016			3,002
Unrealized gains - equities		158			145			98			103			46			40
Unrealized gains - fixed maturities		481			384			306			669			639			426
Unrealized gains (losses) - fixed maturity-related cash flow hedges		(6	)		(8	)		(7	)		5			5			4
Other comprehensive income, net of tax		(18	)		(22	)		(22	)		(24	)		(21	)		(22	)
Total shareholders’ equity		5,312			5,191			4,916			5,161			5,000			4,755
Noncontrolling interests		—			4			3			197			193			182
Total liabilities and equity	$	58,618		$	57,464		$	55,072		$	54,845		$	52,733		$	51,038

Page 17

American Financial Group, Inc.     

Book Value Per Share and Price / Book Summary     

(in millions, except per share information)     

	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			03/31/16
Shareholders’ equity	$	5,312		$	5,191		$	4,916		$	5,161		$	5,000		$	4,755
Unrealized (gains) related to fixed maturities		(475	)		(376	)		(299	)		(674	)		(644	)		(430	)
Adjusted shareholders’ equity		4,837			4,815			4,617			4,487			4,356			4,325
Goodwill		(199	)		(199	)		(199	)		(199	)		(199	)		(199	)
Intangibles		(30	)		(32	)		(34	)		(44	)		(46	)		(47	)
Tangible adjusted shareholders’ equity	$	4,608		$	4,584		$	4,384		$	4,244		$	4,111		$	4,079
Common shares outstanding		88.007			87.592			86.924			86.813			86.850			86.966
Book value per share:
Book value per share	$	60.36		$	59.26		$	56.55		$	59.45		$	57.57		$	54.67
Adjusted (a)		54.97			54.98			53.11			51.68			50.16			49.72
Tangible, adjusted (b)		52.36			52.34			50.43			48.89			47.34			46.90
Market capitalization
AFG’s closing common share price	$	99.37		$	95.42		$	88.12		$	75.00		$	73.93		$	70.37
Market capitalization	$	8,745		$	8,358		$	7,660		$	6,511		$	6,421		$	6,120
Price / Adjusted book value ratio		1.81			1.74			1.66			1.45			1.47			1.42

(a) Excludes unrealized gains related to fixed maturity investments.     

(b) Excludes unrealized gains related to fixed maturity investments, goodwill and intangibles.     

Page 18

American Financial Group, Inc.     

Capitalization     

($ in millions)     

	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			03/31/16
AFG senior obligations	$	1,128		$	1,008		$	1,008		$	1,008		$	708		$	708
Borrowings drawn under credit facility		—			—			—			—			—			—
Obligations of subsidiaries - other		—			—			—			18			12			12
Debt excluding subordinated debt	$	1,128		$	1,008		$	1,008		$	1,026		$	720		$	720
AFG subordinated debentures		300			300			300			300			300			300
Total principal amount of long-term debt	$	1,428		$	1,308		$	1,308		$	1,326		$	1,020		$	1,020
Shareholders’ equity		5,312			5,191			4,916			5,161			5,000			4,755
Noncontrolling interests		—			4			3			197			193			182
Less:
Unrealized (gains) - fixed maturity investments		(481	)		(384	)		(306	)		(669	)		(639	)		(426	)
Total adjusted capital	$	6,259		$	6,119		$	5,921		$	6,015		$	5,574		$	5,531
Ratio of debt to total adjusted capital:
Including subordinated debt		22.8	%		21.4	%		22.1	%		22.0	%		18.3	%		18.4	%
Excluding subordinated debt		18.0	%		16.5	%		17.0	%		17.1	%		12.9	%		13.0	%

Page 19

American Financial Group, Inc.     

Additional Supplemental Information     

($ in millions)     

	Three Months Ended										Six Months Ended
	06/30/17		03/31/17		12/31/16		09/30/16		06/30/16		06/30/17		06/30/16
Property and Casualty Insurance
Paid Losses (GAAP)	$	652	$	554	$	683	$	537	$	586	$	1,206	$	1,133

	06/30/17		03/31/17		12/31/16		09/30/16		06/30/16		03/31/16
Statutory Surplus
Property and Casualty Insurance	$	2,882	$	3,013	$	2,939	$	3,038	$	2,601	$	2,574
AFG’s principal annuity subsidiaries (total adjusted capital)	$	2,389	$	2,341	$	2,234	$	2,216	$	2,089	$	2,032
Allowable dividends without regulatory approval
Property and Casualty Insurance	$	496	$	496	$	496	$	434	$	434	$	434
Annuity and Run-off		197		197		197		375		375		375
Total	$	693	$	693	$	693	$	809	$	809	$	809

Page 20

American Financial Group, Inc.     

Total Cash and Investments     

($ in millions)     

	Carrying Value - June 30, 2017
	Property and				Parent and							% of
	Casualty		Annuity and		Other Non-		Consolidate			Total AFG		Investment
	Insurance		Run-off		Insurance		CLOs			Consolidated		Portfolio
Total cash and investments:
Cash and cash equivalents	$	1,024	$	740	$	443	$	—		$	2,207		5	%
Fixed maturities - Available for sale		7,152		30,338		14		—			37,504		84	%
Fixed maturities - Trading		222		117		—		—			339		1	%
Equity securities		1,050		537		53		—			1,640		4	%
Policy loans		—		188		—		—			188		0	%
Mortgage loans		256		928		—		—			1,184		2	%
Equity index call options		—		589		—		—			589		1	%
Real estate and other investments		504		766		46		(188	)		1,128		3	%
Total cash and investments	$	10,208	$	34,203	$	556	$	(188	)	$	44,779		100	%
Unrealized gain/(loss) on equity securities	$	155	$	88	$	—	$	—		$	243
	Carrying Value - December 31, 2016
	Property and				Parent and							% of
	Casualty		Annuity and		Other Non-		Consolidate			Total AFG		Investment
	Insurance		Run-off		Insurance		CLOs			Consolidated		Portfolio
Total cash and investments:
Cash and cash equivalents	$	1,383	$	511	$	213	$	—		$	2,107		5	%
Fixed maturities - Available for sale		6,510		28,021		13		—			34,544		83	%
Fixed maturities - Trading		242		117		—		—			359		1	%
Equity securities		1,013		496		49		—			1,558		4	%
Policy loans		—		192		—		—			192		0	%
Mortgage loans		261		886		—		—			1,147		3	%
Equity index call options		—		492		—		—			492		1	%
Real estate and other investments		497		705		48		(216	)		1,034		3	%
Total cash and investments	$	9,906	$	31,420	$	323	$	(216	)	$	41,433		100	%
Unrealized gain/(loss) on equity securities	$	102	$	49	$	—	$	—		$	151

Page 21

American Financial Group, Inc.     

Net Investment Income     

($ in millions)     

	Three Months Ended															Six Months Ended
	06/30/17			03/31/17			12/31/16			09/30/16			06/30/16			06/30/17			06/30/16
Property and Casualty Insurance:
Gross Investment Income
Fixed maturities - Available for sale	$	65		$	63		$	64		$	63		$	66		$	128		$	130
Fixed maturities - Trading		2			1			(1	)		2			1			3			2
Equity securities		12			14			13			13			12			26			25
Equity in investees		11			4			7			7			2			15			8
Other investments		8			6			6			10			10			14			11
Gross investment income		98			88			89			95			91			186			176
Investment expenses		(2	)		(2	)		(4	)		(2	)		(2	)		(4	)		(4	)
Total net investment income	$	96		$	86		$	85		$	93		$	89		$	182		$	172
Average cash and investments (a)	$	9,947		$	9,855		$	9,779		$	9,647		$	9,465		$	9,872		$	9,397
Average yield (b)		3.86	%		3.49	%		3.48	%		3.86	%		3.76	%		3.69	%		3.66	%
Fixed Annuity:
Gross Investment Income
Fixed maturities - Available for sale	$	322		$	318		$	315		$	307		$	307		$	640		$	601
Fixed maturities - Trading		—			—			—			—			—			—			—
Equity securities		5			5			7			6			6			10			11
Equity in investees		10			6			6			9			2			16			7
Other investments		22			19			20			27			29			41			40
Gross investment income		359			348			348			349			344			707			659
Investment expenses		(2	)		(3	)		(4	)		(1	)		(2	)		(5	)		(5	)
Total net investment income	$	357		$	345		$	344		$	348		$	342		$	702		$	654
Average cash and investments (a)	$	30,988		$	30,055		$	29,192		$	28,548		$	27,964		$	30,522		$	27,575
Average yield (b)		4.62	%		4.59	%		4.72	%		4.88	%		4.88	%		4.60	%		4.74	%
AFG consolidated net investment income:
Property & Casualty	$	96		$	86		$	85		$	93		$	89		$	182		$	172
Annuity and Run-off:
Fixed Annuity		357			345			344			348			342			702			654
Variable Annuity		3			2			2			3			2			5			5
Run-off		5			5			6			5			5			10			10
Other		4			3			—			1			4			7			5
Consolidate CLOs		(5	)		(6	)		(8	)		(17	)		(19	)		(11	)		(12	)
Total net investment income	$	460		$	435		$	429		$	433		$	423		$	895		$	834

(a) Average cash and investments is the average of the beginning and ending quarter balances, or the average of the five quarters balances.     

(b) Average yield is calculated by dividing investment income for the quarter by the average cash and investment balance over the quarter.        

Page 22

American Financial Group, Inc.     

Fixed Maturities - By Security Type - AFG Consolidated     

($ in millions )     

										% of
	Amortized			Unrealized			% of			Investment
June 30, 2017	Cost	Fair Value		Gain (Loss)			Fair Value			Portfolio
US Government and government agencies	$314	$	314	$	—			1	%		1	%
States, municipalities and political subdivisions	6,837		7,056		219			19	%		16	%
Foreign government	256		260		4			1	%		1	%
Residential mortgage-backed securities	3,254		3,567		313			9	%		8	%
Commercial mortgage-backed securities	1,041		1,085		44			3	%		2	%
Asset-backed securities	7,108		7,191		83			19	%		16	%
Corporate and other bonds	17,760		18,370		610			48	%		41	%
Total AFG consolidated	$36,570	$	37,843	$	1,273			100	%		85	%
Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)	4.40%
Net of investment expense (a)	4.36%
Approximate average life and duration:
Approximate average life	6.5 years
Approximate duration	5 years
										% of
	Amortized			Unrealized			% of			Investment
December 31, 2016	Cost	Fair Value		Gain (Loss)			Fair Value			Portfolio
US Government and government agencies	$348	$	348	$	—			1	%		1	%
States, municipalities and political subdivisions	6,677		6,808		131			19	%		16	%
Foreign government	256		261		5			1	%		1	%
Residential mortgage-backed securities	3,371		3,639		268			11	%		9	%
Commercial mortgage-backed securities	1,446		1,493		47			4	%		3	%
Asset-backed securities	5,962		5,959		(3	)		17	%		14	%
Corporate and other bonds	16,034		16,395		361			47	%		40	%
Total AFG consolidated	$34,094	$	34,903	$	809			100	%		84	%
Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)	4.56%
Net of investment expense (a)	4.48%
Approximate average life and duration:
Approximate average life	6.5 years
Approximate duration	5 years

(a) Annualized yield is calculated by dividing investment income for the quarter by the average cost over the quarter. Average cost is the average of the beginning and ending quarter asset balances.     

Page 23

American Financial Group, Inc.

Fixed Maturities - By Security Type Portfolio

($ in millions )

	June 30, 2017										December 31, 2016
	Amortized Cost			Fair Value		Unrealized Gain (Loss)		% of Fair Value			Amortized Cost			Fair Value		Unrealized Gain (Loss)			% of Fair Value
Property and Casualty Insurance:
US Government and government agencies	$	264		$	264	$	—		4	%	$	295		$	295	$	—			4	%
States, municipalities and political subdivisions		2,677			2,725		48		37	%		2,588			2,605		17			39	%
Foreign government		245			247		2		3	%		245			249		4			4	%
Residential mortgage-backed securities		943			1,003		60		14	%		980			1,026		46			15	%
Commercial mortgage-backed securities		107			110		3		1	%		142			144		2			2	%
Asset-backed securities		1,640			1,648		8		22	%		1,445			1,440		(5	)		21	%
Corporate and other bonds		1,351			1,377		26		19	%		976			993		17			15	%
Property and Casualty Insurance	$	7,227		$	7,374	$	147		100	%	$	6,671		$	6,752	$	81			100	%
Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		3.75	%									3.88	%
Net of investment expense (a)		3.65	%									3.67	%
Tax equivalent, net of investment expense (b)		4.15	%									4.20	%
Approximate average life and duration:
Approximate average life		5 years										4.5 years
Approximate duration		4 years										3.5 years

	June 30, 2017										December 31, 2016
	Amortized Cost			Fair Value		Unrealized Gain (Loss)		% of Fair Value			Amortized Cost			Fair Value		Unrealized Gain (Loss)		% of Fair Value
Annuity and Run-off:
US Government and government agencies	$	49		$	49	$	—		0	%	$	52		$	52	$	—		0	%
States, municipalities and political subdivisions		4,160			4,331		171		14	%		4,089			4,203		114		15	%
Foreign government		11			13		2		0	%		11			12		1		0	%
Residential mortgage-backed securities		2,310			2,551		241		9	%		2,390			2,601		211		9	%
Commercial mortgage-backed securities		934			975		41		3	%		1,304			1,349		45		5	%
Asset-backed securities		5,468			5,543		75		18	%		4,517			4,519		2		16	%
Corporate and other bonds		16,409			16,993		584		56	%		15,058			15,402		344		55	%
Total Annuity and Run-off	$	29,341		$	30,455	$	1,114		100	%	$	27,421		$	28,138	$	717		100	%
Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		4.54	%									4.72	%
Net of investment expense (a)		4.52	%									4.67	%
Approximate average life and duration:
Approximate average life		7 years										6.5 years
Approximate duration		5 years										5 years

(a) Annualized yield is calculated by dividing investment income for the quarter by the average cost over the quarter.

Average cost is the average of the beginning and ending quarter asset balances.

(b) Adjusts the yield on tax-exempt bonds to the fully taxable equivalent yield.

Page 24

American Financial Group, Inc.

Fixed Maturities - Credit Rating

($ in millions)

	June 30, 2017
By Credit Rating (a)	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value
Investment grade
AAA	$	6,144	$	6,250	$	106		17	%
AA		8,064		8,303		239		22	%
A		8,905		9,193		288		24	%
BBB		9,939		10,284		345		27	%
Subtotal - Investment grade		33,052		34,030		978		90	%
BB		652		664		12		2	%
B		353		357		4		1	%
Other (b)		2,513		2,792		279		7	%
Subtotal - Non-Investment grade		3,518		3,813		295		10	%
Total	$	36,570	$	37,843	$	1,273		100	%

98% of the fixed maturity portfolio is NAIC designated 1 or 2.

	December 31, 2016
By Credit Rating (a)	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value
Investment grade
AAA	$	6,117	$	6,189	$	72			18	%
AA		7,123		7,257		134			21	%
A		8,323		8,487		164			24	%
BBB		8,999		9,193		194			26	%
Subtotal - Investment grade		30,562		31,126		564			89	%
BB		687		695		8			2	%
B		446		445		(1	)		1	%
Other (b)		2,399		2,637		238			8	%
Subtotal - Non-Investment grade		3,532		3,777		245			11	%
Total	$	34,094	$	34,903	$	809			100	%

97% of the fixed maturity portfolio is NAIC designated 1 or 2.

(a) If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies rate a security, the rating displayed is the second lowest.

(b) See page 28 and 29 for more information.

Page 25

American Financial Group, Inc.

Mortgage-Backed Securities - AFG Consolidated

($ in millions)

June 30, 2017	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value			% of Investment Portfolio
Residential
Agency	$	230	$	230	$	—		5	%		1	%
Prime (Non-Agency)		1,370		1,533		163		33	%		3	%
Alt-A		1,104		1,209		105		26	%		3	%
Subprime		550		595		45		13	%		1	%
Commercial		1,041		1,085		44		23	%		2	%
Total AFG consolidated	$	4,295	$	4,652	$	357		100	%		10	%

• Substantially all of AFG’s MBS securities are either senior tranches of securitizations or collateralized by senior tranches of securitizations.

• The average amortized cost as a percent of par is - Prime 82%; Alt-A 79%; Subprime 86%; CMBS 99%.

• The average FICO score of our residential MBS securities is - Prime 740; Alt-A 710; Subprime 641.

• 95% of our Commercial MBS portfolio is investment-grade rated (80% AAA) and the average subordination for this group of assets is 32%.

• The approximate average life by collateral type is - Residential 4.5 years; Commercial 5 years.

December 31, 2016	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value			% of Investment Portfolio
Residential
Agency	$	243	$	243	$	—		5	%		0	%
Prime (Non-Agency)		1,406		1,557		151		30	%		4	%
Alt-A		1,093		1,170		77		23	%		3	%
Subprime		629		669		40		13	%		2	%
Commercial		1,446		1,493		47		29	%		3	%
Total AFG consolidated	$	4,817	$	5,132	$	315		100	%		12	%

Page 26

American Financial Group, Inc.

Mortgage-Backed Securities Portfolio

($ in millions)

Property and Casualty Insurance:	June 30, 2017
By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value			% of Inv Portfolio
Residential
Agency	$	184	$	183	$	(1	)		16	%		2	%
Prime (Non-Agency)		195		212		17			19	%		2	%
Alt-A		333		362		29			33	%		4	%
Subprime		231		246		15			22	%		2	%
Commercial		107		110		3			10	%		1	%
Total	$	1,050	$	1,113	$	63			100	%		11	%

	December 31, 2016
By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value			% of Inv Portfolio
Residential
Agency	$	192	$	191	$	(1	)		17	%		2	%
Prime (Non-Agency)		187		202		15			17	%		2	%
Alt-A		342		361		19			31	%		4	%
Subprime		259		272		13			23	%		3	%
Commercial		142		144		2			12	%		1	%
Total	$	1,122	$	1,170	$	48			100	%		12	%

Annuity and Run-off:	June 30, 2017
By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value			% of Inv Portfolio
Residential
Agency	$	46	$	47	$	1		1	%		0	%
Prime (Non-Agency)		1,174		1,308		134		37	%		4	%
Alt-A		771		847		76		24	%		2	%
Subprime		319		349		30		10	%		1	%
Commercial		934		975		41		28	%		3	%
Total	$	3,244	$	3,526	$	282		100	%		10	%

	December 31, 2016
By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value			% of Inv Portfolio
Residential
Agency	$	51	$	52	$	1		1	%		0	%
Prime (Non-Agency)		1,218		1,343		125		34	%		4	%
Alt-A		751		809		58		21	%		3	%
Subprime		370		397		27		10	%		1	%
Commercial		1,304		1,349		45		34	%		5	%
Total	$	3,694	$	3,950	$	256		100	%		13	%

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American Financial Group, Inc.

Mortgage-Backed Securities - Credit Rating

($ in millions)

	June 30, 2017
By Credit Rating (a)	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value
Investment grade
AAA	$	1,320	$	1,368	$	48		29	%
AA		107		111		4		2	%
A		253		267		14		6	%
BBB		254		269		15		6	%
Subtotal - investment grade		1,934		2,015		81		43	%
BB		206		209		3		4	%
B		271		278		7		6	%
Other		1,884		2,150		266		47	%
Total	$	4,295	$	4,652	$	357		100	%

96% of the mortgage-backed security portfolio has an NAIC 1 designation.

	December 31, 2016
By Credit Rating (a)	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value
Investment grade
AAA	$	1,668	$	1,720	$	52		34	%
AA		164		169		5		3	%
A		256		268		12		5	%
BBB		274		288		14		6	%
Subtotal - investment grade		2,362		2,445		83		48	%
BB		211		212		1		4	%
B		330		333		3		6	%
Other		1,914		2,142		228		42	%
Total	$	4,817	$	5,132	$	315		100	%

97% of the mortgage-backed security portfolio has an NAIC 1 designation.

(a) If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies rate a security, the rating displayed is the second lowest.

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Appendix A

American Financial Group, Inc.

Fixed Maturities - Credit Rating by Type

($ in millions)

	Fair Value - June 30, 2017
By Credit Rating (a)	US Gov		Munis		Frgn gov		RMBS		CMBS		ABS		Corp/Oth		Total		% Total
Investment grade
AAA	$	270	$	1,811	$	157	$	499	$	869	$	2,418	$	226	$	6,250		17	%
AA		36		4,563		85		93		18		2,150		1,358		8,303		22	%
A		—		522		14		206		61		1,705		6,685		9,193		24	%
BBB		—		51		4		183		86		838		9,122		10,284		27	%
Subtotal - Investment grade		306		6,947		260		981		1,034		7,111		17,391		34,030		90	%
BB		—		4		—		185		24		1		450		664		2	%
B		—		5		—		266		12		—		74		357		1	%
CCC, CC, C		—		8		—		989		4		3		25		1,029		3	%
D		—		—		—		552		—		—		—		552		1	%
Subtotal - Non-Investment grade		—		17		—		1,992		40		4		549		2,602		7	%
Not Rated		8		92		—		594		11		76		430		1,211		3	%
Total	$	314	$	7,056	$	260	$	3,567	$	1,085	$	7,191	$	18,370	$	37,843		100	%
	Fair Value - December 31, 2016
By Credit Rating (a)	US Gov		Munis		Frgn gov		RMBS		CMBS		ABS		Corp/Oth		Total		% Total
Investment grade
AAA	$	299	$	1,727	$	171	$	508	$	1,213	$	2,053	$	218	$	6,189		18	%
AA		41		4,388		30		127		42		1,480		1,149		7,257		21	%
A		—		501		55		170		98		1,593		6,070		8,487		24	%
BBB		—		69		5		202		86		813		8,018		9,193		26	%
Subtotal - Investment grade		340		6,685		261		1,007		1,439		5,939		15,455		31,126		89	%
BB		—		4		—		184		29		16		462		695		2	%
B		—		8		—		307		25		1		104		445		1	%
CCC, CC, C		—		11		—		963		—		3		32		1,009		3	%
D		—		—		—		679		—		—		—		679		2	%
Subtotal - Non-Investment grade		—		23		—		2,133		54		20		598		2,828		8	%
Not Rated		8		100		—		499		—		—		342		949		3	%
Total	$	348	$	6,808	$	261	$	3,639	$	1,493	$	5,959	$	16,395	$	34,903		100	%

(a) If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies rate a security, the rating displayed is the second lowest.

Page 29