Equibles

8-K

AMERICAN FINANCIAL GROUP INC (AFG)

8-K 2020-02-04 For: 2020-02-03
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Added on April 04, 2026

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): February 3, 2020

AMERICAN FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Ohio 1-13653 31-1544320
(State or other jurisdiction<br> <br>of incorporation) (Commission<br> <br>File Number) (IRS Employer<br> <br>Identification No.)
301 East Fourth Street, Cincinnati, OH 45202
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(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)
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☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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.  ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock AFG New York Stock Exchange
6% Subordinated Debentures due<br>November 15, 2055 AFGH New York Stock Exchange
5.875% Subordinated Debentures due<br>March 30, 2059 AFGB New York Stock Exchange
5.125% Subordinated Debentures due<br>December 15, 2059 AFGC New York Stock Exchange

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 fourth quarter of 2019 and the year ended December 31, 2019 and the availability of the Investor Supplement on the Company’s website. The press release was issued on February 3, 2020. 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.
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(c) Shell company transactions. Not applicable
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(d) Exhibits
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Exhibit No. Description
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99.1 Earnings Release dated February 3, 2020, reporting American Financial Group Inc. fourth quarter and full year results for the period ended December 31, 2019.
99.2 Investor Supplement – Fourth Quarter 2019
104 The cover page from this Current Report on Form 8-K, formatted as Inline XBRL.

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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: February 3, 2020
By: /s/ Karl J. Grafe
Karl J. Grafe
Vice President

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EX-99.1

Exhibit 99.1

LOGO

American Financial Group, Inc. Announces Fourth Quarter and Full Year Results

• Net earnings of $9.85 per share for the full year; fourth quarter net earnings of $2.31 per share<br>
• Fourth quarter earnings include ($0.64) per share related to Neon exit charges and $0.73 per share in otherafter-tax non-core items
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• Core net operating earnings per share of $8.62 for the full year; fourth quarter core net operatingearnings per share of $2.22
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• Full year 2019 ROE of 17.1%; 2019 core operating ROE of 14.9%
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• Full year 2020 core net operating earnings guidance between $8.75 - $9.25 per share<br>
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CINCINNATI – February 3, 2020 – American Financial Group, Inc. (NYSE: AFG) today reported 2019 fourth quarter net earnings attributable to shareholders of $211 million ($2.31 per share) compared to a net loss of $29 million ($0.33 per share) for the 2018 fourth quarter. Net earnings for the 2019 fourth quarter include after-tax non-core items aggregating $8 million ($0.09 per share), comprised of $58 million ($0.64 per share) related to costs associated with plans to exit the Lloyd’s of London insurance market in 2020 (as announced previously), $51 million ($0.56 per share) in non-core net realized gains on securities, after-tax annuity non-core earnings of $19 million ($0.21 per share), and a loss on the early retirement of debt of $4 million ($0.04 per share). Comparatively, net earnings in the 2018 fourth quarter were adversely impacted by $188 million ($2.08 per share) in non-core after-tax net realized losses on securities. Net earnings attributable to shareholders for the year were $9.85 per share, compared to $5.85 per share in 2018. Other details may be found in the table below. Book value per share was $69.43 per share at December 31, 2019. AFG paid cash dividends of $2.25 per share during the quarter, which included a $1.80 per share special dividend. Return on equity was 17.1% and 10.9% for 2019 and 2018, respectively.

Core net operating earnings were $203 million ($2.22 per share) for the 2019 fourth quarter, compared to $159 million ($1.75 per share) in the 2018 fourth quarter. Higher core operating earnings in our Annuity Segment were partially offset by lower core operating earnings in our Property and Casualty (“P&C”) insurance operations. In connection with AFG’s new definition of annuity core operating earnings, AFG’s core net operating earnings for the fourth quarter of 2019 exclude the impact of items that are not necessarily indicative of operating trends, and include an expense for the amortization of FIA option costs, which AFG believes better reflects the cost of funds for FIAs and AFG’s evaluation of the financial performance of its Annuity business. Book value per share, excluding unrealized gains related to fixed maturities, was $59.70 per share at December 31, 2019. For the twelve months ended December 31, 2019, AFG’s growth in adjusted book value per share plus dividends was 17.8%. Core operating return on equity was 14.9% and 15.6% for 2019 and 2018, respectively.

Beginning with the second quarter of 2019, AFG changed the way it defines annuity core operating earnings to exclude the impact of items that are not necessarily indicative of operating trends. Core net operating earnings for periods prior to the change have not been adjusted, however results for the three and twelve month periods ended December 31, 2019 are reconciled to historically reported Annuity Segment core operating earnings on page 5 of this release. As a result, reported core net operating earnings for periods beginning with the second quarter of 2019 are not directly comparable to prior year periods.

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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, ratings 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, annuity non-core earnings and losses, and 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.

In millions, except per share amounts Three months ended<br>December 31, Twelve months ended<br>December 31,
2019 2018 2019 2018
Components of net earnings (loss) attributable to shareholders:
Core operating earnings before income taxes $ 251 $ 199 $ 967 $ 932
Pretax non-core items:
Realized gains (losses) on securities 65 (238 ) 287 (266 )
Annuity non-core earnings (losses) 24 — (36 ) —
Special A&E charges — — (29 ) (27 )
Neon exited lines charge (76 ) — (76 ) —
Loss on early retirement of debt (5 ) — (5 ) —
Earnings (loss) before income taxes 259 (39 ) 1,108 639
Provision (credit) for income taxes:
Core operating earnings 50 46 193 184
Non-core items 18 (50 ) 46 (62 )
Total provision (credit) for income taxes 68 (4 ) 239 122
Net earnings (loss), including noncontrolling interests 191 (35 ) 869 517
Less net earnings (losses) attributable to noncontrolling interests:
Core operating earnings (losses) (2 ) (6 ) (10 ) (13 )
Non-core items (18 ) — (18 ) —
Total net earnings (losses) attributable to noncontrolling interests (20 ) (6 ) (28 ) (13 )
Net earnings (loss) attributable to shareholders $ 211 **** $ (29 ) $ 897 **** $ 530 ****
Net earnings (loss):
Core net operating<br>earnings**^(a)^** $ 203 $ 159 $ 784 $ 761
Realized gains (losses) on securities 51 (188 ) 227 (210 )
Annuity non-core earnings (losses) 19 — (29 ) —
Special A&E charges — — (23 ) (21 )
Neon exited lines charge (58 ) — (58 ) —
Loss on early retirement of debt (4 ) — (4 ) —
Net earnings (loss) attributable to shareholders $ 211 **** $ (29 ) $ 897 **** $ 530 ****
Components of Earnings (Loss) Per Share:
Core net operating earnings^(a,b)^ $ 2.22 **** $ 1.75 **** $ 8.62 **** $ 8.40 ****
Non-core Items:
Realized gains (losses) on securities 0.56 (2.08 ) 2.47 (2.31 )
Annuity non-core earnings (losses) 0.21 — (0.31 ) —
Special A&E charges — — (0.25 ) (0.24 )
Neon exited lines charge (0.64 ) — (0.64 ) —
Loss on early retirement of debt (0.04 ) — (0.04 ) —
Diluted Earnings (Loss) Per Share $ 2.31 **** $ (0.33 ) $ 9.85 **** $ 5.85 ****

Footnotes (a) and (b) are 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, commented: “We are very pleased with AFG’s continued strong core operating earnings, which generated an impressive core operating return on equity of 15% in 2019. We believe these results demonstrate the strength of our portfolio of diversified specialty insurance businesses, and the value of our in-house investment management team, American Money Management.

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“AFG had approximately $1.1 billion of excess capital (including parent company cash of approximately $165 million) at December 31, 2019. 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, returning capital to shareholders in the form of regular and special cash dividends and opportunistic share repurchases is also an important and effective component of our capital management strategy. Over the past year, we increased our quarterly dividend by 12.5% and paid special dividends of $3.30 per share.

“We expect AFG’s core net operating earnings in 2020 to be between $8.75 and $9.25 per share. Our core earnings per share guidance excludes non-core items such as realized gains and losses, annuity non-core earnings and losses, and other significant items that are not able to be estimated with reasonable precision, or that may not be indicative of ongoing operations.”

Specialty Property and Casualty Insurance Operations

Pretax core operating earnings in AFG’s P&C Insurance Segment were $199 million in the fourth quarter of 2019, compared to $214 million in the prior year period, a decrease of $15 million, or 7%. Lower underwriting profits were partially offset by higher year-over-year P&C net investment income.

The Specialty P&C insurance operations generated an underwriting profit of $89 million for the 2019 fourth quarter compared to $102 million in the fourth quarter of 2018. Lower underwriting profitability in our Property and Transportation Group, primarily due to lower year-over-year earnings in our crop operations, was partially offset by higher year-over-year underwriting profits in our Specialty Casualty and Specialty Financial Groups.

The fourth quarter 2019 combined ratio of 93.5% increased 1.5 points year-over-year and includes 3.8 points of favorable prior year reserve development, compared to 4.7 points of favorable prior year reserve development in the 2018 fourth quarter. Catastrophe losses added 1.0 point to the combined ratio in the 2019 fourth quarter, compared to 3.0 points in the comparable prior year period. Pretax catastrophe losses, net of reinsurance and inclusive of reinstatement premiums, were $15 million and $38 million in the fourth quarters of 2019 and 2018, respectively.

Gross and net written premiums were up 8% and 9%, respectively, in the 2019 fourth quarter compared to the same period in 2018. Growth in our Specialty Casualty and Specialty Financial Groups was partially offset by lower premiums in our Property and Transportation Group. Average renewal pricing across our entire P&C Group was up approximately 5% for the quarter. Excluding our workers’ compensation business, renewal pricing was up approximately 7%. Pricing in our Specialty P&C group overall is the highest we have achieved in over five years, meeting or exceeding our expectations in each of our Specialty P&C sub-segments.

Further details about AFG’s Specialty P&C operations may be found in the accompanying schedules.

The Property and Transportation Group reported an underwriting loss of $2 million in the fourth quarter of 2019, compared to an underwriting profit of $64 million in the comparable prior year period. Record levels of prevented planting claims in our crop operations were the driver of the lower underwriting results in this group during the quarter. Catastrophe losses for this group were $7 million in the fourth quarter of 2019. By comparison, catastrophe losses had a favorable impact of $2 million in the 2018 fourth quarter.

Fourth quarter 2019 gross written premiums in this group were down by 4% and net written premiums were flat year-over-year. Higher premiums in our property and inland marine and ocean marine businesses were

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more than offset by lower premiums in our transportation businesses (primarily due to the timing of the renewal of a large commercial auto account) and lower year-over-year premiums related to our winter wheat and rainfall index products in our crop operations. For the full year, gross and net written premiums in this group grew by 4% and 7%, respectively. Overall renewal rates in this group increased nearly 5% on average in the 2019 fourth quarter and 4% overall for the full year.

The Specialty Casualty Group reported an underwriting profit of $69 million in the 2019 fourth quarter compared to $22 million in the comparable 2018 period, largely due to a reduction in the core underwriting loss at Neon, resulting primarily from lower year-over-year catastrophe losses. See “Neon Exited Lines Charge” below for information about AFG’s plans to exit the Lloyd’s of London insurance market in 2020. Underwriting profitability in our workers’ compensation business continues to be very strong; these businesses reported higher year-over-year underwriting profit, primarily as a result of higher favorable prior year reserve development. The businesses in this group achieved a very strong 89.7% calendar year combined ratio overall in the fourth quarter. Catastrophe losses for this group were $6 million and $28 million in the fourth quarters of 2019 and 2018, respectively. Catastrophe losses in both periods were primarily attributable to Neon.

Gross and net written premiums increased 19% and 15%, respectively, for the fourth quarter of 2019 when compared to the same prior year period. Growth in our surplus lines and excess liability businesses, primarily the result of new business opportunities, rate increases and higher retentions on renewal business, were primary drivers of the higher premiums. In addition, higher premiums reported by Neon, premium growth in our executive liability business and the addition of ABA Insurance Services contributed to the higher year-over-year premiums. Renewal pricing for this group was up 6% in the fourth quarter, and was up approximately 3% overall for the year. Excluding our workers’ compensation businesses, renewal rates in this group were up approximately 11% in the fourth quarter and 8% for the year. Renewal rates in our Specialty Casualty Group overall and when adjusted to exclude the impact of workers’ compensation are the highest we have seen in more than five years.

The Specialty Financial Group reported an underwriting profit of $32 million in the fourth quarter of 2019, compared to $20 million in the fourth quarter of 2018. Higher year-over-year underwriting profits in our financial institutions, surety and trade credit businesses contributed to these results. Nearly all businesses in this group continued to achieve excellent underwriting margins. Catastrophe losses for this group were $2 million in the fourth quarter of 2019, compared to $10 million in the 2018 fourth quarter.

Gross and net written premiums increased by 4% and 10%, respectively, in the 2019 fourth quarter when compared to the same 2018 period due to modest growth across all businesses in the group. Fourth quarter 2019 net written premiums were favorably impacted by the cancellation of business that was largely ceded. Renewal pricing in this group was up 2% during the fourth quarter and 1% for the full year of 2019.

Carl Lindner III stated: “I am extremely pleased with the strong underwriting margins produced by our Specialty P&C group during the quarter, particularly in the wake of a challenging crop year. We continue to see momentum in our renewal pricing, with nearly one third of our non-workers’ compensation businesses achieving double digit rate increases during the quarter. Looking forward to 2020, we are forecasting an overall calendar year combined ratio in the range of 92% to 94%, and we expect net written premiums to be down 1% to 5% when compared to the $5.3 billion reported in 2019, primarily due to the run-off of Neon. Excluding the impact of Neon, we expect growth in net written premiums in the range of 3% to 7% in 2020.”

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.

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Annuity Segment

Annuity Operating Earnings – For all periods presented, the table below reflects core operating earnings under AFG’s new definition. For periods prior to the second quarter of 2019, “new” core operating earnings are reconciled to previously reported operating results.

In millions Three months ended<br>December 31, Twelve months ended<br>December 31,
2019 2018 2019 2018
Pretax Annuity Core Operating Earnings:
Pretax earnings before certain items below $ 157 $ 139 $ 598 $ 557
Investments marked to market through core operating earnings, net of DAC 20 16 100 104
Amortization of option costs, net of DAC (73 ) (69 ) (289 ) (252 )
Pretax Annuity core operating earnings – new method **** 104 **** **** 86 **** **** 409 **** **** 409 ****
Other amounts previously reported as operating, net* n/a (66 ) (11 ) (48 )
Pretax Annuity core operating earnings, as reported $ 104 $ 20 $ 398 $ 361
Year over year growth in quarterly average invested assets 9 % 12 % 11 % 10 %
Annualized yield on investments marked to market through core operating earnings 7.7 % 7.1 % 9.7 % 12.4 %
* “Other” primarily reflects (i) the impact of fair value accounting, (ii) the impact of<br>changes in the stock market on the liability for guaranteed benefits and deferred acquisition costs (DAC), and (iii) unlocking.
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Pretax earnings before certain items increased primarily as a result of the growth in AFG’s annuity business. In addition, the fourth quarter of 2019 included an unusually high amount of investment income that is not expected to recur.

Earnings from investments marked to market through core operating earnings vary from quarter to quarter based on the reported results of the underlying investments. Higher amortization of option costs reflects growth in AFG’s annuity business, as well as higher costs of options.

Annuity Premiums – AFG’s Annuity Segment reported statutory premiums of $1.14 billion in the fourth quarter of 2019, compared to $1.48 billion in the fourth quarter of 2018, a decrease of 23%. Higher sales of traditional fixed annuities in the financial institutions channel and higher pension risk transfer premiums were more than offset by lower sales of fixed-indexed annuities (FIAs) in all channels.

In response to the continued drop in market interest rates in 2019, AFG implemented numerous crediting rate decreases in order to maintain appropriate returns on its annuity sales, which impacted premium volume.

Craig Lindner stated, “The Annuity Segment continued to perform well in the fourth quarter of 2019, earning a core operating return on equity in excess of 12%. While 2019 premiums fell short of the record level reported in 2018, business written in 2019 contributed to growth in average annuity investments and reserves of approximately 11%. We are well positioned to continue to profitably grow our business and capitalize on our consumer-centric model.”

2020 Annuity Core Operating Earnings Guidance – For 2020, AFG expects:

• Statutory Annuity premiums to be between $4.5 billion and $5.2 billion, compared to $5.0 billion<br>reported in 2019
• Year-over-year average annuity asset and reserve growth of 7% to 9%, and
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• Pretax Annuity core operating earnings in the range of $395 million to $425 million, compared to<br>$398 million reported in 2019.
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This guidance reflects: (i) an assumed annualized return of 10% on investments required to be marked to market through operating earnings, similar to the return earned in 2019 and (ii) the impact of lower interest rates including the impact of lower short term rates, which will have a negative impact on the Annuity Segment’s approximately $4 billion net investment in cash and floating rate securities.

Annuity Non-Core Earnings – In the fourth quarter of 2019, AFG reported after-tax Annuity non-core earnings of $19 million or ($0.21 per share); this amount reflects the favorable impact of the fourth quarter increase in the S&P 500 on fair value accounting for FIAs.

More information about premiums and the results of operations for our Annuity Segment may be found in AFG’s Quarterly Investor Supplement.

Investments

AFG recorded fourth quarter 2019 net realized gains on securities of $51 million ($0.56 per share) after tax and after deferred acquisition costs (DAC), which included $43 million ($0.48 per share) in after-tax, after-DAC net gains to adjust equity securities that the Company continued to own, to fair value. By comparison, AFG recorded net realized losses on securities of $188 million ($2.08 per share) in the comparable 2018 period.

Unrealized gains on fixed maturities were $862 million after tax and after DAC at December 31, 2019, an increase of $779 million since year-end 2018. Our portfolio continues to be high quality, with 91% 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 twelve months ended December 31, 2019, P&C net investment income was approximately 8% higher than the comparable 2018 period.

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

Neon Exited Lines Charge

On January 6, 2020, AFG announced its plans to exit the Lloyd’s of London insurance market and actions it had initiated to place its Lloyd’s subsidiaries including its Lloyd’s Managing Agency, Neon Underwriting Ltd., into run-off. The exit from this business will allow AFG to reallocate capital to its other insurance businesses and opportunities that have the potential to earn targeted returns on investment. Neon and its predecessor, Marketform, have failed to achieve AFG’s profitability objectives since AFG’s purchase of Marketform in 2008. As a result of this decision, AFG recognized a non-core after-tax charge of $58 million ($0.64 per share) in the fourth quarter of 2019 for Neon reserve strengthening and expenses related to exit costs associated with the run-off of this business. Beginning with the first quarter of 2020, the run-off expenses for Neon will be reported as a non-core item.

Loss on Early Retirement of Debt

In November 2019, AFG announced the offering of $200 million aggregate principal amount of 5.125% Subordinated Debentures due December 2059. A portion of the proceeds was used to fund the early redemption of its $150 million 6-1/4% Subordinated Debentures due September 2054. The redemption

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resulted in after-tax non-core expenses in the fourth quarter of 2019 of approximately $4 million ($0.04 per share).

About American Financial Group, Inc.

American Financial Group is an insurance holding company, based in Cincinnati, Ohio with assets of $70 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 traditional fixed, fixed-indexed and variable-indexed annuities in the retail, financial institutions, broker-dealer and registered investment advisor 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, including the cost of equity index options; 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; changes in insurance law or regulation, including changes in statutory accounting rules and changes in regulation of the Lloyd’s market, including modifications to capital requirements; changes in costs associated with the exit from the Lloyd’s market and the run-off of AFG’s Lloyd’s-based insurer, Neon; 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; disruption caused by cyber-attacks or other technology breaches or failures by AFG or its business partners and service providers, which could negatively impact AFG’s business and/or expose AFG to litigation; 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 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 2019 fourth quarter and full year results at 11:30 am (ET) tomorrow, Tuesday, February 4, 2020. Toll-free telephone access will be available by dialing 877-459-8719 (international dial-in 424-276-6843). The conference ID for the live call is 9996079. Please dial in five to ten minutes prior to the scheduled start time of the call.

A replay will be available approximately two hours following the completion of the call and will remain available until 11:59 pm (ET) on February 11, 2020. To listen to the replay, dial 1-855-859-2056 (international dial-in 404-537-3406) and provide the conference ID 9996079.

The conference call and accompanying webcast slides will also be broadcast live over the Internet. To access the event, click on the following link: https://www.AFGinc.com/news-and-events/event-calendar. Alternatively, you can choose Events from the Investor Relations page at www.AFGinc.com.

An archived webcast will be available immediately after the call via the same link on our website until February 11, 2020 at 11:59 p.m. (ET). An archived audio MP3 file will be available within 24 hours of the call.

Contact:

Diane P. Weidner, IRC

Asst. Vice President – Investor & Media 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.

AFG2020-05

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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<br>December 31, Twelve months ended<br>December 31,
2019 2018 2019 2018
Revenues
P&C insurance net earned premiums $ 1,370 $ 1,270 $ 5,185 $ 4,865
Life, accident & health net earned premiums 5 6 22 24
Net investment income 593 542 2,303 2,094
Realized gains (losses) on securities 65 (238 ) 287 (266 )
Income of managed investment entities:
Investment income 63 68 269 255
Gain (loss) on change in fair value of assets/liabilities (14 ) (11 ) (30 ) (21 )
Other income 48 53 201 199
Total revenues 2,130 1,690 8,237 7,150
Costs and expenses
P&C insurance losses & expenses 1,362 1,175 4,996 4,586
Annuity, life, accident & health benefits & expenses 333 400 1,440 1,299
Interest charges on borrowed money 18 16 68 62
Expenses of managed investment entities 52 57 220 211
Other expenses 106 81 405 353
Total costs and expenses 1,871 1,729 7,129 6,511
Earnings (loss) before income taxes 259 (39 ) 1,108 639
Provision (credit) for income taxes 68 (4 ) 239 122
Net earnings (losses) including noncontrolling interests 191 (35 ) 869 517
Less: Net earnings (loss) attributable to noncontrolling interests (20 ) (6 ) (28 ) (13 )
Net earnings (loss) attributable to shareholders $ 211 $ (29 ) $ 897 $ 530
Diluted earnings (loss) per Common Share $ 2.31 $ (0.33 ) $ 9.85 $ 5.85
Average number of diluted shares 91.3 89.3 91.0 90.6
December 31, December 31,
Selected Balance Sheet Data: 2019 2018
Total cash and investments $ 55,252 $ 48,498
Long-term debt $ 1,473 $ 1,302
Shareholders’<br>equity**^(c)^** $ 6,269 $ 4,970
Shareholders’ equity (excluding unrealized gains/losses related to fixed<br>maturities)^(c)^ $ 5,390 $ 4,898
Book value per share $ 69.43 $ 55.66
Book value per share (excluding unrealized gains/losses related to fixed<br>maturities)^(c)^ $ 59.70 $ 54.86
Common Shares Outstanding 90.3 89.3

Footnote (c) is 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<br>December 31, Pct.<br>Change Twelve months ended<br>December 31, Pct.<br>Change
2019 2018 2019 2018
Gross written premiums $ 1,749 $ 1,613 8 % $ 7,299 $ 6,840 7 %
Net written premiums $ 1,313 $ 1,208 9 % $ 5,342 $ 5,023 6 %
Ratios (GAAP):
Loss & LAE ratio 63.2 % 62.7 % 61.5 % 61.3 %
Underwriting expense ratio 30.3 % 29.3 % 32.2 % 32.1 %
Specialty Combined Ratio 93.5 % 92.0 % 93.7 % 93.4 %
Combined Ratio – P&C Segment 99.1 % 92.0 % 95.8 % 93.8 %
SupplementalInformation:^(d)^
Gross Written Premiums:
Property & Transportation $ 628 $ 651 (4 %) $ 2,759 $ 2,645 4 %
Specialty Casualty 929 778 19 % 3,768 3,445 9 %
Specialty Financial 192 184 4 % 772 750 3 %
$ 1,749 $ 1,613 8 % $ 7,299 $ 6,840 7 %
Net Written Premiums:
Property & Transportation $ 449 $ 448 - % $ 1,876 $ 1,754 7 %
Specialty Casualty 669 581 15 % 2,701 2,509 8 %
Specialty Financial 156 142 10 % 617 602 2 %
Other 39 37 5 % 148 158 (6 %)
$ 1,313 $ 1,208 9 % $ 5,342 $ 5,023 6 %
Combined Ratio (GAAP):
Property & Transportation 100.4 % 86.5 % 95.7 % 93.1 %
Specialty Casualty 89.7 % 96.5 % 93.3 % 94.2 %
Specialty Financial 79.6 % 85.5 % 85.0 % 88.9 %
Aggregate Specialty Group 93.5 % 92.0 % 93.7 % 93.4 %
Three months ended<br>December 31, Twelve months ended<br>December 31,
--- --- --- --- --- --- --- --- --- --- --- --- ---
2019 2018 2019 2018
Reserve Development (Favorable)/Adverse:
Property & Transportation $ (18 ) $ (7 ) $ (67 ) $ (50 )
Specialty Casualty (25 ) (52 ) (88 ) (139 )
Specialty Financial (14 ) (7 ) (38 ) (26 )
Other Specialty 4 5 6 3
Specialty Group Excluding A&E and Neon Charge (53 ) (61 ) (187 ) (212 )
Special A&E Reserve Charge – P&C<br>Run-off — — 18 18
Neon Exited Lines Charge and Other 8 — 26 2
Total Reserve Development $ (45 ) $ (61 ) $ (143 ) $ (192 )
Points on Combined Ratio:
Property & Transportation (3.5 ) (1.5 ) (3.6 ) (2.8 )
Specialty Casualty (3.8 ) (8.5 ) (3.4 ) (5.8 )
Specialty Financial (9.2 ) (5.2 ) (6.3 ) (4.4 )
Aggregate Specialty Group (3.8 ) (4.7 ) (3.7 ) (4.4 )
Total P&C Segment (0.4 ) (4.7 ) (2.2 ) (4.0 )

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

Page 10

AMERICAN FINANCIAL GROUP, INC.

ANNUITY SEGMENT

(Dollarsin Millions)

Components of Statutory Premiums

Three months ended<br>December 31, Pct.<br>Change Twelve months ended<br>December 31, Pct.<br>Change
2019 2018 2019 2018
Annuity Premiums:
Financial Institutions $ 629 $ 597 5 % $ 2,766 $ 2,268 22 %
Retail 195 419 (53 %) 1,063 1,505 (29 %)
Broker-Dealer 116 339 (66 %) 689 1,285 (46 %)
Pension Risk Transfer 158 75 111 % 257 132 95 %
Education Market 36 46 (22 %) 164 192 (15 %)
Variable Annuities 5 6 (17 %) 21 25 (16 %)
Total Annuity Premiums $ 1,139 $ 1,482 (23 %) $ 4,960 $ 5,407 (8 %)

Components of Annuity Earnings Before Income Taxes

Three months ended<br>December 31, Pct.<br>Change Twelve months ended<br>December 31, Pct.<br>Change
2019 2018 2019 2018
Revenues:
Net investment income $ 458 $ 419 9 % $ 1,792 $ 1,638 9 %
Other income 26 27 (4 %) 108 107 1 %
Total revenues 484 446 9 % 1,900 1,745 9 %
Costs and Expenses:
Annuity benefits 251 334 (25 %) 1,151 998 15 %
Acquisition expenses 71 56 27 % 248 255 (3 %)
Other expenses 34 36 (6 %) 139 131 6 %
Total costs and expenses 356 426 (16 %) 1,538 1,384 11 %
Annuity earnings before income taxes $ 128 $ 20 540 % $ 362 $ 361 — %

Supplemental Annuity Information

Three months ended<br>December 31, Twelve months ended<br>December 31,
2019 2018 2019 2018
Core net interest spread on fixed annuities – new method 1.98 % 1.94 % 2.01 % 2.14 %
Core net spread earned on fixed annuities – new method 1.07 % 0.98 % 1.08 % 1.20 %
* Excludes fixed annuity portion of variable annuity business.
--- ---

Further details may be found in our Quarterly Investor Supplement, which is posted on our website.

Page 11

AMERICAN FINANCIAL GROUP, INC.

Notes to Financial Schedules

a) Components of core net operating earnings (in millions):
Three months ended<br>December 31, Twelve months ended<br>December 31,
--- --- --- --- --- --- --- --- --- --- --- --- ---
2019 2018 2019 2018
Core Operating Earnings before Income Taxes:
P&C insurance segment $ 199 $ 214 $ 753 $ 740
Annuity segment, new method 104 86 409 409
Annuity results previously reported as operating earnings — (66 ) (11 ) (48 )
Interest and other corporate expenses* (50 ) (29 ) (174 ) (156 )
Core operating earnings before income taxes 253 205 977 945
Related income taxes 50 46 193 184
Core net operating earnings $ 203 $ 159 $ 784 $ 761
* Other Corporate Expenses includes income and expenses associated with AFG‘s run-off businesses.
--- ---
b) Because AFG had a net loss for the fourth quarter of 2018, the impact of potential dilutive options (weighted<br>average of 1.4 million shares) was excluded from AFG’s fully diluted earnings per share calculation. However, for the non-GAAP measure of core net operating earnings, the Company believes it is most<br>appropriate to use the fully diluted share data that would have been used if AFG had net earnings for the fourth quarter.
--- ---
c) Shareholders’ Equity at December 31, 2019 includes $862 million ($9.54 per share) in unrealized after-tax gains on fixed maturities and $17 million ($0.19 per share) in unrealized after-tax losses on fixed maturity-related cash flow hedges. Shareholders’ Equity<br>at December 31, 2018 includes $83 million ($0.93 per share) in unrealized after-tax gains on fixed maturities and $11 million ($0.13 per share) in unrealized<br>after-tax losses on fixed maturity-related cash flow hedges.
--- ---
d) Supplemental Notes:
--- ---
• Property & Transportation includes primarily physical damage and liability coverage<br>for buses and trucks, inland and ocean marine, agricultural-related products and other commercial property coverages.
--- ---
• Specialty Casualty includes primarily excess and surplus, general liability, executive liability,<br>professional liability, umbrella and excess liability, specialty coverages in targeted markets, customized programs for small to mid-sized businesses and workers’ compensation insurance.<br>
--- ---
• Specialty Financial includes risk management insurance programs for lending and leasing institutions<br>(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 12

EX-99.2

Exhibit 99.2

American Financial Group, Inc.<br><br><br><br> <br>Investor Supplement - Fourth Quarter2019<br> <br><br> <br>February 3, 2020<br><br><br><br> <br>American Financial Group, Inc.<br><br><br>Corporate Headquarters<br><br><br>Great American Insurance Group Tower<br><br><br>301 E Fourth Street<br><br><br>Cincinnati, OH 45202<br><br><br>513 579 6739
American Financial Group, Inc.<br><br><br>Table of Contents - Investor Supplement - Fourth Quarter 2019
---
Section Page
--- --- ---
Table of Contents - Investor Supplement - Fourth Quarter 2019 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 12
Detail of Annuity Benefits Expense 13
Core Net Spread on Fixed Annuities - New Method 14
Statutory Annuity Premiums 15
Fixed Annuity Benefits Accumulated (GAAP) 16
Guaranteed Minimum Interest Rate Analysis 17
Annuity Non-Core Earnings (Losses) 18
Reconciliation from Core to GAAP Annuity Pretax Earnings 19
Consolidated Balance Sheet / Book Value / Debt
Consolidated Balance Sheet 20
Book Value Per Share and Price / Book Summary 21
Capitalization 22
Additional Supplemental Information 23
Consolidated Investment Supplement
Total Cash and Investments 24
Net Investment Income 25
Significant Investments<br>Marked-to-Market Through Investment Income and Investments Accounted For Using the Equity Method 26
Fixed Maturities - By Security Type - AFG Consolidated 27
Fixed Maturities - By Security Type Portfolio 28
Fixed Maturities - Credit Rating 29
Mortgage-Backed Securities - AFG Consolidated 30
Mortgage-Backed Securities Portfolio 31
Mortgage-Backed Securities - Credit Rating 32
Appendix
A. Fixed Maturities - Credit Rating by Type 33

Page 2

American Financial Group, Inc.<br><br><br>Financial Highlights<br> <br>(in millions, except per share<br>information)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Highlights
Net earnings (loss) $ 211 $ 147 $ 210 $ 329 $ (29 ) $ 897 $ 530
Core net operating earnings 203 205 192 184 159 784 761
Total assets 70,130 69,067 67,697 66,132 63,456 70,130 63,456
Adjusted shareholders’ equity (a) 5,390 5,376 5,260 5,201 4,898 5,390 4,898
Property and Casualty net written premiums 1,313 1,618 1,264 1,147 1,208 5,342 5,023
Annuity statutory premiums 1,139 1,077 1,349 1,395 1,482 4,960 5,407
Per share data
Diluted earnings per share $ 2.31 $ 1.62 $ 2.31 $ 3.63 $ (0.33 ) $ 9.85 $ 5.85
Core net operating earnings per share 2.22 2.25 2.12 2.02 1.75 8.62 8.40
Adjusted book value per share (a) 59.70 59.65 58.49 58.02 54.86 59.70 54.86
Cash dividends per common share 2.2500 0.4000 1.9000 0.4000 1.9000 4.9500 4.4500
Financial ratios
Annualized return on equity (b) 15.6 % 11.0 % 16.0 % 25.9 % (2.3 %) 17.1 % 10.9 %
Annualized core operating return on equity (b) 15.0 % 15.3 % 14.7 % 14.5 % 12.6 % 14.9 % 15.6 %
Property and Casualty combined ratio - Specialty:
Loss & LAE ratio 63.2 % 63.1 % 60.2 % 58.9 % 62.7 % 61.5 % 61.3 %
Underwriting expense ratio 30.3 % 30.9 % 34.8 % 33.6 % 29.3 % 32.2 % 32.1 %
Combined ratio - Specialty 93.5 % 94.0 % 95.0 % 92.5 % 92.0 % 93.7 % 93.4 %
Net spread on fixed annuities:
Net interest spread on fixed annuities - new method 1.98 % 1.97 % 2.08 % 2.01 % 1.94 % 2.01 % 2.14 %
Net spread earned on fixed annuities:
Core operating - new method 1.07 % 1.06 % 1.11 % 1.08 % 0.98 % 1.08 % 1.20 %
Non-core - new method:
Previously reported in core operating n/a n/a n/a (0.12 %) (0.73 %) (0.03 %) (0.13 %)
Currently reported in non-core 0.24 % (0.28 %) (0.35 %) n/a n/a (0.09 %) n/a
(a) Excludes unrealized gains related to fixed maturity investments, a reconciliation to the GAAP measure is on<br>page 21.
--- ---
(b) Excludes accumulated other comprehensive income.
--- ---

Page 3

American Financial Group, Inc.<br><br><br>Summary of Earnings<br> <br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Property and Casualty Insurance
Underwriting profit $ 88 $ 72 $ 59 $ 87 $ 101 $ 306 $ 320
Net investment income 120 124 124 104 115 472 438
Other income (expense) (9 ) (2 ) (8 ) (6 ) (2 ) (25 ) (18 )
Property and Casualty Insurance operating earnings 199 194 175 185 214 753 740
Annuity earnings 104 100 104 90 20 398 361
Interest expense of parent holding companies (18 ) (17 ) (17 ) (16 ) (16 ) (68 ) (62 )
Other expense (32 ) (22 ) (25 ) (27 ) (13 ) (106 ) (94 )
Pre-tax core operating earnings 253 255 237 232 205 977 945
Income tax expense 50 50 45 48 46 193 184
Core net operating earnings **** 203 **** **** 205 **** **** 192 **** **** 184 **** **** 159 **** **** 784 **** **** 761 ****
Non-core items, net of tax:
Realized gains (losses) on securities 51 (14 ) 45 145 (188 ) 227 (210 )
Annuity non-core earnings (losses), net of taxes 19 (21 ) (27 ) — — (29 ) —
Special A&E charges:
Property and Casualty Insurance run-off<br>operations — (14 ) — — — (14 ) (14 )
Former Railroad and Manufacturing operations — (9 ) — — — (9 ) (7 )
Neon exited lines charge (58 ) — — — — (58 ) —
Other non-core items, net of taxes (4 ) — — — — (4 ) —
Net earnings $ 211 **** $ 147 **** $ 210 **** $ 329 **** $ (29 ) $ 897 **** $ 530 ****

Page 4

American Financial Group, Inc.<br><br><br>Earnings Per Share Summary<br> <br>(in millions, except per share<br>information)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Core net operating earnings $ 203 **** $ 205 **** $ 192 **** $ 184 $ 159 **** $ 784 **** $ 761 ****
Net earnings $ 211 **** $ 147 **** $ 210 **** $ 329 $ (29 ) $ 897 **** $ 530 ****
Average number of diluted shares - core 91.274 91.137 90.981 90.695 90.668 91.024 90.626
Average number of diluted shares - net 91.274 91.137 90.981 90.695 89.278 91.024 90.626
Diluted earnings per share:
Core net operating earnings per share $ 2.22 **** $ 2.25 **** $ 2.12 **** $ 2.02 $ 1.75 **** $ 8.62 **** $ 8.40 ****
Realized gains (losses) on securities 0.56 (0.15 ) 0.48 1.61 (2.08 ) 2.47 (2.31 )
Annuity non-core earnings (losses), net of taxes 0.21 (0.23 ) (0.29 ) — — (0.31 ) —
Special A&E charges:
Property and Casualty Insurance run-off<br>operations — (0.15 ) — — — (0.15 ) (0.16 )
Former Railroad and Manufacturing operations — (0.10 ) — — — (0.10 ) (0.08 )
Neon exited lines charge (0.64 ) — — — — (0.64 ) —
Other non-core items, net of taxes (0.04 ) — — — — (0.04 ) —
Diluted earnings per share $ 2.31 **** $ 1.62 **** $ 2.31 **** $ 3.63 $ (0.33 ) $ 9.85 **** $ 5.85 ****

Page 5

American Financial Group, Inc.<br><br><br>Property and Casualty Insurance - Summary Underwriting Results (GAAP)<br><br><br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Property and Transportation $ (2 ) $ 38 $ 4 $ 39 $ 64 $ 79 $ 120
Specialty Casualty 69 23 47 36 22 175 141
Specialty Financial 32 26 21 13 20 92 66
Other Specialty (10 ) 1 (12 ) — (4 ) (21 ) (5 )
Underwriting profit - Specialty **** 89 **** **** 88 **** **** 60 **** **** 88 **** **** 102 **** **** 325 **** **** 322 ****
Other core charges, included in loss and LAE (1 ) (16 ) (1 ) (1 ) (1 ) (19 ) (2 )
Underwriting profit - Core **** 88 **** **** 72 **** **** 59 **** **** 87 **** **** 101 **** **** 306 **** **** 320 ****
Special A&E charges, included in loss and LAE — (18 ) — — — (18 ) (18 )
Neon exited lines charge (76 ) — — — — (76 ) —
Underwriting profit (loss) - Property and Casualty Insurance $ 12 **** $ 54 **** $ 59 **** $ 87 **** $ 101 **** $ 212 **** $ 302 ****
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium $ 1 $ — $ — $ — $ (1 ) $ 1 $ 2
Catastrophe loss 14 22 12 12 39 60 103
Total current accident year catastrophe losses $ 15 $ 22 $ 12 $ 12 $ 38 $ 61 $ 105
Prior year loss reserve development (favorable) / adverse $ (45 ) $ (12 ) $ (41 ) $ (45 ) $ (61 ) $ (143 ) $ (192 )
Combined ratio:
Property and Transportation 100.4 % 93.5 % 99.1 % 89.0 % 86.5 % 95.7 % 93.1 %
Specialty Casualty 89.7 % 96.5 % 92.5 % 94.2 % 96.5 % 93.3 % 94.2 %
Specialty Financial 79.6 % 83.7 % 85.6 % 91.4 % 85.5 % 85.0 % 88.9 %
Other Specialty 122.5 % 98.5 % 135.1 % 98.9 % 112.3 % 113.3 % 103.7 %
Combined ratio - Specialty **** 93.5 % **** 94.0 % **** 95.0 % **** 92.5 % **** 92.0 % **** 93.7 % **** 93.4 %
Other core charges 0.1 % 1.1 % 0.1 % 0.1 % 0.0 % 0.4 % 0.0 %
Neon exited lines charge, loss and LAE 5.5 % 0.0 % 0.0 % 0.0 % 0.0 % 1.4 % 0.0 %
Special A&E charges 0.0 % 1.2 % 0.0 % 0.0 % 0.0 % 0.3 % 0.4 %
Combined ratio **** 99.1 % **** 96.3 % **** 95.1 % **** 92.6 % **** 92.0 % **** 95.8 % **** 93.8 %
Combined ratio excl. catastrophe and prior year development 96.3 % 95.5 % 97.5 % 95.4 % 93.7 % 96.2 % 95.7 %
Loss and LAE components - property and casualty insurance
Current accident year, excluding catastrophe loss 66.0 % 64.6 % 62.7 % 61.8 % 64.4 % 64.0 % 63.6 %
Prior accident year loss reserve development (0.4 %) (0.8 %) (3.3 %) (3.9 %) (4.7 %) (2.2 %) (4.0 %)
Current accident year catastrophe loss 1.0 % 1.6 % 0.9 % 1.1 % 3.0 % 1.2 % 2.1 %
Loss and LAE ratio **** 66.6 % **** 65.4 % **** 60.3 % **** 59.0 % **** 62.7 % **** 63.0 % **** 61.7 %

Page 6

American Financial Group, Inc.<br><br><br>Specialty - Underwriting Results (GAAP)<br> <br>($ in<br>millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Gross written premiums $ 1,749 $ 2,351 $ 1,664 $ 1,535 $ 1,613 $ 7,299 $ 6,840
Ceded reinsurance premiums (436 ) (733 ) (400 ) (388 ) (405 ) (1,957 ) (1,817 )
Net written premiums 1,313 1,618 1,264 1,147 1,208 5,342 5,023
Change in unearned premiums 57 (176 ) (64 ) 26 62 (157 ) (158 )
Net earned premiums 1,370 1,442 1,200 1,173 1,270 5,185 4,865
Loss and LAE 865 910 722 691 796 3,188 2,983
Underwriting expense 416 444 418 394 372 1,672 1,560
Underwriting profit $ 89 **** $ 88 **** $ 60 **** $ 88 **** $ 102 **** $ 325 **** $ 322 ****
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium $ 1 $ — $ — $ — $ (1 ) $ 1 $ 2
Catastrophe loss 14 22 12 12 39 60 103
Total current accident year catastrophe losses $ 15 $ 22 $ 12 $ 12 $ 38 $ 61 $ 105
Prior year loss reserve development (favorable) / adverse $ (53 ) $ (46 ) $ (42 ) $ (46 ) $ (61 ) $ (187 ) $ (212 )
Combined ratio:
Loss and LAE ratio 63.2 % 63.1 % 60.2 % 58.9 % 62.7 % 61.5 % 61.3 %
Underwriting expense ratio 30.3 % 30.9 % 34.8 % 33.6 % 29.3 % 32.2 % 32.1 %
Combined ratio **** 93.5 % **** 94.0 % **** 95.0 % **** 92.5 % **** 92.0 % **** 93.7 % **** 93.4 %
Combined ratio excl. catastrophe and prior year development 96.3 % 95.5 % 97.5 % 95.4 % 93.7 % 96.2 % 95.7 %
Loss and LAE components:
Current accident year, excluding catastrophe loss 66.0 % 64.6 % 62.7 % 61.8 % 64.4 % 64.0 % 63.6 %
Prior accident year loss reserve development (3.8 %) (3.1 %) (3.4 %) (4.0 %) (4.7 %) (3.7 %) (4.4 %)
Current accident year catastrophe loss 1.0 % 1.6 % 0.9 % 1.1 % 3.0 % 1.2 % 2.1 %
Loss and LAE ratio **** 63.2 % **** 63.1 % **** 60.2 % **** 58.9 % **** 62.7 % **** 61.5 % **** 61.3 %

Page 7

American Financial Group, Inc.<br><br><br>Property and Transportation - Underwriting Results (GAAP)<br><br><br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Gross written premiums $ 628 $ 1,113 $ 579 $ 439 $ 651 $ 2,759 $ 2,645
Ceded reinsurance premiums (179 ) (452 ) (157 ) (95 ) (203 ) (883 ) (891 )
Net written premiums 449 661 422 344 448 1,876 1,754
Change in unearned premiums 56 (78 ) (43 ) 17 31 (48 ) (25 )
Net earned premiums 505 583 379 361 479 1,828 1,729
Loss and LAE 392 421 259 225 327 1,297 1,192
Underwriting expense 115 124 116 97 88 452 417
Underwriting profit $ (2 ) $ 38 **** $ 4 **** $ 39 **** $ 64 **** $ 79 **** $ 120 ****
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium $ — $ — $ — $ — $ (1 ) $ — $ —
Catastrophe loss 7 8 8 9 (1 ) 32 26
Total current accident year catastrophe losses $ 7 $ 8 $ 8 $ 9 $ (2 ) $ 32 $ 26
Prior year loss reserve development (favorable) / adverse $ (18 ) $ (17 ) $ (6 ) $ (26 ) $ (7 ) $ (67 ) $ (50 )
Combined ratio:
Loss and LAE ratio 77.8 % 72.1 % 68.4 % 62.2 % 68.2 % 71.0 % 69.0 %
Underwriting expense ratio 22.6 % 21.4 % 30.7 % 26.8 % 18.3 % 24.7 % 24.1 %
Combined ratio **** 100.4 % **** 93.5 % **** 99.1 % **** 89.0 % **** 86.5 % **** 95.7 % **** 93.1 %
Combined ratio excl. catastrophe and prior year development 102.5 % 94.9 % 98.7 % 93.6 % 88.2 % 97.5 % 94.4 %
Loss and LAE components:
Current accident year, excluding catastrophe loss 79.9 % 73.5 % 68.0 % 66.8 % 69.9 % 72.8 % 70.3 %
Prior accident year loss reserve development (3.5 %) (2.8 %) (1.6 %) (7.2 %) (1.5 %) (3.6 %) (2.8 %)
Current accident year catastrophe loss 1.4 % 1.4 % 2.0 % 2.6 % (0.2 %) 1.8 % 1.5 %
Loss and LAE ratio **** 77.8 % **** 72.1 % **** 68.4 % **** 62.2 % **** 68.2 % **** 71.0 % **** 69.0 %

Page 8

American Financial Group, Inc.<br><br><br>Specialty Casualty - Underwriting Results (GAAP)<br> <br>($ in<br>millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Gross written premiums $ 929 $ 1,031 $ 896 $ 912 $ 778 $ 3,768 $ 3,445
Ceded reinsurance premiums (260 ) (287 ) (234 ) (286 ) (197 ) (1,067 ) (936 )
Net written premiums 669 744 662 626 581 2,701 2,509
Change in unearned premiums 7 (86 ) (28 ) 3 32 (104 ) (106 )
Net earned premiums 676 658 634 629 613 2,597 2,403
Loss and LAE 402 416 380 388 389 1,586 1,476
Underwriting expense 205 219 207 205 202 836 786
Underwriting profit $ 69 **** $ 23 **** $ 47 **** $ 36 **** $ 22 **** $ 175 **** $ 141 ****
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium $ 1 $ — $ — $ — $ — $ 1 $ 1
Catastrophe loss 5 10 1 1 28 17 45
Total current accident year catastrophe losses $ 6 $ 10 $ 1 $ 1 $ 28 $ 18 $ 46
Prior year loss reserve development (favorable) / adverse $ (25 ) $ (19 ) $ (31 ) $ (13 ) $ (52 ) $ (88 ) $ (139 )
Combined ratio:
Loss and LAE ratio 59.4 % 63.1 % 60.0 % 61.6 % 63.5 % 61.1 % 61.5 %
Underwriting expense ratio 30.3 % 33.4 % 32.5 % 32.6 % 33.0 % 32.2 % 32.7 %
Combined ratio **** 89.7 % **** 96.5 % **** 92.5 % **** 94.2 % **** 96.5 % **** 93.3 % **** 94.2 %
Combined ratio excl. catastrophe and prior year development 92.7 % 97.8 % 97.1 % 96.3 % 100.3 % 96.0 % 98.1 %
Loss and LAE components:
Current accident year, excluding catastrophe loss 62.4 % 64.4 % 64.6 % 63.7 % 67.3 % 63.8 % 65.4 %
Prior accident year loss reserve development (3.8 %) (2.9 %) (4.7 %) (2.2 %) (8.5 %) (3.4 %) (5.8 %)
Current accident year catastrophe loss 0.8 % 1.6 % 0.1 % 0.1 % 4.7 % 0.7 % 1.9 %
Loss and LAE ratio **** 59.4 % **** 63.1 % **** 60.0 % **** 61.6 % **** 63.5 % **** 61.1 % **** 61.5 %

Page 9

American Financial Group, Inc.<br><br><br>Specialty Financial - Underwriting Results (GAAP)<br> <br>($ in<br>millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Gross written premiums $ 192 $ 207 $ 189 $ 184 $ 184 $ 772 $ 750
Ceded reinsurance premiums (36 ) (40 ) (40 ) (39 ) (42 ) (155 ) (148 )
Net written premiums 156 167 149 145 142 617 602
Change in unearned premiums (4 ) (6 ) 2 1 (1 ) (7 ) (4 )
Net earned premiums 152 161 151 146 141 610 598
Loss and LAE 40 47 49 56 51 192 225
Underwriting expense 80 88 81 77 70 326 307
Underwriting profit $ 32 **** $ 26 **** $ 21 **** $ 13 **** $ 20 **** $ 92 **** $ 66 ****
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium $ — $ — $ — $ — $ — $ — $ 1
Catastrophe loss 2 3 3 2 10 10 28
Total current accident year catastrophe losses $ 2 $ 3 $ 3 $ 2 $ 10 $ 10 $ 29
Prior year loss reserve development (favorable) / adverse $ (14 ) $ (9 ) $ (9 ) $ (6 ) $ (7 ) $ (38 ) $ (26 )
Combined ratio:
Loss and LAE ratio 26.1 % 29.7 % 32.3 % 38.2 % 36.4 % 31.5 % 37.6 %
Underwriting expense ratio 53.5 % 54.0 % 53.3 % 53.2 % 49.1 % 53.5 % 51.3 %
Combined ratio **** 79.6 % **** 83.7 % **** 85.6 % **** 91.4 % **** 85.5 % **** 85.0 % **** 88.9 %
Combined ratio excl. catastrophe and prior year development 87.7 % 87.2 % 89.7 % 94.3 % 83.6 % 89.7 % 88.6 %
Loss and LAE components:
Current accident year, excluding catastrophe loss 34.2 % 33.2 % 36.4 % 41.1 % 34.5 % 36.2 % 37.3 %
Prior accident year loss reserve development (9.2 %) (5.5 %) (5.9 %) (4.3 %) (5.2 %) (6.3 %) (4.4 %)
Current accident year catastrophe loss 1.1 % 2.0 % 1.8 % 1.4 % 7.1 % 1.6 % 4.7 %
Loss and LAE ratio **** 26.1 % **** 29.7 % **** 32.3 % **** 38.2 % **** 36.4 % **** 31.5 % **** 37.6 %

Page 10

American Financial Group, Inc.<br> <br>OtherSpecialty - Underwriting Results (GAAP)<br> <br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Gross written premiums $ — $ — $ — $ — $ — $ — $ —
Ceded reinsurance premiums 39 46 31 32 37 148 158
Net written premiums 39 46 31 32 37 148 158
Change in unearned premiums (2 ) (6 ) 5 5 — 2 (23 )
Net earned premiums 37 40 36 37 37 150 135
Loss and LAE 31 26 34 22 29 113 90
Underwriting expense 16 13 14 15 12 58 50
Underwriting profit (loss) $ (10 ) $ 1 **** $ (12 ) $ — **** $ (4 ) $ (21 ) $ (5 )
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium $ — $ — $ — $ — $ — $ — $ —
Catastrophe loss — 1 — — 2 1 4
Total current accident year catastrophe losses $ — $ 1 $ — $ — $ 2 $ 1 $ 4
Prior year loss reserve development (favorable) / adverse $ 4 $ (1 ) $ 4 $ (1 ) $ 5 $ 6 $ 3
Combined ratio:
Loss and LAE ratio 83.5 % 64.0 % 96.0 % 59.7 % 76.5 % 75.4 % 66.4 %
Underwriting expense ratio 39.0 % 34.5 % 39.1 % 39.2 % 35.8 % 37.9 % 37.3 %
Combined ratio **** 122.5 % **** 98.5 % **** 135.1 % **** 98.9 % **** 112.3 % **** 113.3 % **** 103.7 %
Combined ratio excl. catastrophe and prior year development 113.4 % 99.0 % 123.4 % 100.8 % 95.6 % 108.9 % 99.0 %

Page 11

American Financial Group, Inc.<br><br><br>Annuity Earnings<br><br><br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Net investment income $ 435 $ 421 $ 420 $ 406 $ 401 $ 1,682 $ 1,524
Investments marked to market through core operating earnings 23 27 31 29 18 110 114
Guaranteed withdrawal benefit fees 17 17 17 16 17 67 65
Policy charges and other miscellaneous income 9 10 10 11 10 40 43
Total revenues 484 475 478 462 446 1,899 1,746
Annuity benefits 281 276 272 266 260 1,095 964
Acquisition expenses 65 64 67 60 64 256 242
Other expenses 34 35 35 35 36 139 131
Total costs and expenses 380 375 374 361 360 1,490 1,337
Pretax Annuity core operating earnings - new method $ 104 $ 100 $ 104 $ 101 **** $ 86 **** $ 409 **** $ 409 ****
Other amounts previously reported as core operating, net (a) n/a n/a n/a (11 ) (66 ) (11 ) (48 )
Pretax Annuity core operating earnings - as reported $ 104 $ 100 $ 104 $ 90 **** $ 20 **** $ 398 **** $ 361 ****
(a) “Other” primarily reflects (1) the impact of fair value accounting, (2) the impact of<br>changes in the stock market on the liability for guaranteed benefits and DAC, and (3) unlocking.
--- ---

Page 12

American Financial Group, Inc.<br><br><br>Detail of Annuity Benefits Expense<br><br><br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Detail of annuity benefits expense:
Cost of funds:
Amortization of options (a) $ 150 $ 149 $ 146 $ 141 $ 141 $ 586 $ 506
Traditional fixed annuities 62 62 61 59 58 244 234
Fixed component of fixed-indexed annuities 25 24 23 22 21 94 78
Immediate annuities 6 6 6 6 6 24 24
Pension risk transfer (PRT) 3 2 1 1 1 7 1
Federal Home Loan Bank 6 7 7 7 6 27 20
Total cost of funds - new method 252 250 244 236 233 982 863
Guaranteed withdrawal benefit reserve 24 21 20 19 19 84 74
Amortization of sales inducements 3 3 4 4 5 14 19
Change in expected death and annuitization reserve and other 2 2 4 7 3 15 8
Total other annuity benefits 29 26 28 30 27 113 101
Total annuity benefits expense - new method $ 281 **** $ 276 **** $ 272 **** $ 266 **** $ 260 **** $ 1,095 **** $ 964 ****
(a) Amortizaton of options, net of DAC and reserve offsets:
Amortization of options $ 150 $ 149 $ 146 $ 141 $ 141 $ 586 $ 506
DAC and reserve offsets (77 ) (74 ) (74 ) (72 ) (72 ) (297 ) (254 )
Amortization of options, net of DAC and reserve offsets $ 73 $ 75 $ 72 $ 69 $ 69 $ 289 $ 252

Page 13

American Financial Group, Inc.<br><br><br>Core Net Spread on Fixed Annuities - New Method<br><br><br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Average fixed annuity investments (at amortized cost) (a) $ 39,316 $ 38,650 $ 37,907 $ 36,991 $ 35,993 $ 38,216 $ 34,471
Average annuity benefits accumulated 39,615 38,946 38,202 37,078 36,103 38,460 34,706
Annuity benefits accumulated in excess of investments (a) $ (299 ) $ (296 ) $ (295 ) $ (87 ) $ (110 ) $ (244 ) $ (235 )
As % of average annuity benefits accumulated (except as noted)
Net investment income (as % of investments) 4.40 % 4.34 % 4.40 % 4.37 % 4.44 % 4.38 % 4.40 %
Investments marked to market through core operating earnings (as % of investments) 0.23 % 0.28 % 0.33 % 0.31 % 0.20 % 0.29 % 0.33 %
Cost of funds (2.54 %) (2.57 %) (2.55 %) (2.54 %) (2.58 %) (2.55 %) (2.49 %)
Other annuity benefits, net of guaranteed withdrawal benefit fees (0.11 %) (0.08 %) (0.10 %) (0.13 %) (0.12 %) (0.11 %) (0.10 %)
Core net interest spread on fixed annuities - new method **** 1.98 % **** 1.97 % **** 2.08 % **** 2.01 % **** 1.94 % **** 2.01 % **** 2.14 %
Policy charges and other miscellaneous income 0.07 % 0.08 % 0.08 % 0.08 % 0.08 % 0.08 % 0.10 %
Acquisition expenses (0.65 %) (0.65 %) (0.68 %) (0.65 %) (0.66 %) (0.66 %) (0.67 %)
Other expenses (0.33 %) (0.34 %) (0.37 %) (0.36 %) (0.38 %) (0.35 %) (0.37 %)
Core net spread earned on fixed annuities - new method **** 1.07 % **** 1.06 % **** 1.11 % **** 1.08 % **** 0.98 % **** 1.08 % **** 1.20 %
Net spread earned on items previously reported as core operating **** n/a **** **** n/a **** **** n/a **** **** (0.12 %) **** (0.73 %) **** (0.03 %) **** (0.13 %)
Core net spread earned on fixed annuities - as reported **** 1.07 % **** 1.06 % **** 1.11 % **** 0.96 % **** 0.25 % **** 1.05 % **** 1.07 %
Average annuity benefits accumulated $ 39,615 $ 38,946 $ 38,202 $ 37,078 $ 36,103 $ 38,460 $ 34,706
Net spread earned on fixed annuities - core 1.07 % 1.06 % 1.11 % 1.08 % 0.98 % 1.08 % 1.20 %
Earnings on fixed annuity benefits accumulated - core $ 105 **** $ 103 **** $ 106 **** $ 100 **** $ 88 **** $ 414 **** $ 418 ****
Annuity benefits accumulated in excess of investments $ (299 ) $ (296 ) $ (295 ) $ (87 ) $ (110 ) $ (244 ) $ (235 )
Net investment income (as % of investments) 4.63 % 4.62 % 4.73 % 4.68 % 4.64 % 4.67 % 4.73 %
Earnings/(loss) on annuity benefits accumulated in excess of investments $ (3 ) $ (3 ) $ (3 ) $ (1 ) $ (1 ) $ (10 ) $ (11 )
Variable annuity earnings **** 2 **** **** — **** **** 1 **** **** 2 **** **** (1 ) **** 5 **** **** 2 ****
Pretax Annuity core operating earnings - new method **** 104 **** **** 100 **** **** 104 **** **** 101 **** **** 86 **** **** 409 **** **** 409 ****
Other amounts previously reported as core operating, net **** n/a **** **** n/a **** **** n/a **** **** (11 ) **** (66 ) **** (11 ) **** (48 )
Pretax Annuity core operating earnings - as reported $ 104 **** $ 100 **** $ 104 **** $ 90 **** $ 20 **** $ 398 **** $ 361 ****
(a) Excludes non-investment assets such as deferred acquisition costs, FIA<br>options, accrued investment income and company owned life insurance.
--- ---

Page 14

American Financial Group, Inc.<br><br><br>Statutory Annuity Premiums<br> <br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Financial institutions single premium annuities - indexed $ 359 $ 325 $ 429 $ 424 $ 455 $ 1,537 $ 1,776
Financial institutions single premium annuities - fixed 270 302 313 344 142 1,229 492
Retail single premium annuities - indexed 170 198 274 301 392 943 1,418
Retail single premium annuities - fixed 25 30 36 29 27 120 87
Broker dealer single premium annuities - indexed 107 134 189 227 335 657 1,271
Broker dealer single premium annuities - fixed 9 9 8 6 4 32 14
Pension risk transfer (PRT) 158 39 50 10 75 257 132
Education market - fixed and indexed annuities 36 35 44 49 46 164 192
Subtotal fixed annuity premiums **** 1,134 **** 1,072 **** 1,343 **** 1,390 **** 1,476 **** 4,939 **** 5,382
Variable annuities 5 5 6 5 6 21 25
Total annuity premiums $ 1,139 $ 1,077 $ 1,349 $ 1,395 $ 1,482 $ 4,960 $ 5,407
Summary by Distribution Channel:
Financial institutions $ 629 $ 627 $ 742 $ 768 $ 597 $ 2,766 $ 2,268
Retail 195 228 310 330 419 1,063 1,505
Broker dealer 116 143 197 233 339 689 1,285
Other 199 79 100 64 127 442 349
Total annuity premiums $ 1,139 $ 1,077 $ 1,349 $ 1,395 $ 1,482 $ 4,960 $ 5,407
Summary by Product Type:
Total indexed $ 655 $ 675 $ 917 $ 980 $ 1,211 $ 3,227 $ 4,580
Total fixed 479 397 426 410 265 1,712 802
Variable 5 5 6 5 6 21 25
Total annuity premiums $ 1,139 $ 1,077 $ 1,349 $ 1,395 $ 1,482 $ 4,960 $ 5,407

Page 15

American Financial Group, Inc.<br> <br>FixedAnnuity Benefits Accumulated (GAAP)<br> <br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Beginning fixed annuity reserves $ 39,212 $ 38,680 $ 37,724 $ 36,431 $ 35,774 $ 36,431 $ 33,005
Premiums 1,134 1,072 1,343 1,390 1,476 4,939 5,382
Federal Home Loan Bank (“FHLB”) advances (paydowns) — — — — 225 — 225
Surrenders, benefits and other withdrawals (829 ) (808 ) (862 ) (761 ) (796 ) (3,260 ) (2,836 )
Interest and other annuity benefit expenses:
Cost of funds 252 250 244 236 233 982 863
Embedded derivative<br>mark-to-market 276 111 251 462 (490 ) 1,100 (248 )
Unlockings — (75 ) — — 4 (75 ) 59
Other (27 ) (18 ) (20 ) (34 ) 5 (99 ) (19 )
Ending fixed annuity reserves $ 40,018 **** $ 39,212 **** $ 38,680 **** $ 37,724 **** $ 36,431 **** $ 40,018 **** $ 36,431 ****
Reconciliation to annuity benefits accumulated:
Ending fixed annuity reserves $ 40,018 $ 39,212 $ 38,680 $ 37,724 $ 36,431 $ 40,018 $ 36,431
Impact of unrealized investment gains on reserves 225 269 192 108 10 225 10
Fixed component of variable annuities 163 170 172 174 175 163 175
Annuity benefits accumulated per balance sheet $ 40,406 **** $ 39,651 **** $ 39,044 **** $ 38,006 **** $ 36,616 **** $ 40,406 **** $ 36,616 ****
Annualized surrenders and other withdrawals as a % of beginning reserves 8.5 % 8.4 % 9.1 % 8.4 % 8.9 % 8.9 % 8.6 %
Rider reserves included in ending fixed annuity reserves above $ 625 **** $ 611 **** $ 491 **** $ 478 **** $ 472 **** $ 625 **** $ 472 ****
Embedded Derivative liability included in ending fixed annuity reserves above $ 3,730 **** $ 3,469 **** $ 3,541 **** $ 3,247 **** $ 2,720 **** $ 3,730 **** $ 2,720 ****

Page 16

American Financial Group, Inc.<br><br><br>Guaranteed Minimum Interest Rate (“GMIR”) Analysis<br><br><br>($ in millions)
9/30/19 6/30/19 3/31/19 12/31/18 9/30/18
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
GMIR
1 - 1.99% 81 % 81 % 80 % 79 % 79 % 78 %
2 - 2.99% 3 % 3 % 4 % 4 % 4 % 4 %
3 - 3.99% 7 % 7 % 7 % 8 % 8 % 9 %
4.00% and above 9 % 9 % 9 % 9 % 9 % 9 %
Annuity Benefits Accumulated 40,406 $ 39,651 $ 39,044 $ 38,006 $ 36,616 $ 35,958
Traditional Fixed and FIA Surrender Value (a) 30,921 $ 30,292 $ 29,891 $ 29,163 $ 27,842 $ 27,434
Ability to Lower Average Crediting Rates by (a) (b) 1.19 % 1.20 % 1.20 % 1.20 % 1.19 % 1.16 %
Pretax earnings impact of crediting guaranteed minimums (a) 368 $ 363 $ 359 $ 350 $ 331 $ 317
(assumes net DAC impact over time = 0)

All values are in US Dollars.

(a) Excludes Annuities with Guaranteed Withdrawal Benefits, FHLB advances, immediate reserves and certain other<br>reserves.
(b) Weighted Average Crediting Rate less GMIR
--- ---

Page 17

American Financial Group, Inc.<br><br><br>Annuity Non-Core Earnings (Losses)<br><br><br>($ in millions)
Reported in<br>Non-Core Earnings Reported in Core Earnings<br>Prior to Second Quarter of 2019
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Three Months Ended Three Months Ended Twelve Months Ended
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19
Annuity Non-Core Earnings (Losses):
Stock market impact on:
Liability for guaranteed benefits (a) $ 12 $ 2 $ 6 $ 14 $ (22 ) $ 34 (14 )
DAC and sales inducements (b) 4 1 1 5 (8 ) 11 (4 )
Fair Value (FV) accounting 8 1 — 14 (27 ) 23 (11 )
Subtotal impact of changes in stock market 24 4 7 33 (57 ) 68 (29 )
Impact of changes in interest rates on FV accounting (4 ) (30 ) (38 ) (45 ) (4 ) (117 ) 33
Other FIA items 4 — (2 ) 1 (1 ) 3 (21 )
Unlockings — (1 ) — — (4 ) (1 ) (31 )
Annuity Non-Core Earnings (Losses) $ 24 **** $ (27 ) $ (33 ) $ (11 ) $ (66 ) $ (47 ) (48 )
Reported as Non-core Non-core Non-core Core Core Q1 Core =<br><br><br>Q2/Q3/Q4 Non-core = (11)  (36) Core
Annuity Non-Core Net Spread Earned:
Stock market impact on:
Liability for guaranteed benefits (a) 0.12 % 0.02 % 0.06 % 0.15 % (0.24 %) 0.09 % (0.04 %)
DAC and sales inducements (b) 0.04 % 0.01 % 0.01 % 0.06 % (0.09 %) 0.03 % (0.01 %)
Fair Value (FV) accounting 0.08 % 0.01 % 0.00 % 0.15 % (0.30 %) 0.06 % (0.03 %)
Subtotal impact of changes in stock market 0.24 % 0.04 % 0.07 % 0.36 % (0.63 %) 0.18 % (0.08 %)
Impact of changes in interest rates on FV accounting (0.04 %) (0.31 %) (0.40 %) (0.49 %) (0.05 %) (0.31 %) 0.10 %
Other FIA items 0.04 % 0.00 % (0.02 %) 0.01 % (0.01 %) 0.01 % (0.06 %)
Unlockings 0.00 % (0.01 %) 0.00 % 0.00 % (0.04 %) 0.00 % (0.09 %)
Non-core net spread earned on fixedannuities **** 0.24 % **** (0.28 %) **** (0.35 %) **** (0.12 %) **** (0.73 %) **** (0.12 %) (0.13 %)
Reported as Non-core Non-core Non-core Core Core Q1 Core = (.03%)<br><br><br>Q2/Q3/Q4 Non-core = (.09%) Core

All values are in US Dollars.

(a) Reflects the impact of changes in the stock market on AFG’s liability for fixed-indexed annuities with<br>guaranteed benefits. Increases in the stock market will generally have a favorable earnings impact; decreases in the stock market will generally have an unfavorable impact.
(b) Reflects the impact of changes in the stock market on the current and projected lifetime profitability of<br>AFG’s annuity business. Increases in the stock market will generally have a favorable earnings impact; decreases in the stock market will generally have an unfavorable impact.
--- ---
S&P 500 3,231 2,977 2,942 2,834 2,507 3,231 2,507
--- --- --- --- --- --- --- --- --- --- --- --- --- ---
Average 5 and 15 year Corp A2 rates 2.74 2.71 % 2.97 % 3.41 % 3.90 % 2.74 % 3.90 %
Non-core earnings sensitivities:
Incremental +/- 1% change in S&P 500 ~ +/- 1mm to 3mm
Incremental +/- 10bps change in interest rates ~ +/- 9mm to 11mm
(Assumes parallel shift in rates (primarily Corporate A2 rates))

All values are in US Dollars.

Page 18

American Financial Group, Inc.<br><br><br>Reconciliation from Core to GAAP Annuity Pretax Earnings<br><br><br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Annuity Earnings
Core annuity operating earnings - as reported (see page 12) $ 104 $ 100 $ 104 $ 90 $ 20 $ 398 $ 361
Annuity non-core earnings (losses) 24 (27 ) (33 ) — — (36 ) —
Earnings before income taxes - GAAP $ 128 $ 73 $ 71 $ 90 $ 20 $ 362 $ 361
Policy Charges and Other Miscellaneous Income
Policy charges and other miscellaneous income - new method (see page 12) $ 9 $ 10 $ 10 $ 11 $ 10 $ 40 $ 43
Annuity non-core policy charges and other miscellaneous<br>income — 1 — — — 1 (1 )
Policy Charges and Other Miscellaneous Income - GAAP $ 9 $ 11 $ 10 $ 11 $ 10 $ 41 $ 42
Annuity Benefit Expense
Annuity benefits expense - new method (see page 13) $ 281 $ 276 $ 272 $ 266 $ 260 $ 1,095 $ 964
Annuity non-core annuity benefits (30 ) (26 ) 67 45 74 56 34
Annuity Benefit Expense - GAAP $ 251 $ 250 $ 339 $ 311 $ 334 $ 1,151 $ 998
Acquisition Expenses
Acquisition expenses - new method (see page 12) $ 65 $ 64 $ 67 $ 60 $ 64 $ 256 $ 242
Annuity non-core acquisition expenses 6 54 (34 ) (34 ) (8 ) (8 ) 13
Acquisition Expenses - GAAP $ 71 $ 118 $ 33 $ 26 $ 56 $ 248 $ 255
Net Spread on Fixed Annuities
Core net spread earned on fixed annuities - as reported (see page 14) 1.07 % 1.06 % 1.11 % 0.96 % 0.25 % 1.05 % 1.07 %
Non-core net spread earned on fixed annuities 0.24 % (0.28 %) (0.35 %) 0.00 % 0.00 % (0.09 %) 0.00 %
Net Spread on Fixed Annuities 1.31 % 0.78 % 0.76 % 0.96 % 0.25 % 0.96 % 1.07 %

Page 19

American Financial Group, Inc.<br><br><br>Consolidated Balance Sheet<br> <br>($ in millions)
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 9/30/18
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Assets:
Total cash and investments $ 55,252 $ 54,207 $ 52,907 $ 51,040 $ 48,498 $ 47,841
Recoverables from reinsurers 3,415 3,261 3,150 3,258 3,349 3,352
Prepaid reinsurance premiums 678 781 651 636 610 717
Agents’ balances and premiums receivable 1,335 1,403 1,398 1,283 1,234 1,299
Deferred policy acquisition costs 1,037 964 1,203 1,447 1,682 1,669
Assets of managed investment entities 4,736 4,702 4,781 4,786 4,700 4,998
Other receivables 975 1,187 999 1,011 1,090 1,633
Variable annuity assets (separate accounts) 628 601 616 610 557 650
Other assets 1,867 1,754 1,785 1,854 1,529 1,832
Goodwill 207 207 207 207 207 199
Total assets $ 70,130 **** $ 69,067 **** $ 67,697 **** $ 66,132 **** $ 63,456 **** $ 64,190 ****
Liabilities and Equity:
Unpaid losses and loss adjustment expenses $ 10,232 $ 9,847 $ 9,577 $ 9,623 $ 9,741 $ 9,670
Unearned premiums 2,830 2,986 2,683 2,605 2,595 2,740
Annuity benefits accumulated 40,406 39,651 39,044 38,006 36,616 35,958
Life, accident and health reserves 612 613 619 632 635 643
Payable to reinsurers 814 867 755 730 752 932
Liabilities of managed investment entities 4,571 4,523 4,590 4,593 4,512 4,807
Long-term debt 1,473 1,423 1,423 1,423 1,302 1,302
Variable annuity liabilities (separate accounts) 628 601 616 610 557 650
Other liabilities 2,295 2,235 2,300 2,245 1,774 2,324
Total liabilities $ 63,861 **** $ 62,746 **** $ 61,607 **** $ 60,467 **** $ 58,484 **** $ 59,026 ****
Shareholders’ equity:
Common stock $ 90 $ 90 $ 90 $ 90 $ 89 $ 89
Capital surplus 1,307 1,292 1,277 1,256 1,245 1,231
Retained earnings 4,009 4,022 3,914 3,875 3,588 3,800
Unrealized gains - fixed maturities 862 920 812 464 83 93
Unrealized gains (losses) - fixed maturity-related cash flow hedges 17 25 18 — (11 ) (32 )
Other comprehensive income, net of tax (16 ) (28 ) (21 ) (20 ) (24 ) (17 )
Total shareholders’ equity **** 6,269 **** **** 6,321 **** **** 6,090 **** **** 5,665 **** **** 4,970 **** **** 5,164 ****
Noncontrolling interests **** — **** **** — **** **** — **** **** — **** **** 2 **** **** — ****
Total liabilities and equity $ 70,130 **** $ 69,067 **** $ 67,697 **** $ 66,132 **** $ 63,456 **** $ 64,190 ****

Page 20

American Financial Group, Inc.<br> <br>BookValue Per Share and Price / Book Summary<br> <br>(in millions, except per share information)
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 9/30/18
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Shareholders’ equity $ 6,269 **** $ 6,321 **** $ 6,090 **** $ 5,665 **** $ 4,970 **** $ 5,164 ****
Unrealized (gains) related to fixed maturities (879 ) (945 ) (830 ) (464 ) (72 ) (61 )
Adjusted shareholders’ equity **** 5,390 **** **** 5,376 **** **** 5,260 **** **** 5,201 **** **** 4,898 **** **** 5,103 ****
Goodwill (207 ) (207 ) (207 ) (207 ) (207 ) (199 )
Intangibles (43 ) (45 ) (48 ) (51 ) (54 ) (31 )
Tangible adjusted shareholders’ equity $ 5,140 **** $ 5,124 **** $ 5,005 **** $ 4,943 **** $ 4,637 **** $ 4,873 ****
Common shares outstanding 90.304 90.127 89.918 89.638 89.292 89.189
Book value per share:
Book value per share $ 69.43 **** $ 70.14 **** $ 67.72 **** $ 63.20 **** $ 55.66 **** $ 57.90 ****
Adjusted (a) **** 59.70 **** **** 59.65 **** **** 58.49 **** **** 58.02 **** **** 54.86 **** **** 57.22 ****
Tangible, adjusted (b) **** 56.93 **** **** 56.84 **** **** 55.65 **** **** 55.14 **** **** 51.93 **** **** 54.64 ****
Market capitalization
AFG’s closing common share price $ 109.65 $ 107.85 $ 102.47 $ 96.21 $ 90.53 $ 110.97
Market capitalization $ 9,902 $ 9,720 $ 9,214 $ 8,624 $ 8,084 $ 9,897
Price / Adjusted book value ratio 1.84 1.81 1.75 1.66 1.65 1.94
(a) Excludes unrealized gains related to fixed maturity investments.
--- ---
(b) Excludes unrealized gains related to fixed maturity investments, goodwill and intangibles.<br>
--- ---

Page 21

American Financial Group, Inc.<br><br><br>Capitalization<br> <br>($ in millions)
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 9/30/18
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
AFG senior obligations $ 1,018 $ 1,018 $ 1,018 $ 1,018 $ 1,018 $ 1,018
Borrowings drawn under credit facility — — — — — —
Debt excluding subordinated debt $ 1,018 **** $ 1,018 **** $ 1,018 **** $ 1,018 **** $ 1,018 **** $ 1,018 ****
AFG subordinated debentures 475 425 425 425 300 300
Total principal amount of long-term debt $ 1,493 **** $ 1,443 **** $ 1,443 **** $ 1,443 **** $ 1,318 **** $ 1,318 ****
Shareholders’ equity 6,269 6,321 6,090 5,665 4,970 5,164
Noncontrolling interests (including redeemable NCI) — — — — 2 —
Less:
Unrealized (gains) related to fixed maturity investments (879 ) (945 ) (830 ) (464 ) (72 ) (61 )
Total adjusted capital $ 6,883 **** $ 6,819 **** $ 6,703 **** $ 6,644 **** $ 6,218 **** $ 6,421 ****
Ratio of debt to total adjusted capital:
Including subordinated debt **** 21.7 % **** 21.2 % **** 21.5 % **** 21.7 % **** 21.2 % **** 20.5 %
Excluding subordinated debt **** 14.8 % **** 14.9 % **** 15.2 % **** 15.3 % **** 16.4 % **** 15.9 %

Page 22

American Financial Group, Inc.<br><br><br>Additional Supplemental Information<br> <br>($ in<br>millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Property and Casualty Insurance
Paid Losses (GAAP) $ 727 $ 769 $ 666 $ 704 $ 719 $ 2,866 $ 2,602
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 09/30/18
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
GAAP Equity (excluding AOCI)
Property and Casualty Insurance $ 4,043 $ 4,094 $ 3,959 $ 3,868 $ 3,638 $ 3,664
Annuity 2,664 2,613 2,612 2,553 2,443 2,513
Parent and other subsidiaries (1,301 ) (1,303 ) (1,290 ) (1,200 ) (1,159 ) (1,057 )
AFG GAAP Equity (excluding AOCI) $ 5,406 $ 5,404 $ 5,281 $ 5,221 $ 4,922 $ 5,120
Allowable dividends without regulatory approval
Property and Casualty Insurance $ 565 $ 529 $ 529 $ 529 $ 529 $ 563
Annuity and Run-off 287 768 768 768 768 263
Total $ 852 **** $ 1,297 **** $ 1,297 **** $ 1,297 **** $ 1,297 **** $ 826 ****

Page 23

American Financial Group, Inc.<br> <br>TotalCash and Investments<br> <br>($ in millions)
Carrying Value - December 31, 2019
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
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 $ 1,387 $ 746 $ 181 $ — $ 2,314 4 %
Fixed maturities - Available for sale 8,596 37,899 10 — 46,505 84 %
Fixed maturities - Trading 59 54 — — 113 0 %
Equity securities 1,061 810 66 — 1,937 4 %
Investments accounted for using the equity method 703 985 — — 1,688 3 %
Mortgage loans 262 1,067 — — 1,329 2 %
Policy loans — 164 — — 164 0 %
Equity index call options — 924 — — 924 2 %
Real estate and other investments 122 265 55 (164 ) 278 1 %
Total cash and investments $ 12,190 $ 42,914 $ 312 $ (164 ) $ 55,252 **** 100 %
Carrying Value - December 31, 2018
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 $ 1,007 $ 339 $ 169 $ — $ 1,515 3 %
Fixed maturities - Available for sale 7,853 34,132 12 — 41,997 87 %
Fixed maturities - Trading 50 55 — — 105 0 %
Equity securities 1,017 744 53 — 1,814 4 %
Investments accounted for using the equity method 557 817 — — 1,374 3 %
Mortgage loans 289 779 — — 1,068 2 %
Policy loans — 174 — — 174 0 %
Equity index call options — 184 — — 184 0 %
Real estate and other investments 134 276 44 (187 ) 267 1 %
Total cash and investments $ 10,907 $ 37,500 $ 278 $ (187 ) $ 48,498 **** 100 %

Page 24

American Financial Group, Inc.<br> <br>NetInvestment Income<br> <br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Property and Casualty Insurance:
Gross Investment Income
Fixed maturities - Available for sale $ 79 $ 75 $ 79 $ 77 $ 74 $ 310 $ 284
Fixed maturities - Trading — 1 1 1 1 3 3
Equity securities - dividends 11 12 13 13 11 49 48
Equity securities - MTM (1 ) 7 1 2 9 9 13
Equity in investees 21 20 20 3 14 64 65
AFG managed CLOs (2 ) (2 ) 2 3 (1 ) 1 2
Other investments (a) 13 12 10 7 10 42 32
Gross investment income **** 121 **** **** 125 **** **** 126 **** **** 106 **** **** 118 **** **** 478 **** **** 447 ****
Investment expenses (1 ) (1 ) (2 ) (2 ) (3 ) (6 ) (9 )
Total net investment income $ 120 **** $ 124 **** $ 124 **** $ 104 **** $ 115 **** $ 472 **** $ 438 ****
Average cash and investments (b) $ 11,744 **** $ 11,387 **** $ 11,193 **** $ 10,997 **** $ 10,651 **** $ 11,348 **** $ 10,497 ****
Average yield (c) **** 4.09 % **** 4.36 % **** 4.43 % **** 3.78 % **** 4.32 % **** 4.16 % **** 4.17 %
Fixed Annuity
Gross Investment Income
Fixed maturities - Available for sale $ 406 $ 393 $ 391 $ 384 $ 376 $ 1,574 $ 1,425
Equity securities - dividends 8 9 8 9 9 34 30
Equity securities - MTM 4 7 3 3 2 17 13
Equity in investees 24 23 25 18 19 90 96
AFG managed CLOs (5 ) (3 ) 3 8 (3 ) 3 5
Other investments (a) 23 21 22 15 18 81 73
Gross investment income **** 460 **** **** 450 **** **** 452 **** **** 437 **** **** 421 **** **** 1,799 **** **** 1,642 ****
Investment expenses (4 ) (4 ) (4 ) (4 ) (4 ) (16 ) (13 )
Total net investment income $ 456 **** $ 446 **** $ 448 **** $ 433 **** $ 417 **** $ 1,783 **** $ 1,629 ****
Average cash and investments (b) $ 39,316 **** $ 38,650 **** $ 37,907 **** $ 36,991 **** $ 35,993 **** $ 38,216 **** $ 34,471 ****
Average yield (c) **** 4.63 % **** 4.62 % **** 4.73 % **** 4.68 % **** 4.64 % **** 4.67 % **** 4.73 %
AFG consolidated net investment income:
Property & Casualty $ 120 $ 124 $ 124 $ 104 $ 115 $ 472 $ 438
Annuity:
Fixed Annuity 456 446 448 433 417 1,783 1,629
Variable Annuity 2 2 3 2 2 9 9
Parent & other 8 11 10 14 4 43 25
Consolidate CLOs 7 5 (5 ) (11 ) 4 (4 ) (7 )
Total net investment income $ 593 **** $ 588 **** $ 580 **** $ 542 **** $ 542 **** $ 2,303 **** $ 2,094 ****
(a) Includes income from mortgage loans, real estate, policy loans, short-term investments, and cash equivalents.<br>
--- ---
(b) Average cash and investments is the average of the beginning and ending quarter balances, or the average of the<br>five quarters balances.
--- ---
(c) Average yield is calculated by dividing investment income for the quarter by the average cash and investment<br>balance over the quarter.
--- ---

Page 25

American Financial Group, Inc.<br><br><br>Significant Investments Marked-to-Market Through Investment Income andInvestments Accounted For Using the Equity Method<br> <br>($ in millions)
Three Months Ended Twelve Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
12/31/19 9/30/19 6/30/19 3/31/19 12/31/18 12/31/19 12/31/18
Property and Casualty Insurance:
Net Investment Income
Equity securities MTM through investment income (a) $ (1 ) $ 7 $ 1 $ 2 $ 9 $ 9 $ 13
Investments accounted for using the equity method (b) 21 20 20 3 14 64 65
AFG managed CLOs (eliminated in consolidation) (2 ) (2 ) 2 3 (1 ) 1 2
Total Property & Casualty $ 18 **** $ 25 **** $ 23 **** $ 8 **** $ 22 **** $ 74 **** $ 80 ****
Investments
Equity securities MTM through investment income (a) $ 85 $ 77 $ 57 $ 52 $ 50 $ 85 $ 50
Investments accounted for using the equity method (b) 703 625 614 578 557 703 557
AFG managed CLOs (eliminated in consolidation) 48 53 56 57 56 48 56
Total Property & Casualty $ 836 **** $ 755 **** $ 727 **** $ 687 **** $ 663 **** $ 836 **** $ 663 ****
Annualized Yield - Property & Casualty **** 9.1 % **** 13.5 % **** 13.0 % **** 4.7 % **** 13.8 % **** 10.1 % **** 13.9 %
Fixed Annuity:
Net Investment Income
Equity securities MTM through investment income (a) $ 4 $ 7 $ 3 $ 3 $ 2 $ 17 $ 13
Investments accounted for using the equity method (b) 24 23 25 18 19 90 96
AFG managed CLOs (eliminated in consolidation) (5 ) (3 ) 3 8 (3 ) 3 5
Total Fixed Annuity $ 23 **** $ 27 **** $ 31 **** $ 29 **** $ 18 **** $ 110 **** $ 114 ****
Investments
Equity securities MTM through investment income (a) $ 142 $ 120 $ 101 $ 88 $ 84 $ 142 $ 84
Investments accounted for using the equity method (b) 985 910 892 862 817 985 817
AFG managed CLOs (eliminated in consolidation) 116 125 135 136 132 116 132
Total Fixed Annuity $ 1,243 **** $ 1,155 **** $ 1,128 **** $ 1,086 **** $ 1,033 **** $ 1,243 **** $ 1,033 ****
Annualized Yield - Fixed Annuity **** 7.7 % **** 9.5 % **** 11.2 % **** 10.9 % **** 7.1 % **** 9.7 % **** 12.4 %
Combined (includes Parent amounts not shown above): ****
Net Investment Income
Equity securities MTM through investment income (a) $ 3 $ 17 $ 8 $ 11 $ 6 $ 39 $ 22
Investments accounted for using the equity method (b) 45 43 45 21 33 154 161
AFG managed CLOs (eliminated in consolidation) (7 ) (5 ) 5 11 (4 ) 4 7
Total Combined (including Parent) $ 41 **** $ 55 **** $ 58 **** $ 43 **** $ 35 **** $ 197 **** $ 190 ****
Investments
Equity securities MTM through investment income (a) $ 294 $ 262 $ 220 $ 198 $ 187 $ 294 $ 187
Investments accounted for using the equity method (b) 1,688 1,535 1,506 1,440 1,374 1,688 1,374
AFG managed CLOs (eliminated in consolidation) 164 178 191 193 188 164 188
Total Combined (including Parent) $ 2,146 **** $ 1,975 **** $ 1,917 **** $ 1,831 **** $ 1,749 **** $ 2,146 **** $ 1,749 ****
Annualized Yield - Combined **** 8.0 % **** 11.3 % **** 12.4 % **** 9.6 % **** 8.2 % **** 10.2 % **** 12.2 %
(a) AFG carries the small portion of its equity securities previously classified as “trading” and<br>investments in limited partnerships and similar investments that aren’t accounted for using the equity method at fair value through net investment income.
--- ---
(b) The majority of AFG’s investments accounted for using the equity method mark their underlying assets to<br>market through net income.
--- ---

Page 26

American Financial Group, Inc.<br> <br>FixedMaturities - By Security Type - AFG Consolidated<br> <br>($ in millions )
% of
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Amortized Unrealized % of Investment
December 31, 2019 Cost Fair Value Gain (Loss) Fair Value Portfolio
US Government and government agencies $ 203 $ 213 $ 10 1 % 0 %
States, municipalities and political subdivisions 6,628 6,987 359 15 % 12 %
Foreign government 209 211 2 0 % 0 %
Residential mortgage-backed securities 2,901 3,161 260 7 % 6 %
Commercial mortgage-backed securities 896 927 31 2 % 2 %
Collateralized loan obligations 4,307 4,280 (27 ) 9 % 8 %
Other asset-backed securities 6,992 7,128 136 15 % 13 %
Corporate and other bonds 22,501 23,711 1,210 51 % 43 %
Total AFG consolidated $ 44,637 **** $ 46,618 $ 1,981 **** **** 100 % **** 84 %
Annualized yield on available for sale fixed maturities: ****
Excluding investment expense (a) 4.48 %
Net of investment expense (a) 4.44 %
Approximate average life and duration:
Approximate average life 5.5 years
Approximate duration 4 years
% of
Amortized Unrealized % of Investment
December 31, 2018 Cost Fair Value Gain (Loss) Fair Value Portfolio
US Government and government agencies $ 245 $ 243 $ (2 ) 1 % 1 %
States, municipalities and political subdivisions 6,850 6,964 114 17 % 14 %
Foreign government 166 168 2 0 % 0 %
Residential mortgage-backed securities 2,478 2,746 268 7 % 6 %
Commercial mortgage-backed securities 905 920 15 2 % 2 %
Collateralized loan obligations 4,350 4,278 (72 ) 10 % 9 %
Other asset-backed securities 5,431 5,533 102 13 % 11 %
Corporate and other bonds 21,517 21,250 (267 ) 50 % 44 %
Total AFG consolidated $ 41,942 **** $ 42,102 $ 160 **** **** 100 % **** 87 %
Annualized yield on available for sale fixed maturities: ****
Excluding investment expense (a) 4.47 %
Net of investment expense (a) 4.42 %
Approximate average life and duration:
Approximate average life 6 years
Approximate duration 4.5 years
(a) Annualized yield is calculated by dividing investment income for the quarter by the average cost over the<br>quarter. Average cost is the average of the beginning and ending quarter asset balances.
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Page 27

American Financial Group, Inc.<br> <br>FixedMaturities - By Security Type Portfolio<br> <br>($ in millions )
December 31, 2019 December 31, 2018
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Amortized Unrealized % of Amortized Unrealized % of
Property and Casualty Insurance: Cost Fair Value Gain (Loss) Fair Value Cost Fair Value Gain (Loss) Fair Value
US Government and government agencies $ 165 $ 167 2 2 % $ 203 $ 202 $ (1 ) 3 %
States, municipalities and political subdivisions 2,524 2,614 90 30 % 2,630 2,642 12 33 %
Foreign government 178 177 (1 ) 2 % 155 156 1 2 %
Residential mortgage-backed securities 990 1,051 61 12 % 725 784 59 10 %
Commercial mortgage-backed securities 89 92 3 1 % 83 84 1 1 %
Collateralized loan obligations 906 901 (5 ) 11 % 910 895 (15 ) 12 %
Other asset-backed securities 1,727 1,741 14 20 % 1,365 1,364 (1 ) 17 %
Corporate and other bonds 1,861 1,912 51 22 % 1,792 1,776 (16 ) 22 %
Property and Casualty Insurance $ 8,440 **** $ 8,655 $ 215 **** **** 100 % $ 7,863 **** $ 7,903 $ 40 **** **** 100 %
Annualized yield on available for sale fixed maturities:
Excluding investment expense (a) 3.94 % 3.91 %
Net of investment expense (a) 3.90 % 3.81 %
Tax equivalent, net of investment expense (b) 4.05 % 3.99 %
Approximate average life and duration:
Approximate average life 4.5 years 4.5 years
Approximate duration 3.0 years 3.5 years
December 31, 2019 December 31, 2018
Amortized Unrealized % of Amortized Unrealized % of
Annuity and Run-off: Cost Fair Value Gain (Loss) Fair Value Cost Fair Value Gain (Loss) Fair Value
US Government and government agencies $ 38 $ 46 $ 8 0 % $ 42 $ 41 $ (1 ) 0 %
States, municipalities and political subdivisions 4,104 4,373 269 12 % 4,220 4,322 102 13 %
Foreign government 31 34 3 0 % 11 12 1 0 %
Residential mortgage-backed securities 1,909 2,100 191 6 % 1,750 1,950 200 6 %
Commercial mortgage-backed securities 807 835 28 2 % 822 836 14 2 %
Collateralized loan obligations 3,401 3,379 (22 ) 9 % 3,440 3,383 (57 ) 10 %
Other asset-backed securities 5,265 5,387 122 14 % 4,066 4,169 103 12 %
Corporate and other bonds 20,640 21,799 1,159 57 % 19,725 19,474 (251 ) 57 %
Total Annuity and Run-off $ 36,195 **** $ 37,953 $ 1,758 **** **** 100 % $ 34,076 **** $ 34,187 $ 111 **** **** 100 %
Annualized yield on available for sale fixed maturities:
Excluding investment expense (a) 4.59 % 4.59 %
Net of investment expense (a) 4.55 % 4.55 %
Approximate average life and duration:
Approximate average life 6 years 6.5 years
Approximate duration 4.5 years 4.5 years
(a) Annualized yield is calculated by dividing investment income for the quarter by the average cost over the<br>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<br>yield.
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Page 28

American Financial Group, Inc.<br> <br>FixedMaturities - Credit Rating<br> <br>($ in millions)
December 31, 2019
--- --- --- --- --- --- --- --- --- --- ---
By Credit Rating (a) AmortizedCost Fair Value UnrealizedGain (Loss) % ofFair Value
Investment grade
AAA $ 8,854 $ 9,010 $ 156 19 %
AA 8,615 8,957 342 19 %
A 10,456 10,983 527 24 %
BBB 12,759 13,465 706 29 %
Subtotal - Investment grade 40,684 42,415 1,731 91 %
BB 714 724 10 2 %
B 186 183 (3 ) 0 %
Other (b) 3,053 3,296 243 7 %
Subtotal - Non-Investment grade 3,953 4,203 250 9 %
Total $ 44,637 $ 46,618 $ 1,981 **** **** 100 %

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

December 31, 2018
By Credit Rating (a) AmortizedCost Fair Value UnrealizedGain (Loss) % ofFair Value
Investment grade
AAA $ 7,367 $ 7,359 $ (8 ) 17 %
AA 8,714 8,831 117 21 %
A 10,006 9,989 (17 ) 24 %
BBB 12,206 12,053 (153 ) 29 %
Subtotal - Investment grade 38,293 38,232 (61 ) 91 %
BB 703 685 (18 ) 2 %
B 261 254 (7 ) 0 %
Other (b) 2,685 2,931 246 7 %
Subtotal - Non-Investment grade 3,649 3,870 221 9 %
Total $ 41,942 $ 42,102 $ 160 **** **** 100 %

98% 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<br>rate a security, the rating displayed is the second lowest.
(b) See page 33 for more information.
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Page 29

American Financial Group, Inc.<br><br><br>Mortgage-Backed Securities - AFG Consolidated<br> <br>($ in<br>millions)
December 31, 2019 AmortizedCost Fair Value UnrealizedGain (Loss) % ofFair Value % ofInvestmentPortfolio
--- --- --- --- --- --- --- --- --- --- --- --- ---
Residential
Agency $ 549 $ 552 $ 3 13 % 1 %
Prime (Non-Agency) 1,157 1,264 107 31 % 2 %
Alt-A 897 1,015 118 25 % 2 %
Subprime 298 330 32 8 % 1 %
Commercial 896 927 31 23 % 2 %
Total AFG consolidated $ 3,797 $ 4,088 $ 291 **** 100 % **** 8 %
• Substantially all of AFG’s MBS securities are either senior tranches of securitizations or collateralized by<br>senior tranches of securitizations.
--- ---
• The average amortized cost as a percent of par is - Prime 87%; Alt-A 81%;<br>Subprime 82%; CMBS 100%.
--- ---
• The average FICO score of our residential MBS securities is - Prime 742;<br>Alt-A 685; Subprime 630.
--- ---
• 96% of our Commercial MBS portfolio is investment-grade rated (83% AAA) and the average subordination for this<br>group of assets is 36%.
--- ---
• The approximate average life by collateral type is - Residential 4.5 years; Commercial 3 years.<br>
--- ---
December 31, 2018 AmortizedCost Fair Value UnrealizedGain (Loss) % ofFair Value % ofInvestmentPortfolio
--- --- --- --- --- --- --- --- --- --- --- --- --- ---
Residential
Agency $ 170 $ 168 $ (2 ) 5 % 1 %
Prime (Non-Agency) 967 1,098 131 30 % 2 %
Alt-A 972 1,074 102 29 % 2 %
Subprime 369 406 37 11 % 1 %
Commercial 905 920 15 25 % 2 %
Total AFG consolidated $ 3,383 $ 3,666 $ 283 **** **** 100 % **** 8 %

Page 30

American Financial Group, Inc.<br><br><br>Mortgage-Backed Securities Portfolio<br> <br>($ in<br>millions)

Property and Casualty Insurance:

December 31, 2019
By Asset Type AmortizedCost Fair Value UnrealizedGain (Loss) % ofFair Value % of InvPortfolio
Residential
Agency $ 315 $ 317 $ 2 28 % 3 %
Prime (Non-Agency) 279 292 13 26 % 2 %
Alt-A 265 299 34 26 % 2 %
Subprime 131 143 12 12 % 1 %
Commercial 89 92 3 8 % 1 %
Total $ 1,079 $ 1,143 $ 64 **** **** 100 % **** 9 %
December 31, 2018
By Asset Type AmortizedCost Fair Value UnrealizedGain (Loss) % of FairValue % of InvPortfolio
Residential
Agency $ 137 $ 134 $ (3 ) 15 % 1 %
Prime (Non-Agency) 138 155 17 18 % 1 %
Alt-A 289 319 30 37 % 3 %
Subprime 161 176 15 20 % 2 %
Commercial 83 84 1 10 % 1 %
Total $ 808 $ 868 $ 60 **** **** 100 % **** 8 %

Annuity and Run-off:

December 31, 2019
By Asset Type AmortizedCost Fair Value UnrealizedGain (Loss) % ofFair Value % of InvPortfolio
Residential
Agency $ 234 $ 235 $ 1 8 % 1 %
Prime (Non-Agency) 876 962 86 33 % 2 %
Alt-A 632 716 84 25 % 2 %
Subprime 167 187 20 6 % 0 %
Commercial 807 835 28 28 % 2 %
Total $ 2,716 $ 2,935 $ 219 **** 100 % **** 7 %
December 31, 2018
By Asset Type AmortizedCost Fair Value UnrealizedGain (Loss) % of<br>Fair Value % of InvPortfolio
Residential
Agency $ 33 $ 34 $ 1 1 % 0 %
Prime (Non-Agency) 826 931 105 34 % 2 %
Alt-A 683 755 72 27 % 2 %
Subprime 208 230 22 8 % 1 %
Commercial 822 836 14 30 % 2 %
Total $ 2,572 $ 2,786 $ 214 **** 100 % **** 7 %

Page 31

American Financial Group, Inc.<br><br><br>Mortgage-Backed Securities - Credit Rating<br> <br>($ in<br>millions)
December 31, 2019
--- --- --- --- --- --- --- --- --- ---
By Credit Rating (a) AmortizedCost Fair Value UnrealizedGain (Loss) % ofFair Value
Investment grade
AAA $ 1,921 $ 1,957 $ 36 48 %
AA 144 151 7 4 %
A 248 266 18 6 %
BBB 181 193 12 5 %
Subtotal - investment grade 2,494 2,567 73 63 %
BB 105 106 1 3 %
B 102 102 — 2 %
Other (b) 1,096 1,313 217 32 %
Total $ 3,797 $ 4,088 $ 291 **** 100 %

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

December 31, 2018
By Credit Rating (a) AmortizedCost Fair Value UnrealizedGain (Loss) % ofFair Value
Investment grade
AAA $ 1,107 $ 1,119 $ 12 31 %
AA 143 147 4 4 %
A 263 270 7 7 %
BBB 232 243 11 7 %
Subtotal - investment grade 1,745 1,779 34 49 %
BB 128 131 3 3 %
B 155 154 (1 ) 4 %
Other (b) 1,355 1,602 247 44 %
Total $ 3,383 $ 3,666 $ 283 **** **** 100 %

96% 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<br>rate a security, the rating displayed is the second lowest.
(b) See page 33 for more information.
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Page 32

Appendix A<br> <br>American Financial Group,Inc.<br> <br>Fixed Maturities - Credit Rating by Type<br> <br>($<br>in millions)
Fair Value - December 31, 2019
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
By Credit Rating (a) US Gov Munis Frgn Gov RMBS CMBS CLOs Other ABS Corp/Oth Total % Total
Investment grade
AAA $ 204 $ 2,086 $ 134 $ 1,184 $ 773 $ 2,921 $ 1,529 $ 179 $ 9,010 19 %
AA 9 4,325 52 131 20 1,074 1,779 1,567 8,957 19 %
A — 418 8 250 16 241 1,983 8,067 10,983 24 %
BBB — 95 3 115 78 27 742 12,405 13,465 29 %
Subtotal - Investment grade 213 6,924 197 1,680 887 4,263 6,033 22,218 42,415 91 %
BB — 9 — 74 32 — 13 596 724 2 %
B — — 1 97 5 — 4 76 183 0 %
CCC, CC, C — — — 544 3 — 4 42 593 1 %
D — — — 185 — — — 1 186 0 %
Subtotal - Non-Investment grade — 9 1 900 40 — 21 715 1,686 3 %
Not Rated — 54 13 581 — 17 1,074 778 2,517 6 %
Total $ 213 $ 6,987 $ 211 $ 3,161 $ 927 $ 4,280 $ 7,128 $ 23,711 $ 46,618 **** 100 %
Fair Value - December 31, 2018
By Credit Rating (a) US Gov Munis Frgn Gov RMBS CMBS CLOs Other ABS Corp/Oth Total % Total
Investment grade
AAA $ 213 $ 1,889 $ 98 $ 367 $ 752 $ 2,679 $ 1,191 $ 170 $ 7,359 17 %
AA 22 4,456 53 129 18 1,244 1,326 1,583 8,831 21 %
A — 448 — 248 22 250 1,836 7,185 9,989 24 %
BBB — 110 — 169 74 84 685 10,931 12,053 29 %
Subtotal - Investment grade 235 6,903 151 913 866 4,257 5,038 19,869 38,232 91 %
BB — — — 97 34 — 23 531 685 2 %
B — 8 — 151 3 — 4 88 254 0 %
CCC, CC, C — — — 670 5 — 2 12 689 2 %
D — 3 — 230 — — — 1 234 1 %
Subtotal - Non-Investment grade — 11 — 1,148 42 — 29 632 1,862 5 %
Not Rated 8 50 17 685 12 21 466 749 2,008 4 %
Total $ 243 $ 6,964 $ 168 $ 2,746 $ 920 $ 4,278 $ 5,533 $ 21,250 $ 42,102 **** 100 %
(a) If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies<br>rate a security, the rating displayed is the second lowest.
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Page 33

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