XML 45 R22.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following is a reconciliation of income taxes on continuing operations at the statutory rate of 21% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions):
| 2023 |  | 2022 |  | 2021
| Amount |  | % of EBT |  | Amount |  | % of EBT |  | Amount |  | % of EBT
Earnings from continuing operations before income taxes (“EBT”) | $ | 1,073 |  |  |  |  | $ | 1,123 |  |  |  |  | $ | 1,335 |  |  |
Income taxes at statutory rate | $ | 225 |  |  | 21 | % |  | $ | 236 |  |  | 21 | % |  | $ | 280 |  |  | 21 | %
Effect of: |  |  |  |  |  |  |  |  |  |  |
Employee stock ownership plan dividend paid deduction | (5) |  |  | (1 | %) |  | (8) |  |  | (1 | %) |  | (16) |  |  | (1 | %)
Tax exempt interest | (5) |  |  | (1 | %) |  | (6) |  |  | (1 | %) |  | (8) |  |  | (1 | %)
Adjustment to prior year taxes | (5) |  |  | — | % |  | (3) |  |  | — | % |  | (1) |  |  | — | %
Stock-based compensation | (2) |  |  | — | % |  | (5) |  |  | — | % |  | (13) |  |  | (1 | %)
Change in valuation allowance | (2) |  |  | — | % |  | (9) |  |  | (1 | %) |  | (4) |  |  | — | %
Dividend received deduction | (2) |  |  | — | % |  | (2) |  |  | — | % |  | (2) |  |  | — | %
Nondeductible expenses | 11 |  |  | 1 | % |  | 8 |  |  | 1 | % |  | 8 |  |  | 1 | %
Foreign operations | 6 |  |  | 1 | % |  | 7 |  |  | 1 | % |  | — |  |  | — | %
Other | — |  |  | — | % |  | 7 |  |  | — | % |  | 10 |  |  | — | %
Provision for income taxes as shown in the statement of earnings | $ | 221 |  |  | 21 | % |  | $ | 225 |  |  | 20 | % |  | $ | 254 |  |  | 19 | %
On January 1, 2023, the two major tax provisions in the Inflation Reduction Act ("IRA”) became effective. The IRA created a new corporate alternative minimum tax (“CAMT”) based on the earnings that a company reports in its financial statements and imposes a 1% excise tax on corporate stock repurchases. Any CAMT incurred would be available to offset taxes payable under the standard calculation in future periods. Accordingly, the CAMT is a timing difference and would result in the recording of an offsetting deferred tax asset with no impact on overall income tax expense. Based on current guidance, while AFG meets the financial statement income thresholds to be subject to CAMT, management does not believe AFG will incur a CAMT liability for 2023. The excise tax on stock repurchases in excess of any issuances is recorded as part of the cost of the repurchases directly in shareholders’ equity. Since almost all of AFG’s earnings are taxable based on U.S. tax rates, the Global Intangible Low-taxed Income (“GILTI”) provision is not expected to be material to AFG’s results of operations and will be recorded in the period that any tax arises. The Organisation for Economic Co-operation and Development, an intergovernmental organization with 38 member countries, has proposed a global minimum corporate tax rate of 15% (“Pillar Two”). Due to AFG’s limited international operations and the tax rate AFG is subject to in those jurisdictions, management does not believe Pillar Two will have a material impact on AFG’s results of operations. AFG’s 2013 — 2018 and 2020 — 2023 tax years remain subject to examination by the IRS. Total earnings before income taxes include earnings subject to tax in foreign jurisdictions of $32 million in 2023, $64 million in 2022 and $33 million in 2021. The total income tax provision of continuing operations consists of (in millions):
| 2023 |  | 2022 |  | 2021
Current taxes: |  |  |  |  |
Federal | $ | 176 |  |  | $ | 192 |  |  | $ | 162 |
State | 9 |  |  | 10 |  |  | 7 |
Foreign | (1) |  |  | 1 |  |  | 1 |
Deferred taxes: |  |  |  |  |
Federal | 37 |  |  | 22 |  |  | 84 |
Provision for income taxes | $ | 221 |  |  | $ | 225 |  |  | $ | 254 |
For income tax purposes, AFG and its subsidiaries had the following carryforwards available at December 31, 2023 (in millions):
| Expiring |  | Amount |
Operating Loss – U.S. | 2024 - 2041 |  | $ | 10 |  |
Operating Loss – United Kingdom | indefinite |  | 38 |  | (*)
(*)£30 million Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The significant components of deferred tax assets and liabilities included in AFG’s Balance Sheet at December 31 were as follows (in millions):
| 2023 |  | 2022
Deferred tax assets: |  |  |
Federal net operating loss carryforwards | $ | 2 |  |  | $ | 2 |
Foreign underwriting losses | 10 |  |  | 10 |
Insurance claims and reserves | 269 |  |  | 255 |
Employee benefits | 111 |  |  | 108 |
Other, net | 25 |  |  | 24 |
Total deferred tax assets before valuation allowance | 417 |  |  | 399 |
Valuation allowance against deferred tax assets | (14) |  |  | (16) |
Total deferred tax assets | 403 |  |  | 383 |
Deferred tax liabilities: |  |  |
Investment securities | (177) |  |  | (52) |
Deferred policy acquisition costs | (70) |  |  | (66) |
Insurance claims and reserves transition liability | (8) |  |  | (12) |
Real estate, property and equipment | (12) |  |  | (23) |
Total deferred tax liabilities | (267) |  |  | (153) |
Net deferred tax asset | $ | 136 |  |  | $ | 230 |
AFG’s net deferred tax asset at December 31, 2023 and 2022 is included in other assets in AFG’s Balance Sheet. The decrease in AFG’s net deferred tax asset at December 31, 2023 compared to December 31, 2022 reflects lower net unrealized losses on fixed maturities at December 31, 2023 compared to December 31, 2022 and the increase in fair value of equity securities still owned. The likelihood of realizing deferred tax assets is reviewed periodically. Any adjustments required to the valuation allowance are made in the period during which developments requiring an adjustment become known. At both December 31, 2023 and December 31, 2022, there are unrecognized tax benefits and related interest and penalties of less than $1 million that, if recognized, would impact the effective tax rate. AFG’s provision for income taxes in 2023, 2022 and 2021 included interest expense of less than $1 million related to unrecognized tax benefits. There were liabilities of less than $1 million for interest related to unrecognized tax benefits at both December 31, 2023 and December 31, 2022. There were no penalties related to unrecognized tax benefits included in AFG’s provision for income taxes in 2023, 2022 and 2021. There is no liability for penalties related to unrecognized tax benefits at December 31, 2023 or December 31, 2022. Cash payments for income taxes, net of refunds, were $201 million, $242 million and $212 million for 2023, 2022 and 2021, respectively.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration