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Investments

12 Months Ended

Dec. 31, 2025

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

Available for sale fixed maturities at December 31 consisted of the following (in millions):

			Amortized Cost						Allowance for Expected Credit Losses						Gross Unrealized												Net Unrealized						Fair Value
															Gains						Losses
December 31, 2025
Fixed maturities:
U.S. government and government agencies			$	160					$	—					$	1					$	—					$	1					$	161
States, municipalities and political subdivisions			853						—						8						(26)						(18)						835
Foreign government			236						—						2						—						2						238
Residential MBS			2,808						1						43						(103)						(60)						2,747
Collateralized loan obligations			1,167						5						1						(3)						(2)						1,160
Other asset-backed securities			2,539						5						29						(38)						(9)						2,525
Corporate and other			3,338						10						81						(23)						58						3,386
Total fixed maturities			$	11,101					$	21					$	165					$	(193)					$	(28)					$	11,052
December 31, 2024
Fixed maturities:
U.S. government and government agencies			$	176					$	—					$	—					$	(3)					$	(3)					$	173
States, municipalities and political subdivisions			905						—						3						(49)						(46)						859
Foreign government			236						—						2						(1)						1						237
Residential MBS			2,122						1						22						(154)						(132)						1,989
Collateralized loan obligations			1,243						4						10						(12)						(2)						1,237
Other asset-backed securities			2,463						6						19						(69)						(50)						2,407
Corporate and other			3,542						23						42						(65)						(23)						3,496
Total fixed maturities			$	10,687					$	34					$	98					$	(353)					$	(255)					$	10,398

Equity securities which are reported at fair value with holding gains and losses recognized in net earnings, consisted of the following at December 31 (in millions):

			2025																		2024
			Actual Cost						Fair Value						Fair Value Over Cost						Actual Cost						Fair Value						Fair Value Over Cost
Common stocks			$	332					$	365					$	33					$	304					$	336					$	32
Perpetual preferred stocks			398						420						22						380						415						35
Total equity securities carried at fair value			$	730					$	785					$	55					$	684					$	751					$	67

The following table summarizes investments accounted for using the equity method, by strategy (in millions):

			Carrying Value												Net Investment Income
			December 31, 2025						December 31, 2024						2025						2024						2023
Real estate-related investments (*)			$	1,431					$	1,392					$	12					$	8					$	85
Private equity			895						804						35						32						9
Private debt			95						81						9						6						5
Total investments accounted for using the equity method			$	2,421					$	2,277					$	56					$	46					$	99

(*)87% and 88% of the carrying value relates to underlying investments in multi-family properties as of December 31, 2025 and December 31, 2024, respectively.

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

With respect to partnerships and similar investments, AFG had unfunded commitments of $456 million and $457 million as of December 31, 2025 and December 31, 2024, respectively.

The following table shows gross unrealized losses (dollars in millions) on available for sale fixed maturities by investment category and length of time that individual securities have been in a continuous unrealized loss position at the following balance sheet dates.

			Less Than Twelve Months																		Twelve Months or More
			Unrealized Loss						Fair Value						Fair Value as % of Cost						Unrealized Loss						Fair Value						Fair Value as % of Cost
																																				December 31, 2025
Fixed maturities:
U.S. government and government agencies			$	—					$	15					100		%				$	—					$	44					100		%
States, municipalities and political subdivisions			—						47						100		%				(26)						426						94		%
Foreign government			—						52						100		%				—						5						100		%
Residential MBS			(4)						186						98		%				(99)						914						90		%
Collateralized loan obligations			—						124						100		%				(3)						147						98		%
Other asset-backed securities			(1)						311						100		%				(37)						803						96		%
Corporate and other			(2)						174						99		%				(21)						794						97		%
Total fixed maturities			$	(7)					$	909					99		%				$	(186)					$	3,133					94		%
December 31, 2024
Fixed maturities:
U.S. government and government agencies			$	—					$	35					100		%				$	(3)					$	105					97		%
States, municipalities and political subdivisions			(5)						256						98		%				(44)						470						91		%
Foreign government			—						98						100		%				(1)						50						98		%
Residential MBS			(6)						452						99		%				(148)						916						86		%
Collateralized loan obligations			—						—						—		%				(12)						247						95		%
Other asset-backed securities			(4)						332						99		%				(65)						1,217						95		%
Corporate and other			(10)						605						98		%				(55)						1,151						95		%
Total fixed maturities			$	(25)					$	1,778					99		%				$	(328)					$	4,156					93		%

At December 31, 2025, the gross unrealized losses on fixed maturities of $193 million relate to approximately 850 securities. Investment grade securities (as determined by nationally recognized rating agencies) represented approximately 96% of the gross unrealized loss and 96% of the fair value of securities with unrealized losses.

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

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

Management believes AFG will recover its cost basis (net of any allowance) in the securities with unrealized losses and that AFG has the ability to hold the securities until they recover in value and had no intent to sell them at December 31, 2025.

A progression of the allowance for expected credit losses on available for sale fixed maturity securities is shown below (in millions):

			Structured securities (*)						Corporate and other						Total
Balance at December 31, 2022			$	10					$	1					$	11
Provision for expected credit losses on securities with no previous allowance			1						8						9
Additions (reductions) to previously recognized expected credit losses			2						(1)						1
Reductions due to sales or redemptions			(4)						(5)						(9)
Balance at December 31, 2023			9						3						12
Provision for expected credit losses on securities with no previous allowance			1						25						26
Additions to previously recognized expected credit losses			1						—						1
Reductions due to sales or redemptions			—						(5)						(5)
Balance at December 31, 2024			11						23						34
Provision for expected credit losses on securities with no previous allowance			1						8						9
Additions to previously recognized expected credit losses			—						5						5
Reductions due to sales or redemptions			(1)						(26)						(27)
Balance at December 31, 2025			$	11					$	10					$	21

(*)Includes residential MBS, collateralized loan obligations and other asset-backed securities (“ABS”).

AFG did not purchase any securities with expected credit losses in 2025, 2024 or 2023.

The table below sets forth the scheduled maturities of AFG’s available for sale fixed maturities as of December 31, 2025 (dollars in millions). Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.

			Amortized Cost, net (*)						Fair Value
									Amount						%
Maturity
One year or less			$	629					$	626					6		%
After one year through five years			2,320						2,342						21		%
After five years through ten years			1,395						1,432						13		%
After ten years			233						220						2		%
			4,577						4,620						42		%
CLOs and other ABS (average life of approximately 3.5 years)			3,696						3,685						33		%
Residential MBS (average life of approximately 6 years)			2,807						2,747						25		%
Total			$	11,080					$	11,052					100		%

(*)Amortized cost, net of allowance for expected credit losses.

Certain risks are inherent in fixed maturity securities, including loss upon default, price volatility in reaction to changes in interest rates, and general market factors and risks associated with reinvestment of proceeds due to prepayments or redemptions in a period of declining interest rates.

There were no investments in individual issuers that exceeded 10% of shareholders’ equity at December 31, 2025 or 2024.

Net Investment Income   The following table shows investment income earned and investment expenses incurred (in millions):

			2025						2024						2023
Investment income:
Fixed maturities:
Interest and amortization			$	569					$	544					$	502
Change in fair value (*)			6						17						(3)
Equity securities:
Dividends			33						29						34
Change in fair value			(14)						57						36
Equity in earnings of partnerships and similar investments			56						46						99
Cash and cash equivalents			53						56						43
Mortgage loans			44						32						24
Other			23						21						23
Gross investment income			770						802						758
Investment expenses			(25)						(22)						(16)
Net investment income			$	745					$	780					$	742

(*)The change in the fair value of fixed maturities classified as trading and derivatives embedded in convertible fixed maturities related to limited partnerships and similar investments.

Realized gains (losses) and changes in unrealized appreciation (depreciation) included in AOCI related to fixed maturity securities are summarized as follows (in millions):

			2025																								2024
			Realized gains (losses)																								Realized gains (losses)
			Before Impairments						Impairment Allowance						Total						Change in Unrealized						Before Impairments						Impairment Allowance						Total						Change in Unrealized
Fixed maturities			$	(5)					$	(14)					$	(19)					$	227					$	(5)					$	(27)					$	(32)					$	108
Equity securities			31						—						31						—						32						—						32						—
Mortgage loans and other investments			—						(2)						(2)						—						—						—						—						—
Total pretax			26						(16)						10						227						27						(27)						—						108
Tax effects			(5)						3						(2)						(47)						(6)						6						—						(23)
Net of tax			$	21					$	(13)					$	8					$	180					$	21					$	(21)					$	—					$	85

																											2023
																											Realized gains (losses)
																											Before Impairments						Impairment Allowance						Total						Change in Unrealized
Fixed maturities																											$	(35)					$	(10)					$	(45)					$	267
Equity securities																											10						—						10						—
Mortgage loans and other investments																											—						(1)						(1)						—
Total pretax																											(25)						(11)						(36)						267
Tax effects																											5						3						8						(57)
Net of tax																											$	(20)					$	(8)					$	(28)					$	210

All equity securities are carried at fair value through net earnings. AFG recorded net holding gains (losses) on equity securities during 2025, 2024 and 2023 on securities that were still owned at December 31 of each year as follows (in millions):

			2025						2024						2023
Included in realized gains (losses)			$	19					$	24					$	(2)
Included in net investment income			(2)						56						36
			$	17					$	80					$	34

Gross realized gains and losses (excluding changes in impairment allowance and mark-to-market of derivatives) on available for sale fixed maturity investment transactions consisted of the following (in millions):

			2025						2024						2023
Gross gains			$	7					$	1					$	5
Gross losses			(14)						(5)						(38)

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- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 940
-SubTopic 320
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/940-320/tableOfContent

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Name Regulation S-K (SK)
-Number 229
-Section 1403
-Paragraph b
-Publisher SEC

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/320/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
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-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-10

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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-Section 50
-Paragraph 6B
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6B

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-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/942-320/tableOfContent

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