Managed Investment Entities

12 Months Ended

Dec. 31, 2025

Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract]

AFG is the investment manager and it has investments ranging from 5.4% to 100% of the most subordinate debt tranche of ten active collateralized loan obligations (“CLOs”), which are considered variable interest entities. AFG also owns portions of the senior debt tranches of certain of these CLOs. Upon formation, these entities issued securities in various senior and subordinate classes and invested the proceeds primarily in secured bank loans, which serve as collateral for the debt securities issued by each CLO. None of the collateral was purchased from AFG. AFG’s investments in the subordinate debt tranches of these entities receive residual income from the CLOs only after the CLOs pay expenses (including management fees to AFG) and interest on and returns of capital to senior levels of debt securities. There are no contractual requirements for AFG to provide additional funding for these entities. AFG has not provided and does not intend to provide any financial support to these entities.

AFG’s maximum exposure to economic loss on the CLOs that it manages is limited to its investment in those CLOs, which had an aggregate fair value of $143 million (including $131 million invested in the most subordinate tranches) at December 31, 2025.

In 2025, AFG formed three new CLOs, which issued $1.22 billion face amount of liabilities (including $118 million face amount purchased by AFG). In 2024, AFG formed two new CLOs, which issued $813 million face amount of liabilities (including $73 million face amount purchased by AFG). In 2023, AFG formed one new CLO, which issued $407 million face amount of liabilities (including $16 million face amount purchased by AFG). In 2025, 2024 and 2023, six, one and four CLOs were substantially liquidated in accordance with the CLO indentures, respectively.

The following table shows a progression of the fair value of AFG's investment in CLO tranches and temporary warehousing entities (in millions):


	2025		2024		2023
Balance at beginning of period	$	175	$	177	$	116
Purchases	186		133		67
Sales	(175)		(123)		—
Distributions	(48)		(45)		(33)
CLO earnings attributable to AFG	5		33		27
Balance at end of period	$	143	$	175	$	177

The revenues and expenses of the CLOs are separately identified in AFG’s Statement of Earnings, after the elimination of management fees and earnings attributable to AFG as measured by the change in the fair value of AFG’s investments in the CLOs. Selected financial information related to the CLOs is shown below (in millions):


	Year ended December 31,
	2025		2024		2023
Gains (losses) on change in fair value of assets/liabilities (*):
Assets	$	(75)	$	(2)	$	144
Liabilities	49		6		(117)
Management fees paid to AFG	11		13		16
CLO earnings attributable to AFG	5		33		27

(*)Included in revenues in AFG’s Statement of Earnings.

The aggregate unpaid principal balance of the CLOs’ fixed maturity investments exceeded the fair value of the investments by $77 million and $66 million at December 31, 2025 and 2024, respectively. The carrying value of the CLOs’ debt (excluding the most subordinated tranches) exceeded the aggregate unpaid principal balance by $13 million and $36 million at those dates, respectively. At December 31, 2025, the CLO assets did not include any loans in default for which the CLOs are not accruing interest compared to an aggregate fair value of $3 million of loans in default (with an aggregate unpaid principal balance of $5 million) at December 31, 2024.

In addition to the CLOs that it manages, AFG had investments in CLOs that are managed by third parties (therefore not consolidated), which are included in available for sale fixed maturity securities and had a fair value of $1.16 billion at December 31, 2025 and $1.24 billion at December 31, 2024.