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Statement of Financial Position, Unclassified - Insurance Based Operations | 9 Months Ended
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Sep. 30, 2025
Statement of Financial Position [Abstract] |
Disposal Groups, Including Discontinued Operations, Disclosure | 3. DISCONTINUED OPERATION Sale of Ambac Assurance Corporation ("AAC") On September 29, 2025, pursuant to the stock purchase agreement dated as of June 4, 2024, as amended by the First Amendment thereto dated as of July 3, 2025 (the "Purchase Agreement") and the Letter Agreements dated July 3, 2025 and September 22, 2025, with American Acorn Corporation (the “Buyer”), a Delaware corporation owned by funds managed by Oaktree Capital Management, L.P., AFG sold all of the issued and outstanding shares of common stock of AAC, a wholly-owned subsidiary of AFG, to the Buyer for $420,000 in cash (the "Sale"). The Buyer acquired complete ownership of the common stock of AAC and all of its wholly owned subsidiaries, including Ambac Assurance UK Limited. In connection with and pursuant to the Purchase Agreement, AFG issued to Buyer a warrant exercisable for 5,092,707 shares of common stock, par value $0.01, of AFG representing 9.9% of the fully diluted shares of AFG’s common stock as of March 31, 2024, pro forma for the issuance of the warrant. The warrant has an exercise price per share of $18.50 and expires March 29, 2032. Under terms of the Letter Agreement dated July 3, 2025, between the parties to the Purchase Agreement, the Buyer may convert the warrant at a value equal to its Black-Scholes value, over specified time periods, with the conversion value delivered in shares of AFG common stock or cash at AFG's election. In addition, the Buyer made an incremental payment to AFG totalling $4,300 to resolve other agreed upon matters. See Note 5. Discontinued Operation in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, for further information regarding the Sale. AFG recorded an expected loss on sale in the Statement of Comprehensive Income (Loss) for the year ended December 31, 2024 of $(570,145), equal to the difference between the sale proceeds (net of the value of the warrants to be issued) and the carrying value of AAC's net assets held-for-sale, less expected closing costs. AFG recorded adjustments to the loss on sale of AAC equal to $(50,012) and $(117,468) in the three and nine months ended September 30, 2025, reflecting remeasurement of net assets held-for-sale, changes in fair value of the warrant issued to Buyer, other agreed upon payments, and reestimation of closing costs during the periods up the final Sale closing. The loss on sale for the three and nine months ended September 30, 2025 also included the reclassification of net unrealized gains (losses) on available-for-sale investment securities, cumulative foreign currency translation adjustments and cumulative credit risk changes of fair value option liabilities attributable to AAC and subsidiaries, totaling $(85,096), from Accumulated Other Comprehensive Income (Loss) ("AOCI") to Net income (loss) from discontinued operation at Sale closing. The components of the loss on sale, reflected in the valuation allowance on net assets of discontinued operations as of December 31, 2024, and at Sale closing on September 29, 2025, are summarized below:
|  | Sale Closing on September 29, 2025 |  | December 31, 2024
Fair value of net consideration |  | $ | 407,300 |  |  | $ | 399,727 |
Less: estimated closing costs |  | 7,098 |  |  | 7,235 |
|  | 400,202 |  |  | 392,492 |
Carrying amount of net assets of discontinued operations |  | 1,002,719 |  |  | 962,637 |
Reclassification of AOCI |  | (85,096) |  |  |
Loss on disposal |  | $ | (687,613) |  |  | $ | (570,145) |
The following table summarizes the major classes of assets and liabilities of discontinued operations on the Consolidated Balance Sheet at December 31, 2024 after elimination of intercompany balances:
|  | December 31, 2024
ASSETS: |  |
Total investments |  | 2,226,505 |
Cash and equivalents |  | 8,322 |
Premiums receivable |  | 217,096 |
Reinsurance recoverable on paid and unpaid losses |  | 25,274 |
Deferred ceded premiums |  | 79,074 |
Subrogation recoverable |  | 113,962 |
Intangible assets |  | 213,457 |
Other assets, net |  | 49,396 |
VIE assets (including restricted cash of $57,755) |  | 3,904,259 |
Valuation allowance on assets held-for-sale |  | (570,145) |
Total assets held-for-sale |  | $ | 6,267,200 |
LIABILITIES: |  |
Unearned premiums |  | $ | 228,177 |
Loss and loss adjustment reserves |  | 577,167 |
Ceded premiums payable |  | 56,404 |
Long-term debt and accrued interest |  | 1,046,658 |
Other liabilities, net |  | 105,772 |
VIE liabilities |  | 3,873,507 |
Total liabilities held-for-sale |  | $ | 5,887,685 |
The following table summarizes the major line items constituting net income (loss) from discontinued operations reconciled to net income (loss) from discontinued operations presented in the Consolidated Statement of Comprehensive Income (Loss):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
REVENUES: |  |  |  |  |  |  |  |
Net premiums earned |  | $ | 5,183 |  |  | $ | 5,660 |  |  | $ | 15,145 |  |  | $ | 18,715 |
Net investment income |  | 43,396 |  |  | 34,497 |  |  | 100,203 |  |  | 104,947 |
Net investment gains (losses), including impairments |  | 5,852 |  |  | (920) |  |  | (12,616) |  |  | (1,308) |
Net gains (losses) on derivative contracts |  | 9,669 |  |  | (1,349) |  |  | 302 |  |  | 1,127 |
Other revenues |  | 1,355 |  |  | 6,253 |  |  | 18,016 |  |  | 27,206 |
Total revenues |  | 65,455 |  |  | 44,141 |  |  | 121,050 |  |  | 150,687 |
EXPENSES: |  |  |  |  |  |  |  |
Loss and loss adjustment expenses (benefit) |  | 2,366 |  |  | 17,210 |  |  | 10,444 |  |  | (8,768) |
Intangible amortization |  | 5,909 |  |  | 6,194 |  |  | 17,097 |  |  | 24,535 |
General & administrative and other expenses |  | 64,427 |  |  | 10,756 |  |  | 81,034 |  |  | 47,488 |
Interest expense |  | 15,723 |  |  | 15,766 |  |  | 47,617 |  |  | 47,732 |
Other expenses |  | — |  |  | (20) |  |  | — |  |  | (1) |
Total expenses |  | 88,425 |  |  | 49,906 |  |  | 156,192 |  |  | 110,986 |
Pretax income (loss) |  | (22,970) |  |  | (5,765) |  |  | (35,142) |  |  | 39,701 |
Provision (benefit) for income taxes |  | 7,908 |  |  | 3,621 |  |  | 10,678 |  |  | 10,765 |
Loss on disposal |  | (50,012) |  |  | — |  |  | (117,468) |  |  | — |
Net income (loss) from discontinued operations |  | $ | (80,890) |  |  | $ | (9,386) |  |  | $ | (163,288) |  |  | $ | 28,936 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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