Acquisition and Sale of Businesses

6 Months Ended

Jun. 30, 2022

Business Combinations [Abstract]

Acquisition and Sale of Businesses

Acquisition and Sale of Businesses

Verikai   In December 2021, AFG acquired Verikai, Inc., a machine learning and artificial intelligence company that utilizes predictive risk tools to assess insurance risk, for $120 million using cash on hand at the parent. Verikai continues to operate as a stand-alone company to service its insurance clients. AFG expects to benefit from Verikai’s predictive risk tool and unique Marketplace solution as it enters the medical stop loss insurance business, with a primary focus on small and underserved risks. AFG may pay up to $50 million in contingent consideration based on performance measures over a multiple year period.

Expenses related to the acquisition were approximately $1 million and were expensed as incurred. The purchase price was allocated to the acquired assets and liabilities of Verikai based on management’s best estimate of fair value as of the acquisition date. While no adjustments were made during the first six months of 2022 and management does not expect significant adjustments, the purchase price allocation continues to be subject to refinement during 2022.

Annuity Operations   See Note B — “Discontinued Operations,” for information on the 2021 sale of AFG’s annuity operations.