Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

LeasesAFG and its subsidiaries lease real estate that is primarily used for office space and, to a lesser extent, equipment under operating lease arrangements. Most of AFG’s real estate leases include an option to extend or renew the lease term at AFG’s option. The operating lease liability includes lease payments related to options to extend or renew the lease term if AFG is reasonably certain of exercising those options. Lease payments are discounted using the implicit discount rate in the lease. If the implicit discount rate for the lease cannot be readily determined, AFG uses an estimate of its incremental secured borrowing rate. AFG did not have any material contracts accounted for as finance or short-term leases at December 31, 2022 or December 31, 2021.

AFG’s operating lease right-of-use asset and operating lease liability are included in other assets and other liabilities, respectively, in AFG’s Balance Sheet at December 31 and are presented in the following table (in millions):

	2022		2021
Right-of-use asset	$	103	$	118
Lease liability	116		136

The following table details AFG’s lease activity for the years ended December 31, 2022, 2021 and 2020 (in millions):

	2022		2021		2020
Operating lease expense included in other expenses	$	36	$	41	$	47
Sublease income (*)	(2)		(2)		—
Total lease expense, net of sublease income	$	34	$	39	$	47

(*)Sublease income consists of rent from third parties of office space and is included in other income in AFG’s Consolidated Statement of Earnings.

Other operating lease information for the years ended December 31, 2022, 2021 and 2020 (in millions):

	2022		2021		2020
Cash paid for lease liabilities reported in operating cash flows	$	38	$	43	$	50
Right-of-use assets obtained under new leases	11		10		25

The following table presents the undiscounted contractual maturities of AFG’s operating lease liability at December 31, 2022 (in millions):

Operating lease payments:
2023	$	36
2024	29
2025	25
2026	20
2027	6
Thereafter	12
Total lease payments	128
Impact of discounting	(12)
Operating lease liability	$	116

Weighted-average remaining lease term	4.5 years
Weighted-average discount rate	4.0	%