8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 1, 2017

AMERICAN FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Ohio	1-13653	31-1544320
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

301 East Fourth Street, Cincinnati, OH	45202
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 513-579-2121

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 - Financial Information

Item 2.02 Results Of Operations And Financial Condition.

Reference is made to the press release of American Financial Group, Inc. (the “Company”) relating to the announcement of the Company’s results of operations for the fourth quarter of 2016 and full year ended December 31, 2016 as well as the availability of the Investor Supplement on the Company’s website. The press release was issued on February 1, 2017. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and a copy of the Investor Supplement is attached as Exhibit 99.2 and are incorporated herein by reference.

The information contained herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (the “Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of business acquired. Not applicable.

(b) Pro forma financial information. Not applicable.

(c) Shell company transactions. Not applicable

(d) Exhibits

Exhibit No.	Description
99.1	Earnings Release dated February 1, 2017, reporting American Financial Group Inc. fourth quarter and full year results for the period ended December 31, 2016.
99.2	Investor Supplement – Fourth Quarter 2016

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AMERICAN FINANCIAL GROUP, INC.
Date: February 2, 2017
	By: Karl J. Grafe
	Karl J. Grafe
	Vice President

2

EX-99.1

Exhibit 99.1

American Financial Group, Inc. Announces Record 2016 Fourth Quarter and Full Year Results

• Record net earnings of $4.33 per share in the fourth quarter and $7.33 per share for the full year

• Record fourth quarter core net operating earnings of $1.98 per share; up 30% from 2015

• Record core net operating earnings per share of $6.03 for the full year; up 11% from 2015

• Full year 2016 ROE of 14.8%; 2016 core operating ROE of 12.2%

• Full year 2017 core net operating earnings guidance between $6.20 - $6.70 per share

CINCINNATI – February 1, 2017 – American Financial Group, Inc. (NYSE: AFG) today reported record 2016 fourth quarter net earnings attributable to shareholders of $385 million ($4.33 per share) compared to $129 million ($1.45 per share) for the 2015 fourth quarter. Results for the fourth quarter of 2016 include non-core tax benefits of $111 million ($1.25 per share) as a result of the restructuring of Neon, our Lloyd’s insurer, and $66 million ($0.74 per share) related to the merger with National Interstate, as well as $32 million ($0.36 per share) in after-tax realized gains. Comparatively, net earnings in the 2015 fourth quarter included non-core losses of $7 million ($0.07 per share). Details may be found in the table below. Net earnings attributable to shareholders for the year were $7.33 per share, compared to $3.94 per share in 2015. Due to the impact of rising interest rates on our fixed maturity portfolio, book value per share decreased by $2.90 to $56.55 per share during the fourth quarter of 2016. Return on equity was 14.8% and 8.3% for 2016 and 2015, respectively.

Core net operating earnings were $176 million ($1.98 per share) for the 2016 fourth quarter, compared to $136 million ($1.52 per share) in the 2015 fourth quarter. The $1.98 per share established an all-time high for AFG’s quarterly core EPS. The improved results were attributable to higher underwriting profit in our Specialty Property and Casualty (“P&C”) insurance segment and significantly higher operating earnings in our Annuity Segment. Book value per share, excluding unrealized gains related to fixed maturities, increased by $1.43 to $53.11 per share during the fourth quarter of 2016. Core net operating earnings for the fourth quarters of 2016 and 2015 generated annualized returns on equity of 15.7% and 12.7%, respectively. Core operating return on equity was 12.2% and 11.5% for 2016 and 2015, respectively.

During the fourth quarter of 2016, AFG repurchased approximately 116,000 shares of common stock at an average price per share of $75.09. During 2016, AFG repurchased 1.9 million shares for $133 million, at an average price per share of $69.47.

AFG’s net earnings attributable to shareholders, determined in accordance with U.S. generally accepted accounting principles (“GAAP”), include certain items that may not be indicative of its ongoing core operations. The table below identifies such items and reconciles net earnings attributable to shareholders to core net operating earnings, a non-GAAP financial measure. AFG believes that its core net operating earnings provides management, financial analysts, rating agencies and investors with an understanding of the results from the ongoing operations of the Company by excluding the impact of net realized investment gains and losses and other special items that are not necessarily indicative of operating trends. AFG’s management uses core net operating earnings to evaluate financial performance against historical results because it believes this provides a more comparable measure of its continuing business. Core net operating earnings is also used by AFG’s management as a basis for strategic planning and forecasting.

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In millions, except per share amounts	Three months ended December 31,						Twelve months ended December 31,
	2016			2015			2016			2015
Components of net earnings attributable to shareholders:
Core operating earnings before income taxes	$	266		$	220		$	840		$	762
Pretax non-core items:
Realized gains (losses) on securities		51			(21	)		19			(19	)
Realized gain (loss) on sale of subsidiaries:
Long-term care business		—			(4	)		2			(166	)
Other		—			—			—			5
Gain on sale of apartment properties and hotel		—			15			32			66
Special A&E charges		—			—			(41	)		(79	)
Neon exited lines charge		—			—			(65	)		—
Loss on early retirement of debt		—			—			—			(4	)
Earnings before income taxes		317			210			787			565
Provision (credit) for income taxes:
Core operating earnings		88			83			290			263
Non-core items:
Tax benefit related to National Interstate merger		(66	)		—			(66	)		—
Tax benefit related to Neon restructuring		(111	)		—			(111	)		—
Other		18			(3	)		6			(68	)
Total provision (credit) for income taxes		(71	)		80			119			195
Net earnings, including noncontrolling interests		388			130			668			370
Less net earnings attributable to noncontrolling interests:
Core operating earnings		2			1			16			13
Non-core items		1			—			3			5
Total net earnings attributable to noncontrolling interests		3			1			19			18
Net earnings attributable to shareholders	$	385		$	129		$	649		$	352
Net earnings:
Core net operating earnings(a)	$	176		$	136		$	534		$	486
Non-core items		209			(7	)		115			(134	)
Net earnings attributable to shareholders	$	385		$	129		$	649		$	352
Components of Earnings Per Share:
Core net operating earnings(a)	$	1.98		$	1.52		$	6.03		$	5.44
Non-core Items:
Realized gains (losses) on securities		0.36			(0.15	)		0.16			(0.12	)
Realized gain (loss) on sale of subsidiaries:
Long-term care business		—			(0.03	)		0.01			(1.21	)
Other		—			—			—			0.04
Gain on sale of apartment properties and hotel		—			0.11			0.17			0.40
Special A&E charges		—			—			(0.30	)		(0.58	)
Neon exited lines charge		—			—			(0.73	)		—
Loss on early retirement of debt		—			—			—			(0.03	)
Tax benefit related to National Interstate merger		0.74			—			0.74			—
Tax benefit related to Neon restructuring		1.25			—			1.25			—
Diluted Earnings Per Share	$	4.33		$	1.45		$	7.33		$	3.94

Footnote (a) is contained in the accompanying Notes to Financial Schedules at the end of this release.

Carl H. Lindner III and S. Craig Lindner, AFG’s Co-Chief Executive Officers, commented: “AFG’s fourth quarter and full year results established new records for earnings. Strong operating profitability in both the P&C and Annuity segments of our business, superior investment performance and effective capital management have enabled us to achieve five-year compounded growth in adjusted book value plus dividends of 10%.

“AFG had approximately $950 million of excess capital (including parent company cash of approximately $200 million) at December 31, 2016. Over the past year, we increased our quarterly dividend by 12% and in the fourth quarter of 2016, we paid a special dividend of $1.00 per share. Our excess capital will be deployed into AFG’s core businesses as we identify potential for healthy, profitable organic growth, and opportunities to expand our specialty niche businesses through

acquisitions and

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start-ups that meet our target return thresholds. In addition, share repurchases, particularly when executed at attractive valuations, are an important and effective component of our capital management strategy. We will continue to make opportunistic share repurchases and return capital to shareholders through dividends.

“Based on current information, we expect core net operating earnings in 2017 to be between $6.20 and $6.70 per share. Our core earnings per share guidance assumes no change in the corporate tax rate of 35%, and excludes non-core items such as realized gains and losses, as well as other significant items that are not able to be estimated with reasonable precision, or that may not be indicative of ongoing operations.”

Specialty Property and Casualty Insurance Operations

The Specialty P&C insurance operations generated underwriting profit of $110 million for the 2016 fourth quarter compared to $100 million in the fourth quarter of 2015. Higher underwriting profitability in our Property and Transportation Group and Specialty Financial Groups was partially offset by lower underwriting profitability in our Specialty Casualty Group. The fourth quarter 2016 combined ratio of 90.4% includes 0.9 points of adverse prior year reserve development, compared to 0.4 points of favorable prior year reserve development in the comparable 2015 period. Fourth quarter results in 2016 include $12 million (1.1 points on the combined ratio) in catastrophe losses, compared to $9 million (0.8 points on the combined ratio) in the comparable 2015 period.

Gross and net written premiums were up 6% and 3%, respectively, in the 2016 fourth quarter compared to the same period in 2015. Each of our Specialty P&C groups reported growth during the quarter. Average renewal pricing across our entire P&C Group was up 1% for the quarter, and was flat for the year. Further details of AFG’s Specialty P&C operations may be found in the accompanying schedules.

The Property and Transportation Group reported an underwriting profit of $75 million in the fourth quarter of 2016, compared to $34 million in the comparable prior year period, due primarily to higher underwriting profit in our crop insurance business, largely the result of favorable growing conditions and relatively stable commodity pricing. Catastrophe losses for this group were $6 million in the fourth quarter of 2016 and $3 million in the comparable 2015 period.

Fourth quarter 2016 gross and net written premiums in this group were 12% and 4% higher, respectively, than the comparable prior year period. The increase was primarily attributed to higher crop insurance premiums, the large majority of which were ceded to the Federal Crop Insurance Program. Excluding crop, fourth quarter 2016 gross and net written premiums in this group were virtually unchanged from the prior year period. Overall renewal rates increased 2% in the fourth quarter of 2016, including a 4% increase in National Interstate’s renewal rates. The average renewal rate increase for this group during 2016 was approximately 3%.

The Specialty Casualty Group reported an underwriting profit of $13 million in the 2016 fourth quarter compared to $50 million in the comparable 2015 period. Underwriting losses in one of our excess and surplus lines businesses, primarily related to coverage written for New York contractors, and lower profitability in our targeted markets operations were the primary reasons for the lower underwriting profit year-over-year. Catastrophe losses for this group were $4 million in the fourth quarter of 2016 and $1 million in the comparable 2015 period.

Gross and net written premiums increased 3% and 1%, respectively, for the fourth quarter of 2016 when compared to the same prior year period. Higher premiums in our targeted markets and executive liability businesses were partially offset by lower premiums in our excess and surplus lines operations, primarily the result of tougher underwriting standards related to New York contractors business, as well as lower

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premiums within our workers’ compensation businesses. Net written premiums were also impacted by higher ceded premiums within Neon. Renewal pricing for this group was flat during the fourth quarter, and included a decrease of approximately 2% in our workers’ compensation businesses. Excluding workers’ compensation, renewal pricing in this group was up approximately 1% for the quarter and the full year.

The Specialty Financial Group reported an underwriting profit of $20 million in the fourth quarter of 2016, compared to $15 million in the fourth quarter of 2015. All businesses in this group reported higher year-over-year underwriting profit. Catastrophe losses for this group were $2 million in the fourth quarter of 2016 and $5 million in the comparable prior year period. All businesses in this group continued to achieve excellent underwriting margins during 2016.

Gross and net written premiums both increased by 1% in the 2016 fourth quarter when compared to the same 2015 period. Renewal pricing in this group decreased approximately 1% on average for both the fourth quarter and for the full year of 2016.

Carl Lindner III stated: “I’m very pleased with the overall profitability of our Specialty P&C Group. I am especially pleased that our Property and Transportation Group ended the year with strong underwriting results and returns on equity, driven by excellent results in our crop and inland marine operations, as well as higher profitability in our transportation and equine mortality businesses. In addition, we continued to report outstanding operating results in our Specialty Financial Group, and solid results in our Specialty Casualty Group.”

Mr. Lindner continued, “Despite competitive conditions, I’m optimistic about 2017. We are forecasting an overall calendar year combined ratio in the 92% to 94% range, and we are targeting growth in net written premiums in the range of 2% to 6%.”

Further details about AFG’s Specialty P&C operations may be found in the accompanying schedules and in our Quarterly Investor Supplement, which is posted on our website.

Annuity Segment

The Annuity Segment reported a record $132 million in pretax operating earnings in the fourth quarter of 2016, an increase of 31% from the $101 million reported in the fourth quarter of 2015. In addition, as shown in the table below, earnings before the impact of fair value accounting on fixed-indexed annuities (FIAs) were $103 million, up 7% from the prior year period:

Components of Core Annuity Operating Earnings Before Income Taxes
In millions	Three months ended December 31,				Pct. Change			Twelve months ended December 31,						Pct. Change
	2016		2015					2016			2015
Annuity earnings before fair value accounting for FIAs	$	103	$	96		7	%	$	395		$	354			12	%
Impact of fair value accounting for FIAs		29		5		nm			(27	)		(23	)		nm
Pretax Annuity Operating Earnings	$	132	$	101		31	%	$	368		$	331			11	%

Annuity Earnings Before Fair Value Accounting for FIAs – AFG’s fourth quarter 2016 earnings continued to benefit from favorable investment results, including the continued significant positive impact of certain investments required to be marked to market through earnings. In addition, AFG’s quarterly average annuity investments and reserves grew approximately 11% and 12%, respectively, year-over-year; the benefit of this growth was partially offset by the runoff of higher yielding investments.

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In the fourth quarters of 2016 and 2015, AFG conducted detailed reviews (“unlocking”) of the major actuarial assumptions underlying its annuity operations. The review resulted in a positive unlocking of $1 million in the fourth quarter of 2016; in the fourth quarter of 2015, the positive unlocking amount was $10 million. Unlocking amounts are included in “Annuity earnings before fair value accounting for FIAs” in the table above.

Impact of Fair Value Accounting for FIAs – Variances from expectations of certain items (such as projected interest rates, option costs and surrenders), as well as changes in the stock market, have an impact on the accounting for FIAs; these accounting adjustments are recognized through AFG’s reported core earnings. Many of these adjustments are not economic in nature, but rather impact the timing of reported results.

In the fourth quarter of 2016, a significant increase in interest rates, as well as an increase in the stock market, resulted in a large favorable impact on annuity earnings. This compares to a relatively small favorable impact on annuity earnings in the fourth quarter of 2015, primarily the result of the increase in the stock market.

Annuity Premiums – AFG’s Annuity Segment reported statutory premiums of $1.1 billion in the fourth quarter of 2016, virtually unchanged from the fourth quarter of 2015.

Craig Lindner stated, “AFG’s Annuity Segment had another record year, achieving pretax operating earnings of $368 million and annuity premiums of $4.4 billion. In addition, as a result of its strong statutory results, the Annuity Segment continues to generate significant amounts of excess capital. I am very pleased with these results, which illustrate our investment skills, disciplined product pricing and commitment to consumer-friendly products. We believe that our business model positions us well in a changing regulatory environment.”

Department of Labor (DOL) Rule – The Company continues to implement product and process changes needed to comply with the DOL fiduciary rule and is proceeding under the premise the DOL rule becomes effective in April 2017 in its current form. There is considerable discussion surrounding the possibility of a delay or other action impacting the rule. In addition, there remains pending litigation seeking to invalidate the rule. However, until there is some definitive action impacting the rule, the Company intends to continue to pursue necessary changes.

Assuming the rule is effective in April 2017, AFG believes the biggest impact will be on insurance-only licensed agents whose sales represented less than 10% of our fourth quarter premium. While AFG’s management continues to believe the adjustments required of the Company and its distribution partners to comply with the rule will impact 2017 annuity premiums, management does not believe the new rule will have a material impact on AFG’s results of operations.

2017 Annuity Outlook – AFG expects that 2017 annuity sales will be flat to down 10% compared to the $4.4 billion sold in 2016, resulting in year-over-year average asset and reserve growth of 8% to 10%; the favorable earnings impact of this growth will be partially offset by the runoff of higher yielding investments. As a result, AFG anticipates that its annuity operating earnings will be in the range of $375 to $395 million, an increase from the $368 million reported in 2016.

This guidance assumes (i) the Department of Labor rule is implemented in April 2017, (ii) interest rates and the stock market rise moderately, and (iii) a more normalized return on investments that are required to be marked to market. Fluctuations in the returns on these investments, or large changes in interest rates and/or the stock market, as compared to our expectations, could lead to significant positive or negative impacts on the Annuity Segment’s results.

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More information about premiums and the results of operations for our Annuity Segment may be found in AFG’s Quarterly Investor Supplement, which is posted on our website.

Investments

AFG recorded fourth quarter 2016 net realized gains of $32 million after tax and after deferred acquisition costs (DAC), compared to net realized losses of $14 million in the comparable prior year period. Unrealized gains on fixed maturities were $306 million after tax and after DAC at December 31, 2016, an increase of $28 million from year-end 2015. Our portfolio continues to be high quality, with 89% of our fixed maturity portfolio rated investment grade and 97% with a National Association of Insurance Commissioners’ designation of NAIC 1 or 2, its highest two categories.

For the three months ended December 31, 2016, P&C net investment income was approximately 15% higher than the comparable 2015 period, reflecting the positive impact of certain investments required to be marked to market through earnings and higher income from equity in the earnings of limited partnerships and similar investments.

More information about the components of our investment portfolio may be found in our Quarterly Investor Supplement, which is posted on our website.

Tax Benefit Related to National Interstate Merger

As previously announced, on November 10, 2016 holders of National Interstate common shares voted to approve an Agreement and Plan of Merger. The Merger allowed National Interstate and its subsidiaries to become members of the AFG consolidated tax group, which resulted in a non-core tax benefit of $66 million to AFG during the fourth quarter of 2016.

Tax Benefit Related to Neon Restructuring

During December 2016, AFG undertook a restructuring that included the liquidation for tax purposes of the foreign subsidiary that is the parent of our Neon operations, resulting in a taxable loss for U.S. tax purposes. AFG reported the tax benefit associated with this loss as a non-core tax benefit of $111 million in the fourth quarter of 2016.

About American Financial Group, Inc.

American Financial Group is an insurance holding company based in Cincinnati, Ohio with assets over $50 billion. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of fixed and fixed-indexed annuities in the retail, financial institutions and education markets. Great American Insurance Group’s roots go back to 1872 with the founding of its flagship company, Great American Insurance Company.

Forward Looking Statements

This press release contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this press release not dealing with historical results are forward-

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looking and are based on estimates, assumptions and projections. Examples of such forward-looking statements include statements relating to: the Company’s expectations concerning market and other conditions and their effect on future premiums, revenues, earnings, investment activities and the amount and timing of share repurchases; recoverability of asset values; expected losses and the adequacy of reserves for asbestos, environmental pollution and mass tort claims; rate changes; and improved loss experience.

Actual results and/or financial condition could differ materially from those contained in or implied by such forward-looking statements for a variety of reasons including, but not limited to: changes in financial, political and economic conditions, including changes in interest and inflation rates, currency fluctuations and extended economic recessions or expansions in the U.S. and/or abroad; performance of securities markets; new legislation or declines in credit quality or credit ratings that could have a material impact on the valuation of securities in AFG’s investment portfolio; the availability of capital; regulatory actions (including changes in statutory accounting rules); changes in the legal environment affecting AFG or its customers; tax law and accounting changes; levels of natural catastrophes and severe weather, terrorist activities (including any nuclear, biological, chemical or radiological events), incidents of war or losses resulting from civil unrest and other major losses; development of insurance loss reserves and establishment of other reserves, particularly with respect to amounts associated with asbestos and environmental claims; availability of reinsurance and ability of reinsurers to pay their obligations; trends in persistency and mortality; competitive pressures; the ability to obtain adequate rates and policy terms; changes in AFG’s credit ratings or the financial strength ratings assigned by major ratings agencies to our operating subsidiaries; the impact of the conditions in the international financial markets and the global economy (including those associated with the United Kingdom’s expected withdrawal from the European Union, or “Brexit”) relating to our international operations; and other factors identified in our filings with the Securities and Exchange Commission.

The forward-looking statements herein are made only as of the date of this press release. The Company assumes no obligation to publicly update any forward-looking statements.

Conference Call

The company will hold a conference call to discuss 2016 fourth quarter and full year results at 11:30 am (ET) tomorrow, Thursday, February 2, 2017. Toll-free telephone access will be available by dialing 877-459-8719 (international dial-in 424-276-6843). The conference ID for the live call is 48169817. Please dial in five to ten minutes prior to the scheduled start time of the call.

A replay will be available approximately two hours following the completion of the call and will remain available until 11:59 pm (ET) on February 9, 2017. To listen to the replay, dial 1-855-859-2056 (international dial-in 404-537-3406) and provide the conference ID 48169817.

The conference and accompanying webcast slides will also be broadcast live over the Internet. To listen to the call via the Internet, go to the Investor Relations page on AFG’s website, www.AFGinc.com, and follow the instructions under Webcasts and Presentations.

The archived webcast will be available immediately after the call via the same link on the Investor Relations page until February 9, 2017 at 11:59 pm (ET). An archived audio MP3 file will be available within 24 hours of the call.

Contact:

Diane P. Weidner

Asst. Vice President - Investor Relations

513-369-5713

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Websites:

www.AFGinc.com

www.GreatAmericanInsuranceGroup.com

# # #

(Financial summaries follow)

This earnings release and AFG’s Quarterly Investor Supplement are available in the Investor Relations section of AFG’s website: www.AFGinc.com.

AFG17-03

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AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES

SUMMARY OF EARNINGS AND SELECTED BALANCE SHEET DATA

(In Millions, Except Per Share Data)

	Three months ended December 31,						Twelve months ended December 31,
	2016			2015			2016		2015
Revenues
P&C insurance net earned premiums	$	1,144		$	1,120		$	4,328	$	4,224
Life, accident & health net earned premiums		6			24			24		104
Net investment income		429			416			1,696		1,633
Realized gains (losses) on:
Securities		51			(21	)		19		(19	)
Subsidiaries		—			(4	)		2		(161	)
Income (loss) of managed investment entities:
Investment income		49			43			190		155
Gain (loss) on change in fair value of assets/liabilities		6			(18	)		15		(34	)
Other income		52			58			224		243
Total revenues		1,737			1,618			6,498		6,145
Costs and expenses
P&C insurance losses & expenses		1,040			1,026			4,111		4,015
Annuity, life, accident & health benefits & expenses		222			247			1,019		1,042
Interest charges on borrowed money		21			17			77		75
Expenses of managed investment entities		42			32			151		112
Other expenses		95			86			353		336
Total costs and expenses		1,420			1,408			5,711		5,580
Earnings before income taxes		317			210			787		565
Provision for income taxes(b)		(71	)		80			119		195
Net earnings including noncontrolling interests		388			130			668		370
Less: Net earnings (loss) attributable to noncontrolling interests		3			1			19		18
Net earnings attributable to shareholders	$	385		$	129		$	649	$	352
Diluted earnings per Common Share	$	4.33		$	1.45		$	7.33	$	3.94
Average number of diluted shares		88.8			89.2			88.5		89.4

Selected Balance Sheet Data:	December 31, 2016		December 31, 2015
Total cash and investments	$	41,433	$	37,736
Long-term debt(c)	$	1,283	$	998
Shareholders’ equity(d)	$	4,916	$	4,592
Shareholders’ equity (excluding unrealized gains/losses related to fixed maturities)(d)	$	4,617	$	4,313
Book value per share	$	56.55	$	52.50
Book value per share (excluding unrealized gains/losses related to fixed maturities)	$	53.11	$	49.32
Common Shares Outstanding		86.9		87.5

Footnotes (b), (c) and (d) are contained in the accompanying Notes to Financial Schedules at the end of this release.

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AMERICAN FINANCIAL GROUP, INC.

SPECIALTY P&C OPERATIONS

(Dollars in Millions)

	Three months ended December 31,						Pct. Change			Twelve months ended December 31,						Pct. Change
	2016			2015						2016			2015
Gross written premiums	$	1,441		$	1,356			6	%	$	5,981		$	5,832			3	%
Net written premiums	$	1,083		$	1,056			3	%	$	4,386		$	4,327			1	%
Ratios (GAAP):
Loss & LAE ratio		63.7	%		61.8	%					61.7	%		62.2	%
Underwriting expense ratio		26.7	%		29.2	%					30.6	%		30.9	%
Specialty Combined Ratio		90.4	%		91.0	%					92.3	%		93.1	%
Combined Ratio – P&C Segment		90.4	%		91.0	%					94.5	%		94.7	%
Supplemental Information:(e)
Gross Written Premiums:
Property & Transportation	$	577		$	515			12	%	$	2,504		$	2,455			2	%
Specialty Casualty		684			661			3	%		2,792			2,739			2	%
Specialty Financial		180			179			1	%		685			637			8	%
Other		—			1			na			—			1			na
	$	1,441		$	1,356			6	%	$	5,981		$	5,832			3	%
Net Written Premiums:
Property & Transportation	$	394		$	378			4	%	$	1,672		$	1,636			2	%
Specialty Casualty		510			503			1	%		2,036			2,052			(1	%)
Specialty Financial		154			152			1	%		572			540			6	%
Other		25			23			9	%		106			99			7	%
	$	1,083		$	1,056			3	%	$	4,386		$	4,327			1	%
Combined Ratio (GAAP):
Property & Transportation		83.9	%		92.4	%					90.0	%		96.9	%
Specialty Casualty		97.4	%		90.2	%					96.1	%		92.7	%
Specialty Financial		86.0	%		88.7	%					84.9	%		83.1	%
Aggregate Specialty Group		90.4	%		91.0	%					92.3	%		93.1	%

	Three months ended December 31,						Twelve months ended December 31,
	2016			2015			2016			2015
Reserve Development (Favorable)/Adverse:
Property & Transportation	$	13		$	8		$	(21	)	$	15
Specialty Casualty		3			(7	)		(13	)		(11	)
Specialty Financial		(6	)		(5	)		(23	)		(30	)
Other		—			(1	)		(4	)		(11	)
Specialty Group Excluding A&E and Neon Charge		10			(5	)		(61	)		(37	)
Special A&E Reserve Charge – P&C Run-off		—			—			36			67
Neon Exited Lines Charge and Other		—			—			57			3
Total Reserve Development	$	10		$	(5	)	$	32		$	33
Points on Combined Ratio:
Property & Transportation		3.0			1.8			(1.2	)		0.9
Specialty Casualty		0.5			(1.4	)		(0.7	)		(0.5	)
Specialty Financial		(4.5	)		(3.6	)		(4.0	)		(5.7	)
Aggregate Specialty Group		0.9			(0.4	)		(1.4	)		(0.8	)
Total P&C Segment		0.9			(0.4	)		0.7			0.8

Footnote (e) is contained in the accompanying Notes to Financial Schedules at the end of this release.

Page 10

AMERICAN FINANCIAL GROUP, INC.

ANNUITY SEGMENT

(Dollars in Millions)

Components of Statutory Premiums

	Three months ended December 31,						Pct. Change			Twelve months ended December 31,						Pct. Change
	2016			2015						2016			2015
Annuity Premiums:
Financial Institutions	$	626		$	534			17	%	$	2,418		$	1,970			23	%
Retail		437			512			(15	%)		1,796			1,934			(7	%)
Education Market		40			51			(22	%)		184			194			(5	%)
Variable Annuities		8			10			(20	%)		37			42			(12	%)
Total Annuity Premiums	$	1,111		$	1,107			—	%	$	4,435		$	4,140			7	%
Components of Operating Earnings Before Income Taxes
	Three months ended December 31,						Pct. Change			Twelve months ended December 31,						Pct. Change
	2016			2015						2016			2015
Revenues:
Net investment income	$	346		$	309			12	%	$	1,356		$	1,224			11	%
Other income		27			23			17	%		103			98			5	%
Total revenues		373			332			12	%		1,459			1,322			10	%
Costs and Expenses:
Annuity benefits		160			189			(15	%)		800			732			9	%
Acquisition expenses		54			20			170	%		181			163			11	%
Other expenses		27			22			23	%		110			96			15	%
Total costs and expenses		241			231			4	%		1,091			991			10	%
Operating earnings before income taxes	$	132		$	101			31	%	$	368		$	331			11	%
Supplemental Annuity Information
	Three months ended December 31,						Pct. Change			Twelve months ended December 31,						Pct. Change
	2016			2015						2016			2015
Operating earnings before impact of fair value accounting on FIAs	$	103		$	96			7	%	$	395		$	354			12	%
Impact of fair value accounting		29			5			nm			(27	)		(23	)		nm
Operating earnings before income taxes	$	132		$	101			31	%	$	368		$	331			11	%
Average Fixed Annuity Reserves*	$	29,250		$	26,048			12	%	$	28,146		$	24,898			13	%
Net Interest Spread*		2.70	%		2.53	%					2.73	%		2.69	%
Net Spread Earned Before Impact of Fair Value Accounting*		1.42	%		1.31	%					1.39	%		1.35	%
Net Spread Earned After Impact of Fair Value Accounting*		1.82	%		1.39	%					1.29	%		1.26	%

* Excludes fixed annuity portion of variable annuity business.

Page 11

AMERICAN FINANCIAL GROUP, INC.

Notes to Financial Schedules

a) Components of core net operating earnings (in millions):

	Three months ended December 31,						Twelve months ended December 31,
	2016			2015			2016			2015
Core Operating Earnings before Income Taxes:
P&C insurance segment	$	180		$	163		$	630		$	566
Annuity segment, before impact of fair value accounting		103			96			395			354
Impact of fair value accounting		29			5			(27	)		(23	)
Run-off long-term care and life segment		2			—			2			14
Interest & other corporate expense		(50	)		(45	)		(176	)		(162	)
Core operating earnings before income taxes		264			219			824			749
Related income taxes		88			83			290			263
Core net operating earnings	$	176		$	136		$	534		$	486

b) Excluding the impact of the Neon Exited Lines Charge that was reported in the second quarter of 2016, the Tax Benefit related to the National Interstate Merger and the Tax Benefit Related to the Neon Restructuring reported in the fourth quarter of 2016, AFG’s effective tax rate for the fourth quarter and twelve months ended December 31, 2016 was 33% and 35%, respectively. AFG maintains a full valuation allowance against the deferred tax benefits associated with losses related to AFG’s specialist Lloyd’s insurance business, Neon (formerly known as Marketform).

c) December 2015 and prior periods have been adjusted for adoption of FASB Accounting Standard Update 2015-03, which impacted the presentation of debt issue costs and long-term debt. The impact of this adjustment was to reduce the carrying value of long-term debt on AFG’s balance sheet by $22 million at December 31, 2015, from amounts originally reported. Adjustments to the income statement increased interest charges on borrowed money by $1 million for the twelve months ended December 31, 2015.

d) Shareholders’ Equity at December 31, 2016 includes $299 million ($3.44 per share) in unrealized after-tax gains related to fixed maturities. Shareholders’ Equity at December 31, 2015 includes $279 million ($3.18 per share) in unrealized after-tax gains related to fixed maturities.

e) Supplemental Notes:

• Property & Transportation includes primarily physical damage and liability coverage for buses, trucks and recreational vehicles, inland and ocean marine, agricultural-related products and other property coverages.

• Specialty Casualty includes primarily excess and surplus, general liability, executive liability, professional liability, umbrella and excess liability, specialty coverages in targeted markets, customized programs for small to mid-sized businesses and workers’ compensation insurance.

• Specialty Financial includes risk management insurance programs for leasing and financing institutions (including collateral and lender-placed mortgage property insurance), surety and fidelity products and trade credit insurance.

• Other includes an internal reinsurance facility.

Page 12

EX-99.2

Exhibit 99.2

	American Financial Group, Inc.
	Investor Supplement - Fourth Quarter 2016
	February 1, 2017
	American Financial Group, Inc.
	Corporate Headquarters
	Great American Insurance Group Tower
	301 E Fourth Street
	Cincinnati, OH 45202
	513 579 6739

American Financial Group, Inc. Table of Contents - Investor Supplement - Fourth Quarter 2016

Section	Page
Table of Contents - Investor Supplement - Fourth Quarter 2016		2
Financial Highlights		3
Summary of Earnings		4
Earnings Per Share Summary		5
Property and Casualty Insurance Segment
Property and Casualty Insurance - Summary Underwriting Results (GAAP)		6
Specialty - Underwriting Results (GAAP)		7
Property and Transportation - Underwriting Results (GAAP)		8
Specialty Casualty - Underwriting Results (GAAP)		9
Specialty Financial - Underwriting Results (GAAP)		10
Other Specialty - Underwriting Results (GAAP)		11
Annuity Segment
Annuity Earnings (GAAP)		12
Detail of Annuity Benefits Expense (GAAP)		13
Net Spread on Fixed Annuities (GAAP)		14
Annuity Premiums (Statutory)		15
Fixed Annuity Benefits Accumulated (GAAP)		16
Consolidated Balance Sheet / Book Value / Debt
Consolidated Balance Sheet		17
Book Value Per Share and Price / Book Summary		18
Capitalization		19
Additional Supplemental Information		20
Consolidated Investment Supplement
Total Cash and Investments		21
Net Investment Income		22
Fixed Maturities - By Security Type - AFG Consolidated		23
Fixed Maturities - By Security Type Portfolio		24
Fixed Maturities - Credit Rating		25
Mortgage-Backed Securities - AFG Consolidated		26
Mortgage-Backed Securities Portfolio		27
Mortgage-Backed Securities - Credit Rating		28
Appendix
A. Fixed Maturities - Credit Rating by Type		29

Page 2

American Financial Group, Inc. Financial Highlights (in millions, except per share information)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Highlights
Net earnings	$	385		$	109		$	54		$	101		$	129		$	649		$	352
Core net operating earnings		176			134			113			111			136			534			486
Total assets		55,072			54,845			52,733			51,038			49,837			55,072			49,837
Adjusted shareholders’ equity (a)		4,617			4,487			4,356			4,325			4,313			4,617			4,313
Property and Casualty net written premiums		1,083			1,268			1,056			979			1,056			4,386			4,327
Annuity statutory premiums		1,111			941			1,098			1,285			1,107			4,435			4,140
Per share data
Diluted earnings per share	$	4.33		$	1.23		$	0.62		$	1.14		$	1.45		$	7.33		$	3.94
Core net operating earnings per share		1.98			1.51			1.28			1.25			1.52			6.03			5.44
Adjusted book value per share (a)		53.11			51.68			50.16			49.72			49.32			53.11			49.32
Cash dividends per common share		1.3125			0.2800			0.2800			0.2800			1.2800			2.1525			2.0300
Financial ratios
Annualized return on equity (b)		34.4	%		9.9	%		5.1	%		9.4	%		12.1	%		14.8	%		8.3	%
Annualized core operating return on equity (b)		15.7	%		12.2	%		10.5	%		10.3	%		12.7	%		12.2	%		11.5	%
Property and Casualty combined ratio - Specialty:
Loss & LAE ratio		63.7	%		62.9	%		61.2	%		58.3	%		61.8	%		61.7	%		62.2	%
Underwriting expense ratio		26.7	%		30.3	%		32.7	%		33.0	%		29.2	%		30.6	%		30.9	%
Combined ratio - Specialty		90.4	%		93.2	%		93.9	%		91.3	%		91.0	%		92.3	%		93.1	%
Net spread on fixed annuities:
Net interest spread		2.70	%		2.85	%		2.84	%		2.54	%		2.53	%		2.73	%		2.69	%
Net spread earned:
Before impact of fair value accounting		1.42	%		1.46	%		1.45	%		1.20	%		1.31	%		1.39	%		1.35	%
Impact of fair value accounting (c)		0.40	%		0.01	%		(0.37	%)		(0.46	%)		0.08	%		(0.10	%)		(0.09	%)
After impact of fair value accounting		1.82	%		1.47	%		1.08	%		0.74	%		1.39	%		1.29	%		1.26	%

(a) Excludes unrealized gains related to fixed maturity investments, a reconciliation to the GAAP measure is on page 18.

(b) Excludes accumulated other comprehensive income.

(c) Change in fair value of derivatives offset by the estimated related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs.

Page 3

American Financial Group, Inc. Summary of Earnings ($ in millions)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Property and Casualty Insurance
Underwriting profit	$	110		$	78		$	62		$	87		$	100		$	337		$	292
Net investment income		85			93			89			83			74			350			319
Other expense		(15	)		(18	)		(12	)		(12	)		(11	)		(57	)		(45	)
Property and Casualty Insurance operating earnings		180			153			139			158			163			630			566
Annuity earnings		132			107			76			53			101			368			331
Run-off Long-Term Care and Life earnings		2			1			—			(1	)		—			2			14
Interest expense of parent holding companies (a)		(21	)		(19	)		(19	)		(18	)		(16	)		(77	)		(73	)
Other expense (a)		(29	)		(29	)		(19	)		(22	)		(29	)		(99	)		(89	)
Pre-tax core operating earnings		264			213			177			170			219			824			749
Income tax expense		88			79			64			59			83			290			263
Core net operating earnings		176			134			113			111			136			534			486
Non-core items, net of tax:
Realized gains (losses) on securities		32			1			(10	)		(10	)		(14	)		13			(12	)
Realized gain (loss) on sale of subsidiaries		—			—			1			—			(3	)		1			(104	)
Gain on sale of hotel and apartment properties		—			—			15			—			10			15			36
Special A&E charges:
Property and Casualty Insurance run-off operations		—			(23	)		—			—			—			(23	)		(44	)
Former Railroad and Manufacturing operations		—			(3	)		—			—			—			(3	)		(8	)
Neon exited lines charge		—			—			(65	)		—			—			(65	)		—
Tax benefit related to National Interstate merger		66			—			—			—			—			66			—
Tax benefit related to Neon restructuring		111			—			—			—			—			111			—
Other		—			—			—			—			—			—			(2	)
Net earnings	$	385		$	109		$	54		$	101		$	129		$	649		$	352

(a) December 2015 has been adjusted for adoption of FASB Accounting Standard Update 2015-03, which impacted the presentation of debt issue costs and long-term debt.

Page 4

American Financial Group, Inc. Earnings Per Share Summary (in millions, except per share information)

	Three Months Ended														Twelve Months Ended
	12/31/16		09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Core net operating earnings	$	176	$	134		$	113		$	111		$	136		$	534		$	486
Net earnings	$	385	$	109		$	54		$	101		$	129		$	649		$	352
Average number of diluted shares		88.774		88.461			88.390			88.495			89.228			88.530			89.362
Diluted earnings per share:
Core net operating earnings per share	$	1.98	$	1.51		$	1.28		$	1.25		$	1.52		$	6.03		$	5.44
Realized gains (losses) on securities		0.36		0.02			(0.11	)		(0.11	)		(0.15	)		0.16			(0.12	)
Realized gain (loss) on sale of subsidiaries		—		—			0.01			—			(0.03	)		0.01			(1.17	)
Gain on sale of hotel and apartment properties		—		—			0.17			—			0.11			0.17			0.40
Special A&E charges:
Property and Casualty Insurance run-off operations		—		(0.26	)		—			—			—			(0.26	)		(0.49	)
Former Railroad and Manufacturing operations		—		(0.04	)		—			—			—			(0.04	)		(0.09	)
Neon exited lines charge		—		—			(0.73	)		—			—			(0.73	)		—
Tax benefit related to National Interstate merger		0.74		—			—			—			—			0.74			—
Tax benefit related to Neon restructuring		1.25		—			—			—			—			1.25			—
Other		—		—			—			—			—			—			(0.03	)
Diluted earnings per share	$	4.33	$	1.23		$	0.62		$	1.14		$	1.45		$	7.33		$	3.94

Page 5

American Financial Group, Inc. Property and Casualty Insurance - Summary Underwriting Results (GAAP) ($ in millions)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Property and Transportation	$	75		$	44		$	15		$	32		$	34		$	166		$	48
Specialty Casualty		13			13			23			29			50			78			146
Specialty Financial		20			19			22			23			15			84			87
Other Specialty		2			2			3			2			1			9			14
Underwriting profit - Specialty		110			78			63			86			100			337			295
Other core charges, included in loss and LAE		—			—			1			(1	)		—			—			3
Underwriting profit - Core		110			78			62			87			100			337			292
Special A&E charges, included in loss and LAE		—			(36	)		—			—			—			(36	)		(67	)
Neon exited lines charge, included in loss and LAE		—			—			(57	)		—			—			(57	)		—
Neon exited lines charge, included in underwriting expenses		—			—			(8	)		—			—			(8	)		—
Underwriting profit (loss) - Property and Casualty Insurance	$	110		$	42		$	(3	)	$	87		$	100		$	236		$	225
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		12			14			21			8			9			55			35
Total current accident year catastrophe losses	$	12		$	14		$	21		$	8		$	9		$	55		$	35
Prior year loss reserve development (favorable) / adverse	$	10		$	22		$	28		$	(28	)	$	(5	)	$	32		$	33
Combined ratio:
Property and Transportation		83.9	%		91.1	%		95.9	%		90.6	%		92.4	%		90.0	%		96.9	%
Specialty Casualty		97.4	%		97.4	%		95.3	%		94.3	%		90.2	%		96.1	%		92.7	%
Specialty Financial		86.0	%		86.4	%		84.4	%		82.6	%		88.7	%		84.9	%		83.1	%
Other Specialty		94.9	%		91.5	%		89.2	%		89.7	%		97.1	%		91.4	%		85.5	%
Combined ratio - Specialty		90.4	%		93.2	%		93.9	%		91.3	%		91.0	%		92.3	%		93.1	%
Other core charges		0.0	%		0.1	%		0.1	%		(0.1	%)		0.0	%		(0.1	%)		0.0	%
Neon exited lines charge, loss and LAE		0.0	%		0.0	%		5.5	%		0.0	%		0.0	%		1.3	%		0.0	%
Neon exited lines charge, underwriting expenses		0.0	%		0.0	%		0.8	%		0.0	%		0.0	%		0.2	%		0.0	%
Special A&E charges		0.0	%		3.0	%		0.0	%		0.0	%		0.0	%		0.8	%		1.6	%
Combined ratio		90.4	%		96.3	%		100.3	%		91.2	%		91.0	%		94.5	%		94.7	%
Combined ratio excl. catastrophe and prior year development		88.4	%		93.1	%		94.8	%		93.2	%		90.6	%		92.4	%		93.1	%
Loss and LAE components - property and casualty insurance
Current accident year, excluding catastrophe loss		61.7	%		62.8	%		62.1	%		60.2	%		61.4	%		61.8	%		62.2	%
Prior accident year loss reserve development		0.9	%		2.0	%		2.7	%		(2.8	%)		(0.4	%)		0.7	%		0.8	%
Current accident year catastrophe loss		1.1	%		1.2	%		2.0	%		0.8	%		0.8	%		1.3	%		0.8	%
Loss and LAE ratio		63.7	%		66.0	%		66.8	%		58.2	%		61.8	%		63.8	%		63.8	%

Page 6

American Financial Group, Inc. Specialty - Underwriting Results (GAAP) ($ in millions)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Gross written premiums	$	1,441		$	1,899		$	1,398		$	1,243		$	1,356		$	5,981		$	5,832
Ceded reinsurance premiums		(358	)		(631	)		(342	)		(264	)		(300	)		(1,595	)		(1,505	)
Net written premiums		1,083			1,268			1,056			979			1,056			4,386			4,327
Change in unearned premiums		61			(109	)		(29	)		19			64			(58	)		(103	)
Net earned premiums		1,144			1,159			1,027			998			1,120			4,328			4,224
Loss and LAE		729			729			629			582			693			2,669			2,625
Underwriting expense		305			352			335			330			327			1,322			1,304
Underwriting profit	$	110		$	78		$	63		$	86		$	100		$	337		$	295
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		12			14			21			8			9			55			35
Total current accident year catastrophe losses	$	12		$	14		$	21		$	8		$	9		$	55		$	35
Prior year loss reserve development (favorable) / adverse	$	10		$	(14	)	$	(30	)	$	(27	)	$	(5	)	$	(61	)	$	(37	)
Combined ratio:
Loss and LAE ratio		63.7	%		62.9	%		61.2	%		58.3	%		61.8	%		61.7	%		62.2	%
Underwriting expense ratio		26.7	%		30.3	%		32.7	%		33.0	%		29.2	%		30.6	%		30.9	%
Combined ratio		90.4	%		93.2	%		93.9	%		91.3	%		91.0	%		92.3	%		93.1	%
Combined ratio excl. catastrophe and prior year development		88.4	%		93.1	%		94.8	%		93.2	%		90.6	%		92.4	%		93.1	%
Loss and LAE components:
Current accident year, excluding catastrophe loss		61.7	%		62.8	%		62.1	%		60.2	%		61.4	%		61.8	%		62.2	%
Prior accident year loss reserve development		0.9	%		(1.1	%)		(2.9	%)		(2.7	%)		(0.4	%)		(1.4	%)		(0.8	%)
Current accident year catastrophe loss		1.1	%		1.2	%		2.0	%		0.8	%		0.8	%		1.3	%		0.8	%
Loss and LAE ratio		63.7	%		62.9	%		61.2	%		58.3	%		61.8	%		61.7	%		62.2	%

Page 7

American Financial Group, Inc. Property and Transportation - Underwriting Results (GAAP) ($ in millions)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Gross written premiums	$	577		$	991		$	538		$	398		$	515		$	2,504		$	2,455
Ceded reinsurance premiums		(183	)		(406	)		(156	)		(87	)		(137	)		(832	)		(819	)
Net written premiums		394			585			382			311			378			1,672			1,636
Change in unearned premiums		71			(92	)		(17	)		28			64			(10	)		(37	)
Net earned premiums		465			493			365			339			442			1,662			1,599
Loss and LAE		319			339			245			211			317			1,114			1,159
Underwriting expense		71			110			105			96			91			382			392
Underwriting profit	$	75		$	44		$	15		$	32		$	34		$	166		$	48
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		6			7			12			6			3			31			21
Total current accident year catastrophe losses	$	6		$	7		$	12		$	6		$	3		$	31		$	21
Prior year loss reserve development (favorable) / adverse	$	13		$	(5	)	$	(12	)	$	(17	)	$	8		$	(21	)	$	15
Combined ratio:
Loss and LAE ratio		68.6	%		68.8	%		67.0	%		62.2	%		71.7	%		67.0	%		72.4	%
Underwriting expense ratio		15.3	%		22.3	%		28.9	%		28.4	%		20.7	%		23.0	%		24.5	%
Combined ratio		83.9	%		91.1	%		95.9	%		90.6	%		92.4	%		90.0	%		96.9	%
Combined ratio excl. catastrophe and prior year development		79.7	%		90.7	%		95.8	%		94.1	%		89.9	%		89.3	%		94.7	%
Loss and LAE components:
Current accident year, excluding catastrophe loss		64.4	%		68.4	%		66.9	%		65.7	%		69.2	%		66.3	%		70.2	%
Prior accident year loss reserve development		3.0	%		(1.2	%)		(3.2	%)		(5.2	%)		1.8	%		(1.2	%)		0.9	%
Current accident year catastrophe loss		1.2	%		1.6	%		3.3	%		1.7	%		0.7	%		1.9	%		1.3	%
Loss and LAE ratio		68.6	%		68.8	%		67.0	%		62.2	%		71.7	%		67.0	%		72.4	%

Page 8

American Financial Group, Inc. Specialty Casualty - Underwriting Results (GAAP) ($ in millions)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Gross written premiums	$	684		$	722		$	688		$	698		$	661		$	2,792		$	2,739
Ceded reinsurance premiums		(174	)		(218	)		(185	)		(179	)		(158	)		(756	)		(687	)
Net written premiums		510			504			503			519			503			2,036			2,052
Change in unearned premiums		—			(7	)		(6	)		(17	)		12			(30	)		(41	)
Net earned premiums		510			497			497			502			515			2,006			2,011
Loss and LAE		348			330			329			313			315			1,320			1,265
Underwriting expense		149			154			145			160			150			608			600
Underwriting profit	$	13		$	13		$	23		$	29		$	50		$	78		$	146
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		4			2			3			1			1			10			4
Total current accident year catastrophe losses	$	4		$	2		$	3		$	1		$	1		$	10		$	4
Prior year loss reserve development (favorable) / adverse	$	3		$	(2	)	$	(10	)	$	(4	)	$	(7	)	$	(13	)	$	(11	)
Combined ratio:
Loss and LAE ratio		68.2	%		66.5	%		66.1	%		62.4	%		61.1	%		65.8	%		62.9	%
Underwriting expense ratio		29.2	%		30.9	%		29.2	%		31.9	%		29.1	%		30.3	%		29.8	%
Combined ratio		97.4	%		97.4	%		95.3	%		94.3	%		90.2	%		96.1	%		92.7	%
Combined ratio excl. catastrophe and prior year development		96.1	%		97.4	%		96.6	%		94.9	%		91.4	%		96.3	%		93.0	%
Loss and LAE components:
Current accident year, excluding catastrophe loss		66.9	%		66.5	%		67.4	%		63.0	%		62.3	%		66.0	%		63.2	%
Prior accident year loss reserve development		0.5	%		(0.3	%)		(2.0	%)		(0.7	%)		(1.4	%)		(0.7	%)		(0.5	%)
Current accident year catastrophe loss		0.8	%		0.3	%		0.7	%		0.1	%		0.2	%		0.5	%		0.2	%
Loss and LAE ratio		68.2	%		66.5	%		66.1	%		62.4	%		61.1	%		65.8	%		62.9	%

Page 9

American Financial Group, Inc. Specialty Financial - Underwriting Results (GAAP) ($ in millions)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Gross written premiums	$	180		$	186		$	172		$	147		$	179		$	685		$	637
Ceded reinsurance premiums		(26	)		(37	)		(28	)		(22	)		(27	)		(113	)		(97	)
Net written premiums		154			149			144			125			152			572			540
Change in unearned premiums		(13	)		(4	)		(5	)		7			(15	)		(15	)		(23	)
Net earned premiums		141			145			139			132			137			557			517
Loss and LAE		46			45			42			45			46			178			154
Underwriting expense		75			81			75			64			76			295			276
Underwriting profit	$	20		$	19		$	22		$	23		$	15		$	84		$	87
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		2			5			3			1			5			11			9
Total current accident year catastrophe losses	$	2		$	5		$	3		$	1		$	5		$	11		$	9
Prior year loss reserve development (favorable) / adverse	$	(6	)	$	(6	)	$	(7	)	$	(4	)	$	(5	)	$	(23	)	$	(30	)
Combined ratio:
Loss and LAE ratio		32.4	%		31.6	%		30.1	%		34.0	%		32.8	%		32.0	%		29.7	%
Underwriting expense ratio		53.6	%		54.8	%		54.3	%		48.6	%		55.9	%		52.9	%		53.4	%
Combined ratio		86.0	%		86.4	%		84.4	%		82.6	%		88.7	%		84.9	%		83.1	%
Combined ratio excl. catastrophe and prior year development		88.8	%		87.0	%		87.0	%		84.8	%		88.8	%		86.9	%		87.1	%
Loss and LAE components:
Current accident year, excluding catastrophe loss		35.2	%		32.2	%		32.7	%		36.2	%		32.9	%		34.0	%		33.7	%
Prior accident year loss reserve development		(4.5	%)		(3.9	%)		(4.6	%)		(3.3	%)		(3.6	%)		(4.0	%)		(5.7	%)
Current accident year catastrophe loss		1.7	%		3.3	%		2.0	%		1.1	%		3.5	%		2.0	%		1.7	%
Loss and LAE ratio		32.4	%		31.6	%		30.1	%		34.0	%		32.8	%		32.0	%		29.7	%

Page 10

American Financial Group, Inc. Other Specialty - Underwriting Results (GAAP) ($ in millions)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Gross written premiums	$	—		$	—		$	—		$	—		$	1		$	—		$	1
Ceded reinsurance premiums		25			30			27			24			22			106			98
Net written premiums		25			30			27			24			23			106			99
Change in unearned premiums		3			(6	)		(1	)		1			3			(3	)		(2	)
Net earned premiums		28			24			26			25			26			103			97
Loss and LAE		16			15			13			13			15			57			47
Underwriting expense		10			7			10			10			10			37			36
Underwriting profit	$	2		$	2		$	3		$	2		$	1		$	9		$	14
Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		—			—			3			—			—			3			1
Total current accident year catastrophe losses	$	—		$	—		$	3		$	—		$	—		$	3		$	1
Prior year loss reserve development (favorable) / adverse	$	—		$	(1	)	$	(1	)	$	(2	)	$	(1	)	$	(4	)	$	(11	)
Combined ratio:
Loss and LAE ratio		59.5	%		55.2	%		52.5	%		52.1	%		61.0	%		54.9	%		49.4	%
Underwriting expense ratio		35.4	%		36.3	%		36.7	%		37.6	%		36.1	%		36.5	%		36.1	%
Combined ratio		94.9	%		91.5	%		89.2	%		89.7	%		97.1	%		91.4	%		85.5	%
Combined ratio excl. catastrophe and prior year development		93.7	%		95.1	%		86.4	%		96.0	%		98.1	%		92.8	%		96.4	%

Page 11

American Financial Group, Inc. Annuity Earnings (GAAP) ($ in millions)

	Three Months Ended												Twelve Months Ended
	12/31/16		09/30/16		06/30/16			03/31/16			12/31/15		12/31/16			12/31/15
Net investment income	$	346	$	351	$	344		$	315		$	309	$	1,356		$	1,224
Guaranteed withdrawal benefit fees		14		14		13			12			12		53			43
Policy charges and other miscellaneous income		13		12		11			14			11		50			55
Total revenues		373		377		368			341			332		1,459			1,322
Annuity benefits expense		160		189		223			228			189		800			732
Acquisition expenses		54		53		40			34			20		181			163
Other expenses		27		28		29			26			22		110			96
Total costs and expenses		241		270		292			288			231		1,091			991
Annuity earnings before income taxes	$	132	$	107	$	76		$	53		$	101	$	368		$	331
Detail of Annuity earnings before income taxes
Earnings before income taxes and impact of fair value accounting	$	103	$	106	$	102		$	84		$	96	$	395		$	354
Impact of fair value accounting (a)		29		1		(26	)		(31	)		5		(27	)		(23	)
Annuity earnings before income taxes	$	132	$	107	$	76		$	53		$	101	$	368		$	331

(a) Change in fair value of derivatives offset by the estimated related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs.

Page 12

American Financial Group, Inc. Detail of Annuity Benefits Expense (GAAP) ($ in millions)

	Three Months Ended														Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16		12/31/15			12/31/16			12/31/15
Detail of annuity benefits expense:
Interest credited - fixed	$	148		$	145		$	142		$	139	$	138		$	574		$	532
Interest credited - fixed component of variable annuities		1			1			2			1		1			5			6
Change in expected death and annuitization reserve		4			5			4			5		5			18			19
Amortization of sales inducements		7			6			6			5		6			24			26
Guaranteed withdrawal benefit reserve		20			18			15			16		15			69			63
Change in other benefit reserves		11			10			8			5		5			34			22
Unlockings (a)		23			—			—			—		19			23			19
Subtotal before impact of fair value accounting		214			185			177			171		189			747			687
Embedded derivative mark-to-market (b)		6			109			62			17		88			194			(11	)
Equity option mark-to-market		(60	)		(105	)		(16	)		40		(88	)		(141	)		56
Subtotal impact of fair value accounting		(54	)		4			46			57		—			53			45
Total annuity benefits expense	$	160		$	189		$	223		$	228	$	189		$	800		$	732

(a) Includes unlockings for fixed indexed annuity embedded derivative reserves, sales inducement asset and other reserves. Does not include unlocking income of $24 million in 2016 and $29 million in 2015 for deferred policy acquisition costs and unearned revenue reserves. These unlockings are included in acquisition expenses and other income. In total, AFG recorded an unlocking expense reduction of $1 million in 2016 and $10 million in 2015.

(b) Excludes unlocking impact of $17 million in 2016 and $28 million in 2015.

Page 13

American Financial Group, Inc. Net Spread on Fixed Annuities (GAAP) ($ in millions)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Average fixed annuity investments (at amortized cost)	$	29,192		$	28,548		$	27,964		$	27,186		$	26,401		$	28,223		$	25,174
Average annuity benefits accumulated		29,250			28,538			27,861			26,935			26,048			28,146			24,898
Investments in excess of annuity benefits accumulated	$	(58	)	$	10		$	103		$	251		$	353		$	77		$	276
As % of average annuity benefits accumulated (except as noted)
Net investment income (as % of investments)		4.72	%		4.88	%		4.88	%		4.60	%		4.65	%		4.77	%		4.83	%
Interest credited		(2.02	%)		(2.03	%)		(2.04	%)		(2.06	%)		(2.12	%)		(2.04	%)		(2.14	%)
Net interest spread on fixed annuities		2.70	%		2.85	%		2.84	%		2.54	%		2.53	%		2.73	%		2.69	%
Policy charges and other miscellaneous income		0.15	%		0.14	%		0.13	%		0.16	%		0.15	%		0.15	%		0.18	%
Other annuity benefit expenses, net		(0.38	%)		(0.36	%)		(0.30	%)		(0.27	%)		(0.31	%)		(0.33	%)		(0.35	%)
Acquisition expenses		(1.06	%)		(0.72	%)		(0.55	%)		(0.47	%)		(0.75	%)		(0.70	%)		(0.74	%)
Other expenses		(0.35	%)		(0.39	%)		(0.38	%)		(0.38	%)		(0.32	%)		(0.38	%)		(0.36	%)
Change in fair value of derivatives		0.73	%		(0.05	%)		(0.66	%)		(0.84	%)		0.02	%		(0.19	%)		(0.18	%)
Unlockings		0.03	%		0.00	%		0.00	%		0.00	%		0.07	%		0.01	%		0.02	%
Net spread earned on fixed annuities		1.82	%		1.47	%		1.08	%		0.74	%		1.39	%		1.29	%		1.26	%
Average annuity benefits accumulated	$	29,250		$	28,538		$	27,861		$	26,935		$	26,048		$	28,146		$	24,898
Net spread earned on fixed annuities		1.82	%		1.47	%		1.08	%		0.74	%		1.39	%		1.29	%		1.26	%
Earnings on fixed annuity benefits accumulated	$	133		$	105		$	75		$	50		$	91		$	363		$	313
Investments in excess of annuity benefits accumulated	$	(58	)	$	10		$	103		$	251		$	353		$	77		$	276
Net investment income (as % of investments)		4.72	%		4.88	%		4.88	%		4.60	%		4.65	%		4.77	%		4.83	%
Earnings on investments in excess of annuity benefits accumulated	$	—		$	—		$	1		$	3		$	4		$	4		$	13
Variable annuity earnings		(1	)		2			—			—			6			1			5
Earnings before income taxes	$	132		$	107		$	76		$	53		$	101		$	368		$	331
Detail of net spread earned on fixed annuities - core
Net spread earned core - before impact of fair value accounting		1.42	%		1.46	%		1.45	%		1.20	%		1.31	%		1.39	%		1.35	%
Change in fair value of derivatives		0.73	%		(0.05	%)		(0.66	%)		(0.84	%)		0.02	%		(0.19	%)		(0.18	%)
Estimated net offsets to deferred sales inducements and deferred policy acquisition costs		(0.33	%)		0.06	%		0.29	%		0.38	%		0.06	%		0.09	%		0.09	%
Net spread earned core - after impact of fair value accounting		1.82	%		1.47	%		1.08	%		0.74	%		1.39	%		1.29	%		1.26	%

Page 14

American Financial Group, Inc. Annuity Premiums (Statutory) ($ in millions)

	Three Months Ended										Twelve Months Ended
	12/31/16		09/30/16		06/30/16		03/31/16		12/31/15		12/31/16		12/31/15
Retail single premium annuities - indexed	$	415	$	340	$	413	$	546	$	494	$	1,714	$	1,864
Retail single premium annuities - fixed		22		18		22		20		18		82		70
Financial institutions single premium annuities - indexed		474		435		507		534		462		1,950		1,741
Financial institutions single premium annuities - fixed		152		97		100		119		72		468		229
Education market - fixed and indexed annuities		40		42		45		57		51		184		194
Subtotal fixed annuity premiums		1,103		932		1,087		1,276		1,097		4,398		4,098
Variable annuities		8		9		11		9		10		37		42
Total annuity premiums	$	1,111	$	941	$	1,098	$	1,285	$	1,107	$	4,435	$	4,140

Page 15

American Financial Group, Inc. Fixed Annuity Benefits Accumulated (GAAP) ($ in millions)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Beginning fixed annuity reserves	$	28,853		$	28,222		$	27,499		$	26,371		$	25,725		$	26,371		$	23,462
Premiums		1,103			932			1,087			1,276			1,097			4,398			4,098
Federal Home Loan Bank advances		—			—			—			150			45			150			345
Surrenders, benefits and other withdrawals		(524	)		(586	)		(596	)		(483	)		(515	)		(2,189	)		(1,932	)
Sale of subsidiaries		—			—			—			—			(261	)		—			(261	)
Interest and other annuity benefit expenses:
Interest credited		148			145			142			139			138			574			532
Embedded derivative mark-to-market		6			109			62			17			88			194			(11	)
Change in other benefit reserves		34			31			28			29			31			122			115
Unlockings		27			—			—			—			23			27			23
Ending fixed annuity reserves	$	29,647		$	28,853		$	28,222		$	27,499		$	26,371		$	29,647		$	26,371
Reconciliation to annuity benefits accumulated:
Ending fixed annuity reserves	$	29,647		$	28,853		$	28,222		$	27,499		$	26,371		$	29,647		$	26,371
Impact of unrealized investment gains on reserves		76			180			188			127			64			76			64
Fixed component of variable annuities		184			189			186			186			187			184			187
Annuity benefits accumulated per balance sheet	$	29,907		$	29,222		$	28,596		$	27,812		$	26,622		$	29,907		$	26,622
Annualized surrenders and other withdrawals as a % of beginning reserves		7.3	%		8.3	%		8.7	%		7.3	%		8.0	%		8.3	%		8.2	%

Page 16

American Financial Group, Inc. Consolidated Balance Sheet ($ in millions)

	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			09/30/15
Assets:
Total cash and investments	$	41,433		$	41,805		$	40,639		$	39,437		$	37,736		$	38,132
Recoverables from reinsurers		2,737			2,814			2,576			2,561			2,636			3,151
Prepaid reinsurance premiums		539			634			521			475			480			604
Agents’ balances and premiums receivable		997			1,029			992			936			937			976
Deferred policy acquisition costs		1,239			867			881			1,055			1,184			993
Assets of managed investment entities		4,765			4,312			4,410			3,906			4,047			3,613
Other receivables		908			1,391			788			693			820			1,241
Variable annuity assets (separate accounts)		600			606			595			595			608			595
Other assets (a)		1,655			1,188			1,132			1,181			1,190			1,034
Goodwill		199			199			199			199			199			201
Total assets	$	55,072		$	54,845		$	52,733		$	51,038		$	49,837		$	50,540
Liabilities and Equity:
Unpaid losses and loss adjustment expenses	$	8,563		$	8,661		$	8,203		$	8,108		$	8,127		$	8,061
Unearned premiums		2,171			2,328			2,109			2,051			2,060			2,238
Annuity benefits accumulated		29,907			29,222			28,596			27,812			26,622			26,026
Life, accident and health reserves		691			700			702			708			705			2,159
Payable to reinsurers		634			835			588			501			591			724
Liabilities of managed investment entities		4,549			4,067			4,192			3,656			3,781			3,287
Long-term debt (a)		1,283			1,300			998			998			998			863
Variable annuity liabilities (separate accounts)		600			606			595			595			608			595
Other liabilities		1,755			1,768			1,557			1,672			1,575			1,681
Total liabilities	$	50,153		$	49,487		$	47,540		$	46,101		$	45,067		$	45,634
Shareholders’ equity:
Common stock	$	87		$	87		$	87		$	87		$	87		$	87
Capital surplus		1,111			1,242			1,228			1,218			1,214			1,195
Unappropriated retained earnings		3,343			3,079			3,016			3,002			2,987			2,981
Unrealized gains - equities		98			103			46			40			54			44
Unrealized gains - fixed maturities		306			669			639			426			278			445
Unrealized gains (losses) - fixed maturity-related cash flow hedges		(7	)		5			5			4			1			2
Other comprehensive income, net of tax		(22	)		(24	)		(21	)		(22	)		(29	)		(30	)
Total shareholders’ equity		4,916			5,161			5,000			4,755			4,592			4,724
Noncontrolling interests		3			197			193			182			178			182
Total liabilities and equity	$	55,072		$	54,845		$	52,733		$	51,038		$	49,837		$	50,540

(a) December 2015 and prior periods have been adjusted for adoption of FASB Accounting Standard Update 2015-03, which impacted the presentation of debt issue costs and long-term debt.

Page 17

American Financial Group, Inc. Book Value Per Share and Price / Book Summary (in millions, except per share information)

	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			09/30/15
Shareholders’ equity	$	4,916		$	5,161		$	5,000		$	4,755		$	4,592		$	4,724
Unrealized (gains) related to fixed maturities		(299	)		(674	)		(644	)		(430	)		(279	)		(447	)
Adjusted shareholders’ equity		4,617			4,487			4,356			4,325			4,313			4,277
Goodwill		(199	)		(199	)		(199	)		(199	)		(199	)		(201	)
Intangibles		(34	)		(44	)		(46	)		(47	)		(49	)		(51	)
Tangible adjusted shareholders’ equity	$	4,384		$	4,244		$	4,111		$	4,079		$	4,065		$	4,025
Common shares outstanding		86.924			86.813			86.850			86.966			87.474			87.327
Book value per share:
Book value per share	$	56.55		$	59.45		$	57.57		$	54.67		$	52.50		$	54.10
Adjusted (a)		53.11			51.68			50.16			49.72			49.32			48.98
Tangible, adjusted (b)		50.43			48.89			47.34			46.90			46.49			46.09
Market capitalization
AFG’s closing common share price	$	88.12		$	75.00		$	73.93		$	70.37		$	72.08		$	68.91
Market capitalization	$	7,660		$	6,511		$	6,421		$	6,120		$	6,305		$	6,018
Price / Adjusted book value ratio		1.66			1.45			1.47			1.42			1.46			1.41

(a) Excludes unrealized gains related to fixed maturity investments.

(b) Excludes unrealized gains related to fixed maturity investments, goodwill and intangibles.

Page 18

American Financial Group, Inc. Capitalization ($ in millions)

	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			09/30/15
AFG senior obligations (a)	$	1,008		$	1,008		$	708		$	708		$	708		$	708
Borrowings drawn under credit facility		—			—			—			—			—			—
Obligations of subsidiaries - other		—			18			12			12			12			12
Debt excluding subordinated debt & debt secured by real estate	$	1,008		$	1,026		$	720		$	720		$	720		$	720
AFG subordinated debentures		300			300			300			300			300			150
Obligations of subsidiaries - secured by real estate		—			—			—			—			—			10
Total principal amount of long-term debt	$	1,308		$	1,326		$	1,020		$	1,020		$	1,020		$	880
Shareholders’ equity		4,916			5,161			5,000			4,755			4,592			4,724
Noncontrolling interests		3			197			193			182			178			182
Less:
Unrealized (gains) - fixed maturity investments		(306	)		(669	)		(639	)		(426	)		(278	)		(445	)
Total adjusted capital	$	5,921		$	6,015		$	5,574		$	5,531		$	5,512		$	5,341
Less:
Obligations of subsidiaries - secured by real estate		—			—			—			—			—			(10	)
Total adjusted capital excluding obligations secured by real estate	$	5,921		$	6,015		$	5,574		$	5,531		$	5,512		$	5,331
Ratio of debt to total adjusted capital:
Including subordinated debt & debt secured by real estate		22.1	%		22.0	%		18.3	%		18.4	%		18.5	%		16.5	%
Excluding subordinated debt & debt secured by real estate		17.0	%		17.1	%		12.9	%		13.0	%		13.1	%		13.5	%

(a) December 2015 and prior periods have been adjusted for adoption of FASB Accounting Standard Update 2015-03, which impacted the presentation of debt issue costs and long-term debt.

Page 19

American Financial Group, Inc. Additional Supplemental Information ($ in millions)

	Three Months Ended										Twelved Months Ended
	12/31/16		09/30/16		06/30/16		03/31/16		12/31/15		12/31/16		12/31/15
Property and Casualty Insurance
Paid Losses (GAAP)	$	683	$	537	$	586	$	547	$	675	$	2,353	$	2,403
	12/31/16		09/30/16		06/30/16		03/31/16		12/31/15		09/30/15
Statutory Surplus
Property and Casualty Insurance	$	2,939	$	3,038	$	2,601	$	2,574	$	2,488	$	2,356
AFG’s principal annuity subsidiaries (total adjusted capital)	$	2,234	$	2,216	$	2,089	$	2,032	$	1,918	$	1,816
Allowable dividends without regulatory approval
Property and Casualty Insurance	$	496	$	434	$	434	$	434	$	434	$	315
Annuity and Run-off		197		375		375		375		375		358
Total	$	693	$	809	$	809	$	809	$	809	$	673

Page 20

American Financial Group, Inc. Total Cash and Investments ($ in millions)

	Carrying Value - December 31, 2016
	Property and					Parent and							% of
	Casualty		Annuity and			Other Non-		Consolidate			Total AFG		Investment
	Insurance		Run-off			Insurance		CLOs			Consolidated		Portfolio
Total cash and investments:
Cash and cash equivalents	$	1,383	$	511		$	213	$	—		$	2,107		5	%
Fixed maturities - Available for sale		6,510		28,021			13		—			34,544		83	%
Fixed maturities - Trading		242		117			—		—			359		1	%
Equity securities		1,013		496			49		—			1,558		4	%
Policy loans		—		192			—		—			192		0	%
Mortgage loans		261		886			—		—			1,147		3	%
Real estate and other investments		497		1,197			48		(216	)		1,526		4	%
Total cash and investments	$	9,906	$	31,420		$	323	$	(216	)	$	41,433		100	%
Unrealized gain/(loss) on equity securities	$	102	$	49		$	—	$	—		$	151
	Carrying Value - December 31, 2015
	Property and					Parent and							% of
	Casualty		Annuity and			Other Non-		Consolidate			Total AFG		Investment
	Insurance		Run-off			Insurance		CLOs			Consolidated		Portfolio
Total cash and investments:
Cash and cash equivalents	$	708	$	282		$	230	$	—		$	1,220		3	%
Fixed maturities - Available for sale		6,784		25,486			14		—			32,284		85	%
Fixed maturities - Trading		140		114			—		—			254		1	%
Equity securities		1,182		488			49		—			1,719		5	%
Policy loans		—		201			—		—			201		0	%
Mortgage loans		191		876			—		—			1,067		3	%
Real estate and other investments		457		781			18		(265	)		991		3	%
Total cash and investments	$	9,462	$	28,228		$	311	$	(265	)	$	37,736		100	%
Unrealized gain/(loss) on equity securities	$	87	$	(3	)	$	—	$	—		$	84

Page 21

American Financial Group, Inc. Net Investment Income ($ in millions)

	Three Months Ended															Twelve Months Ended
	12/31/16			09/30/16			06/30/16			03/31/16			12/31/15			12/31/16			12/31/15
Property and Casualty Insurance:
Gross Investment Income
Fixed maturities - Available for sale	$	64		$	63		$	66		$	64		$	63		$	257		$	248
Fixed maturities - Trading		(1	)		2			1			1			—			3			4
Equity securities		13			13			12			13			14			51			48
Equity in investees		7			7			2			6			(1	)		22			11
Other investments		6			10			10			1			—			27			16
Gross investment income		89			95			91			85			76			360			327
Investment expenses		(4	)		(2	)		(2	)		(2	)		(2	)		(10	)		(8	)
Total net investment income	$	85		$	93		$	89		$	83		$	74		$	350		$	319
Average cash and investments (a)	$	9,779		$	9,647		$	9,465		$	9,366		$	9,113		$	9,550		$	8,956
Average yield (b)		3.48	%		3.86	%		3.76	%		3.54	%		3.25	%		3.66	%		3.56	%
Fixed Annuity:
Gross Investment Income
Fixed maturities - Available for sale	$	315		$	307		$	307		$	294		$	294		$	1,223		$	1,126
Fixed maturities - Trading		—			—			—			—			—			—			—
Equity securities		7			6			6			5			6			24			21
Equity in investees		6			9			2			5			2			22			16
Other investments		20			27			29			11			7			87			62
Gross investment income		348			349			344			315			309			1,356			1,225
Investment expenses		(4	)		(1	)		(2	)		(3	)		(2	)		(10	)		(10	)
Total net investment income	$	344		$	348		$	342		$	312		$	307		$	1,346		$	1,215
Average cash and investments (a)	$	29,192		$	28,548		$	27,964		$	27,186		$	26,401		$	28,223		$	25,174
Average yield (b)		4.72	%		4.88	%		4.88	%		4.60	%		4.65	%		4.77	%		4.83	%
AFG consolidated net investment income:
Property & Casualty	$	85		$	93		$	89		$	83		$	74		$	350		$	319
Annuity and Run-off:
Fixed Annuity		344			348			342			312			307			1,346			1,215
Variable Annuity		2			3			2			3			2			10			9
Run-off		6			5			5			5			19			21			80
Other		—			1			4			1			3			6			4
Consolidate CLOs		(8	)		(17	)		(19	)		7			11			(37	)		6
Total net investment income	$	429		$	433		$	423		$	411		$	416		$	1,696		$	1,633

(a) Average cash and investments is the average of the beginning and ending quarter balances, or the average of the five quarters balances.

(b) Average yield is calculated by dividing investment income for the quarter by the average cash and investment balance over the quarter.

Page 22

American Financial Group, Inc. Fixed Maturities - By Security Type - AFG Consolidated ($ in millions)

December 31, 2016	Amortized Cost			Fair Value		Unrealized Gain (Loss)			% of Fair Value			% of Investment Portfolio
US Government and government agencies	$	348		$	348	$	—			1	%		1	%
States, municipalities and political subdivisions		6,677			6,808		131			19	%		16	%
Foreign government		256			261		5			1	%		1	%
Residential mortgage-backed securities		3,371			3,639		268			11	%		9	%
Commercial mortgage-backed securities		1,446			1,493		47			4	%		3	%
Asset-backed securities		5,962			5,959		(3	)		17	%		14	%
Corporate and other bonds		16,034			16,395		361			47	%		40	%
Total AFG consolidated	$	34,094		$	34,903	$	809			100	%		84	%
Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		4.56	%
Net of investment expense (a)		4.48	%
Approximate average life and duration:
Approximate average life		6.5 years
Approximate duration		5 years
December 31, 2015	Amortized Cost			Fair Value		Unrealized Gain (Loss)			% of Fair Value			% of Investment Portfolio
US Government and government agencies	$	319		$	321	$	2			1	%		1	%
States, municipalities and political subdivisions		6,671			6,885		214			21	%		18	%
Foreign government		225			232		7			1	%		1	%
Residential mortgage-backed securities		3,241			3,534		293			11	%		9	%
Commercial mortgage-backed securities		2,112			2,188		76			7	%		6	%
Asset-backed securities		4,961			4,934		(27	)		15	%		13	%
Corporate and other bonds		14,290			14,444		154			44	%		38	%
Total AFG consolidated	$	31,819		$	32,538	$	719			100	%		86	%
Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		4.74	%
Net of investment expense (a)		4.69	%
Approximate average life and duration:
Approximate average life		6.5 years
Approximate duration		5 years

(a) Annualized yield is calculated by dividing investment income for the quarter by the average cost over the quarter.

Average cost is the average of the beginning and ending quarter asset balances.

Page 23

American Financial Group, Inc. Fixed Maturities - By Security Type Portfolio ($ in millions)

	December 31, 2016											December 31, 2015
Property and Casualty Insurance:	Amortized Cost			Fair Value		Unrealized Gain (Loss)			% of Fair Value			Amortized Cost			Fair Value		Unrealized Gain (Loss)			% of Fair Value
US Government and government agencies	$	295		$	295	$	—			4	%	$	255		$	257	$	2			4	%
States, municipalities and political subdivisions		2,588			2,605		17			39	%		2,807			2,891		84			42	%
Foreign government		245			249		4			4	%		213			219		6			3	%
Residential mortgage-backed securities		980			1,026		46			15	%		893			932		39			13	%
Commercial mortgage-backed securities		142			144		2			2	%		209			213		4			3	%
Asset-backed securities		1,445			1,440		(5	)		21	%		1,453			1,442		(11	)		21	%
Corporate and other bonds		976			993		17			15	%		979			970		(9	)		14	%
Property and Casualty Insurance	$	6,671		$	6,752	$	81			100	%	$	6,809		$	6,924	$	115			100	%
Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		3.88	%										3.82	%
Net of investment expense (a)		3.67	%										3.71	%
Tax equivalent, net of investment expense (b)		4.20	%										4.31	%
Approximate average life and duration:
Approximate average life		4.5 years											5 years
Approximate duration		3.5 years											4 years
	December 31, 2016											December 31, 2015
Annuity and Run-off:	Amortized Cost			Fair Value		Unrealized Gain (Loss)			% of Fair Value			Amortized Cost			Fair Value		Unrealized Gain (Loss)			% of Fair Value
US Government and government agencies	$	52		$	52	$	—			0	%	$	62		$	62	$	—			0	%
States, municipalities and political subdivisions		4,089			4,203		114			15	%		3,864			3,994		130			15	%
Foreign government		11			12		1			0	%		12			13		1			0	%
Residential mortgage-backed securities		2,390			2,601		211			9	%		2,347			2,590		243			10	%
Commercial mortgage-backed securities		1,304			1,349		45			5	%		1,903			1,975		72			8	%
Asset-backed securities		4,517			4,519		2			16	%		3,508			3,492		(16	)		14	%
Corporate and other bonds		15,058			15,402		344			55	%		13,311			13,474		163			53	%
Total Annuity and Run-off	$	27,421		$	28,138	$	717			100	%	$	25,007		$	25,600	$	593			100	%
Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		4.72	%										4.98	%
Net of investment expense (a)		4.67	%										4.94	%
Approximate average life and duration:
Approximate average life		6.5 years											6.5 years
Approximate duration		5 years											5.5 years

(a) Annualized yield is calculated by dividing investment income for the quarter by the average cost over the quarter.

Average cost is the average of the beginning and ending quarter asset balances.

(b) Adjusts the yield on tax-exempt bonds to the fully taxable equivalent yield.

Page 24

American Financial Group, Inc. Fixed Maturities - Credit Rating ($ in millions)

	December 31, 2016
By Credit Rating (a)	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value
Investment grade
AAA	$	6,117	$	6,189	$	72			18	%
AA		7,123		7,257		134			21	%
A		8,323		8,487		164			24	%
BBB		8,999		9,193		194			26	%
Subtotal - Investment grade		30,562		31,126		564			89	%
BB		687		695		8			2	%
B		446		445		(1	)		1	%
Other (b)		2,399		2,637		238			8	%
Subtotal - Non-Investment grade		3,532		3,777		245			11	%
Total	$	34,094	$	34,903	$	809			100	%
97% of the fixed maturity portfolio is NAIC designated 1 or 2.
	December 31, 2015
By Credit Rating (a)	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value
Investment grade
AAA	$	6,519	$	6,655	$	136			20	%
AA		6,785		6,954		169			22	%
A		7,780		7,969		189			25	%
BBB		7,478		7,507		29			23	%
Subtotal - Investment grade		28,562		29,085		523			90	%
BB		790		765		(25	)		2	%
B		438		417		(21	)		1	%
Other (b)		2,029		2,271		242			7	%
Subtotal - Non-Investment grade		3,257		3,453		196			10	%
Total	$	31,819	$	32,538	$	719			100	%

97% of the fixed maturity portfolio is NAIC designated 1 or 2.

(a) If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies rate a security, the rating displayed is the second lowest.

(b) See page 28 and 29 for more information.

Page 25

American Financial Group, Inc. Mortgage-Backed Securities - AFG Consolidated ($ in millions)

December 31, 2016	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value			% of Investment Portfolio
Residential
Agency	$	243	$	243	$	—		5	%		0	%
Prime (Non-Agency)		1,406		1,557		151		30	%		4	%
Alt-A		1,093		1,170		77		23	%		3	%
Subprime		629		669		40		13	%		2	%
Commercial		1,446		1,493		47		29	%		3	%
Total AFG consolidated	$	4,817	$	5,132	$	315		100	%		12	%

• Substantially all of AFG’s MBS securities are either senior tranches of securitizations or collateralized by senior tranches of securitizations.

• The average amortized cost as a percent of par is - Prime 82%; Alt-A 78%; Subprime 85%; CMBS 99%.

• The average FICO score of our residential MBS securities is - Prime 740; Alt-A 710; Subprime 641.

• 96% of our Commercial MBS portfolio is investment-grade rated (81% AAA) and the average subordination for this group of assets is 37%.

• The approximate average life by collateral type is - Residential 4.5 years; Commercial 4 years.

December 31, 2015	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value			% of Investment Portfolio
Residential
Agency	$	260	$	269	$	9		5	%		1	%
Prime (Non-Agency)		1,489		1,651		162		29	%		4	%
Alt-A		794		872		78		15	%		2	%
Subprime		698		742		44		13	%		2	%
Commercial		2,112		2,188		76		38	%		6	%
Total AFG consolidated	$	5,353	$	5,722	$	369		100	%		15	%

Page 26

American Financial Group, Inc. Mortgage-Backed Securities Portfolio ($ in millions)

Property and Casualty Insurance:	December 31, 2016
By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value			% of Inv Portfolio
Residential
Agency	$	192	$	191	$	(1	)		17	%		2	%
Prime (Non-Agency)		187		202		15			17	%		2	%
Alt-A		342		361		19			31	%		4	%
Subprime		259		272		13			23	%		3	%
Commercial		142		144		2			12	%		1	%
Total	$	1,122	$	1,170	$	48			100	%		12	%
	December 31, 2015
By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value			% of Inv Portfolio
Residential
Agency	$	151	$	153	$	2			13	%		2	%
Prime (Non-Agency)		218		231		13			20	%		2	%
Alt-A		241		257		16			23	%		3	%
Subprime		283		291		8			25	%		3	%
Commercial		209		213		4			19	%		2	%
Total	$	1,102	$	1,145	$	43			100	%		12	%
Annuity and Run-off:	December 31, 2016
By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value			% of Inv Portfolio
Residential
Agency	$	51	$	52	$	1			1	%		0	%
Prime (Non-Agency)		1,218		1,343		125			34	%		4	%
Alt-A		751		809		58			21	%		3	%
Subprime		370		397		27			10	%		1	%
Commercial		1,304		1,349		45			34	%		5	%
Total	$	3,694	$	3,950	$	256			100	%		13	%
	December 31, 2015
By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value			% of Inv Portfolio
Residential
Agency	$	109	$	116	$	7			3	%		0	%
Prime (Non-Agency)		1,270		1,408		138			31	%		5	%
Alt-A		553		615		62			13	%		2	%
Subprime		415		451		36			10	%		2	%
Commercial		1,903		1,975		72			43	%		7	%
Total	$	4,250	$	4,565	$	315			100	%		16	%

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American Financial Group, Inc. Mortgage-Backed Securities - Credit Rating ($ in millions)

	December 31, 2016
By Credit Rating (a)	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value
Investment grade
AAA	$	1,668	$	1,720	$	52		34	%
AA		164		169		5		3	%
A		256		268		12		5	%
BBB		274		288		14		6	%
Subtotal - investment grade		2,362		2,445		83		48	%
BB		211		212		1		4	%
B		330		333		3		6	%
Other		1,914		2,142		228		42	%
Total	$	4,817	$	5,132	$	315		100	%
97% of the mortgage-backed security portfolio has an NAIC 1 designation.
	December 31, 2015
By Credit Rating (a)	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value
Investment grade
AAA	$	2,409	$	2,494	$	85		43	%
AA		255		263		8		5	%
A		329		345		16		6	%
BBB		272		292		20		5	%
Subtotal - investment grade		3,265		3,394		129		59	%
BB		253		258		5		5	%
B		305		311		6		5	%
Other		1,530		1,759		229		31	%
Total	$	5,353	$	5,722	$	369		100	%

97% of the mortgage-backed security portfolio has an NAIC 1 designation.

(a) If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies rate a security, the rating displayed is the second lowest.

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Appendix A American Financial Group, Inc. Fixed Maturities - Credit Rating by Type ($ in millions)

	Fair Value - December 31, 2016
By Credit Rating (a)	US Gov		Munis		Frgn gov		RMBS		CMBS		ABS		Corp/Oth		Total		% Total
Investment grade
AAA	$	299	$	1,727	$	171	$	508	$	1,213	$	2,053	$	218	$	6,189		18	%
AA		41		4,388		30		127		42		1,480		1,149		7,257		21	%
A		—		501		55		170		98		1,593		6,070		8,487		24	%
BBB		—		69		5		202		86		813		8,018		9,193		26	%
Subtotal - Investment grade		340		6,685		261		1,007		1,439		5,939		15,455		31,126		89	%
BB		—		4		—		184		29		16		462		695		2	%
B		—		8		—		307		25		1		104		445		1	%
CCC, CC, C		—		11		—		963		—		3		32		1,009		3	%
D		—		—		—		679		—		—		—		679		2	%
Subtotal - Non-Investment grade		—		23		—		2,133		54		20		598		2,828		8	%
Not Rated		8		100		—		499		—		—		342		949		3	%
Total	$	348	$	6,808	$	261	$	3,639	$	1,493	$	5,959	$	16,395	$	34,903		100	%
	Fair Value - December 31, 2015
By Credit Rating (a)	US Gov		Munis		Frgn gov		RMBS		CMBS		ABS		Corp/Oth		Total		% Total
Investment grade
AAA	$	262	$	1,607	$	138	$	640	$	1,854	$	1,986	$	168	$	6,655		20	%
AA		44		4,488		32		151		112		1,239		888		6,954		21	%
A		—		569		62		173		172		1,252		5,741		7,969		25	%
BBB		—		92		—		248		44		429		6,694		7,507		23	%
Subtotal - Investment grade		306		6,756		232		1,212		2,182		4,906		13,491		29,085		89	%
BB		—		20		—		258		—		14		473		765		3	%
B		—		—		—		306		6		2		103		417		1	%
CCC, CC, C		—		9		—		894		—		4		11		918		3	%
D		—		—		—		445		—		—		3		448		1	%
Subtotal - Non-Investment grade		—		29		—		1,903		6		20		590		2,548		8	%
Not Rated		15		100		—		419		—		8		363		905		3	%
Total	$	321	$	6,885	$	232	$	3,534	$	2,188	$	4,934	$	14,444	$	32,538		100	%

(a) If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies rate a security, the rating displayed is the second lowest.

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