EX-99.2

EX-99.2 3 d486839dex992.htm EX-99.2 EX-99.2

Exhibit 99.2


		American Financial Group, Inc.
		Investor Supplement - Third Quarter 2017


		October 31, 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 - Third Quarter 2017


Section	Page

Table of Contents - Investor Supplement - Third Quarter 2017		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															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Highlights
Net earnings	$	11		$	145		$	153		$	385		$	109		$	309		$	264
Core net operating earnings		95			145			151			176			134			391			358
Total assets		60,163			58,618			57,464			55,072			54,845			60,163			54,845
Adjusted shareholders’ equity (a)		4,852			4,837			4,815			4,617			4,487			4,852			4,487
Property and Casualty net written premiums		1,433			1,130			1,027			1,083			1,268			3,590			3,303
Annuity statutory premiums		876			1,266			1,290			1,111			941			3,432			3,324
Per share data
Diluted earnings per share	$	0.13		$	1.61		$	1.72		$	4.33		$	1.23		$	3.44		$	2.98
Core net operating earnings per share		1.06			1.61			1.69			1.98			1.51			4.35			4.04
Adjusted book value per share (a)		55.08			54.97			54.98			53.11			51.68			55.08			51.68
Cash dividends per common share		0.3125			1.8125			0.3125			1.3125			0.2800			2.4375			0.8400
Financial ratios
Annualized return on equity (b)		1.0	%		12.3	%		13.3	%		34.4	%		9.9	%		8.9	%		8.1	%
Annualized core operating return on equity (b)		8.1	%		12.3	%		13.1	%		15.7	%		12.2	%		11.2	%		11.0	%
Property and Casualty combined ratio - Specialty:
Loss & LAE ratio		71.4	%		59.5	%		59.5	%		63.7	%		62.9	%		64.0	%		61.0	%
Underwriting expense ratio		27.9	%		33.7	%		32.7	%		26.7	%		30.3	%		31.2	%		31.9	%

Combined ratio - Specialty		99.3	%		93.2	%		92.2	%		90.4	%		93.2	%		95.2	%		92.9	%

Net spread on fixed annuities:
Net interest spread		2.69	%		2.61	%		2.58	%		2.70	%		2.85	%		2.63	%		2.75	%
Net spread earned:
Before impact of fair value accounting		1.36	%		1.32	%		1.31	%		1.42	%		1.46	%		1.32	%		1.37	%
Impact of fair value accounting (c)		(0.05	%)		(0.21	%)		(0.03	%)		0.40	%		0.01	%		(0.09	%)		(0.27	%)

After impact of fair value accounting		1.31	%		1.11	%		1.28	%		1.82	%		1.47	%		1.23	%		1.10	%

(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															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Property and Casualty Insurance
Underwriting profit	$	8		$	72		$	78		$	110		$	78		$	158		$	227
Net investment income		94			96			86			85			93			276			265
Other income (expense)		(7	)		(5	)		5			(15	)		(18	)		(7	)		(42	)

Property and Casualty Insurance operating earnings		95			163			169			180			153			427			450
Annuity earnings		102			85			96			132			107			283			236
Run-off Long-Term Care and Life earnings		2			2			—			2			1			4			—
Interest expense of parent holding companies		(21	)		(23	)		(21	)		(21	)		(19	)		(65	)		(56	)
Other expense		(20	)		(23	)		(26	)		(29	)		(29	)		(69	)		(70	)

Pre-tax core operating earnings		158			204			218			264			213			580			560
Income tax expense		63			59			67			88			79			189			202

Core net operating earnings		95			145			151			176			134			391			358
Non-core items, net of tax:
Realized gains (losses) on securities		(8	)		5			2			32			1			(1	)		(19	)
Gain on sale of subsidiaries		—			—			—			—			—			—			1
Gain on sale of apartment property		—			—			—			—			—			—			15
Special A&E charges:
Property and Casualty Insurance run-off operations		(58	)		—			—			—			(23	)		(58	)		(23	)
Former Railroad and Manufacturing operations		(16	)		—			—			—			(3	)		(16	)		(3	)
Neon exited lines charge		—			—			—			—			—			—			(65	)
Tax benefit related to National Interstate merger		—			—			—			66			—			—			—
Tax benefit related to Neon restructuring		—			—			—			111			—			—			—
Loss on retirement of debt		(2	)		(5	)		—			—			—			(7	)		—

Net earnings	$	11		$	145		$	153		$	385		$	109		$	309		$	264

Page 4

American Financial Group, Inc.

Earnings Per Share Summary

(in millions, except per share information)


	Three Months Ended													Nine Months Ended
	09/30/17			06/30/17			03/31/17		12/31/16		09/30/16			09/30/17			09/30/16
Core net operating earnings	$	95		$	145		$	151	$	176	$	134		$	391		$	358

Net earnings	$	11		$	145		$	153	$	385	$	109		$	309		$	264

Average number of diluted shares		89.984			89.799			89.342		88.774		88.461			89.712			88.447
Diluted earnings per share:
Core net operating earnings per share	$	1.06		$	1.61		$	1.69	$	1.98	$	1.51		$	4.35		$	4.04
Realized gains (losses) on securities		(0.08	)		0.05			0.03		0.36		0.02			(0.01	)		(0.21	)
Gain on sale of subsidiaries		—			—			—		—		—			—			0.01
Gain on sale of apartment property		—			—			—		—		—			—			0.17
Special A&E charges:
Property and Casualty Insurance run-off operations		(0.64	)		—			—		—		(0.26	)		(0.64	)		(0.26	)
Former Railroad and Manufacturing operations		(0.18	)		—			—		—		(0.04	)		(0.18	)		(0.04	)
Neon exited lines charge		—			—			—		—		—			—			(0.73	)
Tax benefit related to National Interstate merger		—			—			—		0.74		—			—			—
Tax benefit related to Neon restructuring		—			—			—		1.25		—			—			—
Loss on retirement of debt		(0.03	)		(0.05	)		—		—		—			(0.08	)		—

Diluted earnings per share	$	0.13		$	1.61		$	1.72	$	4.33	$	1.23		$	3.44		$	2.98

Page 5

American Financial Group, Inc.

Property and Casualty Insurance - Summary Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Property and Transportation	$	6		$	21		$	43		$	75		$	44		$	70		$	91
Specialty Casualty		2			29			15			13			13			46			65
Specialty Financial		(3	)		23			22			20			19			42			64
Other Specialty		4			—			(1	)		2			2			3			7

Underwriting profit -Specialty		9			73			79			110			78			161			227
Other core charges, included in loss and LAE		1			1			1			—			—			3			—
Underwriting profit - Core		8			72			78			110			78			158			227
Special A&E charges, included in loss and LAE		(89	)		—			—			—			(36	)		(89	)		(36	)
Neon exited lines charge, included in loss and LAE		—			—			—			—			—			—			(57	)
Neon exited lines charge, included in underwriting expenses		—			—			—			—			—			—			(8	)

Underwriting profit (loss) - Property and Casualty Insurance	$	(81	)	$	72		$	78		$	110		$	42		$	69		$	126

Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	6		$	—		$	—		$	—		$	—		$	6		$	—
Catastrophe loss		107			18			7			12			14			132			43

Total current accident year catastrophe losses	$	113		$	18		$	7		$	12		$	14		$	138		$	43

Prior year loss reserve development (favorable) / adverse	$	52		$	(22	)	$	(28	)	$	10		$	22		$	2		$	22

Combined ratio:
Property and Transportation		98.9	%		94.2	%		87.3	%		83.9	%		91.1	%		94.3	%		92.4	%
Specialty Casualty		99.5	%		94.7	%		97.0	%		97.4	%		97.4	%		97.1	%		95.7	%
Specialty Financial		102.2	%		84.4	%		85.0	%		86.0	%		86.4	%		90.4	%		84.5	%
Other Specialty		85.1	%		98.3	%		105.8	%		94.9	%		91.5	%		95.8	%		90.1	%
Combined ratio - Specialty		99.3	%		93.2	%		92.2	%		90.4	%		93.2	%		95.2	%		92.9	%
Other core charges		0.1	%		0.2	%		0.1	%		0.0	%		0.1	%		0.1	%		0.0	%
Neon exited lines charge, loss and LAE		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		1.8	%
Neon exited lines charge, underwriting expenses		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.2	%
Special A&E charges		7.0	%		0.0	%		0.0	%		0.0	%		3.0	%		2.6	%		1.1	%

Combined ratio		106.4	%		93.4	%		92.3	%		90.4	%		96.3	%		97.9	%		96.0	%

Combined ratio excl. catastrophe and prior year development		93.8	%		93.7	%		94.3	%		88.4	%		93.1	%		93.9	%		93.7	%

Loss and LAE components - property and casualty insurance
Current accident year, excluding catastrophe loss		65.9	%		60.0	%		61.6	%		61.7	%		62.8	%		62.7	%		61.8	%
Prior accident year loss reserve development		4.2	%		(2.0	%)		(2.7	%)		0.9	%		2.0	%		0.1	%		0.7	%
Current accident year catastrophe loss		8.4	%		1.7	%		0.7	%		1.1	%		1.2	%		3.9	%		1.3	%

Loss and LAE ratio		78.5	%		59.7	%		59.6	%		63.7	%		66.0	%		66.7	%		63.8	%

Page 6

American Financial Group, Inc.

Specialty - Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Gross written premiums	$	2,104		$	1,503		$	1,324		$	1,441		$	1,899		$	4,931		$	4,540
Ceded reinsurance premiums		(671	)		(373	)		(297	)		(358	)		(631	)		(1,341	)		(1,237	)

Net written premiums		1,433			1,130			1,027			1,083			1,268			3,590			3,303
Change in unearned premiums		(166	)		(65	)		(5	)		61			(109	)		(236	)		(119	)

Net earned premiums		1,267			1,065			1,022			1,144			1,159			3,354			3,184
Loss and LAE		905			634			608			729			729			2,147			1,940
Underwriting expense		353			358			335			305			352			1,046			1,017

Underwriting profit	$	9		$	73		$	79		$	110		$	78		$	161		$	227

Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	6		$	—		$	—		$	—		$	—		$	6		$	—
Catastrophe loss		107			18			7			12			14			132			43

Total current accident year catastrophe losses	$	113		$	18		$	7		$	12		$	14		$	138		$	43

Prior year loss reserve development (favorable) / adverse	$	(38	)	$	(23	)	$	(29	)	$	10		$	(14	)	$	(90	)	$	(71	)

Combined ratio:
Loss and LAE ratio		71.4	%		59.5	%		59.5	%		63.7	%		62.9	%		64.0	%		61.0	%
Underwriting expense ratio		27.9	%		33.7	%		32.7	%		26.7	%		30.3	%		31.2	%		31.9	%

Combined ratio		99.3	%		93.2	%		92.2	%		90.4	%		93.2	%		95.2	%		92.9	%

Combined ratio excl. catastrophe and prior year development		93.8	%		93.7	%		94.3	%		88.4	%		93.1	%		93.9	%		93.7	%

Loss and LAE components:
Current accident year, excluding catastrophe loss		65.9	%		60.0	%		61.6	%		61.7	%		62.8	%		62.7	%		61.8	%
Prior accident year loss reserve development		(2.9	%)		(2.2	%)		(2.8	%)		0.9	%		(1.1	%)		(2.6	%)		(2.1	%)
Current accident year catastrophe loss		8.4	%		1.7	%		0.7	%		1.1	%		1.2	%		3.9	%		1.3	%

Loss and LAE ratio		71.4	%		59.5	%		59.5	%		63.7	%		62.9	%		64.0	%		61.0	%

Page 7

American Financial Group, Inc.

Property and Transportation - Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Gross written premiums	$	1,073		$	573		$	416		$	577		$	991		$	2,062		$	1,927
Ceded reinsurance premiums		(449	)		(180	)		(92	)		(183	)		(406	)		(721	)		(649	)

Net written premiums		624			393			324			394			585			1,341			1,278
Change in unearned premiums		(97	)		(36	)		18			71			(92	)		(115	)		(81	)

Net earned premiums		527			357			342			465			493			1,226			1,197
Loss and LAE		407			232			208			319			339			847			795
Underwriting expense		114			104			91			71			110			309			311

Underwriting profit	$	6		$	21		$	43		$	75		$	44		$	70		$	91

Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	2		$	—		$	—		$	—		$	—		$	2		$	—
Catastrophe loss		23			11			5			6			7			39			25

Total current accident year catastrophe losses	$	25		$	11		$	5		$	6		$	7		$	41		$	25

Prior year loss reserve development (favorable) / adverse	$	(8	)	$	(11	)	$	(17	)	$	13		$	(5	)	$	(36	)	$	(34	)

Combined ratio:
Loss and LAE ratio		77.3	%		64.9	%		60.8	%		68.6	%		68.8	%		69.1	%		66.4	%
Underwriting expense ratio		21.6	%		29.3	%		26.5	%		15.3	%		22.3	%		25.2	%		26.0	%

Combined ratio		98.9	%		94.2	%		87.3	%		83.9	%		91.1	%		94.3	%		92.4	%

Combined ratio excl. catastrophe and prior year development		96.0	%		94.3	%		90.7	%		79.7	%		90.7	%		94.1	%		93.1	%

Loss and LAE components:
Current accident year, excluding catastrophe loss		74.4	%		65.0	%		64.2	%		64.4	%		68.4	%		68.9	%		67.1	%
Prior accident year loss reserve development		(1.5	%)		(3.1	%)		(4.8	%)		3.0	%		(1.2	%)		(3.0	%)		(2.8	%)
Current accident year catastrophe loss		4.4	%		3.0	%		1.4	%		1.2	%		1.6	%		3.2	%		2.1	%

Loss and LAE ratio		77.3	%		64.9	%		60.8	%		68.6	%		68.8	%		69.1	%		66.4	%

Page 8

American Financial Group, Inc.

Specialty Casualty - Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Gross written premiums	$	850		$	756		$	744		$	684		$	722		$	2,350		$	2,108
Ceded reinsurance premiums		(226	)		(195	)		(204	)		(174	)		(218	)		(625	)		(582	)

Net written premiums		624			561			540			510			504			1,725			1,526
Change in unearned premiums		(56	)		(24	)		(32	)		—			(7	)		(112	)		(30	)

Net earned premiums		568			537			508			510			497			1,613			1,496
Loss and LAE		402			339			331			348			330			1,072			972
Underwriting expense		164			169			162			149			154			495			459

Underwriting profit	$	2		$	29		$	15		$	13		$	13		$	46		$	65

Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	2		$	—		$	—		$	—		$	—		$	2		$	—
Catastrophe loss		54			2			1			4			2			57			6

Total current accident year catastrophe losses	$	56		$	2		$	1		$	4		$	2		$	59		$	6

Prior year loss reserve development (favorable) / adverse	$	(23	)	$	(5	)	$	(6	)	$	3		$	(2	)	$	(34	)	$	(16	)

Combined ratio:
Loss and LAE ratio		70.7	%		63.1	%		65.2	%		68.2	%		66.5	%		66.4	%		65.0	%
Underwriting expense ratio		28.8	%		31.6	%		31.8	%		29.2	%		30.9	%		30.7	%		30.7	%

Combined ratio		99.5	%		94.7	%		97.0	%		97.4	%		97.4	%		97.1	%		95.7	%

Combined ratio excl. catastrophe and prior year development		94.0	%		95.2	%		97.9	%		96.1	%		97.4	%		95.7	%		96.4	%

Loss and LAE components:
Current accident year, excluding catastrophe loss		65.2	%		63.6	%		66.1	%		66.9	%		66.5	%		65.0	%		65.7	%
Prior accident year loss reserve development		(4.0	%)		(0.9	%)		(1.1	%)		0.5	%		(0.3	%)		(2.1	%)		(1.1	%)
Current accident year catastrophe loss		9.5	%		0.4	%		0.2	%		0.8	%		0.3	%		3.5	%		0.4	%

Loss and LAE ratio		70.7	%		63.1	%		65.2	%		68.2	%		66.5	%		66.4	%		65.0	%

Page 9

American Financial Group, Inc.

Specialty Financial - Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Gross written premiums	$	181		$	174		$	164		$	180		$	186		$	519		$	505
Ceded reinsurance premiums		(31	)		(25	)		(23	)		(26	)		(37	)		(79	)		(87	)

Net written premiums		150			149			141			154			149			440			418
Change in unearned premiums		(8	)		(3	)		6			(13	)		(4	)		(5	)		(2	)

Net earned premiums		142			146			147			141			145			435			416
Loss and LAE		79			49			52			46			45			180			132
Underwriting expense		66			74			73			75			81			213			220

Underwriting profit (loss)	$	(3	)	$	23		$	22		$	20		$	19		$	42		$	64

Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	2		$	—		$	—		$	—		$	—		$	2		$	—
Catastrophe loss		29			5			1			2			5			35			9

Total current accident year catastrophe losses	$	31		$	5		$	1		$	2		$	5		$	37		$	9

Prior year loss reserve development (favorable) / adverse	$	(5	)	$	(8	)	$	(9	)	$	(6	)	$	(6	)	$	(22	)	$	(17	)

Combined ratio:
Loss and LAE ratio		56.0	%		33.1	%		35.6	%		32.4	%		31.6	%		41.4	%		31.8	%
Underwriting expense ratio		46.2	%		51.3	%		49.4	%		53.6	%		54.8	%		49.0	%		52.7	%

Combined ratio		102.2	%		84.4	%		85.0	%		86.0	%		86.4	%		90.4	%		84.5	%

Combined ratio excl. catastrophe and prior year development		84.9	%		86.5	%		90.6	%		88.8	%		87.0	%		87.4	%		86.3	%

Loss and LAE components:
Current accident year, excluding catastrophe loss		38.7	%		35.2	%		41.2	%		35.2	%		32.2	%		38.4	%		33.6	%
Prior accident year loss reserve development		(3.1	%)		(5.4	%)		(6.4	%)		(4.5	%)		(3.9	%)		(5.0	%)		(4.0	%)
Current accident year catastrophe loss		20.4	%		3.3	%		0.8	%		1.7	%		3.3	%		8.0	%		2.2	%

Loss and LAE ratio		56.0	%		33.1	%		35.6	%		32.4	%		31.6	%		41.4	%		31.8	%

Page 10

American Financial Group, Inc.

Other Specialty - Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Gross written premiums	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Ceded reinsurance premiums		35			27			22			25			30			84			81

Net written premiums		35			27			22			25			30			84			81
Change in unearned premiums		(5	)		(2	)		3			3			(6	)		(4	)		(6	)

Net earned premiums		30			25			25			28			24			80			75
Loss and LAE		17			14			17			16			15			48			41
Underwriting expense		9			11			9			10			7			29			27

Underwriting profit (loss)	$	4		$	—		$	(1	)	$	2		$	2		$	3		$	7

Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		1			—			—			—			—			1			3

Total current accident year catastrophe losses	$	1		$	—		$	—		$	—		$	—		$	1		$	3

Prior year loss reserve development (favorable) / adverse	$	(2	)	$	1		$	3		$	—		$	(1	)	$	2		$	(4	)

Combined ratio:
Loss and LAE ratio		52.6	%		62.0	%		68.0	%		59.5	%		55.2	%		60.4	%		53.2	%
Underwriting expense ratio		32.5	%		36.3	%		37.8	%		35.4	%		36.3	%		35.4	%		36.9	%

Combined ratio		85.1	%		98.3	%		105.8	%		94.9	%		91.5	%		95.8	%		90.1	%

Combined ratio excl. catastrophe and prior year development		90.4	%		93.5	%		93.4	%		93.7	%		95.1	%		92.3	%		92.5	%

Page 11

American Financial Group, Inc.

Annuity Earnings (GAAP)

($ in millions)


	Three Months Ended													Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16		09/30/16		09/30/17			09/30/16
Net investment income	$	375		$	360		$	347		$	346	$	351	$	1,082		$	1,010
Guaranteed withdrawal benefit fees		15			14			14			14		14		43			39
Policy charges and other miscellaneous income		11			12			13			13		12		36			37

Total revenues		401			386			374			373		377		1,161			1,086
Annuity benefits expense		215			224			196			160		189		635			640
Acquisition expenses		54			47			52			54		53		153			127
Other expenses		30			30			30			27		28		90			83

Total costs and expenses		299			301			278			241		270		878			850

Annuity earnings before income taxes	$	102		$	85		$	96		$	132	$	107	$	283		$	236

Detail of Annuity earnings before income taxes
Earnings before income taxes and impact of fair value accounting	$	106		$	101		$	98		$	103	$	106	$	305		$	292
Impact of fair value accounting (a)		(4	)		(16	)		(2	)		29		1		(22	)		(56	)

Annuity earnings before income taxes	$	102		$	85		$	96		$	132	$	107	$	283		$	236

(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															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Detail of annuity benefits expense:
Interest credited - fixed	$	160		$	157		$	152		$	148		$	145		$	469		$	426
Interest credited - fixed component of variable annuities		1			2			1			1			1			4			4
Change in expected death and annuitization reserve		5			4			4			4			5			13			14
Amortization of sales inducements		4			4			6			7			6			14			17
Guaranteed withdrawal benefit reserve		18			17			16			20			18			51			49
Change in other benefit reserves		16			9			11			11			10			36			23
Unlockings (a)		—			—			—			23			—			—			—

Subtotal before impact of fair value accounting		204			193			190			214			185			587			533
Embedded derivative mark-to-market (b)		127			112			147			6			109			386			188
Equity option mark-to-market		(116	)		(81	)		(141	)		(60	)		(105	)		(338	)		(81	)

Subtotal impact of fair value accounting		11			31			6			(54	)		4			48			107

Total annuity benefits expense	$	215		$	224		$	196		$	160		$	189		$	635		$	640

(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 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.

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

Page 13

American Financial Group, Inc.

Net Spread on Fixed Annuities (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Average fixed annuity investments (at amortized cost) (a)	$	31,713		$	30,988		$	30,055		$	29,192		$	28,548		$	30,919		$	27,899
Average annuity benefits accumulated		32,029			31,212			30,183			29,250			28,538			31,141			27,778

Annuity benefits accumulated in excess of investments (a)	$	(316	)	$	(224	)	$	(128	)	$	(58	)	$	10		$	(222	)	$	121

As % of average annuity benefits accumulated (except as noted)
Net investment income (as % of investments)		4.70	%		4.62	%		4.59	%		4.72	%		4.88	%		4.64	%		4.79	%
Interest credited		(2.01	%)		(2.01	%)		(2.01	%)		(2.02	%)		(2.03	%)		(2.01	%)		(2.04	%)

Net interest spread on fixed annuities		2.69	%		2.61	%		2.58	%		2.70	%		2.85	%		2.63	%		2.75	%
Policy charges and other miscellaneous income		0.10	%		0.12	%		0.14	%		0.15	%		0.14	%		0.12	%		0.14	%
Other annuity benefit expenses, net		(0.33	%)		(0.27	%)		(0.31	%)		(0.38	%)		(0.36	%)		(0.31	%)		(0.31	%)
Acquisition expenses		(0.65	%)		(0.58	%)		(0.67	%)		(1.06	%)		(0.72	%)		(0.63	%)		(0.58	%)
Other expenses		(0.36	%)		(0.38	%)		(0.38	%)		(0.35	%)		(0.39	%)		(0.38	%)		(0.39	%)
Change in fair value of derivatives		(0.14	%)		(0.39	%)		(0.08	%)		0.73	%		(0.05	%)		(0.20	%)		(0.51	%)
Unlockings		0.00	%		0.00	%		0.00	%		0.03	%		0.00	%		0.00	%		0.00	%

Net spread earned on fixed annuities		1.31	%		1.11	%		1.28	%		1.82	%		1.47	%		1.23	%		1.10	%

Average annuity benefits accumulated	$	32,029		$	31,212		$	30,183		$	29,250		$	28,538		$	31,141		$	27,778
Net spread earned on fixed annuities		1.31	%		1.11	%		1.28	%		1.82	%		1.47	%		1.23	%		1.10	%

Earnings on fixed annuity benefits accumulated	$	105		$	87		$	96		$	133		$	105		$	288		$	230
Annuity benefits accumulated in excess of investments	$	(316	)	$	(224	)	$	(128	)	$	(58	)	$	10		$	(222	)	$	121

Net investment income (as % of investments)		4.70	%		4.62	%		4.59	%		4.72	%		4.88	%		4.64	%		4.79	%

Earnings on annuity benefits accumulated in excess of investments	$	(4	)	$	(3	)	$	(1	)	$	—		$	—		$	(8	)	$	4
Variable annuity earnings (loss)		1			1			1			(1	)		2			3			2

Earnings before income taxes - core	$	102		$	85		$	96		$	132		$	107		$	283		$	236

Detail of net spread earned on fixed annuities - core
Net spread earned core - before impact of fair value accounting		1.36	%		1.32	%		1.31	%		1.42	%		1.46	%		1.32	%		1.37	%
Change in fair value of derivatives		(0.14	%)		(0.39	%)		(0.08	%)		0.73	%		(0.05	%)		(0.20	%)		(0.51	%)
Estimated net offsets to deferred sales inducements and deferred policy acquisition costs		0.09	%		0.18	%		0.05	%		(0.33	%)		0.06	%		0.11	%		0.24	%

Net spread earned core - after impact of fair value accounting		1.31	%		1.11	%		1.28	%		1.82	%		1.47	%		1.23	%		1.10	%

(a)	Excludes non-investment assets such as deferred acquisition costs, FIA options, accrued investment income and company owned life insurance.

Page 14

American Financial Group, Inc.

Annuity Premiums (Statutory)

($ in millions)


	Three Months Ended										Nine Months Ended
	09/30/17		06/30/17		03/31/17		12/31/16		09/30/16		09/30/17		09/30/16
Retail single premium annuities - indexed	$	367	$	474	$	469	$	415	$	340	$	1,310	$	1,299
Retail single premium annuities - fixed		19		22		20		22		18		61		60
Financial institutions single premium annuities - indexed		360		500		487		474		435		1,347		1,476
Financial institutions single premium annuities - fixed		82		215		262		152		97		559		316
Education market - fixed and indexed annuities		41		47		45		40		42		133		144

Subtotal fixed annuity premiums		869		1,258		1,283		1,103		932		3,410		3,295
Variable annuities		7		8		7		8		9		22		29

Total annuity premiums	$	876	$	1,266	$	1,290	$	1,111	$	941	$	3,432	$	3,324

Page 15

American Financial Group, Inc.

Fixed Annuity Benefits Accumulated (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Beginning fixed annuity reserves	$	31,704		$	30,719		$	29,647		$	28,853		$	28,222		$	29,647		$	26,371
Premiums		869			1,258			1,283			1,103			932			3,410			3,295
Federal Home Loan Bank advances		—			—			—			—			—			—			150
Surrenders, benefits and other withdrawals		(540	)		(571	)		(539	)		(524	)		(586	)		(1,650	)		(1,665	)
Interest and other annuity benefit expenses:
Interest credited		160			157			152			148			145			469			426
Embedded derivative mark-to-market		127			112			147			6			109			386			188
Change in other benefit reserves		34			29			29			34			31			92			88
Unlockings		—			—			—			27			—			—			—

Ending fixed annuity reserves	$	32,354		$	31,704		$	30,719		$	29,647		$	28,853		$	32,354		$	28,853

Reconciliation to annuity benefits accumulated:
Ending fixed annuity reserves	$	32,354		$	31,704		$	30,719		$	29,647		$	28,853		$	32,354		$	28,853
Impact of unrealized investment gains on reserves		138			128			100			76			180			138			180
Fixed component of variable annuities		179			182			183			184			189			179			189

Annuity benefits accumulated per balance sheet	$	32,671		$	32,014		$	31,002		$	29,907		$	29,222		$	32,671		$	29,222

Annualized surrenders and other withdrawals as a % of beginning reserves		6.8	%		7.4	%		7.3	%		7.3	%		8.3	%		7.4	%		8.4	%

Page 16

American Financial Group, Inc.

Consolidated Balance Sheet

($ in millions)


	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			06/30/16
Assets:
Total cash and investments	$	45,253		$	44,779		$	43,350		$	41,433		$	41,805		$	40,639
Recoverables from reinsurers		3,262			2,839			2,735			2,737			2,814			2,576
Prepaid reinsurance premiums		691			587			533			539			634			521
Agents’ balances and premiums receivable		1,173			1,124			989			997			1,029			992
Deferred policy acquisition costs		1,119			1,156			1,205			1,239			867			881
Assets of managed investment entities		4,767			4,873			5,331			4,765			4,312			4,410
Other receivables		1,545			923			875			908			1,391			788
Variable annuity assets (separate accounts)		628			620			614			600			606			595
Other assets		1,526			1,518			1,633			1,655			1,188			1,132
Goodwill		199			199			199			199			199			199

Total assets	$	60,163		$	58,618		$	57,464		$	55,072		$	54,845		$	52,733

Liabilities and Equity:
Unpaid losses and loss adjustment expenses	$	9,563		$	8,730		$	8,621		$	8,563		$	8,661		$	8,203
Unearned premiums		2,567			2,294			2,174			2,171			2,328			2,109
Annuity benefits accumulated		32,671			32,014			31,002			29,907			29,222			28,596
Life, accident and health reserves		667			676			687			691			700			702
Payable to reinsurers		906			681			621			634			835			588
Liabilities of managed investment entities		4,506			4,685			5,101			4,549			4,067			4,192
Long-term debt		1,284			1,405			1,283			1,283			1,300			998
Variable annuity liabilities (separate accounts)		628			620			614			600			606			595
Other liabilities		1,992			2,201			2,166			1,755			1,768			1,557

Total liabilities	$	54,784		$	53,306		$	52,269		$	50,153		$	49,487		$	47,540
Shareholders’ equity:
Common stock	$	88		$	88		$	88		$	87		$	87		$	87
Capital surplus		1,167			1,158			1,138			1,111			1,242			1,228
Unappropriated retained earnings		3,435			3,451			3,466			3,343			3,079			3,016
Unrealized gains - equities		173			158			145			98			103			46
Unrealized gains - fixed maturities		533			481			384			306			669			639
Unrealized gains (losses) - fixed maturity-related cash flow hedges		(6	)		(6	)		(8	)		(7	)		5			5
Other comprehensive income, net of tax		(11	)		(18	)		(22	)		(22	)		(24	)		(21	)

Total shareholders’ equity		5,379			5,312			5,191			4,916			5,161			5,000
Noncontrolling interests		—			—			4			3			197			193

Total liabilities and equity	$	60,163		$	58,618		$	57,464		$	55,072		$	54,845		$	52,733

Page 17

American Financial Group, Inc.

Book Value Per Share and Price / Book Summary

(in millions, except per share information)


	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			06/30/16
Shareholders’ equity	$	5,379		$	5,312		$	5,191		$	4,916		$	5,161		$	5,000
Unrealized (gains) related to fixed maturities		(527	)		(475	)		(376	)		(299	)		(674	)		(644	)

Adjusted shareholders’ equity		4,852			4,837			4,815			4,617			4,487			4,356
Goodwill		(199	)		(199	)		(199	)		(199	)		(199	)		(199	)
Intangibles		(29	)		(30	)		(32	)		(34	)		(44	)		(46	)

Tangible adjusted shareholders’ equity	$	4,624		$	4,608		$	4,584		$	4,384		$	4,244		$	4,111

Common shares outstanding		88.093			88.007			87.592			86.924			86.813			86.850
Book value per share:
Book value per share	$	61.06		$	60.36		$	59.26		$	56.55		$	59.45		$	57.57
Adjusted (a)		55.08			54.97			54.98			53.11			51.68			50.16
Tangible, adjusted (b)		52.50			52.36			52.34			50.43			48.89			47.34
Market capitalization
AFG’s closing common share price	$	103.45		$	99.37		$	95.42		$	88.12		$	75.00		$	73.93
Market capitalization	$	9,113		$	8,745		$	8,358		$	7,660		$	6,511		$	6,421
Price / Adjusted book value ratio		1.88			1.81			1.74			1.66			1.45			1.47

(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)


	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			06/30/16
AFG senior obligations	$	1,003		$	1,128		$	1,008		$	1,008		$	1,008		$	708
Borrowings drawn under credit facility		—			—			—			—			—			—
Obligations of subsidiaries - other		—			—			—			—			18			12

Debt excluding subordinated debt	$	1,003		$	1,128		$	1,008		$	1,008		$	1,026		$	720
AFG subordinated debentures		300			300			300			300			300			300

Total principal amount of long-term debt	$	1,303		$	1,428		$	1,308		$	1,308		$	1,326		$	1,020
Shareholders’ equity		5,379			5,312			5,191			4,916			5,161			5,000
Noncontrolling interests		—			—			4			3			197			193
Less:
Unrealized (gains) - fixed maturity investments		(533	)		(481	)		(384	)		(306	)		(669	)		(639	)

Total adjusted capital	$	6,149		$	6,259		$	6,119		$	5,921		$	6,015		$	5,574

Ratio of debt to total adjusted capital:
Including subordinated debt		21.2	%		22.8	%		21.4	%		22.1	%		22.0	%		18.3	%
Excluding subordinated debt		16.3	%		18.0	%		16.5	%		17.0	%		17.1	%		12.9	%

Page 19

American Financial Group, Inc.

Additional Supplemental Information

($ in millions)


	Three Months Ended										Nine Months Ended
	09/30/17		06/30/17		03/31/17		12/31/16		09/30/16		09/30/17		09/30/16
Property and Casualty Insurance
Paid Losses (GAAP)	$	596	$	652	$	554	$	683	$	537	$	1,802	$	1,670

	09/30/17		06/30/17		03/31/17		12/31/16		09/30/16		06/30/16
Statutory Surplus
Property and Casualty Insurance	$	2,817	$	2,882	$	3,013	$	2,939	$	3,038	$	2,601
AFG’s principal annuity subsidiaries (total adjusted capital)	$	2,433	$	2,389	$	2,341	$	2,234	$	2,216	$	2,089
Allowable dividends without regulatory approval
Property and Casualty Insurance	$	496	$	496	$	496	$	496	$	434	$	434
Annuity and Run-off		197		197		197		197		375		375

Total	$	693	$	693	$	693	$	693	$	809	$	809

Page 20

American Financial Group, Inc.

Total Cash and Investments

($ in millions)


	Carrying Value - September 30, 2017
	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	$	1,074	$	825	$	450	$	—		$	2,349		5	%
Fixed maturities - Available for sale		6,969		30,836		13		—			37,818		84	%
Fixed maturities - Trading		233		117		—		—			350		1	%
Equity securities		1,046		539		54		—			1,639		4	%
Policy loans		—		186		—		—			186		0	%
Mortgage loans		255		788		—		—			1,043		2	%
Equity index call options		—		629		—		—			629		1	%
Real estate and other investments		552		895		53		(261	)		1,239		3	%

Total cash and investments	$	10,129	$	34,815	$	570	$	(261	)	$	45,253		100	%

Unrealized gain/(loss) on equity securities	$	167	$	100	$	—	$	—		$	267


	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	%
Equity index call options		—		492		—		—			492		1	%
Real estate and other investments		497		705		48		(216	)		1,034		3	%

Total cash and investments	$	9,906	$	31,420	$	323	$	(216	)	$	41,433		100	%

Unrealized gain/(loss) on equity securities	$	102	$	49	$	—	$	—		$	151

Page 21

American Financial Group, Inc.

Net Investment Income

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/17			06/30/17			03/31/17			12/31/16			09/30/16			09/30/17			09/30/16
Property and Casualty Insurance:
Gross Investment Income
Fixed maturities - Available for sale	$	65		$	65		$	63		$	64		$	63		$	193		$	193
Fixed maturities - Trading		—			2			1			(1	)		2			3			4
Equity securities		12			12			14			13			13			38			38
Equity in investees		8			11			4			7			7			23			15
Other investments		11			8			6			6			10			25			21

Gross investment income		96			98			88			89			95			282			271
Investment expenses		(2	)		(2	)		(2	)		(4	)		(2	)		(6	)		(6	)

Total net investment income	$	94		$	96		$	86		$	85		$	93		$	276		$	265

Average cash and investments (a)	$	9,851		$	9,947		$	9,855		$	9,779		$	9,647		$	9,853		$	9,507

Average yield (b)		3.82	%		3.86	%		3.49	%		3.48	%		3.86	%		3.73	%		3.72	%

Fixed Annuity:
Gross Investment Income
Fixed maturities - Available for sale	$	332		$	322		$	318		$	315		$	307		$	972		$	908
Fixed maturities - Trading		—			—			—			—			—			—			—
Equity securities		5			5			5			7			6			15			17
Equity in investees		12			10			6			6			9			28			16
Other investments		26			22			19			20			27			67			67

Gross investment income		375			359			348			348			349			1,082			1,008
Investment expenses		(2	)		(2	)		(3	)		(4	)		(1	)		(7	)		(6	)

Total net investment income	$	373		$	357		$	345		$	344		$	348		$	1,075		$	1,002

Average cash and investments (a)	$	31,713		$	30,988		$	30,055		$	29,192		$	28,548		$	30,919		$	27,899

Average yield (b)		4.70	%		4.62	%		4.59	%		4.72	%		4.88	%		4.64	%		4.79	%

AFG consolidated net investment income:
Property & Casualty	$	94		$	96		$	86		$	85		$	93		$	276		$	265
Annuity and Run-off:
Fixed Annuity		373			357			345			344			348			1,075			1,002
Variable Annuity		2			3			2			2			3			7			8
Run-off		6			5			5			6			5			16			15
Other		1			4			3			—			1			8			6
Consolidate CLOs		(5	)		(5	)		(6	)		(8	)		(17	)		(16	)		(29	)

Total net investment income	$	471		$	460		$	435		$	429		$	433		$	1,366		$	1,267

(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 )


												% of
	Amortized					Unrealized			% of			Investment
September 30, 2017	Cost			Fair Value		Gain (Loss)			Fair Value			Portfolio
US Government and government agencies	$	309		$	309	$	—			1	%		1	%
States, municipalities and political subdivisions		6,788			7,024		236			18	%		15	%
Foreign government		251			254		3			1	%		1	%
Residential mortgage-backed securities		3,065			3,399		334			9	%		8	%
Commercial mortgage-backed securities		967			1,010		43			3	%		2	%
Asset-backed securities		7,362			7,490		128			19	%		17	%
Corporate and other bonds		18,020			18,682		662			49	%		41	%

Total AFG consolidated	$	36,762		$	38,168	$	1,406			100	%		85	%

Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		4.45	%
Net of investment expense (a)		4.41	%
Approximate average life and duration:
Approximate average life		6.5 years
Approximate duration		5 years

												% of
	Amortized					Unrealized			% of			Investment
December 31, 2016	Cost			Fair Value		Gain (Loss)			Fair Value			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

(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 )


	September 30, 2017										December 31, 2016
	Amortized					Unrealized		% of			Amortized					Unrealized			% of
	Cost			Fair Value		Gain (Loss)		Fair Value			Cost			Fair Value		Gain (Loss)			Fair Value
Property and Casualty Insurance:
US Government and government agencies	$	260		$	260	$	—		4	%	$	295		$	295	$	—			4	%
States, municipalities and political subdivisions		2,607			2,661		54		37	%		2,588			2,605		17			39	%
Foreign government		240			241		1		3	%		245			249		4			4	%
Residential mortgage-backed securities		894			964		70		13	%		980			1,026		46			15	%
Commercial mortgage-backed securities		97			100		3		1	%		142			144		2			2	%
Asset-backed securities		1,630			1,641		11		23	%		1,445			1,440		(5	)		21	%
Corporate and other bonds		1,308			1,335		27		19	%		976			993		17			15	%

Property and Casualty Insurance	$	7,036		$	7,202	$	166		100	%	$	6,671		$	6,752	$	81			100	%

Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		3.77	%									3.88	%
Net of investment expense (a)		3.67	%									3.67	%
Tax equivalent, net of investment expense (b)		4.15	%									4.20	%
Approximate average life and duration:
Approximate average life		5 years										4.5 years
Approximate duration		4 years										3.5 years

	September 30, 2017										December 31, 2016
	Amortized					Unrealized		% of			Amortized					Unrealized			% of
	Cost			Fair Value		Gain (Loss)		Fair Value			Cost			Fair Value		Gain (Loss)			Fair Value
Annuity and Run-off:
US Government and government agencies	$	48		$	48	$	—		0	%	$	52		$	52	$	—			0	%
States, municipalities and political subdivisions		4,181			4,363		182		14	%		4,089			4,203		114			15	%
Foreign government		11			13		2		0	%		11			12		1			0	%
Residential mortgage-backed securities		2,170			2,423		253		8	%		2,390			2,601		211			9	%
Commercial mortgage-backed securities		870			910		40		3	%		1,304			1,349		45			5	%
Asset-backed securities		5,732			5,849		117		19	%		4,517			4,519		2			16	%
Corporate and other bonds		16,712			17,347		635		56	%		15,058			15,402		344			55	%

Total Annuity and Run-off	$	29,724		$	30,953	$	1,229		100	%	$	27,421		$	28,138	$	717			100	%

Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		4.60	%									4.72	%
Net of investment expense (a)		4.57	%									4.67	%
Approximate average life and duration:
Approximate average life		7 years										6.5 years
Approximate duration		5 years										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)


	September 30, 2017
	Amortized				Unrealized		% of
By Credit Rating (a)	Cost		Fair Value		Gain (Loss)		Fair Value
Investment grade
AAA	$	6,106	$	6,221	$	115		16	%
AA		8,108		8,375		267		22	%
A		8,873		9,195		322		24	%
BBB		10,063		10,447		384		28	%

Subtotal - Investment grade		33,150		34,238		1,088		90	%
BB		708		725		17		2	%
B		335		340		5		1	%
Other (b)		2,569		2,865		296		7	%

Subtotal - Non-Investment grade		3,612		3,930		318		10	%

Total	$	36,762	$	38,168	$	1,406		100	%

98% of the fixed maturity portfolio is NAIC designated 1 or 2.


	December 31, 2016
	Amortized				Unrealized			% of
By Credit Rating (a)	Cost		Fair Value		Gain (Loss)			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.

(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 29 for more information.

Page 25

American Financial Group, Inc.

Mortgage-Backed Securities - AFG Consolidated

($ in millions)


September 30, 2017	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value			% of Investment Portfolio
Residential
Agency	$	218	$	218	$	—		5	%		1	%
Prime (Non-Agency)		1,283		1,452		169		33	%		3	%
Alt-A		1,049		1,167		118		26	%		3	%
Subprime		515		562		47		13	%		1	%
Commercial		967		1,010		43		23	%		2	%

Total AFG consolidated	$	4,032	$	4,409	$	377		100	%		10	%

- 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 79%; Subprime 85%; CMBS 99%.

- The average FICO score of our residential MBS securities is - Prime 733; Alt-A 703; Subprime 632.

- 95% of our Commercial MBS portfolio is investment-grade rated (82% AAA) and the average subordination for this group of assets is 31%.

- The approximate average life by collateral type is - Residential 4.5 years; Commercial 5.5 years.


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	%

Page 26

American Financial Group, Inc.

Mortgage-Backed Securities Portfolio

($ in millions)


Property and Casualty Insurance:	September 30, 2017
By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value			% of Inv Portfolio
Residential
Agency	$	175	$	174	$	(1	)		17	%		2	%
Prime (Non-Agency)		183		203		20			19	%		2	%
Alt-A		317		351		34			33	%		4	%
Subprime		219		236		17			22	%		2	%
Commercial		97		100		3			9	%		1	%

Total	$	991	$	1,064	$	73			100	%		11	%


	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	%


Annuity and Run-off:	September 30, 2017
By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)			% of Fair Value			% of Inv Portfolio
Residential
Agency	$	43	$	44	$	1			1	%		0	%
Prime (Non-Agency)		1,099		1,237		138			37	%		4	%
Alt-A		732		816		84			25	%		2	%
Subprime		296		326		30			10	%		1	%
Commercial		870		910		40			27	%		3	%

Total	$	3,040	$	3,333	$	293			100	%		10	%


	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	%

Page 27

American Financial Group, Inc.

Mortgage-Backed Securities - Credit Rating

($ in millions)


	September 30, 2017
	Amortized				Unrealized		% of
By Credit Rating (a)	Cost		Fair Value		Gain (Loss)		Fair Value
Investment grade
AAA	$	1,259	$	1,306	$	47		30	%
AA		94		98		4		2	%
A		219		233		14		5	%
BBB		229		243		14		6	%

Subtotal - investment grade		1,801		1,880		79		43	%
BB		189		192		3		4	%
B		249		257		8		6	%
Other (b)		1,793		2,080		287		47	%

Total	$	4,032	$	4,409	$	377		100	%

96% of the mortgage-backed security portfolio has an NAIC 1 designation.


	December 31, 2016
	Amortized				Unrealized		% of
By Credit Rating (a)	Cost		Fair Value		Gain (Loss)		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 (b)		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.

(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 29 for more information.

Page 28

Appendix A

American Financial Group, Inc.

Fixed Maturities - Credit Rating by Type

($ in millions)


	Fair Value - September 30, 2017
By Credit Rating (a)	US Gov		Munis		Frgn gov		RMBS		CMBS		ABS		Corp/Oth		Total		% Total
Investment grade
AAA	$	217	$	1,810	$	180	$	476	$	830	$	2,495	$	213	$	6,221		16	%
AA		84		4,564		67		79		19		2,170		1,392		8,375		22	%
A		—		504		3		206		27		1,703		6,752		9,195		24	%
BBB		—		49		4		155		88		846		9,305		10,447		28	%

Subtotal - Investment grade		301		6,927		254		916		964		7,214		17,662		34,238		90	%
BB		—		4		—		173		19		5		524		725		2	%
B		—		7		—		253		4		—		76		340		1	%
CCC, CC, C		—		1		—		936		3		2		29		971		3	%
D		—		7		—		534		—		—		—		541		1	%

Subtotal - Non-Investment grade		—		19		—		1,896		26		7		629		2,577		7	%
Not Rated		8		78		—		587		20		269		391		1,353		3	%

Total	$	309	$	7,024	$	254	$	3,399	$	1,010	$	7,490	$	18,682	$	38,168		100	%


	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	%

(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.

Page 29