AMERICAN FINANCIAL GROUP INC - FORM 8-K - EX-99.2 - INVESTOR SUPPLEMENT

Attached files

file	filename
8-K - CURRENT REPORT - AMERICAN FINANCIAL GROUP INC	d80824d8k.htm
EX-99.1 - EARNINGS RELEASE - AMERICAN FINANCIAL GROUP INC	d80824dex991.htm

Exhibit 99.2


		American Financial Group, Inc.
		Investor Supplement - Third Quarter 2015
		November 3, 2015
		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 2015


Section	Page
Table of Contents - Investor Supplement - Third Quarter 2015		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 and Quarterly Net Investment Income		21
Fixed Maturities - By Security Type - AFG Consolidated		22
Fixed Maturities - By Security Type Portfolio		23
Fixed Maturities - Credit Rating and NAIC Designation		24
Mortgage-Backed Securities - AFG Consolidated		25
Mortgage-Backed Securities Portfolio		26
Mortgage-Backed Securities - Credit Rating and NAIC Designation		27

American Financial Group, Inc.

Financial Highlights

(in millions, except per share information)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Highlights
Core net operating earnings	$	123		$	115		$	112		$	122		$	127		$	350		$	317
Net earnings		63			141			19			127			116			223			325
Total assets		50,557			49,424			48,307			47,535			46,552			50,557			46,552
Adjusted shareholders’ equity (a)		4,279			4,345			4,267			4,277			4,300			4,279			4,300
Property and Casualty net written premiums		1,319			1,026			926			1,025			1,242			3,271			2,995
Annuity statutory premiums		1,321			899			813			971			809			3,033			2,725
Per share data
Core net operating earnings per share	$	1.38		$	1.28		$	1.25		$	1.35		$	1.40		$	3.92		$	3.47
Diluted earnings per share		0.71			1.57			0.21			1.41			1.28			2.49			3.56
Adjusted book value per share (a)		49.01			49.63			48.55			48.76			48.59			49.01			48.59
Cash dividends per common share		0.250			0.250			0.250			1.250			0.220			0.750			0.660
Financial ratios
Annualized core operating return on equity (b)		11.6	%		10.9	%		10.8	%		11.7	%		12.3	%		11.1	%		10.3	%
Annualized return on equity (b)		5.9	%		13.4	%		1.8	%		12.1	%		11.1	%		7.1	%		10.6	%
Property and Casualty combined ratio - Specialty:
Loss & LAE ratio		64.5	%		61.0	%		60.8	%		64.0	%		67.1	%		62.2	%		63.6	%
Underwriting expense ratio		28.4	%		33.9	%		32.8	%		28.6	%		26.7	%		31.5	%		30.8	%

Combined ratio - Specialty		92.9	%		94.9	%		93.6	%		92.6	%		93.8	%		93.7	%		94.4	%

Net spread on fixed annuities:
Net interest spread		2.80	%		2.77	%		2.67	%		2.64	%		2.77	%		2.75	%		2.83	%
Net spread earned:
Before impact of fair value accounting		1.37	%		1.21	%		1.49	%		1.54	%		1.50	%		1.36	%		1.57	%
Impact of fair value accounting (c)		(0.35	%)		0.18	%		(0.28	%)		(0.14	%)		(0.02	%)		(0.15	%)		(0.16	%)

After impact of fair value accounting		1.02	%		1.39	%		1.21	%		1.40	%		1.48	%		1.21	%		1.41	%

(a)	Excludes appropriated retained earnings and unrealized gains related to fixed maturity investments.

(b)	Excludes appropriated retained earnings and 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.

American Financial Group, Inc.

Summary of Earnings

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Property and Casualty Insurance
Underwriting profit	$	82		$	50		$	60		$	79		$	70		$	192		$	157
Net investment income		83			83			79			75			76			245			219
Other expense		(12	)		(12	)		(10	)		(13	)		(16	)		(34	)		(41	)

Property and Casualty Insurance operating earnings		153			121			129			141			130			403			335
Annuity earnings		67			88			75			85			86			230			243
Run-off Long-Term Care and Life (losses)/earnings		6			4			4			(7	)		1			14			(3	)
Interest expense of parent holding companies		(18	)		(19	)		(19	)		(19	)		(17	)		(56	)		(50	)
Other expense		(19	)		(20	)		(22	)		(16	)		(13	)		(61	)		(58	)

Pre-tax core operating earnings		189			174			167			184			187			530			467
Income tax expense		66			59			55			62			60			180			150

Core net operating earnings		123			115			112			122			127			350			317
Non-core items, net of tax:
Loss on sale of long-term care business		—			—			(105	)		—			—			(105	)		—
Gain on sale of hotel property		—			26			—			—			—			26			—
Other realized gains (losses)		(6	)		—			12			5			8			6			27
Significant A&E charges:
Property and Casualty Insurance run-off operations		(44	)		—			—			—			(15	)		(44	)		(15	)
Former Railroad and Manufacturing operations		(8	)		—			—			—			(4	)		(8	)		(4	)
Other		(2	)		—			—			—			—			(2	)		—

Net earnings	$	63		$	141		$	19		$	127		$	116		$	223		$	325

American Financial Group, Inc.

Earnings Per Share Summary

(in millions, except per share information)


	Three Months Ended													Nine Months Ended
	09/30/15			06/30/15		03/31/15			12/31/14		09/30/14			09/30/15			09/30/14
Core net operating earnings	$	123		$	115	$	112		$	122	$	127		$	350		$	317

Net earnings	$	63		$	141	$	19		$	127	$	116		$	223		$	325

Average number of diluted shares		89.343			89.503		89.377			89.772		90.873			89.407			91.360
Diluted earnings per share:
Core net operating earnings per share	$	1.38		$	1.28	$	1.25		$	1.35	$	1.40		$	3.92		$	3.47
Loss on sale of long-term care business		—			—		(1.18	)		—		—			(1.18	)		—
Gain on sale of hotel property		—			0.29		—			—		—			0.29			—
Other realized gains (losses)		(0.06	)		—		0.14			0.06		0.09			0.07			0.30
Significant A&E charges:
Property and Casualty Insurance run-off operations		(0.49	)		—		—			—		(0.17	)		(0.49	)		(0.17	)
Former Railroad and Manufacturing operations		(0.09	)		—		—			—		(0.04	)		(0.09	)		(0.04	)
Other		(0.03	)		—		—			—		—			(0.03	)		—

Diluted earnings per share	$	0.71		$	1.57	$	0.21		$	1.41	$	1.28		$	2.49		$	3.56

American Financial Group, Inc.

Property and Casualty Insurance - Summary Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Property and Transportation	$	20		$	(13	)	$	7		$	22		$	11		$	14		$	(1	)
Specialty Casualty		31			37			28			36			32			96			100
Specialty Financial		26			24			22			18			21			72			46
Other Specialty		7			3			3			3			6			13			13

Underwriting profit - Specialty		84			51			60			79			70			195			158
Other core charges, included in loss and LAE		2			1			—			—			—			3			1

Underwriting profit - Core		82			50			60			79			70			192			157
Special A&E charges, included in loss and LAE		(67	)		—			—			—			(24	)		(67	)		(24	)

Underwriting profit - Property and Casualty Insurance	$	15		$	50		$	60		$	79		$	46		$	125		$	133

Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		10			10			6			3			3			26			25

Total current accident year catastrophe losses	$	10		$	10		$	6		$	3		$	3		$	26		$	25

Prior year loss reserve development (favorable) / adverse	$	55		$	(10	)	$	(7	)	$	10		$	13		$	38		$	(4	)

Combined ratio:
Property and Transportation		96.2	%		104.0	%		97.7	%		94.6	%		97.8	%		98.7	%		100.1	%
Specialty Casualty		93.8	%		92.7	%		94.2	%		92.9	%		93.3	%		93.6	%		92.1	%
Specialty Financial		80.6	%		81.0	%		81.7	%		85.6	%		81.6	%		81.0	%		86.7	%
Other Specialty		67.3	%		88.0	%		89.3	%		86.9	%		78.0	%		81.4	%		82.1	%
Combined ratio - Specialty		92.9	%		94.9	%		93.6	%		92.6	%		93.8	%		93.7	%		94.4	%
Other core charges		0.1	%		0.0	%		0.1	%		0.0	%		0.1	%		0.1	%		0.0	%
Special A&E charges		5.7	%		0.0	%		0.0	%		0.0	%		2.1	%		2.2	%		0.8	%

Combined ratio		98.7	%		94.9	%		93.7	%		92.6	%		96.0	%		96.0	%		95.2	%

Combined ratio excl. catastrophe and prior year development		93.2	%		95.0	%		93.8	%		91.4	%		94.5	%		93.9	%		94.5	%

Loss and LAE components - property and casualty insurance
Current accident year, excluding catastrophe loss		64.8	%		61.1	%		61.0	%		62.8	%		67.8	%		62.4	%		63.7	%
Prior accident year loss reserve development		4.6	%		(1.1	%)		(0.7	%)		1.0	%		1.2	%		1.3	%		(0.2	%)
Current accident year catastrophe loss		0.9	%		1.0	%		0.6	%		0.2	%		0.3	%		0.8	%		0.9	%

Loss and LAE ratio		70.3	%		61.0	%		60.9	%		64.0	%		69.3	%		64.5	%		64.4	%

American Financial Group, Inc.

Specialty - Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Gross written premiums	$	1,962		$	1,318		$	1,196		$	1,303		$	1,859		$	4,476		$	4,174
Ceded reinsurance premiums		(643	)		(292	)		(270	)		(278	)		(617	)		(1,205	)		(1,179	)

Net written premiums		1,319			1,026			926			1,025			1,242			3,271			2,995
Change in unearned premiums		(146	)		(41	)		20			36			(110	)		(167	)		(178	)

Net earned premiums		1,173			985			946			1,061			1,132			3,104			2,817
Loss and LAE		756			600			576			679			760			1,932			1,790
Underwriting expense		333			334			310			303			302			977			869

Underwriting profit	$	84		$	51		$	60		$	79		$	70		$	195		$	158

Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		10			10			6			3			3			26			25

Total current accident year catastrophe losses	$	10		$	10		$	6		$	3		$	3		$	26		$	25

Prior year loss reserve development (favorable) / adverse	$	(14	)	$	(11	)	$	(7	)	$	10		$	(11	)	$	(32	)	$	(29	)

Combined ratio:
Loss and LAE ratio		64.5	%		61.0	%		60.8	%		64.0	%		67.1	%		62.2	%		63.6	%
Underwriting expense ratio		28.4	%		33.9	%		32.8	%		28.6	%		26.7	%		31.5	%		30.8	%

Combined ratio		92.9	%		94.9	%		93.6	%		92.6	%		93.8	%		93.7	%		94.4	%

Combined ratio excl. catastrophe and prior year development		93.2	%		95.0	%		93.8	%		91.4	%		94.5	%		93.9	%		94.5	%

Loss and LAE components:
Current accident year, excluding catastrophe loss		64.8	%		61.1	%		61.0	%		62.8	%		67.8	%		62.4	%		63.7	%
Prior accident year loss reserve development		(1.2	%)		(1.1	%)		(0.8	%)		1.0	%		(1.0	%)		(1.0	%)		(1.0	%)
Current accident year catastrophe loss		0.9	%		1.0	%		0.6	%		0.2	%		0.3	%		0.8	%		0.9	%

Loss and LAE ratio		64.5	%		61.0	%		60.8	%		64.0	%		67.1	%		62.2	%		63.6	%

American Financial Group, Inc.

Property and Transportation - Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Gross written premiums	$	1,064		$	500		$	376		$	482		$	995		$	1,940		$	1,860
Ceded reinsurance premiums		(456	)		(138	)		(88	)		(109	)		(439	)		(682	)		(667	)

Net written premiums		608			362			288			373			556			1,258			1,193
Change in unearned premiums		(91	)		(35	)		25			42			(52	)		(101	)		(64	)

Net earned premiums		517			327			313			415			504			1,157			1,129
Loss and LAE		391			240			211			299			407			842			856
Underwriting expense		106			100			95			94			86			301			274

Underwriting profit (loss)	$	20		$	(13	)	$	7		$	22		$	11		$	14		$	(1	)

Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		7			7			4			2			1			18			18

Total current accident year catastrophe losses	$	7		$	7		$	4		$	2		$	1		$	18		$	18

Prior year loss reserve development (favorable) / adverse	$	(2	)	$	6		$	3		$	3		$	(5	)	$	7		$	13

Combined ratio:
Loss and LAE ratio		75.7	%		73.2	%		67.5	%		72.2	%		80.7	%		72.7	%		75.8	%
Underwriting expense ratio		20.5	%		30.8	%		30.2	%		22.4	%		17.1	%		26.0	%		24.3	%

Combined ratio		96.2	%		104.0	%		97.7	%		94.6	%		97.8	%		98.7	%		100.1	%

Combined ratio excl. catastrophe and prior year development		95.1	%		100.2	%		95.4	%		93.7	%		98.5	%		96.6	%		97.3	%

Loss and LAE components:
Current accident year, excluding catastrophe loss		74.6	%		69.4	%		65.2	%		71.3	%		81.4	%		70.6	%		73.0	%
Prior accident year loss reserve development		(0.4	%)		1.7	%		1.1	%		0.6	%		(0.9	%)		0.5	%		1.2	%
Current accident year catastrophe loss		1.5	%		2.1	%		1.2	%		0.3	%		0.2	%		1.6	%		1.6	%

Loss and LAE ratio		75.7	%		73.2	%		67.5	%		72.2	%		80.7	%		72.7	%		75.8	%

American Financial Group, Inc.

Specialty Casualty - Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Gross written premiums	$	734		$	661		$	683		$	660		$	707		$	2,078		$	1,869
Ceded reinsurance premiums		(189	)		(158	)		(182	)		(162	)		(171	)		(529	)		(503	)

Net written premiums		545			503			501			498			536			1,549			1,366
Change in unearned premiums		(42	)		—			(11	)		1			(50	)		(53	)		(100	)

Net earned premiums		503			503			490			499			486			1,496			1,266
Loss and LAE		323			311			316			325			310			950			782
Underwriting expense		149			155			146			138			144			450			384

Underwriting profit	$	31		$	37		$	28		$	36		$	32		$	96		$	100

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

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

Prior year loss reserve development (favorable) / adverse	$	3		$	(7	)	$	—		$	14		$	7		$	(4	)	$	(21	)

Combined ratio:
Loss and LAE ratio		64.2	%		61.9	%		64.4	%		65.1	%		63.7	%		63.5	%		61.8	%
Underwriting expense ratio		29.6	%		30.8	%		29.8	%		27.8	%		29.6	%		30.1	%		30.3	%

Combined ratio		93.8	%		92.7	%		94.2	%		92.9	%		93.3	%		93.6	%		92.1	%

Combined ratio excl. catastrophe and prior year development		92.9	%		94.0	%		93.9	%		89.9	%		91.6	%		93.6	%		93.5	%

Loss and LAE components:
Current accident year, excluding catastrophe loss		63.3	%		63.2	%		64.1	%		62.1	%		62.0	%		63.5	%		63.2	%
Prior accident year loss reserve development		0.6	%		(1.4	%)		0.0	%		2.9	%		1.3	%		(0.2	%)		(1.7	%)
Current accident year catastrophe loss		0.3	%		0.1	%		0.3	%		0.1	%		0.4	%		0.2	%		0.3	%

Loss and LAE ratio		64.2	%		61.9	%		64.4	%		65.1	%		63.7	%		63.5	%		61.8	%

American Financial Group, Inc.

Specialty Financial - Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Gross written premiums	$	164		$	157		$	137		$	160		$	157		$	458		$	445
Ceded reinsurance premiums		(27	)		(21	)		(22	)		(29	)		(36	)		(70	)		(88	)

Net written premiums		137			136			115			131			121			388			357
Change in unearned premiums		(6	)		(7	)		5			(10	)		(6	)		(8	)		(9	)

Net earned premiums		131			129			120			121			115			380			348
Loss and LAE		36			36			36			42			32			108			117
Underwriting expense		69			69			62			61			62			200			185

Underwriting profit	$	26		$	24		$	22		$	18		$	21		$	72		$	46

Included in results above:
Current accident year catastrophe losses:
Catastrophe reinstatement premium	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Catastrophe loss		1			2			1			—			—			4			3

Total current accident year catastrophe losses	$	1		$	2		$	1		$	—		$	—		$	4		$	3

Prior year loss reserve development (favorable) / adverse	$	(8	)	$	(8	)	$	(9	)	$	(4	)	$	(10	)	$	(25	)	$	(13	)

Combined ratio:
Loss and LAE ratio		27.7	%		27.7	%		30.4	%		34.5	%		27.7	%		28.5	%		33.6	%
Underwriting expense ratio		52.9	%		53.3	%		51.3	%		51.1	%		53.9	%		52.5	%		53.1	%

Combined ratio		80.6	%		81.0	%		81.7	%		85.6	%		81.6	%		81.0	%		86.7	%

Combined ratio excl. catastrophe and prior year development		85.8	%		85.2	%		88.5	%		88.8	%		90.3	%		86.4	%		89.7	%

Loss and LAE components:
Current accident year, excluding catastrophe loss		32.9	%		31.9	%		37.2	%		37.7	%		36.4	%		33.9	%		36.6	%
Prior accident year loss reserve development		(5.8	%)		(6.2	%)		(7.3	%)		(3.3	%)		(9.0	%)		(6.5	%)		(3.9	%)
Current accident year catastrophe loss		0.6	%		2.0	%		0.5	%		0.1	%		0.3	%		1.1	%		0.9	%

Loss and LAE ratio		27.7	%		27.7	%		30.4	%		34.5	%		27.7	%		28.5	%		33.6	%

American Financial Group, Inc.

Other Specialty - Underwriting Results (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Gross written premiums	$	—		$	—		$	—		$	1		$	—		$	—		$	—
Ceded reinsurance premiums		29			25			22			22			29			76			79

Net written premiums		29			25			22			23			29			76			79
Change in unearned premiums		(7	)		1			1			3			(2	)		(5	)		(5	)

Net earned premiums		22			26			23			26			27			71			74
Loss and LAE		6			13			13			13			11			32			35
Underwriting expense		9			10			7			10			10			26			26

Underwriting profit	$	7		$	3		$	3		$	3		$	6		$	13		$	13

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

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

Prior year loss reserve development (favorable) / adverse	$	(7	)	$	(2	)	$	(1	)	$	(3	)	$	(3	)	$	(10	)	$	(8	)

Combined ratio:
Loss and LAE ratio		29.4	%		52.4	%		54.4	%		49.6	%		43.4	%		45.3	%		47.3	%
Underwriting expense ratio		37.9	%		35.6	%		34.9	%		37.3	%		34.6	%		36.1	%		34.8	%

Combined ratio		67.3	%		88.0	%		89.3	%		86.9	%		78.0	%		81.4	%		82.1	%

Combined ratio excl. catastrophe and prior year development		97.6	%		93.2	%		96.6	%		97.4	%		85.6	%		95.7	%		91.1	%

American Financial Group, Inc.

Annuity Earnings (GAAP)

($ in millions)


	Three Months Ended														Nine Months Ended
	09/30/15			06/30/15		03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Net investment income	$	317		$	306	$	292		$	285		$	287		$	915		$	851
Guaranteed withdrawal benefit fees		11			10		10			9			9			31			25
Policy charges and other miscellaneous income		11			12		14			12			11			37			32

Total revenues		339			328		316			306			307			983			908
Annuity benefits expense		208			151		184			157			157			543			491
Acquisition expenses		42			60		34			47			41			136			109
Other expenses		22			29		23			17			23			74			65

Total costs and expenses		272			240		241			221			221			753			665

Core Annuity earnings before income taxes	$	67		$	88	$	75		$	85		$	86		$	230		$	243

Detail of core Annuity earnings before income taxes
Core earnings before income taxes and impact of fair value accounting	$	89		$	77	$	92		$	93		$	87		$	258		$	269
Impact of fair value accounting (a)		(22	)		11		(17	)		(8	)		(1	)		(28	)		(26	)

Core Annuity earnings before income taxes	$	67		$	88	$	75		$	85		$	86		$	230		$	243

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

American Financial Group, Inc.

Detail of Annuity Benefits Expense (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Detail of annuity benefits expense:
Interest credited - fixed	$	135		$	131		$	128		$	127		$	126		$	394		$	370
Interest credited - fixed component of variable annuities		2			2			1			1			2			5			5
Change in expected death and annuitization reserve		5			5			4			4			5			14			14
Amortization of sales inducements		6			7			7			6			7			20			20
Guaranteed withdrawal benefit reserve		20			16			12			11			12			48			30
Change in other benefit reserves		3			12			2			1			3			17			11
Unlockings (a)		—			—			—			(11	)		—			—			—

Subtotal before impact of fair value accounting		171			173			154			139			155			498			450
Embedded derivative mark-to-market (b)		(130	)		(19	)		50			87			21			(99	)		153
Equity option mark-to-market		167			(3	)		(20	)		(69	)		(19	)		144			(112	)

Subtotal impact of fair value accounting		37			(22	)		30			18			2			45			41

Total annuity benefits expense	$	208		$	151		$	184		$	157		$	157		$	543		$	491

(a)

Includes unlockings for fixed indexed annuity embedded derivative reserves, sales inducement asset and other reserves. Does not include unlocking charge of $10mm in the 4th quarter of 2014 for deferred policy acquisition costs and unearned revenue reserves. These unlockings are included in acquisition expenses. In total AFG recorded an unlocking expense reduction of $1mm in the 4th quarter of 2014.

(b)	Excludes unlocking impact of ($58mm) in the 4th quarter of 2014.

American Financial Group, Inc.

Net Spread on Fixed Annuities (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Average fixed annuity investments (at amortized cost)	$	25,642		$	24,711		$	23,943		$	23,334		$	22,730		$	24,765		$	22,077
Average annuity benefits accumulated		25,316			24,474			23,752			23,104			22,475			24,514			21,790

Investments in excess of annuity benefits accumulated	$	326		$	237		$	191		$	230		$	255		$	251		$	287

As % of average annuity benefits accumulated (except as noted)
Net investment income (as % of investments)		4.92	%		4.91	%		4.83	%		4.85	%		5.01	%		4.89	%		5.09	%
Interest credited		(2.12	%)		(2.14	%)		(2.16	%)		(2.21	%)		(2.24	%)		(2.14	%)		(2.26	%)

Net interest spread on fixed annuities		2.80	%		2.77	%		2.67	%		2.64	%		2.77	%		2.75	%		2.83	%
Policy charges and other miscellaneous income		0.12	%		0.13	%		0.20	%		0.14	%		0.14	%		0.15	%		0.13	%
Other annuity benefit expenses, net		(0.36	%)		(0.49	%)		(0.25	%)		(0.20	%)		(0.33	%)		(0.36	%)		(0.30	%)
Acquisition expenses		(0.61	%)		(0.94	%)		(0.55	%)		(0.61	%)		(0.69	%)		(0.70	%)		(0.63	%)
Other expenses		(0.34	%)		(0.43	%)		(0.36	%)		(0.28	%)		(0.37	%)		(0.38	%)		(0.37	%)
Change in fair value of derivatives		(0.59	%)		0.35	%		(0.50	%)		(0.31	%)		(0.04	%)		(0.25	%)		(0.25	%)
Unlockings		0.00	%		0.00	%		0.00	%		0.02	%		0.00	%		0.00	%		0.00	%

Net spread earned on fixed annuities - core		1.02	%		1.39	%		1.21	%		1.40	%		1.48	%		1.21	%		1.41	%

Average annuity benefits accumulated	$	25,316		$	24,474		$	23,752		$	23,104		$	22,475		$	24,514		$	21,790
Net spread earned on fixed annuities		1.02	%		1.39	%		1.21	%		1.40	%		1.48	%		1.21	%		1.41	%

Earnings on fixed annuity benefits accumulated	$	65		$	85		$	72		$	81		$	83		$	222		$	231
Investments in excess of annuity benefits accumulated	$	326		$	237		$	191		$	230		$	255		$	251		$	287
Net investment income (as % of investments)		4.92	%		4.91	%		4.83	%		4.85	%		5.01	%		4.89	%		5.09	%

Earnings on investments in excess of annuity benefits accumulated	$	4		$	3		$	2		$	3		$	3		$	9		$	11
Variable annuity earnings		(2	)		—			1			1			—			(1	)		1

Earnings before income taxes - core	$	67		$	88		$	75		$	85		$	86		$	230		$	243

Detail of net spread earned on fixed annuities - core
Net spread earned core - before impact of fair value accounting		1.37	%		1.21	%		1.49	%		1.54	%		1.50	%		1.36	%		1.57	%
Impact of fair value accounting (a)		(0.35	%)		0.18	%		(0.28	%)		(0.14	%)		(0.02	%)		(0.15	%)		(0.16	%)

Net spread earned core - after impact of fair value accounting		1.02	%		1.39	%		1.21	%		1.40	%		1.48	%		1.21	%		1.41	%

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

American Financial Group

Annuity Premiums (Statutory)

($ in millions)


	Three Months Ended										Nine months ended
	09/30/15		06/30/15		03/31/15		12/31/14		09/30/14		09/30/15		09/30/14
Retail single premium annuities - indexed	$	617	$	404	$	349	$	405	$	339	$	1,370	$	1,128
Retail single premium annuities - fixed		22		18		12		19		18		52		82
Financial institutions single premium annuities - indexed		554		369		356		426		333		1,279		1,063
Financial institutions single premium annuities - fixed		71		48		38		61		62		157		271
Education market - fixed and indexed annuities		47		49		47		49		46		143		145

Subtotal fixed annuity premiums		1,311		888		802		960		798		3,001		2,689
Variable annuities		10		11		11		11		11		32		36

Total annuity premiums	$	1,321	$	899	$	813	$	971	$	809	$	3,033	$	2,725

American Financial Group, Inc.

Fixed Annuity Benefits Accumulated (GAAP)

($ in millions)


	Three Months Ended															Nine Months Ended
	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			09/30/15			09/30/14
Beginning fixed annuity reserves	$	24,906		$	24,042		$	23,462		$	22,745		$	22,205		$	23,462		$	20,679
Premiums		1,311			888			802			960			798			3,001			2,689
Federal Home Loan Bank advances		—			300			—			—			—			300			—
Surrenders, benefits and other withdrawals		(526	)		(471	)		(420	)		(464	)		(426	)		(1,417	)		(1,209	)
Interest and other annuity benefit expenses:
Interest credited		135			131			128			127			126			394			370
Embedded derivative mark-to-market		(130	)		(19	)		50			87			21			(99	)		153
Change in other benefit reserves		29			35			20			18			21			84			63
Unlockings		—			—			—			(11	)		—			—			—

Ending fixed annuity reserves	$	25,725		$	24,906		$	24,042		$	23,462		$	22,745		$	25,725		$	22,745

Reconciliation to annuity benefits accumulated:
Ending fixed annuity reserves	$	25,725		$	24,906		$	24,042		$	23,462		$	22,745		$	25,725		$	22,745
Impact of unrealized investment gains on reserves		113			107			179			111			107			113			107
Fixed component of variable annuities		188			190			190			191			192			188			192

Annuity benefits accumulated per balance sheet	$	26,026		$	25,203		$	24,411		$	23,764		$	23,044		$	26,026		$	23,044

Annualized surrenders and other withdrawals as a % of beginning reserves		8.4	%		7.8	%		7.2	%		8.2	%		7.7	%		8.1	%		7.8	%

American Financial Group, Inc.

Consolidated Balance Sheet

($ in millions)


	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			06/30/14
Assets:
Total cash and investments	$	38,132		$	37,644		$	37,384		$	36,210		$	35,151		$	34,843
Recoverables from reinsurers		3,151			3,075			3,046			3,238			3,134			3,107
Prepaid reinsurance premiums		604			499			475			469			587			489
Agents’ balances and premiums receivable		976			959			864			889			901			902
Deferred policy acquisition costs		993			965			756			821			858			806
Assets of managed investment entities		3,613			3,629			3,279			3,108			2,946			2,799
Other receivables		1,241			660			641			910			1,140			527
Variable annuity assets (separate accounts)		595			655			667			662			649			681
Other assets		1,051			1,137			994			1,027			985			1,001
Goodwill		201			201			201			201			201			200

Total assets	$	50,557		$	49,424		$	48,307		$	47,535		$	46,552		$	45,355

Liabilities and Equity:
Unpaid losses and loss adjustment expenses	$	8,061		$	7,744		$	7,636		$	7,872		$	7,645		$	7,370
Unearned premiums		2,238			2,004			1,936			1,956			2,114			1,911
Annuity benefits accumulated		26,026			25,203			24,411			23,764			23,044			22,516
Life, accident and health reserves		2,159			2,156			2,195			2,175			2,098			2,082
Payable to reinsurers		724			511			494			645			673			445
Liabilities of managed investment entities		3,287			3,309			2,952			2,819			2,625			2,499
Long-term debt		880			1,024			1,061			1,061			1,062			912
Variable annuity liabilities (separate accounts)		595			655			667			662			649			681
Other liabilities		1,681			1,834			1,855			1,527			1,564			1,781

Total liabilities	$	45,651		$	44,440		$	43,207		$	42,481		$	41,474		$	40,197
Shareholders’ equity:
Common stock	$	87		$	88		$	88		$	88		$	88		$	90
Capital surplus		1,195			1,183			1,173			1,152			1,150			1,152
Appropriated retained earnings		—			—			—			(2	)		2			31
Unappropriated retained earnings		2,981			2,968			2,886			2,914			2,946			2,913
Unrealized gains - fixed maturities		445			457			656			604			602			656
Unrealized gains - equities		44			130			143			139			124			149
Other comprehensive income, net of tax		(28	)		(24	)		(23	)		(16	)		(8	)		(6	)

Total shareholders’ equity		4,724			4,802			4,923			4,879			4,904			4,985
Noncontrolling interests		182			182			177			175			174			173

Total liabilities and equity	$	50,557		$	49,424		$	48,307		$	47,535		$	46,552		$	45,355

American Financial Group, Inc.

Book Value Per Share and Price / Book Summary

(in millions, except per share information)


	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			06/30/14
Shareholders’ equity	$	4,724		$	4,802		$	4,923		$	4,879		$	4,904		$	4,985
Appropriated retained earnings		—			—			—			2			(2	)		(31	)

Shareholders’ equity, excluding appropriated retained earnings		4,724			4,802			4,923			4,881			4,902			4,954
Unrealized (gains) on fixed maturities		(445	)		(457	)		(656	)		(604	)		(602	)		(656	)

Adjusted shareholders’ equity		4,279			4,345			4,267			4,277			4,300			4,298
Goodwill		(201	)		(201	)		(201	)		(201	)		(201	)		(200	)
Intangibles		(51	)		(53	)		(55	)		(57	)		(63	)		(66	)

Tangible adjusted shareholders’ equity	$	4,027		$	4,091		$	4,011		$	4,019		$	4,036		$	4,032

Common shares outstanding		87.327			87.540			87.886			87.709			88.491			89.618
Book value per share:
Excluding appropriated retained earnings (a)	$	54.10		$	54.86		$	56.01		$	55.65		$	55.39		$	55.27
Adjusted (b)		49.01			49.63			48.55			48.76			48.59			47.95
Tangible, adjusted (c)		46.12			46.73			45.63			45.82			45.61			44.99
Market capitalization
AFG’s closing common share price	$	68.91		$	65.04		$	64.15		$	60.72		$	57.89		$	59.56
Market capitalization	$	6,018		$	5,694		$	5,638		$	5,326		$	5,123		$	5,338
Price / Adjusted book value ratio		1.41			1.31			1.32			1.25			1.19			1.24

(a)	Excludes appropriated retained earnings.

(b)	Excludes appropriated retained earnings and unrealized gains related to fixed maturity investments.

(c)	Excludes appropriated retained earnings, unrealized gains related to fixed maturity investments, goodwill and intangibles.

American Financial Group, Inc.

Capitalization

($ in millions)


	09/30/15			06/30/15			03/31/15			12/31/14			09/30/14			06/30/14
AFG senior obligations	$	708		$	840		$	840		$	840		$	840		$	840
Borrowings drawn under credit facility		—			—			—			—			—			—
Obligations of subsidiaries - other		12			12			12			12			12			12

Debt excluding subordinated debt & debt secured by real estate	$	720		$	852		$	852		$	852		$	852		$	852
AFG subordinated debentures		150			150			150			150			150			—
Obligations of subsidiaries - secured by real estate		10			22			59			59			60			60
Payable to subsidiary trusts - subordinated		—			—			—			—			—			—

Total Long-term debt	$	880		$	1,024		$	1,061		$	1,061		$	1,062		$	912
Shareholders’ equity		4,724			4,802			4,923			4,879			4,904			4,985
Noncontrolling interests		182			182			177			175			174			173
Less:
Appropriated retained earnings		—			—			—			2			(2	)		(31	)
Unrealized gains related to fixed maturity investments		(445	)		(457	)		(656	)		(604	)		(602	)		(656	)

Total adjusted capital	$	5,341		$	5,551		$	5,505		$	5,513		$	5,536		$	5,383

Less:
Obligations of subsidiaries - secured by real estate		(10	)		(22	)		(59	)		(59	)		(60	)		(60	)

Total adjusted capital excluding obligations secured by real estate	$	5,331		$	5,529		$	5,446		$	5,454		$	5,476		$	5,323

Ratio of debt to total adjusted capital:
Including subordinated debt & debt secured by real estate		16.5	%		18.4	%		19.3	%		19.2	%		19.2	%		16.9	%
Excluding subordinated debt & debt secured by real estate		13.5	%		15.4	%		15.6	%		15.6	%		15.6	%		16.0	%

American Financial Group, Inc.

Additional Supplemental Information

($ in millions)


	Three Months Ended										Nine months ended
	09/30/15		06/30/15		03/31/15		12/31/14		09/30/14		09/30/15		09/30/14
Property and Casualty Insurance
Paid Losses (GAAP)	$	585	$	526	$	617	$	562	$	528	$	1,728	$	1,568


	09/30/15		06/30/15		03/31/15		12/31/14		09/30/14		6/30/2014
Statutory Surplus
Property and Casualty Insurance	$	2,356	$	2,399	$	2,340	$	2,286	$	2,206	$	2,227
AFG’s principal annuity subsidiaries (total adjusted capital)	$	1,816	$	1,911	$	1,861	$	1,822	$	1,818	$	1,751
Allowable dividends without regulatory approval
Property and Casualty Insurance	$	315	$	315	$	315	$	315	$	335	$	335
Annuity and Run-off		358		358		358		358		275		275

Total	$	673	$	673	$	673	$	673	$	610	$	610

American Financial Group, Inc.

Total Cash and Investments and Quarterly Net Investment Income

September 30, 2015

($ in millions)


	Carrying Value
	Property and Casualty Insurance		Annuity and Run-off*		Other		Consolidate CLOs			Total AFG Consolidated		% of Investment Portfolio
Total cash and investments:
Cash and cash equivalents	$	570	$	177	$	147	$	—		$	894		2	%
Fixed maturities - Available for sale		6,648		26,452		14		—			33,114		87	%
Fixed maturities - Trading		147		122		—		—			269		1	%
Equity securities		1,209		576		46		—			1,831		5	%
Policy loans		—		221		—		—			221		0	%
Mortgage loans		187		807		—		—			994		3	%
Real estate and other investments		442		673		18		(324	)		809		2	%

Total cash and investments	$	9,203	$	29,028	$	225	$	(324	)	$	38,132		100	%

*	Total cash and investments in Annuity and Run-off segment includes $1.37 billion in cash and investments held by AFG’s two long-term care insurance subsidiaries, which are being sold.


	Property and Casualty Insurance			Annuity and Run-off			Other		Consolidate CLOs		Total AFG Consolidated
Total quarterly net investment income:
Fixed maturities - Available for sale	$	62		$	307		$	—	$	—	$	369
Fixed maturities - Trading		—			1			—		—		1
Equity securities		12			6			2		—		20
Equity in investees		7			11			—		—		18
Other investments		4			15			—		3		22

Gross investment income		85			340			2		3		430
Investment expenses		(2	)		(3	)		—		—		(5	)

Total net investment income	$	83		$	337		$	2	$	3	$	425


	Equity Securities
					Unrealized
	Cost		Fair Value		Gain (Loss)
Annuity and Run-off	$	585	$	576	$	(9	)
Property and Casualty Insurance		1,132		1,209		77
Other		46		46		—

Total AFG consolidated	$	1,763	$	1,831	$	68

American Financial Group, Inc.

Fixed Maturities - By Security Type - AFG Consolidated

September 30, 2015

($ in millions )


											% of
	Amortized					Unrealized		% of			Investment
	Cost			Fair Value		Gain (Loss)		Fair Value			Portfolio
US Government and government agencies	$	345		$	351	$	6		1	%		1	%
States, municipalities and political subdivisions		6,904			7,196		292		22	%		19	%
Foreign government		246			255		9		1	%		1	%
Residential mortgage-backed securities		3,546			3,885		339		12	%		10	%
Commercial mortgage-backed securities		2,185			2,297		112		7	%		6	%
Asset-backed securities		4,674			4,702		28		14	%		12	%
Corporate bonds
Manufacturing		2,608			2,690		82		8	%		7	%
Banks, lending and credit institutions		3,348			3,449		101		10	%		9	%
Gas and electric services		1,386			1,468		82		4	%		4	%
Insurance and insurance related		1,023			1,077		54		3	%		3	%
Other corporate		5,872			6,013		141		18	%		16	%

Total AFG consolidated	$	32,137		$	33,383	$	1,246		100	%		88	%

Annuity and Run-off	$	25,500		$	26,574		1,074		80	%		70	%
Property and Casualty Insurance		6,634			6,795		161		20	%		18	%
Other		3			14		11		0	%		0	%

Total AFG consolidated	$	32,137		$	33,383	$	1,246		100	%		88	%

Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		4.71	%
Net of investment expense (a)		4.65	%
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.

American Financial Group, Inc.

Fixed Maturities - By Security Type Portfolio

September 30, 2015

($ in millions )


	Amortized					Unrealized		% of
Annuity and Run-off:	Cost			Fair Value		Gain (Loss)		Fair Value
US Government and government agencies	$	82		$	83	$	1		0	%
States, municipalities and political subdivisions		4,161			4,370		209		16	%
Foreign government		17			20		3		0	%
Residential mortgage-backed securities		2,640			2,920		280		11	%
Commercial mortgage-backed securities		1,971			2,077		106		8	%
Asset-backed securities		3,326			3,351		25		13	%
Corporate debt		13,303			13,753		450		52	%

Total Annuity and Run-off	$	25,500		$	26,574	$	1,074		100	%

Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		4.93	%
Net of investment expense (a)		4.88	%
Approximate average life and duration:
Approximate average life		7 years
Approximate duration		5 years


	Amortized					Unrealized		% of
Property and Casualty Insurance:	Cost			Fair Value		Gain (Loss)		Fair Value
US Government and government agencies	$	261		$	266	$	5		4	%
States, municipalities and political subdivisions		2,743			2,826		83		42	%
Foreign government		229			235		6		3	%
Residential mortgage-backed securities		905			953		48		14	%
Commercial mortgage-backed securities		214			220		6		3	%
Asset-backed securities		1,348			1,351		3		20	%
Corporate debt		934			944		10		14	%

Property and Casualty Insurance	$	6,634		$	6,795	$	161		100	%

Annualized yield on available for sale fixed maturities:
Excluding investment expense (a)		3.87	%
Net of investment expense (a)		3.75	%
Tax equivalent, net of investment expense (b)		4.62	%
Approximate average life and duration:
Approximate average life		5 years
Approximate duration		3.5 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.

American Financial Group, Inc.

Fixed Maturities - Credit Rating and NAIC Designation

September 30, 2015

($ in millions)


	GAAP Data
	Amortized				Unrealized			% of
By Credit Rating	Cost		Fair Value		Gain (Loss)			Fair Value
Investment grade
AAA	$	6,650	$	6,852	$	202			21	%
AA		6,695		6,934		239			21	%
A		8,271		8,615		344			26	%
BBB		6,659		6,844		185			20	%

Subtotal - Investment grade		28,275		29,245		970			88	%
BB		803		791		(12	)		2	%
B		378		383		5			1	%
Other		2,681		2,964		283			9	%

Total	$	32,137	$	33,383	$	1,246			100	%

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.


	Statutory Data
By NAIC Designation	Carrying Value		% of Carrying Value			Amortized Cost		Fair Value		Unrealized Gain (Loss)
NAIC 1	$	24,134		76	%	$	24,135	$	25,203	$	1,068
NAIC 2		6,828		22	%		6,828		7,004		176

		30,962		98	%		30,963		32,207		1,244
NAIC 3		686		2	%		691		677		(14	)
NAIC 4		145		0	%		147		147		—
NAIC 5		50		0	%		50		61		11
NAIC 6		41		0	%		44		58		14

Total	$	31,884		100	%	$	31,895	$	33,150	$	1,255

American Financial Group, Inc.

Mortgage-Backed Securities - AFG Consolidated

September 30, 2015

($ in millions)


By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value			% of Investment Portfolio
Residential
Agency	$	294	$	306	$	12		5	%		1	%
Prime (Non-Agency)		1,624		1,807		183		29	%		5	%
Alt-A		848		940		92		15	%		2	%
Subprime		780		832		52		14	%		2	%

Subtotal - Residential		3,546		3,885		339		63	%		10	%
Commercial		2,185		2,297		112		37	%		6	%

Total AFG consolidated	$	5,731	$	6,182	$	451		100	%		16	%

Annuity and Run-off	$	4,611	$	4,997	$	386		81	%		13	%
Property and Casualty Insurance		1,119		1,173		54		19	%		3	%
Other		1		12		11		0	%		0	%

Total AFG consolidated	$	5,731	$	6,182	$	451		100	%		16	%

•

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 77%; Subprime 86%; CMBS 99%.

•

The average FICO score of our residential MBS securities is - Prime 741; Alt-A 712; Subprime 637.

•

99.7% of our Commercial MBS portfolio is investment-grade rated (84% AAA) and the average subordination for this group of assets is 39%.

•

The approximate average life by collateral type is - Residential 5.0 years; Commercial 3.0 years.

American Financial Group, Inc.

Mortgage-Backed Securities Portfolio

September 30, 2015

($ in millions)


Annuity and Run-off: By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value			%of Investment Portfolio
Residential
Agency	$	134	$	143	$	9		3	%		0	%
Prime (Non-Agency)		1,401		1,559		158		31	%		5	%
Alt-A		620		693		73		14	%		2	%
Subprime		485		525		40		10	%		2	%

Subtotal - Residential		2,640		2,920		280		58	%		9	%
Commercial		1,971		2,077		106		42	%		7	%

Total Annuity and Run-off	$	4,611	$	4,997	$	386		100	%		16	%


Property and Casualty Insurance: By Asset Type	Amortized Cost		Fair Value		Unrealized Gain (Loss)		% of Fair Value			% of Investment Portfolio
Residential
Agency	$	160	$	163	$	3		14	%		2	%
Prime (Non-Agency)		222		236		14		20	%		3	%
Alt-A		228		247		19		21	%		3	%
Subprime		295		307		12		26	%		3	%

Subtotal - Residential		905		953		48		81	%		11	%
Commercial		214		220		6		19	%		2	%

Total Property and Casualty Insurance	$	1,119	$	1,173	$	54		100	%		13	%

American Financial Group, Inc.

Mortgage-Backed Securities - Credit Rating and NAIC Designation

September 30, 2015

($ in millions)


	GAAP data
	Amortized				Unrealized		% of
By Credit Rating	Cost		Fair Value		Gain (Loss)		Fair Value
Investment grade
AAA	$	2,537	$	2,662	$	125		43	%
AA		276		287		11		4	%
A		405		425		20		7	%
BBB		222		240		18		4	%

Subtotal - investment grade		3,440		3,614		174		58	%
BB		261		267		6		4	%
B		327		334		7		6	%
Other		1,703		1,967		264		32	%

Total	$	5,731	$	6,182	$	451		100	%

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.


	Statutory data
By NAIC Designation	Carrying Value		% of Carrying Value			Amortized Cost		Fair Value		Unrealized Gain (Loss)
NAIC 1	$	5,472		97	%	$	5,473	$	5,943	$	470
NAIC 2		58		1	%		58		59		1

		5,530		98	%		5,531		6,002		471
NAIC 3		49		1	%		49		51		2
NAIC 4		56		1	%		56		59		3
NAIC 5		18		0	%		18		29		11
NAIC 6		2		0	%		2		16		14

Total	$	5,655		100	%	$	5,656	$	6,157	$	501

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AMERICAN FINANCIAL GROUP INC Reports