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Form 8-K AMERICAN FINANCIAL GROUP For: Feb 02

February 3, 2015 10:02 AM EST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section�13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 2, 2015

AMERICAN FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Ohio 1-13653 31-1544320

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

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

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

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

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

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

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

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


Section�2 - Financial Information

Item�2.02 Results Of Operations And Financial Condition.

Reference is made to the press release of American Financial Group, Inc. (the �Company�) relating to the announcement of the Company�s results of operations for the fourth quarter of 2014 and full year ended December�31, 2014 as well as the availability of the Investor Supplement on the Company�s website. The press release was issued on February�2, 2015. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and a copy of the Investor Supplement is attached as Exhibit 99.2 and are incorporated herein by reference.

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

Section�9 - Financial Statements and Exhibits

Item�9.01 Financial Statements and Exhibits.

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

(b) Pro forma financial information.�Not applicable.

(c) Shell company transactions. Not applicable

(d) Exhibits

Exhibit
No.

��

Description

99.1 �� Earnings Release dated February 2, 2015, reporting American Financial Group Inc. fourth quarter and full year results for the period ended December 31, 2014.
99.2 �� Investor Supplement � Fourth Quarter 2014

2


SIGNATURES

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

AMERICAN FINANCIAL GROUP, INC.
Date:�February 3, 2015
By:

Karl J. Grafe

Karl J. Grafe
Vice President

3

Exhibit 99.1

LOGO

American Financial Group, Inc. Announces Record 2014 Fourth Quarter and Full Year Core Net Operating Earnings Per Share

Record fourth quarter core net operating earnings of $1.35 per share; up 5% from prior year period

Record core net operating earnings per share of $4.82 for the full year; up 14% from 2013

Growth in adjusted book value plus dividends of 10% during 2014

Full year 2015 core net operating earnings guidance between $5.10 - $5.50 per share

Cincinnati, Ohio � February�2, 2015 � American Financial Group, Inc. (NYSE/NASDAQ: AFG) today reported 2014 fourth quarter net earnings attributable to shareholders of $127 million ($1.41 per share) compared to $158 million ($1.73 per share) for the 2013 fourth quarter. Results for the fourth quarter of 2014 include $5 million ($0.06 per share) in after-tax realized gains compared to $41 million ($0.45 per share) in the prior year period. Book value per share, excluding appropriated retained earnings and unrealized gains on fixed maturities, increased by $0.17, to $48.76 per share during the fourth quarter of 2014. Total value creation, measured as growth in adjusted book value plus dividends, was $4.77 per share, or 10%, for the full year 2014. Net earnings attributable to shareholders for the year were $4.97 per share, compared to $5.16 per share in 2013. Return on equity was 11.0% and 12.3% for 2014 and 2013, respectively.

Core net operating earnings were $122 million ($1.35 per share) for the 2014 fourth quarter, compared to $117 million ($1.28 per share) in the 2013 fourth quarter. Higher underwriting profit and net investment income in our Specialty Property and Casualty (�P&C�) insurance operations were partially offset by lower core operating earnings in our Annuity and Run-off Long-term Care and Life segments. Core net operating earnings for the fourth quarters of 2014 and 2013 generated annualized returns on equity of 11.7% and 11.8%, respectively. Full year 2014 core net operating earnings per share increased by 14% over the prior year.

During the fourth quarter of 2014, AFG repurchased approximately 1.1�million shares of common stock for $64 million (average price per share of $58.54).

AFG�s net earnings attributable to shareholders, determined in accordance with generally accepted accounting principles (�GAAP�), include certain items that may not be indicative of its ongoing core operations. The following table identifies such items and reconciles net earnings attributable to shareholders to core net operating earnings, a non-GAAP financial measure that AFG believes is a useful tool for investors and analysts in analyzing ongoing operating trends.

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In millions, except per share amounts �� Three�months�ended
December 31,
�� Twelve�months�ended
December 31,
�� 2014 �� 2013 �� 2014 2013

Components of net earnings attributable to shareholders:

�� �� ��

Core net operating earnings(a)

�� $ 122 �� �� $ 117 �� �� $ 439 �� $ 385 ��

Non-Core Items:

�� �� ��

Realized gains

�� 5 �� �� 41 �� �� 32 �� 138 ��

Special A&E charges(b)

�� ��� �� �� ��� �� �� (19 )� (49 )�

Other

�� ��� �� �� ��� �� �� ��� �� (3 )�
��

��

��

Net earnings attributable to shareholders

�� $ 127 �� �� $ 158 �� �� $ 452 �� $ 471 ��
��

��

��

�� Three�months�ended
December 31,
�� Twelve�months�ended
December 31,
�� 2014 �� 2013 �� 2014 2013

Components of Earnings per Share:

�� �� ��

Core net operating earnings(a)

�� $ 1.35 �� �� $ 1.28 �� �� $ 4.82 �� $ 4.22 ��

Non-Core Items:

�� �� ��

Realized gains

�� 0.06 �� �� 0.45 �� �� 0.36 �� 1.52 ��

Special A&E charges(b)

�� ��� �� �� ��� �� �� (0.21 )� (0.54 )�

Other

�� ��� �� �� ��� �� �� ��� �� (0.04 )�
��

��

��

Diluted earnings per share

�� $ 1.41 �� �� $ 1.73 �� �� $ 4.97 �� $ 5.16 ��
��

��

��

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

Carl H. Lindner III and S. Craig Lindner, AFG�s Co-Chief Executive Officers, commented: �Strong specialty P&C underwriting profitability and excellent annuity core operating earnings produced a 14% increase in AFG�s core net operating earnings per share for the year, establishing a new record for us. Our operating performance, superior investment execution and intelligent deployment of capital have helped us to achieve five year compounded growth in adjusted book value plus dividends of 12%. We thank God and our management team and employees for helping to achieve these results.

�AFG had approximately $810 million of excess capital (including parent company cash of approximately $290 million) at December�31, 2014. During 2014, we increased our quarterly dividend by 14% and in the fourth quarter of 2014 we paid a special dividend of $1.00 per share. Our strong financial position provides the flexibility to act on strategic business opportunities with the potential to produce desired long-term returns. We will continue to invest excess capital when we see potential for healthy, profitable organic growth and return value to our shareholders through opportunistic share repurchases and dividends.

�Based on current information, we expect core net operating earnings in 2015 to be between $5.10 and $5.50 per share. Our core earnings per share guidance excludes non-core items such as realized gains and losses, as well as other significant items that may not be indicative of ongoing operations.�

Specialty Property and Casualty Insurance Operations

The P&C specialty insurance operations generated underwriting profit of $79 million for the 2014 fourth quarter compared to $75 million in the fourth quarter of 2013, with each of our Specialty P&C sub-segments achieving higher underwriting profitability. The fourth quarter 2014 combined ratio of 92.6% includes 1.0 point of adverse prior year reserve development, compared to 0.5 points of favorable development in the comparable prior year period. Fourth quarter results in 2014 include $3 million (0.2 points on the combined ratio) in catastrophe losses, compared to $1 million (0.1 points on the combined ratio) in the comparable 2013 period.

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Gross and net written premiums were up 22% and 25%, respectively, in the 2014 fourth quarter compared to the prior year period. The 2014 results include premiums from Summit, AFG�s specialty workers� compensation subsidiary, from the date of acquisition on April�1, 2014. Excluding Summit premiums, gross and net written premiums for the fourth quarter grew by 8% and 7%, respectively, year-over-year. Full year 2014 net written premiums were up 20%; excluding Summit, full year net written premiums grew by 8%. Further details of AFG�s Specialty P&C operations may be found in the accompanying schedules.

The Property and Transportation Group reported an underwriting profit of $22 million in the fourth quarter of 2014, compared to $17 million in the comparable prior year period. Higher accident year profitability in our property and inland marine operations was partially offset by lower underwriting profits in our transportation operations. Catastrophe losses for this group were $2 million in the fourth quarter of 2014 and negligible in the comparable 2013 period.

Fourth quarter 2014 gross and net written premiums in this group were 8% and 7% higher, respectively, than the comparable prior year period, and reflect growth in most business units within this group. Net written premiums for the full year of 2014 were up approximately 1%. Overall renewal rates in this group increased 4% in the fourth quarter of 2014. The average rate increase for this group during 2014 was approximately 5%.

The Specialty Casualty Group reported an underwriting profit of $36 million in the 2014 fourth quarter compared to $32 million in the comparable 2013 period. This increase reflects higher accident year profitability in our workers� compensation businesses, which was partially offset by $14 million of adverse prior year reserve development, primarily attributable to our international operations. The majority of businesses in this group produced strong underwriting profit margins during 2014.

Gross and net written premiums grew by 44% and 55%, respectively, in the fourth quarter of 2014 compared to the same period in 2013 and include Summit�s results since April�1, 2014. Excluding premiums from Summit, gross and net written premiums grew by 12% and 11%, respectively during the quarter. Broad-based growth across this group was primarily the result of growth in our workers� compensation operations and excess and surplus lines businesses. New business opportunities and increased exposures on existing accounts have driven the growth in our workers� compensation businesses. Organic growth opportunities have contributed to higher premiums in our excess and surplus businesses. Net written premiums were up 52% for the full year. Excluding Summit, net written premiums for the full year increased by 19%. Renewal pricing in this group was up 1% for the quarter. The average rate increase for this group during 2014 was 2%.

The Specialty Financial Group reported an underwriting profit of $18 million for the fourth quarter of 2014, compared to $17 million for the same period a year ago. Higher underwriting profits in our surety and fidelity and financial institutions businesses were partially offset by lower underwriting profitability in our trade credit business. Nearly all businesses in this group continued to achieve excellent underwriting margins during 2014, with an overall combined operating ratio of 85.6% for the fourth quarter of 2014.

Gross written premiums were down 2% and net written premiums were down 1% in the 2014 fourth quarter when compared to the 2013 fourth quarter, primarily due to the October 2013 sale of a service contract business, which ceded all of its premiums under reinsurance contracts. Full year net written premiums were flat when compared to amounts reported in 2013. Pricing in this group was flat for the quarter and down about 1% on average for the full year of 2014.

Carl Lindner III stated: �I�m pleased with our strong underwriting results for the fourth quarter and full year of 2014. The overall performance of our specialty casualty businesses and consistently superior underwriting profitability of the businesses within our specialty financial group have contributed to these results. Although focused efforts to improve profitability in some of our property and

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transportation businesses have been effective, we still have work to do to strengthen results in our transportation and international businesses. With the exception of the impact of commodity prices on our crop business, we reported growth in net written premiums in nearly all of our specialty P&C businesses during 2014. Over two-thirds of these businesses were successful in achieving pricing increases during year, with an average overall renewal rate increase of approximately 2% for the quarter and 3% for the year.

�Looking ahead to 2015, we are forecasting an overall calendar year combined ratio in the 92% to 94% range. Although we have experienced pricing deceleration in many of our business units, we will keep our focus on maintaining adequate rates. We are targeting growth in net written premium in the range of 4% to 8% for 2015.�

Annuity Segment

AFG�s Annuity segment contributed $85 million in core pretax operating earnings in the fourth quarter of 2014 compared to $92 million in the fourth quarter of 2013, a decrease of 8%. The decrease was largely the result of the impact of fair value accounting for fixed-indexed annuities (FIAs) on fourth quarter annuity earnings, which is detailed in the table below:

Components of Core Annuity Operating Earnings Before Income Taxes

In millions �� Three�months�ended
December�31,
�� Pct.
Change
�� 2014 2013 ��

Annuity earnings before fair value accounting for FIAs

�� $ 93 �� $ 86 �� �� 8 %�

Impact of Fair Value Accounting for FIAs

�� (8 )� 6 �� �� nm ��
��

��

Core Pretax Annuity Operating Earnings

�� $ 85 �� $ 92 �� �� (8 %)�
��

��

Annuity Earnings Before Fair Value Accounting for FIAs

AFG�s 2014 earnings continued to benefit from growth in annuity assets and the favorable impact of lower than expected surrenders. AFG�s quarterly average annuity investments and reserves grew approximately 14% and 15%, respectively, year-over-year; however, the impact of this growth was partially offset by the runoff of higher yielding investments. In addition, fourth quarter earnings in both years benefitted from unanticipated investment and other income. In the fourth quarters of 2014 and 2013, AFG conducted a detailed review (�unlocking�) of the major actuarial assumptions underlying its annuity operations; the results of the unlocking review were immaterial in both the fourth quarters of 2014 and 2013.

Impact of Fair Value Accounting for FIAs

Interest rate and stock market fluctuations have an impact on the accounting for FIAs; these accounting adjustments are recognized through AFG�s reported core earnings. In the fourth quarter of 2014, the combination of an increase in the stock market but a decrease in longer-term interest rates (as measured by the Corporate A2 rate) resulted in an unfavorable impact on earnings. Conversely, in the fourth quarter of 2013, the combination of a much larger increase in the stock market and a moderate increase in longer-term interest rates resulted in a favorable impact on earnings.

The Annuity segment reported statutory premiums of $971 million in the fourth quarter of 2014. While this represents a 30% decrease from the fourth quarter of 2013 � which established a record level of annuity premiums for AFG and occurred in a favorable interest rate environment � it also reflects a 20% increase in premiums over the third quarter of 2014. Furthermore, despite the low interest rate environment, AFG�s $3.7 billion of annuity premiums in 2014 represents the second highest level of annuity premiums in the Company�s history.

Page 4


Craig Lindner stated, �I am pleased with our strong core annuity earnings in the fourth quarter and full year 2014. Looking ahead to 2015, we believe that the decrease in interest rates is likely to put downward pressure on core annuity earnings in the first quarter due to fair value accounting for FIAs. For the full year, we expect reported core pretax annuity operating earnings to be about the same in 2015 when compared to 2014. While we expect average annuity assets and reserves to grow around 10% in 2015, this growth will be largely offset by the impact that low interest rates are expected to have on the Company�s investment portfolio. Significant changes in interest rates and/or the stock market from today�s level could lead to additional positive or negative impacts on the Annuity segment�s results.

�We remain committed to our disciplined product pricing strategy, which means that our focus is on growing our business when we can achieve desired long-term returns. The interest rate environment in 2015 is expected to slow the pace of our annuity sales. As a result, based on information currently available, we now expect that premiums for the full year of 2015 will be relatively flat or down slightly compared to 2014.�

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

Run-off Long-Term Care and Life Segment

AFG�s Run-off Long-term Care and Life segment reported a core pretax operating loss of $7 million in the fourth quarter of 2014 compared to a core pretax operating loss of $3 million in the comparable prior year period. Included in the results for the fourth quarter of 2014 is a $5 million loss on the commutation of a long-term care reinsurance agreement.

In the fourth quarter of 2014, with the assistance of an external actuarial consulting firm, AFG completed its review of the major actuarial assumptions for its run-off long-term care business, which resulted in no charge to earnings and an updated net loss recognition margin of $11 million. The $53 million decrease in AFG�s long-term care loss recognition margin since year end 2013 is due primarily to the drop in interest rates in 2014.

Investments

AFG recorded fourth quarter 2014 net realized gains on securities of $5 million after tax and after deferred acquisition costs (DAC), compared to $41 million in the fourth quarter of 2013. Unrealized gains on fixed maturities were $604 million after tax and after DAC at December�31, 2014, an increase of $2 million from September�30, 2014, and $163 million from year-end 2013. Our portfolio continues to be high quality, with 87% of our fixed maturity portfolio rated investment grade and 97% with a National Association of Insurance Commissioners� designation of NAIC 1or 2, its highest two categories.

For the year ended December�31, 2014, P&C net investment income was approximately 12% higher than the prior year, reflecting the investment of cash received in connection with the Summit acquisition.

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

Page 5


About American Financial Group, Inc.

American Financial Group is an insurance holding company, based in Cincinnati, Ohio with assets of over $45 billion. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of fixed and fixed-indexed annuities in the retail, financial institutions and education markets. Great American Insurance Group�s roots go back to 1872 with the founding of its flagship company, Great American Insurance Company.

Forward Looking Statements

This press release contains certain statements that may be deemed to be �forward-looking statements� within the meaning of Section�27A of the Securities Act of 1933 and Section�21E of the Securities Exchange Act of 1934. All statements in this press release not dealing with historical results are forward-looking and are based on estimates, assumptions and projections. Examples of such forward-looking statements include statements relating to: the Company�s expectations concerning market and other conditions and their effect on future premiums, revenues, earnings and investment activities; recoverability of asset values; expected losses and the adequacy of reserves for long-term care, asbestos, environmental pollution and mass tort claims; rate changes; and improved loss experience.

Actual results and/or financial condition could differ materially from those contained in or implied by such forward-looking statements for a variety of reasons including but not limited to: changes in financial, political and economic conditions, including changes in interest and inflation rates, currency fluctuations and extended economic recessions or expansions in the U.S. and/or abroad; performance of securities markets; AFG�s ability to estimate accurately the likelihood, magnitude and timing of any losses in connection with investments in the non-agency residential mortgage market; new legislation or declines in credit quality or credit ratings that could have a material impact on the valuation of securities in AFG�s investment portfolio; the availability of capital; regulatory actions (including changes in statutory accounting rules); changes in the legal environment affecting AFG or its customers; tax law and accounting changes; levels of natural catastrophes and severe weather, terrorist activities (including any nuclear, biological, chemical or radiological events), incidents of war or losses resulting from civil unrest and other major losses; development of insurance loss reserves and establishment of other reserves, particularly with respect to amounts associated with asbestos and environmental claims and AFG�s run-off long-term care business; availability of reinsurance and ability of reinsurers to pay their obligations; trends in persistency, mortality and morbidity; competitive pressures, including those in the annuity distribution channels, the ability to obtain adequate rates and policy terms; changes in AFG�s credit ratings or the financial strength ratings assigned by major ratings agencies to our operating subsidiaries; and other factors identified in our filings with the Securities and Exchange Commission.

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

Conference Call

The company will hold a conference call to discuss 2014 fourth quarter and full year results at 11:30 am (ET) tomorrow, Tuesday, February�3, 2015. Toll-free telephone access will be available by dialing 877-459-8719 (international dial-in 424-276-6843). The conference ID for the live call is 63019020. Please dial in five to ten minutes prior to the scheduled start time of the call.

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A replay will be available two hours following the completion of the call and will remain available until 11:59 pm (ET) on February�10, 2015. To listen to the replay, dial 1-855-859-2056 (international dial-in 404-537-3406) and provide the conference ID 63019020.

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

The archived webcast will be available immediately after the call via the same link on the Investor Relations page until February�10, 2015 at 11:59 pm (ET). An archived audio MP3 file will be available within 24 hours of the call.

Contact:

Diane P. Weidner

Asst. Vice President - Investor Relations

513-369-5713

Websites:

www.AFGinc.com

www.GreatAmericanInsuranceGroup.com

# # #

(Financial summaries follow)

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

AFG15-03

Page 7


AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES

SUMMARY OF EARNINGS AND SELECTED BALANCE SHEET DATA

(In Millions, Except Per Share Data)

�� Three�months�ended
December�31,
�� Twelve�months�ended
December�31,
�� 2014 2013 �� 2014 2013

Revenues

�� ��

P&C insurance net earned premiums

�� $ 1,061 �� $ 859 �� �� $ 3,878 �� $ 3,204 ��

Life, accident�& health net earned premiums

�� 26 �� 27 �� �� 108 �� 114 ��

Net investment income

�� 384 �� 350 �� �� 1,501 �� 1,346 ��

Realized gains

�� 8 �� 63 �� �� 52 �� 217 ��

Income (loss) of managed investment entities:

�� ��

Investment income

�� 32 �� 30 �� �� 116 �� 128 ��

Gain (loss) on change in fair value of assets/liabilities

�� (9 )� 7 �� �� (44 )� (14 )�

Other income

�� 27 �� 26 �� �� 102 �� 97 ��
��

��

Total revenues

�� 1,529 �� 1,362 �� �� 5,713 �� 5,092 ��
��

��

Costs and expenses

�� ��

P&C insurance losses�& expenses

�� 982 �� 784 �� �� 3,666 �� 3,059 ��

Annuity, life, accident�& health benefits�& expenses

�� 253 �� 216 �� �� 985 �� 858 ��

Interest charges on borrowed money

�� 20 �� 17 �� �� 73 �� 71 ��

Expenses of managed investment entities

�� 22 �� 21 �� �� 82 �� 89 ��

Other expenses

�� 62 �� 78 �� �� 281 �� 326 ��
��

��

Total costs and expenses

�� 1,339 �� 1,116 �� �� 5,087 �� 4,403 ��
��

��

Earnings before income taxes

�� 190 �� 246 �� �� 626 �� 689 ��

Provision for income taxes(c)

�� 65 �� 81 �� �� 220 �� 236 ��
��

��

Net earnings including noncontrolling interests

�� 125 �� 165 �� �� 406 �� 453 ��

Less: Net earnings (loss) attributable to noncontrolling interests

�� (2 )� 7 �� �� (46 )� (18 )�
��

��

Net earnings attributable to shareholders

�� $ 127 �� $ 158 �� �� $ 452 �� $ 471 ��
��

��

Diluted Earnings per Common Share

�� $ 1.41 �� $ 1.73 �� �� $ 4.97 �� $ 5.16 ��
��

��

Average number of diluted shares

�� 89.8 �� 91.4 �� �� 91.0 �� 91.2 ��

�� December�31, �� December�31,
�� 2014 �� 2013

Selected Balance Sheet Data:

�� ��

Total cash and investments

�� $ 36,210 �� �� $ 31,313 ��

Long-term debt

�� $ 1,061 �� �� $ 913 ��

Shareholders� equity(d)

�� $ 4,879 �� �� $ 4,599 ��

Shareholders� equity (excluding appropriated retained earnings and unrealized gains/losses on fixed maturities)(d)

�� $ 4,277 �� �� $ 4,109 ��

Book Value Per Share:

�� ��

Excluding appropriated retained earnings

�� $ 55.65 �� �� $ 50.83 ��

Excluding appropriated retained earnings and unrealized gains/losses on fixed maturities

�� $ 48.76 �� �� $ 45.90 ��

Common Shares Outstanding

�� 87.7 �� �� 89.5 ��

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


AMERICAN FINANCIAL GROUP, INC.

SPECIALTY P&C OPERATIONS

(Dollars in Millions)

�� Three�months�ended
December�31,
Pct.
Change
Twelve�months�ended
December�31,
Pct.
Change
�� 2014 2013 2014 2013

Gross written premiums

�� $ 1,303 �� $ 1,071 �� 22 %� $ 5,477 �� $ 4,805 �� 14 %�
��

Net written premiums

�� $ 1,025 �� $ 821 �� 25 %� $ 4,020 �� $ 3,341 �� 20 %�
��

Ratios (GAAP):

��

Loss�& LAE ratio

�� 64.0 %� 62.4 %� 63.7 %� 61.7 %�

Underwriting expense ratio

�� 28.6 %� 28.9 %� 30.2 %� 31.8 %�
��

Specialty Combined Ratio

�� 92.6 %� 91.3 %� 93.9 %� 93.5 %�
��

Combined Ratio (Including A&E)

�� 92.6 %� 91.4 %� 94.5 %� 95.5 %�
��

Supplemental Information:(e)

��

Gross Written Premiums:

��

Property�& Transportation

�� $ 482 �� $ 447 �� 8 %� $ 2,342 �� $ 2,392 �� (2 %)�

Specialty Casualty

�� 660 �� 459 �� 44 %� 2,529 �� 1,790 �� 41 %�

Specialty Financial

�� 160 �� 164 �� (2 %)� 605 �� 622 �� (3 %)�

Other

�� 1 �� 1 �� ��� �� 1 �� 1 �� ��� ��
��

�� $ 1,303 �� $ 1,071 �� 22 %� $ 5,477 �� $ 4,805 �� 14 %�
��

Net Written Premiums:

��

Property�& Transportation

�� $ 373 �� $ 349 �� 7 %� $ 1,566 �� $ 1,547 �� 1 %�

Specialty Casualty

�� 498 �� 321 �� 55 %� 1,864 �� 1,224 �� 52 %�

Specialty Financial

�� 131 �� 132 �� (1 %)� 488 �� 486 �� ��� ��

Other

�� 23 �� 19 �� 21 %� 102 �� 84 �� 21 %�
��

�� $ 1,025 �� $ 821 �� 25 %� $ 4,020 �� $ 3,341 �� 20 %�
��

Combined Ratio (GAAP):

��

Property�& Transportation

�� 94.6 %� 95.8 %� 98.7 %� 99.2 %�

Specialty Casualty

�� 92.9 %� 89.7 %� 92.3 %� 90.9 %�

Specialty Financial

�� 85.6 %� 85.2 %� 86.5 %� 85.6 %�

Aggregate Specialty Group

�� 92.6 %� 91.3 %� 93.9 %� 93.5 %�

�� Three�months�ended
December�31,
Twelve�months�ended
December�31,
�� 2014 2013 2014 2013

Reserve Development (Favorable)/Adverse:

��

Property�& Transportation

�� $ 3 �� $ 3 �� $ 16 �� $ (1 )�

Specialty Casualty

�� 14 �� 2 �� (7 )� (40 )�

Specialty Financial

�� (4 )� (4 )� (17 )� (14 )�

Other

�� (3 )� (6 )� (11 )� (20 )�
��

Aggregate Specialty Group Excluding A&E

�� 10 �� (5 )� (19 )� (75 )�

Special A&E Reserve Charge � P&C Run-off

�� ��� �� ��� �� 24 �� 54 ��

Other

�� ��� �� ��� �� 1 �� 6 ��
��

Total Reserve Development Including A&E

�� $ 10 �� $ (5 )� $ 6 �� $ (15 )�
��

Points on Combined Ratio:

��

Property�& Transportation

�� 0.6 �� 0.8 �� 1.0 �� (0.1 )�

Specialty Casualty

�� 2.9 �� 0.5 �� (0.4 )� (3.6 )�

Specialty Financial

�� (3.3 )� (3.2 )� (3.7 )� (3.0 )�

Aggregate Specialty Group

�� 1.0 �� (0.5 )� (0.5 )� (2.4 )�

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


AMERICAN FINANCIAL GROUP, INC.

ANNUITY SEGMENT

(Dollars in Millions)

Components of Statutory Premiums

�� Three�months�ended
December�31,
�� Pct.
Change
Twelve�months�ended
December�31,
�� Pct.
Change
�� 2014 �� 2013 �� 2014 �� 2013 ��

Annuity Premiums:

�� �� �� �� ��

Retail Single Premium

�� $ 424 �� �� $ 618 �� �� (31 %)� $ 1,634 �� �� $ 2,044 �� �� (20 %)�

Financial Institutions Single Premium

�� 487 �� �� 699 �� �� (30 %)� 1,821 �� �� 1,730 �� �� 5 %�

Education Market

�� 49 �� �� 51 �� �� (4 %)� 194 �� �� 207 �� �� (6 %)�

Variable Annuities

�� 11 �� �� 13 �� �� (15 %)� 47 �� �� 52 �� �� (10 %)�
��

��

��

��

��

Total Annuity Premiums

�� $ 971 �� �� $ 1,381 �� �� (30 %)� $ 3,696 �� �� $ 4,033 �� �� (8 %)�
��

��

��

��

��

Components of Core Operating Earnings Before Income Taxes

�� Three�months�ended
December�31,
�� Pct.
Change
Twelve�months�ended
December�31,
�� Pct.
Change
�� 2014 �� 2013 �� 2014 �� 2013 ��

Revenues:

�� �� �� �� ��

Net investment income

�� $ 285 �� �� $ 270 �� �� 6 %� $ 1,136 �� �� $ 1,034 �� �� 10 %�

Other income

�� 21 �� �� 21 �� �� ��� �� 78 �� �� 67 �� �� 16 %�
��

��

��

��

��

Total revenues

�� 306 �� �� 291 �� �� 5 %� 1,214 �� �� 1,101 �� �� 10 %�

Costs and Expenses:

�� �� �� �� ��

Annuity benefits

�� 157 �� �� 137 �� �� 15 %� 648 �� �� 531 �� �� 22 %�

Acquisition expenses

�� 47 �� �� 35 �� �� 34 %� 156 �� �� 149 �� �� 5 %�

Other expenses

�� 17 �� �� 27 �� �� (37 %)� 82 �� �� 93 �� �� (12 %)�
��

��

��

��

��

Total costs and expenses

�� 221 �� �� 199 �� �� 11 %� 886 �� �� 773 �� �� 15 %�
��

��

��

��

��

Core operating earnings before income taxes

�� $ 85 �� �� $ 92 �� �� (8 %)� $ 328 �� �� $ 328 �� �� ��� ��
��

��

��

��

��

Supplemental Fixed Annuity Information

�� Three months ended
December 31,
Pct.
Change
Twelve months ended
December�31,
Pct.
Change
�� 2014 2013 2014 2013

Core Operating Earnings Before impact of fair value accounting on FIAs

�� $ 93 �� $ 86 �� 8 %� $ 362 �� $ 313 �� 16 %�

Impact of Fair Value Accounting

�� (8 )� 6 �� nm �� (34 )� 15 �� nm ��
��

Core operating earnings before income taxes

�� $ 85 �� $ 92 �� (8 %)� $ 328 �� $ 328 �� ��� ��
��

Average Fixed Annuity Reserves*

�� $ 23,104 �� $ 20,092 �� 15 %� $ 22,119 �� $ 18,696 �� 18 %�

Net Interest Spread

�� 2.64 %� 2.86 %� 2.78 %� 2.94 %�

Net Spread Earned Before Impact of Fair Value Accounting*

�� 1.54 %� 1.55 %� 1.56 %� 1.52 %�

Net Spread Earned After Impact of Fair Value Accounting

�� 1.40 %� 1.67 %� 1.41 %� 1.60 %�

* Excludes fixed annuity portion of variable annuity business.


AMERICAN FINANCIAL GROUP, INC.

Notes to Financial Schedules

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

�� Three�months�ended
December�31,
Twelve�months�ended
December�31,
�� 2014 2013 2014 2013

Core Operating Earnings before Income Taxes:

��

P&C insurance segment

Annuity segment

�� $

141

85

��

��

$

131

92

��

��

$

476

328

��

��

$

422

328

��

��

Run-off long-term care and life segment

�� (7 )� (3 )� (10 )� (10 )�

Interest�& other corporate expense

�� (35 )� (45 )� (143 )� (168 )�
��

Core operating earnings before income taxes

�� 184 �� 175 �� 651 �� 572 ��

Related income taxes

�� 62 �� 58 �� 212 �� 187 ��
��

Core net operating earnings

�� $ 122 �� $ 117 �� $ 439 �� $ 385 ��
��

b) Reflects the following effects of special A&E charges during the twelve months ended December�31, 2014 and 2013 (dollars in millions, except per share amounts):

�� Pretax �� After-tax �� EPS
�� 2014 �� 2013 �� 2014 �� 2013 �� 2014 �� 2013

A&E Charge:

�� �� �� �� �� ��

P&C insurance run-off operations

�� �� �� �� �� ��

Asbestos

�� $ 4 �� �� $ 16 �� �� $ 3 �� �� $ 10 �� �� ��

Environmental

�� 20 �� �� 38 �� �� 12 �� �� 25 �� �� ��
�� $ 24 �� �� $ 54 �� �� $ 15 �� �� $ 35 �� �� $ 0.17 �� �� $ 0.39 ��

Former railroad�& manufacturing operations

�� �� �� �� �� ��

Asbestos

�� $ ��� �� �� $ 2 �� �� $ ��� �� �� $ 1 �� �� ��

Environmental

�� 6 �� �� 20 �� �� 4 �� �� 13 �� �� ��
�� $ 6 �� �� $ 22 �� �� $ 4 �� �� $ 14 �� �� $ 0.04 �� �� $ 0.15 ��

Total A&E

�� $ 30 �� �� $ 76 �� �� $ 19 �� �� $ 49 �� �� $ 0.21 �� �� $ 0.54 ��

c) Earnings before income taxes include $4 million and $51 million in non-deductible losses attributable to noncontrolling interests related to managed investment entities in the fourth quarter and full year of 2014, respectively, and $4 million of non-taxable income and $26 million in non-deductible losses in the fourth quarter and full year of 2013, respectively.

d) Shareholders� Equity at December�31, 2014 includes $604 million ($6.89 per share) in unrealized after-tax gains on fixed maturities and ($2) million ($0.03 per share) of retained earnings appropriated to managed investment entities. Shareholders� Equity at December�31, 2013 includes $441 million ($4.93 per share) in unrealized after-tax gains on fixed maturities and $49 million ($0.55 per share) of retained earnings appropriated to managed investment entities. The appropriated retained earnings will ultimately inure to the benefit of the debt holders of the investment entities managed by AFG.

e) Supplemental Notes:

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

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

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

Other includes an internal reinsurance facility.

Exhibit 99.2

LOGO

American Financial Group, Inc.

Investor Supplement - Fourth Quarter 2014

February�2, 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 - Fourth Quarter 2014

�� LOGO

Section

�� Page

Table of Contents - Investor Supplement - Fourth Quarter 2014

�� 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 ��

Appendix

��

Attribution of Changes in Long-Term Care Net Loss Recognition Margin

�� 28 ��

Reinvestment Rates Used in Loss Recognition Testing and Annuity Unlocking

�� 29 ��

2


American Financial Group, Inc.

Financial Highlights

(in millions, except per share information)

�� LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Highlights

��

Core net operating earnings

�� $ 122 �� $ 127 �� $ 99 �� $ 91 �� $ 117 �� $ 439 �� $ 385 ��

Net earnings

�� 127 �� 116 �� 106 �� 103 �� 158 �� 452 �� 471 ��

Total assets

�� 47,535 �� 46,552 �� 45,355 �� 42,770 �� 42,087 �� 47,535 �� 42,087 ��

Adjusted shareholders� equity (a)

�� 4,277 �� 4,300 �� 4,298 �� 4,191 �� 4,109 �� 4,277 �� 4,109 ��

Property and Casualty net written premiums

�� 1,025 �� 1,242 �� 998 �� 755 �� 821 �� 4,020 �� 3,341 ��

Annuity statutory premiums

�� 971 �� 809 �� 949 �� 967 �� 1,381 �� 3,696 �� 4,033 ��

Per share data

��

Core net operating earnings per share

�� $ 1.35 �� $ 1.40 �� $ 1.07 �� $ 1.00 �� $ 1.28 �� $ 4.82 �� $ 4.22 ��

Diluted earnings per share

�� 1.41 �� 1.28 �� 1.15 �� 1.13 �� 1.73 �� 4.97 �� 5.16 ��

Adjusted book value per share (a)

�� 48.76 �� 48.59 �� 47.95 �� 46.79 �� 45.90 �� 48.76 �� 45.90 ��

Cash dividends per common share

�� 1.250 �� 0.220 �� 0.220 �� 0.220 �� 1.220 �� 1.910 �� 1.805 ��

Financial ratios

��

Annualized core operating return on equity (b)

�� 11.7 %� 12.3 %� 9.6 %� 9.1 %� 11.8 %� 10.7 %� 10.0 %�

Annualized return on equity (b)

�� 12.1 %� 11.1 %� 10.3 %� 10.3 %� 16.0 %� 11.0 %� 12.3 %�

Property and Casualty combined ratio - Specialty:

��

Loss�& LAE ratio

�� 64.0 %� 67.1 %� 64.6 %� 56.9 %� 62.4 %� 63.7 %� 61.7 %�

Underwriting expense ratio

�� 28.6 %� 26.7 %� 32.3 %� 35.3 %� 28.9 %� 30.2 %� 31.8 %�
��

Combined ratio - Specialty

�� 92.6 %� 93.8 %� 96.9 %� 92.2 %� 91.3 %� 93.9 %� 93.5 %�
��

Net spread on fixed annuities:

��

Net interest spread

�� 2.64 %� 2.77 %� 2.92 %� 2.81 %� 2.86 %� 2.78 %� 2.94 %�

Net spread earned:

��

Before impact of fair value accounting

�� 1.54 %� 1.50 %� 1.64 %� 1.58 %� 1.55 %� 1.56 %� 1.52 %�

Impact of fair value accounting (c)

�� (0.14 %)� (0.02 %)� (0.18 %)� (0.28 %)� 0.12 %� (0.15 %)� 0.08 %�
��

After impact of fair value accounting

�� 1.40 %� 1.48 %� 1.46 %� 1.30 %� 1.67 %� 1.41 %� 1.60 %�
��

(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.

3


American Financial Group, Inc.

Summary of Earnings

($ in millions)

�� LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Property and Casualty Insurance

��

Underwriting profit

�� $ 79 �� $ 70 �� $ 29 �� $ 58 �� $ 75 �� $ 236 �� $ 199 ��

Net investment income

�� 75 �� 76 �� 76 �� 67 �� 67 �� 294 �� 263 ��

Other expense

�� (13 )� (16 )� (8 )� (17 )� (11 )� (54 )� (40 )�
��

Property and Casualty Insurance operating earnings

�� 141 �� 130 �� 97 �� 108 �� 131 �� 476 �� 422 ��

Annuity earnings

�� 85 �� 86 �� 84 �� 73 �� 92 �� 328 �� 328 ��

Run-off Long-Term Care and Life (losses)/earnings

�� (7 )� 1 �� (2 )� (2 )� (3 )� (10 )� (10 )�

Interest expense of parent holding companies

�� (19 )� (17 )� (16 )� (17 )� (17 )� (69 )� (68 )�

Other expense

�� (16 )� (13 )� (21 )� (24 )� (28 )� (74 )� (100 )�
��

Pre-tax core operating earnings

�� 184 �� 187 �� 142 �� 138 �� 175 �� 651 �� 572 ��

Income tax expense

�� 62 �� 60 �� 43 �� 47 �� 58 �� 212 �� 187 ��
��

Core net operating earnings

�� 122 �� 127 �� 99 �� 91 �� 117 �� 439 �� 385 ��

Non-core items, net of tax:

��

Realized gains

�� 5 �� 8 �� 7 �� 12 �� 41 �� 32 �� 138 ��

Significant A&E charges:

��

Property and Casualty Insurance run-off operations

�� ��� �� (15 )� ��� �� ��� �� ��� �� (15 )� (35 )�

Former Railroad and Manufacturing operations

�� ��� �� (4 )� ��� �� ��� �� ��� �� (4 )� (14 )�

ELNY guaranty fund assessments charge (a)

�� ��� �� ��� �� ��� �� ��� �� ��� �� ��� �� (3 )�
��

Net earnings

�� $ 127 �� $ 116 �� $ 106 �� $ 103 �� $ 158 �� $ 452 �� $ 471 ��
��

(a) The ELNY guaranty fund assessments charge represent guaranty fund assessments in connection with the insolvency and liquidation of Executive Life Insurance Company of New York, an unaffiliated life insurance company.

4


American Financial Group, Inc.

Earnings Per Share Summary

(in millions, except per share information)

�� LOGO

�� Three Months Ended �� Twelve�Months�Ended
�� 12/31/14 �� 09/30/14 06/30/14 �� 03/31/14 �� 12/31/13 �� 12/31/14 12/31/13

Core net operating earnings

�� $ 122 �� �� $ 127 �� $ 99 �� �� $ 91 �� �� $ 117 �� �� $ 439 �� $ 385 ��
��

��

��

��

��

Net earnings

�� $ 127 �� �� $ 116 �� $ 106 �� �� $ 103 �� �� $ 158 �� �� $ 452 �� $ 471 ��
��

��

��

��

��

Average number of diluted shares

�� 89.772 �� �� 90.873 �� 91.593 �� �� 91.621 �� �� 91.438 �� �� 90.960 �� 91.242 ��

Diluted earnings per share:

�� �� �� �� ��

Core net operating earnings per share

�� $ 1.35 �� �� $ 1.40 �� $ 1.07 �� �� $ 1.00 �� �� $ 1.28 �� �� $ 4.82 �� $ 4.22 ��

Realized gains

�� 0.06 �� �� 0.09 �� 0.08 �� �� 0.13 �� �� 0.45 �� �� 0.36 �� 1.52 ��

Significant A&E charges:

�� �� �� �� ��

Property and Casualty Insurance run-off operations

�� ��� �� �� (0.17 )� ��� �� �� ��� �� �� ��� �� �� (0.17 )� (0.39 )�

Former Railroad and Manufacturing operations

�� ��� �� �� (0.04 )� ��� �� �� ��� �� �� ��� �� �� (0.04 )� (0.15 )�

ELNY guaranty fund assessments charge (a)

�� ��� �� �� ��� �� ��� �� �� ��� �� �� ��� �� �� ��� �� (0.04 )�
��

��

��

��

��

Diluted earnings per share

�� $ 1.41 �� �� $ 1.28 �� $ 1.15 �� �� $ 1.13 �� �� $ 1.73 �� �� $ 4.97 �� $ 5.16 ��
��

��

��

��

��

(a) The ELNY guaranty fund assessments charge represent guaranty fund assessments in connection with the insolvency and liquidation of Executive Life Insurance Company of New York, an unaffiliated life insurance company.

5


American Financial Group, Inc.

Property and Casualty Insurance - Summary Underwriting Results (GAAP)

($ in millions)

�� LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Property and Transportation

�� $ 22 �� $ 11 �� $ (18 )� $ 6 �� $ 17 �� $ 21 �� $ 12 ��

Specialty Casualty

�� 36 �� 32 �� 30 �� 38 �� 32 �� 136 �� 102 ��

Specialty Financial

�� 18 �� 21 �� 15 �� 10 �� 17 �� 64 �� 67 ��

Other Specialty

�� 3 �� 6 �� 2 �� 5 �� 9 �� 16 �� 25 ��
��

Underwriting profit - Specialty

�� 79 �� 70 �� 29 �� 59 �� 75 �� 237 �� 206 ��

Other charges, included in loss and LAE

�� ��� �� ��� �� ��� �� 1 �� ��� �� 1 �� 7 ��
��

Underwriting profit - Core

�� 79 �� 70 �� 29 �� 58 �� 75 �� 236 �� 199 ��

Special A&E charges, included in loss and LAE

�� ��� �� (24 )� ��� �� ��� �� ��� �� (24 )� (54 )�
��

Underwriting profit - Property and Casualty Insurance

�� $ 79 �� $ 46 �� $ 29 �� $ 58 �� $ 75 �� $ 212 �� $ 145 ��
��

Included in results above:

��

Current accident year catastrophe losses:

��

Catastrophe reinstatement premium

�� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� ��

Catastrophe loss

�� 3 �� 3 �� 10 �� 12 �� 1 �� 28 �� 31 ��
��

Total current accident year catastrophe losses

�� $ 3 �� $ 3 �� $ 10 �� $ 12 �� $ 1 �� $ 28 �� $ 31 ��
��

Prior year loss reserve development (favorable) / adverse

�� $ 10 �� $ 13 �� $ 14 �� $ (31 )� $ (5 )� $ 6 �� $ (15 )�
��

Combined ratio:

��

Property and Transportation

�� 94.6 %� 97.8 %� 105.5 %� 98.1 %� 95.8 %� 98.7 %� 99.2 %�

Specialty Casualty

�� 92.9 %� 93.3 %� 93.6 %� 87.8 %� 89.7 %� 92.3 %� 90.9 %�

Specialty Financial

�� 85.6 %� 81.6 %� 87.6 %� 91.0 %� 85.2 %� 86.5 %� 85.6 %�

Other Specialty

�� 86.9 %� 78.0 %� 89.0 %� 79.9 %� 60.4 %� 83.4 %� 68.8 %�

Combined ratio - Specialty

�� 92.6 %� 93.8 %� 96.9 %� 92.2 %� 91.3 %� 93.9 %� 93.5 %�

Other core charges

�� 0.0 %� 0.1 %� 0.0 %� 0.0 %� 0.1 %� 0.0 %� 0.3 %�

Special A&E charges

�� 0.0 %� 2.1 %� 0.0 %� 0.0 %� 0.0 %� 0.6 %� 1.7 %�
��

Combined ratio

�� 92.6 %� 96.0 %� 96.9 %� 92.2 %� 91.4 %� 94.5 %� 95.5 %�
��

Combined ratio excl. catastrophe and prior year development

�� 91.4 %� 94.5 %� 94.4 %� 94.8 %� 91.7 %� 93.7 %� 94.9 %�
��

Loss and LAE components - property and casualty insurance

��

Current accident year, excluding catastrophe loss

�� 62.8 %� 67.8 %� 62.1 %� 59.4 %� 62.8 %� 63.5 %� 63.1 %�

Prior accident year loss reserve development

�� 1.0 %� 1.2 %� 1.4 %� (4.1 %)� (0.4 %)� 0.1 %� (0.4 %)�

Current accident year catastrophe loss

�� 0.2 %� 0.3 %� 1.1 %� 1.6 %� 0.1 %� 0.7 %� 1.0 %�
��

Loss and LAE ratio

�� 64.0 %� 69.3 %� 64.6 %� 56.9 %� 62.5 %� 64.3 %� 63.7 %�
��

6


American Financial Group, Inc.

Specialty - Underwriting Results (GAAP)

($ in millions)

LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Gross written premiums

�� $ 1,303 �� $ 1,859 �� $ 1,291 �� $ 1,024 �� $ 1,071 �� $ 5,477 �� $ 4,805 ��

Ceded reinsurance premiums

�� (278 )� (617 )� (293 )� (269 )� (250 )� (1,457 )� (1,464 )�
��

Net written premiums

1,025 �� 1,242 �� 998 �� 755 �� 821 �� 4,020 �� 3,341 ��

Change in unearned premiums

36 �� (110 )� (67 )� (1 )� 38 �� (142 )� (137 )�
��

Net earned premiums

1,061 �� 1,132 �� 931 �� 754 �� 859 �� 3,878 �� 3,204 ��

Loss and LAE

679 �� 760 �� 602 �� 428 �� 537 �� 2,469 �� 1,979 ��

Underwriting expense

303 �� 302 �� 300 �� 267 �� 247 �� 1,172 �� 1,019 ��
��

Underwriting profit

$ 79 �� $ 70 �� $ 29 �� $ 59 �� $ 75 �� $ 237 �� $ 206 ��
��

Included in results above:

Current accident year catastrophe losses:

Catastrophe reinstatement premium

$ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� ��

Catastrophe loss

3 �� 3 �� 10 �� 12 �� 1 �� 28 �� 31 ��
��

Total current accident year catastrophe losses

$ 3 �� $ 3 �� $ 10 �� $ 12 �� $ 1 �� $ 28 �� $ 31 ��
��

Prior year loss reserve development (favorable) / adverse

$ 10 �� $ (11 )� $ 14 �� $ (32 )� $ (5 )� $ (19 )� $ (75 )�
��

Combined ratio:

Loss and LAE ratio

64.0 %� 67.1 %� 64.6 %� 56.9 %� 62.4 %� 63.7 %� 61.7 %�

Underwriting expense ratio

28.6 %� 26.7 %� 32.3 %� 35.3 %� 28.9 %� 30.2 %� 31.8 %�
��

Combined ratio

92.6 %� 93.8 %� 96.9 %� 92.2 %� 91.3 %� 93.9 %� 93.5 %�
��

Combined ratio excl. catastrophe and prior year development

91.4 %� 94.5 %� 94.4 %� 94.8 %� 91.7 %� 93.7 %� 94.9 %�
��

Loss and LAE components:

Current accident year, excluding catastrophe loss

62.8 %� 67.8 %� 62.1 %� 59.5 %� 62.8 %� 63.5 %� 63.1 %�

Prior accident year loss reserve development

1.0 %� (1.0 %)� 1.4 %� (4.2 %)� (0.5 %)� (0.5 %)� (2.4 %)�

Current accident year catastrophe loss

0.2 %� 0.3 %� 1.1 %� 1.6 %� 0.1 %� 0.7 %� 1.0 %�
��

Loss and LAE ratio

64.0 %� 67.1 %� 64.6 %� 56.9 %� 62.4 %� 63.7 %� 61.7 %�
��

7


American Financial Group, Inc.

Property and Transportation - Underwriting Results (GAAP)

($ in millions)

�� LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Gross written premiums

�� $ 482 �� $ 995 �� $ 489 �� $ 376 �� $ 447 �� $ 2,342 �� $ 2,392 ��

Ceded reinsurance premiums

�� (109 )� (439 )� (136 )� (92 )� (98 )� (776 )� (845 )�
��

Net written premiums

�� 373 �� 556 �� 353 �� 284 �� 349 �� 1,566 �� 1,547 ��

Change in unearned premiums

�� 42 �� (52 )� (29 )� 17 �� 61 �� (22 )� (26 )�
��

Net earned premiums

�� 415 �� 504 �� 324 �� 301 �� 410 �� 1,544 �� 1,521 ��

Loss and LAE

�� 299 �� 407 �� 248 �� 201 �� 307 �� 1,155 �� 1,142 ��

Underwriting expense

�� 94 �� 86 �� 94 �� 94 �� 86 �� 368 �� 367 ��
��

Underwriting profit (loss)

�� $ 22 �� $ 11 �� $ (18 )� $ 6 �� $ 17 �� $ 21 �� $ 12 ��
��

Included in results above:

��

Current accident year catastrophe losses:

��

Catastrophe reinstatement premium

�� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� ��

Catastrophe loss

�� 2 �� 1 �� 8 �� 9 �� ��� �� 20 �� 27 ��
��

Total current accident year catastrophe losses

�� $ 2 �� $ 1 �� $ 8 �� $ 9 �� $ ��� �� $ 20 �� $ 27 ��
��

Prior year loss reserve development (favorable) / adverse

�� $ 3 �� $ (5 )� $ 22 �� $ (4 )� $ 3 �� $ 16 �� $ (1 )�
��

Combined ratio:

��

Loss and LAE ratio

�� 72.2 %� 80.7 %� 76.4 %� 67.0 %� 74.9 %� 74.9 %� 75.1 %�

Underwriting expense ratio

�� 22.4 %� 17.1 %� 29.1 %� 31.1 %� 20.9 %� 23.8 %� 24.1 %�
��

Combined ratio

�� 94.6 %� 97.8 %� 105.5 %� 98.1 %� 95.8 %� 98.7 %� 99.2 %�
��

Combined ratio excl. catastrophe and prior year development

�� 93.7 %� 98.5 %� 96.2 %� 96.4 %� 95.0 %� 96.4 %� 97.5 %�
��

Loss and LAE components:

��

Current accident year, excluding catastrophe loss

�� 71.3 %� 81.4 %� 67.1 %� 65.3 %� 74.1 %� 72.6 %� 73.4 %�

Prior accident year loss reserve development

�� 0.6 %� (0.9 %)� 6.6 %� (1.1 %)� 0.8 %� 1.0 %� (0.1 %)�

Current accident year catastrophe loss

�� 0.3 %� 0.2 %� 2.7 %� 2.8 %� 0.0 %� 1.3 %� 1.8 %�
��

Loss and LAE ratio

�� 72.2 %� 80.7 %� 76.4 %� 67.0 %� 74.9 %� 74.9 %� 75.1 %�
��

8


American Financial Group, Inc.

Specialty Casualty - Underwriting Results (GAAP)

($ in millions)

�� LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Gross written premiums

�� $ 660 �� $ 707 �� $ 655 �� $ 507 �� $ 459 �� $ 2,529 �� $ 1,790 ��

Ceded reinsurance premiums

�� (162 )� (171 )� (156 )� (176 )� (138 )� (665 )� (566 )�
��

Net written premiums

�� 498 �� 536 �� 499 �� 331 �� 321 �� 1,864 �� 1,224 ��

Change in unearned premiums

�� 1 �� (50 )� (32 )� (18 )� (11 )� (99 )� (89 )�
��

Net earned premiums

�� 499 �� 486 �� 467 �� 313 �� 310 �� 1,765 �� 1,135 ��

Loss and LAE

�� 325 �� 310 �� 300 �� 172 �� 183 �� 1,107 �� 653 ��

Underwriting expense

�� 138 �� 144 �� 137 �� 103 �� 95 �� 522 �� 380 ��
��

Underwriting profit

�� $ 36 �� $ 32 �� $ 30 �� $ 38 �� $ 32 �� $ 136 �� $ 102 ��
��

Included in results above:

��

Current accident year catastrophe losses:

��

Catastrophe reinstatement premium

�� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� ��

Catastrophe loss

�� 1 �� 1 �� 1 �� 1 �� ��� �� 4 �� 1 ��
��

Total current accident year catastrophe losses

�� $ 1 �� $ 1 �� $ 1 �� $ 1 �� $ ��� �� $ 4 �� $ 1 ��
��

Prior year loss reserve development (favorable) / adverse

�� $ 14 �� $ 7 �� $ (4 )� $ (24 )� $ 2 �� $ (7 )� $ (40 )�
��

Combined ratio:

��

Loss and LAE ratio

�� 65.1 %� 63.7 %� 64.3 %� 55.0 %� 59.0 %� 62.7 %� 57.5 %�

Underwriting expense ratio

�� 27.8 %� 29.6 %� 29.3 %� 32.8 %� 30.7 %� 29.6 %� 33.4 %�
��

Combined ratio

�� 92.9 %� 93.3 %� 93.6 %� 87.8 %� 89.7 %� 92.3 %� 90.9 %�
��

Combined ratio excl. catastrophe and prior year development

�� 89.9 %� 91.6 %� 94.3 %� 95.1 %� 89.2 %� 92.5 %� 94.4 %�
��

Loss and LAE components:

��

Current accident year, excluding catastrophe loss

�� 62.1 %� 62.0 %� 65.0 %� 62.3 %� 58.5 %� 62.9 %� 61.0 %�

Prior accident year loss reserve development

�� 2.9 %� 1.3 %� (0.8 %)� (7.7 %)� 0.5 %� (0.4 %)� (3.6 %)�

Current accident year catastrophe loss

�� 0.1 %� 0.4 %� 0.1 %� 0.4 %� 0.0 %� 0.2 %� 0.1 %�
��

Loss and LAE ratio

�� 65.1 %� 63.7 %� 64.3 %� 55.0 %� 59.0 %� 62.7 %� 57.5 %�
��

9


American Financial Group, Inc.

Specialty Financial - Underwriting Results (GAAP)

($ in millions)

�� LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Gross written premiums

�� $ 160 �� $ 157 �� $ 147 �� $ 141 �� $ 164 �� $ 605 �� $ 622 ��

Ceded reinsurance premiums

�� (29 )� (36 )� (27 )� (25 )� (32 )� (117 )� (136 )�
��

Net written premiums

�� 131 �� 121 �� 120 �� 116 �� 132 �� 488 �� 486 ��

Change in unearned premiums

�� (10 )� (6 )� (4 )� 1 �� (13 )� (19 )� (17 )�
��

Net earned premiums

�� 121 �� 115 �� 116 �� 117 �� 119 �� 469 �� 469 ��

Loss and LAE

�� 42 �� 32 �� 40 �� 45 �� 42 �� 159 �� 158 ��

Underwriting expense

�� 61 �� 62 �� 61 �� 62 �� 60 �� 246 �� 244 ��
��

Underwriting profit

�� $ 18 �� $ 21 �� $ 15 �� $ 10 �� $ 17 �� $ 64 �� $ 67 ��
��

Included in results above:

��

Current accident year catastrophe losses:

��

Catastrophe reinstatement premium

�� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� ��

Catastrophe loss

�� ��� �� ��� �� 1 �� 2 �� 1 �� 3 �� 3 ��
��

Total current accident year catastrophe losses

�� $ ��� �� $ ��� �� $ 1 �� $ 2 �� $ 1 �� $ 3 �� $ 3 ��
��

Prior year loss reserve development (favorable) / adverse

�� $ (4 )� $ (10 )� $ (2 )� $ (1 )� $ (4 )� $ (17 )� $ (14 )�
��

Combined ratio:

��

Loss and LAE ratio

�� 34.5 %� 27.7 %� 35.3 %� 37.9 %� 34.2 %� 33.9 %� 33.5 %�

Underwriting expense ratio

�� 51.1 %� 53.9 %� 52.3 %� 53.1 %� 51.0 %� 52.6 %� 52.1 %�
��

Combined ratio

�� 85.6 %� 81.6 %� 87.6 %� 91.0 %� 85.2 %� 86.5 %� 85.6 %�
��

Combined ratio excl. catastrophe and prior year development

�� 88.8 %� 90.3 %� 88.6 %� 90.2 %� 87.7 %� 89.5 %� 88.0 %�
��

Loss and LAE components:

��

Current accident year, excluding catastrophe loss

�� 37.7 %� 36.4 %� 36.3 %� 37.1 %� 36.7 %� 36.9 %� 35.9 %�

Prior accident year loss reserve development

�� (3.3 %)� (9.0 %)� (1.8 %)� (0.7 %)� (3.2 %)� (3.7 %)� (3.0 %)�

Current accident year catastrophe loss

�� 0.1 %� 0.3 %� 0.8 %� 1.5 %� 0.7 %� 0.7 %� 0.6 %�
��

Loss and LAE ratio

�� 34.5 %� 27.7 %� 35.3 %� 37.9 %� 34.2 %� 33.9 %� 33.5 %�
��

10


American Financial Group, Inc.

Other Specialty - Underwriting Results (GAAP)

($ in millions)

�� LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Gross written premiums

�� $ 1 �� $ ��� �� $ ��� �� $ ��� �� $ 1 �� $ 1 �� $ 1 ��

Ceded reinsurance premiums

�� 22 �� 29 �� 26 �� 24 �� 18 �� 101 �� 83 ��
��

Net written premiums

�� 23 �� 29 �� 26 �� 24 �� 19 �� 102 �� 84 ��

Change in unearned premiums

�� 3 �� (2 )� (2 )� (1 )� 1 �� (2 )� (5 )�
��

Net earned premiums

�� 26 �� 27 �� 24 �� 23 �� 20 �� 100 �� 79 ��

Loss and LAE

�� 13 �� 11 �� 14 �� 10 �� 5 �� 48 �� 26 ��

Underwriting expense

�� 10 �� 10 �� 8 �� 8 �� 6 �� 36 �� 28 ��
��

Underwriting profit

�� $ 3 �� $ 6 �� $ 2 �� $ 5 �� $ 9 �� $ 16 �� $ 25 ��
��

Included in results above:

��

Current accident year catastrophe losses:

��

Catastrophe reinstatement premium

�� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� �� $ ��� ��

Catastrophe loss

�� ��� �� 1 �� ��� �� ��� �� ��� �� 1 �� ��� ��
��

Total current accident year catastrophe losses

�� $ ��� �� $ 1 �� $ ��� �� $ ��� �� $ ��� �� $ 1 �� $ ��� ��
��

Prior year loss reserve development (favorable) / adverse

�� $ (3 )� $ (3 )� $ (2 )� $ (3 )� $ (6 )� $ (11 )� $ (20 )�
��

Combined ratio:

��

Loss and LAE ratio

�� 49.6 %� 43.4 %� 53.2 %� 45.8 %� 28.3 %� 47.9 %� 32.9 %�

Underwriting expense ratio

�� 37.3 %� 34.6 %� 35.8 %� 34.1 %� 32.1 %� 35.5 %� 35.9 %�
��

Combined ratio

�� 86.9 %� 78.0 %� 89.0 %� 79.9 %� 60.4 %� 83.4 %� 68.8 %�
��

Combined ratio excl. catastrophe and prior year development

�� 97.4 %� 85.6 %� 97.1 %� 91.4 %� 87.5 %� 92.8 %� 93.6 %�
��

11


American Financial Group, Inc.

Annuity Earnings (GAAP)

($ in millions)

LOGO

�� Three Months Ended �� Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 �� 12/31/14 12/31/13

Net investment income

�� $ 285 �� $ 287 �� $ 289 �� $ 275 �� $ 270 �� �� $ 1,136 �� $ 1,034 ��

Guaranteed withdrawal benefit fees

�� 9 �� 9 �� 8 �� 8 �� 7 �� �� 34 �� 25 ��

Policy charges and other miscellaneous income

�� 12 �� 11 �� 11 �� 10 �� 14 �� �� 44 �� 42 ��
��

��

Total revenues

306 �� 307 �� 308 �� 293 �� 291 �� 1,214 �� 1,101 ��

Annuity benefits expense

157 �� 157 �� 166 �� 168 �� 137 �� 648 �� 531 ��

Acquisition expenses

47 �� 41 �� 37 �� 31 �� 35 �� 156 �� 149 ��

Other expenses

17 �� 23 �� 21 �� 21 �� 27 �� 82 �� 93 ��
��

��

Total costs and expenses

221 �� 221 �� 224 �� 220 �� 199 �� 886 �� 773 ��
��

��

Core Annuity earnings before income taxes

85 �� 86 �� 84 �� 73 �� 92 �� 328 �� 328 ��

ELNY guaranty fund assessments charge before
income tax (a)

��� �� ��� �� ��� �� ��� �� ��� �� ��� �� (5 )�
��

��

Annuity earnings before income taxes

$ 85 �� $ 86 �� $ 84 �� $ 73 �� $ 92 �� $ 328 �� $ 323 ��
��

��

Detail of core Annuity earnings before income taxes

Core earnings before income taxes and impact of fair value accounting

$ 93 �� $ 87 �� $ 94 �� $ 88 �� $ 86 �� $ 362 �� $ 313 ��

Impact of fair value accounting (b)

(8 )� (1 )� (10 )� (15 )� 6 �� (34 )� 15 ��
��

��

Core Annuity earnings before income taxes

$ 85 �� $ 86 �� $ 84 �� $ 73 �� $ 92 �� $ 328 �� $ 328 ��
��

��

(a) The ELNY guaranty fund assessments charge represent guaranty fund assessments in connection with the insolvency and liquidation of Executive Life Insurance Company of New York, an unaffiliated life insurance company.
(b) Change in fair value of derivatives offset by the estimated related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs.

12


American Financial Group, Inc.

Detail of Annuity Benefits Expense (GAAP)

($ in millions)

�� LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Detail of annuity benefits expense:

��

Interest credited - fixed

�� $ 127 �� $ 126 �� $ 123 �� $ 121 �� $ 118 �� $ 497 �� $ 451 ��

Interest credited - fixed component of variable annuities

�� 1 �� 2 �� 2 �� 1 �� 1 �� 6 �� 6 ��

Change in expected death and annuitization reserve

�� 4 �� 5 �� 5 �� 4 �� 5 �� 18 �� 19 ��

Amortization of sales inducements

�� 6 �� 7 �� 6 �� 7 �� 7 �� 26 �� 30 ��

Guaranteed withdrawal benefit reserve

�� 11 �� 12 �� 10 �� 8 �� 10 �� 41 �� 38 ��

Change in other benefit reserves

�� 1 �� 3 �� 5 �� 3 �� 1 �� 12 �� 7 ��

Unlockings (a)

�� (11 )� ��� �� ��� �� ��� �� 6 �� (11 )� 6 ��
��

Subtotal before impact of fair value accounting

�� 139 �� 155 �� 151 �� 144 �� 148 �� 589 �� 557 ��

Embedded derivative mark-to-market (b)

�� 87 �� 21 �� 78 �� 54 �� 74 �� 240 �� 184 ��

Equity option mark-to-market

�� (69 )� (19 )� (63 )� (30 )� (85 )� (181 )� (210 )�
��

Subtotal impact of fair value accounting

�� 18 �� 2 �� 15 �� 24 �� (11 )� 59 �� (26 )�
��

Total annuity benefits expense

�� $ 157 �� $ 157 �� $ 166 �� $ 168 �� $ 137 �� $ 648 �� $ 531 ��
��

(a) Includes unlockings for fixed indexed annuity embedded derivative reserves, sales inducement asset and other reserves. Does not include unlocking charge of $10mm in 2014 and income of $4mm in 2013 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 2014 and an unlocking charge of $2mm in 2013.
(b) Excludes unlocking impact of ($58) million in 2014 and ($2) million in 2013.

13


American Financial Group, Inc.

Net Spread on Fixed Annuities (GAAP)

($ in millions)

LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Average fixed annuity investments (at amortized cost)

�� $ 23,334 �� $ 22,730 �� $ 22,098 �� $ 21,402 �� $ 20,524 �� $ 22,391 �� $ 19,151 ��

Average annuity benefits accumulated

�� 23,104 �� 22,475 �� 21,829 �� 21,066 �� 20,092 �� 22,119 �� 18,696 ��
��

Investments in excess of annuity benefits accumulated

$ 230 �� $ 255 �� $ 269 �� $ 336 �� $ 432 �� $ 272 �� $ 455 ��
��

As % of average annuity benefits accumulated (except as noted)

Net investment income (as % of investments)

4.85 %� 5.01 %� 5.18 %� 5.10 %� 5.21 %� 5.03 %� 5.35 %�

Interest credited

(2.21 %)� (2.24 %)� (2.26 %)� (2.29 %)� (2.35 %)� (2.25 %)� (2.41 %)�
��

Net interest spread on fixed annuities

2.64 %� 2.77 %� 2.92 %� 2.81 %� 2.86 %� 2.78 %� 2.94 %�

Policy charges and other miscellaneous income

0.14 %� 0.14 %� 0.14 %� 0.13 %� 0.22 %� 0.14 %� 0.16 %�

Other annuity benefit expenses, net

(0.20 %)� (0.33 %)� (0.33 %)� (0.27 %)� (0.31 %)� (0.28 %)� (0.37 %)�

Acquisition expenses

(0.61 %)� (0.69 %)� (0.64 %)� (0.55 %)� (0.75 %)� (0.63 %)� (0.79 %)�

Other expenses

(0.28 %)� (0.37 %)� (0.36 %)� (0.37 %)� (0.53 %)� (0.34 %)� (0.46 %)�

Change in fair value of derivatives

(0.31 %)� (0.04 %)� (0.27 %)� (0.45 %)� 0.22 %� (0.27 %)� 0.13 %�

Unlockings

0.02 %� 0.00 %� 0.00 %� 0.00 %� (0.04 %)� 0.01 %� (0.01 %)�
��

Net spread earned on fixed annuities - core

1.40 %� 1.48 %� 1.46 %� 1.30 %� 1.67 %� 1.41 %� 1.60 %�
��

Average annuity benefits accumulated

$ 23,104 �� $ 22,475 �� $ 21,829 �� $ 21,066 �� $ 20,092 �� $ 22,119 �� $ 18,696 ��

Net spread earned on fixed annuities

1.40 %� 1.48 %� 1.46 %� 1.30 %� 1.67 %� 1.41 %� 1.60 %�
��

Earnings on fixed annuity benefits accumulated

$ 81 �� $ 83 �� $ 80 �� $ 68 �� $ 84 �� $ 312 �� $ 300 ��

Investments in excess of annuity benefits accumulated

$ 230 �� $ 255 �� $ 269 �� $ 336 �� $ 432 �� $ 272 �� $ 455 ��

Net investment income (as % of investments)

4.85 %� 5.01 %� 5.18 %� 5.10 %� 5.21 %� 5.03 %� 5.35 %�
��

Earnings on investments in excess of annuity benefits accumulated

$ 3 �� $ 3 �� $ 3 �� $ 5 �� $ 6 �� $ 14 �� 24 ��

Variable annuity earnings

1 �� ��� �� 1 �� ��� �� 2 �� 2 �� 4 ��
��

Earnings before income taxes - core

$ 85 �� $ 86 �� $ 84 �� $ 73 �� $ 92 �� $ 328 �� $ 328 ��
��

Detail of net spread earned on fixed annuities - core

Net spread earned core - before impact of fair value accounting

1.54 %� 1.50 %� 1.64 %� 1.58 %� 1.55 %� 1.56 %� 1.52 %�

Impact of fair value accounting (a)

(0.14 %)� (0.02 %)� (0.18 %)� (0.28 %)� 0.12 %� (0.15 %)� 0.08 %�
��

Net spread earned core - after impact of fair value accounting

1.40 %� 1.48 %� 1.46 %� 1.30 %� 1.67 %� 1.41 %� 1.60 %�
��

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

14


American Financial Group

Annuity Premiums (Statutory)

($ in millions)

LOGO

�� Three Months Ended �� Twelve�Months�Ended
�� 12/31/14 �� 09/30/14 �� 06/30/14 �� 03/31/14 �� 12/31/13 �� 12/31/14 �� 12/31/13

Retail single premium annuities - indexed

�� $ 405 �� �� $ 339 �� �� $ 403 �� �� $ 386 �� �� $ 565 �� �� $ 1,533 �� �� $ 1,879 ��

Retail single premium annuities - fixed

�� 19 �� �� 18 �� �� 25 �� �� 39 �� �� 53 �� �� 101 �� �� 165 ��

Financial institutions single premium annuities - indexed

�� 426 �� �� 333 �� �� 364 �� �� 366 �� �� 498 �� �� 1,489 �� �� 1,102 ��

Financial institutions single premium annuities - fixed

�� 61 �� �� 62 �� �� 95 �� �� 114 �� �� 201 �� �� 332 �� �� 628 ��

Education market - fixed and indexed annuities

�� 49 �� �� 46 �� �� 49 �� �� 50 �� �� 51 �� �� 194 �� �� 207 ��
��

��

��

��

��

��

��

Subtotal�fixed�annuity�premiums

960 �� 798 �� 936 �� 955 �� 1,368 �� 3,649 �� 3,981 ��

Variable annuities

11 �� 11 �� 13 �� 12 �� 13 �� 47 �� 52 ��
��

��

��

��

��

��

��

Total annuity premiums

$ 971 �� $ 809 �� $ 949 �� $ 967 �� $ 1,381 �� $ 3,696 �� $ 4,033 ��
��

��

��

��

��

��

��

15


American Financial Group, Inc.

Fixed Annuity Benefits Accumulated (GAAP)

($ in millions)

LOGO

�� Three Months Ended Twelve�Months�Ended
�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 12/31/14 12/31/13

Beginning fixed annuity reserves

�� $ 22,745 �� $ 22,205 �� $ 21,453 �� $ 20,679 �� $ 19,505 �� $ 20,679 �� $ 17,274 ��

Premiums

�� 960 �� 798 �� 936 �� 955 �� 1,368 �� 3,649 �� 3,981 ��

Federal Home Loan Bank advances

�� ��� �� ��� �� ��� �� ��� �� ��� �� ��� �� 200 ��

Surrenders, benefits and other withdrawals

�� (464 )� (426 )� (408 )� (375 )� (408 )� (1,673 )� (1,493 )�

Interest and other annuity benefit expenses:

��

Interest credited

�� 127 �� 126 �� 123 �� 121 �� 118 �� 497 �� 451 ��

Embedded derivative mark-to-market

�� 87 �� 21 �� 78 �� 54 �� 74 �� 240 �� 184 ��

Change in other benefit reserves

�� 18 �� 21 �� 23 �� 19 �� 18 �� 81 �� 78 ��

Unlockings

�� (11 )� ��� �� ��� �� ��� �� 4 �� (11 )� 4 ��
��

Ending fixed annuity reserves

$ 23,462 �� $ 22,745 �� $ 22,205 �� $ 21,453 �� $ 20,679 �� $ 23,462 �� $ 20,679 ��
��

Reconciliation to annuity benefits accumulated:

Ending fixed annuity reserves

$ 23,462 �� $ 22,745 �� $ 22,205 �� $ 21,453 �� $ 20,679 �� $ 23,462 �� $ 20,679 ��

Impact of unrealized investment gains on reserves

111 �� 107 �� 117 �� 97 �� 71 �� 111 �� 71 ��

Fixed component of variable annuities

191 �� 192 �� 194 �� 194 �� 194 �� 191 �� 194 ��
��

Annuity benefits accumulated per balance�sheet

$ 23,764 �� $ 23,044 �� $ 22,516 �� $ 21,744 �� $ 20,944 �� $ 23,764 �� $ 20,944 ��
��

Annualized surrenders and other withdrawals as a % of beginning reserves

8.2 %� 7.7 %� 7.6 %� 7.3 %� 8.4 %� 8.1 %� 8.6 %�

16


American Financial Group, Inc.

Consolidated Balance Sheet

($ in millions)

�� LOGO

�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 09/30/13

Assets:

��

Total cash and investments

�� $ 36,210 �� $ 35,151 �� $ 34,843 �� $ 32,727 �� $ 31,313 �� $ 29,921 ��

Recoverables from reinsurers

�� 3,238 �� 3,134 �� 3,107 �� 2,969 �� 3,157 �� 3,138 ��

Prepaid reinsurance premiums

�� 469 �� 587 �� 489 �� 438 �� 408 �� 662 ��

Agents� balances and premiums receivable

�� 889 �� 901 �� 902 �� 735 �� 739 �� 801 ��

Deferred policy acquisition costs

�� 821 �� 858 �� 806 �� 890 �� 975 �� 867 ��

Assets of managed investment entities

�� 3,108 �� 2,946 �� 2,799 �� 2,723 �� 2,888 �� 2,779 ��

Other receivables

�� 910 �� 1,140 �� 527 �� 524 �� 854 �� 1,078 ��

Variable annuity assets (separate accounts)

�� 662 �� 649 �� 681 �� 666 �� 665 �� 629 ��

Other assets

�� 1,027 �� 985 �� 1,001 �� 913 �� 903 �� 887 ��

Goodwill

�� 201 �� 201 �� 200 �� 185 �� 185 �� 185 ��
��

Total assets

�� $ 47,535 �� $ 46,552 �� $ 45,355 �� $ 42,770 �� $ 42,087 �� $ 40,947 ��
��

Liabilities and Equity:

��

Unpaid losses and loss adjustment expenses

�� $ 7,872 �� $ 7,645 �� $ 7,370 �� $ 6,134 �� $ 6,410 �� $ 6,441 ��

Unearned premiums

�� 1,956 �� 2,114 �� 1,911 �� 1,788 �� 1,757 �� 2,047 ��

Annuity benefits accumulated

�� 23,764 �� 23,044 �� 22,516 �� 21,744 �� 20,944 �� 19,785 ��

Life, accident and health reserves

�� 2,175 �� 2,098 �� 2,082 �� 2,039 �� 2,008 �� 2,011 ��

Payable to reinsurers

�� 645 �� 673 �� 445 �� 400 �� 508 �� 601 ��

Liabilities of managed investment entities

�� 2,819 �� 2,625 �� 2,499 �� 2,413 �� 2,567 �� 2,429 ��

Long-term debt

�� 1,061 �� 1,062 �� 912 �� 913 �� 913 �� 913 ��

Variable annuity liabilities (separate accounts)

�� 662 �� 649 �� 681 �� 666 �� 665 �� 629 ��

Other liabilities

�� 1,527 �� 1,564 �� 1,781 �� 1,700 �� 1,546 �� 1,381 ��
��

Total liabilities

�� $ 42,481 �� $ 41,474 �� $ 40,197 �� $ 37,797 �� $ 37,318 �� $ 36,237 ��

Shareholders� equity:

��

Common stock

�� $ 88 �� $ 88 �� $ 90 �� $ 90 �� $ 90 �� $ 89 ��

Capital surplus

�� 1,152 �� 1,150 �� 1,152 �� 1,138 �� 1,123 �� 1,109 ��

Appropriated retained earnings

�� (2 )� 2 �� 31 �� 49 �� 49 �� 45 ��

Unappropriated retained earnings

�� 2,914 �� 2,946 �� 2,913 �� 2,842 �� 2,777 �� 2,729 ��

Unrealized gains - fixed maturities

�� 604 �� 602 �� 656 �� 556 �� 441 �� 449 ��

Unrealized gains - equities

�� 139 �� 124 �� 149 �� 129 �� 121 �� 119 ��

Other comprehensive income, net of tax

�� (16 )� (8 )� (6 )� (8 )� (2 )� 2 ��
��

Total shareholders� equity

�� 4,879 �� 4,904 �� 4,985 �� 4,796 �� 4,599 �� 4,542 ��

Noncontrolling interests

�� 175 �� 174 �� 173 �� 177 �� 170 �� 168 ��
��

Total liabilities and equity

�� $ 47,535 �� $ 46,552 �� $ 45,355 �� $ 42,770 �� $ 42,087 �� $ 40,947 ��
��

17


American Financial Group, Inc.

Book Value Per Share and Price / Book Summary

(in millions, except per share information)

�� LOGO

�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 09/30/13

Shareholders� equity

�� $ 4,879 �� $ 4,904 �� $ 4,985 �� $ 4,796 �� $ 4,599 �� $ 4,542 ��

Appropriated retained earnings

�� 2 �� (2 )� (31 )� (49 )� (49 )� (45 )�
��

Shareholders� equity, excluding appropriated retained earnings

�� 4,881 �� 4,902 �� 4,954 �� 4,747 �� 4,550 �� 4,497 ��

Unrealized (gains) on fixed maturities

�� (604 )� (602 )� (656 )� (556 )� (441 )� (449 )�
��

Adjusted shareholders� equity

�� 4,277 �� 4,300 �� 4,298 �� 4,191 �� 4,109 �� 4,048 ��

Goodwill

�� (201 )� (201 )� (200 )� (185 )� (185 )� (185 )�

Intangibles

�� (57 )� (63 )� (66 )� (27 )� (22 )� (26 )�
��

Tangible adjusted shareholders� equity

�� $ 4,019 �� $ 4,036 �� $ 4,032 �� $ 3,979 �� $ 3,902 �� $ 3,837 ��
��

Common shares outstanding

�� 87.709 �� 88.491 �� 89.618 �� 89.589 �� 89.513 �� 89.224 ��

Book value per share:

��

Excluding appropriated retained earnings (a)

�� $ 55.65 �� $ 55.39 �� $ 55.27 �� $ 52.99 �� $ 50.83 �� $ 50.40 ��

Adjusted (b)

�� 48.76 �� 48.59 �� 47.95 �� 46.79 �� 45.90 �� 45.36 ��

Tangible, adjusted (c)

�� 45.82 �� 45.61 �� 44.99 �� 44.42 �� 43.59 �� 43.00 ��

Market capitalization

��

AFG�s closing common share price

�� $ 60.72 �� $ 57.89 �� $ 59.56 �� $ 57.71 �� $ 57.72 �� $ 54.06 ��

Market capitalization

�� $ 5,326 �� $ 5,123 �� $ 5,338 �� $ 5,170 �� $ 5,167 �� $ 4,823 ��

Price / Adjusted book value ratio

�� 1.25 �� 1.19 �� 1.24 �� 1.23 �� 1.26 �� 1.19 ��

(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.

18


American Financial Group, Inc.

Capitalization

($ in millions)

�� LOGO

�� 12/31/14 09/30/14 06/30/14 03/31/14 12/31/13 09/30/13

AFG senior obligations

�� $ 840 �� $ 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

�� $ 852 �� $ 852 �� $ 852 �� $ 852 �� $ 852 �� $ 852 ��

AFG subordinated debentures

�� 150 �� 150 �� ��� �� ��� �� ��� �� ��� ��

Obligations of subsidiaries - secured by real estate

�� 59 �� 60 �� 60 �� 61 �� 61 �� 61 ��

Payable to subsidiary trusts - subordinated

�� ��� �� ��� �� ��� �� ��� �� ��� �� ��� ��
��

Total Long-term debt

�� $ 1,061 �� $ 1,062 �� $ 912 �� $ 913 �� $ 913 �� $ 913 ��

Shareholders� equity

�� 4,879 �� 4,904 �� 4,985 �� 4,796 �� 4,599 �� 4,542 ��

Noncontrolling interests

�� 175 �� 174 �� 173 �� 177 �� 170 �� 168 ��

Less:

��

Appropriated retained earnings

�� 2 �� (2 )� (31 )� (49 )� (49 )� (45 )�

Unrealized gains related to fixed maturity investments

�� (604 )� (602 )� (656 )� (556 )� (441 )� (449 )�
��

Total adjusted capital

�� $ 5,513 �� $ 5,536 �� $ 5,383 �� $ 5,281 �� $ 5,192 �� $ 5,129 ��
��

Less:

��

Obligations of subsidiaries - secured by real estate

�� (59 )� (60 )� (60 )� (61 )� (61 )� (61 )�
��

Total adjusted capital excluding obligations secured by real estate

�� $ 5,454 �� $ 5,476 �� $ 5,323 �� $ 5,220 �� $ 5,131 �� $ 5,068 ��
��

Ratio of debt to total adjusted capital:

��

Including subordinated debt�& debt secured by real estate

�� 19.2 %� 19.2 %� 16.9 %� 17.3 %� 17.6 %� 17.8 %�

Excluding subordinated debt�& debt secured by real estate

�� 15.6 %� 15.6 %� 16.0 %� 16.3 %� 16.6 %� 16.8 %�

19


American Financial Group, Inc.

Additional Supplemental Information

($ in millions)

�� LOGO

�� Three Months Ended �� Twelve�Months�Ended
�� 12/31/14 �� 09/30/14 �� 06/30/14 �� 03/31/14 �� 12/31/13 �� 12/31/14 �� 12/31/13

Property and Casualty Insurance

�� �� �� �� �� �� ��

Paid Losses (GAAP)

�� $ 562 �� �� $ 528 �� �� $ 530 �� �� $ 510 �� �� $ 577 �� �� $ 2,130 �� �� $ 1,871 ��
�� 12/31/14 �� 09/30/14 �� 06/30/14 �� 03/31/14 �� 12/31/13 �� 9/30/2013 ��

Statutory Surplus

�� �� �� �� �� �� ��

Property and Casualty Insurance

�� $ 2,286 �� �� $ 2,206 �� �� $ 2,227 �� �� $ 1,981 �� �� $ 1,896 �� �� $ 2,133 �� ��

AFG�s principal annuity subsidiaries (total adjusted capital)

�� $ 1,822 �� �� $ 1,818 �� �� $ 1,751 �� �� $ 1,688 �� �� $ 1,661 �� �� $ 1,590 �� ��

Allowable dividends without regulatory approval

�� �� �� �� �� �� ��

Property and Casualty Insurance

�� $ 315 �� �� $ 335 �� �� $ 335 �� �� $ 335 �� �� $ 335 �� �� $ 237 �� ��

Annuity and Run-off

�� 359 �� �� 275 �� �� 275 �� �� 275 �� �� 275 �� �� 158 �� ��
��

��

��

��

��

��

��

Total

�� $ 674 �� �� $ 610 �� �� $ 610 �� �� $ 610 �� �� $ 610 �� �� $ 395 �� ��
��

��

��

��

��

��

��

20


American Financial Group, Inc.

Total�Cash�and�Investments�and�Quarterly�Net�Investment�Income

December�31, 2014

($ in millions)

�� LOGO

�� Carrying Value
�� Property�and �� �� �� �� % of
�� Casualty �� Annuity�and �� �� Consolidate Total AFG �� Investment
�� Insurance �� Run-off �� Other �� CLOs Consolidated �� Portfolio

Total cash and investments:

�� �� �� �� ��

Cash and cash equivalents

�� $ 693 �� �� $ 320 �� �� $ 330 �� �� $ ��� �� $ 1,343 �� �� 4 %�

Fixed maturities - Available for sale

�� 6,409 �� �� 24,313 �� �� 12 �� �� ��� �� 30,734 �� �� 85 %�

Fixed maturities - Trading

�� 138 �� �� 128 �� �� ��� �� �� ��� �� 266 �� �� 1 %�

Equity securities

�� 1,190 �� �� 460 �� �� 46 �� �� ��� �� 1,696 �� �� 4 %�

Policy loans

�� ��� �� �� 228 �� �� ��� �� �� ��� �� 228 �� �� 1 %�

Mortgage loans

�� 229 �� �� 888 �� �� ��� �� �� ��� �� 1,117 �� �� 3 %�

Real estate and other investments

�� 358 �� �� 747 �� �� 10 �� �� (289 )� 826 �� �� 2 %�
��

��

��

��

��

Total cash and investments

�� $ 9,017 �� �� $ 27,084 �� �� $ 398 �� �� $ (289 )� $ 36,210 �� �� 100 %�
��

��

��

��

��

�� Property�and �� ��
�� Casualty Annuity�and �� Consolidate �� Total AFG
�� Insurance Run-off Other �� CLOs �� Consolidated

Total quarterly net investment income:

�� �� ��

Fixed maturities - Available for sale

�� $ 58 �� $ 283 �� $ ��� �� �� $ ��� �� �� $ 341 ��

Fixed maturities - Trading

�� 2 �� 1 �� ��� �� �� ��� �� �� 3 ��

Equity securities

�� 11 �� 5 �� 3 �� �� ��� �� �� 19 ��

Equity in investees

�� 1 �� 2 �� ��� �� �� ��� �� �� 3 ��

Other investments

�� 5 �� 15 �� ��� �� �� 1 �� �� 21 ��
��

��

��

Gross investment income

�� 77 �� 306 �� 3 �� �� 1 �� �� 387 ��

Investment expenses

�� (2 )� (1 )� ��� �� �� ��� �� �� (3 )�
��

��

��

Total net investment income

�� $ 75 �� $ 305 �� $ 3 �� �� $ 1 �� �� $ 384 ��
��

��

��

�� Equity Securities
�� �� �� Unrealized
�� Cost �� Fair�Value �� Gain�(Loss)

Annuity and Run-off

�� $ 411 �� �� $ 460 �� �� $ 49 ��

Property and Casualty Insurance

�� 1,021 �� �� 1,190 �� �� 169 ��

Other

�� 46 �� �� 46 �� �� ��� ��
��

��

��

Total AFG consolidated

�� $ 1,478 �� �� $ 1,696 �� �� $ 218 ��
��

��

��

21


American Financial Group, Inc.

Fixed Maturities - By Security Type - AFG Consolidated

December�31, 2014

($ in millions )

�� LOGO

�� �� �� % of
�� Amortized �� Unrealized �� % of Investment
�� Cost Fair�Value �� Gain�(Loss) �� Fair�Value Portfolio

US Government and government agencies

�� $ 361 �� $ 367 �� �� $ 6 �� �� 1 %� 1 %�

States, municipalities and political subdivisions

�� 6,423 �� 6,777 �� �� 354 �� �� 22 %� 19 %�

Foreign government

�� 267 �� 277 �� �� 10 �� �� 1 %� 1 %�

Residential mortgage-backed securities

�� 4,053 �� 4,449 �� �� 396 �� �� 14 %� 12 %�

Commercial mortgage-backed securities

�� 2,300 �� 2,457 �� �� 157 �� �� 8 %� 7 %�

Asset-backed securities

�� 3,874 �� 3,889 �� �� 15 �� �� 13 %� 11 %�

Corporate bonds

�� �� ��

Manufacturing

�� 2,281 �� 2,415 �� �� 134 �� �� 8 %� 7 %�

Banks, lending and credit institutions

�� 2,607 �� 2,743 �� �� 136 �� �� 9 %� 7 %�

Gas and electric services

�� 1,284 �� 1,403 �� �� 119 �� �� 4 %� 4 %�

Insurance and insurance related

�� 910 �� 975 �� �� 65 �� �� 3 %� 3 %�

Other corporate

�� 4,980 �� 5,248 �� �� 268 �� �� 17 %� 14 %�
��

��

��

Total AFG consolidated

�� $ 29,340 �� $ 31,000 �� �� $ 1,660 �� �� 100 %� 86 %�
��

��

��

Annuity and Run-off

�� $ 22,998 �� $ 24,441 �� �� 1,443 �� �� 79 %� 68 %�

Property and Casualty Insurance

�� 6,341 �� 6,547 �� �� 206 �� �� 21 %� 18 %�

Other

�� 1 �� 12 �� �� 11 �� �� 0 %� 0 %�
��

��

��

Total AFG consolidated

�� $ 29,340 �� $ 31,000 �� �� $ 1,660 �� �� 100 %� 86 %�
��

��

��

Annualized yield on available for sale fixed maturities:

�� �� ��

Excluding investment expense (a)

�� 4.75 %� �� ��

Net of investment expense (a)

�� 4.71 %� �� ��

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.

22


American Financial Group, Inc.

Fixed Maturities - By Security Type Portfolio

December�31, 2014

($ in millions )

�� LOGO

�� Amortized �� Unrealized % of
�� Cost Fair�Value �� Gain (Loss) Fair�Value

Annuity and Run-off:

�� ��

US Government and government agencies

�� $ 85 �� $ 87 �� �� $ 2 �� 0 %�

States, municipalities and political subdivisions

�� 3,799 �� 4,051 �� �� 252 �� 17 %�

Foreign government

�� 17 �� 20 �� �� 3 �� 0 %�

Residential mortgage-backed securities

�� 3,079 �� 3,405 �� �� 326 �� 14 %�

Commercial mortgage-backed securities

�� 2,057 �� 2,205 �� �� 148 �� 9 %�

Asset-backed securities

�� 2,815 �� 2,832 �� �� 17 �� 12 %�

Corporate debt

�� 11,146 �� 11,841 �� �� 695 �� 48 %�
��

��

Total Annuity and Run-off

�� $ 22,998 �� $ 24,441 �� �� $ 1,443 �� 100 %�
��

��

Annualized yield on available for sale fixed maturities:

�� ��

Excluding investment expense (a)

�� 5.00 %� ��

Net of investment expense (a)

�� 4.98 %� ��

Approximate average life and duration:

�� ��

Approximate average life

�� 7 years �� ��

Approximate duration

�� 5 years �� ��
�� Amortized �� Unrealized % of
�� Cost Fair�Value �� Gain�(Loss) Fair�Value

Property and Casualty Insurance:

�� ��

US Government and government agencies

�� $ 276 �� $ 280 �� �� $ 4 �� 4 %�

States, municipalities and political subdivisions

�� 2,624 �� 2,726 �� �� 102 �� 42 %�

Foreign government

�� 250 �� 257 �� �� 7 �� 4 %�

Residential mortgage-backed securities

�� 973 �� 1,032 �� �� 59 �� 16 %�

Commercial mortgage-backed securities

�� 243 �� 252 �� �� 9 �� 4 %�

Asset-backed securities

�� 1,059 �� 1,057 �� �� (2 )� 16 %�

Corporate debt

�� 916 �� 943 �� �� 27 �� 14 %�
��

��

Property and Casualty Insurance

�� $ 6,341 �� $ 6,547 �� �� $ 206 �� 100 %�
��

��

Annualized yield on available for sale fixed maturities:

�� ��

Excluding investment expense (a)

�� 3.81 %� ��

Net of investment expense (a)

�� 3.71 %� ��

Tax equivalent, net of investment expense (b)

�� 4.33 %� ��

Approximate average life and duration:

�� ��

Approximate average life

�� 4.5�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.

23


American Financial Group, Inc.

Fixed Maturities - Credit Rating and NAIC Designation

December�31, 2014

($ in millions)

LOGO

�� GAAP Data
�� Amortized �� �� Unrealized �� % of

By Credit Rating

�� Cost �� Fair�Value �� Gain�(Loss) �� Fair�Value

Investment grade

�� �� �� ��

AAA

�� $ 6,680 �� �� $ 6,936 �� �� $ 256 �� �� 22 %�

AA

�� 6,053 �� �� 6,342 �� �� 289 �� �� 21 %�

A

�� 7,526 �� �� 7,966 �� �� 440 �� �� 26 %�

BBB

�� 5,289 �� �� 5,603 �� �� 314 �� �� 18 %�
��

��

��

��

Subtotal - Investment grade

25,548 �� 26,847 �� 1,299 �� 87 %�

BB

807 �� 834 �� 27 �� 3 %�

B

428 �� 440 �� 12 �� 1 %�

Other

2,557 �� 2,879 �� 322 �� 9 %�
��

��

��

��

Total

$ 29,340 �� $ 31,000 �� $ 1,660 �� 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 �� Carrying �� %�of�Carrying Amortized �� �� Unrealized

Designation

�� Value �� Value Cost �� Fair�Value �� Gain�(Loss)

NAIC 1

�� $ 22,829 �� �� 78 %� $ 22,830 �� �� $ 24,166 �� �� $ 1,336 ��

NAIC 2

�� 5,389 �� �� 19 %� 5,389 �� �� 5,695 �� �� 306 ��
��

��

��

��

28,218 �� 97 %� 28,219 �� 29,861 �� 1,642 ��

NAIC 3

638 �� 2 %� 638 �� 657 �� 19 ��

NAIC 4

142 �� 1 %� 144 �� 146 �� 2 ��

NAIC 5

46 �� 0 %� 46 �� 58 �� 12 ��

NAIC 6

37 �� 0 %� 40 �� 59 �� 19 ��
��

��

��

��

Total

$ 29,081 �� 100 %� $ 29,087 �� $ 30,781 �� $ 1,694 ��
��

��

��

��

24


American Financial Group, Inc.

LOGO
Mortgage-Backed Securities - AFG Consolidated
December�31, 2014

($ in millions)

�� �� �� �� % of
�� Amortized �� �� Unrealized �� % of Investment

By Asset Type

�� Cost �� Fair�Value �� Gain�(Loss) �� Fair�Value Portfolio

Residential

�� �� �� ��

Agency

�� $ 315 �� �� $ 327 �� �� $ 12 �� �� 5 %� 1 %�

Prime (Non-Agency)

�� 1,923 �� �� 2,135 �� �� 212 �� �� 31 %� 6 %�

Alt-A

�� 948 �� �� 1,054 �� �� 106 �� �� 15 %� 3 %�

Subprime

�� 867 �� �� 933 �� �� 66 �� �� 13 %� 2 %�
��

��

��

��

Subtotal - Residential

4,053 �� 4,449 �� 396 �� 64 %� 12 %�

Commercial

2,300 �� 2,457 �� 157 �� 36 %� 7 %�
��

��

��

��

Total AFG consolidated

$ 6,353 �� $ 6,906 �� $ 553 �� 100 %� 19 %�
��

��

��

��

Annuity and Run-off

$ 5,136 �� $ 5,610 �� $ 474 �� 81 %� 15 %�

Property and Casualty Insurance

1,216 �� 1,284 �� 68 �� 19 %� 4 %�

Other

1 �� 12 �� 11 �� 0 %� 0 %�
��

��

��

��

Total AFG consolidated

$ 6,353 �� $ 6,906 �� $ 553 �� 100 %� 19 %�
��

��

��

��

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 83%; Alt-A 78%; Subprime 86%; CMBS 99%.

The average FICO score of our residential MBS securities is - Prime 741; Alt-A 712; Subprime 639.

99.7% of our Commercial MBS portfolio is investment-grade rated (85% AAA) and the average subordination for this group assets is 38%.

The approximate average life by collateral type is - Residential 5 years; Commercial 4 years.

25


American Financial Group, Inc.

Mortgage-Backed Securities Portfolio

December�31, 2014

($ in millions)

LOGO

Annuity and Run-off:

By Asset Type

�� Amortized
Cost
�� Fair�Value �� Unrealized
Gain (Loss)
�� % of
Fair�Value
%of
Investment
Portfolio

Residential

�� �� �� ��

Agency

�� $ 130 �� �� $ 138 �� �� $ 8 �� �� 3 %� 1 %�

Prime (Non-Agency)

�� 1,684 �� �� 1,868 �� �� 184 �� �� 33 %� 7 %�

Alt-A

�� 698 �� �� 782 �� �� 84 �� �� 14 %� 3 %�

Subprime

�� 567 �� �� 617 �� �� 50 �� �� 11 %� 2 %�
��

��

��

��

Subtotal - Residential

3,079 �� 3,405 �� 326 �� 61 %� 13 %�

Commercial

2,057 �� 2,205 �� 148 �� 39 %� 8 %�
��

��

��

��

Total Annuity and Run-off

$ 5,136 �� $ 5,610 �� $ 474 �� 100 %� 21 %�
��

��

��

��

Property and Casualty Insurance:

By Asset Type

�� Amortized
Cost
�� Fair�Value �� Unrealized
Gain�(Loss)
�� % of
Fair�Value
% of
Investment
Portfolio

Residential

�� �� �� ��

Agency

�� $ 185 �� �� $ 189 �� �� $ 4 �� �� 15 %� 2 %�

Prime (Non-Agency)

�� 238 �� �� 255 �� �� 17 �� �� 20 %� 3 %�

Alt-A

�� 250 �� �� 272 �� �� 22 �� �� 21 %� 3 %�

Subprime

�� 300 �� �� 316 �� �� 16 �� �� 24 %� 3 %�
��

��

��

��

Subtotal - Residential

973 �� 1,032 �� 59 �� 80 %� 11 %�

Commercial

243 �� 252 �� 9 �� 20 %� 3 %�
��

��

��

��

Total Property and Casualty Insurance

$ 1,216 �� $ 1,284 �� $ 68 �� 100 %� 14 %�
��

��

��

��

26


American Financial Group, Inc.

Mortgage-Backed Securities - Credit Rating and NAIC Designation

December�31, 2014

($ in millions)

LOGO ��

�� GAAP data

By Credit Rating

�� Amortized
Cost
�� Fair
Value
�� Unrealized
Gain�(Loss)
�� % of
Fair�Value

Investment grade

�� �� �� ��

AAA

�� $ 2,764 �� �� $ 2,932 �� �� $ 168 �� �� 43 %�

AA

�� 346 �� �� 362 �� �� 16 �� �� 5 %�

A

�� 484 �� �� 512 �� �� 28 �� �� 7 %�

BBB

�� 216 �� �� 235 �� �� 19 �� �� 3 %�
��

��

��

��

Subtotal - investment grade

3,810 �� 4,041 �� 231 �� 58 %�

BB

334 �� 347 �� 13 �� 5 %�

B

368 �� 380 �� 12 �� 6 %�

Other

1,841 �� 2,138 �� 297 �� 31 %�
��

��

��

��

Total

$ 6,353 �� $ 6,906 �� $ 553 �� 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

�� $ 6,056 �� �� 97 %� $ 6,057 �� �� $ 6,634 �� �� $ 577 ��

NAIC 2

�� 88 �� �� 1 %� 88 �� �� 90 �� �� 2 ��
��

��

��

��

6,144 �� 98 %� 6,145 �� 6,724 �� 579 ��

NAIC 3

51 �� 1 %� 51 �� 52 �� 1 ��

NAIC 4

55 �� 1 %� 55 �� 59 �� 4 ��

NAIC 5

16 �� 0 %� 16 �� 27 �� 11 ��

NAIC 6

2 �� 0 %� 2 �� 18 �� 16 ��
��

��

��

��

Total

$ 6,268 �� 100 %� $ 6,269 �� $ 6,880 �� $ 611 ��
��

��

��

��

27


Appendix:

American Financial Group, Inc.

Attribution of Changes in Long-Term Care Net Loss Recognition Margin

($ in millions)

LOGO

Net Loss Recognition Margin at 12/31/13

�� $ 64 ��

Changes in margin attributed to each updated assumption:

��

Claim costs

�� $ (50 )�

Rate increases

�� 40 ��

Reinvestment rates

�� (34 )�

Expenses

�� (11 )�

Other

�� 2 ��
��

Net Loss Recognition Margin at 12/31/14

$ 11 ��
��

The following table illustrates the impact of changes in key assumptions on AFG�s net loss recognition margin as of December�31, 2014. Assumption changes could have either a favorable or unfavorable impact on the margin depending on the nature of the change.

Assumptions Change

�� Impact�on�Net
Loss�Recognition
Margin (pretax)

5% morbidity change in all future years

�� $55�-�$65

5% lapse and mortality rate change in all future years

�� $35�-�$40

0.25% reinvestment rate change in all future years

�� $20�-�$25

0.25% initial reinvestment rate change; no change to ultimate reinvestment rate

�� $8�-�$10

1% change in expected rate increase approvals

�� $15�-�$20

Once the loss recognition margin is reduced to zero, the impact of adverse changes in assumptions, unless offset by other favorable assumption changes, would be recorded as an increase in long-term care reserves through a charge to earnings. Each item reflects a change to a single assumption without changes to other assumptions. For example, assuming increased claim payments did not change the assumption on future rate increases and persistency, nor did it change projected investment yields resulting from cash flow differences. These amounts are valid for a point in time, and will change in future periods as the in-force block ages, and as actual performance deviates from the assumptions used at December�31, 2014.

28


Appendix:

American Financial Group, Inc.

Reinvestment Rates Used in Loss Recognition Testing and Annuity Unlocking

($ in millions)

LOGO

�� Initial Net
Reinvestment
Rate
Ultimate Net
Reinvestment
Rate
Years to
Reach
Ultimate

Segments

��

Run-off Long-Term Care

�� 4.52 %� 6.25 %� 7�years ��

Annuity

�� 3.57 %� 5.54 %� 7 years ��

Differences in reinvestment rates between segments reflect differences in expected durations of liabilities, as well as different assumed investment allocations.

29



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