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AMERICAN FINANCIAL GROUP INC – 10-Q – Management's Discussion and Analysis of Financial Condition and Results of Operations
INDEX TO MD&A
Page Page
Forward-Looking Statements 28 Managed Investment Entities 36
Overview 29 Results of Operations 38
Critical Accounting Policies 29 General 38
Liquidity and Capital Resources 30 Segmented Statement of Earnings 39
Ratios 30 Property and Casualty Insurance 40
Holding Company, Other and
Condensed Consolidated Cash Flows 30 Unallocated 49 Parent and Subsidiary Liquidity 31 Investments 32 Uncertainties 35 FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Some of the forward-looking statements can be identified by the use of words such as "anticipates", "believes", "expects", "projects", "estimates", "intends", "plans", "seeks", "could", "may", "should", "will" or the negative version of those words or other comparable terminology. Such forward-looking statements include statements relating to: expectations concerning market and other conditions and their effect on future premiums, revenues, earnings, investment activities, and the amount and timing of share repurchases; recoverability of asset values; expected losses and the adequacy of reserves for asbestos, environmental pollution and mass tort claims; rate changes; improved loss experience; anticipated timing of closing of the acquisition ofCrop Risk Services ("CRS"); and performance of the CRS business under the ownership of AFG. 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 theU.S. and/or abroad; •performance of securities markets; •new legislation or declines in credit quality or credit ratings that could have a material impact on the valuation of securities in AFG's investment portfolio; •the availability of capital; •changes in insurance law or regulation, including changes in statutory accounting rules, including modifications to capital requirements; •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 pandemics, civil unrest and other major losses; •disruption caused by cyber-attacks or other technology breaches or failures by AFG or its business partners and service providers, which could negatively impact AFG's business and/or expose AFG to litigation; •development of insurance loss reserves and establishment of other reserves, particularly with respect to amounts associated with asbestos and environmental claims; •availability of reinsurance and ability of reinsurers to pay their obligations; •competitive pressures; •the ability to obtain adequate rates and policy terms; •changes in AFG's credit ratings or the financial strength ratings assigned by major ratings agencies to AFG's operating subsidiaries; •the impact of the conditions in the international financial markets and the global economy relating to AFG's international operations; and •effects on AFG's reputation, including as a result of environmental, social and governance matters.
The forward-looking statements herein are made only as of the date of this
report. The Company assumes no obligation to publicly update any forward-looking
statements.
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AMERICAN FINANCIAL GROUP, INC. 10-Q
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Continued
OBJECTIVE
The objective of Management's Discussion and Analysis is to provide a discussion and analysis of the financial statements and other statistical data that management believes will enhance the understanding of AFG's financial condition, changes in financial condition and results of operations. The tables and narrative that follow are presented in a manner that is consistent with the information that AFG's management uses to make operational decisions and allocate capital resources. They are provided to demonstrate the nature of the transactions and events that could impact AFG's financial results. This discussion should be read in conjunction with the financial statements beginning on page 2 . OVERVIEW Financial Condition AFG is organized as a holding company with almost all of its operations being conducted by subsidiaries. AFG, however, has continuing cash needs for administrative expenses, the payment of principal and interest on borrowings, shareholder dividends, and taxes. Therefore, certain analyses are most meaningfully presented on a parent only basis while others are best done on a total enterprise basis. In addition, because its businesses are financial in nature, AFG does not prepare its consolidated financial statements using a current-noncurrent format. Consequently, certain traditional ratios and financial analysis tests are not meaningful. Results of Operations Through the operations of its subsidiaries, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses. AFG reported net earnings of$212 million ($2.49 per share, diluted) for the first three months of 2023 compared to$290 million ($3.40 per share, diluted) for the first three months of 2022. The year-over-year decrease was due primarily to lower returns on AFG's alternative investment portfolio (partnerships and similar investments and AFG-managed CLOs) when compared to the exceptionally strong performance of this portfolio in the prior year period, lower underwriting profit, and higher realized losses on securities. These items were partially offset by the impact of higher yields on fixed maturity investments.
Outlook
AFG's financial condition, results of operations and cash flows are impacted by the economic, legal and regulatory environment. Inflation (including social inflation), supply chain disruption, labor shortages, banking system instability and other economic conditions may impact premium levels, loss cost trends and investment returns. Management believes that AFG's strong financial position and current liquidity and capital at its subsidiaries will give AFG the flexibility to continue to effectively address and respond to the ongoing uncertainties presented by the macro-economic environment, the conflict betweenRussia andUkraine and any lingering effects of the COVID-19 pandemic. AFG's insurance subsidiaries continue to have capital at or in excess of the levels required by ratings agencies in order to maintain their current ratings, and the parent company does not have any near-term debt maturities. Management expects continued premium growth and strong underwriting results in the ongoing favorable property and casualty insurance market. In addition, the deployment of cash during the elevated interest rate environment (since early 2022) will continue to have a positive impact on investment income on fixed maturity investments throughout 2023.
CRITICAL ACCOUNTING POLICIES
Significant accounting policies are summarized in Note A - "Accounting Policies"
to the financial statements. The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions that
can have a significant effect on amounts reported in the financial statements.
As more information becomes known, these estimates and assumptions change and,
thus, impact amounts reported in the future. The areas where management believes
the degree of judgment required to determine amounts recorded in the financial
statements is most significant are as follows:
•the valuation of investments, including the determination of impairment
allowances,
•the establishment of insurance reserves, especially asbestos and
environmental-related reserves,
•the recoverability of reinsurance, and
•the establishment of asbestos and environmental liabilities of former railroad
and manufacturing operations.
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AMERICAN FINANCIAL GROUP, INC. 10-Q
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Continued
For a discussion of these policies, see Management's Discussion and Analysis -
"Critical Accounting Policies" in AFG's 2022 Form 10-K.
LIQUIDITY AND CAPITAL RESOURCES
Ratios
AFG's debt to total capital ratio on a consolidated basis is shown below
(dollars in millions):
December 31,
March 31, 2023 2022 2021
Principal amount of long-term debt $ 1,503 $ 1,521 $ 1,993
Total capital 5,878 6,099 6,869
Ratio of debt to total capital:
Including subordinated debt 25.6 % 24.9 % 29.0 %
Excluding subordinated debt 14.1 % 13.9 % 19.2 %
The ratio of debt to total capital is a non-GAAP measure that management
believes is useful for investors, analysts and ratings agencies to evaluate
AFG's financial strength and liquidity and to provide insight into how AFG
finances its operations. In addition, maintaining a ratio of debt, excluding
subordinated debt and debt secured by real estate (if any), to total capital of
35% or lower is a financial covenant in AFG's bank credit facility. The ratio is
calculated by dividing the principal amount of AFG's long-term debt by its total
capital, which includes long-term debt and shareholders' equity (excluding
unrealized gains (losses) related to fixed maturity investments).
Condensed Consolidated Cash Flows
AFG's principal sources of cash include insurance premiums, income from its
investment portfolio and proceeds from the maturities, redemptions and sales of
investments. Insurance premiums in excess of acquisition expenses and operating
costs are invested until they are needed to meet policyholder obligations or
made available to the parent company through dividends to cover debt obligations
and corporate expenses, and to provide returns to shareholders through share
repurchases and dividends. Cash flows from operating, investing and financing
activities as detailed in AFG's Consolidated Statement of Cash Flows are shown
below (in millions):
Three months ended
2023 2022
Net cash provided by operating activities $ 403 $ 503
Net cash provided by (used in) investing activities 73 (1,111)
Net cash used in financing activities (491) (342)
Net change in cash and cash equivalents $
(15)
Net Cash Provided by Operating Activities AFG's property and casualty insurance
operations typically produce positive net operating cash flows as premiums
collected and investment income exceed policy acquisition costs, claims payments
and operating expenses. AFG's net cash provided by operating activities is
impacted by the level and timing of property and casualty premiums, claim and
expense payments and recoveries from reinsurers. Cash flows provided by
operating activities also include the activity of AFG's managed investment
entities (collateralized loan obligations ("CLO")) other than those activities
included in investing or financing activities. The changes in the assets and
liabilities of the managed investment entities included in operating activities
increased cash flows from operating activities by $139 million during the first
three months of 2023 and $172 million in the first three months of 2022,
accounting for a $33 million decline in cash flows from operating activities in
the 2023 period compared to the 2022 period. As discussed in Note A -
"Accounting Policies - Managed Investment Entities" to the financial statements,
AFG has no right to use the CLO assets and no obligation to pay the CLO
liabilities and such assets and liabilities are shown separately in AFG's
Balance Sheet. Excluding the impact of the managed investment entities, net cash
provided by operating activities was $264 million and $331 million in the first
three months of 2023 and 2022, respectively.
Net Cash Provided by (Used in) Investing Activities AFG's investing activities
consist primarily of the investment of funds provided by its property and
casualty businesses. Investing activities also include the purchase and disposal
of managed investment entity investments, which are presented separately in
AFG's Balance Sheet. Net
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AMERICAN FINANCIAL GROUP, INC. 10-Q
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Continued investment activity in the managed investment entities was a$94 million use of cash in the first three months of 2023 compared to$140 million in the comparable 2022 period, accounting for a$46 million decrease in net cash used in investing activities in the first three months of 2023 compared to the same 2022 period. See Note A - "Accounting Policies - Managed Investment Entities" and Note F - "Managed Investment Entities" to the financial statements. Excluding the activity of the managed investment entities, net cash provided by investing activities was$167 million in the first three months of 2023 compared to a$971 million use of cash in the first three months of 2022, a change of$1.14 billion reflecting the opportunistic investment of cash on hand in the property and casualty operations during the rising interest rate environment in the first three months of 2022.Net Cash Used in Financing Activities AFG's financing activities consist primarily of issuances and retirements of long-term debt, issuances and repurchases of common stock and dividend payments. Net cash used in financing activities was$491 million for the first three months of 2023 compared to$342 million in the first three months of 2022, an increase of$149 million . Debt retirements were a$16 million use of cash in the first three months of 2023 compared to$50 million in the first three months of 2022, a decrease in cash used in financing activities of$34 million . During the first three months of 2023, AFG repurchased$24 million of its Common Stock compared to$5 million in the comparable 2022 period, resulting in a$19 million increase in net cash used in financing activities in the first three months of 2023 compared to the first three months of 2022. AFG paid cash dividends totaling$393 million in the first three months of 2023 compared to$216 million in the first three months of 2022. Financing activities also include issuances and retirements of managed investment entity liabilities, which are nonrecourse to AFG and presented separately in AFG's Balance Sheet. Retirements of managed investment entity liabilities exceeded issuances by$62 million in the first three months of 2023 compared to$76 million in the first three months of 2022, accounting for a$14 million decrease in net cash used in financing activities in the 2023 period compared to the 2022 period. See Note A - "Accounting Policies - Managed Investment Entities" and Note F - "Managed Investment Entities" to the financial statements.
Parent and Subsidiary Liquidity
Parent Holding Company Liquidity Management believes AFG has sufficient resources to meet its liquidity requirements. If funds generated from operations, including dividends, tax payments and borrowings from subsidiaries, are insufficient to meet fixed charges in any period, AFG would be required to utilize parent company cash and investments or to generate cash through borrowings, sales of other assets, or similar transactions. AFG's operations continue to generate significant excess capital for returns of capital to shareholders in the form of regular and special cash dividends and through opportunistic share repurchases or to be deployed into its property and casualty businesses as management identifies the potential for profitable organic growth and opportunities to expand through acquisitions of established businesses and acquisitions of or investments in start-ups that meet target return thresholds. During the first three months of 2023, AFG repurchased 199,762 shares of its Common Stock for$24 million and paid a special cash dividend of$4.00 per share in February totaling$341 million . AFG may, at any time and from time to time, seek to retire or purchase its outstanding debt through cash purchases or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as management may determine, and will depend on prevailing market conditions, AFG's liquidity requirements, contractual restrictions and other factors. During the first three months of 2023, AFG repurchased$18 million principal amount of its senior notes for$16 million cash. During 2022, AFG repurchased 89,368 shares of its Common Stock for$11 million and paid special cash dividends totaling$1.02 billion ($2.00 per share in March,$8.00 per share in May and$2.00 per share in November). In 2022, AFG repurchased$472 million principal amount of its senior notes for$477 million cash. AtMarch 31, 2023 , AFG (parent) held approximately$672 million in cash and investments. Management believes that AFG's cash balances are held at stable banking institutions, although the amounts of many of these deposits are in excess of federally insured balances. In addition, AFG can borrow up to$500 million under its revolving credit facility, which expires inDecember 2025 . Amounts borrowed under this agreement bear interest at rates ranging from 1.00% to 1.875% (currently 1.375%) over LIBOR based on AFG's credit rating. The credit facility is in the process of being amended to replace the LIBOR-based interest rate to a similar rate based on SOFR. There were no borrowings under this agreement, or under any other parent company short-term borrowing arrangements, during 2022 or the first three months of 2023. 31
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AMERICAN FINANCIAL GROUP, INC. 10-Q
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Continued
Under a tax allocation agreement with AFG, all 80% (or more) owned
subsidiaries generally pay taxes to (or recover taxes from) AFG based on each
subsidiary's contribution to amounts due under AFG's consolidated tax return.
Subsidiary Liquidity The liquidity requirements of AFG's insurance subsidiaries relate primarily to the policyholder claims and underwriting expenses and payments of dividends and taxes to AFG. Historically, cash flows from premiums and investment income have generally provided more than sufficient funds to meet these requirements. Funds received in excess of cash requirements are generally invested in marketable securities. In addition, the insurance subsidiaries generally hold a significant amount of highly liquid, short duration investments. AFG believes its insurance subsidiaries maintain sufficient liquidity to pay claims and underwriting expenses. In addition, these subsidiaries have sufficient capital to meet commitments in the event of unforeseen events such as reserve deficiencies, inadequate premium rates or reinsurer insolvencies. Even in the current uncertain economic environment, management believes that the capital levels in AFG's insurance subsidiaries are adequate to maintain its business and rating agency ratings. Nonetheless, changes in statutory accounting rules, significant declines in the fair value of the insurance subsidiaries' investment portfolios or significant ratings downgrades on these investments, could create a need for additional capital.
Investments
AFG's investment portfolio atMarch 31, 2023 , contained$10.04 billion in fixed maturity securities classified as available for sale and carried at fair value with unrealized gains and losses included in accumulated other comprehensive income and$36 million in fixed maturities classified as trading with holding gains and losses included in net investment income. In addition, AFG's investment portfolio includes$624 million in equity securities carried at fair value with holding gains and losses included in realized gains (losses) on securities and$384 million in equity securities carried at fair value with holding gains and losses included in net investment income. Fair values for AFG's portfolio are determined by AFG's internal investment professionals using data from nationally recognized pricing services, non-binding broker quotes and other market information. Fair values of equity securities are generally based on published closing prices. For AFG's fixed maturity portfolio, approximately 88% was priced using pricing services atMarch 31, 2023 and 6% was priced using non-binding broker quotes. When prices obtained for the same security vary, AFG's internal investment professionals select the price they believe is most indicative of an exit price. The pricing services use a variety of observable inputs to estimate fair value of fixed maturities that do not trade on a daily basis. Based upon information provided by the pricing services, these inputs include, but are not limited to, recent reported trades, benchmark yields, issuer spreads, bids or offers, reference data, and measures of volatility. Included in the pricing of mortgage-backed securities ("MBS") are estimates of the rate of future prepayments and defaults of principal over the remaining life of the underlying collateral. Due to the lack of transparency in the process that brokers use to develop prices, valuations that are based on brokers' prices are classified as Level 3 in the GAAP hierarchy unless the price can be corroborated, for example, by comparison to similar securities priced using observable inputs. Valuation techniques utilized by pricing services and prices obtained from external sources are reviewed by AFG's internal investment professionals who are familiar with the securities being priced and the markets in which they trade to ensure the fair value determination is representative of an exit price. To validate the appropriateness of the prices obtained, these investment managers consider widely published indices (as benchmarks), recent trades, changes in interest rates, general economic conditions and the credit quality of the specific issuers. In addition, AFG communicates directly with pricing services regarding the methods and assumptions used in pricing, including verifying, on a test basis, the inputs used by the services to value specific securities. 32
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AMERICAN FINANCIAL GROUP, INC. 10-Q
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Continued In general, the fair value of AFG's fixed maturity investments is inversely correlated to changes in interest rates. The following table demonstrates the sensitivity of such fair values to reasonably likely changes in interest rates by illustrating the estimated effect on AFG's fixed maturity portfolio that an immediate increase of 100 basis points in the interest rate yield curve would have had atMarch 31, 2023 (dollars in millions). Effects of increases or decreases from the 100 basis points illustrated would be approximately proportional. Fair value of fixed maturity portfolio $
10,080
Percentage impact on fair value of 100 bps increase in interest rates (3.0 %)
Pretax impact on fair value of fixed maturity portfolio
$
(302)
Approximately 93% of the fixed maturities held by AFG atMarch 31, 2023 , were rated "investment grade" (credit rating ofAAA to BBB) by nationally recognized rating agencies, 4% were rated "non-investment grade" and 3% were not rated. Investment grade securities generally bear lower yields and lower degrees of risk than those that are unrated and non-investment grade. Management believes that the high-quality investment portfolio should generate a stable and predictable investment return. Municipal bonds represented approximately 10% of AFG's fixed maturity portfolio atMarch 31, 2023 . AFG's municipal bond portfolio is high quality, with over 99% of the securities rated investment grade at that date. The portfolio is well diversified across the states of issuance and individual issuers. AtMarch 31, 2023 , approximately 92% of the municipal bond portfolio was held in revenue bonds, with the remaining 8% held in general obligation bonds. AFG has less than$100 million of direct exposure to office commercial real estate through property ownership, mortgages or equity method investments. AFG's exposure to office commercial real estate within its fixed maturity portfolio includes securities (the majority of which are AAA-rated) with a carrying value of approximately$670 million that have minimal exposure to office commercial real estate. Summarized information for the unrealized gains and losses recorded in AFG's Balance Sheet atMarch 31, 2023 , is shown in the following table (dollars in millions). Approximately$180 million of available for sale fixed maturity securities had no unrealized gains or losses atMarch 31, 2023 . Securities Securities With With Unrealized Unrealized Gains Losses Available for Sale Fixed Maturities Fair value of securities $
1,772
Amortized cost of securities, net of allowance for expected credit
losses
$ 1,718 $ 8,669 Gross unrealized gain (loss)$ 54 $ (577) Fair value as % of amortized cost 103 % 93 % Number of security positions 473 1,712 Number individually exceeding$2 million gain or loss 2 59 Concentration of gains (losses) by type or industry (exceeding 5% of unrealized): Mortgage-backed securities$ 23 $ (177) Banking 7 (23) States and municipalities 4 (35) Collateralized loan obligations 3 (53) Other asset-backed securities 2 (148) Asset managers 1 (43) Percentage rated investment grade 88 % 95 % 33
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AMERICAN FINANCIAL GROUP, INC. 10-Q
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Continued The table below sets forth the scheduled maturities of AFG's available for sale fixed maturity securities atMarch 31, 2023 , based on their fair values. Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers. Securities Securities With With Unrealized Unrealized Gains Losses Maturity One year or less 5 % 3 % After one year through five years 21 % 25 % After five years through ten years 27 % 7 % After ten years 10 % 3 % 63 % 38 %
Collateralized loan obligations and other asset-backed securities
(average life of approximately 3 years)
26 % 45 %
Mortgage-backed securities (average life of approximately 6 years)
11 % 17 %
100 % 100 %
The table below (dollars in millions) summarizes the unrealized gains and losses
on fixed maturity securities by dollar amount:
Aggregate Aggregate Fair
Fair Unrealized Value as
Value Gain (Loss) % of Cost
Fixed Maturities at March 31, 2023
Securities with unrealized gains:
Exceeding $500,000 (17 securities) $ 142 $ 16 113 %
$500,000 or less (456 securities) 1,630 38
102 %
$ 1,772 $ 54 103 %
Securities with unrealized losses:
Exceeding $500,000 (300 securities) $ 3,460 $ (428) 89 %
$500,000 or less (1,412 securities) 4,632 (149) 97 %
$ 8,092 $ (577) 93 %
The following table (dollars in millions) summarizes the unrealized losses for
all securities with unrealized losses by issuer quality and the length of time
those securities have been in an unrealized loss position:
Aggregate Aggregate Fair
Fair Unrealized Value as
Value Loss % of Cost
Securities with Unrealized Losses at
Investment grade fixed maturities with losses for:
Less than one year (630 securities)
$ 2,989 $ (97) 97 % One year or longer (794 securities) 4,676 (447) 91 %$ 7,665 $ (544) 93 %
Non-investment grade fixed maturities with losses for:
Less than one year (176 securities)
$ 195 $ (9) 96 % One year or longer (112 securities) 232 (24) 91 %$ 427 $ (33) 93 % When a decline in the value of a specific investment is considered to be other-than-temporary, an allowance for credit losses (impairment) is charged to earnings (accounted for as a realized loss). The determination of whether unrealized losses are other-than-temporary requires judgment based on subjective as well as objective factors as detailed in AFG's 2022 Form 10-K under Management's Discussion and Analysis - "Investments." 34
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AMERICAN FINANCIAL GROUP, INC. 10-Q
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Continued Based on its analysis, management believes AFG will recover its cost basis (net of any allowance) in the fixed maturity securities with unrealized losses and that AFG has the ability to hold the securities until they recover in value and had no intent to sell them atMarch 31, 2023 . Although AFG has the ability to continue holding its fixed maturity investments with unrealized losses, its intent to hold them may change due to deterioration in the issuers' creditworthiness, decisions to lessen exposure to a particular issuer or industry, asset/liability management decisions, market movements, changes in views about appropriate asset allocation or the desire to offset taxable realized gains. Should AFG's ability or intent change regarding a particular security, a charge for impairment would likely be required. While it is not possible to accurately predict if or when a specific security will become impaired, increases in the allowance for credit losses could be material to results of operations in future periods. Significant declines in the fair value of AFG's investment portfolio could have a significant adverse effect on AFG's liquidity. For information on AFG's realized gains (losses) on securities, see "Results of Operations - Realized Gains (Losses) on Securities."
Uncertainties
Management believes that the areas posing the greatest risk of material loss are
the adequacy of its insurance reserves and contingencies arising out of its
former railroad and manufacturing operations. See Management's Discussion and
Analysis - "Uncertainties - Asbestos and Environmental-related ("A&E") Insurance
Reserves" in AFG's 2022 Form 10-K.
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AMERICAN FINANCIAL GROUP, INC. 10-Q
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Continued
MANAGED INVESTMENT ENTITIES
Accounting standards require AFG to consolidate its investments in
collateralized loan obligation ("CLO") entities that it manages and owns an
interest in (in the form of debt). See Note A - "Accounting Policies - Managed
Investment Entities" and Note F - "Managed Investment Entities" to the financial
statements. The effect of consolidating these entities is shown in the tables
below (in millions). The "Before CLO Consolidation" columns include AFG's
investment and earnings in the CLOs on an unconsolidated basis.
CONDENSED CONSOLIDATING BALANCE SHEET
Managed
Before CLO Investment Consol. Consolidated
Consolidation Entities Entries As Reported
March 31, 2023
Assets:
Cash and investments $ 14,583 $ - $ (132) (*) $ 14,451
Assets of managed investment entities - 5,391 - 5,391
Other assets 8,640 - (1) (*) 8,639
Total assets $ 23,223 $ 5,391 $ (133) $ 28,481
Liabilities:
Unpaid losses and loss adjustment expenses and unearned premiums $ 15,196 $ - $ - $ 15,196
Liabilities of managed investment entities - 5,378 (120) (*)
5,258
Long-term debt and other liabilities 4,086 - - 4,086 Total liabilities 19,282 5,378 (120) 24,540 Shareholders' equity: Common Stock and Capital surplus 1,459 13 (13) 1,459 Retained earnings 2,933 - - 2,933 Accumulated other comprehensive income (loss), net of tax (451) - - (451) Total shareholders' equity 3,941 13 (13) 3,941 Total liabilities and shareholders' equity$ 23,223 $ 5,391 $ (133) $ 28,481 December 31, 2022 Assets: Cash and investments$ 14,627 $ -$ (115) (*)$ 14,512 Assets of managed investment entities - 5,447 - 5,447 Other assets 8,872 - - (*) 8,872 Total assets$ 23,499 $ 5,447 $ (115) $ 28,831 Liabilities: Unpaid losses and loss adjustment expenses and unearned premiums$ 15,220 $ - $ -$ 15,220 Liabilities of managed investment entities - 5,444 (112) (*)
5,332
Long-term debt and other liabilities 4,227 - - 4,227 Total liabilities 19,447 5,444 (112) 24,779 Shareholders' equity: Common Stock and Capital surplus 1,453 3 (3) 1,453 Retained earnings 3,142 - - 3,142 Accumulated other comprehensive income (loss), net of tax (543) - - (543) Total shareholders' equity 4,052 3 (3) 4,052 Total liabilities and shareholders' equity$ 23,499 $ 5,447 $ (115)
(*)Elimination of the fair value of AFG's investment in CLOs and related accrued
interest.
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U.S. Surplus Lines Insurance Market : Key Drivers, Restrains, And Opportunities and Their Impact Analysis
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