American Financial Group (AFG) risk factors, FY2024 10-K

RISKS RELATING TO AFG’S INSURANCE OPERATIONS, DISTRIBUTION AND PRODUCTS

1. 01AFG’s results of operations could be adversely impacted by catastrophes, both natural and man-made, pandemics, severe weather conditions or climate change
2. 02Volatility in crop prices or yields, as a result of weather conditions or other events, could adversely impact AFG’s results of operations
3. 03AFG’s results of operations and revenues may fluctuate as a result of many factors, including cyclical changes in the insurance industry
4. 04AFG’s success will depend on its ability to maintain and enhance effective operating procedures and manage risks on an enterprise-wide basis
5. 05AFG could face unanticipated losses from war, terrorism, political unrest and geopolitical uncertainty which could have a material adverse effect on AFG’s financial condition and results of operations
6. 06AFG’s international operations expose it to investment, political and economic risks, including foreign currency and credit risk

RISKS RELATING TO THE INSURANCE INDUSTRY

1. 07Intense competition could adversely affect AFG’s results of operations
2. 08AFG’s revenues could be adversely affected if it is not able to attract and retain independent agents

RISKS RELATING TO ESTIMATES, ASSUMPTIONS AND VALUATIONS

1. 09AFG’s property and casualty reserves may be inadequate, which could have a material adverse effect on AFG’s results of operations
2. 10AFG uses analytical models to assist in its underwriting, reserving and reinsurance purchasing decision-making, and actual results may differ materially from the model outputs and related analyses
3. 11Exposure to mass tort claims could materially adversely affect AFG’s results of operations and financial condition

RISKS RELATING TO ECONOMIC, POLITICAL AND GLOBAL MARKET CONDITIONS

1. 12AFG’s investment portfolio is subject to market risk, including changes in interest rates, which could have a material adverse effect on AFG’s results of operations and financial condition
2. 13Investment returns are an important part of AFG’s profitability. AFG’s investments are subject to market-wide risks and fluctuations, including in the fixed maturity and equity securities markets, which could impair its profitability, financial condition and cash flows
3. 14General economic, financial market and political conditions and conditions in the markets in which AFG operates may materially adversely affect its investment portfolio, results of operations, financial condition and stock price
4. 15AFG’s alternative investments may be illiquid and volatile in terms of value and returns, which could negatively affect AFG’s investment income and liquidity
5. 16AFG’s access to capital may be limited or may not be available on favorable terms

RISKS RELATED TO TECHNOLOGY, DATA SECURITY AND PRIVACY

1. 17AFG or third parties may experience difficulties with technology or data security, which could have an adverse effect on AFG’s business or reputation
2. 18Any failure to appropriately collect, administer and protect consumer information could adversely affect AFG’s reputation, subject AFG to fines, claims and penalties, and have a material adverse effect on AFG’s business, financial condition and results of operations

RISKS RELATED TO FINANCIAL STRENGTH, CREDIT AND COUNTERPARTIES

1. 19A downgrade or potential downgrade in AFG’s financial strength and/or credit ratings by one or more rating agencies could adversely affect its business, financial condition, results of operations and/or cash flows
2. 20The inability to obtain reinsurance or to collect on ceded reinsurance could adversely affect AFG’s results of operations

REGULATORY AND LEGAL RISKS

1. 21AFG may suffer losses from litigation, including from effects of emerging claim and coverage issues which could materially and adversely affect AFG’s financial condition and business operations
2. 22AFG is subject to comprehensive regulation, and its ability to earn profits may be restricted by these regulations
3. 23As a holding company, AFG is dependent on the operations of its insurance company subsidiaries to meet its obligations and pay future dividends
4. 24AFG could be adversely impacted by changes to the U.S. Federal income tax laws
5. 25New accounting rules or changes to existing accounting standards could adversely impact AFG’s reported results of operations
6. 26Certain shareholders exercise substantial control over AFG’s affairs, which may impede a change of control transaction
7. 27AFG’s business and operations may be negatively impacted by its and its business partners’ failure to recruit and retain key employees
8. 28The price of AFG Common Stock may fluctuate significantly, which may make it difficult for holders to resell common stock when they want or at a price they find attractive