American Financial Group, Inc.

Credit and liquidity · Credit risk and customer defaults

The inability to obtain reinsurance or to collect on ceded reinsurance could adversely affect AFG's results of operations. AFG is also subject to credit risk with respect to its reinsurers, as AFG will remain liable to its insureds regardless of whether a reinsurer is able to meet its obligations under agreements covering the reinsurance ceded.

Market and investment · Asset valuation and impairment

AFG's property and casualty reserves may be inadequate, which could have a material adverse effect on AFG's results of operations. Liabilities for unpaid losses and loss adjustment expenses do not represent an exact calculation of liability but instead represent management estimates of what the ultimate settlement and administration of claims will cost.

Capital structure and performance · Financial performance volatility

The 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. AFG's Common Stock price could materially fluctuate or decrease in response to a number of events or factors including quarterly variations in AFG's operating results.

Market and investment · Market volatility and economic cycles

AFG's results of operations and revenues may fluctuate as a result of many factors, including cyclical changes in the insurance industry. The results of operations of companies in the property and casualty insurance industry historically have been subject to fluctuations and uncertainties from many factors, including competitive pressures, rising loss costs and changes in the level of reinsurance pricing and capacity, among others.

International and currency · Foreign exchange and currency exposure

AFG's international operations expose it to investment, political and economic risks, including foreign currency and credit risk. AFG's business activities outside the United States subject AFG to additional domestic and foreign laws and regulations.

Human capital and workforce · Talent acquisition and retention

AFG's business and operations may be negatively impacted by its and its business partners' failure to recruit and retain key employees. The expertise and experience of AFG's employees is a critical component of the Company's success. There can be intense competition for qualified candidates in the activities that AFG conducts and in the markets that it serves.

Digital transformation and innovation · Artificial intelligence and automation

AFG 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. AFG may also utilize artificial intelligence or machine learning technologies to assist with modeled outputs and related analyses, the results of which may be unintentionally deficient, arbitrary, inaccurate or misleading.

Cybersecurity and data protection · Third party data security and vendors

AFG has outsourced certain technology and business process functions to third parties over which it has no control and may continue to do so in the future. Outsourcing of certain technology and business process functions to third parties may expose AFG to increased risk related to data security or service disruptions.

Geopolitical and trade · Regulatory and policy uncertainty

The Company may be subject to increasing regulation imposing mandatory disclosure of sustainability and climate-related data in the United States and foreign jurisdictions. AFG is subject to complex and changing laws, regulation and public policy debates relating to climate change that are difficult to predict and quantify.

Geopolitical and trade · Political instability and government changes

AFG 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. AFG has substantial exposure to unexpected losses resulting from war, acts of terrorism, political unrest and geopolitical instability in many regions of the world.

Economic and market conditions · Economic recession and downturns

General economic, financial market and political conditions and conditions in the markets in which AFG operates could have a material adverse effect on its results of operations and financial condition. Disruptive actions or policies by the U.S. or foreign governments; disruptive geopolitical events and other events outside of AFG's control, such as a major epidemic or another pandemic, could contribute to increased volatility.

Natural and catastrophic events · Natural disasters and extreme weather

Catastrophes can be caused by unpredictable natural events such as hurricanes, windstorms, severe storms, tornadoes, floods, hailstorms, earthquakes, explosions and fire... These events may have a material adverse effect on AFG's workforce and business operations as well as the workforce and operations of AFG's customers, business partners and independent agents.

Natural and catastrophic events · Climate change and environmental impact

Changing weather patterns, whether as a result of global climate change caused by human activities or otherwise, have added to the unpredictability, frequency and severity of weather-related catastrophes and other losses, such as wildfires, storms or flooding, incurred by the industry in recent years. Changing weather patterns also make it more difficult for AFG to predict and model catastrophic events, reducing AFG's ability to accurately price its exposure to such events and mitigate its risks.

Market position and competition · Disruptive competitors and new market entrants

Technology companies or other third parties have created, and may in the future create, technology-enabled business models, processes, platforms or alternate distribution channels that may adversely impact AFG's competitive position in some parts of its business.

Market position and competition · Pricing pressure and margin compression

During periods in which price competition is high or industry underwriting standards have loosened or degraded, AFG may lose business to competitors offering competitive insurance products at lower prices or more favorable terms. If competition limits AFG's ability to write new or renewal business at adequate rates, its results of operations will be adversely affected.

Market position and competition · Competitive pressure and market share loss

Intense competition could adversely affect AFG's results of operations. The property and casualty insurance segment operates in a highly competitive industry that is affected by many factors that can cause significant fluctuations in its results of operations. Well-capitalized new entrants to the property and casualty insurance industry, or existing competitors that receive substantial infusions of capital or access to third-party capital, provide increasing competition.

Corporate governance · Internal controls and risk management

AFG's success will depend on its ability to maintain and enhance effective operating procedures and manage risks on an enterprise-wide basis. Operational risk and losses can result from, among other things, fraud, errors, failure to document transactions properly, failure to obtain proper internal authorization, failure to comply with regulatory requirements, information technology failures or other internal or external events.

Legal and litigation · Litigation and legal proceedings

AFG 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. AFG is involved in routine legal proceedings incidental to its insurance operations and litigation related to asbestos and environmental claims from its historical operations.

Industry regulation · Regulatory compliance and changes

AFG's business activities outside the United States subject AFG to additional domestic and foreign laws and regulations, including the Foreign Corrupt Practices Act, the UK Bribery Act and similar laws in other countries that prohibit the making of improper payments to foreign officials.

Industry regulation · Capital and liquidity requirements

Statutory capital requirements set by the NAIC and the various state insurance regulatory bodies establish regulations that provide minimum capitalization requirements based on risk-based capital ratios for insurance companies. Increases in the amount of capital or reserves that AFG's larger insurance subsidiaries are required to hold could reduce the amount of future dividends such subsidiaries are able to distribute.