American Financial (AFG)

Risks

• AFG’s results of operations could be adversely impacted by catastrophes, both natural and man-made, pandemics or severe weather conditions or climate change.
• AFG’s results of operations and revenues may fluctuate as a result of many factors, including cyclical changes in the insurance industry.
• AFG’s success will depend on its ability to maintain and enhance effective operating procedures and manage risks on an enterprise-wide basis.
• 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’s international operations exposes it to investment, political and economic risks, including foreign currency and credit risk.
• Intense competition could adversely affect AFG’s results of operations.
• AFG’s revenues could be adversely affected if it is not able to attract and retain independent agents.
• AFG’s property and casualty reserves may be inadequate, which could have a material adverse effect on AFG’s results of operations.
• 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.
• Exposure to asbestos or environmental claims could materially adversely affect AFG’s results of operations and financial condition.
• AFG’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.
• General 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.
• AFG’s alternative investments may be illiquid and volatile in terms of value and returns, which could negatively affect AFG’s investment income and liquidity.
• The modification or elimination of the London Inter-Bank Offered Rate may adversely affect AFG’s results of operations.
• AFG may experience difficulties with technology or data security, which could have an adverse effect on its business or reputation.
• Any 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.
• A 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.
• The inability to obtain reinsurance or to collect on ceded reinsurance could adversely affect AFG’s results of operations.
• 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 subject to comprehensive regulation, and its ability to earn profits may be restricted by these regulations.
• As a holding company, AFG is dependent on the operations of its insurance company subsidiaries to meet its obligations and pay future dividends.
• New accounting rules or changes to existing accounting standards could adversely impact AFG’s reported results of operations.
• Certain shareholders exercise substantial control over AFG’s affairs, which may impede a change of control transaction.
• 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.