rates and higher balances of invested assets. The annualized return on alternative investments was approximately 9.6% for the 2023 second quarter compared to 12.4% for the prior year quarter.
Earnings from alternative investments may vary from quarter to quarter based on the reported results of the underlying investments, and generally are reported on a quarter lag. The average annual return on alternative investments over the five
calendar years ended December 31, 2022, was approximately 14%. Our guidance for 2023 assumes a return of approximately 9% on alternative investments.
Non-Core Net Realized Gains (Losses) AFG recorded second quarter 2023 net realized losses on securities
of $1 million ($0.02 per share loss) after tax, which included $2 million ($0.02 per share) in after-tax net gains to adjust equity securities that the Company continued to own at June 30, 2023,
to fair value. By comparison, AFG recorded net realized losses on securities of $73 million ($0.86 per share) in the comparable 2022 period.
After-tax unrealized losses related to fixed maturities were $497 million at June 30, 2023. Our portfolio continues to be high quality, with 93% of our fixed maturity portfolio rated investment grade and
96% of our P&C fixed maturity portfolio with a National Association of Insurance Commissioners designation of NAIC 1 or 2, its highest two categories.
More information about the components of our investment portfolio may be found in our Quarterly Investor Supplement, which is posted on our website.
About American Financial Group, Inc.
American
Financial Group is an insurance holding company, based in Cincinnati, Ohio. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for
businesses. Great American Insurance Groups roots go back to 1872 with the founding of its flagship company, Great American Insurance Company.
Forward Looking Statements
This press release,
and any related oral statements, 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
Companys expectations concerning market and other conditions and their effect on future premiums, revenues, earnings, investment activities and the amount and timing of share repurchases or special dividends; recoverability of asset values;
expected losses and the adequacy of reserves for 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: the risks and uncertainties AFG describes in the Risk Factors section of its most recent Annual Report on Form 10-K, as updated by its other reports filed
with the Securities and Exchange Commission; 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; new legislation or declines in credit quality or credit ratings that could have a material impact on the valuation of securities in AFGs 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
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