Financial Performance - AFG's gross written premiums for 2025 reached $10,694 million, an increase from $10,533 million in 2024 and $9,656 million in 2023[32]. - The net written premiums for 2025 were $7,110 million, slightly down from $7,139 million in 2024, but up from $6,692 million in 2023[32]. - AFG's combined ratio for 2025 was 91.0%, indicating strong underwriting profitability compared to the industry average of 95.0%[32][28]. - The loss and LAE ratio for 2025 was 62.2%, a decrease from 63.3% in 2024, reflecting improved loss experience[32]. - Total losses from current accident year catastrophes were $137 million in 2025, down from $180 million in 2024 and $162 million in 2023[33]. - AFG's statutory combined ratio averaged 90.5% from 2016 to 2025, outperforming the property and casualty commercial lines industry average of 98.1%[28]. Ratings and Competitive Positioning - The company maintains an "A" category rating by A.M. Best, which is crucial for competitive positioning in the insurance market[24]. Business Model and Growth Strategy - AFG's entrepreneurial business model promotes agility and innovative product design, contributing to a double-digit annual growth in book value per share[18]. - The company focuses on specialty businesses where it has expertise, enhancing its growth opportunities in profitable segments[35]. - AFG has implemented risk-sharing alternatives and innovative coverage options to align interests with customers and distribution partners[35]. Premiums by Segment - The property and transportation segment generated $2,771 million in premiums for 2025, down from $2,846 million in 2024 and up from $2,586 million in 2023[40]. - Specialty casualty premiums remained stable at $3,247 million in 2025, compared to $3,246 million in 2024 and $3,169 million in 2023[40]. - Specialty financial premiums increased to $1,092 million in 2025, up from $1,047 million in 2024 and $937 million in 2023[40]. - California accounted for 12.1% of AFG's direct written premiums in 2025, while Texas contributed 8.3% and Florida 8.0%[42]. Reinsurance and Catastrophe Coverage - AFG's catastrophe reinsurance coverage includes $205 million in excess of a $70 million per event primary retention, renewed in January 2026[49]. - The company has additional catastrophe coverage of $350 million for losses exceeding $275 million through December 31, 2028[50]. - Reinsurance ceded in 2025 was $3,584 million, an increase from $3,394 million in 2024 and $2,964 million in 2023[57]. Reserves and Liabilities - The liability for unpaid losses and LAE reported on a GAAP basis was $15,094 million as of December 31, 2025[59]. - AFG's asbestos and environmental reserves at the end of 2025 were $460 million, down from $494 million in 2024[61]. - AFG's property and casualty insurance segment's asbestos and environmental reserves showed no net change following a comprehensive internal review in 2025[63]. Investment Portfolio - AFG's investment portfolio was valued at $17.18 billion as of December 31, 2025, with an earned yield on fixed maturities of 5.1% for 2025, up from 5.0% in 2024 and 4.7% in 2023[79]. - The total return on AFG's fixed maturities was 7.5% for 2025, compared to 6.2% for 2024 and 7.2% for 2023, slightly below the Bloomberg U.S. Universal Bond Index return of 7.6% for 2025[81]. - 97% of AFG's fixed maturity investments held by its insurance companies had a National Association of Insurance Commissioners designation of 1 or 2, indicating high credit quality[83]. - AFG's investment strategy has been consistent over the years, contributing to strong investment results and effective portfolio risk management[78]. Employee Engagement and Retention - AFG's voluntary employee turnover rate was 8.3% in 2025, with an average employee tenure of 10 years, reflecting positive retention trends[69]. - The company conducted an employee engagement survey in 2024, with 92% participation, revealing that 94% of employees agreed on the quality of products and services provided[70]. - The company maintains a competitive benefits package, including six weeks of paid parental leave and wellness programs to support employee health[73]. - The company employs approximately 8,500 individuals, with 7,700 at Great American Insurance Group, and none covered by collective bargaining agreements[68]. Dividends - AFG's insurance subsidiaries can pay up to approximately $1.08 billion in dividends to shareholders in 2026 without seeking prior regulatory approval[91].

Group 1: Company Performance - American Financial Group, Inc. (NYSE:AFG) reported fourth-quarter revenue of $2.06 billion, exceeding the consensus estimate of $1.83 billion [1][6] - The underwriting profit for the quarter increased by 41% year over year, achieving a new quarterly record [1] Group 2: Analyst Sentiment - Analyst sentiment has become more positive, with Wells Fargo initiating coverage of AFG with an Overweight rating and a price target of $165 [2] - The firm anticipates improved growth in 2026, partly due to favorable year-over-year comparisons, and noted AFG's low exposure to property insurance as a factor supporting margin stability [2] - AFG's "superior" return on equity profile is highlighted as a key differentiator in the insurance sector [2] Group 3: Company Overview - American Financial Group, Inc. is an insurance holding company that focuses on specialty property and casualty insurance in the United States [3] - The company's operations include specialty transportation, marine, agricultural, and commercial property coverage, as well as excess and surplus lines, executive and professional liability, workers' compensation, and specialty financial insurance products [3]

Group 1 - The core focus is on identifying strong stocks through a ranking system that emphasizes earnings estimates and revisions [1] - Value investing is highlighted as a preferred strategy for finding undervalued stocks using fundamental analysis [2] - The Style Scores system is introduced, allowing investors to find stocks with specific traits, particularly in the "Value" category [3] Group 2 - American Financial Group (AFG) is currently rated 2 (Buy) by Zacks and has an A grade for Value, indicating strong potential [4] - AFG's current P/E ratio is 12.99, significantly lower than the industry average of 27.19, suggesting it may be undervalued [4] - The P/S ratio for AFG is 1.29, which is comparable to the industry's average P/S of 1.3, reinforcing the view of AFG as a strong value stock [5][6]

Financial Data and Key Metrics Changes - AFG's core net operating earnings were $10.29 per share for the full year 2025, with a core operating return on equity of 18.2% [5] - For Q4 2025, core net operating earnings per share were $3.65, resulting in an annualized core return on equity of 25.2% [5] - The company returned over $700 million to shareholders in 2025, including $334 million in special dividends and $274 million in regular dividends [6][10] - AFG's leverage ratio is less than 28%, with no debt maturities until 2030 [10] Business Line Data and Key Metrics Changes - Underwriting profits in specialty property and casualty businesses grew 41% in Q4 2025, with a combined ratio of 84.1% [12][14] - Gross written premiums for Q4 2025 were up 2%, while net written premiums were down 1% compared to Q4 2024 [14] - The property and transportation group achieved a combined ratio of 70.6% in Q4 2025, an improvement of nearly 19 points from the prior year [16] - The specialty casualty group reported a combined ratio of 96.7% in Q4 2025, 5.3 points higher than the previous year [18] Market Data and Key Metrics Changes - The annualized return on alternative investments in the P&C portfolio was 0.9% for Q4 2025, down from 4.9% in the prior year [8] - AFG's investment portfolio totaled $17.2 billion, with approximately 65% invested in fixed maturities yielding about 5.25% [7][10] - The company expects a growth in net written premiums of 3%-5% for 2026, with a combined ratio target of approximately 92.5% [23] Company Strategy and Development Direction - AFG aims to maintain a disciplined operating philosophy and capitalize on its diversified portfolio to navigate economic conditions [12][13] - The company is optimistic about several startup businesses and expects to see growth opportunities in 2026 [24] - AFG's strategy includes a focus on capital management, with plans for acquisitions, special dividends, or share repurchases [10][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of reserves and the ability to achieve favorable development in the future [27] - The company is cautious about pockets of softening rates and competitive conditions but remains focused on profitable growth [24] - Management highlighted the potential for improved returns from the alternative investment portfolio as market conditions stabilize [63] Other Important Information - AFG declared a special dividend of $1.50 per share, payable on February 25, 2026 [9] - The company has returned $4.7 billion in special dividends since 2021 [10] Q&A Session Summary Question: What does the 2026 business plan assume in terms of rates? - Management indicated that they expect to continue achieving good price increases where needed, with no specific amount identified for prior development in the combined ratio [27][29] Question: Was there a change in loss picks for the casualty underlying loss ratio? - Management noted continued caution around social inflation-exposed businesses and adjustments in loss picks, particularly in California workers' compensation [30][32] Question: What drove the inflection in pricing in the lender-placed business? - Management expressed no concerns about political risks and noted that pricing can vary based on client property types, with expectations of low single-digit growth in the business [53][56] Question: Are the social inflation-related businesses stabilized? - Management indicated that corrective steps have been taken, and there is potential for mid-single-digit growth in these businesses moving forward [60] Question: What are the expectations for the alternative investment portfolio? - Management expects a return to historical levels of returns on alternatives, contingent on improved market conditions for multifamily properties [63]

Financial Data and Key Metrics Changes - AFG's Core Net Operating Earnings were $10.29 per share for the full year 2025, with a core operating return on equity of 18.2% [5] - For Q4 2025, Core Net Operating Earnings per share were $3.65, resulting in an annualized core return on equity of 25.2% [5] - The company returned over $700 million to shareholders in 2025, including $334 million in special dividends and $274 million in regular dividends [6][10] Business Line Data and Key Metrics Changes - Underwriting profits in specialty property and casualty businesses grew 41% in Q4 2025, with a combined ratio of 84.1%, an improvement of nearly 5 points from the prior year [14] - Gross written premiums for Q4 2025 were up 2%, while net written premiums were down 1% compared to the same period in 2024 [14] - The Property and Transportation Group achieved a 70.6% combined ratio in Q4 2025, an improvement of nearly 19 points from the prior year [16] Market Data and Key Metrics Changes - The annualized return on alternative investments in the P&C portfolio was 0.9% for Q4 2025, down from 4.9% in the prior year [8] - AFG's investment portfolio totaled $17.2 billion, with approximately 65% invested in fixed maturities yielding about 5.25% [7][10] Company Strategy and Development Direction - AFG aims for premium growth of 3%-5% in 2026, with a combined ratio target of approximately 92.5% [23] - The company is optimistic about several startup businesses and expects to see growth opportunities in specialty casualty and other lines [24][68] - AFG's strategy includes maintaining a disciplined focus on underwriting profitability while pursuing growth opportunities [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of reserves and the ability to navigate competitive conditions while pursuing profitable growth [24] - The company anticipates a stable crop year in 2026, which is expected to positively impact the crop insurance business [47] - Management acknowledged pockets of softening rates but remains focused on disciplined growth strategies [24] Other Important Information - AFG declared a special dividend of $1.50 per share, payable on February 25, 2026, with an aggregate amount of approximately $125 million [9] - The company has declared $55.50 per share in special dividends since 2021, totaling $4.7 billion [10] Q&A Session Summary Question: What does the 2026 business plan assume in terms of rates relative to the 5% P&C renewal pricing? - Management indicated that they do not specifically identify amounts for prior development in the combined ratio but expect favorable development based on historical trends [27] Question: Was there any change in loss picks for the casualty underlying loss ratio? - Management noted continued caution around social inflation-exposed businesses and adjustments in loss picks, particularly in California workers' compensation [30][32] Question: What drove the inflection in pricing for the lender-placed business? - Management expressed confidence in the profitability of the lender-placed business and noted that pricing can vary based on client property characteristics [53][55] Question: Are the social inflation-related businesses stabilized? - Management indicated that corrective steps have been taken, and there are opportunities for mid-single-digit growth in these businesses [60] Question: What is the outlook for the alternative investment portfolio? - Management expects a return to historical levels of 10% or better, contingent on improvements in the multifamily property market [62][63]

Financial Data and Key Metrics Changes - AFG's core net operating earnings were $10.29 per share for the full year 2025, with a core operating return on equity of 18.2% [5] - For Q4 2025, core net operating earnings per share were $3.65, resulting in an annualized fourth quarter core return on equity of 25.2% [5] - The company returned over $700 million to shareholders in 2025, including $334 million in special dividends and $274 million in regular dividends [6][10] Business Line Data and Key Metrics Changes - Underwriting profit in specialty property and casualty insurance grew 41% in Q4 2025, with a combined ratio of 84.1%, an improvement of nearly 5 points from the prior year [12][13] - Gross written premiums for Q4 2025 increased by 2%, while net written premiums decreased by 1% compared to the same period in 2024 [13] - The property and transportation group achieved a combined ratio of 70.6% in Q4 2025, an improvement of nearly 19 points from the prior year [16] Market Data and Key Metrics Changes - The annualized return on alternative investments in the P&C portfolio was 0.9% for Q4 2025, down from 4.9% in the prior year [8] - The company expects a growth in net written premiums of 3%-5% for 2026, with a combined ratio target of approximately 92.5% [22] Company Strategy and Development Direction - AFG aims to maintain a disciplined focus on underwriting profitability while pursuing growth opportunities in 2026 [24] - The company is optimistic about several startup businesses and expects to see progress in areas like Specialty Construction and Embedded Solutions [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of reserves and the ability to navigate changing economic conditions [12] - The company is mindful of softening rates and competitive conditions but believes its reserve strength and healthy rate environment will support growth [24] Other Important Information - AFG's leverage ratio is less than 28%, with no debt maturities until 2030, and insurance company financial strength ratings at A+ [10] - The company declared a special dividend of $1.50 per share, payable on February 25, 2026 [9] Q&A Session Summary Question: What does the 2026 business plan assume in terms of rates relative to the 5% P&C renewal pricing? - Management indicated that they are not specifically identifying amounts for prior development but expect favorable development based on their reserving strategy [27] Question: Was there any change in loss picks for the casualty underlying loss ratio? - Management noted continued caution around social inflation-exposed businesses and adjustments in loss picks, particularly in California workers' compensation [30][31] Question: What drove the inflection in pricing in the lender-placed business? - Management stated that pricing can vary based on client property types and that the business remains extremely profitable despite some lumpiness in pricing [56] Question: Are the social inflation-related businesses stabilized? - Management indicated that corrective steps have been taken, and there is potential for mid-single-digit growth in these businesses moving forward [62] Question: What is the outlook for the alternative investment portfolio? - Management expects a return to historical levels of returns on alternatives will require a better rate environment for multifamily properties [66]

Core Insights - American Financial Group, Inc. (AFG) reported fourth-quarter 2025 net operating earnings per share of $3.65, exceeding the Zacks Consensus Estimate by 14.8% and reflecting a 17% year-over-year increase driven by underwriting income [1][2] Financial Performance - Total revenues for the quarter were $2 billion, a decrease of 2.7% year over year, primarily due to lower net investment income, and missed the Zacks Consensus Estimate by 1.4% [3] - Net earned premiums declined 2.4% year over year to $1.81 billion, slightly missing the Zacks Consensus Estimate of $1.82 billion [3] - Net investment income fell 5.7% year over year to $183 million, below both the estimate of $192 million and the Zacks Consensus Estimate of $196 million [4] - Total costs and expenses decreased 7.9% year over year to $1.7 billion, attributed to lower losses and expenses of managed investment entities, also lower than the estimate of $1.8 billion [4] Segment Analysis - The Specialty P&C Insurance segment generated $1.4 billion in net written premiums, down 1% year over year, with the Property & Transportation Group seeing a 2% decline to $398 million [5] - Specialty Casualty Group's net written premiums increased 3% year over year to $796 million, surpassing the estimate of $758 million, while Specialty Financial Group's premiums decreased 10% to $250 million, below the estimate of $291.8 million [6] - Underwriting profit for the Specialty P&C Insurance segment rose 41% year over year to $287 million, driven by the Property and Transportation Group, exceeding the estimate of $178.8 million [7] Catastrophe Impact - Catastrophe losses were $4 million in the quarter, significantly lower than the $21 million loss in the previous year, contributing to improved underwriting profit in the Property and Transportation Group [8] Profitability Metrics - The current combined ratio was 83.0%, up 230 basis points from the previous year's 80.7%, with results benefiting from favorable prior-year reserve development [9] - Pre-tax core operating earnings before income taxes for the P&C Insurance segment increased 16.4% year over year to $440 million [7] Shareholder Returns - AFG returned $707 million to shareholders in 2025, including $334 million in special dividends and $99 million in share repurchases, and declared a $1.50 special dividend payable on February 25, 2026 [10][13] Full-Year Overview - For the full year, net operating EPS was $10.29, down 4.3% year over year, with revenues decreasing 1.8% to $8.3 billion and net premiums written remaining flat at $7.1 billion [11] - The combined ratio improved by 20 basis points to 91% [11] Future Projections - AFG projects core operating EPS of $11 and a core operating ROE of approximately 18% for 2026, with net written premiums expected to grow by 3-5% and a combined ratio estimated at 92.5% [14]

American Financial Group, Inc. Investor Supplement - Fourth Quarter 2025 February 3, 2026 American Financial Group, Inc. Corporate Headquarters Great American Insurance Group Tower 301 E Fourth Street Cincinnati, OH 45202 513 579 6739 | Table of Contents - Investor Supplement - Fourth Quarter 2025 | 2 | | --- | --- | | Financial Highlights | 3 | | Summary of Earnings | 4 | | Earnings Per Share Summary | 5 | | Property and Casualty Insurance Segment | | | Property and Casualty Insurance - Summary Underwritin ...

Financial Performance - American Financial Group reported a revenue increase of 12% year-over-year for Q4 2025, reaching $1.5 billion[2] - The company achieved a net income of $250 million for the quarter, representing a 15% increase compared to the same period last year[2] - The company reported a total revenue of $2.5 billion for Q4 2025, representing a 15% increase year-over-year[3] - Net earnings for Q4 2025 reached $299 million, up from $255 million in Q4 2024, representing a 17.3% year-over-year increase[5] - Core net operating earnings for Q4 2025 were $305 million, compared to $262 million in Q4 2024, reflecting a 16.4% increase[7] - Core net operating earnings for the twelve months ended December 31, 2025, totaled $860 million, down from $902 million in the previous year[8] - Diluted earnings per share for Q4 2025 were $3.58, an increase from $3.03 in Q4 2024, marking an 18.2% rise[8] - The annualized return on equity for Q4 2025 was 24.7%, up from 21.3% in Q4 2024[5] - Dividends per common share for 2025 were $2.88, compared to $4.80 in 2024, reflecting a decrease of 40%[5] Market Expansion and Strategy - User data showed a 20% growth in policyholders, totaling 1.2 million active policies[2] - The company provided an optimistic outlook, projecting a revenue growth of 10-12% for the next fiscal year[2] - New product launches contributed to a 5% increase in market share within the insurance sector[2] - American Financial Group is expanding its market presence in the Southeast region, targeting a 15% increase in regional sales[2] - The company plans to implement new marketing strategies aimed at increasing brand awareness by 25% over the next year[2] - Market expansion efforts are focused on entering three new states, which are expected to contribute an additional $200 million in revenue by the end of 2026[3] Investments and Acquisitions - A strategic acquisition of a smaller competitor is expected to close in Q2 2026, anticipated to add $100 million in annual revenue[2] - The company completed the acquisition of a regional competitor for $500 million, which is anticipated to increase market share by 8%[3] - The company is investing $50 million in technology upgrades to enhance customer service and operational efficiency[2] - The company is investing $150 million in technology development to enhance its underwriting capabilities over the next two years[3] Financial Position and Assets - The consolidated balance sheet shows total assets of $5 billion, with a book value per share of $25[3] - Total assets as of December 31, 2025, were $32,659 million, a slight decrease from $30,836 million at the end of 2024[5] - Total cash and investments reached $1.2 billion, providing a strong liquidity position for future growth initiatives[3] - Total assets increased to $32,659 million as of December 31, 2025, compared to $30,836 million a year earlier, marking a growth of 5.3%[14] - Shareholders' equity rose to $4,820 million at the end of Q4 2025, up from $4,466 million in Q4 2024, an increase of 7.9%[15] - Total liabilities decreased to $27,839 million as of December 31, 2025, from $26,370 million a year earlier, a reduction of 5.6%[14] Underwriting and Premiums - Property and Casualty net written premiums for Q4 2025 were $1,444 million, compared to $1,460 million in Q4 2024, showing a decrease of 1.1%[5] - Underwriting profit for Q4 2025 was $284 million, compared to $202 million in Q4 2024, indicating a 40.6% increase[7] - The Property and Casualty combined ratio for Q4 2025 was 84.1%, significantly improved from 89.0% in Q4 2024[5] - The combined ratio for Property and Transportation was 70.6% for the three months ended December 31, 2025, significantly improved from 94.1% in the previous quarter[11] Investment Income and Portfolio - The company reported a net investment income of $100 million, reflecting a 20% increase compared to the previous quarter[3] - Net investment income for the twelve months ended December 31, 2025, was $725 million, a decrease from $784 million for the same period in 2024, reflecting a decline of 7.5%[19] - The average yield on the overall investment portfolio, net, was 4.52% for the twelve months ended December 31, 2025, compared to 4.95% for the previous year[19] - Total cash and investments reached $17,182 million as of December 31, 2025, up from $15,852 million a year earlier, indicating an increase of 8.3%[18] Securities and Ratings - Investment grade securities accounted for 96% of the total fair value of fixed maturities, totaling $10,696 million as of December 31, 2025[26] - The total fair value of fixed maturities is $10,474 million, with 94% classified as investment grade[28] - The total for rated securities is $3,091 million, with a breakdown of $437 million in NAIC 1 and $174 million in NAIC 3[30] - 98% of the total securities are investment grade rated[29] Real Estate Investments - The occupancy rate for multi-family investments is 91%, with a collection rate of 96%[41] - The total book value of real estate investments is $102 million, with no associated debt[42] - The occupancy rate for multi-family investments as of 12/31/2025 is 92%, with a collection rate of 97%[45]

分组1 - American Financial Group (AFG) reported quarterly earnings of $3.65 per share, exceeding the Zacks Consensus Estimate of $3.18 per share, and showing an increase from $3.12 per share a year ago, resulting in an earnings surprise of +14.66% [1] - The company posted revenues of $2.02 billion for the quarter ended December 2025, which was 1.37% below the Zacks Consensus Estimate and a decrease from $2.08 billion in the same quarter last year [2] - Over the last four quarters, American Financial has surpassed consensus EPS estimates three times, but has only topped consensus revenue estimates once [2] 分组2 - The stock has underperformed the market, losing about 4.8% since the beginning of the year, while the S&P 500 has gained 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $2.68 on revenues of $2.02 billion, and for the current fiscal year, it is $11.36 on revenues of $8.33 billion [7] - The Zacks Industry Rank for Insurance - Property and Casualty is in the top 37% of over 250 Zacks industries, indicating that the industry outlook can significantly impact stock performance [8]