American Financial Group Reports Record Q4 Performance with Strong Underwriting Profits
American Financial Group, Inc. (AFG) has announced a robust financial performance for the fourth quarter of 2025, highlighted by record underwriting profits. The Cincinnati-based insurer reported net earnings of $299 million, or $3.58 per share, an increase from $255 million, or $3.03 per share, during the same period in 2024. Core net operating earnings reached $305 million, or $3.65 per share, surpassing last year's figures and exceeding analyst predictions by 10.1%. Despite these achievements, AFG's stock saw a 2.26% decline in premarket trading.
Throughout 2025, AFG reported net earnings of $10.08 per share, a slight drop from $10.57 per share in 2024. The insurer's return on equity was 17.8%, down from the previous year's 19.0%. In its specialty property and casualty operations, AFG achieved an underwriting profit of $287 million in Q4, marking a 41% improvement from $204 million in 2024. The combined ratio was reported at 84.1%, outperforming the broader U.S. property and casualty industry combined ratio of 94.0 for the first nine months of 2025.
Strong Performance in Specialty Divisions
AFG's co-CEO, Carl Lindner III, attributed the exceptional profitability to strong performance in crop insurance due to favorable agricultural yields and commodity pricing. The Property and Transportation Group achieved a combined ratio of 70.6%, improving by nearly 19 points year-over-year. Meanwhile, the Specialty Financial Group posted a combined ratio of 83.0%, and the Specialty Casualty Group recorded 96.7%.
Minimal Catastrophe Losses
Catastrophe losses were minimal, contributing just 0.2 points to Q4 results, decreasing from 1.1 points the previous year. Losses totaled $4 million in Q4 2025, compared to $21 million in Q4 2024. Favorable reserve development added $27 million to the quarter's financial outcome, enhancing AFG's risk management strategy.
Investment and Shareholder Returns
Alternative investments contributed $6 million to AFG's pretax core operating earnings in Q4 2025, down from $33 million the previous year. The company's book value per share stood at $57.78 as of December 31, 2025. AFG's board declared a special dividend of $1.50 per share, with total special dividends since 2021 reaching $55.50 per share. Co-CEOs Carl H. Lindner III and S. Craig Lindner stressed returning capital to shareholders through dividends and share buybacks, maintaining substantial excess capital.
AFG anticipates 2026 core net operating earnings of $11 per share, projecting net written premium growth between 3-5% and aiming for a combined ratio of 92.5%, ensuring regulatory compliance and strategic growth in their underwriting and claims processes.