American Financial Group Reports Strong Q1 2026 Earnings
American Financial Group, Inc. (AFG) reported robust financial results for the first quarter of 2026, driven by significant growth in net earnings and strong performance in its Specialty Property and Casualty (P&C) Insurance Operations. The company recorded net earnings of $191 million, or $2.29 per diluted share, marking an increase from $154 million, or $1.84 per share, in the first quarter of 2025. This rise largely reflects improved property and casualty underwriting despite diminished returns from alternative investments.
Core net operating earnings, a non-GAAP measure indicating ongoing business performance, reached $206 million or $2.47 per share, compared to $152 million or $1.81 per share in the prior year's period. AFG achieved an annualized return on equity of 17% for the quarter, excluding accumulated other comprehensive income.
AFG’s Specialty P&C Division saw a notable increase in underwriting profit, with the combined ratio improving to 90.3% from 94.0% in the first quarter of 2025. This improvement was driven by reduced catastrophe losses and favorable prior year reserve development. Additionally, gross and net written premiums rose by 6% and 3%, respectively, from the previous year.
The Property and Transportation Group reported an underwriting profit of $65 million, up from $37 million last year, benefiting from stronger performance in agricultural and transportation lines. This group's combined ratio improved to 87.6%, supported by favorable renewal rates and growth in crop insurance.
Underwriting profit in the Specialty Casualty Group increased to $34 million from $20 million, with workers' compensation and professional liability segments contributing significantly. The group posted a combined ratio improvement to 95.8% from 97.6%. Excluding workers' compensation, renewal rates increased by 6%, underscoring a focus on profitability amid competitive pressures.
The Specialty Financial Group recorded an underwriting profit of $57 million, up from $37 million in the previous year, bolstered by strong results in fidelity/crime and financial institution sectors. The group’s combined ratio improved to 80.0%, demonstrating a 7.0 point enhancement year-over-year.
AFG's investment income rose by 8%, excluding alternative investments, despite negative returns from these investments for the quarter. However, the company anticipates continuing positive returns in the long term. AFG also announced the anticipated sale of the Charleston Harbor Resort & Marina, expected to close later in 2026, potentially yielding a pretax gain of $125 million.
Company leaders, including Co-CEOs S. Craig Lindner and Carl H. Lindner III, highlighted the strong start to 2026 and reiterated their strategy of returning capital to shareholders through dividends and share repurchases. They also outlined strategic plans for capital deployment aimed at fostering organic growth and expanding specialty niches via acquisitions and start-ups. Additional financial details are available in AFG's Quarterly Investor Supplement on the company's website.