Results
Net earnings per share of $2.99; includes $0.17 per share income from non-core items
Second quarter core net operating earnings per share of $2.82
Record second quarter pretax P&C operating income of $350 million
Second quarter annualized ROE of 20.3%; core operating ROE of 19.2%
3Second quarter growth in net written premiums of 6%
2Overall average renewal rate increases, excluding workers’ compensation, of approximately 5%
CINCINNATI – August 4, 2026 – American Financial Group, Inc. (NYSE: AFG) today reported 2026 second quarter net earnings of $248 million ($2.99 per share) compared to $174 million ($2.07 per share) for the 2025 second quarter.
Net earnings included after-tax non-core gains of $14 million ($0.17 per share).
By comparison, net earnings for the 2025 second quarter included after-tax non-core losses of $5 million ($0.07 per share loss).
Annualized return on equity was 20.3% and 15.0% for the second quarters of 2026 and 2025, respectively, and is calculated excluding accumulated other comprehensive income (AOCI).
Other details may be found in the table on the following page.
Core net operating earnings were $234 million ($2.82 per share) for the 2026 second quarter, compared to $179 million ($2.14 per share) in the 2025 second quarter.
The year-over-year increase reflects higher underwriting profit and higher returns in AFG’s alternative investment portfolio.
Additional details for the 2026 and 2025 second quarters may be found in the table below.
Core net operating earnings for the second quarters of 2026 and 2025 generated annualized returns on equity of 19.2% and 15.5%, respectively, which is calculated excluding AOCI.
Capital return
AFG’s book value per share was $58.14 at June 30, 2026.
AFG repurchased $26 million of its Common Stock (average price of $129.85 per share) and paid cash dividends of $0.88 per share during the second quarter.
6For the three and six months ended June 30, 2026, AFG’s growth in book value per share plus dividends was 4.8% and 6.3%, respectively.
Results
Book value per share excluding AOCI was $59.85 at June 30, 2026.
7For the three and six months ended June 30, 2026, AFG’s growth in book value per share excluding AOCI plus dividends was 5.0% and 8.1%, respectively.
Management commentary
Carl H. Lindner III and S. Craig Lindner, AFG’s Co-Chief Executive Officers, issued this statement: “AFG’s strong underwriting margins, healthy premium growth and higher P&C net investment income set a new second quarter record for pretax P&C operating income.
1This level of performance contributed to an annualized core operating return on equity of 19%.
These results, coupled with effective capital management and our entrepreneurial, opportunistic culture and disciplined operating philosophy enable us to continue to create value for our shareholders.
Messrs.
Lindner continued: “AFG continued to have significant excess capital at June 30, 2026.
Returning capital to shareholders in the form of regular and special cash dividends and through opportunistic share repurchases is an important and effective component of our capital management strategy.
In addition, our capital will be deployed into AFG’s core businesses as we identify the potential for healthy, profitable organic growth, and opportunities to expand our specialty niche businesses through acquisitions and start-ups that meet our target return thresholds.”
Results
Specialty Property and Casualty Insurance Operations
The Specialty P&C insurance operations generated a 91.5% combined ratio in the second quarter of 2026, an improvement of 1.6 points from the 93.1% reported in the second quarter of 2025.
Second quarter 2026 results include 1.8 points related to catastrophe losses, compared to 2.3 points in the 2025 second quarter.
Second quarter 2026 results benefited from 3.4 points of favorable prior year reserve development, compared to 0.7 points in the second quarter of 2025.
Underwriting profit was $144 million for the 2026 second quarter compared to $114 million for the 2025 second quarter.
Higher year-over-year underwriting profit in our Property and Transportation Group was the driver of this increase.
Second quarter 2026 gross and net written premiums were up 7% and 6%, respectively, when compared to the second quarter of 2025.
This quarterly increase highlights the benefit of diversification across our 36 businesses, particularly as some markets in the P&C industry have softened.
We achieved year-over-year premium growth in each of our Specialty P&C Groups overall as a result of new business opportunities, a favorable renewal rate environment, and increased exposures – while maintaining discipline and focusing on underwriting profitability.
Average renewal pricing across our P&C Group, excluding workers’ compensation, was up 5% on average for the quarter, consistent with pricing increases achieved in the first quarter.
Average renewal rates including workers’ compensation were up approximately 4% overall, about a point higher than the previous quarter.
We believe we are achieving overall renewal rate increases that enable us to meet or exceed targeted returns.
The Property and Transportation Group reported an underwriting profit of $57 million in the second quarter of 2026, compared to $27 million in the second quarter of 2025, reflecting higher underwriting profit in our transportation and agricultural businesses.
Catastrophe losses in this group were $12 million in both the second quarters of 2026 and 2025.
Overall, the businesses in the Property and Transportation Group achieved a 90.3% calendar year combined ratio in the second quarter, an improvement of 4.9 points from the comparable period in 2025.
Second quarter 2026 gross and net written premiums in this group were 8% and 5% higher, respectively, than the comparable prior year.
The increase is primarily attributable to growth in crop insurance products with higher premium cessions, along with new business opportunities, higher exposures, and a favorable rate environment in several of our transportation businesses.
Overall renewal rates in this group increased approximately 8% in the second quarter of 2026, two points higher than the pricing achieved in this group for the first quarter of 2026.
The Specialty Casualty Group reported underwriting profit of $45 million in the second quarter of 2026, compared to $49 million in the second quarter of 2025.
Higher profitability in our general liability businesses focused on energy, construction and environmental risks, along with our excess and surplus and targeted markets businesses, was more than offset by lower profitability in our workers compensation and executive and professional liability businesses.
Underwriting profitability in our workers’ compensation and professional liability businesses continues to be very strong.
The businesses in the Specialty Casualty Group achieved a solid 94.5% calendar year combined ratio in the second quarter of 2026, 0.6 points higher than the 93.9% reported in the comparable period in 2025.
Second quarter 2026 gross and net written premiums in this group increased 5% and 6%, respectively, when compared to the same prior year period.
New business opportunities, increased exposures and higher rates drove the year-over-year increase in many of our Specialty Casualty businesses.
Excluding workers’ compensation, renewal pricing for this group was up approximately 4% in the second quarter.
Pricing in this group, including workers’ compensation, was up about 2%.
The Specialty Financial Group reported an underwriting profit of $42 million in the second quarter of 2026, compared to $38 million in the second quarter of 2025, due primarily to higher underwriting profitability in our financial institutions, fidelity / crime, and surety businesses.
Catastrophe losses for this group were $10 million in the second quarter of 2026 compared to $19 million in the prior year quarter.
5This group continued to achieve excellent underwriting margins and reported a combined ratio of 85.6% for the second quarter of 2026, 0.5 points better than the 86.1% reported in the comparable period in 2025.
Second quarter 2026 gross and net written premiums were both up 10% in this group when compared to the prior year period, primarily due to growth in our financial institutions business.
Renewal pricing in this group decreased less than 1% in the second quarter, reflecting the strong margins earned on these businesses overall.
Management commentary
4Carl Lindner III stated, “I am very pleased with the 44% increase in underwriting profit in the first six months of the year, and happy to see our teams executing on opportunities to grow while achieving renewal rate increases that are helping us meet targeted returns.
These results position us well as we enter the second half of the year.”
Corporate events
Investments
Results
8Net Investment Income – Net investment income in our property and casualty insurance operations for the three months ended June 30, 2026 established a new second quarter record, increasing 23% year-over-year.
The year-over-year increase was primarily attributable to higher yields on our portfolio of alternative investments.
Property and casualty net investment income excluding the impact of alternative investments was flat when compared to the 2025 second quarter.
The annualized return on alternative investments was approximately 7.1% for the 2026 second quarter compared to 1.2% 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, 2025, was approximately 11%.
Longer term, we continue to remain optimistic regarding the prospects of attractive returns from our alternative investment portfolio, with an expectation of annual returns averaging 10% or better.
Corporate events
In April 2026, AFG reached definitive agreements to sell the Charleston Harbor Resort & Marina.
Subject to receipt of necessary third-party approvals and satisfaction of customary closing conditions, the transaction is expected to close in the third quarter of 2026.
AFG currently expects to recognize a pretax core operating gain of approximately $125 million on the sale.
This transaction was not contemplated in AFG’s original business plan assumptions.
Results
Non-Core Net Realized Gains (Losses) – AFG recorded second quarter 2026 net realized gains of $14 million ($0.17 per share) after tax, which included $10 million ($0.12 per share) in after-tax net gains to adjust equity securities that the Company continued to own at June 30, 2026, to fair value.
By comparison, AFG recorded second quarter 2025 net realized gains of $2 million ($0.02 per share) after tax.
After-tax unrealized losses related to fixed maturities were $116 million at June 30, 2026.
Our portfolio continues to be high quality, with 97% of our fixed maturity portfolio rated investment grade and 98% of our P&C fixed maturity portfolio with a National Association of Insurance Commissioners’ designation of NAIC 1 or 2, its highest two categories.
Corporate events
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Results
SUMMARY OF EARNINGS AND SELECTED BALANCE SHEET DATA
a)Components of core net operating earnings (in millions):
b)Shareholders’ Equity at June 30, 2026, includes ($142 million) ($1.71 per share loss) in Accumulated Other Comprehensive Income (Loss) compared to ($50 million) ($0.60 per share loss) at December 31, 2025.
61 boilerplate lines (safe-harbor disclaimer, contacts, call details) are set aside.