American Financial Group Stock Earnings Reports

Key investor takeaways from AFG's Q2 2025 earnings call: strong core operating profitability and disciplined underwriting — management reported a 15.5% annualized core operating return on equity and core net operating earnings of $2.14 per share (down from $2.56 prior year). Specialty P&C underwriting remained solid (Specialty P&C combined ratio 93.1%), with premium growth (Q2 gross +10%, net +7%; excluding crop business gross +6%/net +5%) and continued renewal rate increases (36 consecutive quarters). Investment income benefited from higher interest rates (P&C fixed maturities yields ~5.2%–5.75%; net investment income ex-alternatives +10% y/y) but alternative investments underperformed in the quarter (P&C alternatives annualized Q2 return ~1.2% vs 5.1% prior year) driven by multifamily valuation pressure from excess supply; management expects alternatives to generate attractive long-term returns. Capital allocation remains a priority — AFG returned over $100 million in Q2 (including $39 million of buybacks and a $0.80 quarterly dividend) and expects to generate excess capital through 2025, leaving flexibility for acquisitions, special dividends or further repurchases. Reserve development was less favorable vs. last year (lower reserve releases YTD), but management affirmed confidence in reserve strength. Business highlights: continued rate adequacy actions across lines (notably commercial auto +15% in Q2 in Property & Transportation; Specialty Financial combined ratio 86.1% with strong growth), targeted nonrenewals in social-inflation-exposed accounts (housing/daycare) largely nearing completion, and a cautiously constructive outlook for crop results (timing shift of crop premiums into Q2 ~ $100M gross / $40M net). Overall, AFG emphasizes capital discipline, underwriting segmentation/price actions, and opportunistic investing as its path to long-term shareholder value creation.