American Financial Group Inc.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 30 April 2026: press release. Guidance figures: 1 new, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net earnings $2.29 per share: Net earnings were $191 million, or $2.29 per share, against $154 million ($1.84) a year earlier. The result included a $0.18 per share loss from non-core items. Source
• Core earnings up 36% year over year: Core net operating earnings were $206 million, or $2.47 per share, against $152 million ($1.81). Core ROE was 17.0%, against 13.1%. Higher P&C underwriting profit was partly offset by lower alternative investment returns. Source
• Underwriting profit up 66%: Specialty P&C underwriting profit was $156 million against $94 million, up 66%. Each of the three Specialty P&C groups reported higher underwriting profit than a year earlier. Source
• Specialty combined ratio improved 3.7 points: The Specialty combined ratio was 90.3%, against 94.0%. The loss and LAE ratio fell to 56.3% from 61.0%, while the underwriting expense ratio rose to 34.0% from 33.0%. Source
• Written premiums up 6% gross, 3% net: Gross written premiums were $2,435 million, up 6%, and net written premiums were $1,664 million, up 3%. Source
• Favorable prior-year reserve development: Prior year reserve development added 4.4 points to the Specialty combined ratio, against 1.3 points a year earlier. Total reserve development was $70 million favorable, against $20 million. Source
• Alternative return negative this quarter: The annualized return on alternative investments was (0.4%), against 1.8% a year earlier. Including alternatives, P&C net investment income was about 1% lower year over year. Source
• About $259 million returned in quarter: Capital returned to shareholders was about $259 million, including $125 million of special dividends and $60 million of share repurchases. Source

“We are pleased to report a core net operating ROE of 17% in the first quarter.”

S. Craig Lindner and Carl H. Lindner III, AFG’s Co-Chief Executive Officers

Guidance

What changed from last quarter

• New: Definitive agreements were reached in April 2026 to sell Charleston Harbor Resort & Marina. Source

Earnings and core results

• Net earnings $2.29 per share: Net earnings were $191 million, or $2.29 per share, against $154 million ($1.84) a year earlier. The result included a $0.18 per share loss from non-core items. Source
• Core earnings up 36% year over year: Core net operating earnings were $206 million, or $2.47 per share, against $152 million ($1.81). Core ROE was 17.0%, against 13.1%. Higher P&C underwriting profit was partly offset by lower alternative investment returns. Source
• Realized losses excluded from core: After-tax realized losses on securities were $15 million. Of that, $13 million came from fair value adjustments to equity securities still held at March 31, 2026. Source

Specialty P&C underwriting by group

• Underwriting profit up 66%: Specialty P&C underwriting profit was $156 million against $94 million, up 66%. Each of the three Specialty P&C groups reported higher underwriting profit than a year earlier. Source
• Specialty combined ratio improved 3.7 points: The Specialty combined ratio was 90.3%, against 94.0%. The loss and LAE ratio fell to 56.3% from 61.0%, while the underwriting expense ratio rose to 34.0% from 33.0%. Source
• Property and Transportation profit higher: The group's combined ratio was 87.6%, against 92.5%. Underwriting profit was $65 million against $37 million, led by agricultural and transportation businesses, with catastrophe losses of $12 million against $10 million. Source
• Specialty Casualty profit higher: Underwriting profit was $34 million against $20 million, with a combined ratio of 95.8% against 97.6%. Targeted markets, workers' compensation, and executive and professional liability drove the improvement. Source
• Specialty Financial combined ratio 80.0%: Underwriting profit was $57 million against $37 million, with a combined ratio of 80.0% against 87.0%. Fidelity/crime and financial institutions drove the improvement, and catastrophe losses were $12 million against $35 million. Source

“and are confident about the strength of our reserves.”

Carl Lindner III

Premium growth and renewal pricing

• Written premiums up 6% gross, 3% net: Gross written premiums were $2,435 million, up 6%, and net written premiums were $1,664 million, up 3%. Source
• Crop insurance drove Property growth: Property and Transportation gross premiums rose 11% and net premiums rose 6%. The increase was mainly from crop insurance products with higher premium cessions, plus new business, higher exposures and rates. Source
• Renewal pricing up about 5%: Renewal pricing excluding workers' compensation rose about 5%, in line with the prior quarter. Including workers' compensation, pricing rose about 3%. Source

Reserves and catastrophe losses

• Favorable prior-year reserve development: Prior year reserve development added 4.4 points to the Specialty combined ratio, against 1.3 points a year earlier. Total reserve development was $70 million favorable, against $20 million. Source
• Catastrophe losses fell to 2.2 points: Catastrophe losses were 2.2 points of the Specialty combined ratio, against 4.5 points a year earlier. Source
• Property and Transportation reserve release: Property and Transportation recorded $47 million of favorable development this quarter, against $19 million a year earlier. Specialty Casualty recorded none, against $12 million adverse. Source

“AFG continued to have significant excess capital at March 31, 2026.”

S. Craig Lindner and Carl H. Lindner III, AFG’s Co-Chief Executive Officers

Investment income and alternative returns

• Alternative return negative this quarter: The annualized return on alternative investments was (0.4%), against 1.8% a year earlier. Including alternatives, P&C net investment income was about 1% lower year over year. Source
• Investment income up 8% before alternatives: Excluding alternatives, P&C net investment income rose 8%, mainly from higher invested asset balances. Source
• Five-year alternative return about 11%: The average annual return on alternative investments was about 11% over the five calendar years ended December 31, 2025. Source

Capital returns to shareholders

• About $259 million returned in quarter: Capital returned to shareholders was about $259 million, including $125 million of special dividends and $60 million of share repurchases. Source
• Repurchases at average $127.12 per share: Repurchases were $60 million at an average of $127.12 per share. Dividends paid were $2.38 per share, including a $1.50 special dividend paid in February. Source
• Book value plus dividends up 1.6%: Growth in book value per share plus dividends was 1.6% for the quarter. Excluding AOCI, the same measure was 3.1%. Source

Strategy and capital deployment

• Capital to fund growth and acquisitions: Management said capital will be deployed into core businesses as organic growth potential is identified, and into acquisitions and start-ups that meet target return thresholds. Source
• Charleston sale not in original plan: The Charleston Harbor transaction was not contemplated in the original business plan assumptions. Closing requires third-party approvals and customary closing conditions. Source
• Culture and philosophy cited: Management said its entrepreneurial, opportunistic culture and disciplined operating philosophy position it for long-term success. Source

Book value and balance sheet

• Book value per share $56.30: Book value per share was $56.30 at March 31, 2026, against $57.78 at December 31, 2025. Excluding AOCI, it was $57.83, against $58.38. Source
• AOCI loss widened: AOCI was a loss of $127 million ($1.53 per share) at March 31, 2026, against a $50 million loss at year-end 2025. After-tax unrealized losses on fixed maturities were $101 million. Source
• Cash, investments and debt steady: Total cash and investments were $17,143 million, against $17,182 million at year-end. Long-term debt was unchanged at $1,820 million. Source

Coming up, as management said on 30 April 2026

• Charleston Harbor sale closing: Closing is expected in the second or third quarter of 2026, subject to third-party approvals and customary closing conditions. Source

Figures management reported

Risks management discussed

• Financial: Alternative investment earnings vary from quarter to quarter with underlying results and are reported on a quarter lag. Source
• Demand: Growth in excess and surplus lines was partly offset by heightened competition in that business. Source
• Operational: Management ceded more coastal-exposed property business in financial institutions from the second quarter of 2025, which tempered net written premiums. Source

Earlier plans management reported on

• Not stated: Management continues to expect long-term alternative investment returns averaging 10% or better. The release gives no status against that target for this quarter. Source
• Not stated: Management believes renewal rate increases are enabling it to meet or exceed targeted returns. Source

Other quarters

• Q2 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.