American Financial Group Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 5 August 2026: press release. Guidance figures: 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Diluted EPS $2.99, core EPS $2.82: Diluted EPS was $2.99 against $2.07, including $0.17 of after-tax non-core gains. Core net operating EPS was $2.82 against $2.14. Source
• Pretax P&C income at second-quarter high: Pretax P&C operating income was $350 million, a second-quarter record, against $273 million a year earlier. Source
• Specialty P&C combined ratio improved: Specialty P&C combined ratio was 91.5% against 93.1%. Underwriting profit was $144 million against $114 million a year earlier. Source
• Renewal pricing up about 5%: Renewal pricing excluding workers’ compensation rose about 5%, consistent with the first quarter. Including workers’ compensation, renewal rates rose about 4%. Source
• Prior-year reserve releases lifted results: Favorable reserve development totaled $55 million, led by $42 million in Property and Transportation and $14 million in Specialty Financial. Source
• Investment income up 23%: P&C net investment income rose 23% to a second-quarter record. Excluding alternative investments it was flat. Source
• Alternative return about 7.1%: Annualized return on alternative investments was about 7.1% against 1.2% a year earlier. Source
• Charleston Harbor sale agreements: Definitive agreements for the Charleston Harbor Resort & Marina sale were reached in April 2026. Management said the sale was not in its original plan assumptions. Source

“AFG continued to have significant excess capital at June 30, 2026.”

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

Guidance

Earnings and return measures

• Diluted EPS $2.99, core EPS $2.82: Diluted EPS was $2.99 against $2.07, including $0.17 of after-tax non-core gains. Core net operating EPS was $2.82 against $2.14. Source
• Core earnings rose on underwriting: Core net operating earnings were $234 million against $179 million. The company attributed the rise to higher underwriting profit and higher alternative investment returns. Source
• Pretax P&C income at second-quarter high: Pretax P&C operating income was $350 million, a second-quarter record, against $273 million a year earlier. Source
• Returns on equity higher: Annualized ROE was 20.3% against 15.0%, excluding AOCI. Core operating ROE was 19.2% against 15.5%. Source

Specialty P&C groups

• Specialty P&C combined ratio improved: Specialty P&C combined ratio was 91.5% against 93.1%. Underwriting profit was $144 million against $114 million a year earlier. Source
• Property and Transportation profit rose: Property and Transportation underwriting profit was $57 million against $27 million. Its combined ratio was 90.3% against 95.2%, led by transportation and agricultural businesses. Source
• Specialty Casualty profit was lower: Specialty Casualty underwriting profit was $45 million against $49 million. Combined ratio was 94.5% against 93.9%, with lower workers’ compensation and executive and professional liability profit. Source
• Specialty Financial profit rose: Specialty Financial underwriting profit was $42 million against $38 million. Combined ratio was 85.6% against 86.1%, mainly from financial institutions, fidelity/crime and surety. Source

“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.”

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

Premiums and renewal pricing

• Premiums up 7% gross, 6% net: Gross written premiums rose 7% to $2,850 million and net written premiums rose 6% to $1,915 million. Premiums grew year over year in each Specialty P&C group. Source
• Renewal pricing up about 5%: Renewal pricing excluding workers’ compensation rose about 5%, consistent with the first quarter. Including workers’ compensation, renewal rates rose about 4%. Source
• Property and Transportation renewals up 8%: Renewal rates in the group rose about 8%, two points above first-quarter pricing. Gross written premiums rose 8% to $1,351 million, mainly from crop insurance growth. Source
• Specialty Casualty and Financial pricing: Specialty Casualty pricing excluding workers’ compensation was about 4%, and about 2% including it. Specialty Financial renewal pricing decreased less than 1%. Source

Losses, expenses and reserves

• Prior-year reserve releases lifted results: Favorable reserve development totaled $55 million, led by $42 million in Property and Transportation and $14 million in Specialty Financial. Source
• Catastrophe losses lower: Catastrophe losses were 1.8 points of the Specialty P&C combined ratio against 2.3 points. Specialty Financial catastrophe losses were $10 million against $19 million. Source

“These results position us well as we enter the second half of the year.”

Carl Lindner III

Investment income and alternatives

• Investment income up 23%: P&C net investment income rose 23% to a second-quarter record. Excluding alternative investments it was flat. Source
• Alternative return about 7.1%: Annualized return on alternative investments was about 7.1% against 1.2% a year earlier. Source
• Five-year alternative return about 11%: Average annual alternative return over the five calendar years to 2025 was about 11%. Source
• Fixed maturity portfolio credit quality: 97% of fixed maturities were investment grade and 98% of P&C fixed maturities were NAIC 1 or 2. After-tax unrealized fixed-maturity losses were $116 million. Source

Capital and shareholder returns

• Book value per share $58.14: Book value per share was $58.14 against $57.78 at December 31, 2025. Excluding AOCI it was $59.85 against $58.38. Growth plus dividends was 6.3% for six months. Source
• Buybacks and dividends in quarter: Repurchased $26 million of common stock at an average $129.85 per share and paid $0.88 per share of cash dividends in the quarter. Source
• Accumulated other comprehensive loss higher: AOCI loss was $142 million at June 30, 2026, against a $50 million loss at year-end 2025, reflected in reported shareholders’ equity. Source

Deal activity and capital deployment

• Charleston Harbor sale agreements: Definitive agreements for the Charleston Harbor Resort & Marina sale were reached in April 2026. Management said the sale was not in its original plan assumptions. Source
• Acquisitions and start-ups targeted: Management cites expansion of specialty niche businesses through acquisitions and start-ups that meet target return thresholds. Source
• Capital to fund core businesses: Management said capital will go into core businesses as potential for healthy, profitable organic growth is identified. Source

Coming up, as management said on 5 August 2026

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

Figures management reported

Risks management discussed

• Financial: Alternative investment earnings may vary quarter to quarter and are reported on a quarter lag. Source
• Demand: Management said some P&C markets have softened, while premium growth was supported by diversification across 36 businesses. Source

Earlier plans management reported on

• Not stated: Management believes overall renewal rate increases enable it to meet or exceed targeted returns. Source

Other quarters

• Q1 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.