American Financial reports net earnings of $174m in Q2’25

American Financial Group, Inc. (AFG) reported net earnings of $174 million for the second quarter of 2025, down from $209 million in the same quarter a year earlier.

Net earnings included after-tax non-core losses of $5 million, compared to $6 million in Q2’24.

Core net operating earnings for the quarter were $179 million, down from $215 million, primarily due to lower underwriting profit and reduced returns on alternative investments.

Total revenues stood at $1.92 billion, slightly up from $1.9 billion.

Net earned premiums rose to $1.65 billion from $1.59 billion.

Net investment income declined to $184 million, down from $188 million in the prior-year quarter.

In AFG’s Specialty P&C insurance operations, the company reported a combined ratio of 93.1% in Q2’25, up 2.6 points from 90.5% in Q2’24. Of this increase, 2.3 points were related to catastrophe losses, consistent with the prior-year period. The quarter also benefited from 0.7 points of favourable prior year reserve development, compared to 2.3 points in Q2’24.

The combined ratio consisted of a loss ratio of 61.1% and an expense ratio of 32%, compared to 59.1% and 31.4%, respectively, a year earlier.

Underwriting profit totalled $114 million, down from $151 million, with the Property and Transportation Group contributing $27 million, the Specialty Casualty Group $49 million, and the Specialty Financial Group $38 million.

Gross written premiums for the Specialty P&C operations were $2.65 billion, up 10% from $2.41 billion.

Net written premiums rose 7% to $1.8 billion, from $1.69 billion.

Carl H. Lindner III and S. Craig Lindner, AFG’s Co-CEOs, stated, “We are pleased to report an annualised core operating return on equity of 15.5% despite muted quarterly returns from alternative investments. Overall underwriting margins in our specialty P&C insurance businesses were strong, and higher interest rates increased net investment income, excluding alternatives, by 10% year over year. 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, 2025. 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.”