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Group 1 - American Financial Group, Inc. (AFG) will participate in investor meetings hosted by Dowling & Partners in New York City on November 20, 2025 [1] - The investor materials for the meeting will be available on AFG's Investor Relations page prior to the event [2] - AFG is primarily engaged in property and casualty insurance through its subsidiary, Great American Insurance Group, which has a history dating back to 1872 [3] Group 2 - AFG reported third quarter net earnings of $215 million ($2.58 per share) for 2025, an increase from $181 million ($2.16 per share) in the same quarter of 2024 [5] - The net earnings for the third quarter included after-tax non-core items that reduced net income by $9 million ($0.11 per share loss) in 2025 and $13 million ($0.15 per share loss) in 2024 [5] - The annualized return on equity for the third quarter was 18.2% in 2025 compared to 15.2% in 2024 [5] Group 3 - AFG will participate in the 2025 Raymond James Virtual Insurance Conference on November 10, 2025, with several investor meetings planned [6] - AFG expects to release its third quarter results on November 4, 2025, followed by a conference call on November 5, 2025, to discuss the results [7]

Financial Performance - Net earned premiums for the three months ended September 30, 2025, were $2,013 million, a decrease of 2.0% compared to $2,055 million for the same period in 2024[9] - Net earnings for the three months ended September 30, 2025, were $215 million, an increase of 18.8% from $181 million in the same period of 2024[10] - Earnings per share for the three months ended September 30, 2025, were $2.58, up from $2.16 in the same period of 2024, marking a 19.5% increase[9] - Total revenues for Q3 2025 were $2,331 million, a slight decrease of 1.6% compared to $2,369 million in Q3 2024[63] - Total revenues for the nine months ended September 30, 2025, were $6,111 million, a decrease of 1.0% from $6,175 million in the same period of 2024[63] - Net earnings for the nine months ended September 30, 2025, were $543 million, a decrease of 14.1% compared to $632 million in 2024[16] - Earnings before income taxes (EBT) for Q3 2025 was $268 million, compared to $229 million in Q3 2024, reflecting an increase of 17%[133] Assets and Liabilities - Total assets increased to $33,834 million as of September 30, 2025, up from $30,836 million at December 31, 2024, representing a growth of 9.7%[7] - Total liabilities increased to $29,104 million as of September 30, 2025, compared to $26,370 million at December 31, 2024, indicating an increase of 10.4%[7] - Shareholders' equity rose to $4,730 million as of September 30, 2025, compared to $4,466 million at December 31, 2024, reflecting a growth of 5.9%[7] - The balance of recoverables from reinsurers was $5,565 million as of September 30, 2025, compared to $5,176 million at the end of 2024[139] - The net liability for losses and LAE at the end of Q3 2025 was $9,708 million, an increase from $9,221 million at the end of Q3 2024[136] Investment Income - Net investment income rose to $205 million for the three months ended September 30, 2025, compared to $200 million in the same period of 2024, reflecting a 2.5% increase[9] - The company reported a gross investment income of $211 million for the three months ended September 30, 2025, compared to $206 million for the same period in 2024[102] - The company reported a net investment income of $27 million for the nine months ended September 30, 2025, compared to $34 million for the same period in 2024[86] Dividends - The company declared dividends of $0.80 per share for the three months ended September 30, 2025, compared to $0.71 per share in the same period of 2024[11] - The company paid dividends of $4.40 per share in 2025, totaling $368 million, compared to $4.63 per share totaling $387 million in 2024, indicating a decrease in total dividends paid[14] Underwriting and Claims - Underwriting profit for the property and casualty insurance segment increased to $138 million in Q3 2025, up 20.0% from $115 million in Q3 2024[66] - Losses and loss adjustment expenses for the property and casualty insurance segment were $1,355 million in Q3 2025, a decrease of 5.2% from $1,430 million in Q3 2024[66] - Total losses and loss adjustment expenses (LAE) incurred for the first nine months of 2025 were $3,327 million, slightly up from $3,279 million in the same period of 2024[136] Cash Flow - The company reported a net cash provided by operating activities of $749 million for the nine months ended September 30, 2025, compared to $478 million for the same period in 2024, representing a 56.6% increase[16] - The company reported a net cash used in investing activities of $(71) million, a decrease from $116 million in 2024[16] - The net cash used in financing activities decreased to $242 million in 2025 from $497 million in 2024, indicating a reduction of 51.3%[16] Fair Value Measurements - Total assets accounted for at fair value as of September 30, 2025, amounted to $15,374 million, with Level 3 assets representing approximately 7% of this total[74] - Total liabilities accounted for at fair value as of September 30, 2025, were $3,840 million[74] - Level 3 assets experienced a balance of $1,004 million as of September 30, 2025, after accounting for various gains and losses[79] Acquisitions - In the third quarter of 2025, AFG acquired 52% of Radion Insurance Holdings, LLC for $7 million, resulting in $5 million of amortizing intangible assets and $22 million in goodwill[56] - The company recognized a $3 million realized gain from the remeasurement of its existing investment in Radion at fair value upon acquisition[56] Other Comprehensive Income - Other comprehensive income for Q3 2025 was $59 million, compared to $195 million in Q3 2024[10] - The accumulated other comprehensive income (AOCI) ending balance for the quarter ended September 30, 2025, was $(73) million, reflecting net unrealized gains and losses on securities and cash flow hedges[128]

Core Insights - American Financial Group, Inc. (AFG) reported better-than-expected earnings for Q3 2025, with net operating earnings per share of $2.69, surpassing the Zacks Consensus Estimate by 14.5% and increasing 16.4% year over year [1][9] Financial Performance - Total revenues for Q3 2025 were $2.2 billion, a decrease of 1.4% year over year, primarily due to lower P&C insurance net earned premiums, but still beating the Zacks Consensus Estimate by 8.8% [3] - Net investment income rose 2.5% year over year to $205 million, exceeding both the internal estimate of $193.2 million and the Zacks Consensus Estimate of $191 million [3] - Total costs and expenses decreased 3.6% year over year to $2.1 billion, attributed to lower losses and loss adjustment expenses [4] Segment Analysis - The Specialty P&C Insurance segment generated $2.2 billion in net written premiums, down 4% year over year, with average renewal pricing across the P&C Group increasing by approximately 5% [5] - Net written premiums in the Property & Transportation Group fell 9% year over year to $1 billion, while the Specialty Casualty Group saw a slight decrease of 0.3% to $914 million [6][5] - Underwriting profit for the Specialty P&C Insurance segment increased 19% year over year to $139 million, driven by improved results in the Property and Transportation and Specialty Financial Groups [7] Catastrophe Losses - Catastrophe losses were reported at $23 million, significantly lower than the previous year's loss of $90 million, contributing to improved underwriting profit [8] Capital Management - AFG declared a special cash dividend of $2.00 per share, to be paid on November 26, 2025, bringing total special dividends since 2021 to $54 per share [13][14] - The company ended Q3 2025 with total cash and investments of $16.7 billion, a 5.7% increase from the end of 2024 [11] Return on Equity - The annualized return on equity for Q3 was 18.2%, reflecting a 300 basis points year-over-year expansion [12]

Financial Data and Key Metrics Changes - The company reported core net operating earnings of $2.69 per share, a 16% increase from $2.31 per share in the prior year period [7] - The annualized core operating return on equity for the third quarter was 19% [4] - Net investment income increased by 5% year-over-year, attributed to higher interest rates and increased balances of invested assets [7][8] Business Line Data and Key Metrics Changes - Underwriting profit in specialty property and casualty insurance businesses grew 19%, with a combined ratio of 93, improving by 1.3 points from the prior year [15] - Gross and net written premiums in specialty property and casualty businesses decreased by 2% and 4% respectively compared to the previous year [15] - In the specialty financial group, the combined ratio was 81.1, which is 11.2 percentage points better than the comparable period in 2024 [22] Market Data and Key Metrics Changes - Average renewal pricing across the property and casualty group increased by approximately 5% in the third quarter [15] - The property and transportation group achieved a combined ratio of 94.1, improving by 2.7 points from the comparable 2024 period [16] - The specialty casualty group reported a combined ratio of 95.8, which is 3.7 percentage points higher than the 92.1 reported in the comparable period in 2024 [19] Company Strategy and Development Direction - The company aims to maintain a disciplined underwriting approach while seeking growth opportunities in specialty property and casualty businesses [12] - There is a focus on evaluating acquisitions and maintaining a pipeline of startups that could become new business units [13] - The company expects to generate significant excess capital throughout 2025 and into 2026, allowing for potential acquisitions, special dividends, or share repurchases [10] Management Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the recovery in multifamily investments and expects higher rental and occupancy rates by the end of 2026 [9] - The company anticipates premium growth to rebound in 2026, driven by startups and underwriting actions taken in specialty casualty businesses [14] - Management noted that while some loss ratio trends have improved, others, particularly in social inflation-exposed businesses, remain stable [30] Other Important Information - The company returned $66 million to shareholders through regular quarterly dividends and announced a special dividend of $2 per share [10] - The company has declared $54 per share or $4.6 billion in special dividends since the beginning of 2021 [10] Q&A Session Summary Question: Why were there no buybacks in the quarter? - Management indicated that they become active in buybacks when the stock is trading at a significant discount to its value and have retained capital for future opportunities [25] Question: Can you elaborate on pricing trends in the P&C side? - Management stated that a 5% price increase is still exceeding prospective loss ratio trends, with a diverse portfolio mitigating risks [28] Question: What is the outlook for crop premium and pricing? - Management suggested that trade aspects are reflected in futures prices, leading to stable or potentially increasing premiums for crops [39] Question: Is there an impact from new participating insurance companies on crop premiums? - Management believes the impact is marginal, with new entrants likely taking on less desirable business [47]

Financial Data and Key Metrics Changes - AFG reported core net operating earnings of $2.69 per share, a 16% increase from $2.31 per share in the prior year period [6] - The annualized core operating return on equity was 19% for the third quarter [4] - Net investment income increased by 5% year over year, attributed to higher interest rates and increased balances of invested assets [6][8] Business Line Data and Key Metrics Changes - Underwriting profit in specialty property and casualty insurance businesses grew 19%, with a combined ratio of 93, improving by 1.3 points from the prior year [13] - Gross and net written premiums in specialty property and casualty businesses decreased by 2% and 4% respectively compared to the previous year [13] - In the specialty financial group, the combined ratio was 81.1, 11.2 percentage points better than the comparable period in 2024, with gross and net written premiums up 3% and 1% respectively [20] Market Data and Key Metrics Changes - Average renewal pricing across the property and casualty group increased approximately 5% in the third quarter [14] - The property and transportation group achieved a combined ratio of 94.1, improving by 2.7 points from the previous year [15] - The specialty casualty group reported a combined ratio of 95.8, 3.7 percentage points higher than the prior year [18] Company Strategy and Development Direction - The company aims to maintain underwriting discipline and prudent growth while exploring new business opportunities and acquisitions [11] - AFG plans to continue generating significant excess capital, providing opportunities for acquisitions, special dividends, or share repurchases [9] - The company is optimistic about the prospects of attractive returns from its alternative investment portfolio, expecting annual returns averaging 10% or better [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of reserves and the overall underwriting profitability in specialty property and casualty businesses [11] - The company anticipates premium growth to rebound in 2026, driven by startups and underwriting actions taken in specialty casualty businesses [12] - Management noted that while some loss ratio trends have improved, others, particularly in social inflation-exposed businesses, require careful pricing adjustments [29] Other Important Information - AFG returned $66 million to shareholders through regular quarterly dividends, with a 10% increase in the quarterly dividend to $0.88 per share [9] - A special dividend of $2 per share was declared, amounting to approximately $167 million [9] Q&A Session Summary Question: Why were there no material buybacks in the quarter? - Management indicated that share repurchases are more active when the stock is trading at a significant discount to its value, and they have retained capital for future opportunities [24] Question: Can you elaborate on pricing trends in relation to prospective loss ratios? - Management stated that a 5% price increase is still exceeding prospective loss ratio trends, with a diverse portfolio mitigating risks [25][26] Question: What is the outlook for crop premium and pricing? - Management suggested that crop pricing should be stable or potentially increasing, depending on trade relationships and market conditions [36] Question: Is there an impact from new participating insurance companies on premiums? - Management noted that the impact is marginal, with new entrants likely taking on less desirable business [44]

Financial Performance Highlights - Net earnings for the third quarter of 2025 were $215 million, compared to $181 million for the same period in 2024[3, 5] - Core net operating earnings for the third quarter of 2025 were $224 million, versus $194 million in 2024[3, 5] - Property and Casualty net written premiums for the third quarter of 2025 reached $2,252 million, slightly lower than the $2,353 million in 2024[3, 8] - Diluted earnings per share were $2.58 for the third quarter of 2025, compared to $2.16 in 2024[3, 6] - Book value per share, excluding AOCI, was $57.59 as of September 30, 2025, a slight decrease from $57.71 on September 30, 2024[3, 12] Property and Casualty Insurance Segment - Underwriting profit for Property and Casualty Insurance in Q3 2025 was $138 million, compared to $115 million in Q3 2024[5, 7] - Net investment income for Property and Casualty Insurance was $205 million in Q3 2025, equal to Q3 2024[5, 17] - The combined ratio for Specialty Property and Casualty was 930% for the third quarter of 2025, compared to 943% for the same period in 2024[3, 7, 8] Investment Portfolio - Total cash and investments amounted to $16,761 million as of September 30, 2025, compared to $15,741 million as of September 30, 2024[3, 16] - Fixed maturities constituted 64% of the total investment portfolio, with a fair value of $10,598 million as of September 30, 2025[20] - Average yield on the overall investment portfolio, net, was 497% for the three months ended September 30, 2025[17]

Core Viewpoint - American Financial Group, Inc. (AFG) has shown moderate performance over the past year with a gain of approximately 4% alongside its dividend, but experienced a pullback of about 10% in October due to market fears regarding peak conditions [1] Company Performance - AFG's shares gained about 4% over the past year, indicating a stable performance in the context of its dividend [1] - The company’s shares saw a decline of approximately 10% in October, despite the absence of specific news related to the company during that month [1] Market Sentiment - The decline in AFG's shares in October is attributed to broader market fears rather than company-specific news, suggesting external factors influencing investor sentiment [1]

Core Viewpoint - American Financial Group (AFG) shares have shown moderate performance over the past year, with a gain of approximately 4% alongside its dividend, but experienced a pullback of about 10% in October due to concerns regarding peak underwriting [1] Summary by Relevant Sections - **Stock Performance** - AFG shares gained about 4% over the past year, including dividends [1] - The shares pulled back approximately 10% in October [1] - **Market Sentiment** - There was no specific news related to AFG in October, but fears about peak underwriting contributed to the stock's decline [1]

Financial Performance - Net earnings for Q3 2025 reached $215 million, up from $174 million in Q2 2025, representing a 23.5% increase[3] - Core net operating earnings for Q3 2025 were $224 million, compared to $179 million in Q2 2025, reflecting a 25.1% growth[3] - Diluted earnings per share for Q3 2025 were $2.58, an increase from $2.07 in Q2 2025, which is a 24.6% growth[7] - Annualized return on equity improved to 18.2% in Q3 2025, up from 15.0% in Q2 2025[3] - For the three months ended September 30, 2025, the underwriting profit for Property and Casualty Insurance was $138 million, compared to $113 million for the previous quarter[8] - Underwriting profit for the three months ended September 30, 2025, was $33 million, down from $63 million in the same period last year, showing a decline of 47.6%[13] Premiums and Underwriting - Property and Casualty net written premiums increased to $2,252 million in Q3 2025, up from $1,803 million in Q2 2025, marking a 24.8% rise[3] - Gross written premiums for the Specialty segment reached $3,665 million for the three months ended September 30, 2025, up from $2,653 million in the previous quarter, representing a 38% increase[10] - The net earned premiums for the Specialty segment were $2,013 million for the three months ended September 30, 2025, compared to $1,647 million in the previous quarter, reflecting a 22% increase[10] - The combined ratio for the Property and Transportation segment was 94.1% for the three months ended September 30, 2025, improving from 95.2% in the previous quarter[11] - The combined ratio for the three months ended September 30, 2025, was 95.8%, slightly higher than 91.1% in the same period last year, indicating a deterioration in underwriting performance[13] Investment Income and Assets - Net investment income for Q3 2025 was $205 million, up from $179 million in Q2 2025, reflecting a 14.6% increase[6] - Total assets increased to $33,834 million as of September 30, 2025, compared to $30,669 million at the end of Q2 2025, a growth of 10.7%[3] - Total cash and investments reached $16,761 million as of September 30, 2025, up from $15,852 million at December 31, 2024, marking a 5.7% increase[19] - Total Property & Casualty net investment income for the three months ended September 30, 2025, was $43 million, compared to $8 million in the previous quarter[23] Shareholder Equity and Book Value - Book value per share, excluding AOCI, was $57.59 as of September 30, 2025, compared to $55.74 at the end of Q2 2025, indicating a 3.3% increase[3] - Shareholders' equity as of September 30, 2025, was $4,730 million, a slight decrease from $4,708 million in the same period last year, indicating a decline of 0.5%[15] - The book value per share as of September 30, 2025, was $56.72, up from $56.10 a year ago, representing an increase of 1.1%[16] Debt and Liabilities - Total liabilities increased to $29,104 million as of September 30, 2025, compared to $27,883 million a year ago, reflecting a rise of 4.4%[15] - Total principal amount of long-term debt increased to $1,848 million as of September 30, 2025, up from $1,498 million at December 31, 2024, reflecting a 23.4% increase[17] - The ratio of debt to total capital, excluding accumulated other comprehensive income (AOCI), was 27.8% including subordinated debt and 17.6% excluding subordinated debt as of September 30, 2025[17] Loss Ratios and Catastrophe Losses - The loss and LAE ratio for the Specialty segment was 67.2% for the three months ended September 30, 2025, compared to 61.1% in the previous quarter[10] - Catastrophe losses for the current accident year totaled $23 million for the three months ended September 30, 2025, down from $38 million in the previous quarter[10] - The loss and LAE ratio for the three months ended September 30, 2025, was 66.8%, compared to 63.4% in the same period last year, indicating an increase in loss costs[13] Investment Portfolio - Average yield on the overall investment portfolio, net, was 5.09% for the three months ended September 30, 2025, compared to 4.96% for the three months ended December 31, 2024[20] - The total cash and investments in fixed maturities available for sale was $10,518 million as of September 30, 2025, accounting for 63% of the total investment portfolio[19] - Investment grade securities accounted for 96% of the total fair value of fixed maturities as of September 30, 2025[27] Real Estate Investments - Real estate-related investments accounted for using the equity method total $1,422 million, with multi-family investments making up 88%[39] - The occupancy rate for multi-family investments is 92%, with a collection rate of 96%[39] - The total book value of real estate investments is $1,392 million, with multi-family investments again representing 88%[43]