Part I [Financial Statements](index=3&type=section&id=Item%201%20%E2%80%94%20Financial%20Statements) This section presents the unaudited consolidated financial statements for American Financial Group, Inc. for the quarter ended March 31, 2025 [Consolidated Balance Sheet](index=3&type=section&id=Consolidated%20Balance%20Sheet) Total assets decreased to **$30.29 billion** at March 31, 2025, from **$30.84 billion** at year-end 2024, with liabilities and equity also declining Consolidated Balance Sheet Highlights (in Millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$30,294** | **$30,836** | | Total Cash and Investments | $15,994 | $15,852 | | Recoverables from reinsurers | $4,945 | $5,176 | | **Total Liabilities** | **$25,902** | **$26,370** | | Unpaid losses and loss adjustment expenses | $13,970 | $14,179 | | Long-term debt | $1,476 | $1,475 | | **Total Shareholders' Equity** | **$4,392** | **$4,466** | [Consolidated Statement of Earnings](index=4&type=section&id=Consolidated%20Statement%20of%20Earnings) Net earnings for Q1 2025 decreased to **$154 million** ($1.84 per diluted share) from **$242 million** ($2.89 per diluted share) in Q1 2024 Q1 Earnings Summary (in Millions, Except Per Share Data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Earned Premiums | $1,580 | $1,546 | | Net Investment Income | $173 | $198 | | Total Revenues | $1,856 | $1,906 | | Total Costs and Expenses | $1,659 | $1,602 | | Earnings Before Income Taxes | $197 | $304 | | **Net Earnings** | **$154** | **$242** | | **Total Diluted Earnings Per Share** | **$1.84** | **$2.89** | [Consolidated Statement of Comprehensive Income](index=5&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) Comprehensive income for Q1 2025 decreased to **$215 million** from **$246 million** in Q1 2024, partially offset by increased other comprehensive income Comprehensive Income Summary (in Millions) | Component | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Earnings | $154 | $242 | | Other Comprehensive Income, net of tax | $61 | $4 | | **Comprehensive Income** | **$215** | **$246** | [Consolidated Statement of Changes in Equity](index=6&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Shareholders' equity decreased from **$4.47 billion** at year-end 2024 to **$4.39 billion** at March 31, 2025, primarily due to dividends and share repurchases - Key activities impacting equity in Q1 2025 included **$154 million** in net earnings, offset by **$234 million** in dividends and **$58 million** in share repurchases[12](index=12&type=chunk) [Consolidated Statement of Cash Flows](index=7&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities increased to **$342 million** in Q1 2025, with financing activities using **$495 million**, resulting in a **$130 million** net decrease in cash Cash Flow Summary (in Millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $342 | $107 | | Net Cash from (used in) Investing Activities | $23 | ($155) | | Net Cash used in Financing Activities | ($495) | ($90) | | **Net Change in Cash** | **($130)** | **($138)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on accounting policies, segment operations, and other financial details - Beginning in 2025, the results of the internal reinsurance facility are included within the same sub-segments as the ceding businesses, aligning with how management evaluates performance. Prior period information has been recast for consistency[57](index=57&type=chunk)[59](index=59&type=chunk) - AFG consolidates Collateralized Loan Obligations (CLOs) that it manages, as it is deemed the primary beneficiary. The assets and liabilities of these CLOs are shown separately on the balance sheet, and AFG has no right to the assets or obligation for the liabilities[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - The net decrease in the provision for claims of prior years (favorable development) was **$20 million** in Q1 2025, compared to **$50 million** in Q1 2024. This was driven by better-than-expected outcomes in crop, trucking, workers' compensation, and financial institutions businesses, partially offset by adverse development in excess liability[127](index=127&type=chunk)[129](index=129&type=chunk) [Management's Discussion and Analysis (MD&A)](index=30&type=section&id=Item%202%20%E2%80%94%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results of operations for Q1 2025, covering financial performance, liquidity, and segment results - Q1 2025 net earnings were **$154 million** (**$1.84/share**), down from **$242 million** (**$2.89/share**) in Q1 2024. The decrease was attributed to lower underwriting profit and reduced net investment income from the alternative investment portfolio[143](index=143&type=chunk) - Management expects continued premium growth and strong underwriting results in a generally favorable P&C market. The elevated interest rate environment is anticipated to positively impact fixed maturity investment income in 2025[144](index=144&type=chunk) Reconciliation to Core Net Operating Earnings (in Millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Earnings | $154 | $242 | | *Less: Realized gains on securities, net of tax* | ($2) | ($11) | | **Core Net Operating Earnings** | **$152** | **$231** | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with a **24.7%** debt-to-total capital ratio and substantial available cash and credit facilities Debt to Total Capital Ratio | Metric | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Ratio of debt to total capital (incl. subordinated) | 24.7% | 24.1% | | Ratio of debt to total capital (excl. subordinated) | 13.6% | 13.3% | - In Q1 2025, AFG repurchased **462,398 shares** for **$58 million** and paid a special dividend of **$2.00 per share**, totaling **$167 million**[158](index=158&type=chunk) - At March 31, 2025, the parent company held approximately **$323 million** in cash and investments and had full availability under its **$450 million** revolving credit facility[160](index=160&type=chunk) [Investments](index=36&type=section&id=Investments) The investment portfolio, including **$10.57 billion** in fixed maturities, is high quality with **95%** investment grade and minimal direct office commercial real estate exposure - Approximately **95%** of the fixed maturities held at March 31, 2025, were rated 'investment grade'[171](index=171&type=chunk) - The company has approximately **$75 million** of direct exposure to office commercial real estate through property, mortgages, or equity investments, with an additional **$415 million** in fixed income securities having minimal exposure[174](index=174&type=chunk) Interest Rate Sensitivity of Fixed Maturity Portfolio | Metric | Value (in Millions) | | :--- | :--- | | Fair value of fixed maturity portfolio | $10,639 | | Pretax impact on fair value of 100 bps rate increase | ($319) | [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Core net operating earnings decreased in Q1 2025 due to lower P&C underwriting profit and alternative investment income, with the P&C combined ratio increasing to **94.1%** - The Property & Casualty insurance segment's pretax earnings decreased **28%** to **$246 million** in Q1 2025 from **$340 million** in Q1 2024, due to lower underwriting profit and alternative investment income[199](index=199&type=chunk) P&C Insurance Combined Ratio | Component | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Loss and LAE ratio | 61.1% | 58.6% | +2.5 pts | | Underwriting expense ratio | 33.0% | 31.5% | +1.5 pts | | **Combined ratio** | **94.1%** | **90.1%** | **+4.0 pts** | - Catastrophe losses were **$72 million** (**4.5 points** on the combined ratio) in Q1 2025, compared to **$35 million** (**2.3 points**) in Q1 2024[216](index=216&type=chunk) [Quantitative and Qualitative Disclosure about Market Risk](index=54&type=section&id=Item%203%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) The company reports no material changes to market risk disclosures, noting a 100 basis point interest rate increase would decrease fixed maturity portfolio fair value by **$319 million** - There were no material changes to the market risk information provided in the 2024 Form 10-K[258](index=258&type=chunk) Interest Rate Sensitivity Analysis | Metric | Value (in Millions) | | :--- | :--- | | Fair value of fixed maturity portfolio | $10,639 | | Pretax impact on fair value of 100 bps rate increase | ($319) | [Controls and Procedures](index=54&type=section&id=Item%204%20%E2%80%94%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Based on an evaluation as of the end of the reporting period, the Co-CEOs and CFO concluded that the company's disclosure controls and procedures are effective[261](index=261&type=chunk) Part II [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202%20%E2%80%94%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, AFG repurchased **462,398** shares at **$123.86** per share, with **5,266,612** shares remaining available for repurchase Q1 2025 Share Repurchases | Month | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | January | — | $— | | February | 399,706 | $123.83 | | March | 62,692 | $124.12 | | **Total** | **462,398** | **$123.86** | [Other Information](index=55&type=section&id=Item%205%20%E2%80%94%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[265](index=265&type=chunk) [Exhibits](index=56&type=section&id=Item%206%20%E2%80%94%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by Co-CEOs and CFO, and XBRL data files

Core Viewpoint - American Financial Group, Inc. (AFG) reported disappointing first-quarter 2025 results, with net operating earnings per share of $1.81, missing estimates by 16.6% and reflecting a 34.4% year-over-year decline [1] Financial Performance - Total revenues for the quarter were $1.9 billion, down 1.4% year over year, missing estimates by 3.8% due to lower net investment income and other income [2] - Net premiums earned increased by 2.2% to $1.9 billion [2] - Net investment income fell by 12.6% year over year to $173 million, below the estimate of $213.7 million [2] Cost and Expenses - Total costs and expenses rose by 3.6% year over year to $1.7 billion, driven by higher property and casualty (P&C) insurance losses and expenses [3] Segmental Update - The Specialty P&C Insurance segment generated $1.6 billion in net written premiums, a decline of 1% year over year, despite a favorable renewal rate environment and increased exposure [4] - Net written premiums in the Property & Transportation Group decreased by 6% year over year to $563 million, lower than the estimate of $703 million [5] - Specialty Casualty Group's net written premiums decreased by 4% year over year to $772 million, slightly above the estimate of $765 million [5] - Specialty Financial's net written premiums increased by 18% year over year to $276 million, exceeding the estimate of $270 million [5] Underwriting Profit - The underwriting profit for the Specialty P&C Insurance segment decreased by 39% year over year to $94 million, below the estimate of $133 million [6] - The combined ratio for the segment deteriorated by 390 basis points year over year to 94%, primarily due to losses from California wildfires [6] Financial Update - As of March 31, 2025, total cash and investments stood at $16 billion, a 0.9% increase from the end of 2024 [7] - Long-term debt remained unchanged at $1.5 billion [7] - Book value per share, excluding accumulated other comprehensive income, was $54.63, up 2.5% from the end of 2024 [7] - Annualized return on equity was 13.3%, contracting by 800 basis points year over year [8] Capital Deployment - The company returned $292 million to shareholders, which included $167 million in special dividends and $58 million in share repurchases [10]

Financial Data and Key Metrics Changes - AFG reported core net operating earnings of $1.81 per share for Q1 2025, reflecting a year-over-year decrease due to lower property and casualty (P&C) insurance underwriting profit and lower returns on the alternative investment portfolio [8][10] - The company returned over $290 million to shareholders in Q1 2025 through dividends and share repurchases [6][12] - AFG's growth in book value per share, excluding AOCI plus dividends, was 2.5% for the quarter [12] Business Line Data and Key Metrics Changes - Specialty Property and Casualty businesses had a combined ratio of 94% in Q1 2025, which is 3.9 points higher than the 90.1% reported in Q1 2024, driven by higher catastrophe losses [14][15] - Gross and net written premiums for Specialty Property and Casualty were 21% lower compared to Q1 2024, but excluding the impact of nonrenewed large accounts, gross written premiums grew by 2% year over year [16][17] - The Specialty Casualty Group reported a combined ratio of 97.6% in Q1 2025, which is 5.4 points higher than the previous year, with gross and net written premiums decreasing by 34% [21][22] Market Data and Key Metrics Changes - The average renewal pricing across the P&C Group, excluding workers' compensation, increased by approximately 7% in Q1 2025 [16] - The company achieved overall renewal rate increases for 35 consecutive quarters, indicating strong pricing discipline [16] Company Strategy and Development Direction - AFG's management emphasized maintaining underwriting discipline and strategic decisions to optimize long-term results, including the nonrenewal of underperforming accounts [16][25] - The company is focused on capital deployment opportunities, including acquisitions and special dividends, as it expects to generate significant excess capital throughout 2025 [12][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged elevated economic uncertainty and its potential impact on returns from the alternative investment portfolio in 2025 [10][11] - The company remains optimistic about long-term returns from its alternative investment portfolio, expecting annual returns averaging 10% or better [11] Other Important Information - AFG announced the sale of the Charleston Harbor Resort and Marina, expecting to recognize an after-tax core operating gain of approximately $100 million or $1.2 per share from the transaction [11] Q&A Session Summary Question: Inquiry about expense ratio changes - Management noted that changes in the expense ratio are influenced by the mix of business and investments in IT initiatives, which were anticipated in the business plan [28][30][31] Question: Clarification on catastrophe losses - Catastrophe losses from California wildfires were at the low end of expectations, with minimal additional smaller catastrophes impacting the quarter [32] Question: Discussion on premium growth and market cycle - Management expressed a desire to grow across businesses but acknowledged competitive pressures and strategic decisions that may temper growth in the near term [34][36] Question: EPS guidance and impact of Charleston Harbor sale - Management indicated that the sale would provide an incremental benefit to EPS, but uncertainty in alternative investment returns complicates predictions for the year [41][43] Question: Future premium growth expectations - Management suggested that premium growth would likely be lower than the previously guided 5%, but still expects positive growth for the year [45] Question: Review of property and transportation premium trends - Management confirmed ongoing reviews of accounts for profitability, which may lead to continued pressure on written premiums [47] Question: Addressing elevated social inflation in specialty casualty - Management is actively monitoring loss trends and has made adjustments to address adverse developments in social inflation-exposed businesses [50][52]

| Section | Page | | --- | --- | | Table of Contents - Investor Supplement - First Quarter 2025 | 2 | | Financial Highlights | 3 | | Summary of Earnings. | イ | | Earnings Per Share Summary | 5 | | Property and Casualty Insurance Segment | | | Property and Casualty Insurance - Summary Underwiting Results (GAAP) | | | Specialty - Underwriting Results (GAAP). | 7 | | Property and Transportation - Underwriting Results (GAAP). | 8 | | Specialty Casualty - Underwriting Results (GAAP) . | 9 | | Specialty Financial ...

[Financial Highlights](index=3&type=section&id=Financial%20Highlights) This section provides an overview of American Financial Group's key financial performance metrics for Q1 2025, highlighting earnings, EPS, and P&C combined ratio trends [Q1 2025 Financial Highlights](index=3&type=section&id=Financial%20Highlights) In Q1 2025, American Financial Group reported net earnings of $154 million and core net operating earnings of $152 million. This represents a decrease from Q1 2024, where net earnings were $242 million and core earnings were $231 million. Diluted EPS fell to $1.84 from $2.89 year-over-year. The Property and Casualty (P&C) combined ratio for the Specialty segment increased to 94.0% from 90.1% in the prior year's quarter | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Earnings | $154M | $242M | -36.4% | | Core Net Operating Earnings | $152M | $231M | -34.2% | | Diluted EPS | $1.84 | $2.89 | -36.3% | | Core Net Operating EPS | $1.81 | $2.76 | -34.4% | | P&C Net Written Premiums | $1,611M | $1,634M | -1.4% | | P&C Specialty Combined Ratio | 94.0% | 90.1% | +3.9 pts | [Earnings Summary](index=4&type=section&id=Summary%20of%20Earnings) This section provides a detailed breakdown of the company's earnings components, including underwriting profit, net investment income, and earnings per share for Q1 2025 [Detailed Earnings Breakdown](index=4&type=section&id=Summary%20of%20Earnings) For Q1 2025, the company's underwriting profit was $94 million, a significant decrease from $153 million in Q1 2024. Net investment income also declined to $170 million from $205 million year-over-year. These factors led to a drop in pretax core operating earnings to $194 million, compared to $290 million in the same period last year | Earnings Component | Q1 2025 ($M) | Q1 2024 ($M) | Change | | :--- | :--- | :--- | :--- | | Underwriting Profit | 94 | 153 | -38.6% | | Net Investment Income | 170 | 205 | -17.1% | | P&C Insurance Operating Earnings | 246 | 340 | -27.6% | | Pretax Core Operating Earnings | 194 | 290 | -33.1% | | Core Net Operating Earnings | 152 | 231 | -34.2% | | Net Earnings | 154 | 242 | -36.4% | [Earnings Per Share (EPS) Summary](index=5&type=section&id=Earnings%20Per%20Share%20Summary) In Q1 2025, core net operating EPS was $1.81, down from $2.76 in Q1 2024. After accounting for a $0.03 per share gain from realized securities, the diluted EPS for the quarter was $1.84. This compares to a diluted EPS of $2.89 in Q1 2024, which included a $0.13 per share gain from securities | EPS Component | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Core net operating earnings per share | $1.81 | $2.76 | | Realized gains (losses) on securities | $0.03 | $0.13 | | **Diluted earnings per share** | **$1.84** | **$2.89** | [Property and Casualty (P&C) Insurance Segment](index=6&type=section&id=Property%20and%20Casualty%20Insurance%20Segment) This section details the underwriting performance of the Property and Casualty insurance segment and its sub-segments, including premiums, profits, and combined ratios [P&C Summary Underwriting Results](index=6&type=section&id=Property%20and%20Casualty%20Insurance%20-%20Summary%20Underwriting%20Results%20(GAAP)) The P&C insurance segment generated an underwriting profit of $94 million in Q1 2025, down from $153 million in Q1 2024. The decline was driven by a significant increase in current accident year catastrophe losses, which rose to $72 million from $34 million. The overall combined ratio deteriorated to 94.1% from 90.1% year-over-year, while the combined ratio excluding catastrophes and prior year development remained relatively stable at 90.8% | Metric | Q1 2025 ($M) | Q1 2024 ($M) | | :--- | :--- | :--- | | Underwriting Profit | 94 | 153 | | Current Accident Year Catastrophe Losses | 72 | 34 | | Prior Year Favorable Reserve Development | (20) | (50) | | Ratio | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Combined Ratio | 94.1% | 90.1% | | P&C combined ratio excl. cats & prior year dev. | 90.8% | 91.1% | [Specialty Segment Underwriting Results](index=7&type=section&id=Specialty%20-%20Underwriting%20Results%20(GAAP)) The Specialty segment's net written premiums were $1.611 billion in Q1 2025, a slight decrease from $1.634 billion in Q1 2024. Underwriting profit fell to $94 million from $154 million, largely due to higher catastrophe losses. The combined ratio for the segment increased to 94.0% from 90.1% year-over-year | Metric | Q1 2025 ($M) | Q1 2024 ($M) | | :--- | :--- | :--- | | Net Written Premiums | $1,611 | $1,634 | | Underwriting Profit | $94 | $154 | | Combined Ratio | 94.0% | 90.1% | [Property and Transportation Underwriting Results](index=8&type=section&id=Property%20and%20Transportation%20-%20Underwriting%20Results%20(GAAP)) The Property and Transportation segment reported a decrease in underwriting profit to $37 million in Q1 2025 from $60 million in Q1 2024. Net written premiums decreased slightly to $563 million. The combined ratio worsened to 92.5% from 88.5% in the prior year's quarter | Metric | Q1 2025 ($M) | Q1 2024 ($M) | | :--- | :--- | :--- | | Net Written Premiums | $563 | $597 | | Underwriting Profit | $37 | $60 | | Combined Ratio | 92.5% | 88.5% | [Specialty Casualty Underwriting Results](index=9&type=section&id=Specialty%20Casualty%20-%20Underwriting%20Results%20(GAAP)) The Specialty Casualty segment's underwriting profit dropped significantly to $20 million in Q1 2025 from $61 million in Q1 2024. Net written premiums were down to $772 million from $803 million. The combined ratio increased to 97.6% from 92.2%, impacted by higher catastrophe losses ($27 million vs. $18 million) and adverse prior year reserve development of $12 million compared to a favorable development of $11 million in Q1 2024 | Metric | Q1 2025 ($M) | Q1 2024 ($M) | | :--- | :--- | :--- | | Net Written Premiums | $772 | $803 | | Underwriting Profit | $20 | $61 | | Combined Ratio | 97.6% | 92.2% | | Catastrophe Losses | $27 | $18 | | Prior Year Reserve Development | $12 (Adverse) | $(11) (Favorable) | [Specialty Financial Underwriting Results](index=10&type=section&id=Specialty%20Financial%20-%20Underwriting%20Results%20(GAAP)) The Specialty Financial segment showed improved performance, with underwriting profit increasing to $37 million in Q1 2025 from $33 million in Q1 2024. Net written premiums grew to $276 million from $234 million. Despite higher catastrophe losses ($35 million vs. $7 million), the combined ratio improved slightly to 87.0% from 86.6%, aided by favorable prior year reserve development | Metric | Q1 2025 ($M) | Q1 2024 ($M) | | :--- | :--- | :--- | | Net Written Premiums | $276 | $234 | | Underwriting Profit | $37 | $33 | | Combined Ratio | 87.0% | 86.6% | | Catastrophe Losses | $35 | $7 | [Balance Sheet and Capitalization](index=11&type=section&id=Consolidated%20Balance%20Sheet%20%2F%20Book%20Value%20%2F%20Debt) This section outlines the company's financial position, including consolidated balance sheet figures, book value per share, and capitalization structure as of March 31, 2025 [Consolidated Balance Sheet](index=11&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2025, total assets were $30.29 billion, a slight decrease from $30.84 billion at year-end 2024. Total liabilities also decreased to $25.90 billion from $26.37 billion. Total shareholders' equity stood at $4.39 billion | Balance Sheet Item | 3/31/2025 ($B) | 12/31/2024 ($B) | | :--- | :--- | :--- | | Total Cash and Investments | 16.0 | 15.9 | | Total Assets | 30.3 | 30.8 | | Total Liabilities | 25.9 | 26.4 | | Total Shareholders' Equity | 4.4 | 4.5 | [Book Value Per Share](index=12&type=section&id=Book%20Value%20Per%20Share%20and%20Price%20%2F%20Book%20Summary) Book value per share, excluding accumulated other comprehensive income (AOCI), was $54.63 as of March 31, 2025, down from $56.03 at the end of 2024. The closing share price of $131.34 resulted in a Price to Book Value (ex-AOCI) multiple of 2.40x | Metric | 3/31/2025 | 12/31/2024 | | :--- | :--- | :--- | | Shareholders' equity, excluding AOCI | $4,571M | $4,706M | | Book value per share, excluding AOCI | $54.63 | $56.03 | | Price / Book value per share, excluding AOCI | 2.40x | 2.44x | [Capitalization](index=13&type=section&id=Capitalization) The company's capital structure remained stable, with total long-term debt at $1.5 billion as of March 31, 2025. The ratio of debt to total capital (excluding AOCI) was 24.7%, consistent with the prior year-end | Metric | 3/31/2025 ($M) | 12/31/2024 ($M) | | :--- | :--- | :--- | | Total principal amount of long-term debt | $1,498 | $1,498 | | Total capital, excluding AOCI | $6,069 | $6,204 | | Ratio of debt to total capital, excluding AOCI | 24.7% | 24.1% | [Investment Portfolio](index=15&type=section&id=Consolidated%20Investment%20Supplement) This section analyzes the company's investment portfolio, detailing its composition, net investment income, and performance of various asset classes [Composition of Cash and Investments](index=15&type=section&id=Total%20Cash%20and%20Investments) Total cash and investments increased slightly to $15.99 billion at the end of Q1 2025 from $15.85 billion at year-end 2024. The portfolio is predominantly composed of fixed maturities (66%), with investments accounted for using the equity method making up the next largest portion (15%) | Investment Type | Carrying Value 3/31/25 ($B) | % of Portfolio | | :--- | :--- | :--- | | Fixed maturities | 10.64 | 66% | | Investments accounted for using the equity method | 2.33 | 15% | | Mortgage loans | 0.83 | 5% | | Other | 2.19 | 14% | | **Total** | **15.99** | **100%** | [Net Investment Income Analysis](index=16&type=section&id=Net%20Investment%20Income) Total net investment income for the P&C segment was $170 million in Q1 2025, a decrease from $205 million in Q1 2024. The decline was primarily due to lower income from alternative investments, which fell to $12 million from $56 million year-over-year. Income from the core fixed maturity portfolio remained stable | P&C Net Investment Income Source | Q1 2025 ($M) | Q1 2024 ($M) | | :--- | :--- | :--- | | Fixed maturities | 137 | 131 | | Alternative investments | 12 | 56 | | Other | 27 | 24 | | Investment expenses | (6) | (6) | | **Total Net Investment Income** | **170** | **205** | - The average yield on the overall P&C portfolio decreased to **4.28%** in Q1 2025 from **5.35%** in Q1 2024, driven by the lower returns from alternative investments[17](index=17&type=chunk) [Alternative Investments Performance](index=17&type=section&id=Alternative%20Investments) Net investment income from the P&C segment's alternative investments totaled $12 million in Q1 2025, a sharp drop from $56 million in Q1 2024. The annualized return on these investments was 1.8% for the quarter, compared to 9.0% in the prior-year period. The total carrying value of these investments was $2.73 billion | P&C Alternative Investments | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Investment Income ($M) | $12 | $56 | | Total Investments ($M) | $2,728 | $2,557 | | Annualized Return | 1.8% | 9.0% | [Fixed Maturity Portfolio by Security Type](index=18&type=section&id=Fixed%20Maturities%20-%20By%20Security%20Type%20-%20AFG%20Consolidated) As of March 31, 2025, the consolidated fixed maturity portfolio had a fair value of $10.64 billion. The portfolio is well-diversified, with the largest allocations to Corporate and other bonds (33%), Other asset-backed securities (22%), and Residential mortgage-backed securities (20%). The approximate duration of the P&C portfolio was 3.0 years | Security Type | Fair Value 3/31/25 ($B) | % of Fair Value | | :--- | :--- | :--- | | Corporate and other bonds | 3.51 | 33% | | Other asset-backed securities | 2.38 | 22% | | Residential mortgage-backed securities | 2.12 | 20% | | Collateralized loan obligations | 1.24 | 12% | | Other | 1.39 | 13% | | **Total** | **10.64** | **100%** | - The approximate duration of the P&C fixed maturity portfolio was **3.0 years** (**2.8 years** including cash) as of March 31, 2025[21](index=21&type=chunk) [Appendix: Detailed Portfolio Breakdowns](index=19&type=section&id=Appendix) This appendix provides detailed breakdowns of the company's investment portfolio, including fixed maturities by credit quality, corporate securities by industry, and asset-backed securities by collateral type [Fixed Maturities Portfolio Quality](index=19&type=section&id=A.%20Fixed%20Maturities%20by%20Credit%20Rating%20%26%20NAIC%20Designation%20by%20Type%203%2F31%2F2025) This section provides a detailed breakdown of the fixed maturities portfolio by credit rating and NAIC designation as of March 31, 2025, and December 31, 2024. The portfolio maintains a high credit quality, with the vast majority of holdings rated as investment grade - As of March 31, 2025, **95%** of the fixed maturity portfolio, with a total fair value of **$10.6 billion**, was rated investment grade[23](index=23&type=chunk) - Based on NAIC designations, **96%** of the insurance companies' fixed maturity portfolio was in the top two categories (NAIC 1 and 2), indicating strong regulatory capital treatment[23](index=23&type=chunk) [Corporate Securities Portfolio by Industry](index=21&type=section&id=C.%20Corporate%20Securities%20by%20Credit%20Rating%20%26%20NAIC%20Designation%20by%20Industry%203%2F31%2F2025) This section details the corporate securities portfolio, breaking it down by industry, credit rating, and NAIC designation. The portfolio is diversified across various industries with a concentration in financial services - As of March 31, 2025, the largest industry exposures in the **$3.5 billion** corporate securities portfolio were **Asset Managers (24%)**, **Banking (13%)**, **Insurance (7%)**, and **Technology (7%)**[27](index=27&type=chunk) [Asset-Backed Securities (ABS) Portfolio by Collateral](index=23&type=section&id=E.%20Asset-Backed%20Securities%20by%20Credit%20Rating%20%26%20NAIC%20Designation%20by%20Collateral%20Type%203%2F31%2F2025) This section provides a granular view of the Asset-Backed Securities (ABS) portfolio, categorized by collateral type and credit rating. The portfolio is high quality and diversified across various collateral types - As of March 31, 2025, the **$2.38 billion** ABS portfolio was **97% investment grade**. Key collateral types include **Whole Business ($516M)**, **Commercial Real Estate ($233M)**, **TruPS ($232M)**, and **Triple Net Lease ($230M)**[35](index=35&type=chunk) [Real Estate-Related Investments](index=25&type=section&id=G.%20Real%20Estate-Related%20Investments%203%2F31%2F2025) This section details the company's real estate-related investments, including equity method investments, directly owned real estate, and mortgage loans. The portfolio is heavily weighted towards multi-family properties - The mortgage loan portfolio of **$827 million** has a conservative loan-to-value ratio of **64%**, with **73%** of the portfolio in multifamily properties. No loans are currently receiving interest deferral[40](index=40&type=chunk) - Investments accounted for via the equity method in real estate total **$1.43 billion**, with **88%** invested in multi-family properties that have a **92%** occupancy rate and **97%** collection rate[39](index=39&type=chunk)

Core Insights - American Financial Group (AFG) reported a revenue of $1.86 billion for the quarter ended March 2025, reflecting a decrease of 1.4% year-over-year and falling short of the Zacks Consensus Estimate of $1.93 billion, resulting in a surprise of -3.79% [1] - The earnings per share (EPS) for the quarter was $1.81, down from $2.76 in the same quarter last year, with an EPS surprise of -16.59% against the consensus estimate of $2.17 [1] Financial Performance Metrics - The company’s shares have returned +10.4% over the past month, compared to the Zacks S&P 500 composite's +11.5% change, indicating a performance in line with the broader market [3] - In the Property and Transportation segment, the Loss and LAE Ratio was reported at 62.1%, better than the estimated 66.8% [4] - The Underwriting Expense Ratio for Property and Transportation was 30.4%, slightly above the average estimate of 30.1% [4] - The Combined Ratio for Property and Transportation was 92.5%, outperforming the estimated 96.8% [4] - In the Specialty Casualty segment, the Loss and LAE Ratio was 67.6%, worse than the estimated 62.8% [4] - The Underwriting Expense Ratio for Specialty Casualty was 30%, above the average estimate of 27.7% [4] - The Combined Ratio for Property and Casualty - Specialty was reported at 94%, in line with the average estimate of 94.7% [4] - The Underwriting Expense Ratio for Specialty Financial was 45.9%, better than the estimated 46.9% [4] Revenue and Premiums - Net investment income was reported at $173 million, below the average estimate of $203.73 million, representing a year-over-year decline of 12.6% [4] - Net earned premium in the Property and Transportation segment was $500 million, significantly lower than the estimated $675.75 million, reflecting a -2.5% change year-over-year [4] - In the Specialty Casualty segment, net earned premium was $794 million, exceeding the average estimate of $759.90 million, with an 8.8% year-over-year increase [4] - Specialty Financial's net earned premium was reported at $286 million, above the average estimate of $270.42 million, indicating a year-over-year increase of 17.7% [4] - Other income (loss) was reported at $27 million, below the average estimate of $37.94 million, representing a year-over-year decline of 30.8% [4]

American Financial Group (AFG) came out with quarterly earnings of $1.81 per share, missing the Zacks Consensus Estimate of $2.17 per share. This compares to earnings of $2.76 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -16.59%. A quarter ago, it was expected that this property and casualty insurer would post earnings of $3.20 per share when it actually produced earnings of $3.12, delivering a surprise of -2.50%.Over the l ...

Core Viewpoint - American Financial Group (AFG) is expected to report quarterly earnings of $2.17 per share, reflecting a 21.4% decline year-over-year, while revenues are forecasted to increase by 2.9% to $1.94 billion [1]. Earnings Estimates - The consensus EPS estimate has been revised upward by 0.2% over the past 30 days, indicating analysts have reassessed their projections [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate trends and short-term stock performance [3]. Revenue Projections - Analysts estimate 'Revenues- P&C insurance net earned premiums' at $1.73 billion, indicating a 12% year-over-year increase [5]. - 'Revenues- Net investment income' is projected to reach $203.73 million, reflecting a 2.9% increase year-over-year [5]. - 'Specialty Casualty- Net earned premium' is expected to be $759.90 million, showing a 4.1% increase from the previous year [5]. - 'Property and Transportation- Net earned premium' is forecasted at $675.75 million, suggesting a significant 31.7% year-over-year increase [6]. Loss and LAE Ratios - The estimated 'Property and Transportation - Loss and LAE Ratio' is 66.8%, up from 59.2% in the previous year [6]. - The 'Property and Casualty - Combined Ratio - Specialty' is projected at 94.7%, compared to 90.1% in the same quarter last year [7]. - 'Specialty Casualty - Loss and LAE Ratio' is expected to be 62.8%, slightly up from 62.5% year-over-year [7]. - 'Specialty Financial - Loss and LAE Ratio' is projected at 44.4%, compared to 40.2% in the previous year [8]. Underwriting Expense Ratios - The 'Specialty Casualty - Underwriting Expense Ratio' is expected to be 27.7%, up from 27.3% in the same quarter last year [8]. - 'Specialty Financial - Underwriting Expense Ratio' is projected at 46.9%, compared to 46.1% in the previous year [9]. - The 'Property and Transportation - Underwriting Expense Ratio' is expected to be 30.1%, slightly up from 29.8% year-over-year [9]. Market Performance - Over the past month, shares of American Financial have returned +6.5%, outperforming the Zacks S&P 500 composite's +0.4% change [10].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for American Financial Group (AFG) despite higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - AFG is expected to report quarterly earnings of $2.17 per share, reflecting a year-over-year decrease of 21.4%, while revenues are projected to be $1.94 billion, an increase of 2.9% from the previous year [3]. - The earnings report is scheduled for May 6, 2025, and could lead to stock price increases if results exceed expectations [2]. Estimate Revisions - The consensus EPS estimate has been revised 0.2% higher in the last 30 days, indicating a slight positive adjustment by analysts [4]. - The Most Accurate Estimate for AFG is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.42%, suggesting a bearish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict earnings deviations, with positive readings being more reliable [6][7]. - AFG's current Zacks Rank is 3, which complicates the prediction of an earnings beat [11]. Historical Performance - In the last reported quarter, AFG was expected to post earnings of $3.20 per share but delivered only $3.12, resulting in a surprise of -2.50% [12]. - Over the past four quarters, AFG has only beaten consensus EPS estimates once [13]. Industry Comparison - Skyward Specialty Insurance (SKWD), another player in the property and casualty insurance sector, is expected to report earnings of $0.78 per share, indicating a year-over-year increase of 4% [17]. - SKWD has an Earnings ESP of 8.15% and has consistently beaten consensus EPS estimates in the last four quarters, contrasting with AFG's performance [18].

Shares of American Financial Group, Inc. (AFG) are trading at a premium to the Zacks Property and Casualty Insurance industry. Its price-to-book value of 2.39X is higher than the industry average of 1.63X. It has a Value Score of B. Shares of other insurers like The Travelers Companies, Inc. (TRV) , Palomar Holdings, Inc. (PLMR) and W.R. Berkley Corporation (WRB) are also trading at a multiple higher than the industry average. Image Source: Zacks Investment ResearchAmerican Financial shares have gained 2.1% ...