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]

Core Insights - American Financial Group (AFG) reported quarterly earnings of $1.81 per share, missing the Zacks Consensus Estimate of $2.17 per share, and down from $2.76 per share a year ago, representing an earnings surprise of -16.59% [1] - The company posted revenues of $1.86 billion for the quarter, missing the Zacks Consensus Estimate by 3.79%, and down from $1.88 billion year-over-year [2] - The stock has underperformed the market, losing about 5.7% since the beginning of the year compared to the S&P 500's decline of -3.9% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.45 on revenues of $1.97 billion, and for the current fiscal year, it is $10.51 on revenues of $8.31 billion [7] - The estimate revisions trend for American Financial is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Insurance - Property and Casualty industry is currently in the top 17% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

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].

Core Viewpoint - American Financial Group, Inc. (AFG) is trading at a premium compared to the Zacks Property and Casualty Insurance industry, with a price-to-book value of 2.39X versus the industry average of 1.63X, and holds a Value Score of B [1] Financial Performance - AFG shares have increased by 2.1% over the past year, underperforming its industry, the Finance sector, and the Zacks S&P 500 composite [2] - The market capitalization of AFG is $10.62 billion, with an average trading volume of 0.5 million shares over the last three months, and shares are currently above the 50-day moving average, indicating a bullish trend [4] Growth Projections - The Zacks Consensus Estimate for AFG's 2025 revenues is $8.32 million, reflecting a year-over-year growth of 3.4%. For 2026, earnings per share and revenues are expected to increase by 9.4% and 5.9%, respectively, compared to 2025 estimates [5] - AFG has a Growth Score of B, indicating favorable growth prospects [5] Return on Capital - AFG's return on equity (ROE) for the trailing 12 months is 20.2%, significantly higher than the industry average of 8.3%, showcasing its efficiency in utilizing shareholders' funds [6] Strategic Positioning - AFG is well-positioned for growth due to new business opportunities, increased exposure, a favorable renewal rate environment, and additional crop premiums from the Crop Risk Services acquisition [9] - The company has maintained satisfactory rates in P&C renewal pricing and expects to achieve renewal rate increases above prospective loss ratio trends [10] Dividend Performance - AFG has increased its dividend for 18 consecutive years, reflecting financial stability driven by robust operating profitability, stellar investment performance, and effective capital management [11] - The 10-year compound annual growth rate for AFG's regular annual dividends is 12.4%, with a dividend yield of 2.5%, outperforming the industry average of 0.2% [12] Investment Outlook - AFG's prudent capital deployment, increased exposures, favorable renewal rate environment, and improved combined ratio make it an attractive stock despite its high valuation [13] - The company is expected to benefit from strategic acquisitions, new business opportunities, stronger underwriting profit, and favorable growth estimates, leading to a recommendation to hold the stock [13]

Group 1 - The article discusses concerns regarding an American Financial Group, Inc. debenture (NYSE: AFGC) which has a face yield of 5.125% annually through 2059 [1] - Robert F. Abbott has been managing his family's investments since 1995 and has incorporated options strategies such as covered calls and collars since 2010 [1] - Abbott is a freelance writer with a focus on providing information for new and intermediate-level mutual fund investors [1]