American Financial (US:AFG)2025-11-05 12:16Financial 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]