American Financial (US:AFG) ZACKSยท2025-11-06 15:41Core 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]