American Financial Group, Inc. Announces 2025 Fourth Quarter and Full Year Results and Declares Special Dividend

Core Financial Performance - American Financial Group reported fourth quarter net earnings of $299 million ($3.58 per share) for 2025, an increase from $255 million ($3.03 per share) in the fourth quarter of 2024 [1] - Core net operating earnings for the fourth quarter of 2025 were $305 million ($3.65 per share), compared to $262 million ($3.12 per share) in the same period of 2024, reflecting a record quarterly underwriting profit [2] - Full year net earnings for 2025 were $10.08 per share, down from $10.57 per share in 2024, with a return on equity of 17.8% for 2025 compared to 19.0% for 2024 [1][3] Underwriting and Premiums - The Specialty Property and Casualty (P&C) insurance operations achieved a combined ratio of 84.1% in the fourth quarter of 2025, improving from 89.0% in the prior year quarter, with underwriting profit reaching a record $287 million, a 41% increase year-over-year [12][10] - Gross written premiums for the fourth quarter of 2025 increased by 2%, while net written premiums decreased by 1% compared to the same period in 2024 [13] - Average renewal rates across the P&C Group, excluding workers' compensation, were up approximately 5% for the quarter, consistent with the previous quarter [14] Investment Performance - Net investment income for the fourth quarter of 2025 was approximately 12% lower than the comparable 2024 period, primarily due to lower returns from alternative investments [22] - The annualized return on alternative investments was 0.9% for the fourth quarter of 2025, down from 4.9% in the prior year quarter [22] - For the full year 2025, the return on alternative investments was 2.5%, compared to 6.1% in 2024 [23] Shareholder Returns - The company declared a special cash dividend of $1.50 per share, payable on February 25, 2026, in addition to a regular quarterly cash dividend of $0.88 per share [9] - AFG returned over $700 million to shareholders in 2025, including a 10% increase in the quarterly dividend and special dividends totaling $4.00 per share [11] Future Outlook - The company anticipates core operating earnings per share of approximately $11.00 for 2026, with a core operating return on equity excluding AOCI of approximately 18% [10] - Assumptions for 2026 include a growth in net written premiums of 3% to 5% compared to 2025 and a combined ratio of 92.5% [10]