Financial Data and Key Metrics Changes - AFG's core net operating earnings were $10.29 per share for the full year 2025, with a core operating return on equity of 18.2% [5] - For Q4 2025, core net operating earnings per share were $3.65, resulting in an annualized core return on equity of 25.2% [5] - The company returned over $700 million to shareholders in 2025, including $334 million in special dividends and $274 million in regular dividends [6][10] - AFG's leverage ratio is less than 28%, with no debt maturities until 2030 [10] Business Line Data and Key Metrics Changes - Underwriting profits in specialty property and casualty businesses grew 41% in Q4 2025, with a combined ratio of 84.1% [12][14] - Gross written premiums for Q4 2025 were up 2%, while net written premiums were down 1% compared to Q4 2024 [14] - The property and transportation group achieved a combined ratio of 70.6% in Q4 2025, an improvement of nearly 19 points from the prior year [16] - The specialty casualty group reported a combined ratio of 96.7% in Q4 2025, 5.3 points higher than the previous year [18] Market Data and Key Metrics Changes - The annualized return on alternative investments in the P&C portfolio was 0.9% for Q4 2025, down from 4.9% in the prior year [8] - AFG's investment portfolio totaled $17.2 billion, with approximately 65% invested in fixed maturities yielding about 5.25% [7][10] - The company expects a growth in net written premiums of 3%-5% for 2026, with a combined ratio target of approximately 92.5% [23] Company Strategy and Development Direction - AFG aims to maintain a disciplined operating philosophy and capitalize on its diversified portfolio to navigate economic conditions [12][13] - The company is optimistic about several startup businesses and expects to see growth opportunities in 2026 [24] - AFG's strategy includes a focus on capital management, with plans for acquisitions, special dividends, or share repurchases [10][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of reserves and the ability to achieve favorable development in the future [27] - The company is cautious about pockets of softening rates and competitive conditions but remains focused on profitable growth [24] - Management highlighted the potential for improved returns from the alternative investment portfolio as market conditions stabilize [63] Other Important Information - AFG declared a special dividend of $1.50 per share, payable on February 25, 2026 [9] - The company has returned $4.7 billion in special dividends since 2021 [10] Q&A Session Summary Question: What does the 2026 business plan assume in terms of rates? - Management indicated that they expect to continue achieving good price increases where needed, with no specific amount identified for prior development in the combined ratio [27][29] Question: Was there a change in loss picks for the casualty underlying loss ratio? - Management noted continued caution around social inflation-exposed businesses and adjustments in loss picks, particularly in California workers' compensation [30][32] Question: What drove the inflection in pricing in the lender-placed business? - Management expressed no concerns about political risks and noted that pricing can vary based on client property types, with expectations of low single-digit growth in the business [53][56] Question: Are the social inflation-related businesses stabilized? - Management indicated that corrective steps have been taken, and there is potential for mid-single-digit growth in these businesses moving forward [60] Question: What are the expectations for the alternative investment portfolio? - Management expects a return to historical levels of returns on alternatives, contingent on improved market conditions for multifamily properties [63]

Financial Data and Key Metrics Changes - AFG's Core Net Operating Earnings were $10.29 per share for the full year 2025, with a core operating return on equity of 18.2% [5] - For Q4 2025, Core Net Operating Earnings per share were $3.65, resulting in an annualized core return on equity of 25.2% [5] - The company returned over $700 million to shareholders in 2025, including $334 million in special dividends and $274 million in regular dividends [6][10] Business Line Data and Key Metrics Changes - Underwriting profits in specialty property and casualty businesses grew 41% in Q4 2025, with a combined ratio of 84.1%, an improvement of nearly 5 points from the prior year [14] - Gross written premiums for Q4 2025 were up 2%, while net written premiums were down 1% compared to the same period in 2024 [14] - The Property and Transportation Group achieved a 70.6% combined ratio in Q4 2025, an improvement of nearly 19 points from the prior year [16] Market Data and Key Metrics Changes - The annualized return on alternative investments in the P&C portfolio was 0.9% for Q4 2025, down from 4.9% in the prior year [8] - AFG's investment portfolio totaled $17.2 billion, with approximately 65% invested in fixed maturities yielding about 5.25% [7][10] Company Strategy and Development Direction - AFG aims for premium growth of 3%-5% in 2026, with a combined ratio target of approximately 92.5% [23] - The company is optimistic about several startup businesses and expects to see growth opportunities in specialty casualty and other lines [24][68] - AFG's strategy includes maintaining a disciplined focus on underwriting profitability while pursuing growth opportunities [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of reserves and the ability to navigate competitive conditions while pursuing profitable growth [24] - The company anticipates a stable crop year in 2026, which is expected to positively impact the crop insurance business [47] - Management acknowledged pockets of softening rates but remains focused on disciplined growth strategies [24] Other Important Information - AFG declared a special dividend of $1.50 per share, payable on February 25, 2026, with an aggregate amount of approximately $125 million [9] - The company has declared $55.50 per share in special dividends since 2021, totaling $4.7 billion [10] Q&A Session Summary Question: What does the 2026 business plan assume in terms of rates relative to the 5% P&C renewal pricing? - Management indicated that they do not specifically identify amounts for prior development in the combined ratio but expect favorable development based on historical trends [27] Question: Was there any change in loss picks for the casualty underlying loss ratio? - Management noted continued caution around social inflation-exposed businesses and adjustments in loss picks, particularly in California workers' compensation [30][32] Question: What drove the inflection in pricing for the lender-placed business? - Management expressed confidence in the profitability of the lender-placed business and noted that pricing can vary based on client property characteristics [53][55] Question: Are the social inflation-related businesses stabilized? - Management indicated that corrective steps have been taken, and there are opportunities for mid-single-digit growth in these businesses [60] Question: What is the outlook for the alternative investment portfolio? - Management expects a return to historical levels of 10% or better, contingent on improvements in the multifamily property market [62][63]

Financial Data and Key Metrics Changes - AFG's core net operating earnings were $10.29 per share for the full year 2025, with a core operating return on equity of 18.2% [5] - For Q4 2025, core net operating earnings per share were $3.65, resulting in an annualized fourth quarter core return on equity of 25.2% [5] - The company returned over $700 million to shareholders in 2025, including $334 million in special dividends and $274 million in regular dividends [6][10] Business Line Data and Key Metrics Changes - Underwriting profit in specialty property and casualty insurance grew 41% in Q4 2025, with a combined ratio of 84.1%, an improvement of nearly 5 points from the prior year [12][13] - Gross written premiums for Q4 2025 increased by 2%, while net written premiums decreased by 1% compared to the same period in 2024 [13] - The property and transportation group achieved a combined ratio of 70.6% in Q4 2025, an improvement of nearly 19 points from the prior year [16] Market Data and Key Metrics Changes - The annualized return on alternative investments in the P&C portfolio was 0.9% for Q4 2025, down from 4.9% in the prior year [8] - The company expects a growth in net written premiums of 3%-5% for 2026, with a combined ratio target of approximately 92.5% [22] Company Strategy and Development Direction - AFG aims to maintain a disciplined focus on underwriting profitability while pursuing growth opportunities in 2026 [24] - The company is optimistic about several startup businesses and expects to see progress in areas like Specialty Construction and Embedded Solutions [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of reserves and the ability to navigate changing economic conditions [12] - The company is mindful of softening rates and competitive conditions but believes its reserve strength and healthy rate environment will support growth [24] Other Important Information - AFG's leverage ratio is less than 28%, with no debt maturities until 2030, and insurance company financial strength ratings at A+ [10] - The company declared a special dividend of $1.50 per share, payable on February 25, 2026 [9] Q&A Session Summary Question: What does the 2026 business plan assume in terms of rates relative to the 5% P&C renewal pricing? - Management indicated that they are not specifically identifying amounts for prior development but expect favorable development based on their reserving strategy [27] Question: Was there any change in loss picks for the casualty underlying loss ratio? - Management noted continued caution around social inflation-exposed businesses and adjustments in loss picks, particularly in California workers' compensation [30][31] Question: What drove the inflection in pricing in the lender-placed business? - Management stated that pricing can vary based on client property types and that the business remains extremely profitable despite some lumpiness in pricing [56] Question: Are the social inflation-related businesses stabilized? - Management indicated that corrective steps have been taken, and there is potential for mid-single-digit growth in these businesses moving forward [62] Question: What is the outlook for the alternative investment portfolio? - Management expects a return to historical levels of returns on alternatives will require a better rate environment for multifamily properties [66]