American Financial Group, Inc. posted record quarterly underwriting profit in the fourth quarter of 2025, with the Cincinnati-based insurer reporting net earnings of $299 million, or $3.58 per share, compared with $255 million, or $3.03 per share, in the same period last year.
Core net operating earnings for the quarter totaled $305 million, or $3.65 per share, up from $262 million, or $3.12 per share, in Q4 2024. The results topped analyst expectations, with earnings coming in 10.1% above consensus estimates while revenue of $2.06 billion exceeded forecasts.
Despite the beat, AFG's stock declined 2.26% in premarket trading following the announcement.
For the full year 2025, net earnings came in at $10.08 per share, compared with $10.57 per share in 2024. Return on equity stood at 17.8% for 2025, down from 19.0% the prior year.
AFG's specialty property and casualty operations delivered underwriting profit of $287 million for the quarter, up 41% from $204 million a year earlier. The segment achieved a combined ratio of 84.1%, improving nearly 5 points from 89.0% in Q4 2024.
The result significantly outpaced the broader US P&C industry, which reported a combined ratio of 94.0 for the first nine months of 2025, according to sector data.
Co-CEO Carl Lindner III attributed the record quarter to "exceptionally strong profitability" in crop insurance, citing record yields for corn and soybeans alongside favorable commodity pricing.
The Property and Transportation Group posted a combined ratio of 70.6%, improving nearly 19 points year over year. The Specialty Financial Group reported 83.0%, while the Specialty Casualty Group came in at 96.7%.
Catastrophe losses contributed just 0.2 points to Q4 results, down from 1.1 points a year earlier, with losses totaling $4 million compared with $21 million in Q4 2024. Favorable prior year reserve development added $27 million to the quarter's results.
Alternative investments contributed $6 million to pretax core operating earnings, down from $33 million in Q4 2024.
Book value per share reached $57.78 at December 31, 2025. Growth in book value per share plus dividends was 6.9% for Q4 and 22.3% for the full year.
AFG's board declared a special cash dividend of $1.50 per share, payable February 25, 2026. The company has now declared $55.50 per share in special dividends since early 2021.
Co-CEOs Carl H. Lindner III and S. Craig Lindner said returning capital through dividends and share repurchases remains central to AFG's strategy, while noting the company maintained significant excess capital at year-end.
For 2026, AFG projects core net operating earnings of $11 per share, with net written premium growth of 3-5% and a combined ratio target of 92.5%.
