American Financial Group, a Cincinnati-based insurer, reported a standout performance in the last quarter of 2025, posting record underwriting profits. The company earned $299 million, or $3.58 per share, beating the previous year’s $255 million, or $3.03 per share, for the same period.
Core net operating earnings also saw a boost, reaching $305 million, or $3.65 per share, up from $262 million, or $3.12 per share, in the fourth quarter of 2024. These results surpassed analysts’ expectations by just over 10%, alongside revenue of $2.06 billion, which also exceeded forecasts.
Despite the strong numbers, AFG’s stock fell 2.26% in premarket trading after the announcement.
For the full year, the company’s net earnings per share stood at $10.08, a slight dip from $10.57 in 2024. Return on equity dropped to 17.8% from 19.0% the previous year.
The company’s specialty property and casualty segment led the way with a 41% rise in underwriting profit to $287 million. This division’s combined ratio improved to 84.1%, down nearly five points from 89.0% the year before. This was well below the broader U.S. property and casualty industry’s 94.0 combined ratio reported for the first nine months of 2025.
Co-CEO Carl Lindner III credited the record quarter to strong profits in crop insurance, helped by excellent corn and soybean yields and favorable prices.
Other divisions also showed improvement. The Property and Transportation Group posted a combined ratio of 70.6%, nearly 19 points better than a year ago. The Specialty Financial Group had a ratio of 83.0%, and the Specialty Casualty Group’s ratio stood at 96.7%.
Catastrophe losses were minimal, adding only 0.2 points to the quarter’s results compared to 1.1 points the previous year, with losses totaling $4 million versus $21 million in Q4 2024. Additionally, favorable prior year reserve development contributed $27 million to earnings.
Alternative investments added $6 million to pretax core operating earnings, though this was lower than the $33 million added in the final quarter of 2024.
AFG’s book value per share rose to $57.78 by the end of 2025. The growth in book value per share plus dividends was 6.9% in the fourth quarter and 22.3% over the full year.
The board declared a special cash dividend of $1.50 per share, payable February 25, 2026, bringing the total special dividends declared since early 2021 to $55.50 per share.
Co-CEOs Carl H. Lindner III and S. Craig Lindner emphasized that returning capital through dividends and share repurchases remains a key part of the company’s approach. They also noted that AFG had significant excess capital at year-end.
Looking ahead to 2026, the company expects core net operating earnings to hit $11 per share, with net written premium growth of 3-5%, and aims for a combined ratio of 92.5%.