Second Quarter 2026
Filed Aug 5, 2026Filed under $AFGSecond-quarter core operating earnings and Property and Casualty underwriting profit exceeded the prior-year quarter, supported by higher net investment income and net written premiums.
Core net operating earnings were $234 million versus $179 million in the prior-year quarter, while Property and Casualty underwriting profit was $142 million versus $113 million and net investment income was $221 million versus $179 million. Specialty underwriting profitability remained favorable, with a 91.5% combined ratio.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net earningsGAAP | $248 million | – | – |
| Core net operating earningsnon-GAAP | $234 million | – | – |
| Diluted earnings per shareGAAP | $2.99 | – | – |
| Core net operating earnings per sharenon-GAAP | $2.82 | – | – |
| Average number of diluted sharesother | 83.026 million | – | – |
| Property and Casualty net written premiumsother | $1,915 million | – | – |
| Property and Casualty underwriting profitGAAP | $142 million | – | – |
| Property and Casualty Insurance operating earningsother | $350 million | – | – |
| Net investment incomeother | $221 million | – | – |
| Pretax core operating earningsnon-GAAP | $300 million | – | – |
| Income tax expenseother | $66 million | – | – |
| Realized gains on securitiesGAAP | $14 million | – | – |
| Specialty gross written premiumsGAAP | $2,850 million | – | – |
| Specialty ceded reinsurance premiumsGAAP | $(935) million | – | – |
| Specialty net written premiumsGAAP | $1,915 million | – | – |
| Specialty net earned premiumsGAAP | $1,694 million | – | – |
| Specialty loss and LAEGAAP | $998 million | – | – |
| Specialty underwriting expenseGAAP | $552 million | – | – |
| Specialty underwriting profitGAAP | $144 million | – | – |
| Specialty loss and LAE ratioGAAP | 58.9% | – | – |
| Specialty underwriting expense ratioGAAP | 32.6% | – | – |
| Specialty combined ratioGAAP | 91.5% | – | – |
| Specialty combined ratio excluding catastrophe losses and prior year reserve developmentGAAP | 93.1% | – | – |
| Current accident year catastrophe lossesGAAP | $31 million | – | – |
| Prior year loss reserve development (favorable) / adverseGAAP | $(57) million | – | – |
| Annualized return on equityother | 20.3% | – | – |
| Annualized core operating return on equitynon-GAAP | 19.2% | – | – |
| Total assetsother | $33,034 million | – | – |
| Shareholders’ equity, excluding AOCInon-GAAP | $4,963 million | – | – |
| Book value per share, excluding AOCInon-GAAP | $59.85 | – | – |
| Dividends per common shareother | $0.88 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Property and TransportationGross written premiums were $1,351 million, ceded reinsurance premiums were $(554) million, net earned premiums were $590 million, and underwriting profit was $57 million. The combined ratio was 90.3%, including a 62.6% loss and LAE ratio and a 27.7% underwriting expense ratio. Current accident year catastrophe losses were $12 million and prior year loss reserve development was $(42) million. | $797 million net written premiums | – | – |
| Specialty CasualtyGross written premiums were $1,119 million, ceded reinsurance premiums were $(307) million, net earned premiums were $814 million, and underwriting profit was $45 million. The combined ratio was 94.5%, including a 64.6% loss and LAE ratio and a 29.9% underwriting expense ratio. Current accident year catastrophe losses were $9 million and prior year loss reserve development was $(1) million. | $812 million net written premiums | – | – |
| Specialty FinancialUnderwriting profit was $42 million and the combined ratio was 85.6%. The supplied filing text does not include the detailed Specialty Financial underwriting-results table. | Not reported in the supplied filing text | – | – |
Capital returns
- Dividends per common share were $0.88.
What drove it
- Property and Casualty net written premiums were $1,915 million, compared with $1,803 million in the prior-year quarter and $1,664 million in the prior quarter.
- Property and Casualty underwriting profit was $142 million, compared with $113 million in the prior-year quarter.
- Net investment income was $221 million, compared with $179 million in the prior-year quarter and $168 million in the prior quarter.
- Specialty had $144 million of underwriting profit and a 91.5% combined ratio.
- Favorable prior year loss reserve development was $(57) million, while current accident year catastrophe losses were $31 million.
Concerns
- Specialty underwriting profit was $144 million versus $156 million in the prior quarter.
- The Specialty underwriting expense ratio was 32.6% versus 32.0% in the prior-year quarter.
- The Specialty combined ratio excluding catastrophe losses and prior year reserve development was 93.1% versus 91.5% in the prior-year quarter.
- Property and Transportation's combined ratio excluding catastrophe losses and prior year reserve development was 95.2%.
What to watch
- Property and Transportation current accident year loss and LAE performance, for which the combined ratio excluding catastrophe losses and prior year reserve development was 95.2%.
- The level of prior year loss reserve development, which was $(57) million for Specialty in the quarter.
- Current accident year catastrophe losses, which were $31 million for Specialty in the quarter.
- The sustainability of net investment income after it reached $221 million in the quarter.
Balance sheet and cash flow
- Total assets were $33,034 million.
- Shareholders’ equity, excluding AOCI, was $4,963 million.
- Book value per share, excluding AOCI, was $59.85.
Analysis
American Financial Group reported second-quarter net earnings of $248 million, compared with $174 million in the prior-year quarter and $191 million in the prior quarter. Core net operating earnings were $234 million, compared with $179 million and $206 million, respectively. Diluted earnings per share were $2.99, and core net operating earnings per share were $2.82. The quarter also included $14 million of realized gains on securities.
Property and Casualty Insurance operating earnings were $350 million, with $142 million of underwriting profit and $221 million of net investment income. The underwriting result was above the $113 million reported in the prior-year quarter but below the $156 million reported in the prior quarter. Net investment income was higher than both the $179 million prior-year-quarter result and the $168 million prior-quarter result, making investment income a central contributor to period earnings.
Specialty net written premiums were $1,915 million, versus $1,803 million in the prior-year quarter and $1,664 million in the prior quarter. Specialty underwriting profit was $144 million, and the combined ratio was 91.5%, compared with 93.1% in the prior-year quarter. Favorable prior year loss reserve development was $(57) million, while current accident year catastrophe losses were $31 million. Excluding catastrophe losses and prior year reserve development, the Specialty combined ratio was 93.1%.
Property and Transportation generated $57 million of underwriting profit on $797 million of net written premiums, with a 90.3% combined ratio. Specialty Casualty generated $45 million of underwriting profit on $812 million of net written premiums, with a 94.5% combined ratio. Specialty Financial contributed $42 million of underwriting profit and an 85.6% combined ratio. Capital metrics showed shareholders’ equity excluding AOCI of $4,963 million, book value per share excluding AOCI of $59.85, and an annualized core operating return on equity of 19.2%.
The supplied filing text contains no forward guidance, so the release provides no stated revenue, expense, tax-rate, or earnings outlook against which to assess subsequent-period expectations. The reported figures point to a quarter led by higher investment income, premium volume, favorable reserve development, and underwriting profitability, while the underlying Specialty combined ratio and Property and Transportation underwriting performance remain key areas to monitor.
Not in the filing
stated, not guessed- Total revenue was not reported in the supplied filing text.
- GAAP operating income was not reported in the supplied filing text.
- Gross margin was not reported and is not an applicable insurance metric.
- Operating cash flow was not reported in the supplied filing text.
- Free cash flow was not reported in the supplied filing text.
- Cash and investments balance was not included in the supplied filing text.
- Debt balance was not included in the supplied filing text.
- Share repurchases were not reported in the supplied filing text.
- Forward guidance was not provided in the supplied filing text.
- Previous-period outlook was not provided.
- Named executive commentary and executive quotes were not included in the supplied filing text.
- Detailed Specialty Financial gross written premiums, ceded reinsurance premiums, net written premiums, net earned premiums, loss and LAE, underwriting expense, catastrophe losses, and reserve development were not included in the supplied filing text.
- The supplied filing text is truncated during the Specialty Casualty underwriting-results table.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.