American Financial Group Sets Third-Quarter Core Earnings Record

The Tip Desk · November 4, 2026 · 4 min read

Core net operating earnings reached $3.97 a share, up 48% from a year earlier, as pretax P&C operating income hit a third-quarter record of $406 million.

American Financial Group, Inc. (AFG), the Cincinnati-based insurance holding company, reported a record $3.97 a share of core net operating earnings for the third quarter of 2026, a 48% increase from $2.69 a year earlier.

That pace followed a 32% year-over-year rise in the second quarter and 36% in the first. The company said the third-quarter increase reflected higher year-over-year net investment income.

GAAP net earnings were $282 million, or $3.40 a share, compared with $215 million, or $2.58 a share, in the 2025 third quarter. Those results included $47 million, or $0.57 a share, of after-tax non-core losses, versus $9 million, or $0.11 a share, a year earlier. Annualized return on equity was 22.3%, and annualized core operating return on equity was 26.0%.

Pretax P&C operating income reached $406 million, a third-quarter record, after a second-quarter record of $350 million. Co-Chief Executive Officers S. Craig Lindner and Carl H. Lindner III said strong underwriting margins, healthy premium growth and higher quarterly P&C net investment income produced the new pretax P&C operating-income record.

Net written premiums grew 9% in the third quarter, accelerating from 6% growth in the second quarter. Gross written premiums rose 8%. The company said it continued to achieve premium growth from new business, a favorable renewal-rate environment and strong policy retention. Average renewal pricing excluding workers’ compensation was up about 6% for the quarter, about a point higher than in the previous quarter; including workers’ compensation, rates were up about 5%.

The Specialty P&C combined ratio was 93.8%, 0.8 points higher than 93.0% a year earlier. Underwriting profit was $133 million, down from $139 million. Higher profit in Property and Transportation and Specialty Casualty was more than offset by Specialty Financial.

Property and Transportation reported underwriting profit of $68 million, compared with $55 million a year earlier, on a 93.4% combined ratio. Gross written premiums in that group rose 12% and net written premiums 14%. The company attributed the premium increase primarily to growth in certain crop insurance products and new business and a favorable rate environment in several transportation businesses. Overall renewal rates in the group increased about 7%.

Specialty Casualty reported underwriting profit of $42 million, compared with $33 million. Its combined ratio was 94.9%. Gross written premiums increased less than 1% and net written premiums 2%. Excluding workers’ compensation, renewal pricing was up about 6%; including workers’ compensation, about 4%.

Specialty Financial reported underwriting profit of $23 million, compared with $51 million a year earlier, and a combined ratio of 11.4 points higher than the prior-year period. The company said the decline reflected an isolated large loss in European operations and lower favorable prior-year development. Catastrophe losses in the group were $16 million, or 5.2 points on the combined ratio, compared with $11 million, or 4.1 points, a year earlier. Gross and net written premiums in the group both increased about 14%, primarily due to growth across lender services businesses.

P&C net investment income set a quarterly record of $289 million, up 41% year-over-year. The increase was primarily attributable to income from the August 2026 sale of Charleston Harbor Resort & Marina, which generated $126 million in pretax net investment income. Because the P&C companies and AFG parent each owned half of the property, earnings were split evenly; the parent recorded $63 million of pretax investment income. Excluding the sale, P&C net investment income increased 10%.

The company recorded a special non-core A&E charge of $24 million, or $19 million after-tax, to increase liabilities for environmental exposures of former railroad and manufacturing operations. P&C Group A&E reserves were $332 million, net of reinsurance recoverables, at September 30, 2026.

Book value per share was $57.12 at September 30, 2026. AFG repurchased $26 million of common stock at an average $138.31 a share. The board declared a special cash dividend of $3.50 a share, payable November 25, 2026, an aggregate of about $290 million, in addition to the regular quarterly dividend of $0.97 a share. With that special dividend, the company has declared $59.00 a share in special dividends since the beginning of 2021. Management said AFG continued to have significant excess capital at September 30, 2026.