American Financial Group (AFG) Q1 2025 earnings summary

Executive summary

• Net earnings for Q1 2025 were $154 million ($1.84 per share), down from $242 million ($2.89 per share) in Q1 2024, primarily due to lower P&C underwriting profit and reduced alternative investment returns, partially offset by higher yields on fixed maturities.

• Core net operating earnings were $152 million ($1.81 per share), a year-over-year decrease, with annualized core operating ROE at 13.1% versus 20.2% in Q1 2024.

• Over $290 million was returned to shareholders in Q1 2025 via special dividends and share repurchases.

• Specialty insurance businesses and disciplined operating philosophy contributed to resilience and long-term positioning.

• Management expects continued premium growth and strong underwriting results, with higher interest rates anticipated to benefit investment income in 2025.

Financial highlights

• Total revenues for Q1 2025 were $1.86 billion, down from $1.91 billion in Q1 2024.

• Core net operating earnings per share were $1.81, down from $2.76 year-over-year.

• Net investment income (excluding alternative investments) rose 6% year-over-year; including alternatives, it fell 17%.

• Book value per share (excluding AOCI) was $54.63 at March 31, 2025; growth in book value per share plus dividends was 4.0% (2.5% excluding AOCI) for the quarter.

• Annualized return on alternative investments was 1.8% versus 9% in the prior year quarter.

Outlook and guidance

• Management expects premium growth for full year 2025, though below the original 5% guidance, with continued capital generation supporting acquisitions, dividends, or repurchases.

• Uncertainty in alternative investment returns and economic volatility may pressure earnings in the second half of the year.

• Anticipates after-tax core operating gain of ~$100 million ($1.20 per share) from the sale of Charleston Harbor Resort & Marina, expected to close in Q3 2025.

• Forward-looking statements caution that actual results may differ due to risks and uncertainties.