American Financial Group (AFG) Q1 2026 earnings summary

Executive summary

• Core net operating earnings rose to $206 million ($2.47 per share), up 36% year-over-year, with net earnings at $191 million ($2.29 per share) after realized losses.

• Annualized core operating ROE reached 17.0%, up from 13.1% year-over-year.

• Specialty P&C underwriting profit increased 66% year-over-year, with all segments reporting higher profits and a combined ratio improvement to 90.3%.

• Management expects continued premium growth, strong underwriting, and improved alternative investment returns in the second half of 2026.

• $259 million was returned to shareholders in Q1 2026, including $125 million in special dividends and $60 million in share repurchases.

Financial highlights

• Net investment income (excluding alternatives) at P&C operations rose 8% year-over-year, but overall investment income declined 1%.

• Alternative investments posted a slightly negative return, impacted by a $13 million mark-to-market loss on CLOs.

• Book value per share (excluding AOCI) was $57.83 at March 31, 2026; tangible book value per share (excluding AOCI) was $52.20.

• Book value per share plus dividends grew 3.1% for Q1 2026.

• Net earned premiums increased 2% to $1.61 billion.

Outlook and guidance

• Operations are expected to generate significant excess capital for the remainder of 2026, supporting acquisitions, dividends, or share repurchases.

• Alternative investment return assumption of 8% for the year is now considered aggressive; management targets 10%+ long-term returns and expects improved performance in the second half of 2026.

• Sale of Charleston Harbor Resort & Marina expected to close in Q2 or Q3 2026, with a projected pretax core operating gain of $125 million.