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Jun 30
AFG Q2 2025 Earnings Report
American Financial Group, Inc. announced its second quarter results for 2025, reporting a decrease in net earnings and core net operating earnings compared to the prior year.
Key Takeaways
American Financial Group (AFG) reported a decline in second-quarter 2025 net earnings to $174 million ($2.07 per share) from $209 million ($2.49 per share) in Q2 2024, primarily due to lower underwriting profit and reduced returns on alternative investments. Despite this, the company achieved an annualized core operating return on equity of 15.5% and saw strong underwriting margins in its specialty P&C insurance businesses, with net investment income (excluding alternatives) increasing by 10% year-over-year.
Net earnings decreased to $174 million ($2.07 per share) in Q2 2025 from $209 million ($2.49 per share) in Q2 2024.
Core net operating earnings were $179 million ($2.14 per share) in Q2 2025, down from $215 million ($2.56 per share) in Q2 2024.
The Specialty P&C insurance operations generated a combined ratio of 93.1% in Q2 2025, with gross and net written premiums increasing by 10% and 7% respectively.
Book value per share was $54.15 at June 30, 2025, and the company returned approximately $107 million to shareholders in the quarter.
AFG
AFG
AFG Revenue by Segment
Revenue by Segment
P&C Insurance Net Earned Premiums Revenue
CapyFin.comNet Investment Income Revenue
CapyFin.comRealized Gains on Securities Revenue
CapyFin.comManaged Investment Entities: Investment Income Revenue
CapyFin.comManaged Investment Entities: Gains on FV Changes of Assets/Liabilities Revenue
CapyFin.comOther Income Revenue
CapyFin.com Forward Guidance
AFG maintains significant excess capital and plans to continue returning capital to shareholders through dividends and share repurchases. The company also intends to deploy capital into its core businesses for organic growth and strategic acquisitions that meet target return thresholds. They expect full-year premium growth in 2025 for their Specialty P&C businesses.
Positive Outlook
- Continued significant excess capital at June 30, 2025.
- Commitment to returning capital to shareholders through regular and special cash dividends and opportunistic share repurchases.
- Capital deployment into core businesses for healthy, profitable organic growth.
- Opportunities to expand specialty niche businesses through acquisitions and start-ups meeting target return thresholds.
- Expectation of full-year premium growth in Specialty P&C businesses for 2025.
Challenges Ahead
- Potential for actual results and/or financial condition to differ materially from forward-looking statements.
- Risks associated with changes in financial, political, and economic conditions, including interest and inflation rates.
- Performance of securities markets and potential declines in credit quality or ratings impacting investment portfolio valuation.
- Exposure to levels of natural catastrophes, severe weather, terrorist activities, and other major losses.
- Disruption caused by cyber-attacks or other technology breaches/failures impacting business or reputation.