AFG

A month has gone by since the last earnings report for American Financial Group (AFG). Shares have lost about 2.8% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is American Financial due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for American Financial Group, Inc. before we dive into how investors and analysts have reacted as of late. AFG Q2 Earnings Beat on Strong P&C Underwriting, Investment IncomeAmerican Financial Group, Inc. reported second-quarter 2026 net operating earnings per share of $2.82, which surpassed the Zacks Consensus Estimate by 17%. The bottom line increased 31.8% year over year, driven by underwriting income and stronger returns from its alternative investment portfolio. Total revenues increased approximately 5.5% year over year, to $2.03 billion from $1.924 billion.  The top line also beat the Zacks Consensus Estimate by 0.65%.The quarterly results benefited from record pretax Property & Casualty ("P&C") operating income, healthy premium growth, improved underwriting margins and higher investment income from alternative investments. Net earned premiums rose 2.9% year over year to approximately $1.7 billion in the second quarter of 2026. The figure was slightly below both the Zacks Consensus Estimate and our estimate of $1.71 billion. Net investment income rose 20.1% year over year to $221 million in the quarter under review. The figure was higher than our estimate of $195.4 million and surpassed the Zacks Consensus Estimate of $197.9 million.Total costs and expenses increased 1.1% year over year to $1.7 billion due to higher underwriting expenses and interest charges, partly offset by lower losses and loss adjustment expenses. Our estimate was $1.72 billion. Specialty P&C Insurance: The segment generated $1.9 billion in net written premiums, which improved 6% year over year, reflecting new business opportunities, favorable renewal pricing and increased exposures while maintaining disciplined underwriting. The Specialty P&C Insurance segment’s underwriting profit increased 26.3% year over year to $144 million in the quarter, driven by higher underwriting profit across Property & Transportation and Specialty Financial groups. The figure exceeded our estimate of $143 million. Pre-tax core operating earnings before income taxes of the P&C Insurance segment were $350 million, up 28.2% year over year.Property & Transportation Group: Net written premiums increased 5% year over year to $797 million in the second quarter, driven by crop insurance growth, favorable pricing and higher exposures. The Property & Transportation Group generated underwriting profit of $57 million, more than double the $27 million reported a year ago, driven by stronger transportation and agricultural business performance. The combined ratio improved 490 basis points year over year to 90.3%.Specialty Casualty Group: Net written premiums increased 6% year over year to $812 million. The Specialty Casualty Group generated underwriting profit of $45 million, down from $49 million in the prior-year quarter, due to lower workers' compensation and executive liability profitability, offset by strength in energy, construction and environmental liability businesses. The combined ratio deteriorated 60 basis points year over year to 94.5%.Specialty Financial Group: Net written premiums rose 10% year over year to $306 million. In the Specialty Financial Group, underwriting profit of $42 million, up from $38 million in the prior-year quarter, was primarily driven by stronger performance in its fidelity/crime and financial institutions businesses. Catastrophe losses in Specialty Financial Group totaled $10 million in the reported quarter, narrower than the year-ago loss of $19 million. The current combined ratio of 85.6% improved 50 basis points year over year. American Financial exited the second quarter of 2026 with total cash and investments of $17.1 billion, which decreased 0.7% from the 2025-end level. Long-term debt of $1.82 billion remained unchanged from the 2025-end level.As of June 30, 2026, the company’s book value per share, excluding accumulated other comprehensive income (AOCI), was $59.85 compared with $58.38 at the end of 2025. Annualized return on equity was 20.3% in the second quarter, up 530 basis points year over year. American Financial repurchased $26 million of its common stock in the second quarter of 2026. It paid total cash dividends of 88 cents per share, continuing its disciplined capital management strategy. It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 19.27% due to these changes. Currently, American Financial has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, American Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Financial Group, Inc. (AFG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. American Financial Group (AFG) is back in focus after its August 4 earnings release and a subsequent special call on August 13, which gave investors fresh information on recent performance. See our latest analysis for American Financial Group. The recent earnings update and special call appear to sit against a period of stronger momentum for American Financial Group, with a 30 day share price return of 3.32% and a 1 year total shareholder return of 18.41%. Over five years, the total shareholder return of 60.20% gives a clearer sense of how the stock has rewarded patient holders. If American Financial Group’s recent moves have you thinking about what else could be interesting in financials and beyond, this is a good moment to widen your search with 21 top founder-led companies American Financial Group looks like a solid specialty insurer on recent results and shareholder returns. After this share price move, the real test is whether you are paying a fair price for that strength or stretching on valuation. American Financial Group’s most followed valuation narrative points to a fair value of about $152.33 per share, slightly above the last close of $146.60. That leaves a modest gap that hinges on a handful of specific earnings and margin assumptions. Read the complete narrative. The fair value story for American Financial Group leans heavily on steady revenue, firmer margins and a higher future earnings multiple. Want to see which long term profit and valuation assumptions sit behind that gap and how much buybacks contribute to the per share math. Result: Fair Value of $152.33 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, the narrative around American Financial Group can shift quickly if catastrophe losses stay elevated, or if social inflation and litigation costs keep pressuring underwriting results. Find out about the key risks to this American Financial Group narrative. Analysts see American Financial Group as modestly undervalued, yet current market multiples tell a different story. The stock trades on a P/E of 12.8x versus 11.5x for the US Insurance industry, and a fair ratio of 11.2x. That premium raises the question of how much margin for error is really here. See what the numbers say about this price — find out in our valuation breakdown. With mixed sentiment around American Financial Group after earnings and valuation debates, this is a good time to review the data yourself and move quickly. Balance the upside potential against the concerns by weighing the 1 key reward and 2 important warning signs If American Financial Group has sharpened your focus, do not stop here. Use these curated stock ideas to pressure test your thinking and spot opportunities others may miss. Target dependable cash generators and strong balance sheets by scanning companies in the solid balance sheet and fundamentals stocks screener (50 results). Hunt for potential bargains that combine quality with attractive pricing through the 53 high quality undervalued stocks. Zero in on underfollowed opportunities with solid fundamentals by checking the screener containing 19 high quality undiscovered gems. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AFG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

American Financial Group’s Q2 results received a positive reaction from the market, as management credited strong underwriting margins, premium growth, and higher net investment income for the outperformance. Co-CEO Carl Henry Lindner highlighted, “We set a new second quarter record for pretax property and casualty operating income,” attributing this to a diversified specialty insurance portfolio and disciplined underwriting. Notably, improved investment returns and favorable reserve development played significant roles in the quarter’s financial strength. Is now the time to buy AFG? Find out in our full research report (it’s free). Revenue: $1.90 billion vs analyst estimates of $1.90 billion (5.3% year-on-year growth, in line) Adjusted EPS: $2.82 vs analyst estimates of $2.37 (18.9% beat) Market Capitalization: $11.93 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Hristian Getsov (Wells Fargo) questioned the impact of business mix and AI on loss ratios and expense trends. CFO Brian S. Hertzman explained the higher expense ratio reflects growth in certain segments, while AI is mainly benefiting claims efficiency but is still early in underwriting applications. Michael Zaremski (BMO) asked about renewal pricing trends and the decentralized business model’s impact on AI adoption. Co-CEO Carl Henry Lindner noted broad-based price increases and argued that a diversified structure can accelerate AI tool adoption across business lines. Andrew Andersen (Jefferies) probed commercial auto profitability and workers’ compensation growth. Lindner clarified that commercial auto overall is profitable, with liability lines slowly improving, and that workers’ comp remains strong except for challenges in California. Mitch (Raymond James, for Greg Peters) inquired about competitive pressures from MGAs in casualty and the growth focus in specialty financial. Lindner acknowledged increased MGA activity, especially in excess liability, and highlighted renewed growth in lender-placed and European businesses. No further analyst questions on the call. In coming quarters, our analyst team will be monitoring (1) continued underwriting profitability and premium growth across specialty lines, (2) the pace and measurable impact of AI-driven operational improvements, and (3) how AFG deploys excess capital from both ongoing operations and anticipated asset sales. We are also focused on tracking rate adequacy and competitive dynamics, particularly in casualty and specialty financial segments. American Financial Group currently trades at $143.83, up from $140.60 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 11:30 a.m. ET Vice President, Investor Relations - Diane Weidner Co-Chief Executive Officer - Carl Henry Lindner III Co-Chief Executive Officer - Stephen Craig Lindner Chief Financial Officer - Brian S. Hertzman Operator: Good day, and thank you for standing by. Welcome to the American Financial Group 26 Second Quarter Results Conference Call. At this time, all participants are in a listening-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during this session, you need to press Star 11 on your telephone. You will hear an automated message that your hand is raised. To withdraw your question, please press Star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Diane Weidner, Vice President, Investor Relations. Diane, please go ahead. Diane Weidner: Good morning. And welcome to American Financial Group's Second Quarter 26 Earnings Results Conference Call. We released our results yesterday afternoon. Our press release, investor supplement and webcast presentation are posted on AFG's website under the Investor Relations section. These materials will be referenced during portions of today's call. Joining me this morning are Carl Henry Lindner III and Craig Lindner, co CEOs of American Financial Group, and Brian S. Hertzman, AFG's CFO. Before I turn the discussion over to Carl, I would like to draw your attention to the notes on Slide 2 of our webcast. Some of the matters to be discussed today are forward looking. These forward looking statements involve certain risks and uncertainties that could cause our actual results and or financial condition to differ materially from these statements. A detailed description of these risks and uncertainties can be found in AFG's filings with the Securities and Exchange Commission, which are also available on our website. We may include references to core net operating earnings, a non GAAP financial measure, in our remarks or in responses to questions. A reconciliation of net earnings to core net operating earnings is included in our earnings release. And finally, if you are reading a transcript of this call, please note that it may not be authorized or reviewed for accuracy. And as a result, it may contain factual or transcription errors that could materially alter the intent or meaning of our statements. Now I am pleased to turn the call over to Carl to discuss our results. Carl Henry Lindner: Well, good morning. Before we begin our commentary about the quarter, I want to take a moment to express our deepest condolences to the Berkeley family. Bill was an icon in our industry, a respected competitor, and most importantly, our good friend. He leaves an incredible legacy and will be sorely missed. Turning our focus to AFG's second quarter, I will share a few highlights after which Craig and I will walk through more details. We will then open it up for Q&A, where Craig, Brian and I will respond to your questions. I am pleased to report that we set a new second quarter record for pretax property and casualty operating income, driven by strong underwriting margins healthy premium growth and higher net investment income. I believe our compelling and diversified mix of specialty insurance businesses are entrepreneurial culture, our disciplined operating philosophy, and an astute team of in house investment professionals continue to position us to create value for our shareholders through a variety of insurance market conditions. Craig and I thank God, our talented management team, and our great employees for helping us to achieve these results. And I will turn the discussion over to Craig to walk us through some of these details. Stephen Craig Lindner: Thanks, Carl. Please turn to Slides 3 and 4 for a summary of earnings for the quarter. You will see AFG reported core net operating earnings of $2.82 per share in the 26 second quarter, a 32% increase from the prior year period. This level of performance resulted in an annualized core operating return on equity of 19.2%. I will start with an overview of AFG's investment performance and financial position, and share a few comments about AFG's capital and liquidity. The details surrounding our $17.1 billion investment portfolio are presented on Slides 5 and 6. Net investment income at our property and casualty insurance operations for the 3 months ended 06/30/2026, increased 23% year over year and established a new second quarter record for AFG and was driven by improved returns from alternative investments. You will see on Slide 6, approximately 2/3 of our portfolio is invested in fixed maturities. The current interest rate environment, we are able to invest in fixed maturity securities at yields of approximately 5.5%. The duration of our P and C fixed maturity portfolio, including cash and cash equivalents, was 3.1 years at 06/30/2026. Annualized return on alternative investments was approximately 7.1% for the 26 second quarter compared to 1.2% for the prior year quarter. Longer term, we continue to remain optimistic regarding the prospects of attractive returns from our overall alternative investment portfolio with an expectation of annualized returns averaging 10% or better. In April 2026, AFG reached definitive agreements to sell the Charleston Harbor Resort and Marina. Subject to receipt of necessary third party approvals and satisfaction of customary closing conditions, the transaction is expected to close in the third quarter of 26. AFG currently expects to recognize a pretax core operating gain of approximately $125 million or $1.20 per share on the sale. The property is owned equally by the PNC operations and AFG parent. So the gain on sale will be reported as net investment income and split equally between the 2 entities. This transaction was not contemplated in AFG's original business plan assumptions. Please turn to Slide 7, where you will find a summary of AFG's financial position at 06/30/2026. During the quarter, we returned nearly $100 million to our shareholders, including $26 million in share repurchases, and $0.88 per share regular quarterly dividend. We expect our operations to continue to generate significant excess capital throughout the remainder of 2026, which provides ample opportunity for acquisitions, special dividends or share repurchases. We evaluate the best alternatives for capital deployment on a regular basis. We continue to view total value creation as measured by growth in book value per share plus dividends as an important measure of performance over the long term. For the 3 months ended 06/30/2026, AFG's growth in book value per share, excluding AOCI, plus dividends was 5%. I will now turn the call over to Carl to discuss the results of our P and C operations. Carl Henry Lindner: Thank you, Craig. Please turn to Slides 8 and 9 of the webcast which include an overview of our second quarter results. I am very pleased with the strong performance of Specialty Property and Casualty businesses. We achieved a 44% increase in underwriting profit in first 6 months of the year, while executing on opportunities to grow. With approximately 3/4 of our businesses reporting higher year over year premiums through June 30. In addition, we are doing this while consistently achieving renewal rate increases. Excluding workers' comp, have been around 5% the past 4 quarters. These results showcase the diversification across our 36 businesses. The underwriting discipline and opportunistic culture that have allowed us to produce strong results that outperform peers over the long run. These same attributes give us confidence that those results can continue despite softening in certain parts of the overall property and casualty market. Now looking at a few details, you will see on Slide 8 that our specialty property and casualty insurance businesses produced a 91.5% combined ratio in the second quarter of 26, an improvement of 1.6 points from the 93.1% reported in the second quarter of last year. Second quarter 26 results benefited from 3.4 points of favorable prior year reserve development compared to 0.7 points in the second quarter of 25. Catastrophe losses added 1.8 points in the second quarter of 26 compared to 2.3 points in the second quarter of last year. Second quarter, 26 gross and net written premiums were 7% and 6% higher, respectively, than the comparable period in 2025. As I noted earlier, average renewal rates across our property and casualty group excluding workers' comp, were up approximately 5% for the quarter. Average renewal rates including workers' compensation were up approximately 4% overall. That was about a point higher than the previous quarter. We have reported overall renewal rating increases for 40 consecutive quarters, and we believe we are achieving overall renewal rate increases that enabled us to meet or exceed targeted returns. Now I would like to turn to Slide 9 to review a few highlights from each of our specialty property and casualty business groups. Details are included in our earnings release. So I will focus on summary results here. The businesses in the Property and Transportation Group achieved a 90.3 calendar year combined ratio overall in the second quarter of 26, an improvement of 4.9 points from the 95.2 reported in a comparable 2025 period. Higher year over year underwriting profits in our transportation and agricultural businesses were the primary drivers of these very strong results. In second quarter 26 gross and net written premiums in this group were 8% and 5% higher than the comparable prior year period. The increase is primarily attributable to growth in crop insurance products, with higher premium cessions along with new business opportunities higher exposures, and a favorable rate environment in several of our transportation businesses. Overall, renewal rates in this group increased approximately 8% on average in the second quarter of 26, 2 points higher than the pricing achieved in this group for the first quarter of 26. We reported a small underwriting profit in commercial auto liability, I am pleased to say for the second quarter in a row, and we are continuing to make progress there. Renewal rates in auto liability were up 15% during the quarter. Now in terms of our crop business, commodity futures pricing remains in acceptable ranges relative to spring discovery prices. And the most recent crop progress reports indicate that the crop year is off to a solid start. Although timely rainfall has helped soil moisture conditions across much of our footprint, moisture levels through August and early September remain important. Our crop results for 2026 will depend on the harvest yields and prices in the second half of this year. As a reminder, our third quarter results reflect an element of seasonality as most of our crop insurance premiums are earned in AFG's third quarter but booked at more at a conservative loss ratio until the fourth quarter. When we have better visibility into actual yields and claims activity in our MPCI business. And a clear indication of the performance of our private product businesses. Consequently, we record the majority of our calendar year crop profitability in the fourth quarter. Now the businesses in Specialty Casualty Group achieved a solid 94.5% calendar year combined ratio overall in the second quarter of 26, 0.6 points higher than the 93.9 reported in the comparable period last year. We continue to be mindful of social inflation and remain conservative in our initial loss picks for the lines of business written by business by the businesses in this group. Second quarter 26 gross and net written premiums in this group increased 5% and 6% respectively, when compared to the same prior year period. New business opportunities increased exposures and higher rates drove the year over year increase in many of our specialty casualty businesses, including workers' comp, targeted markets, excess and surplus lines, energy, construction, environmental and M&A liability. Excluding our workers' comp businesses, renewal rates for this group were up approximately 4% in the second quarter. Pricing in this group, including workers' comp, was up about 2%. Now the specialty financial group continued to achieve excellent underwriting margins and reported an 85.6 calendar year combined ratio for the second quarter of 26, an improvement of over 0.5 points from the comparable period last year. Gross and net written premiums were both up 10% in this group when compared to the prior year period, primarily due to the growth in our financial institutions business. Renewal pricing in this group decreased less than 1% in the second quarter reflecting the strong margins earned on these businesses overall. Craig and I are proud of our proven track record of innovation, long term value creation and a forward thinking mindset. And we feel AFG is well positioned to continue to build long term value for shareholders for the remainder of 2026 and beyond. We will now open the lines for the Q and A portion of today's call, and Craig and Brian and I would be happy to respond to your questions. Operator: Thank you. At this time, we will conduct a question and answer session. And wait for your name to be announced. To withdraw your question, Our first speaker is Hristian Getsov from Wells Fargo. Please go ahead, Hristian. Hristian Getsov: Hi, good morning. Thank you for taking my question. My first question is on the uptick in the underlying loss ratios, particularly in Specialty Casualty and Specialty Financials, which it seems like it could be driven by mix and But how should we think about the potential improvement on the expense side of the equation from the mix shift just given like, there is also productivity gains that maybe could be recognized on the expense side. And just given the increased conservatism in those lines and rate continuing to be at or exceeding target margins, could we potentially also see higher PYD? Thank you. Brian S. Hertzman: Hi. This is Brian. I think it is important as you start to think about that answer is to start sort of at the beginning, which is we are looking at our businesses. We are looking at things from a return on equity perspective overall and not just the combined ratio, not just the loss ratio. So we do have to keep in mind that when businesses a longer tail like workers' comp grow and have a greater opportunity for investment income that we can have high teen ROEs even at higher combined ratios. Even after considering investment income, it can be tricky to analyze the components of the combined ratios separately as some products like our successful lender placed business have a higher underwriting expense ratio and a lower loss ratio compared to other businesses. When strong performing businesses like that grow, our expense ratio goes up but so does our ROE. In fact, in our in our lender placed business, where many of our products offer profit based commissions, when that business goes well, our underwriting expenses go up. So in underwriting expenses, in this quarter, you are seeing the impact of growth and continued success in uninplaced insurance. Driving up the expense ratio. When you switch over to the accident year loss ratio, by segment, again, it is important to remember that we look at our reserves by business every quarter and use that information to, not only set our loss picks, but also to inform our pricing and risk appetite So we are very cautious around our reserve picks, and we tend to react quicker to bad news and slower to good news. So we are being deliberately cautious around social inflation exposed businesses despite the improvements that we have seen that area, particularly in places like commercial auto liability. I think in considering the adequacy of our current loss picks, AFG's history of consistent overall favorable development should be an indication of how prudent we tend to be in noting and noting that nothing has changed here. Just practically, I would rather be talking to you and to Carl and Craig about the reasons why we have favorable development versus adverse development. So we are, again, being slow to react to the good news that we are seeing there. When you start to look at it by segment, focusing on cash casualty and financial, In casualty, we are seeing good growth in workers' comp and in certain targeted markets. Results are very good, but those businesses do run at a higher loss ratio compared to the overall segment. Decisions on where we participate in excess policies can also impact the loss ratio for that segment. In financial, there were some minor tweaks to some of the smaller businesses outside of lender placed insurance, but nothing we would call a trend. Mostly, what you are seeing is the impact of intentional growth, in businesses like our European operations that run at a higher loss and LAE ratio And from the change in mix of business, where we are still growing in areas that meet our ROE objectives but happen to have a higher loss ratio than the lender placed business or the other businesses in the overall financial segment. So when you think about things from a longer point of view, Carl said before, we are confident in our reserves. And in our ability to produce strong returns through a variety of market cycles. Hristian Getsov: Got it. Thank you. And then for my follow-up, just sticking with the AI component, I guess the potential benefits on the expense side of the margins is pretty well But how do you think about potential improvements on the underlying loss ratio from the use of AI as underwriters get better access to better data, and they could also digest the data quicker and more efficiently. Carl Henry Lindner: I think that is a work a work in progress. I think that fits under the category with us on AI powered AI powered underwriting knowledge management. We are doing many pilots right now designed to enhance underwriting training, knowledge retrieval, and decision support. You know, in a in a number of our different businesses. So I think we are we are just on the front end of that. I think where a lot of our AI focus has been is on submission automation, document intelligence, claims workflow flow automation, AI enabled recorded statements, which improves claims handling efficiency and customer experience through automated summarization and insights and broad deployment of AI tools across the organization today. So like everyone else, you know, we are making a significant investment And we are encouraged by you know, the productivity improvements that we are seeing. In that. But on underwriting itself, building a an underwriting knowledge management, I think we are probably on the early end of that. Probably farther along in the use in the claim side. Great. Hristian Getsov: Thank you and congrats on the quarter. Operator: 1 moment for our next question. We have Michael Zaremski from BMO. Please go ahead, Michael. Michael Zaremski: Hey. Thanks. Good morning. Maybe first question on the competitive environment and pricing, specifically renewal pricing. I think from data points we have received from a lot of your peers, industry data over the last quarter or so, we have seen you know, a desal in a number of pockets Maybe you can kind of discuss what is doing AFG's pricing levels, maybe even a little bit momentum in certain spots sequentially? Carl Henry Lindner: Yeah. I am I am happy to give a little insight into that. I am pleased, as I think I mentioned in the in my comments that and in our release, 3 quarters of our businesses have some growth through 6 months. So it is you know, that is pretty broad based growth. I think our diversified portfolio, you know, of 36 businesses gives us a broad array of opportunities. I think predictive analytics on pricing growing sophistication there business by business is helping us. I think 1 of the main things is we are kind of as I mentioned in past quarterly conversations that we are pretty much through the reset on the social inflation exposed businesses. We talked about some re underwriting certain classes, lowering bringing you know, limits down. Social inflation exposed businesses, raising retentions in some businesses like public sector. So think we are able to play offense versus defense more today and grow some of these lines now. Commercial auto, the same thing. We are We are we are so I mentioned second quarter in a row, we are you know, in commercial auto liability itself that we are making a small underwriting profit. And we are earning and commercial auto overall, we are earning solid underwriting profits and good ROEs. And we are having the ability to play more offense and find opportunities to for some growth there. So I feel good about for the rest of the year, you know, where we are at. Very optimistic that we will continue to have opportunities to grow our businesses. And in a fairly broad basis. Michael Zaremski: that is helpful, Carl. Maybe just honing in on specialty casualty. The underlying loss ratio this year which gets a lot of attention from investors. Has been you know, on a I guess, on a first half of the year basis, running in kind of the 63 plus range you know, last year, kind of ran in the in the 65 range for the full year. So I do I guess, you know, to the previous question, you know, it was mentioned there was an uptick in the underlying loss ratio. Is there a seasonality in there where I should be thinking about the first half of this year versus the first half of last year? Or is it better to compare the first half of 2026 to the full year 2025 or maybe none of the above. Brian S. Hertzman: I would I would say in casualty, there is really not a lot of seasonality there. there is definitely seasonality You look at the property and transportation numbers just because of the crop business in particular, can cause the loss ratio to vary quarter to quarter. In casualty, really what is driving right, driving those changes is mix of business. And then where we are even though we are seeing a good improvements in the results overall, we are still being conservative on the social inflation exposed areas, and most of that is in casualty. So as far as trends go, I think we are always gonna adjust quarter to quarter. By business. But I would say, there really is not seasonality there that it is more mix of business that is changing it compared to last year. Carl Henry Lindner: Okay. And I had 1 more comment on the growth side. So I am thinking about it. You know, other companies really weighed in heavily on riding more convective storm exposed and coastal property you know, particularly in the E and S side than we did. Had a bigger appetite on the by the same token, as the property pricings caved on a lot of that business it really has less impact on us versus you know, our peers. So I do think that is also 1 differential. That makes sense. Michael Zaremski: And lastly, back to the kind of technology conversation that you will find on a moment ago. I guess there is some folks that have expressed that a company that operates a more decentralized business model with many different segments. Might, on average, not be able to kind of deploy AI technologies as swiftly versus a company that an insurer that they might have run kind of a more centralized operating model Any thoughts about that remark? Carl Henry Lindner: I think in a in a 1- or 2-line business, you know, a primary auto or homeowners rider, maybe that you know, that could be the case. I might argue the opposite that you know, where you have more business units and more people that are enabled to use the tools, you might be you might have greater success finding some applications you know, when you have 36 different business groups you know, deploy deploying AI. In that. So I think some of our businesses, you know, our crop business, for instance, is using extensive AI and getting extensive results, I think. You know, in a lot of different ways in its business and that. So I think that is an example. 1 business we would be ahead of the pack probably in that. So I do not know. Brian S. Hertzman: I think that would be my response to Carl, I would just add to that too that even though we do have 36 different business units with a strong a decentralized focus on underwriting and claims, things like AI. We do a good job of having our business units talk to each other and work together over time. So there is something that works for 1 business unit, you can be assured that will be talked about and, considered for the other business unit. So that even though have a lot of autonomy, they do not they do not operate completely in a vacuum. Michael Zaremski: Thank you. Operator: 1 moment for our next question. Our next question comes from Andrew Andersen from Jefferies. Please go ahead, Andrew. Andrew Andersen: You had mentioned commercial auto produced an under small underwriting profit for a 2nd straight quarter. What is needed to move this from small profit towards targeted returns? Is that going to require pricing above the 15% that you are seeing recently? Carl Henry Lindner: Yes. Thanks for your question. I wanna clarify things. We are making a very solid profit in commercial auto overall. My commentary had to do with the commercial auto liability piece of the commercial auto results. Where on that piece, we are making a small underwriting profit for the second quarter in a row. But I think because of the environment that we are in, you know, we are we are gonna we still have work to do. And we continue to be focused on achieving rate that exceeds loss ratio trends for commercial auto liability. And I mentioned rates were still up 15% I think for the second quarter, I think the good news is we are we are continuing to get good rate. We are having the ability to grow our commercial auto business. In that. And overall, in commercial auto, we are at solid margins. So I feel very, very good about that. And then when, you know, for companies like National Interstate and that when you add the workers' comp into that, the results are even better. So yeah, my comments were more towards commercial auto liability Commercial auto overall and workers' comp in our transportation businesses are doing very well. Thank you for that clarification. Andrew Andersen: And maybe sticking with workers' comp, could you quantify what Q2 pricing was there? And just given the benign loss trends, are you comfortable growing that book despite negative rate? Carl Henry Lindner: The loss ratio trends continue to be very benign. And results, you know, on our-- we continue to have really strong results both on a particular on a calendar year basis and an accident year basis. Poor California underwriting results would be the exception. California is 14% of our workers' comp business and we are not doing well there like a lot of others. We have had continued favorable development in the second quarter and 6 months. We feel reserve position is strong. Second quarter pricing, for the overall business is down about 2%. And about 3% through 6 months. Again, that is on top of really great results and a strong reserve position in that. Our workers' comp results will probably be not as good you know, as we go forward, but continue to be will continue to be very strong. And we are getting we are growing that business some. So I think, you know, we are through in the second quarter, I think, we have mid single digit growth in our overall comp business even with our California premiums being down. Thank you. Operator: Thank you. 1 moment for our next question. Our next question comes from Gregory Peters from Raymond James. Please go ahead, Gregory. Analyst: This is Mitch on for Greg. So we have been hearing about increased competition in casualty from MGAs and fronting back capital. With your comments on being through the social inflation reset, what are you seeing from pricing and submission flow standpoints? Carl Henry Lindner: Well, you know, we are we are continuing, I think, as I mentioned, in our social inflation exposed businesses like excess liability and umbrella, we are continuing to get around 10% or double digit price increase there. High single digit price increase and some businesses like nonprofit. So the businesses that we needed, I think we are continuing to you know, get rate that helps that kind of helps us meet or even exceed, you know, our targeted returns. Exit things like excess liability and umbrella where we have seen MGA step in It certainly probably easy for them to write the business. It will be really interesting to see how many of them burn up. You know, over the next 2 or 3 years. In that. So I do think the MGAs are having some impact you know, in some in some ends of the specialty casualty marketplace. Usually, that does not turn out well. When in longer tail specialty casualty lines where the incentives on growth and that is the way they build earnings. Usually, it does not turn out too well. that is really helpful. I appreciate the color. Turning to specialty financial where rates turned slightly negative in the quarter and premium was up around 10%. Could you provide some insight on what areas that market you are leaning into for growth? Well, you know, the lender placed property business, I think I talked about we had entered into a quota share agreement starting last year that, you know, had an impact on our business for about 12 months. And that now we are we are kind of we have renewed that of we have So really, from the second quarter on, we do not have the drag of that quota share. So I think we are back to more meaningful growth quarter by quarter in our specialty finance our lender placed property business. But we have other businesses like Great American Europe that we are growing. We have a business specialty equipment services where you know, insurance is placed at the front end of a purchase on capital goods equipment and that. So we have a number of businesses that are showing healthy growth in our in our specialty financial segment now. Analyst: Thanks, and congrats on the quarter. Operator: As a reminder, to ask a question, you need to press Star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 11 again. I am showing no further questions at this time. I would like to turn it back to Diane Weidner for closing remarks. Diane Weidner: Thank you, James, and thank you all for joining us this morning and for your good questions. We look forward to chatting with you again next quarter. We hope you all have a great day. Operator: Thank you for participating in today's conference. This does conclude the program. You may now disconnect. Before you buy stock in American Financial Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Financial Group wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. AFG (AFG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record pretax P&C operating income driven by a 44% increase in underwriting profit for the first half of 2026 and strong investment returns. Performance was bolstered by a diversified portfolio of 36 specialty businesses, with approximately 75% of units reporting year-over-year premium growth. Management attributes success to a disciplined 'offense over defense' posture, having largely completed the re-underwriting and limit-reduction reset for social inflation-exposed lines. Underwriting margins improved to a 91.5% combined ratio, aided by 3.4 points of favorable prior year reserve development and lower catastrophe impacts compared to 2025. Maintained pricing discipline with renewal rate increases of approximately 5% (excluding workers' comp), marking 40 consecutive quarters of overall rate hikes. The Property and Transportation group saw significant margin improvement, led by strong results in agricultural and transportation businesses despite seasonal crop accounting complexities. Expects to recognize a pretax core operating gain of approximately $125 million ($1.20 per share) in Q3 2026 from the sale of the Charleston Harbor Resort and Marina. Anticipates continued generation of significant excess capital through the remainder of 2026, providing flexibility for acquisitions, special dividends, or share repurchases. Maintains a long-term expectation of 10% or better annualized returns from the alternative investment portfolio, despite current fluctuations. Crop insurance profitability is expected to be concentrated in the fourth quarter, contingent on harvest yields and commodity prices in the second half of the year. Management remains committed to conservative initial loss picks in casualty lines to mitigate ongoing social inflation risks, even as specific segments like commercial auto liability improve. Social inflation remains a primary headwind, prompting management to remain 'deliberately cautious' and slow to react to positive news when setting loss reserves. Workers' compensation results in California remain a challenge, representing 14% of the comp book and underperforming relative to the rest of the portfolio. The Specialty Financial segment experienced a slight 1% decrease in renewal pricing, though margins remain strong and growth is accelerating following the expiration of a prior quota share agreement. Management noted the emergence of MGA and fronting-backed competition in casualty lines but expressed skepticism regarding the long-term viability of these competitors' growth-focused models. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that higher loss ratios in certain segments are driven by a mix shift toward high-ROE businesses like workers' comp that naturally carry higher combined ratios. The expense ratio increase in Specialty Financial is actually a sign of success, as it reflects profit-based commissions in the lender-placed insurance business. AFG is currently running pilots for AI-powered underwriting knowledge management but considers this to be in the early stages. Current AI successes are more prominent in submission automation, claims workflow, and the crop insurance business where data processing is highly intensive. While commercial auto overall is profitable, the liability-specific portion is only seeing 'small' profits; management is pushing 15% rate increases to exceed loss trends. The company is now playing 'offense' in this sector after years of re-underwriting and limit management. Despite overall pricing being down 2-3%, AFG is comfortable growing the book due to 'benign' loss trends and a strong reserve position. Excluding California, the company is seeing mid-single-digit growth in its workers' comp business.

American Financial Group, Inc. AFG reported second-quarter 2026 net operating earnings per share of $2.82, which surpassed the Zacks Consensus Estimate by 17%. The bottom line increased 31.8% year over year, driven by underwriting income and stronger returns from its alternative investment portfolio. Total revenues of $2 billion increased 5% year over year.  The top line also beat the Zacks Consensus Estimate by 0.7%. The quarterly results benefited from record pretax Property & Casualty ("P&C") operating income, healthy premium growth, improved underwriting margins and higher investment income from alternative investments. American Financial Group, Inc. price-consensus-eps-surprise-chart | American Financial Group, Inc. Quote Net earned premiums rose 2.9% year over year to approximately $1.7 billion in the second quarter of 2026. The figure was slightly below both the Zacks Consensus Estimate and our estimate of $1.71 billion. Net investment income rose 20.1% year over year to $221 million in the quarter under review. The figure was higher than our estimate of $195.4 million and surpassed the Zacks Consensus Estimate of $197.9 million. Total costs and expenses increased 1.1% year over year to $1.7 billion due to higher underwriting expenses and interest charges, partly offset by lower losses and loss adjustment expenses. Our estimate was $1.72 billion. Specialty P&C Insurance: The segment generated $1.9 billion in net written premiums, which improved 6% year over year, reflecting new business opportunities, favorable renewal pricing and increased exposures while maintaining disciplined underwriting. The Specialty P&C Insurance segment’s underwriting profit increased 26.3% year over year to $144 million in the quarter, driven by higher underwriting profit across all three groups. The figure exceeded our estimate of $143 million. Pre-tax core operating earnings before income taxes of the P&C Insurance segment were $350 million, up 28.2% year over year. Property & Transportation Group: Net written premiums increased 5% year over year to $797 million in the second quarter, driven by crop insurance growth, favorable pricing and higher exposures. The Property & Transportation Group generated underwriting profit of $57 million, more than double the $27 million reported a year ago, driven by stronger transportation and agricultural business performance. The combined ratio improved 490 basis points year over year to 90.3%. Specialty Casualty Group: Net written premiums increased 6% year over year to $812 million. The Specialty Casualty Group generated underwriting profit of $45 million, down from $49 million in the prior-year quarter, due to lower workers' compensation and executive liability profitability, offset by strength in energy, construction and environmental liability businesses. The combined ratio deteriorated 60 basis points year over year to 94.5%. Specialty Financial Group: Net written premiums rose 10% year over year to $306 million. In the Specialty Financial Group, underwriting profit of $42 million, up from $38 million in the prior-year quarter, was primarily driven by stronger performance in its fidelity/crime and financial institutions businesses. Catastrophe losses in Specialty Financial Group totaled $10 million in the reported quarter, narrower than the year-ago loss of $39 million. The current combined ratio of 85.6% improved 50 basis points year over year. American Financial exited the second quarter of 2026 with total cash and investments of $17.1 billion, which decreased 0.7% from the 2025-end level. Long-term debt of $1.82 billion remained unchanged from the 2025-end level. As of June 30, 2026, the company’s book value per share, excluding accumulated other comprehensive income (AOCI), was $59.85 compared with $58.38 at the end of 2025. Annualized return on equity was 20.3% in the second quarter, up 50 basis points year over year. American Financial repurchased $26 million of its common stock in the second quarter of 2026. It paid total cash dividends of 88 cents per share, continuing its disciplined capital management strategy. American Financial currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. RLI Corp. RLI reported second-quarter 2026 operating earnings of 83 cents per share, which beat the Zacks Consensus Estimate by 16.9%. The bottom line increased 1.2% from the prior-year quarter’s level. Operating revenues amounted to $463 million, up 4.9% year over year. The top line beat the Zacks Consensus Estimate by 1.6%. Gross premiums written increased 3.1% year over year to $579.7 million, driven by strong growth in the casualty segment. Our estimate was $592.9 million. Net investment income increased 16.8% year over year to $46 million. The Zacks Consensus Estimate was $42.7 million. First American Financial Corporation FAF reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 4.4%. Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. Investment income totaled $183.7 million, up 14.7% year over year. The figure exceeded both our estimate and the Zacks Consensus Estimate of $182.3 million. The Hanover Insurance Group, Inc. THG reported second-quarter 2026 operating earnings of $5.31 per share, up 22.1% year over year. The figure beat the Zacks Consensus Estimate of $3.88 by 36.9%. Total revenues increased 4.6% year over year to $1.72 billion but missed the consensus mark of $1.73 billion by 0.4%. Net investment income increased 13.4% year over year to $119.6 million, driven by operating cash flows and higher earned yields. Catastrophe losses totaled $91.8 million, contributing 5.7 percentage points to the combined ratio, compared with 7.0 percentage points in the prior-year quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RLI Corp. (RLI) : Free Stock Analysis Report First American Financial Corporation (FAF) : Free Stock Analysis Report American Financial Group, Inc. (AFG) : Free Stock Analysis Report The Hanover Insurance Group, Inc. (THG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Error: Response status code does not indicate success: 500 (Internal Server Error). Don't Overlook Hidden Gem Kinsale As Rallies To New Highs American Financial Group (NYSE:AFG) reported record second-quarter pre-tax property and casualty operating income, supported by stronger underwriting margins, premium growth and higher investment income. The insurer posted core net operating earnings of $2.82 per share for the second quarter of 2026, up 32% from the prior-year period, according to Co-CEO Craig Lindner. The result produced an annualized core operating return on equity of 19.2%. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control “We’ve set a new second quarter record for pre-tax property and casualty operating income,” Co-CEO Carl Lindner III said, citing the company’s specialty insurance portfolio, underwriting discipline and investment operations. Net investment income at the company’s property and casualty operations rose 23% year over year during the quarter, establishing a second-quarter record. Craig Lindner said the increase was driven by improved returns from alternative investments. → 3 Drone Stocks That Should Soar After the Summer Slump AFG’s $17.1 billion investment portfolio was approximately two-thirds invested in fixed maturities as of June 30. The company said it was investing in fixed-maturity securities at yields of about 5.5%, while the duration of its P&C fixed-maturity portfolio, including cash and equivalents, was 3.1 years. Alternative investments generated an annualized return of approximately 7.1% in the second quarter, compared with 1.2% a year earlier. The company continues to expect long-term annualized returns of 10% or better from its overall alternative investment portfolio. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure In April, AFG reached definitive agreements to sell the Charleston Harbor Resort & Marina. The transaction is expected to close in the third quarter, subject to approvals and customary closing conditions. The company expects a pre-tax core operating gain of about $125 million, or $1.20 per share, from the sale. The gain will be reported as net investment income and split equally between AFG’s P&C operations and parent company. During the quarter, AFG returned nearly $100 million to shareholders, including $26 million in share repurchases and its regular quarterly dividend of $0.88 per share. The company said it expects continued excess capital generation through the rest of 2026, providing flexibility for acquisitions, special dividends or additional repurchases. Book value per share excluding accumulated other comprehensive income, plus dividends, increased 5% in the quarter. AFG’s specialty property and casualty operations produced a 91.5 combined ratio in the second quarter, improving from 93.1 in the year-earlier period. Results included 3.4 points of favorable prior-year reserve development, compared with 0.7 points a year earlier. Catastrophe losses added 1.8 points to the combined ratio, down from 2.3 points in the prior-year quarter. Second-quarter gross written premiums increased 7%, while net written premiums rose 6%. Renewal rates excluding workers’ compensation increased approximately 5%, while rates including workers’ compensation rose about 4%. The company has recorded overall renewal rate increases for 40 consecutive quarters, Carl Lindner said. For the first six months of the year, underwriting profit rose 44%, while roughly three-fourths of AFG’s businesses reported higher premiums. The company operates across 36 specialty insurance businesses. Property and transportation: The segment reported a 90.3 calendar-year combined ratio, improving 4.9 points from the prior-year quarter. Gross and net written premiums rose 8% and 5%, respectively, aided by crop insurance, transportation opportunities, higher exposures and favorable pricing. Renewal rates increased about 8%. Specialty casualty: The segment’s calendar-year combined ratio was 94.5, 0.6 points higher than a year earlier. Gross written premiums rose 5% and net written premiums increased 6%, driven by new business, increased exposures and higher rates across several operations. Specialty financial: The segment reported an 85.6 calendar-year combined ratio, improving by more than half a point year over year. Gross and net written premiums each increased 10%, primarily reflecting growth in the financial institutions business. Within property and transportation, AFG reported a small underwriting profit in commercial auto liability for the second consecutive quarter. Carl Lindner clarified that commercial auto overall remained solidly profitable, while the company continues to focus on pricing that exceeds loss-cost trends in the liability component. Commercial auto liability renewal rates rose 15% in the quarter. AFG said its crop insurance business entered the year with commodity futures prices in acceptable ranges relative to spring discovery prices, while crop progress reports indicated a solid start to the season. However, the company said moisture conditions through August and early September remain important, and final 2026 crop results will depend on yields and prices in the second half. The company noted that its crop business creates third-quarter seasonality because most crop premiums are earned in that period, while loss ratios are initially booked conservatively. Most annual crop profitability is recorded in the fourth quarter, when claims and yields become clearer. Workers’ compensation pricing declined approximately 2% in the second quarter and 3% through the first six months, following what Carl Lindner described as strong results and a strong reserve position. Workers’ compensation premiums grew at a mid-single-digit rate during the quarter, despite lower premiums in California, which represents 14% of the company’s workers’ compensation business. Management said it remains conservative in businesses exposed to social inflation, including certain casualty lines. CFO Brian Hertzman said segment loss ratios can shift based on business mix and that AFG evaluates businesses based on return on equity rather than the combined ratio alone. AFG said it continues to find growth opportunities despite softening in some insurance markets. Carl Lindner said the company has completed much of its “reset” in social-inflation-exposed businesses through measures including re-underwriting selected classes, reducing limits and raising retentions. He said the company is now better positioned to “play offense versus defense” in certain lines. Management also discussed artificial intelligence initiatives, saying the company is deploying tools for submission automation, document intelligence, claims workflow automation and AI-enabled recorded statements. Carl Lindner said underwriting applications remain in earlier stages, with pilots focused on training, knowledge retrieval and decision support, while the company is further along in applying AI to claims processes. Hertzman said AFG’s decentralized business model does not prevent technology sharing, noting that successful tools developed within one business unit can be considered across the organization. American Financial Group, Inc (NYSE: AFG) is a diversified holding company primarily engaged in property and casualty insurance and reinsurance. Through its flagship subsidiary, Great American Insurance Company, the firm underwrites a broad range of specialty insurance products for commercial and industrial clients, including inland marine, excess and surplus lines, executive liability, and environmental liability coverage. In addition, American Financial Group offers supplemental accident and health insurance and assumes reinsurance risks from other insurers, helping to diversify its underwriting portfolio. The company traces its roots to 1946, when it was founded by Carl Lindner, Sr. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "American Financial Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

For the quarter ended June 2026, American Financial Group (AFG) reported revenue of $1.94 billion, up 4.6% over the same period last year. EPS came in at $2.82, compared to $2.14 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $1.93 billion, representing a surprise of +0.65%. The company delivered an EPS surprise of +17.01%, with the consensus EPS estimate being $2.41. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how American Financial performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Property and Casualty combined ratio - Specialty - Loss and LAE Ratio: 58.9% versus 61.3% estimated by four analysts on average. Property and Casualty combined ratio - Specialty - Underwriting Expense Ratio: 32.6% versus 31.6% estimated by four analysts on average. Property and Casualty combined ratio - Specialty - Combined Ratio: 91.5% versus the four-analyst average estimate of 92.9%. Specialty Casualty - Loss and LAE Ratio: 64.6% compared to the 66% average estimate based on three analysts. Specialty Casualty - Underwriting Expense Ratio: 29.9% versus the three-analyst average estimate of 28.8%. Revenues- Net investment income: $221 million versus $197.85 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +20.1% change. Revenues- Net earned premiums: $1.69 billion versus the four-analyst average estimate of $1.75 billion. The reported number represents a year-over-year change of +2.9%. Specialty Casualty- Net earned premium: $814 million versus $815.28 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +1.9% change. Property and Transportation- Net earned premium: $590 million compared to the $654.89 million average estimate based on three analysts. The reported number represents a change of +2.4% year over year. Specialty Financial- Net earned premium: $290 million versus $288.26 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +6.6% change. Revenues- Other income: $29 million compared to the $31.37 million average estimate based on two analysts. The reported number represents a change of +7.4% year over year. Revenues- Income of managed investment entities- Investment income: $69 million versus $61.39 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +1.5% change. View all Key Company Metrics for American Financial here>>> Shares of American Financial have returned -0.1% over the past month versus the Zacks S&P 500 composite's +1.7% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Financial Group, Inc. (AFG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Core Net Operating Earnings: $2.82 per share in Q2 2026, a 32% increase from the prior year period. Core Operating Return on Equity: Annualized return of 19.2% for Q2 2026. Net Investment Income (P&C Operations): Increased 23% year-over-year for the three months ended June 30, 2026, establishing a new second-quarter record. Alternative Investments Return: Annualized return of approximately 7.1% for Q2 2026, compared to 1.2% in the prior year quarter. Fixed Maturity Yields: New investments in fixed maturity securities at yields of approximately 5.5%. Underwriting Profit: Increased 44% in the first six months of the year. Combined Ratio (Specialty P&C): 91.5% in Q2 2026, an improvement of 1.6 points from 93.1% in Q2 2025. Gross Written Premiums (Specialty P&C): 7% higher in Q2 2026 compared to the prior year period. Net Written Premiums (Specialty P&C): 6% higher in Q2 2026 compared to the prior year period. Renewal Rates (Excluding Workers' Comp): Up approximately 5% in Q2 2026. Renewal Rates (Including Workers' Comp): Up approximately 4% overall in Q2 2026. Property and Transportation Group Combined Ratio: 90.3% in Q2 2026, an improvement of 4.9 points from 95.2% in Q2 2025. Property and Transportation Group Gross Written Premiums: 8% higher in Q2 2026 compared to the prior year period. Property and Transportation Group Net Written Premiums: 5% higher in Q2 2026 compared to the prior year period. Property and Transportation Group Renewal Rates: Increased approximately 8% on average in Q2 2026. Commercial Auto Liability Renewal Rates: Up 15% during Q2 2026. Specialty Casualty Group Combined Ratio: 94.5% in Q2 2026, 0.6 points higher than 93.9% in Q2 2025. Specialty Casualty Group Gross Written Premiums: Increased 5% in Q2 2026 compared to the prior year period. Specialty Casualty Group Net Written Premiums: Increased 6% in Q2 2026 compared to the prior year period. Specialty Casualty Group Renewal Rates (Excluding Workers' Comp): Up approximately 4% in Q2 2026. Specialty Casualty Group Pricing (Including Workers' Comp): Up about 2% in Q2 2026. Specialty Financial Group Combined Ratio: 85.6% in Q2 2026, an improvement of over 0.5 point from the comparable period last year. Specialty Financial Group Gross Written Premiums: Up 10% in Q2 2026 compared to the prior year period. Specialty Financial Group Net Written Premiums: Up 10% in Q2 2026 compared to the prior year period. Specialty Financial Group Renewal Pricing: Decreased less than 1% in Q2 2026. Shareholder Returns: Returned nearly $100 million to shareholders in Q2 2026, including $26 million in share repurchases and $0.88 per share regular quarterly dividend. Book Value Growth: Growth in book value per share, excluding AOCI, plus dividends was 5% for the three months ended June 30, 2026. Is AFG fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record second-quarter pre-tax property and casualty operating income driven by strong underwriting margins, healthy premium growth, and higher net investment income. Core net operating earnings per share increased 32% year-over-year, with an annualized core operating return on equity of 19.2%. Net investment income at P&C operations rose 23% year-over-year, with alternative investments returning 7.1% in the quarter and expectations of 10%+ long-term. Underwriting profit increased 44% in the first half of the year, with renewal rate increases (excluding workers' comp) around 5% for four consecutive quarters. Commercial auto liability achieved a small underwriting profit for the second consecutive quarter, with renewal rates up 15%. Expects to recognize a pre-tax core operating gain of approximately $125 million ($1.20 per share) from the sale of Charleston Harbor Resort & Marina in Q3 2026. Specialty Casualty combined ratio increased 0.6 points to 94.5% due to higher loss ratios from growth in workers' comp and targeted markets. Workers' comp pricing declined about 2% in the quarter and 3% year-to-date, with poor underwriting results in California (14% of the book). Specialty Financial renewal pricing decreased less than 1%, reflecting competitive pressures and a shift in business mix. Underlying loss ratios in Specialty Casualty and Financial were impacted by intentional growth in higher loss ratio businesses, such as European operations. Increased competition from MGAs and fronting-backed capital in Specialty Casualty, particularly in excess liability and umbrella lines, poses a risk to pricing and profitability. Crop insurance results remain uncertain, with profitability dependent on harvest yields and prices in the second half of the year. Q: How should we think about the uptick in underlying loss ratios, particularly in Specialty Casualty and Specialty Financials, and can we potentially see higher prior-year development (PYD) given increased conservatism?A: Brian Hertzman, CFO, explained that AFG evaluates businesses from a return-on-equity perspective rather than focusing solely on the combined ratio. The higher expense ratio in the quarter reflects growth in the lender-placed business, where profit-based commissions increase expenses when performance is strong. The accident-year loss ratio changes are driven by business mix, including growth in workers' comp and targeted markets, which naturally run at higher loss ratios. AFG remains deliberately cautious on social inflation-exposed businesses, reacting slower to good news, which supports the company's history of consistent favorable reserve development. Q: What is buoying AFG's renewal pricing levels, and can you discuss the competitive environment and pricing momentum?A: Carl Lindner, Co-CEO, highlighted that three-quarters of AFG's businesses are growing, driven by a diversified portfolio of 36 businesses and sophisticated predictive analytics. The company is largely through the reset on social inflation-exposed lines, allowing it to play offense. AFG avoided heavily writing convective storm and coastal property like some peers, so the recent property pricing declines have less impact on AFG. The company remains optimistic about broad-based growth opportunities for the rest of the year. Q: What is needed to move commercial auto liability from a small profit towards targeted returns, and is pricing above the recent 15% increases required?A: Carl Lindner clarified that AFG is making a very solid profit in commercial auto overall, with the small underwriting profit specifically in the liability piece for the second consecutive quarter. The company continues to focus on achieving rate increases that exceed loss ratio trends, with rates still up 15%. AFG is now able to grow the commercial auto business while maintaining solid margins, and results are even better when including workers' comp in transportation businesses. Q: Could you quantify second-quarter pricing for workers' comp, and are you comfortable growing that book despite negative rate?A: Carl Lindner noted that loss trends remain benign, with strong results on both calendar-year and accident-year bases, except for poor California results, which represent 14% of the workers' comp book. Second-quarter pricing was down about 2%, and down 3% through six months, but this follows great results and a strong reserve position. AFG is growing the overall comp business at mid-single digits, even with California premiums down. Q: What are you seeing from pricing and submission flow in Casualty given increased competition from MGAs and fronting-backed capital?A: Carl Lindner stated that in social inflation-exposed lines like excess liability and umbrella, AFG continues to achieve around 10% price increases, with high single-digit increases in other areas. While MGAs are having some impact in parts of the Specialty Casualty marketplace, he expressed skepticism about their long-term viability in longer-tail lines, noting that growth-focused incentives typically don't turn out well in that environment. Q: Can you provide insight on what areas of Specialty Financial you're leaning into for growth, given rates turned slightly negative?A: Brian Hertzman explained that the lender-placed property business is back to more meaningful growth following the renewal of a quota share agreement that had dragged results for about 12 months. Other growth areas include Great American Europe and specialty equipment services, where insurance is placed at the front end of capital goods purchases. Several businesses in the Specialty Financial segment are showing healthy growth. Q: How do you think about potential improvements in the underlying loss ratio from the use of AI in underwriting?A: Carl Lindner noted that AI-powered underwriting knowledge management is a work in progress, with many pilots underway to enhance training, knowledge retrieval, and decision support. AFG's AI focus has been on submission automation, document intelligence, and claims workflow automation, where the company is farther along. Significant investments are being made, with encouraging productivity improvements, particularly on the claims side. Q: Does a decentralized business model with many segments hinder the ability to deploy AI technologies swiftly compared to more centralized insurers?A: Carl Lindner argued the opposite, suggesting that having 36 different business groups deploying AI may lead to greater success in finding applications. He cited the crop business as an example of being ahead of the pack in AI usage. Brian Hertzman added that while business units have autonomy, they collaborate and share successful AI applications across the organization. Q: Is there seasonality in the Specialty Casualty underlying loss ratio, and how should we compare the first half of 2026 to prior periods?A: Brian Hertzman stated there is not much seasonality in Casualty, unlike Property and Transportation where crop business causes variation. The changes in the Casualty loss ratio are driven by business mix rather than seasonality. AFG continues to be conservative on social inflation-exposed areas, adjusting quarter-to-quarter by business based on mix changes. For the complete transcript of the earnings call, please refer to the full earnings call transcript.