American Financial Group (AFG) reported first‑quarter 2026 results that fell short of consensus estimates. Net earnings rose to $191 million, or $2.29 per share, up from $154 million ($1.84 per share) a year earlier. Core net operating earnings increased to $206 million, or $2.47 per share, compared with $152 million ($1.81 per share) in Q1 2025. However, both GAAP and core earnings missed analyst expectations of $2.55 and $2.56 per share, respectively.
Total revenue reached $1.85 billion, close to the $1.86 billion consensus estimate, while net earned premiums were $1.61 billion. Specialty property and casualty underwriting profit surged 66 % YoY to $156 million, driven by a 6 % increase in gross written premiums and a 3 % rise in net written premiums. The Property and Transportation Group also posted growth, with gross written premiums up 11 % and net written premiums up 6 %. The company’s specialty P&C combined ratio improved to 90.3 % from 94.0 % a year earlier, reflecting lower catastrophe losses and favorable reserve development.
Capital returned to shareholders totaled $260 million, comprising a $125 million special dividend and $60 million in share repurchases at an average price of $127.12 per share. The dividend per share was $2.38, including a $1.50 special dividend. The company also reported a $15 million after‑tax non‑core net realized loss on securities, compared with a $2 million gain in the prior year quarter.
Investment income was pressured by a decline in the alternative investment portfolio, which posted an annualized return of –0.4 % in Q1 2026 versus 1.8 % in Q1 2025. The weaker returns contributed to the earnings miss and underscored the volatility of the company’s investment portfolio.
Co‑Chief Executive Officers S. Craig Lindner and Carl H. Lindner III said the company’s disciplined underwriting and capital allocation continue to drive performance. They highlighted a 17 % core net operating return on equity and emphasized the company’s focus on returning excess capital to shareholders while maintaining a strong underwriting profile.
Investors reacted cautiously to the earnings miss, with analysts noting that the shortfall in both earnings and revenue, coupled with the weaker alternative investment performance, tempered enthusiasm for the quarter’s results.
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