Company: AFGC
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001042046-25-000035
Chunk: 86

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 86
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 changes in financial condition and results of operations. The tables and narrative that follow are presented in a manner that is consistent with the information that AFG’s management uses to make operational decisions and allocate capital resources. They are provided to demonstrate the nature of the transactions and events that could impact AFG’s financial results. This discussion should be read in conjunction with the financial statements beginning on page 2.

OVERVIEW

Financial Condition

AFG is organized as a holding company with almost all of its operations being conducted by subsidiaries. AFG, however, has continuing cash needs for administrative expenses, the payment of principal and interest on borrowings, shareholder dividends and taxes. Therefore, certain analyses are most meaningfully presented on a parent only basis while others are best done on a total enterprise basis. In addition, because its businesses are financial in nature, AFG does not prepare its consolidated financial statements using a current-noncurrent format. Consequently, certain traditional ratios and financial analysis tests are not meaningful.

Results of Operations

Through the operations of its subsidiaries, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses.

AFG reported net earnings of $215 million ($2.58 per share, diluted) for the third quarter of 2025 compared to $181 million ($2.16 per share, diluted) for the third quarter of 2024. The increase in the 2025 period reflects higher underwriting profit, higher net investment income and net realized gains on securities in the 2025 quarter compared to net realized losses on securities in the 2024 quarter, partially offset by higher special A&E charges.

AFG reported net earnings of $543 million ($6.50 per share, diluted) for the first nine months of 2025 compared to $632 million ($7.54 per share, diluted) for the first nine months of 2024. The decline in the 2025 period reflects lower underwriting profit, lower net investment income from AFG’s alternative investment portfolio and higher special A&E charges, partially offset by the favorable impact on net investment income of higher average balances of investments and higher yields on fixed maturity investments.

Outlook

Management expects premium growth in many of AFG’s business units and continued strong underwriting results in the ongoing generally favorable property and casualty insurance market. In addition, management anticipates the elevated interest rate environment (since early 2022) will continue to have a positive impact on investment income on fixed maturity investments into 2026