American Financial Q3 Earnings Beat on Higher Underwriting Show

Shares of American Financial Group, Inc. AFG gained 2.8% in the last trading session as the company reported better-than-expected earnings for the third quarter of 2025. The company reported third-quarter 2025 net operating earnings per share of $2.69, which beat the Zacks Consensus Estimate by 14.5%. The bottom line increased 16.4% year over year. The increase was due to higher year-over-year underwriting profit and higher net investment income.

American Financial’s results reflected increased average renewal pricing across the P&C group, lower catastrophe losses and improved net investment income, and lower expenses, offset by lower premiums.

Behind the Headlines   

Total revenues of $2.2 billion decreased 1.4% year over year. The decline was due to lower P&C insurance net earned premiums. However, the top line beat the Zacks Consensus Estimate by 8.8%.

Net investment income climbed 2.5% year over year to $205 million in the quarter under review. The figure was higher than our estimate of $193.2 million and beat the Zacks Consensus Estimate of $191 million.

Total cost and expenses decreased 3.6% year over year to $2.1 billion due to lower losses & loss adjustment expenses, and expenses of managed investment entities. The figure was higher than our estimate of $1.9 billion.

Segmental Update

The Specialty P&C Insurance segment generated $2.2 billion in net written premiums, which declined 4% year over year. 
Average renewal pricing across the entire P&C Group was up around 5% in the reported quarter, both including and excluding workers’ compensation businesses. 

Net written premiums in Property & Transportation Group decreased 9% year over year to $1 billion in the quarter. The figure was higher than our estimate of $939.8 million.

Net written premiums at Specialty Casualty Group decreased 0.3% year over year to $914 million. The figure was higher than our estimate of $904.1 million.

Further, net written premiums at Specialty Financial increased 1% year over year to $287 million. The figure was higher than our estimate of $286.8 million.

The Specialty P&C Insurance segment’s underwriting profit increased 19% year over year to $139 million in the quarter. Higher underwriting profit in the Property and Transportation, and Specialty Financial Groups was partially offset by lower underwriting profit in the Specialty Casualty Group. The figure was higher than our estimate of $100.3 million.

Pre-tax core operating earnings before income taxes of the P&C Insurance segment of $328 million in the third quarter increased 12.7% year over year. 

Catastrophe losses were $23 million in the reported quarter, narrower than the year-ago loss of $90 million.

In the Property and Transportation Group, higher year-over-year underwriting profit was primarily due to lower catastrophe losses.
In the Specialty Casualty Group, higher underwriting profit in executive liability business was more than offset by lower year-over-year underwriting profit in some of the social inflation-exposed businesses and, to a lesser extent, our mergers & acquisitions and workers’ compensation businesses.

In the Specialty Financial Group, higher year-over-year underwriting profit was primarily due to improved results in the financial institutions business and higher profitability in surety and fidelity businesses.

The combined ratio improved 130 basis points (bps) year over year to 93% in the segment. The results benefited from favorable prior-year reserve development.

Financial Update

American Financial exited the third quarter with total cash and investments of $16.7 billion, which increased 5.7% from the 2024-end level. The figure is higher than our estimate of $16.4 billion.

As of Sept. 30, 2025, long-term debt totaled $1.8 billion, which increased 23.4% from the level at 2024-end.

As of Sept. 30, 2025, the company’s book value per share, excluding accumulated other comprehensive income (AOCI), was $57.59, up 2.8% from the 2024-end level.

Annualized return on equity came in at 18.2% for the third quarter, which expanded 300 bps year over year.

Prudent Capital Deployment

American Financial declared a special cash dividend of $2.00 per share in the third quarter. The dividend will be paid out on Nov. 26 to shareholders of record at the close of business as of Nov. 17, 2025. The aggregate amount of this special dividend will be approximately $167 million. With this special dividend, AFG has declared $54.00 per share in special dividends since the beginning of 2021.

This special dividend is in addition to AFG’s regular quarterly cash dividend of 88 cents per share, most recently paid on Oct. 24, 2025.

Zacks Rank

American Financial currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Property & Casualty Insurers

NMI Holdings Inc. NMIH reported third-quarter 2025 operating net income per share of $1.21, which matched the Zacks Consensus Estimate. The bottom line increased 5.2% year over year. NMI Holdings’ total operating revenues of $179 million increased 7.8% year over year on higher net premiums earned (up 5.5%) and net investment income (up 19.1%). Revenues beat the Zacks Consensus Estimate by 2.3%.

Primary insurance in force increased 5.2% to $218.4 billion. Annual persistency was 83.9%, down 160 basis points (bps) year over year. New insurance written was $13 billion, up 6.4% year over year. Underwriting and operating expenses totaled $29.2 million, down 0.01% year over year. Insurance claims and claim expenses were $18.6 million, which surged 80.5% year over year. The loss ratio was 12.3, which deteriorated 510 bps.

CNA Financial Corporation CNA reported third-quarter 2025 core earnings of $1.50 per share, which beat the Zacks Consensus Estimate by 20%. The bottom line increased 39% year over year. Total operating revenues of CNA Financial were $3.4 billion, up 6.3% year over year. The top line missed the Zacks Consensus Estimate by 0.05%.

Net written premiums of Property & Casualty Operations increased 3.2% year over year to $2.4 billion, driven by P&C renewal premium change of more than 4% with a written rate of more than 3% and exposure change of more than 1%. Net investment income rose 2% year over year to $638 million. The Zacks Consensus Estimate and our estimate for net investment were both pegged at $690.5 million.

W.R. Berkley Corporation's WRB third-quarter 2025 operating income of $1.10 per share beat the Zacks Consensus Estimate of $1.03 by 2.8%. The bottom line increased 18.3% year over year. Operating revenues came in at $3.6 billion, up 8.2% year over year, on the back of higher net premiums earned as well as improved net investment income and higher insurance service fees. The top line beat the consensus estimate by 0.4%.

W.R. Berkley’s net premiums written were $3.4 billion, up 5.5% year over year. Our estimate was $3.3 billion.  The consolidated combined ratio (a measure of underwriting profitability) remained flat year over year at 90.9. The Zacks Consensus Estimate was pegged at 89.6.

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