American Financial Group (AFG) investor relations material

Executive summary

• Core net operating earnings rose to $206 million ($2.47 per share), up 36% year-over-year, with net earnings at $191 million ($2.29 per share) after $15 million in after-tax net realized losses.

• Annualized core operating return on equity reached 17% in Q1 2026, up from 13.1% year-over-year.

• Specialty P&C underwriting profit increased 66% year-over-year, with a combined ratio of 90.3, improving from 94.0 in Q1 2025.

• Capital returned to shareholders totaled $259 million, including $125 million in special dividends and $60 million in share repurchases.

• Definitive agreements reached for the sale of Charleston Harbor Resort & Marina, expected to generate a $125 million pretax gain in Q2 or Q3 2026.

Financial highlights

• Pretax core operating earnings reached $257 million, up from $194 million year-over-year.

• Net investment income (excluding alternatives) at P&C operations rose 8% year-over-year due to higher invested asset balances.

• Alternative investments posted a slightly negative return, impacted by a $13 million mark-to-market loss on CLOs.

• Book value per share (excluding AOCI) was $57.83 at March 31, 2026; tangible book value per share (excluding AOCI) was $52.20.

• Book value per share plus dividends grew 3.1% for Q1 2026.

Outlook and guidance

• Operations are expected to generate significant excess capital for the remainder of 2026, supporting acquisitions, dividends, or share repurchases.

• Alternative investment return assumption of 8% for the year is now considered aggressive; management targets long-term annual returns of 10% or better.

• Capital deployment will focus on core business growth, opportunistic acquisitions, and continued shareholder returns.

• Sale of Charleston Harbor Resort & Marina expected to close in Q2 or Q3 2026, with a projected pretax core operating gain of $125 million.