American Financial Group, Inc. (AFG) Business Profile

What it does

American Financial Group, Inc. (AFG) is an insurance holding company based in Cincinnati. Founded in 1872, it operates primarily through Great American Insurance Group, selling specialized property and casualty insurance to businesses. Carl H. Lindner III and S. Craig Lindner are co-chief executive officers.

Property and casualty insurance protects customers against specified losses involving property, legal liabilities and other risks. AFG’s policies cover risks as varied as damaged crops, commercial vehicles, workplace injuries, professional mistakes and losses suffered by lenders. Its customers include farms, transportation companies, contractors, financial institutions and nonprofit organizations.

The company groups its specialty insurance activities into property and transportation, specialty casualty, and specialty financial businesses. Property and transportation includes crop insurance and coverage for commercial vehicles and property. Specialty casualty includes liability and workers’ compensation policies. Specialty financial includes surety, lender services and trade credit coverage.

Each insurance business has authority over underwriting—the selection and pricing of risks—as well as claims and policy servicing. Central teams provide investment and administrative support. AFG’s in-house investment professionals oversee the company’s investment portfolio, including money held to help meet future insurance claims. At December 31, 2025, the company had approximately 8,500 employees.

How it makes money

AFG earns insurance premiums in exchange for taking on specified risks. It seeks to charge enough to cover claims, the cost of settling them, commissions and other underwriting expenses. It also earns investment income on premiums and other funds held before they are needed for claims or other obligations.

The company reports a property and casualty insurance segment and an Other segment that includes holding company costs and income and expenses associated with managed investment entities. Within insurance, it evaluates underwriting across property and transportation, specialty casualty, and specialty financial. Policies are sold through agents and brokers, and renewal pricing depends on the business and market conditions.

One measure of insurance profitability is the combined ratio: claims, claims-adjustment costs and underwriting expenses relative to premiums. A ratio below 100% indicates an underwriting profit before investment income and other items. AFG also buys reinsurance, passing some premiums and risk to other insurers in return for protection against covered losses.

The time between collecting premiums and paying claims varies by product. Property claims generally are paid more quickly, while liability and workers’ compensation claims can take years to settle, allowing the company to earn investment income on the related funds for longer. An in-house team manages the portfolio.

In 2025, AFG reported net earnings of $842 million; in the third quarter of 2026, it reported core net operating earnings of $3.97 per share. The quarterly figure is a company-defined measure rather than GAAP net earnings. AFG’s specialty insurance businesses produced a 93.8% combined ratio in the third quarter of 2026.

Customers and how it sells

AFG serves business customers with different insurance needs. Farmers and agribusinesses buy crop and other agricultural coverage; trucking, moving and storage companies buy transportation coverage; and contractors can obtain liability, equipment and surety protection. Other customers include lenders, leasing institutions, nonprofit organizations, social service agencies and businesses seeking directors’ and officers’ coverage.

The insurance group sells primarily through independent agents and brokers, with a small portion written through employee agents. It writes policies through several thousand agents and brokers, who generally receive a commission for each policy sold. Some can also receive bonus commissions based on profitability or the volume of business placed with AFG.

Most direct written premiums come from U.S.-based insurers. Approximately 2% of AFG’s direct written premiums in 2025 were derived from non U.S.-based insurers. AFG also has foreign insurance subsidiaries in the United Kingdom, Ireland, Mexico, Bermuda and the Cayman Islands, and branches in Canada and Singapore.

The company’s agricultural coverage is offered nationwide, while its trade credit products support global trade and related financing. In some programs, customers or distribution partners share a portion of the insured risk or the results of the business.

Suppliers and costs

AFG’s principal insurance costs are claims and the expenses of adjusting them, commissions, reinsurance and other underwriting expenses. The ultimate cost of claims is not always known when a policy is written or when a loss is first reported, so the company uses actuarial estimates and revises them as information develops.

Independent agents and brokers receive commissions, and some are eligible for additional payments tied to profitability or volume. The company also purchases reinsurance to limit catastrophe exposure and provide policy limits larger than it would otherwise retain. Reinsurance availability and cost vary with market conditions.

AFG’s reinsurers include Everest Reinsurance Company, Hannover Rueck SE and Swiss Reinsurance America Corporation. Each accounted for between 9% and 11% of AFG’s total property and casualty reinsurance recoverable at December 31, 2025. AFG also reinsures its multi-peril crop business through the Federal Crop Insurance Corporation under a government risk-sharing agreement, alongside private-market arrangements.

The insurance businesses make local operating decisions, while investment and administrative functions are supported centrally. AFG is an insurer rather than a manufacturer; its principal outside relationships include distribution partners and reinsurers.

Competitive position

AFG competes with other insurers, state funds, insurance groups, self-insurance plans, captive programs and risk retention groups. No individual competing company is named as such in the available material. Competition in specialty coverage depends on service to policyholders and agents, product features and claims-handling reputation, as well as price, financial strength ratings, commissions and profit-sharing terms.

AFG believes its specialized knowledge, data analysis and loss-prevention services help it compete. Its businesses make local underwriting and claims decisions, supported by centralized investment and administrative functions. The company believes maintaining an insurance financial strength rating in the “A” category is important for competing in most lines.

Our reading: Specialty expertise and local decision-making offer a meaningful competitive advantage where customers need coverage for unusual risks, but rivals can also compete on service and policy terms. Our reading: Distribution through several thousand agents and brokers provides reach, although those intermediaries also place business with competing insurers and can choose alternatives.

AFG’s statutory combined ratio averaged 90.5% for the period 2016 to 2025, compared with 98.1% for the property and casualty commercial lines industry over the same period. Our reading: That underwriting record supports the value of AFG’s approach, but price competition and competitors with greater resources can still limit its ability to retain or win business.

Growth opportunities

AFG looks for growth within existing specialty insurance markets and in new markets that meet its profitability objectives. It can expand through new business, renewals, acquisitions and start-ups, while withdrawing from markets that do not fit its profit objectives or strategy. Its insurance units have authority to adapt underwriting, products and distribution to their markets.

In the third quarter of 2026, gross and net written premiums in the specialty property and casualty businesses were 8% and 9% higher respectively than in the comparable period of 2025. Average renewal rates across the property and casualty group, excluding workers’ compensation, were up approximately 6% for the quarter. Premium growth and renewal pricing can vary by product and market.

In property and transportation, the company attributed higher premiums in the third quarter of 2026 primarily to growth in certain crop products and opportunities and rates in transportation. In specialty financial, growth across lender services businesses contributed to higher premiums. New business, retention and higher rates supported several specialty casualty businesses, although non-renewals of underperforming accounts, including actions to reduce the California casualty footprint, partly offset that growth.

The company expects its operations to generate excess capital into 2027, with potential uses including acquisitions, special dividends and share repurchases. It evaluates capital deployment alternatives regularly.

Structural risks

• Catastrophes and crop losses: Severe weather, natural disasters and other catastrophes can produce losses beyond reinsurance protection. Crop insurance results also depend on unpredictable weather, yields and commodity prices.
• Claims estimates: Reserves for unpaid claims and related expenses are estimates. Inflation, litigation, changes in claims patterns and delays in reporting can make ultimate costs higher than expected; strengthening inadequate reserves would reduce earnings.
• Reinsurance: Reinsurance may become more costly or less available, and AFG remains liable to policyholders if a reinsurer does not pay. Reinsurance recoverables depend on reinsurers’ financial condition and individual claims.
• Competition and distribution: Competitors may offer lower prices, broader products or higher commissions. AFG relies on independent agents and could lose revenue if they reduce the business they place with it.
• Investments: The investment portfolio is exposed to interest-rate changes, credit losses and market fluctuations. Alternative investments can be illiquid and their values and returns can be volatile.
• Technology and data security: System failures or cyberattacks affecting AFG or its business partners could disrupt operations, expose information and lead to legal, regulatory or remediation costs.

Bottom line

Our reading

Our reading: AFG combines specialized commercial insurance underwriting with investment income from assets held against future obligations. Its decentralized businesses and long underwriting record support the case for expertise across its niches, while agents and reinsurers remain important outside partners. The main exposures are claims that develop worse than estimated, catastrophes, changing insurance-market competition and volatility in investment returns.