American Financial Group Smashes Q2 Records, Riding Wave of Strong Underwriting, Investment Gains
August 5, 2026 - American Financial Group (AFG) has reported an outstanding set of second-quarter results, with record-breaking pre-tax property and casualty operating income driving a 32% year-over-year increase in core net operating earnings. The company's Co-CEOs, Carl Lindner III and Craig Lindner, took to the conference call stage today to discuss AFG's impressive performance.
AFG's Q2 2026 pre-tax property and casualty operating income has set a new record, driven by strong underwriting margins, healthy premium growth, and higher net investment income. The company's diversified mix of specialty insurance businesses, entrepreneurial culture, disciplined operating philosophy, and in-house investment expertise have all contributed to this success.
"I'm pleased to report that we've set a new second quarter record for pre-tax property and casualty operating income," said Carl Lindner III during the conference call. "Our compelling and diversified mix of specialty insurance businesses, our entrepreneurial culture, our disciplined operating philosophy, and an astute team of in-house investment professionals continue to position us to create value for our shareholders through a variety of insurance market conditions."
AFG's core net operating earnings for Q2 2026 came in at $2.82 per share, a significant increase from the prior year period. This level of performance resulted in an annualized core operating return on equity of 19.2%. The company's investment portfolio also performed well, with net investment income increasing 23% year-over-year and establishing a new second-quarter record.
"We're seeing improved returns from alternative investments," said Craig Lindner during the call. "Our $17.1 billion investment portfolio is invested in fixed maturities, which are yielding approximately 5.5%. The duration of our P&C fixed maturity portfolio, including cash and cash equivalents, was 3.1 years at June 30, 2026."
AFG's alternative investments also showed significant gains, with an annualized return on investment of around 7.1% for the quarter compared to 1.2% in the prior year period. The company remains optimistic regarding the prospects of attractive returns from its overall alternative investment portfolio, expecting annualized returns averaging 10% or better.
The strong performance of AFG's investment portfolio is a significant factor in the company's record-breaking Q2 results. With a diversified range of investments and a team of experienced professionals managing them, AFG is well-positioned to navigate changing market conditions and drive long-term value for its shareholders.
