American Financial Group Declares $3.50 Special Dividend After Third-Quarter Core Earnings Hit $3.97 A Share
A $126 million gain on a resort sale lifted core earnings per share 48%, and the insurer will pay about $290 million to shareholders.
American Financial Group, the Cincinnati insurance holding company that sells specialized commercial property and casualty coverage, declared a $3.50 per share special dividend after core earnings of $3.97 a share in the third quarter, up 48% from $2.69 a year earlier. Management called it the company's highest ever for a third quarter, and an August property sale supplied a large part of the gain.
Earnings and the resort sale
Net earnings were $282 million, or $3.40 per share, against $215 million, or $2.58, in the third quarter of 2025. Core net operating earnings, which exclude investment gains and losses and special charges, were $329 million versus $224 million. Annualized core return on equity was 26.0%, compared with 19.0% a year earlier.
The August sale of Charleston Harbor Resort & Marina produced $126 million of pretax net investment income. The property-casualty units and the parent company each owned half, so the gain is split between them. The sale added $1.21 per share to core earnings.
Excluding the sale, property-casualty net investment income rose 10%. Including it, that income rose 41% to $289 million.
Underwriting: growth, thinner margin
Net written premiums grew 9% and gross written premiums 8%. Average renewal pricing excluding workers' compensation rose about 6%, roughly a point above the second quarter.
The specialty combined ratio, an underwriting measure where lower is better, was 93.8% against 93.0% a year earlier. Specialty underwriting profit was $133 million versus $139 million, as a large loss in European operations in the Specialty Financial group and less favorable reserve development more than offset gains elsewhere. That group's combined ratio was 92.5%, against 81.1%.
Charges, losses and the payout
Results include a special charge of $24 million pretax ($19 million after tax) to raise environmental reserves at former railroad and manufacturing operations, which the company attributed mainly to higher expected investigation and remediation costs at a limited number of sites. Realized investment losses cut net earnings by $28 million after tax.
The special dividend totals about $290 million and is payable November 25 to holders of record on November 16. It comes on top of the regular $0.97 quarterly dividend paid October 23, and brings special dividends declared since the start of 2021 to $59.00 per share.
Co-CEOs S. Craig Lindner and Carl H. Lindner III said the company had "significant excess capital" at September 30. Book value per share excluding unrealized investment gains and losses was $62.29, versus $57.12 including them.
Management discusses the quarter on a conference call at 11:30 a.m. ET on Wednesday.
