AFG Q4 Financial Results: Examining Performance Versus Analyst Consensus

American Financial Group (AFG) wrapped up 2025 with Q4 results that delivered a mixed picture when measured versus Wall Street expectations. The company posted $2.02 billion in quarterly revenue, landing slightly below the Zacks Consensus Estimate of $2.05 billion for a -1.37% miss. However, earnings per share told a different story, with AFG delivering $3.65 in EPS versus the $3.18 consensus forecast, marking a robust +14.66% surprise that caught analysts off guard.

This divergence between revenue underperformance and earnings outperformance underscores why investors should look beyond headline numbers to understand a company’s true operational health. As AFG’s results demonstrate, the metrics that drive profitability often reveal a more compelling narrative versus top-line revenue alone. Here’s how the company’s key operational metrics stacked up versus analyst projections across its three primary business segments:

Revenue and Earnings: The Headline Numbers Versus the Reality

On a year-over-year basis, AFG’s Q4 revenue dipped 2.7%, reflecting sector-wide headwinds in the insurance industry. Yet the earnings beat—with EPS growing from $3.12 a year ago—suggests the company managed its cost structure more effectively than anticipated versus prior performance and analyst models.

Operating Metrics: Property and Transportation Versus Specialty Casualty

The Property and Transportation segment emerged as a standout performer versus expectations. The division’s Loss and LAE Ratio came in at 56.8%, substantially below the three-analyst average estimate of 69.9%. The Underwriting Expense Ratio of 13.8% similarly undercut the projected 20.7%, combining for a reported Combined Ratio of 70.6% versus the forecasted 90.5%. This marked meaningful outperformance on the cost and loss management front.

Specialty Casualty presented a more nuanced picture. The Loss and LAE Ratio of 68.7% exceeded the three-analyst consensus of 63.7%, suggesting slightly higher claim activity than expected. The Underwriting Expense Ratio at 28% also ran above the estimated 25.5%, pushing the Combined Ratio to 84.1% versus the projected 88.3%. While still coming in below estimates, this segment showed tighter margins versus the Property and Transportation division.

Premium Growth and Investment Income: Mixed Signals Versus Projections

Net earned premiums across AFG’s portfolio reached $1.81 billion versus the $1.82 billion three-analyst average, representing a modest -2.4% year-over-year contraction. Property and Transportation premiums of $735 million slightly exceeded the $713.96 million consensus, while Specialty Casualty premiums climbed to $812 million against a $798.1 million estimate, demonstrating +7.7% year-over-year growth in this key segment.

Net investment income of $183 million fell short of the $195.98 million consensus estimate, posting a -5.7% year-over-year decline. This weakness reflects the lower interest rate environment compared to prior-year levels, a headwind that persists across the insurance sector.

The Bottom Line: Stronger Than Expected, But With Caveats

AFG’s Q4 performance demonstrates that earnings quality matters versus raw revenue figures. The significant EPS beat amid modest revenue decline suggests operational execution outweighed top-line challenges. However, mixed results across business segments and softer investment income indicate the company faces ongoing pressures versus a year ago. Investors monitoring AFG should weigh these operational details—how actual performance compared versus consensus estimates—to form a more complete picture of the company’s trajectory heading into 2026.