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Repair Windows errors before they cause bigger problemsFix Now →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →American Financial Group (AFG) reported record 2025 gross written premiums (GWP) of $10.7 billion, a 2% increase from 2024. That growth is consistent with management’s specialty-insurance strategy, but the available disclosures do not prove that AFG grew faster than the overall insurance market. The evidence supports a more precise conclusion: specialization is being used to seek profitable expansion, while “above-market” remains a comparison that requires an appropriate external benchmark.
What AFG means by a specialty focus
AFG’s property-and-casualty operations concentrate on insurance businesses where its personnel have expertise in particular lines, customer groups or distribution channels. Rather than treating the entire commercial insurance market as one pool, the company targets niches in which specialized underwriting knowledge can improve risk selection, pricing and service.
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The company reports its Specialty P&C Group through three operating categories:
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- Specialty casualty: niche casualty products, including workers’ compensation and other liability-oriented businesses.
- Specialty financial: offerings such as fidelity and surety, lender services and trade credit.
AFG describes these businesses and its strategic approach in its 2025 Form 10-K: SEC filing. The list is broad, and performance can differ materially from one unit to another; a record for the group does not mean every specialty line expanded.
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Central oversight, local underwriting
AFG says its property-and-casualty units operate under a centralized senior-executive structure while retaining local authority for underwriting, claims and policy servicing. That arrangement is intended to combine group-level discipline with line-specific judgment. Underwriters closest to a niche can adjust terms to that market’s loss trends, legal environment and customer needs, while senior management can allocate capital toward businesses meeting profitability objectives.
Management also says expansion is evaluated against profitability goals. When a market no longer fits those objectives or the broader strategy, AFG may reduce participation or withdraw. Specialty volume can therefore rise or fall with market conditions; growth is not pursued at any price.
What the 2025 numbers actually show
AFG’s 2025 results show a larger premium base and strong underwriting profitability, but the measures answer different questions. The table below uses the company’s reported figures and qualifications.
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| Measure | 2025 result | What it indicates |
|---|---|---|
| Gross written premiums | $10.7 billion | Record level; up 2% from 2024 |
| Net written premiums | $7.1 billion | Flat year over year after reinsurance cessions |
| Specialty P&C Group GAAP combined ratio | 91.0% | Underwriting claims and expenses were below premiums on a GAAP basis |
| Core operating return on equity | 18.2% | Core operating earnings generated relative to shareholders’ equity |
| Share of group GWP from businesses management believes rank in the top 10 by GWP | More than 55% | Management’s belief, not an independently verified market ranking |
AFG’s 2025 financial highlights and its Form 10-K provide the figures. A 91.0% combined ratio is favorable underwriting performance, and an 18.2% core operating return on equity is a strong profitability indicator in context. Neither metric, however, establishes that premium growth exceeded a market benchmark.
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Why gross and net premiums diverge
GWP is the amount of premium written before reinsurance. Net written premiums (NWP) are the amount retained after ceded reinsurance. A company can report rising GWP while NWP is flat if it cedes more risk, and the reverse can also occur. For 2025, AFG’s record $10.7 billion of GWP increased 2%, while NWP remained $7.1 billion, flat with 2024. Any growth comparison must identify which basis it uses.
AFG’s 2025 filing also changed the presentation of internal reinsurance. Results were moved into the same sub-segments as the ceding businesses, and prior periods were recast for consistency. Readers comparing segment trends should use that recast presentation and avoid mixing old and new classifications.
How management says premiums grew
Management attributed the 2025 GWP increase to three operating factors:
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- New business opportunities: winning accounts or programs that were not previously on AFG’s books.
- Strong renewal rates: retaining existing policyholders as contracts came up for renewal.
- Increased exposures: more insured payroll, vehicles, property values or other exposure units, which can raise premium even without a change in the quoted rate.
Underwriting actions in selected businesses exposed to social inflation tempered growth. Social inflation describes the effect of litigation trends, larger jury awards, changes in liability theories and related claims-cost pressures. Tightening terms, raising prices, reducing limits or declining unattractive risks can protect future returns but reduce near-term premium volume.
This trade-off is central to understanding the specialty model. A niche insurer may intentionally surrender volume when expected losses or expenses make a piece of business unattractive. Premium growth alone therefore cannot show whether management is creating value.
Does AFG have above-market premium growth?
Not on the evidence currently disclosed. AFG reports its own 2% GWP increase, but the cited materials do not provide a like-for-like market growth figure. Without one, “above market” is a hypothesis rather than a demonstrated result.
A defensible comparison would need all of the following:
- The same period and geography. AFG’s 2025 result should be compared with a 2025 market measure covering the same countries and reporting calendar.
- Comparable products. A specialty carrier’s mix of transportation, workers’ compensation, surety, lender services and trade credit should not be compared with a broad commercial-lines index without adjustment.
- The same premium basis. GWP must be compared with GWP, or NWP with NWP. Combining the two can create a false growth differential.
- Rate and exposure effects separated. Higher renewal prices, larger insured exposures and new accounts each increase premium, but they have different implications for future growth.
- Acquisitions and reinsurance considered. Purchased books of business, changes in cessions and internal-reinsurance accounting can alter reported growth without equivalent organic expansion.
For example, if a specialty market grew 1% on a GWP basis in the same geography and period, AFG’s 2% would be above that benchmark. If the comparable market grew 5%, AFG would be below it. The company’s filing does not supply the comparator needed to choose between those outcomes.
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Why the specialty structure could support profitable growth
Expertise can improve risk selection
Specialized teams may recognize industry-specific hazards, contract wording issues and claims patterns sooner than a generalist operation. Better selection can allow an insurer to write more business in a niche while preserving margins, although the company still faces competition and changing loss trends.
Local decisions can respond to market shifts
Keeping underwriting and claims decisions close to each business lets managers react to pricing, capacity and legal developments without applying one policy to every line. Central oversight can then challenge weak results or redirect capital.
Scale in leading niches can reinforce distribution
AFG says management believes more than 55% of 2025 Specialty P&C GWP came from businesses ranked among the top 10 competitors by GWP. That statement suggests meaningful positions in several niches, which can help with broker relationships and operating scale. It remains management’s belief, not a third-party ranking supplied in the disclosure.
Discipline can matter more than volume
The 91.0% combined ratio shows that 2025 premium was accompanied by favorable underwriting performance. A specialty strategy that grows more slowly while maintaining an attractive combined ratio may be economically preferable to rapid expansion at inadequate prices.
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Risks and limits of the strategy
- Niche concentration: Expertise in a line does not eliminate exposure to a severe event, legal change or regulatory shift affecting that niche.
- Social inflation: Liability-cost trends can deteriorate quickly, forcing corrective underwriting actions and reducing premium opportunities.
- Competition: Profitable niches attract additional capital and capacity, which can pressure renewal pricing.
- Mix and reinsurance volatility: Changes in cessions or business mix can make GWP and NWP move differently and complicate year-over-year analysis.
- Uneven segment results: Group-level growth can conceal contraction or weaker returns in individual specialty businesses.
AFG’s 2026 planning assumptions
In its February 2026 full-year results release, AFG described the following as assumptions underlying its 2026 business plan, not guaranteed outcomes:
| 2026 assumption | Figure | Qualification |
|---|---|---|
| Net written premium growth versus 2025 | 3% to 5% | Business-plan assumption |
| Calendar-year combined ratio | 92.5% | Business-plan assumption |
| Core operating earnings per share | Approximately $11.00 | Business-plan assumption |
The release states that AFG does not provide earnings guidance. These figures therefore should not be treated as a promise, forecast certainty or evidence that growth will be above market. Conditions, loss trends, reinsurance decisions and underwriting actions can change the outcome. The announcement is available at American Financial Group’s 2025 fourth-quarter and full-year results release.
How to evaluate future AFG updates
Readers assessing whether the specialty thesis is working should track several measures together rather than focusing on premium growth alone.
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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minute- Start with GWP and NWP. Determine whether growth is organic and whether reinsurance cessions explain a widening gap.
- Read the segment detail. Identify which of property and transportation, specialty casualty or specialty financial drove the change.
- Check the combined ratio. Premium expansion accompanied by a materially worse ratio may indicate that pricing or risk selection is weakening.
- Examine renewal and exposure commentary. Separate rate increases from larger insured exposures and genuinely new accounts.
- Look for underwriting actions. Pullbacks in social-inflation-exposed units can reduce volume while improving expected profitability.
- Use a defined external benchmark. Compare the same lines, geography, period and premium basis before calling growth “above market.”
Bottom line: strong specialty execution, unproven market outperformance
AFG’s 2025 disclosures support the case that specialty expertise, focused underwriting and selective expansion are central to its business model. The company produced record $10.7 billion GWP, 2% year-over-year GWP growth, a 91.0% Specialty P&C Group GAAP combined ratio and an 18.2% core operating return on equity. Management linked premium growth to new business, renewals and higher exposures while acknowledging that corrective underwriting actions limited growth in some units.
What the disclosures do not establish is that AFG outgrew the relevant insurance market. Until a comparable benchmark is identified and matched for product mix, geography, period, GWP versus NWP, pricing, exposure, acquisitions and reinsurance, the accurate conclusion is narrower: AFG is pursuing specialty-led growth with evidence of profitable 2025 underwriting, while the “above-market” claim remains unverified.
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