Dan Cohen

Dan Cohen, on behalf of Michael Zaremski, asked about the accident year improvement in the Property and Transportation segment, specifically if it was solely due to favorable crop results or if other businesses in the segment also contributed to the run rate. Cohen also inquired about the Specialty Financial group's lender-placed business, asking what drove the sequential inflection in pricing and if there were concerns about increased political focus on profitability in this area. Additionally, Cohen asked about capital management, specifically why there were no material share buybacks in Q4 despite similar valuation levels in previous quarters, and if repurchases are expected to resume in 2026.

Answer

CFO Brian S. Hertzman confirmed that strong crop results were the primary driver of the lower loss and expense ratios in Property and Transportation, adding that other businesses performed well and were stable. Co-CEO Carl H. Lindner III dismissed political concerns regarding lender-placed business, citing bipartisan support for the Farm Bill and state-by-state regulation, attributing pricing lumpiness to client property characteristics and noting the business's profitability and expected low single-digit growth. Co-CEO S. Craig Lindner stated that the company is opportunistic with repurchases and maintains dry powder, noting a $0.50 reduction in the Q1 special dividend to save capital for other alternatives, including potential share repurchases.

Dan Cohen from BMO inquired about American Financial Group's capital management strategy, specifically addressing the absence of share repurchases in the fourth quarter and whether buybacks are expected to resume in 2026.

Answer

Craig Lindner, Co-CEO, stated that the lack of Q4 buybacks should not be over-interpreted, as the company is opportunistic with repurchases. He noted a decision to reduce the Q1 special dividend by $0.50 to retain dry powder for other alternatives, including potential share repurchases.