AFG (AFG) Q2 2026 Earnings Call Transcript

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DATE

Wednesday, Aug. 5, 2026 at 11:30 a.m. ET

CALL PARTICIPANTS

• Vice President, Investor Relations - Diane Weidner
• Co-Chief Executive Officer - Carl Henry Lindner III
• Co-Chief Executive Officer - Stephen Craig Lindner
• Chief Financial Officer - Brian S. Hertzman

TAKEAWAYS

• Core Net Operating Earnings -- $2.82 per diluted share, representing a 32% increase due to higher underwriting profit and improved returns from alternative investments.
• Net Earnings -- $248 million or $2.99 per share, including $0.17 per share in after-tax non-core realized gains on securities.
• Property and Casualty Pretax Operating Income -- $350 million, a new second quarter record driven by strong underwriting margins and higher net investment income.
• Core Operating Return on Equity -- 19.2% on an annualized basis, reflecting the company's capital efficiency and specialty insurance margins.
• Net Written Premiums -- $1.92 billion, an increase of 6% resulting from new business opportunities, favorable renewal rates, and increased exposures.
• Specialty Property and Casualty Combined Ratio -- 91.5%, an improvement of 1.6 points reflecting higher underwriting profit in the Property and Transportation Group.
• Alternative Investment Income -- $50 million, yielding an annualized return of 7.1% compared to 1.2% in the prior year period.
• Fixed Maturity Yields -- 5.5% for new investments, with approximately two-thirds of the $17.1 billion portfolio invested in fixed maturity securities.
• Charleston Harbor Resort Sale -- $125 million expected pretax core operating gain, contributing approximately $1.20 per share upon the transaction's anticipated close in the third quarter of 2026.
• Capital Return -- $100 million, including $26 million in share repurchases at an average price of $129.85 and $74 million in regular quarterly dividends.
• Book Value Per Share -- $59.85 excluding AOCI, representing 5% growth when including dividends during the quarter.
• Renewal Rate Increases -- 5% excluding workers' compensation, consistent with the previous quarter and marking 40 consecutive quarters of rate increases.
• Property and Transportation Group Combined Ratio -- 90.3%, a 4.9-point improvement driven by transportation and agricultural business performance.
• Specialty Casualty Group Combined Ratio -- 94.5%, up 0.6 points as higher profitability in general liability was offset by lower profitability in workers' compensation and executive liability.
• Specialty Financial Group Combined Ratio -- 85.6%, an improvement of 0.5 points due to growth in the financial institutions business.
• Catastrophe Losses -- 1.8 percentage points or $30 million, down from 2.3 points in the second quarter of 2025.
• Favorable Reserve Development -- 3.4 points or $57 million, an increase from 0.7 points in the prior year period.
• Crop Insurance Growth -- 8% increase in gross written premiums, reflecting higher premium cessions and favorable rate environments.
• Commercial Auto Liability Rates -- 15% increase during the quarter, as the company continues to address social inflation and target underwriting profitability.
• Fixed Maturity Portfolio Duration -- 3.1 years, including cash and cash equivalents, positioned to manage interest rate risk.
• Corporate Expenses and Interest -- $50 million, compared to $46 million in the prior year period, primarily due to higher holding company interest expense.
• Weighted Average Diluted Shares -- 83 million, a decrease from 83.5 million due to the company's share repurchase program.

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RISKS

• Lindner III stated, "California is 14% of our workers' comp business and we are not doing well there like a lot of others," noting poor underwriting results in that specific geographic market.
• Lindner III noted, "our crop results for 2026 will depend on the harvest yields and prices in the second half of this year," highlighting that moisture levels through August and early September remain a critical risk factor.

SUMMARY

American Financial Group, Inc. (NYSE:AFG) reported record second quarter performance for its specialty insurance operations, characterized by higher underwriting profits and improved investment returns. Management attributed the results to a diversified portfolio of 36 specialty businesses, which allowed the company to grow premiums despite softening in certain segments of the property and casualty market. The company emphasized its disciplined underwriting approach, particularly in response to social inflation, while maintaining a strong capital position for opportunistic deployment. The investment strategy continues to focus on a high-quality fixed maturity portfolio complemented by alternative investments that outperformed the prior year comparison. Management confirmed that the company generates significant excess capital, supporting a strategy of regular dividends, share repurchases, and potential acquisitions.

• Management reported that 75% of its businesses achieved year-over-year premium growth through June 30, 2026.
• The company is utilizing artificial intelligence for submission automation, claims workflow, and document intelligence, with Lindner III stating, "we are making a significant investment and we are encouraged by the productivity improvements that we are seeing."
• Commercial auto liability achieved a small underwriting profit for the second consecutive quarter, which Lindner III described as progress through "re-underwriting certain classes" and "lowering limits."
• The Specialty Financial segment ended a quota share agreement drag, with management stating they are "back to more meaningful growth quarter by quarter" in the lender-placed property business.
• The company noted increased competition from MGAs in the specialty casualty market, with Lindner III stating, "It will be really interesting to see how many of them burn up over the next two or three years."
• Management reported that overall renewal rates including workers' compensation were up 4%, which was approximately one percentage point higher than the previous quarter.

INDUSTRY GLOSSARY

• AOCI (Accumulated Other Comprehensive Income): A component of shareholders' equity that includes unrealized gains and losses on certain investments.
• Combined Ratio: A measure of insurance underwriting profitability; a ratio below 100% indicates an underwriting profit.
• Lender-Placed Property Insurance: Insurance policies purchased by a lending institution to protect its interest in a property when the borrower fails to maintain required coverage.
• NWP (Net Written Premiums): The amount of premiums an insurer keeps for its own account after ceding a portion to reinsurers.
• PYD (Prior Year Development): Changes in the estimated cost of claims that occurred in previous years.
• Social Inflation: The rising costs of insurance claims resulting from societal trends such as increased litigation and larger jury awards.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the American Financial Group 26 Second Quarter Results Conference Call. At this time, all participants are in a listening-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during this session, you need to press Star 11 on your telephone. You will hear an automated message that your hand is raised. To withdraw your question, please press Star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Diane Weidner, Vice President, Investor Relations. Diane, please go ahead.

Diane Weidner: Good morning. And welcome to American Financial Group's Second Quarter 26 Earnings Results Conference Call. We released our results yesterday afternoon. Our press release, investor supplement and webcast presentation are posted on AFG's website under the Investor Relations section. These materials will be referenced during portions of today's call. Joining me this morning are Carl Henry Lindner III and Craig Lindner, co CEOs of American Financial Group, and Brian S. Hertzman, AFG's CFO. Before I turn the discussion over to Carl, I would like to draw your attention to the notes on Slide 2 of our webcast. Some of the matters to be discussed today are forward looking.

These forward looking statements involve certain risks and uncertainties that could cause our actual results and or financial condition to differ materially from these statements. A detailed description of these risks and uncertainties can be found in AFG's filings with the Securities and Exchange Commission, which are also available on our website. We may include references to core net operating earnings, a non GAAP financial measure, in our remarks or in responses to questions. A reconciliation of net earnings to core net operating earnings is included in our earnings release. And finally, if you are reading a transcript of this call, please note that it may not be authorized or reviewed for accuracy.

And as a result, it may contain factual or transcription errors that could materially alter the intent or meaning of our statements. Now I am pleased to turn the call over to Carl to discuss our results.

Carl Henry Lindner: Well, good morning. Before we begin our commentary about the quarter, I want to take a moment to express our deepest condolences to the Berkeley family. Bill was an icon in our industry, a respected competitor, and most importantly, our good friend. He leaves an incredible legacy and will be sorely missed. Turning our focus to AFG's second quarter, I will share a few highlights after which Craig and I will walk through more details. We will then open it up for Q&A, where Craig, Brian and I will respond to your questions.

I am pleased to report that we set a new second quarter record for pretax property and casualty operating income, driven by strong underwriting margins healthy premium growth and higher net investment income. I believe our compelling and diversified mix of specialty insurance businesses are 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. Craig and I thank God, our talented management team, and our great employees for helping us to achieve these results. And I will turn the discussion over to Craig to walk us through some of these details.

Stephen Craig Lindner: Thanks, Carl. Please turn to Slides 3 and 4 for a summary of earnings for the quarter. You will see AFG reported core net operating earnings of $2.82 per share in the 26 second quarter, a 32% increase from the prior year period. This level of performance resulted in an annualized core operating return on equity of 19.2%. I will start with an overview of AFG's investment performance and financial position, and share a few comments about AFG's capital and liquidity. The details surrounding our $17.1 billion investment portfolio are presented on Slides 5 and 6.

Net investment income at our property and casualty insurance operations for the 3 months ended 06/30/2026, increased 23% year over year and established a new second quarter record for AFG and was driven by improved returns from alternative investments. You will see on Slide 6, approximately 2/3 of our portfolio is invested in fixed maturities. The current interest rate environment, we are able to invest in fixed maturity securities at yields of approximately 5.5%. The duration of our P and C fixed maturity portfolio, including cash and cash equivalents, was 3.1 years at 06/30/2026. Annualized return on alternative investments was approximately 7.1% for the 26 second quarter compared to 1.2% for the prior year quarter.

Longer term, we continue to remain optimistic regarding the prospects of attractive returns from our overall alternative investment portfolio with an expectation of annualized returns averaging 10% or better. In April 2026, AFG reached definitive agreements to sell the Charleston Harbor Resort and Marina. Subject to receipt of necessary third party approvals and satisfaction of customary closing conditions, the transaction is expected to close in the third quarter of 26. AFG currently expects to recognize a pretax core operating gain of approximately $125 million or $1.20 per share on the sale. The property is owned equally by the PNC operations and AFG parent.

So the gain on sale will be reported as net investment income and split equally between the 2 entities. This transaction was not contemplated in AFG's original business plan assumptions. Please turn to Slide 7, where you will find a summary of AFG's financial position at 06/30/2026. During the quarter, we returned nearly $100 million to our shareholders, including $26 million in share repurchases, and $0.88 per share regular quarterly dividend. We expect our operations to continue to generate significant excess capital throughout the remainder of 2026, which provides ample opportunity for acquisitions, special dividends or share repurchases. We evaluate the best alternatives for capital deployment on a regular basis.

We continue to view total value creation as measured by growth in book value per share plus dividends as an important measure of performance over the long term. For the 3 months ended 06/30/2026, AFG's growth in book value per share, excluding AOCI, plus dividends was 5%. I will now turn the call over to Carl to discuss the results of our P and C operations.

Carl Henry Lindner: Thank you, Craig. Please turn to Slides 8 and 9 of the webcast which include an overview of our second quarter results. I am very pleased with the strong performance of Specialty Property and Casualty businesses. We achieved a 44% increase in underwriting profit in first 6 months of the year, while executing on opportunities to grow. With approximately 3/4 of our businesses reporting higher year over year premiums through June 30. In addition, we are doing this while consistently achieving renewal rate increases. Excluding workers' comp, have been around 5% the past 4 quarters. These results showcase the diversification across our 36 businesses.

The underwriting discipline and opportunistic culture that have allowed us to produce strong results that outperform peers over the long run. These same attributes give us confidence that those results can continue despite softening in certain parts of the overall property and casualty market. Now looking at a few details, you will see on Slide 8 that our specialty property and casualty insurance businesses produced a 91.5% combined ratio in the second quarter of 26, an improvement of 1.6 points from the 93.1% reported in the second quarter of last year. Second quarter 26 results benefited from 3.4 points of favorable prior year reserve development compared to 0.7 points in the second quarter of 25.

Catastrophe losses added 1.8 points in the second quarter of 26 compared to 2.3 points in the second quarter of last year. Second quarter, 26 gross and net written premiums were 7% and 6% higher, respectively, than the comparable period in 2025. As I noted earlier, average renewal rates across our property and casualty group excluding workers' comp, were up approximately 5% for the quarter. Average renewal rates including workers' compensation were up approximately 4% overall. That was about a point higher than the previous quarter. We have reported overall renewal rating increases for 40 consecutive quarters, and we believe we are achieving overall renewal rate increases that enabled us to meet or exceed targeted returns.

Now I would like to turn to Slide 9 to review a few highlights from each of our specialty property and casualty business groups. Details are included in our earnings release. So I will focus on summary results here. The businesses in the Property and Transportation Group achieved a 90.3 calendar year combined ratio overall in the second quarter of 26, an improvement of 4.9 points from the 95.2 reported in a comparable 2025 period. Higher year over year underwriting profits in our transportation and agricultural businesses were the primary drivers of these very strong results. In second quarter 26 gross and net written premiums in this group were 8% and 5% higher than the comparable prior year period.

The increase is primarily attributable to growth in crop insurance products, with higher premium cessions along with new business opportunities higher exposures, and a favorable rate environment in several of our transportation businesses. Overall, renewal rates in this group increased approximately 8% on average in the second quarter of 26, 2 points higher than the pricing achieved in this group for the first quarter of 26. We reported a small underwriting profit in commercial auto liability, I am pleased to say for the second quarter in a row, and we are continuing to make progress there. Renewal rates in auto liability were up 15% during the quarter.

Now in terms of our crop business, commodity futures pricing remains in acceptable ranges relative to spring discovery prices. And the most recent crop progress reports indicate that the crop year is off to a solid start. Although timely rainfall has helped soil moisture conditions across much of our footprint, moisture levels through August and early September remain important. Our crop results for 2026 will depend on the harvest yields and prices in the second half of this year. As a reminder, our third quarter results reflect an element of seasonality as most of our crop insurance premiums are earned in AFG's third quarter but booked at more at a conservative loss ratio until the fourth quarter.

When we have better visibility into actual yields and claims activity in our MPCI business. And a clear indication of the performance of our private product businesses. Consequently, we record the majority of our calendar year crop profitability in the fourth quarter. Now the businesses in Specialty Casualty Group achieved a solid 94.5% calendar year combined ratio overall in the second quarter of 26, 0.6 points higher than the 93.9 reported in the comparable period last year. We continue to be mindful of social inflation and remain conservative in our initial loss picks for the lines of business written by business by the businesses in this group.

Second quarter 26 gross and net written premiums in this group increased 5% and 6% respectively, when compared to the same prior year period. New business opportunities increased exposures and higher rates drove the year over year increase in many of our specialty casualty businesses, including workers' comp, targeted markets, excess and surplus lines, energy, construction, environmental and M&A liability. Excluding our workers' comp businesses, renewal rates for this group were up approximately 4% in the second quarter. Pricing in this group, including workers' comp, was up about 2%.

Now the specialty financial group continued to achieve excellent underwriting margins and reported an 85.6 calendar year combined ratio for the second quarter of 26, an improvement of over 0.5 points from the comparable period last year. Gross and net written premiums were both up 10% in this group when compared to the prior year period, primarily due to the growth in our financial institutions business. Renewal pricing in this group decreased less than 1% in the second quarter reflecting the strong margins earned on these businesses overall. Craig and I are proud of our proven track record of innovation, long term value creation and a forward thinking mindset.

And we feel AFG is well positioned to continue to build long term value for shareholders for the remainder of 2026 and beyond. We will now open the lines for the Q and A portion of today's call, and Craig and Brian and I would be happy to respond to your questions.

Operator: Thank you. At this time, we will conduct a question and answer session. And wait for your name to be announced. To withdraw your question, Our first speaker is Hristian Getsov from Wells Fargo. Please go ahead, Hristian.

Hristian Getsov: Hi, good morning. Thank you for taking my question. My first question is on the uptick in the underlying loss ratios, particularly in Specialty Casualty and Specialty Financials, which it seems like it could be driven by mix and But how should we think about the potential improvement on the expense side of the equation from the mix shift just given like, there is also productivity gains that maybe could be recognized on the expense side. And just given the increased conservatism in those lines and rate continuing to be at or exceeding target margins, could we potentially also see higher PYD? Thank you.

Brian S. Hertzman: Hi. This is Brian. I think it is important as you start to think about that answer is to start sort of at the beginning, which is we are looking at our businesses. We are looking at things from a return on equity perspective overall and not just the combined ratio, not just the loss ratio. So we do have to keep in mind that when businesses a longer tail like workers' comp grow and have a greater opportunity for investment income that we can have high teen ROEs even at higher combined ratios.

Even after considering investment income, it can be tricky to analyze the components of the combined ratios separately as some products like our successful lender placed business have a higher underwriting expense ratio and a lower loss ratio compared to other businesses. When strong performing businesses like that grow, our expense ratio goes up but so does our ROE. In fact, in our in our lender placed business, where many of our products offer profit based commissions, when that business goes well, our underwriting expenses go up. So in underwriting expenses, in this quarter, you are seeing the impact of growth and continued success in uninplaced insurance. Driving up the expense ratio.

When you switch over to the accident year loss ratio, by segment, again, it is important to remember that we look at our reserves by business every quarter and use that information to, not only set our loss picks, but also to inform our pricing and risk appetite So we are very cautious around our reserve picks, and we tend to react quicker to bad news and slower to good news. So we are being deliberately cautious around social inflation exposed businesses despite the improvements that we have seen that area, particularly in places like commercial auto liability.

I think in considering the adequacy of our current loss picks, AFG's history of consistent overall favorable development should be an indication of how prudent we tend to be in noting and noting that nothing has changed here. Just practically, I would rather be talking to you and to Carl and Craig about the reasons why we have favorable development versus adverse development. So we are, again, being slow to react to the good news that we are seeing there. When you start to look at it by segment, focusing on cash casualty and financial, In casualty, we are seeing good growth in workers' comp and in certain targeted markets.

Results are very good, but those businesses do run at a higher loss ratio compared to the overall segment. Decisions on where we participate in excess policies can also impact the loss ratio for that segment. In financial, there were some minor tweaks to some of the smaller businesses outside of lender placed insurance, but nothing we would call a trend.

Mostly, what you are seeing is the impact of intentional growth, in businesses like our European operations that run at a higher loss and LAE ratio And from the change in mix of business, where we are still growing in areas that meet our ROE objectives but happen to have a higher loss ratio than the lender placed business or the other businesses in the overall financial segment. So when you think about things from a longer point of view, Carl said before, we are confident in our reserves. And in our ability to produce strong returns through a variety of market cycles.

Hristian Getsov: Got it. Thank you. And then for my follow-up, just sticking with the AI component, I guess the potential benefits on the expense side of the margins is pretty well But how do you think about potential improvements on the underlying loss ratio from the use of AI as underwriters get better access to better data, and they could also digest the data quicker and more efficiently.

Carl Henry Lindner: I think that is a work a work in progress. I think that fits under the category with us on AI powered AI powered underwriting knowledge management. We are doing many pilots right now designed to enhance underwriting training, knowledge retrieval, and decision support. You know, in a in a number of our different businesses. So I think we are we are just on the front end of that. I think where a lot of our AI focus has been is on submission automation, document intelligence, claims workflow flow automation, AI enabled recorded statements, which improves claims handling efficiency and customer experience through automated summarization and insights and broad deployment of AI tools across the organization today.

So like everyone else, you know, we are making a significant investment And we are encouraged by you know, the productivity improvements that we are seeing. In that. But on underwriting itself, building a an underwriting knowledge management, I think we are probably on the early end of that. Probably farther along in the use in the claim side. Great.

Hristian Getsov: Thank you and congrats on the quarter.

Operator: 1 moment for our next question. We have Michael Zaremski from BMO. Please go ahead, Michael.

Michael Zaremski: Hey. Thanks. Good morning. Maybe first question on the competitive environment and pricing, specifically renewal pricing. I think from data points we have received from a lot of your peers, industry data over the last quarter or so, we have seen you know, a desal in a number of pockets Maybe you can kind of discuss what is doing AFG's pricing levels, maybe even a little bit momentum in certain spots sequentially?

Carl Henry Lindner: Yeah. I am I am happy to give a little insight into that. I am pleased, as I think I mentioned in the in my comments that and in our release, 3 quarters of our businesses have some growth through 6 months. So it is you know, that is pretty broad based growth. I think our diversified portfolio, you know, of 36 businesses gives us a broad array of opportunities. I think predictive analytics on pricing growing sophistication there business by business is helping us. I think 1 of the main things is we are kind of as I mentioned in past quarterly conversations that we are pretty much through the reset on the social inflation exposed businesses.

We talked about some re underwriting certain classes, lowering bringing you know, limits down. Social inflation exposed businesses, raising retentions in some businesses like public sector. So think we are able to play offense versus defense more today and grow some of these lines now. Commercial auto, the same thing. We are We are we are so I mentioned second quarter in a row, we are you know, in commercial auto liability itself that we are making a small underwriting profit. And we are earning and commercial auto overall, we are earning solid underwriting profits and good ROEs. And we are having the ability to play more offense and find opportunities to for some growth there.

So I feel good about for the rest of the year, you know, where we are at. Very optimistic that we will continue to have opportunities to grow our businesses. And in a fairly broad basis.

Michael Zaremski: that is helpful, Carl. Maybe just honing in on specialty casualty. The underlying loss ratio this year which gets a lot of attention from investors. Has been you know, on a I guess, on a first half of the year basis, running in kind of the 63 plus range you know, last year, kind of ran in the in the 65 range for the full year. So I do I guess, you know, to the previous question, you know, it was mentioned there was an uptick in the underlying loss ratio. Is there a seasonality in there where I should be thinking about the first half of this year versus the first half of last year?

Or is it better to compare the first half of 2026 to the full year 2025 or maybe none of the above.

Brian S. Hertzman: I would I would say in casualty, there is really not a lot of seasonality there. there is definitely seasonality You look at the property and transportation numbers just because of the crop business in particular, can cause the loss ratio to vary quarter to quarter. In casualty, really what is driving right, driving those changes is mix of business. And then where we are even though we are seeing a good improvements in the results overall, we are still being conservative on the social inflation exposed areas, and most of that is in casualty. So as far as trends go, I think we are always gonna adjust quarter to quarter. By business.

But I would say, there really is not seasonality there that it is more mix of business that is changing it compared to last year.

Carl Henry Lindner: Okay. And I had 1 more comment on the growth side. So I am thinking about it. You know, other companies really weighed in heavily on riding more convective storm exposed and coastal property you know, particularly in the E and S side than we did. Had a bigger appetite on the by the same token, as the property pricings caved on a lot of that business it really has less impact on us versus you know, our peers. So I do think that is also 1 differential. That makes sense.

Michael Zaremski: And lastly, back to the kind of technology conversation that you will find on a moment ago. I guess there is some folks that have expressed that a company that operates a more decentralized business model with many different segments. Might, on average, not be able to kind of deploy AI technologies as swiftly versus a company that an insurer that they might have run kind of a more centralized operating model Any thoughts about that remark?

Carl Henry Lindner: I think in a in a 1- or 2-line business, you know, a primary auto or homeowners rider, maybe that you know, that could be the case. I might argue the opposite that you know, where you have more business units and more people that are enabled to use the tools, you might be you might have greater success finding some applications you know, when you have 36 different business groups you know, deploy deploying AI. In that. So I think some of our businesses, you know, our crop business, for instance, is using extensive AI and getting extensive results, I think. You know, in a lot of different ways in its business and that.

So I think that is an example. 1 business we would be ahead of the pack probably in that. So I do not know.

Brian S. Hertzman: I think that would be my response to Carl, I would just add to that too that even though we do have 36 different business units with a strong a decentralized focus on underwriting and claims, things like AI. We do a good job of having our business units talk to each other and work together over time. So there is something that works for 1 business unit, you can be assured that will be talked about and, considered for the other business unit. So that even though have a lot of autonomy, they do not they do not operate completely in a vacuum.

Michael Zaremski: Thank you.

Operator: 1 moment for our next question. Our next question comes from Andrew Andersen from Jefferies. Please go ahead, Andrew.

Andrew Andersen: You had mentioned commercial auto produced an under small underwriting profit for a 2nd straight quarter. What is needed to move this from small profit towards targeted returns? Is that going to require pricing above the 15% that you are seeing recently?

Carl Henry Lindner: Yes. Thanks for your question. I wanna clarify things. We are making a very solid profit in commercial auto overall. My commentary had to do with the commercial auto liability piece of the commercial auto results. Where on that piece, we are making a small underwriting profit for the second quarter in a row. But I think because of the environment that we are in, you know, we are we are gonna we still have work to do. And we continue to be focused on achieving rate that exceeds loss ratio trends for commercial auto liability.

And I mentioned rates were still up 15% I think for the second quarter, I think the good news is we are we are continuing to get good rate. We are having the ability to grow our commercial auto business. In that. And overall, in commercial auto, we are at solid margins. So I feel very, very good about that. And then when, you know, for companies like National Interstate and that when you add the workers' comp into that, the results are even better. So yeah, my comments were more towards commercial auto liability Commercial auto overall and workers' comp in our transportation businesses are doing very well. Thank you for that clarification.

Andrew Andersen: And maybe sticking with workers' comp, could you quantify what Q2 pricing was there? And just given the benign loss trends, are you comfortable growing that book despite negative rate?

Carl Henry Lindner: The loss ratio trends continue to be very benign. And results, you know, on our-- we continue to have really strong results both on a particular on a calendar year basis and an accident year basis. Poor California underwriting results would be the exception. California is 14% of our workers' comp business and we are not doing well there like a lot of others. We have had continued favorable development in the second quarter and 6 months. We feel reserve position is strong. Second quarter pricing, for the overall business is down about 2%. And about 3% through 6 months. Again, that is on top of really great results and a strong reserve position in that.

Our workers' comp results will probably be not as good you know, as we go forward, but continue to be will continue to be very strong. And we are getting we are growing that business some. So I think, you know, we are through in the second quarter, I think, we have mid single digit growth in our overall comp business even with our California premiums being down. Thank you.

Operator: Thank you. 1 moment for our next question. Our next question comes from Gregory Peters from Raymond James. Please go ahead, Gregory.

Analyst: This is Mitch on for Greg. So we have been hearing about increased competition in casualty from MGAs and fronting back capital. With your comments on being through the social inflation reset, what are you seeing from pricing and submission flow standpoints?

Carl Henry Lindner: Well, you know, we are we are continuing, I think, as I mentioned, in our social inflation exposed businesses like excess liability and umbrella, we are continuing to get around 10% or double digit price increase there. High single digit price increase and some businesses like nonprofit. So the businesses that we needed, I think we are continuing to you know, get rate that helps that kind of helps us meet or even exceed, you know, our targeted returns. Exit things like excess liability and umbrella where we have seen MGA step in It certainly probably easy for them to write the business. It will be really interesting to see how many of them burn up.

You know, over the next 2 or 3 years. In that. So I do think the MGAs are having some impact you know, in some in some ends of the specialty casualty marketplace. Usually, that does not turn out well. When in longer tail specialty casualty lines where the incentives on growth and that is the way they build earnings. Usually, it does not turn out too well. that is really helpful. I appreciate the color. Turning to specialty financial where rates turned slightly negative in the quarter and premium was up around 10%. Could you provide some insight on what areas that market you are leaning into for growth?

Well, you know, the lender placed property business, I think I talked about we had entered into a quota share agreement starting last year that, you know, had an impact on our business for about 12 months. And that now we are we are kind of we have renewed that of we have So really, from the second quarter on, we do not have the drag of that quota share. So I think we are back to more meaningful growth quarter by quarter in our specialty finance our lender placed property business. But we have other businesses like Great American Europe that we are growing.

We have a business specialty equipment services where you know, insurance is placed at the front end of a purchase on capital goods equipment and that. So we have a number of businesses that are showing healthy growth in our in our specialty financial segment now.

Analyst: Thanks, and congrats on the quarter.

Operator: As a reminder, to ask a question, you need to press Star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 11 again. I am showing no further questions at this time. I would like to turn it back to Diane Weidner for closing remarks.

Diane Weidner: Thank you, James, and thank you all for joining us this morning and for your good questions. We look forward to chatting with you again next quarter. We hope you all have a great day.

Operator: Thank you for participating in today's conference. This does conclude the program. You may now disconnect.

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