American Financial Group Lifted Its Dividend 10.2% and Kept Buying Back Stock
2026-09-04 10:15
•Reuben Gregg Brewer •The Motley Fool
•••• ••••• Axe Cap view
American Financial Group’s Dividend Push Signals Strength Amid Rising Competition
AFG raises dividends 10.2% and doubles down on buybacks despite tightening insurance margins.
American Financial Group (AFG) just increased its dividend by over 10%, marking 21 years of steady growth, while returning capital aggressively via share buybacks. That’s no small feat in an insurance sector grappling with softer pricing and stiffer competition. Their combined ratio—a key measure of underwriting profitability—improved year on year to 91.6%, though it’s slightly worse sequentially. For South African investors, this highlights a confident capital strategy reminiscent of local banks like Standard Bank, which reward shareholders even as credit environments tighten. The USD/ZAR may feel some pressure if global risk appetite shifts, but strong dividend themes typically support the rand. However, if property and casualty insurance pricing continues to erode faster than expected, AFG’s margins could slip further, testing their capital return resolve. this is just our opinion and not financial advice
Watch the USD/ZAR closely for volatility but consider adding some dividend-focused shares in South African banks or insurers with strong capital returns, like Sanlam. Avoid heavy exposure to foreign insurers unless dividend growth is proven sustainable.
- USD/ZAR
- Sanlam
- Further decline in property and casualty insurance rates
- Rising global competition impacting margins
6/10
American Financial Group announced a 10.2% dividend increase, extending its 21-year streak of annual dividend hikes. The company also continued aggressive stock buybacks ($86 million year-to-date) while maintaining a strong combined ratio of 91.6% in Q2 2026. Despite improving operational metrics, the company is preparing for increased industry competition as property and casualty insurance rates decline.
Our take is based on reporting first published by The Motley Fool.