American Financial Group, Inc. Announces Third Quarter Results and Declares Special Dividend
-
Net earnings per share of
$2.16 ; includes ($0.15 ) per share in after-tax non-core items -
Core net operating earnings
$2.31 per share - Third quarter annualized ROE of 15.2%; core operating ROE of 16.2%
- Overall average renewal rate increases excluding workers’ compensation of 8%
-
Board of Directors declares
$4.00 per share special dividend, payableNovember 26, 2024
Core net operating earnings were
|
Three Months Ended |
|||||||||||||||||
Components of Pretax Core Operating Earnings |
2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
||||||||||||
In millions, except per share amounts |
Before Impact of |
Alternative |
Core Net Operating |
|||||||||||||||
|
Alternative Investments |
Investments |
Earnings, as reported |
|||||||||||||||
|
||||||||||||||||||
P&C Pretax Core Operating Earnings |
$ |
255 |
|
$ |
273 |
|
$ |
36 |
$ |
25 |
$ |
291 |
|
$ |
298 |
|
||
Other expenses |
|
(27 |
) |
|
(22 |
) |
|
- |
|
|
- |
|
|
(27 |
) |
|
(22 |
) |
Holding company interest expense |
|
(19 |
) |
|
(19 |
) |
|
- |
|
|
- |
|
|
(19 |
) |
|
(19 |
) |
Pretax Core Operating Earnings |
|
209 |
|
|
232 |
|
|
36 |
|
|
25 |
|
|
245 |
|
|
257 |
|
Related provision for income taxes |
|
43 |
|
|
44 |
|
|
8 |
|
|
5 |
|
|
51 |
|
|
49 |
|
Core Net Operating Earnings |
$ |
166 |
|
$ |
188 |
|
$ |
28 |
|
$ |
20 |
|
$ |
194 |
|
$ |
208 |
|
|
|
|
|
|
|
|
||||||||||||
Core Operating Earnings Per Share |
$ |
1.98 |
|
$ |
2.21 |
|
$ |
0.33 |
|
$ |
0.24 |
|
$ |
2.31 |
|
$ |
2.45 |
|
|
|
|
|
|
|
|
||||||||||||
Weighted Avg Diluted Shares Outstanding |
|
83.9 |
|
|
84.7 |
|
|
83.9 |
|
|
84.7 |
|
|
83.9 |
|
|
84.7 |
|
AFG’s book value per share was
Book value per share excluding AOCI was
AFG’s net earnings, determined in accordance with
In millions, except per share amounts |
Three months ended
|
Nine months ended
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Components of net earnings: |
|
|
|
|||||||||
Core operating earnings before income taxes |
$ |
245 |
|
$ |
257 |
|
$ |
808 |
|
$ |
823 |
|
Pretax non-core items: |
|
|
|
|
||||||||
Realized gains (losses) |
|
(2 |
) |
|
(23 |
) |
|
10 |
|
|
(71 |
) |
Gain on retirement of debt |
|
- |
|
|
- |
|
|
- |
|
|
1 |
|
Special A&E charges |
|
(14 |
) |
|
(15 |
) |
|
(14 |
) |
|
(15 |
) |
Earnings before income taxes |
|
229 |
|
|
219 |
|
|
804 |
|
|
738 |
|
Provision (credit) for income taxes: |
|
|
|
|
||||||||
Core operating earnings |
|
51 |
|
|
49 |
|
|
168 |
|
|
166 |
|
Non-core items |
|
(3 |
) |
|
(7 |
) |
|
4 |
|
|
(17 |
) |
Total provision for income taxes |
|
48 |
|
|
42 |
|
|
172 |
|
|
149 |
|
Net earnings |
$ |
181 |
|
$ |
177 |
|
$ |
632 |
|
$ |
589 |
|
|
|
|
|
|
||||||||
Net earnings: |
|
|
|
|
||||||||
Core net operating earnings(a) |
$ |
194 |
|
$ |
208 |
|
$ |
640 |
|
$ |
657 |
|
Non-core items: |
|
|
|
|
||||||||
Realized gains (losses) |
|
(2 |
) |
|
(19 |
) |
|
3 |
|
|
(57 |
) |
Gain on retirement of debt |
|
- |
|
|
- |
|
|
- |
|
|
1 |
|
Special A&E charges |
|
(11 |
) |
|
(12 |
) |
|
(11 |
) |
|
(12 |
) |
Net earnings |
$ |
181 |
|
$ |
177 |
|
$ |
632 |
|
$ |
589 |
|
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||
Components of earnings per share: |
||||||||||||
Core net operating earnings(a) |
$ |
2.31 |
|
$ |
2.45 |
|
$ |
7.63 |
|
$ |
7.72 |
|
Non-core Items: |
|
|
|
|
||||||||
Realized gains (losses) |
|
(0.02 |
) |
|
(0.21 |
) |
|
0.04 |
|
|
(0.65 |
) |
Gain on retirement of debt |
|
- |
|
|
- |
|
|
- |
|
|
0.01 |
|
Special A&E charges |
|
(0.13 |
) |
|
(0.15 |
) |
|
(0.13 |
) |
|
(0.15 |
) |
Diluted net earnings per share |
$ |
2.16 |
|
$ |
2.09 |
|
$ |
7.54 |
|
$ |
6.93 |
|
|
||||||||||||
Footnote (a) is contained in the accompanying Notes to Financial Schedules at the end of this release. |
The Company also announced today that its Board of Directors has declared a special cash dividend of
Messrs. Lindner continued, “AFG continued to have significant excess capital at
Specialty Property and Casualty Insurance Operations
The Specialty P&C insurance operations reported underwriting profit of
The third quarter 2024 combined ratio was 94.3%, 2.1 points higher than the 92.2% reported in the comparable prior year period and included 4.4 points in catastrophe losses. By comparison, catastrophe losses in the third quarter of 2023 added 3.0 points to the combined ratio. Third quarter 2024 results benefitted from 0.8 points of favorable prior year reserve development, compared to 2.3 points in the third quarter of 2023.
Third quarter 2024 gross and net written premiums were up 19% and 14%, respectively, when compared to the third quarter of 2023, driven primarily by additional premiums from the
Average renewal pricing across our
The
Third quarter 2024 gross and net written premiums in this group were 32% and 26% higher, respectively, than the comparable prior year. The primary drivers of the growth included additional premiums from the
The
Third quarter 2024 gross and net written premiums increased 6% and 4%, respectively, when compared to the same prior year period. The primary drivers of growth were new business opportunities and favorable renewal pricing in several of our targeted markets businesses and our excess liability business. Our mergers & acquisitions business also benefitted from an increase in M&A activity. This growth was tempered by slightly lower workers’ compensation premiums. Excluding workers’ compensation, third quarter gross and net written premiums in this group both grew 8% year over year. Excluding workers’ compensation, renewal pricing for this group was up 10% in the third quarter, and up 8% including workers’ compensation. Both measures improved about 3 points from the renewal pricing in the previous quarter.
The
Third quarter 2024 gross and net written premiums in this group were up 7% and 9%, respectively, when compared to the prior year period, due primarily to growth in our financial institutions business. Renewal pricing in this group was up 6% for the quarter, consistent with the previous quarter.
Carl Lindner III stated, "Although catastrophe losses, specifically Hurricane Helene, impacted our third quarter operating earnings in our P&C Segment, nearly all of our Specialty P&C businesses are meeting or exceeding targeted returns, and we continue to feel confident about the strength of our reserves. Our third quarter results also reflect an element of seasonality, as most of our crop insurance premiums are recorded in AFG’s third quarter. This business is booked at a more conservative combined ratio until the fourth quarter when we have a better view of profitability for the year. Based on what we know at this time, we are optimistic about an above average crop year. I’m pleased that we continued to grow our Specialty P&C businesses through increasing exposures, new business opportunities, and a continued overall favorable pricing environment.”
Further details about AFG’s Specialty P&C operations may be found in the accompanying schedules and in our Quarterly Investor Supplement, which is posted on our website.
A&E Reserves
As in prior years, during the third quarter, AFG conducted an in-depth comprehensive review of its asbestos and environmental (A&E) exposures relating to the run-off operations of its
At
The 2024 in-depth comprehensive review also encompassed reserves for asbestos and environmental exposures of our former railroad and manufacturing operations. As a result of the review, AFG recorded a special non-core A&E charge to increase its liabilities for environmental exposures by
Investments
Net Investment Income – For the quarter ended
Non-Core Net Realized Gains (Losses) – AFG recorded third quarter 2024 net realized losses of
After-tax unrealized losses related to fixed maturities were
More information about the components of our investment portfolio may be found in our Quarterly Investor Supplement, which is posted on our website.
About
Forward Looking Statements
This press release, and any related oral statements, contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this press release not dealing with historical results are forward-looking and are based on estimates, assumptions, and projections. Examples of such forward-looking statements include statements relating to: the Company's expectations concerning market and other conditions and their effect on future premiums, revenues, earnings, investment activities and the amount and timing of share repurchases or special dividends; recoverability of asset values; expected losses and the adequacy of reserves for asbestos, environmental pollution and mass tort claims; rate changes; and improved loss experience.
Actual results and/or financial condition could differ materially from those contained in or implied by such forward-looking statements for a variety of reasons including, but not limited to: the risks and uncertainties AFG describes in the “Risk Factors” section of its most recent Annual Report on Form 10-K, as updated by its other reports filed with the
The forward-looking statements herein are made only as of the date of this press release. The Company assumes no obligation to publicly update any forward-looking statements.
Conference Call
The Company will hold a conference call to discuss 2024 third quarter results at
Participants should register for the call here now, or any time up to and during the time of the call, and will immediately receive the dial-in number and a unique PIN to access the call. While you may register at any time up to and during the time of the call, you are encouraged to join the call 10 minutes prior to the start of the event.
The conference call and accompanying webcast slides will also be broadcast live over the internet. To access the event, click the following link: https://www.afginc.com/news-and-events/event-calendar. Alternatively, you can choose Events from the Investor Relations page at www.AFGinc.com.
A replay of the webcast will be available via the same link on our website approximately two hours after the completion of the call.
Websites:
www.AFGinc.com
www.GreatAmericanInsuranceGroup.com
(Financial summaries follow)
This earnings release and AFG’s Quarterly Investor Supplement are available in the Investor Relations section of AFG’s website: www.AFGinc.com.
|
||||||||||||
SUMMARY OF EARNINGS AND SELECTED BALANCE SHEET DATA |
||||||||||||
(In Millions, Except Per Share Data) |
||||||||||||
|
Three months ended
|
Nine months ended
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Revenues |
|
|
|
|
||||||||
P&C insurance net earned premiums |
$ |
2,055 |
|
$ |
1,855 |
|
$ |
5,186 |
|
$ |
4,799 |
|
Net investment income |
|
200 |
|
|
168 |
|
|
586 |
|
|
583 |
|
Realized gains (losses) on: |
|
|
|
|
||||||||
Securities |
|
(2 |
) |
|
(19 |
) |
|
10 |
|
|
(67 |
) |
Subsidiaries |
|
- |
|
|
(4 |
) |
|
- |
|
|
(4 |
) |
Income of managed investment entities: |
|
|
|
|
||||||||
Investment income |
|
99 |
|
|
105 |
|
|
296 |
|
|
321 |
|
Gain (loss) on change in fair value of |
|
|
|
|
||||||||
assets/liabilities |
|
(9 |
) |
|
16 |
|
|
5 |
|
12 |
|
|
Other income |
|
26 |
|
|
43 |
|
|
92 |
|
|
100 |
|
Total revenues |
|
2,369 |
|
|
2,164 |
|
|
6,175 |
|
|
5,744 |
|
|
|
|
||||||||||
Costs and expenses |
|
|
|
|||||||||
P&C insurance losses & expenses |
|
1,948 |
|
|
1,736 |
|
|
4,806 |
|
|
4,419 |
|
Interest charges on borrowed money |
|
19 |
|
|
19 |
|
|
57 |
|
|
57 |
|
Expenses of managed investment entities |
|
85 |
|
|
105 |
|
|
267 |
|
|
303 |
|
Other expenses |
|
88 |
|
|
85 |
|
|
241 |
|
|
227 |
|
Total costs and expenses |
|
2,140 |
|
|
1,945 |
|
|
5,371 |
|
|
5,006 |
|
|
|
|||||||||||
Earnings before income taxes |
|
229 |
|
|
219 |
|
|
804 |
|
|
738 |
|
Provision for income taxes |
|
48 |
|
|
42 |
|
|
172 |
|
|
149 |
|
|
|
|
|
|
||||||||
Net earnings |
$ |
181 |
|
$ |
177 |
|
$ |
632 |
|
$ |
589 |
|
|
|
|
|
|
||||||||
Diluted earnings per common share |
$ |
2.16 |
|
$ |
2.09 |
|
$ |
7.54 |
|
$ |
6.93 |
|
|
|
|
|
|
||||||||
Average number of diluted shares |
|
83.9 |
|
|
84.7 |
|
|
83.9 |
|
|
85.1 |
|
|
Selected Balance Sheet Data: |
|
|
||||
Total cash and investments |
$ |
15,741 |
$ |
15,263 |
||
Long-term debt |
$ |
1,475 |
|
$ |
1,475 |
|
|
|
|
||||
Shareholders’ equity(b) |
$ |
4,708 |
|
$ |
4,258 |
|
Shareholders’ equity (excluding AOCI) |
$ |
4,844 |
|
$ |
4,577 |
|
|
|
|
||||
Book value per share(b) |
$ |
56.10 |
|
$ |
50.91 |
|
Book value per share (excluding AOCI) |
$ |
57.71 |
|
$ |
54.72 |
|
|
|
|
||||
Common Shares Outstanding |
|
83.9 |
|
|
83.6 |
|
Footnote (b) is contained in the accompanying Notes to Financial Schedules at the end of this release. |
|
||||||||||||||||
SPECIALTY P&C OPERATIONS |
||||||||||||||||
(Dollars in Millions) |
||||||||||||||||
|
Three months ended
|
Pct. Change |
Nine months ended |
Pct. Change |
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
||
|
|
|
|
|
|
|
||||||||||
Gross written premiums |
$ |
3,748 |
|
$ |
3,140 |
|
19 |
% |
$ |
8,490 |
|
$ |
7,664 |
|
11 |
% |
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Net written premiums |
$ |
2,353 |
|
$ |
2,061 |
|
14 |
% |
$ |
5,679 |
|
$ |
5,247 |
|
8 |
% |
|
|
|
|
|
|
|
||||||||||
Ratios (GAAP): |
|
|
|
|
|
|
||||||||||
Loss & LAE ratio |
|
69.5 |
% |
|
66.7 |
% |
|
|
63.1 |
% |
|
61.8 |
% |
|
||
Underwriting expense ratio |
|
24.8 |
% |
|
25.5 |
% |
|
|
28.8 |
% |
|
29.5 |
% |
|
||
|
|
|
|
|
|
|
||||||||||
Specialty Combined Ratio |
|
94.3 |
% |
|
92.2 |
% |
|
|
91.9 |
% |
|
91.3 |
% |
|
||
|
|
|
|
|
|
|
||||||||||
Combined Ratio – P&C Segment |
|
94.4 |
% |
|
92.3 |
% |
|
|
91.9 |
% |
|
91.3 |
% |
|
||
|
|
|
|
|
|
|
||||||||||
Supplemental Information: (c) |
|
|
|
|
|
|
||||||||||
Gross Written Premiums: |
|
|
|
|
|
|
||||||||||
Property & Transportation |
$ |
2,107 |
|
$ |
1,592 |
|
32 |
% |
$ |
4,150 |
|
$ |
3,523 |
|
18 |
% |
Specialty Casualty |
|
1,297 |
|
|
1,226 |
|
6 |
% |
|
3,417 |
|
|
3,299 |
|
4 |
% |
Specialty Financial |
|
344 |
|
|
322 |
|
7 |
% |
|
923 |
|
|
842 |
|
10 |
% |
|
$ |
3,748 |
|
$ |
3,140 |
|
19 |
% |
$ |
8,490 |
|
$ |
7,664 |
|
11 |
% |
|
|
|
|
|
|
|
||||||||||
Net Written Premiums: |
|
|
|
|
|
|
||||||||||
Property & Transportation |
$ |
1,140 |
|
$ |
905 |
|
26 |
% |
$ |
2,412 |
|
$ |
2,125 |
|
14 |
% |
Specialty Casualty |
|
863 |
|
|
829 |
|
4 |
% |
|
2,318 |
|
|
2,244 |
|
3 |
% |
Specialty Financial |
|
284 |
|
|
261 |
|
9 |
% |
|
766 |
|
|
685 |
|
12 |
% |
Other |
|
66 |
|
|
66 |
|
- |
|
|
183 |
|
|
193 |
|
(5 |
%) |
|
$ |
2,353 |
|
$ |
2,061 |
|
14 |
% |
$ |
5,679 |
|
$ |
5,247 |
|
8 |
% |
|
|
|
|
|
|
|
||||||||||
Combined Ratio (GAAP): |
|
|
|
|
|
|
||||||||||
Property & Transportation |
|
96.5 |
% |
|
94.8 |
% |
|
|
93.6 |
% |
|
93.6 |
% |
|
||
Specialty Casualty |
|
90.0 |
% |
|
89.4 |
% |
|
|
88.4 |
% |
|
87.8 |
% |
|
||
Specialty Financial |
|
91.9 |
% |
|
87.6 |
% |
|
|
89.4 |
% |
|
89.6 |
% |
|
||
|
|
|
|
|
|
|
||||||||||
|
|
94.3 |
% |
|
92.2 |
% |
|
|
91.9 |
% |
|
91.3 |
% |
|
||
|
|
Three months ended
|
Nine months ended
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|||||||||||
Property & Transportation |
$ |
(15 |
) |
$ |
(14 |
) |
$ |
(91 |
) |
$ |
(72 |
) |
||
Specialty Casualty |
|
(4 |
) |
|
(22 |
) |
|
(46 |
) |
|
(73 |
) |
||
Specialty Financial |
|
(9 |
) |
|
(10 |
) |
|
(3 |
) |
|
(24 |
) |
||
Other Specialty |
|
11 |
|
|
2 |
|
|
36 |
|
|
- |
|
||
|
|
(17 |
) |
|
(44 |
) |
|
(104 |
) |
|
(169 |
) |
||
Other |
|
2 |
|
|
1 |
|
|
4 |
|
|
1 |
|
||
|
$ |
(15 |
) |
$ |
(43 |
) |
$ |
(100 |
) |
$ |
(168 |
) |
||
|
||||||||||||||
Points on Combined Ratio: |
|
|
|
|||||||||||
Property & Transportation |
|
(1.5 |
) |
|
(1.7 |
) |
|
(4.4 |
) |
|
(3.9 |
) |
||
Specialty Casualty |
|
(0.6 |
) |
|
(2.9 |
) |
|
(2.1 |
) |
|
(3.4 |
) |
||
Specialty Financial |
|
(3.4 |
) |
|
(4.2 |
) |
|
(0.4 |
) |
|
(3.8 |
) |
||
|
|
|
|
|
||||||||||
|
|
(0.8 |
) |
|
(2.3 |
) |
|
(2.0 |
) |
|
(3.5 |
) |
||
Total P&C Segment |
|
(0.7 |
) |
|
(2.3 |
) |
|
(1.9 |
) |
|
(3.5 |
) |
||
Footnote (c) is contained in the accompanying Notes to Financial Schedules at the end of this release. |
|
|||||||||||||
Notes to Financial Schedules |
|||||||||||||
|
|||||||||||||
a) |
Components of core net operating earnings (dollars in millions): |
||||||||||||
|
|
Three months ended |
Nine months ended |
||||||||||
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Core Operating Earnings before Income Taxes: |
|
|
|
||||||||||
P&C insurance segment |
$ |
291 |
|
$ |
298 |
|
$ |
950 |
|
$ |
947 |
|
|
Interest and other corporate expenses |
|
(46 |
) |
|
(41 |
) |
|
(142 |
) |
|
(124 |
) |
|
|
|
|
|
|
|
||||||||
Core operating earnings before income taxes |
|
245 |
|
|
257 |
|
|
808 |
|
|
823 |
|
|
Related income taxes |
|
51 |
|
|
49 |
|
|
168 |
|
|
166 |
|
|
|
|
||||||||||||
Core net operating earnings |
$ |
194 |
|
$ |
208 |
|
$ |
640 |
|
$ |
657 |
|
|
|
|||||||||||||
b) |
Shareholders’ Equity at |
||||||||||||
|
|||||||||||||
c) |
Supplemental Notes:
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105358592/en/
Vice President – Investor & Media Relations
513-369-5713
Source: