- Net earnings per share of $1.93; includes ($0.31) per share
in after-tax non-core items
- Core net operating earnings $2.24 per share, includes $0.36
per share of after-tax catastrophe losses
- Specialty P&C combined ratio of 91.1% includes 2.5
points of catastrophe losses
- Third quarter annualized ROE of 14.7%; annualized core
operating ROE of 17.1%
- Parent company cash and investments of approximately $760
million; excess capital of $1.3 billion at September 30,
2022
- Announces special cash dividend of $2.00 per share, payable
November 22, 2022
- Full year 2022 core net operating earnings guidance in the
range of $11.00 - $11.75 per share, narrowed from previous guidance
range of $10.75 - $11.75 per share
American Financial Group, Inc. (NYSE: AFG) today reported 2022
third quarter net earnings of $165 million ($1.93 per share)
compared to $219 million ($2.56 per share) in the 2021 third
quarter. Net earnings for the 2022 third quarter included after-tax
non-core realized losses on securities of $28 million ($0.32 per
share loss). By comparison, net earnings for the 2021 third quarter
included after-tax non-core realized losses on securities of $12
million ($0.15 per share loss). Other details may be found in the
table on the following page.
Core net operating earnings were $192 million ($2.24 per share)
for the 2022 third quarter, compared to $231 million ($2.71 per
share) in the 2021 third quarter. The year-over-year decrease was
due primarily to lower returns in AFG’s alternative investment
portfolio, as compared to the very strong performance of this
portfolio in the prior year period. Additional details for the 2022
and 2021 third quarters may be found in the table below. Core net
operating earnings for the third quarters of 2022 and 2021
generated annualized returns on equity of 17.1% and 17.6%,
respectively.
Three Months Ended September
30,
Components of
Pretax Core Operating Earnings
2022
2021
2022
2021
2022
2021
Before Impact of
Alternative
Core Net Operating
In millions, except per share amounts
Alternative Investments
Investments
Earnings, as reported
P&C Pretax Core Operating Earnings
$
253
$
245
$
36
$
84
$
289
$
329
Other expenses
(26
)
(21
)
-
-
(26
)
(21
)
Holding company interest expense
(19
)
(24
)
-
-
(19
)
(24
)
Pretax Core Operating Earnings
208
200
36
84
244
284
Related provision for income taxes
44
35
8
18
52
53
Core Net Operating Earnings
$
164
$
165
$
28
$
66
$
192
$
231
Core Net Operating Earnings Per Share
$
1.91
$
1.94
$
0.33
0.77
$
2.24
$
2.71
Weighted Avg Diluted Shares
Outstanding
85.4
85.2
85.4
85.2
85.4
85.2
AFG’s book value per share was $46.18 at September 30, 2022.
During the third quarter of 2022, AFG declared cash dividends of
$0.56 per share. AFG repurchased $5 million of its common stock at
an average price per share of $123.02. Annualized return on equity
was 14.7% and 16.6% for the third quarters of 2022 and 2021,
respectively. For the nine months ended September 30, 2022, AFG’s
book value per share plus dividends declined by 2.0%, reflecting
the increased unrealized loss on fixed maturities from the impact
of rising interest rates and widening credit spreads.
Book value per share, excluding unrealized gains (losses)
related to fixed maturities, was $53.03 at September 30, 2022. For
the three months ended September 30, 2022, AFG’s growth in adjusted
book value per share plus dividends was 3.7%. Year to date, growth
in adjusted book value per share plus dividends was 12.7%.
AFG’s net earnings attributable to shareholders, determined in
accordance with U.S. generally accepted accounting principles
(GAAP), include certain items that may not be indicative of its
ongoing core operations. The table below identifies such items and
reconciles net earnings attributable to shareholders to core net
operating earnings, a non-GAAP financial measure. AFG believes that
its core net operating earnings provides management, financial
analysts, ratings agencies and investors with an understanding of
the results from the ongoing operations of the Company by excluding
the impact of discontinued operations, net realized gains and
losses, and other items that are not necessarily indicative of
operating trends. AFG’s management uses core net operating earnings
to evaluate financial performance against historical results
because it believes this provides a more comparable measure of its
continuing business. Core net operating earnings is also used by
AFG’s management as a basis for strategic planning and
forecasting.
In millions, except per share amounts
Three months ended September
30,
Nine months ended September
30,
2022
2021
2022
2021
Components of net earnings:
Core operating earnings before income
taxes
$
244
$
284
$
930
$
794
Pretax non-core
items:
Realized gains (losses) on securities
(35
)
(17
)
(143
)
103
Gain (loss) on retirement of debt
1
-
(10
)
-
Other
-
-
-
(7
)
Earnings before income taxes
210
267
777
890
Provision (credit) for income taxes:
Core operating earnings
52
53
192
152
Non-core items
(7
)
(5
)
(37
)
12
Total provision for income taxes
45
48
155
164
Net earnings from continuing
operations
165
219
622
726
Net earnings from discontinued annuity
operations
-
-
-
914
Net earnings
$
165
$
219
$
622
$
1,640
Net earnings:
Core net operating earnings(a)
$
192
$
231
$
738
$
642
Non-core
items:
Realized gains (losses) on securities
(28
)
(12
)
(113
)
83
Gain (loss) on retirement of debt
1
-
(7
)
-
Other
-
-
4
1
Net earnings from continuing
operations
165
219
622
726
Net earnings from discontinued annuity
operations
-
-
-
914
Net earnings
$
165
$
219
$
622
$
1,640
Components of earnings per share:
Core net operating earnings(a)
$
2.24
$
2.71
$
8.65
$
7.48
Non-core
Items:
Realized gains (losses) on securities
(0.32
)
(0.15
)
(1.32
)
0.95
Gain (loss) on retirement of debt
0.01
-
(0.09
)
-
Other
-
-
0.05
0.02
Diluted net earnings per share from
continuing operations
$
1.93
$
2.56
$
7.29
$
8.45
Net earnings from discontinued annuity
operations
-
-
-
10.66
Diluted net earnings per share
$
1.93
$
2.56
$
7.29
$
19.11
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 $2.00 per share of American
Financial Group common stock. The dividend is payable on November
22, 2022 to shareholders of record on November 15, 2022. The
aggregate amount of this special dividend will be approximately
$170 million. This special dividend is in addition to the Company’s
regular quarterly cash dividend of $0.63 per share most recently
paid on October 25, 2022. With this special dividend, the Company
has declared $12.00 per share in special dividends in 2022.
S. Craig Lindner and Carl H. Lindner III, AFG’s Co-Chief
Executive Officers, issued this statement: “We are very pleased
with AFG’s performance during the third quarter. We achieved an
annualized core operating return of over 17% in the quarter, with
strong underwriting results despite elevated industry catastrophe
losses. Strategic positioning of our investment portfolio enabled
us to invest opportunistically, and the returns in our alternative
investment portfolio again exceeded our expectations. Our thoughts
and prayers remain with those who have been affected by the
devastation caused by Hurricane Ian. Our P&C Group claims teams
are working with our agents and policyholders to identify and
process covered claims quickly and efficiently to help our
customers recover and restore their businesses and rebuild their
communities.
“AFG had approximately $1.3 billion of excess capital (including
parent company cash and investments of approximately $760 million)
at September 30, 2022. Returning capital to shareholders in the
form of regular and special cash dividends and through
opportunistic share repurchases is an important and effective
component of our capital management strategy. In addition, our
excess capital will be deployed into AFG’s core businesses as we
identify potential for healthy, profitable organic growth, and
opportunities to expand our specialty niche businesses through
acquisitions and start-ups that meet our target return
thresholds.”
Craig and Carl Lindner continued, “Based on the results reported
in the first nine months of the year and expectations for the
remainder of the year, we now expect AFG’s 2022 core net operating
earnings to be in the range of $11.00 to $11.75 per share, narrowed
from our previous range of $10.75 to $11.75 per share. In addition,
our guidance contemplates the impact of the current interest rate
environment on investment income and assumes an overall annual
yield of 12% on alternative investments for the full year, based on
the strong performance of this portfolio in the first nine months
of 2022. Our guidance reflects minimal income from alternative
investments in the fourth quarter of 2022 as management assumes
that continued strong performance of multi-family housing
investments will offset weaker performance of traditional private
equity investments. Furthermore, our guidance continues to reflect
an average crop year.”
AFG’s core earnings per share guidance excludes non-core items
such as realized gains and losses and other significant items that
are not able to be estimated with reasonable precision, or that may
not be indicative of ongoing operations.
Specialty Property and Casualty
Insurance Operations
The Specialty P&C insurance operations reported underwriting
profit of $158 million in the 2022 third quarter, compared to $169
million in the 2021 third quarter, a 7% decrease. Higher
year-over-year underwriting profit in our Specialty Casualty Group
was more than offset by lower underwriting profit in our Property
and Transportation and Specialty Financial Groups.
The third quarter 2022 combined ratio was a strong 91.1%, 2.1
points higher than the 89.0% reported in the comparable prior year
period, and includes 2.5 points in catastrophe losses. By
comparison, catastrophe losses in the third quarter of 2021 added
2.1 points to the combined ratio. Third quarter 2022 results
included 3.1 points of favorable prior year reserve development,
compared to 5.4 points in the third quarter of 2021.
Third quarter 2022 gross and net written premiums were up 19%
and 15%, respectively, when compared to the third quarter of 2021,
primarily due to growth in our crop insurance business.
Year-over-year growth was reported within each of the Specialty
P&C groups as a result of a combination of new business
opportunities, increased exposures and a good renewal rate
environment. Average renewal pricing across our P&C Group,
excluding workers’ compensation, was up approximately 6% for the
quarter, and up approximately 5% overall, in line with and slightly
higher, respectively, compared to renewal increases reported in the
prior quarter. With the exception of workers’ compensation, we are
continuing to achieve renewal rate increases at or in excess of
prospective loss ratio trends in the majority of our
businesses.
Third Quarter Catastrophe Losses – Catastrophes,
primarily due to Hurricane Ian, impacted AFG’s underwriting results
for the third quarter of 2022 by $39 million, including the impact
of reinstatement premiums and the favorable impact of the reduction
in certain profitability-based commissions due to agents related to
the catastrophe losses.
AFG maintains comprehensive catastrophe reinsurance coverage for
its property and casualty insurance operations, including a $20
million per occurrence net retention for losses up to $125 million
in the vast majority of circumstances. In certain unlikely events,
AFG’s ultimate loss under this coverage could be as high as $39
million for a single occurrence. AFG’s operating units purchased
replacement reinsurance coverage for those layers of the
catastrophe reinsurance program expected to be affected by
Hurricane Ian. AFG further maintains supplemental fully
collateralized reinsurance coverage up to 94% of $325 million for
catastrophe losses in excess of $125 million of traditional
catastrophe reinsurance through a catastrophe bond.
The Property and Transportation Group reported 2022 third
quarter underwriting profit of $39 million, compared to $45 million
in the third quarter of 2021, primarily as a result of lower
year-over-year crop profitability when compared to a very strong
2021 crop year. Catastrophe losses in this group, net of
reinsurance and inclusive of reinstatement premiums, were $13
million in the third quarter of 2022, compared to $14 million in
the comparable 2021 period. Overall, the businesses in the Property
and Transportation Group achieved a 95.4% calendar year combined
ratio in the third quarter, 1.9 points higher than the comparable
period in 2021.
Gross and net written premiums for the third quarter of 2022
were 30% and 24% higher, respectively, than the comparable 2021
period. While nearly all businesses in this group reported higher
year-over-year premiums in the quarter, the growth was driven by
higher commodity futures pricing in our crop insurance business.
Excluding the impact of crop insurance, third quarter 2022 gross
and net written premiums increased 14% and 10%, respectively, when
compared to the 2021 third quarter. Overall renewal rates in this
group increased 5% on average for the third quarter of 2022,
consistent with renewal rates achieved in the second quarter of
2022.
The Specialty Casualty Group reported a 2022 third
quarter underwriting profit of $118 million, compared to $110
million in the third quarter of 2021, primarily the result of
higher year-over-year profitability in our executive liability,
social services and mergers & acquisitions liability business,
which was partially offset by an overall decrease in favorable
prior period reserve development. Underwriting profitability in our
workers’ compensation businesses overall continues to be excellent.
The businesses in the Specialty Casualty Group achieved a very
strong 82.6% calendar year combined ratio overall in the third
quarter, 0.6 point higher than the excellent results achieved in
the comparable prior year period. Catastrophe losses for this group
were $3 million in both of the third quarters of 2022 and 2021.
Third quarter 2022 gross and net written premiums both increased
6% when compared to the same prior year period, with nearly all the
businesses in this group reporting growth during the quarter.
Increased exposures resulting from payroll growth in our workers’
compensation businesses and the impact of economic recovery on our
social services business contributed to the higher year-over-year
premiums. This growth was partially offset by lower premiums in our
mergers & acquisitions liability business. The majority of the
businesses in this group achieved strong renewal pricing during the
third quarter. Excluding workers’ compensation, renewal pricing for
this group was up 7% in the third quarter and was up 6% overall, an
improvement over the renewal pricing in the previous quarter.
The Specialty Financial Group reported an underwriting
profit of $15 million in the third quarter of 2022, compared to $26
million in the third quarter of 2021. The year-over-year decrease
was primarily the result of catastrophe losses from Hurricane Ian
that affected our financial institutions business. Catastrophe
losses for this group, net of reinsurance and inclusive of
reinstatement premiums, were $34 million in the third quarter of
2022, compared to $14 million in the prior year quarter. This group
reported a 91.3% combined ratio for the third quarter of 2022, an
increase of 7.1 points over the prior year period.
Third quarter 2022 gross and net written premiums in this group
were up 15% and 7%, respectively, when compared to the prior year
period. Higher premiums in our financial institutions business
related to lender-placed mortgage protection insurance contributed
to the increase in the quarter. Renewal pricing in this group was
up approximately 4% for the quarter, a point higher than the
renewal pricing achieved in the previous quarter.
Carl Lindner III stated, "Operating earnings in our P&C
Segment continue to be excellent, and I’m pleased to report
exceptionally strong growth in gross and net written premiums
during the quarter. Catastrophe losses were manageable, and we are
continuing to achieve renewal pricing in excess of prospective loss
ratio trends in the vast majority of our businesses, so that nearly
all of our businesses are meeting or exceeding ROE targets.”
Mr. Lindner added, “Based on results through the first nine
months, we now expect an overall 2022 calendar year combined ratio
in the range of 86% to 87%, narrowed from our previous range of 85%
to 87%. We now expect net written premiums to be 10% to 12% higher
than the $5.6 billion reported in 2021, refined from our previous
guidance range of +9% to +13%.”
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
During the third quarter of 2022, AFG conducted an in-depth
comprehensive review of its asbestos and environmental (A&E)
exposures relating to the run-off operations of its P&C Group
and its exposures related to former railroad and manufacturing
operations and sites. During the review, no new trends were
identified and recent claims activity was generally consistent with
our expectations resulting from our 2021 in-depth review and 2020
external study. As a result, the review resulted in no net change
to the P&C Group’s A&E reserves, and a minor increase in
AFG’s liabilities for the environmental exposures of its former
railroad and manufacturing operations. This minor adjustment is
included in AFG’s core operating earnings for the three months
ended September 30, 2022.
At September 30, 2022, the P&C Group’s insurance reserves
include A&E reserves of $391 million, net of reinsurance
recoverables. At September 30, 2022, the property and casualty
insurance segment’s three-year survival ratios were 23.8 times paid
losses for asbestos reserves, 29.6 times paid losses for
environmental reserves and 26.0 times paid losses for total A&E
reserves. These ratios compare favorably with industry data
compiled by S&P Global Market Intelligence as of December 31,
2021, which indicate that industry survival ratios were 9.0 times
paid losses for asbestos, 7.3 times paid losses for environmental,
and 8.5 times paid losses for total A&E reserves.
Investments
Net Investment Income – For the quarter ended September
30, 2022, property and casualty net investment income was
approximately 12% lower than the comparable 2021 period. The
annualized return on alternative investments was approximately 7.1%
for the 2022 quarter and 20.3% for the 2021 quarter. Earnings from
alternative investments may vary from quarter to quarter based on
the reported results of the underlying investments, and generally
are reported on a quarter lag. The average annual return on
alternative investments over the five calendar years ended December
31, 2021, was approximately 13%.
Excluding the impact of alternative investments, net investment
income in our property and casualty insurance operations for the
three months ended September 30, 2022, increased 35% year-over-year
as a result of the impact of rising interest rates and higher
balances of invested assets.
Non-Core Net Realized Gains (Losses) – AFG recorded third
quarter 2022 net realized losses on securities of $28 million
($0.32 per share loss) after tax, which included $21 million ($0.24
per share loss) in after-tax net losses to adjust equity securities
that the Company continued to own at September 30, 2022, to fair
value. AFG recorded net realized losses on securities of $12
million ($0.15 per share loss) in the comparable 2021 period.
After-tax unrealized losses on fixed maturities were $554
million at September 30, 2022. Our portfolio continues to be high
quality, with 91% of our fixed maturity portfolio rated investment
grade and 97% of our P&C fixed maturity portfolio with a
National Association of Insurance Commissioners’ designation of
NAIC 1 or 2, its highest two categories.
More information about the components of our investment
portfolio may be found in our Quarterly Investor Supplement, which
is posted on our website.
About American Financial Group,
Inc.
American Financial Group is an insurance holding company, based
in Cincinnati, Ohio. Through the operations of Great American
Insurance Group, AFG is engaged primarily in property and casualty
insurance, focusing on specialized commercial products for
businesses. Great American Insurance Group’s roots go back to 1872
with the founding of its flagship company, Great American Insurance
Company.
Forward Looking
Statements
This press release 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;
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: changes in financial, political and economic
conditions, including changes in interest and inflation rates,
currency fluctuations and extended economic recessions or
expansions in the U.S. and/or abroad; performance of securities
markets; new legislation or declines in credit quality or credit
ratings that could have a material impact on the valuation of
securities in AFG’s investment portfolio; the availability of
capital; changes in insurance law or regulation, including changes
in statutory accounting rules, including modifications to capital
requirements; the effects of the COVID-19 pandemic; changes in the
legal environment affecting AFG or its customers; tax law and
accounting changes; levels of natural catastrophes and severe
weather, terrorist activities (including any nuclear, biological,
chemical or radiological events), incidents of war or losses
resulting from pandemics, civil unrest and other major losses;
disruption caused by cyber-attacks or other technology breaches or
failures by AFG or its business partners and service providers,
which could negatively impact AFG’s business and/or expose AFG to
litigation; development of insurance loss reserves and
establishment of other reserves, particularly with respect to
amounts associated with asbestos and environmental claims;
availability of reinsurance and ability of reinsurers to pay their
obligations; competitive pressures; the ability to obtain adequate
rates and policy terms; changes in AFG’s credit ratings or the
financial strength ratings assigned by major ratings agencies to
AFG’s operating subsidiaries; the impact of the conditions in the
international financial markets and the global economy relating to
AFG’s international operations; effects on AFG’s reputation,
including as a result of environmental, social and governance
matters; and other factors identified in AFG’s filings with the
Securities and Exchange Commission.
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 2022 third
quarter results at 11:30 a.m. (ET) tomorrow, Thursday, November 3,
2022. New, simplified event registration and access provides two
ways to access the call.
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.
(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.
AMERICAN FINANCIAL GROUP, INC.
AND SUBSIDIARIES
SUMMARY OF EARNINGS AND
SELECTED BALANCE SHEET DATA
(In Millions, Except Per Share
Data)
Three months ended September
30,
Nine months ended September
30,
2022
2021
2022
2021
Revenues
P&C insurance net earned premiums
$
1,767
$
1,529
$
4,462
$
3,952
Net investment income
151
169
549
521
Realized gains (losses) on:
Securities
(35
)
(17
)
(143
)
103
Subsidiaries
-
-
-
4
Income of managed investment entities:
Investment income
75
45
175
135
Gain (loss) on change in fair value of
assets/liabilities
(5
)
1
(25
)
9
Other income
31
27
93
70
Total revenues
1,984
1,754
5,111
4,794
Costs and expenses
P&C insurance losses &
expenses
1,621
1,371
3,934
3,522
Interest charges on borrowed money
19
24
65
71
Expenses of managed investment
entities
62
37
148
115
Other expenses
72
55
187
196
Total costs and expenses
1,774
1,487
4,334
3,904
Earnings from continuing operations
before
income taxes
210
267
777
890
Provision for income taxes
45
48
155
164
Net earnings from continuing
operations
165
219
622
726
Net earnings from discontinued
operations
-
-
-
914
Net earnings
$
165
$
219
$
622
$
1,640
Earnings per diluted common share:
Continuing operations
$
1.93
$
2.56
$
7.29
$
8.45
Discontinued annuity operations
-
-
-
10.66
Diluted earnings
$
1.93
$
2.56
$
7.29
$
19.11
Average number of diluted shares
85.4
85.2
85.3
85.8
AMERICAN FINANCIAL GROUP, INC.
AND SUBSIDIARIES
SUMMARY OF EARNINGS AND
SELECTED BALANCE SHEET DATA
(In Millions, Except Per Share
Data)
September 30,
December 31,
Selected Balance
Sheet Data:
2022
2021
Total cash and investments
$
14,322
$
15,745
Long-term debt
$
1,533
$
1,964
Shareholders’ equity(b)
$
3,932
$
5,012
Shareholders’ equity (excluding
unrealized
gains/losses related to fixed
maturities)
$
4,515
$
4,876
Book value per share(b)
$
46.18
$
59.02
Book value per share (excluding
unrealized
gains/losses related to fixed
maturities)
$
53.03
$
57.42
Common Shares Outstanding
85.1
84.9
Footnote (b) is contained in the
accompanying Notes to Financial Schedules at the end of this
release.
AMERICAN FINANCIAL GROUP,
INC.
SPECIALTY P&C
OPERATIONS
(Dollars in Millions)
Three months ended September
30,
Pct.
Change
Nine months ended September
30,
Pct.
Change
2022
2021
2022
2021
Gross written premiums
$
3,153
$
2,656
19
%
$
7,212
$
6,209
16
%
Net written premiums
$
1,984
$
1,729
15
%
$
4,868
$
4,303
13
%
Ratios (GAAP):
Loss & LAE ratio
66.4
%
62.4
%
59.1
%
59.0
%
Underwriting expense ratio
24.7
%
26.6
%
28.3
%
29.4
%
Specialty Combined Ratio
91.1
%
89.0
%
87.4
%
88.4
%
Combined Ratio – P&C
Segment
91.2
%
89.0
%
87.5
%
88.4
%
Supplemental
Information:(c)
Gross Written Premiums:
Property & Transportation
$
1,737
$
1,334
30
%
$
3,459
$
2,705
28
%
Specialty Casualty
1,184
1,121
6
%
3,108
2,922
6
%
Specialty Financial
232
201
15
%
645
582
11
%
$
3,153
$
2,656
19
%
$
7,212
$
6,209
16
%
Net Written Premiums:
Property & Transportation
$
959
$
773
24
%
$
2,092
$
1,740
20
%
Specialty Casualty
777
732
6
%
2,073
1,912
8
%
Specialty Financial
176
165
7
%
512
485
6
%
Other
72
59
22
%
191
166
15
%
$
1,984
$
1,729
15
%
$
4,868
$
4,303
13
%
Combined Ratio (GAAP):
Property & Transportation
95.4
%
93.5
%
92.2
%
89.6
%
Specialty Casualty
82.6
%
82.0
%
81.1
%
86.6
%
Specialty Financial
91.3
%
84.2
%
83.9
%
84.9
%
Aggregate Specialty Group
91.1
%
89.0
%
87.4
%
88.4
%
Three months ended September
30,
Nine months ended September
30,
2022
2021
2022
2021
Reserve Development
(Favorable)/Adverse:
Property & Transportation
$
(15
)
$
(18
)
$
(79
)
$
(101
)
Specialty Casualty
(42
)
(56
)
(140
)
(85
)
Specialty Financial
(11
)
(18
)
(39
)
(38
)
Other Specialty
12
9
27
14
Specialty Group
(56
)
(83
)
(231
)
(210
)
Other
3
1
5
2
Total Reserve Development
$
(53
)
$
(82
)
$
(226
)
$
(208
)
Points on Combined Ratio:
Property & Transportation
(1.8
)
(2.5
)
(4.4
)
(6.5
)
Specialty Casualty
(6.3
)
(9.1
)
(7.1
)
(4.8
)
Specialty Financial
(6.3
)
(11.2
)
(7.8
)
(8.0
)
Aggregate Specialty Group
(3.1
)
(5.4
)
(5.2
)
(5.3
)
Total P&C Segment
(3.0
)
(5.4
)
(5.1
)
(5.3
)
Footnote (c) is contained in the
accompanying Notes to Financial Schedules at the end of this
release.
AMERICAN FINANCIAL GROUP,
INC.
Notes to Financial
Schedules
a) Components of core net operating earnings (dollars in
millions):
Three months ended
September 30,
Nine months ended
September 30,
2022
2021
2022
2021
Core Operating
Earnings before Income Taxes:
P&C insurance segment
$
289
$
329
$
1,056
$
905
Real estate entities and other acquired
from
Annuity operations*
-
-
-
50
Interest and other corporate expenses
(45
)
(45
)
(126
)
(161
)
Core operating earnings before income
taxes
244
284
930
794
Related income taxes
52
53
192
152
Core net operating earnings
$
192
$
231
$
738
$
642
* Income from real estate entities
acquired from AFG’s Annuity operations through May 31, 2021 (the
effective date of the sale of the Annuity business).
b) Shareholders’ Equity at September 30, 2022 includes $583
million ($6.85 per share) in unrealized after-tax losses related to
fixed maturities compared to $136 million ($1.60 per share) in
unrealized after-tax gains related to fixed maturities at December
31, 2021.
c) Supplemental Notes:
- Property & Transportation includes primarily
physical damage and liability coverage for buses and trucks and
other specialty transportation niches, inland and ocean marine,
agricultural-related products and other commercial property
coverages.
- Specialty Casualty includes primarily excess and
surplus, general liability, executive liability, professional
liability, umbrella and excess liability, specialty coverages in
targeted markets, customized programs for small to mid-sized
businesses and workers’ compensation insurance.
- Specialty Financial includes risk management insurance
programs for lending and leasing institutions (including equipment
leasing and collateral and lender-placed mortgage property
insurance), surety and fidelity products and trade credit
insurance.
- Other includes an internal reinsurance facility.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221102006012/en/
Diane P. Weidner, IRC Vice President – Investor & Media
Relations (513) 369-5713
Websites: www.AFGinc.com
www.GreatAmericanInsuranceGroup.com
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