American Financial Group, Inc. (NYSE:AFG) (NASDAQ:AFG) today
reported 2010 first quarter net earnings attributable to
shareholders of $106 million ($.93 per share), compared to $104
million ($.88 per share) reported in the 2009 first quarter. The
2010 results reflect realized gains of $3 million, compared to
realized losses of $27 million in the first quarter of 2009.
Book value per share, excluding appropriated retained earnings,
increased by $2.11, to $35.46 per share during the quarter. As
discussed further on page 4, a new accounting standard adopted in
2010 resulted in appropriated retained earnings ($2.02 per share at
March 31, 2010), which will reverse over time.
Core net operating earnings of $103 million ($.91 per share) for
the 2010 first quarter were consistent with our expectations but
down 21% from the record results in the 2009 comparable period.
Improved results in the annuity and supplemental insurance group
were offset by lower underwriting profit in our specialty property
and casualty insurance (“P&C”) operations and lower investment
income. Our annualized core operating return on equity was 11%.
During the first quarter of 2010, AFG repurchased 2.9 million
shares of common stock at an average price per share of $25.76.
AFG’s net earnings attributable to shareholders, determined in
accordance with generally accepted accounting principles (“GAAP”),
include realized investment gains and losses and may not be
indicative of its ongoing core operations. The following table
reconciles net earnings attributable to shareholders to core net
operating earnings, a non-GAAP financial measure that AFG believes
is a useful tool for investors and analysts in analyzing ongoing
operating trends.
In millions, except per share
amounts
Three months endedMarch
31,
2010 2009 Components of net
earnings attributable to shareholders:
Core net operating
earnings(a) $ 103 $ 131
Realized investment gains (losses)
3
(27 ) Net earnings
attributable to shareholders $
106 $
104 Components of Diluted
EPS:
Core net operating earnings $ 0.91
$ 1.11 Realized investment gains (losses)
0.02 (.23 )
Diluted EPS $
0.93 $
0.88
Footnote a is contained in the accompanying Notes To Financial
Schedules at the end of this release.
S. Craig Lindner and Carl H. Lindner III, AFG’s Co-Chief
Executive Officers, issued this statement: “Our first quarter
results demonstrate our ability to execute in a challenging
marketplace. Despite lower premium volumes and a soft pricing
environment, our specialization strategy has served us well as we
have continued to post solid core operating earnings. We are
encouraged that we have experienced a meaningful improvement in the
market value of our investment portfolio.
“We continue to evaluate effective ways to deploy our excess
capital to achieve appropriate returns on shareholders’ equity.
Since the beginning of the year, AFG has purchased nearly three
million shares of its common stock. We believe that purchasing
shares at attractive prices is an effective use of our excess
capital, producing a favorable effect on our earnings per share and
book value per share. We also continue to seek opportunities to
grow our specialty niche businesses particularly when expected
investment returns provide the potential to enhance long-term
shareholder value. Our 53%-owned subsidiary, National Interstate,
announced last week that it entered into a definitive agreement to
acquire Vanliner Insurance Company, a subsidiary of UniGroup, Inc.
Vanliner is a market leader in providing insurance for the moving
and storage industry. We expect this deal to close during the
second quarter. We believe this acquisition will be a natural
extension of National Interstate’s business model and complement
its existing book of business.”
“Based on our results for the first three months, our 2010
earnings guidance remains in the range of $3.30 - $3.70 per share.
As has been our practice, this guidance excludes realized gains and
losses, as well as the potential for significant catastrophe and
crop losses and unforeseen major adjustments to asbestos and
environmental reserves, and earnings or losses realized in
connection with unlocking adjustments to annuity deferred
acquisition costs.”
Business Segment
Results
The P&C specialty insurance operations generated an
underwriting profit of $77 million in the 2010 first quarter,
compared to $105 million in the first quarter of 2009. The reduced
profit in 2010 is primarily the result of a $19 million decrease in
favorable reserve development when compared to the 2009 first
quarter results. Catastrophe losses in the 2010 first quarter were
$9 million (2 points on the combined ratio), compared to $2 million
in the first quarter of 2009.
Gross and net written premiums were down 9% and 3%,
respectively, in the 2010 first quarter compared to the same
quarter a year earlier. A continuing soft market and competitive
pressures, depressed economic conditions and a decision to exit
certain automotive related lines of business contributed to these
declines. Cessions under our crop quota share returned to
historical levels, resulting in higher levels of retained crop
premium. Excluding crop operations, gross and net written premiums
decreased 8% and 7%, respectively, for the quarter. Overall average
renewal rates for the first quarter of 2010 were [flat] when
compared with the prior year period. Further details of the P&C
Specialty operations may be found in the accompanying
schedules.
The Property and Transportation group reported an underwriting
profit of $32 million in the first quarter of 2010, compared to $48
million in the first quarter of 2009. This decrease is primarily
the result of a $19 million reduction in favorable reserve
development as compared to the prior year period. Our property and
inland marine, ocean marine and agribusiness operations experienced
higher catastrophe losses from winter storms and spring flooding,
which offset improved results in our transportation businesses.
Gross and net written premiums for the 2010 first quarter were
impacted by a competitive pricing environment and lower winter
wheat prices in our crop business. In 2010, we returned to
historical levels of cessions under our crop reinsurance agreement,
which contributed to an increase to this group’s net written
premiums for the 2010 first quarter compared to the 2009 first
quarter. Excluding crop, net written premiums for this group
decreased by 6% from the prior year.
The Specialty Casualty group reported an underwriting
profit of $18 million in the first quarter of 2010, compared to $40
million in the first quarter of 2009. (Both periods include the
results of our California Workers’ Compensation business, which was
previously reported as a separate operating group). The reduced
profits are primarily the result of a $13 million decrease in
favorable reserve development. Additionally, lower underwriting
results in our general liability operations, (primarily those that
serve the homebuilders industry), Marketform, excess and surplus
lines and our California workers’ compensation businesses were
offset somewhat by improvements in our targeted markets operations.
Most businesses in this group produced excellent underwriting
profit margins, but at lower levels than 2009. Gross and net
written premiums for the first quarter of 2010 were down 6% and 4%,
respectively, from the same 2009 period. A soft pricing environment
and competitive market conditions in the excess and surplus markets
and California workers’ compensation business, as well as volume
reductions resulting from decreased demand for general liability
coverages in the homebuilders market contributed to these declines.
Growth in gross and net written premiums in our executive liability
and Marketform operations partially offset these declines.
The Specialty Financial group reported underwriting
profits of $21 million in the first quarter of 2010 compared to $13
million in the first quarter of 2009. Additional favorable reserve
development in our run-off automobile residual value insurance
business and higher underwriting profits in our financial
institutions business contributed to these results. Lower
underwriting profits in the surety and fidelity operations offset
these amounts somewhat. Gross and net written premiums decreased
approximately 10% and 18%, respectively, from the 2009 first
quarter primarily due to the exit from certain automotive lines of
business during 2009.
Carl Lindner III stated, “Although we experienced increased
catastrophe activity during the first quarter and continue to be
faced with competitive pressures and a soft pricing environment, we
are pleased by the continuing strong results of our operations, and
are making solid progress toward our 2010 operational goals. As
expected, almost all of our businesses continued to achieve solid
underwriting profits, albeit at lower levels than in 2009, because
of prudent underwriting and a strong commitment to pricing and risk
management. Pricing for the quarter was flat overall and we
continue to monitor rate adequacy in our markets.”
Annuity and Supplemental
Insurance Core Results
The Annuity and Supplemental Insurance Group generated core net
operating earnings before income taxes of $44 million for the 2010
first quarter, 13% higher than the same period a year earlier.
These results are principally the result of higher earnings in our
supplemental insurance business.
Statutory premiums of $497 million for the first quarter of 2010
were 33% higher than the first quarter of 2009 due to increased
sales of single premium annuities and higher sales in the bank
market, which were offset somewhat by lower sales in the 403(b)
annuity market.
AFG’s annuity liabilities remain stable. Due to the two-tier
nature and other surrender protection features in certain of its
annuity products, AFG continues to experience strong persistency in
its annuity businesses.
Investments
AFG recorded first quarter net realized gains of $3 million
after-tax, compared to realized losses of $27 million in the prior
year period. Unrealized gains on fixed maturities were $176
million, an increase of $128 million since December 31, 2009. Our
portfolio continues to be high quality, with 92% of our fixed
maturity portfolio rated investment grade and 95% 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 Financial and Investment Supplements,
which are posted on our website.
Consolidation of Variable
Interest Entities
Effective January 1, 2010, AFG adopted new accounting guidance
related to Variable Interest Entities (“VIEs”). Under the new
guidance, AFG is required to consolidate the collateral loan
obligation entities that it manages. Consolidating these entities
increased AFG’s assets by $2.5 billion. The debt of these entities
is non-recourse to AFG. Accordingly, AFG’s maximum exposure to
economic loss from these entities is limited to its investment,
which was $10.3 million at March 31, 2010. AFG’s Shareholders’
Equity at March 31, 2010 includes $225 million ($2.02 per share) in
retained earnings appropriated to managed investment entities
resulting from adoption of the new standard that will reverse over
time. Net earnings attributable to AFG shareholders for the quarter
ended March 31, 2010 includes $5 million in earnings related to the
VIEs.
About American Financial
Group, Inc.
American Financial Group is an insurance holding company, based
in Cincinnati, Ohio with assets in excess of $30 billion. Through
the operations of Great American Insurance Group, AFG is engaged
primarily in property and casualty insurance, focusing on
specialized commercial products for businesses, and in the sale of
traditional fixed, indexed and variable annuities and a variety of
supplemental insurance products. 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 and investment
activities; 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 or financial condition could differ materially
from those contained in or implied by such forward-looking
statements for a variety of factors including but not limited to:
changes in financial, political and economic conditions, including
changes in interest rates and extended economic recessions or
expansions; performance of securities markets; AFG’s ability to
estimate accurately the likelihood, magnitude and timing of any
losses in connection with investments in the non-agency residential
mortgage market; 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, including
mortgage-backed securities; the availability of capital; regulatory
actions, (including changes in statutory accounting rules); changes
in legal environment affecting AFG or its customers; tax law and
accounting changes; levels of natural catastrophes, terrorist
activities (including any nuclear, biological, chemical or
radiological events), incidents of war and other major losses;
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; the
unpredictability of possible future litigation if certain
settlements of current litigation do not become effective; trends
in persistency, mortality and morbidity; competitive pressures,
including the ability to obtain adequate rates; changes in AFG's
credit ratings or the financial strength ratings assigned by major
ratings agencies to AFG’s operating subsidiaries; and other factors
identified in our 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 information in this press release should be read in
conjunction with financial and investment supplements that are
available in the Investor Relations section of our web site at
www.AFGinc.com. The company will hold a conference call to discuss
2010 first quarter results at 11:30 a.m. (ET) tomorrow, Thursday,
May 6, 2010. Toll-free telephone access will be available by
dialing 1-888-892-6137 (international dial in 706-758-4386). The
conference ID for the live call is 68987372. Please dial in five to
ten minutes prior to the scheduled start time of the call.
A replay of the call will also be available two hours from the
conclusion of the call, at approximately 1:30 p.m. (ET) on May 6,
2010 until 11:59 p.m. (ET) on May 12, 2010. To listen to the
replay, dial 1-800-642-1687 (international dial in 706-645-9291)
and provide the conference ID 68987372.
The conference call will also be broadcast over the Internet. To
listen to the call via the Internet, go to AFG’s website,
www.AFGinc.com, and follow the instructions at the Webcast link
within the Investor Relations section. An archived webcast will be
available immediately after the call via a link on the Investor
Relations page until May 12, 2010 at 11:59 pm (ET). An archived
audio MP3 file will also be available within 24 hours of the
call.
-o0o-
(Financial summaries follow)
This earnings release and additional Financial and Investment
Supplements are available in the Investor Relations section of
AFG's web site: www.AFGinc.com.
AFG10-04
AMERICAN FINANCIAL GROUP, INC.
AND SUBSIDIARIES
SUMMARY OF EARNINGS
(In Millions, Except Per Share
Data)
Three months ended
March 31,
2010 2009 Income P&C insurance
premiums $ 579 $ 575 Life, accident & health premiums 115 109
Investment income 295 300 Realized investment gains (losses) 4 (41
) Income (loss) of managed investment entities: Investment income
22 -
Loss on change in fair value of
assets/liabilities
(25 ) - Other income
44
63 1,034
1,006 Costs and expenses P&C insurance
losses & expenses 508 471
Annuity, life, accident &
health benefits & expenses
253
251
Interest & other financing expenses 18 16 Expenses of managed
investment entities 9 - Other operating and general expenses
99 100
887 838
Operating earnings before income
taxes
147
168
Provision for income taxes(b)
59
58
Net earnings including
noncontrolling interests
88
110
Less: Net earnings (loss)
attributable to noncontrolling interests
(18
)
6
Net earnings attributable to shareholders
$ 106 $
104 Diluted Earnings per Common Share
$ .93 $
.88 Average number of Diluted Shares
113.1 116.4 March 31, December 31, Selected Balance Sheet
Data:
2010 2009 Total Cash and
Investments $ 20,611 $ 19,791
Long-term Debt
$
824
$
828
Shareholders’ Equity(c) $ 4,165 $ 3,781
Shareholders’ Equity (Excluding
appropriated retained earnings & unrealized gains/losses on
fixed maturities)(c)
$
3,765
$
3,733
Book Value Per Share: Excluding appropriated retained earnings $
35.46 $ 33.35
Excluding appropriated retained
earnings and unrealized gains/losses on fixed maturities
$ 33.88 $ 32.92 Common Shares Outstanding 111.1 113.4
Footnotes b and c are contained in the accompanying Notes To
Financial schedules at the end of this release.
AMERICAN FINANCIAL GROUP,
INC.
P&C SPECIALTY GROUP
UNDERWRITING RESULTS
(Dollars in Millions)
Three months endedMarch
31,
%Change
2010 2009 Gross written
premiums $ 744 $
818 (9 %)
Net written premiums
$ 566 $
585 (3 %)
Ratios (GAAP): Loss
& LAE ratio 52 % 47 %
Expense ratio 35 % 35 %
Policyholder dividend ratio -
- Combined Ratio
87 %
82 %
Supplemental:
Gross Written Premiums: Property & Transportation $ 277
$ 316 (12 %) Specialty Casualty 347 369 (6 %) Specialty Financial
122 135 (10 %) Other
(2 )
(2 )
$ 744
$ 818 (9 %)
Net Written
Premiums: Property & Transportation $ 216 $ 202 7 %
Specialty Casualty 238 248 (4 %) Specialty Financial 98 119 (18 %)
Other
14 16
$ 566 $
585 (3 %)
Combined Ratio (GAAP):
Property & Transportation 85 % 77 % Specialty Casualty 92 % 81
% Specialty Financial 83 % 90 % Aggregate Specialty Group 87
% 82 %
Three months endedMarch
31,
Three months endedMarch
31,
2010
Points
onCombinedRatio
2009
Points
onCombinedRatio
Reserve Development Favorable/(Unfavorable): Property &
Transportation $ 9 4 $ 28 13 Specialty Casualty 19 9 32 15
Specialty Financial 10 8 1 1 Other
7 -
3 -
$ 45 8
$
64 11
Supplemental Notes:
1. Property & Transportation includes primarily
physical damage & liability coverage for buses, trucks &
recreational vehicles, inland & ocean marine,
agricultural-related products & other property coverages.
2. Specialty Casualty includes primarily excess and
surplus, general liability, executive liability, umbrella and
excess liability, customized programs for small to mid-sized
businesses, and workers’ compensation insurance primarily in the
state of California.
3. Specialty Financial includes risk management
insurance programs for lending and leasing institutions (including
collateral and mortgage protection insurance), surety and fidelity
products and trade credit insurance.
4. Other includes an internal reinsurance
facility.
AMERICAN FINANCIAL GROUP,
INC.
ANNUITY & SUPPLEMENTAL
INSURANCE GROUP
STATUTORY PREMIUMS
(Dollars in Millions)
Three monthsendedMarch
31,
%Change
2010 2009 Retirement
annuity premiums: Fixed annuities $ 152 $ 92 65 % Indexed annuities
160 130 23 % Bank annuities 54 18 200 % Variable annuities
20 26 (23 %) 386 266
Supplemental insurance 102 95 7 % Life insurance
9 12 (25 %) Total statutory
premiums
$ 497 $
373 33 %
AMERICAN FINANCIAL GROUP, INC.
Notes To Financial Schedules
Footnote to GAAP to Non GAAP
Reconciliation:
a) Components of core net
operating earnings:
In millions
Three months endedMarch
31,
2010 2009 P&C operating
earnings $ 149 $ 188
Annuity & supplemental
insurance operating earnings
44 39 Interest & other corporate expense
(31 )
(23 ) Core operating
earnings before income taxes 162 204 Related income taxes
59 73 Core
net operating earnings
$ 103
$ 131
b) Operating income before income taxes includes $20 million in
non-deductible losses attributable to noncontrolling interests
related to managed investment entities.
c) Shareholders’ Equity at March 31, 2010 includes $176 million
($1.58 per share) in unrealized gains on fixed maturities and $225
million ($2.02 per share) of retained earnings appropriated to
managed investment entities. The appropriated retained earnings
will ultimately inure to the benefit of the debt holders of the
investment entities managed by AFG. Shareholder’s Equity at
December 31, 2009 includes $48 million ($.43 per share) in
unrealized gains on fixed maturities.
American Financial (NYSE:AFG)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
American Financial (NYSE:AFG)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024