American Financial Group, Inc. (NYSE/NASDAQ: AFG) today reported
2013 first quarter net earnings attributable to shareholders of
$120 million ($1.32 per share), compared to $113 million ($1.14 per
share) for the 2012 first quarter. The 2013 first quarter results
include $36 million ($0.40 per share) in after-tax net realized
gains compared to $28 million ($0.28 per share) in the prior year
period. Book value per share, excluding appropriated retained
earnings and unrealized gains on fixed maturities, increased by
$1.42 to $43.94 per share during the quarter. Annualized return on
equity was 12.4% and 11.8% for the first quarter of 2013 and 2012,
respectively.
Core net operating earnings were $84 million ($0.92 per share)
for the 2013 first quarter, compared to $85 million ($0.86 per
share) for the 2012 first quarter. Higher profit in our Annuity
segment was offset by the absence of earnings from our Medicare
supplement and critical illness businesses that were sold in August
2012, an adjustment for certain share-based incentive plans and
lower investment income in our Property and Casualty Insurance
(“P&C”) segment. Core net operating earnings for the first
quarter of 2013 and 2012 generated annualized returns on equity of
8.6% and 8.9%, respectively.
During the first quarter of 2013, AFG repurchased 61,586 shares
of common stock at an average price per share of $43.71.
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 following table identifies such items
and 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,
2013 2012 Components of net
earnings attributable to shareholders:
Core net operating
earnings(a) $ 84 $ 85
Realized gains (losses)
36
28 Net earnings attributable to shareholders
$ 120 $
113 Components of Earnings Per Share:
Core net operating earnings $ 0.92 $
0.86 Realized gains (losses)
0.40
0.28 Diluted Earnings Per Share
$ 1.32
$ 1.14
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: “The year is off to a
great start with record profitability in our annuity operations and
solid underwriting results in our property and casualty businesses.
We are pleased to see the positive impact of maintaining spreads in
our annuity business as well as market firming in selected P&C
markets, which has created opportunities for higher growth and
improved results in some of our P&C operations.
“At March 31, 2013, AFG had approximately $620 million of excess
capital (including parent company cash of $225 million). While we
will make opportunistic share repurchases when it makes sense to do
so and return capital to shareholders through dividends, we will
invest excess capital when we see potential for healthy, profitable
organic growth, and for opportunities to expand our specialty niche
businesses through acquisitions and start-ups that meet our target
return thresholds. Growth in our P&C specialty casualty
businesses and the launch of our Professional Liability Division
within our P&C operations last month serve as examples.
“Based on results for the first three months of 2013, we expect
core net operating earnings in 2013 to be between $3.60 and $4.00
per share. Our guidance is unchanged primarily as a result of a
slower pace of anticipated share repurchase activity. Our core
earnings per share guidance excludes non-core items such as
realized gains and losses, as well as other significant items that
may not be indicative of ongoing operations.”
Specialty Property and Casualty
Insurance Operations
The Specialty P&C insurance operations generated an
underwriting profit of $48 million in the 2013 first quarter,
virtually unchanged from the first quarter of 2012. The combined
ratio was 93.1%, 1.2 points higher than the comparable prior year
period. Higher profits in our Specialty Casualty Group were offset
by lower profitability in our Property and Transportation and
Specialty Financial Groups.
Gross and net written premiums were up 12% and 16%,
respectively, in the 2013 first quarter compared to the same
quarter a year earlier. Although premiums were higher in all of
AFG’s Specialty P&C segments, the Specialty Casualty Group was
a primary driver of this growth. Further details about AFG’s
specialty P&C operations may be found in the accompanying
schedules.
The Property and Transportation Group reported an
underwriting profit of $10 million in the first quarter of 2013,
compared to $27 million in the first quarter of 2012 due primarily
to lower profitability in our agricultural operations and higher
catastrophe losses. Catastrophe losses in this group were $10
million, compared to less than $1 million in the 2012 first
quarter, primarily as a result of March storms in the southeastern
United States. Gross and net written premiums were up 7% and 10%
during the first quarter of 2013, primarily due to higher premiums
in our transportation businesses. Net written premiums also
increased as a result of lower cessions of our winter wheat
business. These increases were offset somewhat by the higher cost
of reinsurance programs in several of these businesses. Pricing in
this group was up approximately 5% on average for the quarter,
following a 4% increase achieved in the fourth quarter of 2012.
The Specialty Casualty Group reported an underwriting
profit of $19 million in the first quarter of 2013, compared to $4
million in the first quarter of 2012, reflecting a lower accident
year loss ratio as well as increased favorable reserve development
in our executive liability and excess liability businesses. Gross
and net written premiums for the first quarter of 2013 were up 17%
and 19%. While nearly all businesses in this group reported growth,
our workers' compensation and excess and surplus businesses were
primary drivers of the higher premiums. Increased exposures from
higher payroll on existing accounts, price increases and overall
business growth have contributed to increases in our workers’
compensation businesses. New business opportunities and general
market hardening have generated increased premiums in several of
our excess and surplus businesses. Pricing was up approximately 6%
on average for the quarter, following a 6% increase achieved in the
fourth quarter of 2012.
The Specialty Financial Group reported an
underwriting profit of $13 million in the first quarter of 2013,
compared to $16 million in the comparable 2012 period. Higher
underwriting profits in our financial institutions business and
higher favorable development in our trade credit operations were
more than offset by lower underwriting profits in our fidelity and
crime operations. Gross and net written premiums increased 11% and
22%, respectively. Gross written premiums increased primarily as a
result of growth in mortgage protection insurance offered by our
financial institutions business, which was offset partially by
decreases in our service contract business. Because all of the
service contract business is ceded under reinsurance agreements,
net written premiums increased more than gross written premiums
during the period. Pricing in this group was up 1% for the first
quarter of 2013.
Carl Lindner III noted: “I am encouraged by the premium growth
opportunities we are seeing and the improved profitability reported
in certain of our specialty P&C operations. Based on premium
growth across our P&C book of business during the first three
months of 2013, we now expect net written premium growth for 2013
to be between 8% - 12%, up from 6% - 10% previously estimated.
Overall renewal pricing was up 5% during the quarter, in line with
our projections, and a sequential improvement from the previous
quarter. Our objective remains to achieve an increase of 4% - 6% in
the Specialty Group’s overall average renewal rates in 2013.”
Annuity Segment
AFG's annuity operations contributed $76 million in pretax core
earnings in the first quarter of 2013 compared to $60 million in
the first quarter of 2012, an increase of $16 million or 27%. The
increase in pretax core earnings was primarily a result of growth
in AFG's annuity business and exceptionally strong investment
results. Over the last year, AFG’s fixed annuity investments (at
amortized cost) have grown by 14%.
The profitability of a fixed annuity business is largely
dependent on the ability of a company to earn income on the assets
supporting the business in excess of the amounts credited to
policyholder accounts plus expenses incurred (earning a “spread”).
Performance measures such as net interest spread and net spread
earned are often presented by annuity businesses to help readers of
their financial statements better understand the company's
performance. See the accompanying schedules for information about
these spreads for AFG’s fixed annuity operations.
Statutory premiums of $624 million in the first quarter of 2013
were up more than 11% from the last quarter of 2012, but 22% lower
than the first quarter of 2012. The decrease from the comparable
prior year period was expected, and continues to reflect actions
taken during 2012 to reduce crediting rates and agent commissions
in response to the exceptionally low interest rate environment that
began in the second quarter of 2012.
Craig Lindner stated, “Our record annuity earnings reflect the
successful marketing, investing and pricing discipline and
strategies implemented over the last several years. In addition,
our first quarter 2013 results also benefitted from unusually
strong investment performance. Due to this strong first quarter,
assuming no significant drop in interest rates or the stock market,
we are increasing our guidance for the annuity and run-off segments
and now expect that the full year 2013 pretax core operating
earnings from our annuity and run-off operations will be 8% - 12%
higher than the $252 million reported for the full year of 2012. We
continue to expect that premiums for the full year of 2013 will be
flat to down slightly when compared with the prior year.”
More information about premiums and the results of operations
for our annuity segment may be found in our Quarterly Investor
Supplement which is posted on our website.
Run-off Long-Term Care and Life
Segment
AFG’s run-off long-term care and life segment incurred a pretax
operating loss of $1 million in the first quarter of 2013 compared
to pretax operating earnings of $1 million in the comparable prior
year period. As a result of the year-end 2012 loss recognition
testing on the Company’s closed block of long-term care business
and the corresponding charge to earnings, AFG does not expect its
run-off long-term care and life operations to contribute material
positive or negative results in 2013.
Medicare Supplement and Critical
Illness Segment
AFG’s Medicare supplement and critical illness segment
contributed pretax core operating earnings of $6 million in the
first quarter of 2012. These operations were sold in August 2012
for $326 million.
Investments
AFG recorded first quarter net realized gains of $36 million
after tax, compared to $28 million in the comparable 2012 period.
Unrealized gains on fixed maturities were $719 million after tax,
after DAC, virtually unchanged since year end 2012. Our portfolio
continues to be high quality, with 86% of our fixed maturity
portfolio rated investment grade and 97% with a National
Association of Insurance Commissioners’ designation of NAIC 1 or 2,
its highest two categories. P&C net investment income was
approximately 6% lower than the comparable 2012 period, in line
with our expectations.
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 with assets in excess of $35 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
fixed and fixed-indexed annuities in the retail, financial
institutions and education markets. 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 long-term care, 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; 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; the availability of capital; regulatory actions
(including changes in statutory accounting rules); 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 civil unrest 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 and AFG’s run-off long-term care business;
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 those in the annuity distribution channels,
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 our 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 Company will hold a conference call to discuss 2013 first
quarter results at 11:30 am (ET) tomorrow, Thursday, May 9, 2013.
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 37142436. Please dial in five to ten
minutes prior to the scheduled start time of the call.
A replay will be available two hours following the completion of
the call and will remain available until 11:59 pm on May 16, 2013.
To listen to the replay, dial 1-800-585-8367 (international dial in
404-537-3406) and provide the conference ID 37142436. 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 Webcasts and Presentations link
within the Investor Relations section.
(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
March 31,
2013
2012(b)
Revenues P&C insurance net earned premiums $ 687 $ 603 Life,
accident & health net earned premiums 30 105 Net investment
income 326 317 Realized gains on securities 57 44 Income (loss) of
managed investment entities: Investment income 34 29 Loss on change
in fair value of assets/liabilities (8 ) (29 ) Other income
22 18 Total revenues
1,148 1,087
Costs and expenses P&C insurance losses & expenses 644 555
Annuity, life, accident & health
benefits & expenses
210
265
Interest charges on borrowed money 18 19 Expenses of managed
investment entities 22 19 Other expenses
79
83 Total costs and expenses
973 941
Earnings before income taxes
175
146
Provision for income taxes(c)
62
58
Net earnings including noncontrolling
interests
113
88
Less: Net earnings (loss) attributable to
noncontrolling interests
(7
)
(25
)
Net earnings attributable to shareholders
$
120 $ 113
Diluted earnings per Common Share
$
1.32 $ 1.14
Average number of diluted shares 91.0 99.4
Selected Balance
Sheet Data:
March 31,
2013
December 31,
2012
Total cash and investments $ 29,084 $ 28,449
Long-term debt
$
950
$
953
Shareholders’ equity(d) $ 4,733 $ 4,578
Shareholders’ equity (excluding
appropriated retained earnings & unrealized gains/losses on
fixed maturities)(d)
$
3,950
$
3,784
Book value per share: Excluding appropriated retained earnings $
51.94 $ 50.61 Excluding appropriated retained earnings and
unrealized gains/losses on fixed maturities $ 43.94 $ 42.52
Common Shares outstanding 89.9 89.0
Footnotes (b), (c) and (d) are 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
March 31,
%
Change
2013 2012 Gross written
premiums $ 925 $
823 12 %
Net written premiums
$ 704 $
607 16 %
Ratios (GAAP) Loss
& LAE ratio 56.5 % 56.9 %
Underwriting expense ratio
36.6 % 35.0
% Combined Ratio
93.1 %
91.9 %
Supplemental
Information:(e)
Gross Written Premiums: Property & Transportation $ 352
$ 328 7 % Specialty Casualty 430 366 17 % Specialty Financial
143 129 11 %
$ 925 $
823 12 %
Net Written Premiums:
Property & Transportation $ 276 $ 250 10 % Specialty Casualty
295 247 19 % Specialty Financial 113 93 22 % Other
20 17 18 %
$ 704 $
607 16 %
Combined Ratio (GAAP):
Property & Transportation 96.5 % 89.7 % Specialty Casualty 92.7
% 98.1 % Specialty Financial 88.5 % 85.0 % Total Specialty
Group 93.1 % 91.9 %
Three months ended
March 31,
Three months ended
March 31,
2013
Points on
Combined Ratio
2012
Points onCombined Ratio
Reserve Development (Favorable)/Unfavorable: Property &
Transportation $ (6) (2.0) $ (10) (3.8) Specialty Casualty (16)
(6.2) (1) (0.6) Specialty Financial (6) (4.8) (7) (6.9) Other
(5) n/a
(1) n/a
$ (33) (4.8)
$ (19) (3.3)
Footnote (e) is contained in the accompanying Notes To Financial
Schedules at the end of this release.
AMERICAN FINANCIAL GROUP, INC.
ANNUITY SEGMENT
(Dollars in Millions)
Components of
Statutory Premiums:
Three months ended
March 31,
%
Change
2013 2012
Annuity
Premiums:
Retail Single Premium
$ 360 $ 451 (20 %)
Financial Institutions
Single Premium
194 275 (29 %)
Education Market-403(b)
55 62 (11 %)
Variable Annuities
15 15 - Total Annuity Premiums $ 624 $ 803 (22 %)
Components of Core Operating Earnings
before Income Taxes (Includes $1 million of pretax
variable annuity operating earnings in each of the first quarters
of 2013 and 2012):
Three months ended
March 31,
%
Change
2013 2012 Revenues: Net
investment income $ 248 $ 228 9 % Other income
14 13 8 % Total
revenues 262 241 9 % Costs and Expenses: Annuity
benefits 134 130 3 % Acquisition expenses 31 29 7 % Other expenses
21 22 (5 %)
Total costs and expenses
186
181 3 %
Core operating earnings before income
taxes
$
76
$
60
27
%
Three months ended
March 31,
2013 2012 Supplemental Fixed
Annuity Information:*
Average fixed annuity reserves
$
17,506
$
15,508
Net interest spread 2.99 % 2.88 % Net spread earned 1.58 % 1.43 %
*Excludes fixed annuity portion of variable annuity business
AMERICAN FINANCIAL GROUP, INC. Notes To Financial
Schedules
a) Components of core net operating
earnings (in millions):
Three months ended
March 31,
2013 2012
Core Operating
Earnings before Income Taxes:
P&C insurance segment $ 96 $ 100 Annuity segment 76 60 Run-off
long term-care and life segment (1 ) 1 Medicare supp and critical
illness segment* - 6 Interest & other corporate expense
(45 )
(40 ) Core operating
earnings before income taxes 126 127 Related income taxes
42 42 Core
net operating earnings
$ 84
$ 85
*Medicare supplement and critical illness businesses were sold
in August 2012.
b) Certain reclassifications have been made to conform to the
current year’s presentation.
c) Earnings before income taxes includes $11 million in 2013 and
$28 million in 2012 in non-deductible losses attributable to
noncontrolling interests related to managed investment entities,
increasing the effective tax rate by 2% and 6%, respectively.
d) Shareholders’ equity at March 31, 2013 includes $719 million
($8.00 per share) in unrealized gains on fixed maturities and $64
million ($0.71 per share) of retained earnings appropriated to
managed investment entities. Shareholders’ equity at December 31,
2012 includes $719 million ($8.09 per share) in unrealized
after-tax gains on fixed maturities and $75 million ($0.84 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.
e) Supplemental Notes:
- Property & Transportation
includes primarily physical damage and liability coverage for
buses, trucks and recreational vehicles, inland and ocean marine,
agricultural-related products and other property coverages.
- 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.
- Specialty Financial includes
risk management insurance programs for leasing and financing
institutions (including collateral and mortgage protection
insurance), surety and fidelity products and trade credit
insurance.
- Other includes an internal
reinsurance facility.
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