UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 28, 2014
AMERICAN FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
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| Ohio |
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1-13653 |
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31-1544320 |
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of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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| 301 East Fourth Street, Cincinnati, OH |
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45202 |
| (Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code 513-579-2121
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 - Financial Information
| Item 2.02 |
Results Of Operations And Financial Condition. |
Reference is made to the press release
of American Financial Group, Inc. (the “Company”) relating to the announcement of the Company’s results of operations for the third quarter of 2014 and the availability of the Investor Supplement on the Company’s website. The
press release was issued on October 28, 2014. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and a copy of the Investor Supplement is attached as Exhibit 99.2 and are incorporated herein by reference.
The information contained herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934
as amended (the “Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
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(a) |
Financial statements of business acquired. Not applicable. |
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(b) |
Pro forma financial information. Not applicable. |
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(c) |
Shell company transactions. Not applicable |
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| Exhibit
No. |
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Description |
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| 99.1 |
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Earnings Release dated October 28, 2014, reporting American Financial Group Inc. results for the quarter ended September 30, 2014. |
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| 99.2 |
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Investor Supplement – Third Quarter 2014 |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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AMERICAN FINANCIAL GROUP, INC. |
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| Date: October 29, 2014 |
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By: |
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/s/ Karl J. Grafe |
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Karl J. Grafe |
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Vice President |
3
Exhibit 99.1
American Financial Group, Inc. Announces Record
Third Quarter Core Net Operating Earnings Per Share
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Record third quarter core net operating earnings of $1.40 per share; up 32% from the prior year period |
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Net earnings of $1.28 per share include A&E reserve strengthening and realized gains |
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Adjusted book value per share of $48.59; up 6% year-to-date |
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Full year 2014 core net operating earnings guidance unchanged at $4.50 - $4.90 per share |
Cincinnati, Ohio – October 28, 2014 – American Financial Group, Inc. (NYSE/NASDAQ: AFG) today reported 2014 third quarter net earnings
attributable to shareholders of $116 million ($1.28 per share) compared to $83 million ($0.92 per share) for the 2013 third quarter. AFG’s 2014 third quarter results include an after-tax charge of $19 million ($0.21 per share) to strengthen the
Company’s asbestos and environmental (“A&E”) reserves and $8 million ($0.09 per share) in after-tax realized gains. Book value per share, excluding appropriated retained earnings and unrealized gains on fixed maturities, increased
by $0.64, or 1%, to $48.59 per share during the third quarter of 2014. Including AFG’s quarterly dividend, total value creation measured as growth in book value plus dividends was $3.35 per share, or 7%, for the first nine months of the year.
Annualized return on equity was 11.1% and 8.6% for the third quarters of 2014 and 2013, respectively.
Core net operating earnings were $127 million
($1.40 per share) for the 2014 third quarter, compared to $97 million ($1.06 per share) in the 2013 third quarter. Higher underwriting profit and net investment income in our Specialty Property and Casualty (“P&C”) insurance operations
and higher core operating earnings in our Annuity segment contributed to these results. Core net operating earnings for the third quarters of 2014 and 2013 generated annualized core returns on equity of 12.3% and 10.0%, respectively.
During the third quarter of 2014, AFG repurchased approximately 1.4 million shares of common stock for $83 million (average price per share of $57.37).
AFG’s net earnings attributable to shareholders, determined in accordance with U.S. generally accepted accounting principles (“GAAP”),
include certain items that may not be indicative of its ongoing core operations. The following table identifies such items and reconciles net earnings attributable to shareholders to core net operating earnings, a non-GAAP financial measure that AFG
believes is a useful tool for investors and analysts in analyzing ongoing operating trends.
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| In millions, except per share amounts |
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Three months ended
September 30, |
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Nine months ended
September 30, |
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2014 |
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2013 |
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2014 |
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2013 |
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| Components of net earnings attributable to shareholders: |
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| Core net operating earnings(a) |
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$ |
127 |
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$ |
97 |
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$ |
317 |
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$ |
268 |
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| Non-Core Items: |
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| Realized gains |
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8 |
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35 |
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27 |
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97 |
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| Special A&E charges(b) |
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(19 |
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(49 |
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(19 |
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(49 |
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| ELNY guaranty fund assessments |
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— |
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— |
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— |
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(3 |
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| Net earnings attributable to shareholders |
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$ |
116 |
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$ |
83 |
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$ |
325 |
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$ |
313 |
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| Components of Earnings per Share: |
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| Core net operating earnings(a) |
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$ |
1.40 |
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$ |
1.06 |
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$ |
3.47 |
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$ |
2.94 |
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| Non-Core Items: |
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| Realized gains |
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0.09 |
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0.40 |
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0.30 |
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1.08 |
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| Special A&E charges(b) |
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(0.21 |
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(0.54 |
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(0.21 |
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(0.54 |
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| ELNY guaranty fund assessments |
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— |
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— |
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— |
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(0.04 |
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| Diluted Earnings Per Share |
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$ |
1.28 |
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$ |
0.92 |
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$ |
3.56 |
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$ |
3.44 |
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Footnote (a) and (b) are contained in the accompanying Notes to Financial Schedules at the end of this release.
Page 1
S. Craig Lindner and Carl H. Lindner III, AFG’s Co-Chief Executive Officers, issued this statement: “A
32% increase in third quarter core net operating earnings per share established new AFG records for the third quarter and nine month periods. We are pleased to see higher year-over-year core earnings in both our Specialty P&C Group and our
Annuity Segment and strong growth in net written premiums in our Specialty P&C businesses.
“AFG had approximately $920 million of excess capital
(including parent company cash of approximately $350 million) at September 30, 2014. Our strong financial position provides the flexibility to act on strategic business opportunities. We will continue to invest excess capital when we see
potential for profitable organic growth and return value to our shareholders through opportunistic share repurchases and dividends.
“We continue to
expect core net operating earnings in 2014 to be between $4.50 and $4.90 per share. We are pleased with our results through nine months, which reflect strong performance across most of our business units. Looking ahead to the fourth quarter of 2014,
the midpoint of our earnings guidance assumes a break-even result in our crop insurance business. We are also mindful of the recent changes in interest rates and the impact on fair value accounting for fixed-indexed annuities (“FIAs”) in
our Annuity Segment. 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 P&C specialty insurance operations generated an underwriting profit of $70 million in the 2014 third quarter, compared to $62 million in the third
quarter of 2013. Losses from catastrophes were negligible in the 2014 and 2013 third quarters. Results for the 2014 third quarter include $11 million (1.0 point) in favorable reserve development. By comparison, favorable reserve development in the
third quarter of 2013 was $13 million (1.4 points).
Gross and net written premiums were up 5% and 16%, respectively, for the third quarter of 2014, as
compared to the same period in 2013. The 2014 results include premiums from Summit, AFG’s specialty workers’ compensation subsidiary, from the date of acquisition on April 1, 2014. Excluding Summit premiums, gross written premiums
declined by 3% year-over-year and net written premiums increased by 4%. Strong growth in our specialty casualty group was partially offset by premium declines in our property and transportation group that resulted from the timing of premium
recognition in our agricultural
Page 2
operations during the 2013 third quarter. Excluding Summit and crop premiums, gross and net written premiums grew by 14% and 12%, respectively, during the third quarter of 2014. Further details
of AFG’s Specialty P&C operations may be found in the accompanying schedules.
The Property and Transportation Group reported an
underwriting profit of $11 million in the third quarter of 2014, compared to an underwriting profit of $16 million in the prior year period. This decrease is primarily attributable to lower profitability in our agricultural operations partially
offset by higher profitability in our property and inland marine and transportation businesses. Catastrophe losses for this group were negligible in the third quarters of 2014 and 2013.
Gross and net written premiums for the third quarter of 2014 were 13% and 6% lower, respectively, than the comparable 2013 period. The decreases in gross and
net written premiums were due primarily to lower 2014 commodity prices impacting our crop operations, coupled with the higher than average crop premiums reported in the third quarter of 2013 due to delayed acreage reporting from insureds as a result
of excess moisture and late planting of corn and soybean crops. These decreases were partially offset by growth in our transportation businesses, primarily the result of rate increases. Excluding our crop insurance business, gross written premiums
increased by 6% and net written premiums increased by 4%. Pricing in this group was up approximately 5% on average for the quarter, and includes a 9% increase in National Interstate’s renewal rates.
The Specialty Casualty Group reported third quarter underwriting profit of $32 million compared to an underwriting profit of $19 million in the third
quarter of 2013. This increase was due primarily to higher profitability in our workers’ compensation and alternative markets businesses, offset by lower profitability in our general liability lines of business, primarily the result of adverse
prior year reserve development. Most businesses in this group produced strong underwriting profit margins through the first nine months of 2014.
Gross
and net written premiums were up 53% and 65%, respectively, for the third quarter of 2014 when compared to the same prior year period and include Summit’s results since April 1, 2014. Excluding premiums from Summit, gross and net premiums
each grew by 24%. While all businesses in this group reported growth, the successful renewal of a recently acquired block of public sector business, along with growth in our workers’ compensation, excess and surplus lines and non-profit social
services businesses were primary drivers of the higher premiums. New business opportunities and increased exposures on existing accounts have driven the growth in our workers’ compensation businesses. Organic growth, coupled with the benefit
from rate increases over multiple quarters have contributed to higher premiums in our excess and surplus businesses. Pricing in this group was up approximately 1% on average for the quarter.
The Specialty Financial Group reported an underwriting profit of $21 million in the third quarter of 2014, compared to an underwriting profit of $22
million in the third quarter of 2013. Nearly all of the businesses in this group achieved excellent underwriting margins during the third quarter of 2014.
Gross and net written premiums were both 2% lower in the 2014 third quarter when compared to the same 2013 period. Growth in gross written premiums was
tempered by the October 2013 sale of a service contract business, which ceded all of its premiums under reinsurance contracts. Renewal pricing in this group was down approximately 2% for the third quarter.
Carl Lindner III stated: “Underwriting results across most of our 30 specialty P&C businesses were strong during the third quarter. I am especially
pleased with the performance of our specialty casualty group; we have successfully grown nearly all of these businesses either organically or through acquisition. In addition, results in our specialty financial group continue to be excellent. We
were successful in achieving pricing increases in nearly all of the businesses in our property and transportation group during the third quarter and continue to focus on pricing across our entire P&C group.
Page 3
“Based on premium growth across our P&C book of business during the first nine months of 2014, we now
expect net written premium growth for the full year of 2014 to be between 18% and 21%. This guidance reflects the inclusion of nine months of Summit premiums. Overall renewal pricing was up about 2% during the quarter.”
Annuity Segment
AFG’s annuity operations
contributed $86 million in pretax core earnings in the third quarter of 2014 compared to $78 million in the third quarter of 2013, an increase of $8 million or 10%. AFG’s 2014 earnings continue to benefit from growth in annuity assets.
AFG’s quarterly average annuity investments have grown 16% year-over-year. The impact of this growth was partially offset by the runoff of higher yielding investments.
Interest rate and stock market fluctuations have an impact on the accounting for FIAs; these accounting adjustments are recognized through AFG’s core
earnings. While these fluctuations had a minor impact on operating earnings in the third quarters of both 2014 and 2013, they had a much bigger impact in the year-to-date results of each year. See the accompanying schedules for additional
information about spreads for AFG’s fixed annuity operations.
The annuity operations reported quarterly statutory premiums of $809 million in the
third quarter of 2014, a 31% decrease from the comparable prior year period. The Company’s disciplined approach to product pricing in a declining interest rate environment along with increased levels of competition resulted in lower premiums
across all single premium product lines during the 2014 third quarter. In contrast, a rising interest rate environment in 2013 resulted in record annuity premium production in the 2013 third quarter. Statutory premiums of $2.7 billion for the first
nine months of 2014 were up 3% from the comparable 2013 period.
Craig Lindner stated, “I am pleased with our strong core annuity earnings in the
third quarter and first nine months of this year. Looking ahead, we believe that the decrease in interest rates in October is likely to put downward pressure on core annuity earnings in the fourth quarter due to fair value accounting for FIAs. As a
result, we expect that the full year 2014 core pretax annuity operating earnings will be $315 to $325 million, compared to the $328 million reported for the full year of 2013. This estimate does not reflect any positive or negative impact from our
annual fourth quarter review (“unlocking”) of the Company’s major actuarial assumptions in its fixed annuity business. Significant changes in interest rates and/or the stock market from today’s level could lead to additional
positive or negative impacts on the Annuity segment’s results.
“We remain committed to our disciplined product pricing strategy, which means
that our focus is on growing our business when we can achieve desired long-term returns. The decreasing interest rate environment in 2014 has slowed the pace of our annuity sales, especially when compared to the record level of sales we achieved in
the second half of 2013. As a result, based on information currently available, we now expect that premiums for the full year of 2014 will be approximately $3.6 billion, which would be the second highest level of annuity sales in AFG’s
history.”
Run-off Long-Term Care and Life Segment
AFG’s run-off long-term care and life segment reported pretax core operating earnings of $1 million in the third quarter of 2014, compared to a loss of $4
million in the comparable prior year period. This business incurred a core pretax operating loss of $3 million for the first nine months of 2014. In the fourth quarter, AFG will complete its periodic review (“loss recognition testing”) of
the major actuarial assumptions for its run-off long-term care business. While AFG had a loss recognition margin of $64 million in its long-term care operations as of December 31, 2013, further continuation of the recent low interest rate
environment, including the drop in interest rates during October 2014, will reduce that margin. In addition,
Page 4
with the assistance of an external actuarial consulting firm, AFG is analyzing other assumptions that could have an impact on its loss recognition margin, including projected long-term care
claims and persistency. In the event that the updated loss recognition testing assumptions result in a cumulative adverse impact in excess of $64 million, AFG would record a loss recognition charge equal to that excess amount.
A&E Reserves
During the third quarter of
2014, AFG completed an internal review of its asbestos and environmental exposures relating to the run-off operations of its P&C group and its exposures related to former railroad and manufacturing operations and sites. The review was undertaken
with the aid of a specialty consultant and outside counsel. This year’s review resulted in a non-core after-tax special charge of $19 million ($30 million pretax) to increase AFG’s A&E reserves.
The P&C group’s asbestos reserves were increased by $4 million (net of reinsurance) and its environmental reserves were increased by $20 million (net
of reinsurance). At September 30, 2014, the P&C group’s insurance reserves include A&E reserves of $300 million, net of reinsurance recoverables. At September 30, 2014, AFG’s three year survival ratios, excluding amounts
associated with the settlements of two large asbestos claims, were 14.4x paid losses for asbestos reserves, 6.1x paid losses for environmental reserves and 9.9x paid losses for the total A&E reserves. These ratios compare favorably with industry
statutory data published by SNL Financial LC, which indicate that industry A&E survival ratios were 10.5x paid losses for asbestos reserves, 6.1x paid losses for environmental reserves, and 9.2x paid losses for total A&E reserves at
December 31, 2013.
As the overall industry exposure to asbestos has matured, the focus of litigation has shifted to smaller companies and companies
with ancillary exposures. AFG’s insureds with these exposures have been the driver of our P&C asbestos reserve increases in recent years. The increase in P&C environmental reserves was attributed primarily to AFG’s increased
defense costs and a number of claims where the estimated costs of remediation have increased. There were no new or emerging broad industry trends that were identified in this review.
In addition, the review encompassed reserves for asbestos and environmental exposures of our former railroad and manufacturing operations. As a result of the
review, AFG increased its reserve for environmental exposures by $6 million due primarily to slightly higher estimated operation and maintenance costs at sites where remediation is underway, coupled with higher estimated cleanup costs at a limited
number of sites.
Investments
AFG recorded
third quarter 2014 net realized gains on securities of $8 million after tax and after deferred acquisition costs (DAC), compared to $35 million in the comparable prior year period. Unrealized gains on fixed maturities were $602 million, after tax,
after DAC at September 30, 2014, an increase of $161 million since year-end. 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.
Third quarter 2014 P&C net investment income was approximately 17% higher
than the comparable 2013 period, reflecting the investment of cash received in connection with the Summit acquisition.
More information about the
components of our investment portfolio may be found in our Quarterly Investor Supplement, which is posted on our website.
Page 5
About American Financial Group, Inc.
American Financial Group is an insurance holding company, based in Cincinnati, Ohio with assets of approximately $45 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; 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 2014 third quarter results at 11:30 a.m. (ET) tomorrow, Wednesday, October 29, 2014. Toll-free
telephone access will be available by dialing 1-877-459-8719 (international dial-in 424-276-6843). The conference ID for the live call is 11632336. 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 p.m. (ET) on November 5, 2014. To listen
to the replay, dial 1-855-859-2056 (international dial-in 404-537-3406) and provide the conference ID 11632336.
Page 6
The conference call and accompanying webcast slides will also be broadcast live over the Internet. To listen to
the call via the Internet, go to the Investor Relations page on AFG’s website, www.AFGinc.com, and follow the instructions at the Webcasts and Presentations link.
The archived webcast will be available immediately after the call via the same link on the Investor Relations page until November 5, 2014 at 11:59 p.m.
(ET). An archived audio MP3 file will be available within 24 hours of the call.
Contact:
Diane P. Weidner
Asst. Vice President – Investor Relations
(513) 369-5713
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.
AFG14-21
Page 7
AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES
SUMMARY OF EARNINGS AND SELECTED BALANCE SHEET DATA
(In Millions, Except Per Share Data)
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Three months ended
September 30, |
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Nine months ended
September 30, |
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2014 |
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2013 |
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2014 |
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2013 |
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| Revenues |
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| P&C insurance net earned premiums |
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$ |
1,132 |
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$ |
949 |
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$ |
2,817 |
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$ |
2,345 |
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| Life, accident & health net earned premiums |
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|
27 |
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|
29 |
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|
82 |
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|
87 |
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| Net investment income |
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|
377 |
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|
338 |
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|
1,117 |
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|
996 |
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| Realized gains |
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|
13 |
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|
56 |
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44 |
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|
154 |
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| Income (loss) of managed investment entities: |
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| Investment income |
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29 |
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32 |
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|
84 |
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|
98 |
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| Gain (loss) on change in fair value of assets/liabilities |
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|
(25 |
) |
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15 |
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(35 |
) |
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|
(21 |
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| Other income |
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28 |
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24 |
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|
75 |
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|
71 |
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| Total revenues |
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|
1,581 |
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|
1,443 |
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4,184 |
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|
3,730 |
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| Costs and expenses |
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|
|
|
|
|
|
|
| P&C insurance losses & expenses |
|
|
1,086 |
|
|
|
941 |
|
|
|
2,684 |
|
|
|
2,275 |
|
| Annuity, life, accident & health benefits & expenses |
|
|
240 |
|
|
|
222 |
|
|
|
732 |
|
|
|
642 |
|
| Interest charges on borrowed money |
|
|
18 |
|
|
|
18 |
|
|
|
53 |
|
|
|
54 |
|
| Expenses of managed investment entities |
|
|
19 |
|
|
|
22 |
|
|
|
60 |
|
|
|
68 |
|
| Other expenses |
|
|
73 |
|
|
|
98 |
|
|
|
219 |
|
|
|
248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total costs and expenses |
|
|
1,436 |
|
|
|
1,301 |
|
|
|
3,748 |
|
|
|
3,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings before income taxes |
|
|
145 |
|
|
|
142 |
|
|
|
436 |
|
|
|
443 |
|
| Provision for income taxes(c) |
|
|
54 |
|
|
|
44 |
|
|
|
155 |
|
|
|
155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings including noncontrolling interests |
|
|
91 |
|
|
|
98 |
|
|
|
281 |
|
|
|
288 |
|
|
|
|
|
|
| Less: Net earnings (loss) attributable to noncontrolling interests |
|
|
(25 |
) |
|
|
15 |
|
|
|
(44 |
) |
|
|
(25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings attributable to shareholders |
|
$ |
116 |
|
|
$ |
83 |
|
|
$ |
325 |
|
|
$ |
313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted Earnings per Common Share |
|
$ |
1.28 |
|
|
$ |
0.92 |
|
|
$ |
3.56 |
|
|
$ |
3.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average number of diluted shares |
|
|
90.9 |
|
|
|
91.0 |
|
|
|
91.4 |
|
|
|
91.2 |
|
|
|
|
|
|
|
|
|
|
| Selected Balance Sheet Data: |
|
September 30,
2014 |
|
|
December 31,
2013 |
|
| Total cash and investments |
|
$ |
35,151 |
|
|
$ |
31,313 |
|
| Long-term debt |
|
$ |
1,062 |
|
|
$ |
913 |
|
| Shareholders’ equity(d) |
|
$ |
4,904 |
|
|
$ |
4,599 |
|
| Shareholders’ equity (excluding appropriated retained earnings and unrealized gains/losses on fixed maturities)(d) |
|
$ |
4,300 |
|
|
$ |
4,109 |
|
| Book Value Per Share: |
|
|
|
|
|
|
|
|
| Excluding appropriated retained earnings |
|
$ |
55.39 |
|
|
$ |
50.83 |
|
| Excluding appropriated retained earnings and unrealized gains/losses on fixed maturities |
|
$ |
48.59 |
|
|
$ |
45.90 |
|
|
|
|
| Common Shares Outstanding |
|
|
88.5 |
|
|
|
89.5 |
|
Footnotes (c) and (d) are contained in the accompanying Notes to Financial Schedules at the end of this release.
Page 8
AMERICAN FINANCIAL GROUP, INC.
SPECIALTY P&C OPERATIONS
(Dollars in Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended
Sept 30, |
|
|
Pct.
Change |
|
|
Nine months ended
Sept 30, |
|
|
Pct.
Change |
|
| |
|
2014 |
|
|
2013 |
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
| Gross written premiums |
|
$ |
1,859 |
|
|
$ |
1,768 |
|
|
|
5 |
% |
|
$ |
4,174 |
|
|
$ |
3,734 |
|
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net written premiums |
|
$ |
1,242 |
|
|
$ |
1,067 |
|
|
|
16 |
% |
|
$ |
2,995 |
|
|
$ |
2,520 |
|
|
|
19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratios (GAAP): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss & LAE ratio |
|
|
67.1 |
% |
|
|
66.1 |
% |
|
|
|
|
|
|
63.6 |
% |
|
|
61.5 |
% |
|
|
|
|
| Underwriting expense ratio |
|
|
26.7 |
% |
|
|
27.4 |
% |
|
|
|
|
|
|
30.8 |
% |
|
|
32.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Specialty Combined Ratio |
|
|
93.8 |
% |
|
|
93.5 |
% |
|
|
|
|
|
|
94.4 |
% |
|
|
94.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined Ratio (Including A&E) |
|
|
96.0 |
% |
|
|
99.1 |
% |
|
|
|
|
|
|
95.2 |
% |
|
|
97.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental Information:(e) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross Written Premiums: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property & Transportation |
|
$ |
995 |
|
|
$ |
1,147 |
|
|
|
(13 |
%) |
|
$ |
1,860 |
|
|
$ |
1,945 |
|
|
|
(4 |
%) |
| Specialty Casualty |
|
|
707 |
|
|
|
461 |
|
|
|
53 |
% |
|
|
1,869 |
|
|
|
1,331 |
|
|
|
40 |
% |
| Specialty Financial |
|
|
157 |
|
|
|
160 |
|
|
|
(2 |
%) |
|
|
445 |
|
|
|
458 |
|
|
|
(3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,859 |
|
|
$ |
1,768 |
|
|
|
5 |
% |
|
$ |
4.174 |
|
|
$ |
3,734 |
|
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Written Premiums: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property & Transportation |
|
$ |
556 |
|
|
$ |
594 |
|
|
|
(6 |
%) |
|
$ |
1,193 |
|
|
$ |
1,198 |
|
|
|
— |
|
| Specialty Casualty |
|
|
536 |
|
|
|
325 |
|
|
|
65 |
% |
|
|
1,366 |
|
|
|
903 |
|
|
|
51 |
% |
| Specialty Financial |
|
|
121 |
|
|
|
124 |
|
|
|
(2 |
%) |
|
|
357 |
|
|
|
354 |
|
|
|
1 |
% |
| Other |
|
|
29 |
|
|
|
24 |
|
|
|
21 |
% |
|
|
79 |
|
|
|
65 |
|
|
|
22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,242 |
|
|
$ |
1,067 |
|
|
|
16 |
% |
|
$ |
2,995 |
|
|
$ |
2,520 |
|
|
|
19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined Ratio (GAAP): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property & Transportation |
|
|
97.8 |
% |
|
|
97.1 |
% |
|
|
|
|
|
|
100.1 |
% |
|
|
100.4 |
% |
|
|
|
|
| Specialty Casualty |
|
|
93.3 |
% |
|
|
93.4 |
% |
|
|
|
|
|
|
92.1 |
% |
|
|
91.5 |
% |
|
|
|
|
| Specialty Financial |
|
|
81.6 |
% |
|
|
82.3 |
% |
|
|
|
|
|
|
86.7 |
% |
|
|
85.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
| Aggregate Specialty Group |
|
|
93.8 |
% |
|
|
93.5 |
% |
|
|
|
|
|
|
94.4 |
% |
|
|
94.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended
Sept 30, |
|
|
Nine months ended
Sept 30, |
|
| |
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
| Reserve Development (Favorable)/Adverse: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property & Transportation |
|
$ |
(5 |
) |
|
$ |
(1 |
) |
|
$ |
13 |
|
|
$ |
(4 |
) |
| Specialty Casualty |
|
|
7 |
|
|
|
(4 |
) |
|
|
(21 |
) |
|
|
(42 |
) |
| Specialty Financial |
|
|
(10 |
) |
|
|
(4 |
) |
|
|
(13 |
) |
|
|
(10 |
) |
| Other |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(8 |
) |
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Aggregate Specialty Group Excluding A&E |
|
|
(11 |
) |
|
|
(13 |
) |
|
|
(29 |
) |
|
|
(70 |
) |
| Special A&E Reserve Charge - P&C Run-off |
|
|
24 |
|
|
|
54 |
|
|
|
24 |
|
|
|
54 |
|
| Other |
|
|
— |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Reserve Development Including A&E |
|
$ |
13 |
|
|
$ |
40 |
|
|
$ |
(4 |
) |
|
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Points on Combined Ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property & Transportation |
|
|
(0.9 |
) |
|
|
(0.2 |
) |
|
|
1.2 |
|
|
|
(0.4 |
) |
| Specialty Casualty |
|
|
1.3 |
|
|
|
(1.2 |
) |
|
|
(1.7 |
) |
|
|
(5.0 |
) |
| Specialty Financial |
|
|
(9.0 |
) |
|
|
(3.2 |
) |
|
|
(3.9 |
) |
|
|
(2.9 |
) |
|
|
|
|
|
| Aggregate Specialty Group |
|
|
(1.0 |
) |
|
|
(1.4 |
) |
|
|
(1.0 |
) |
|
|
(3.1 |
) |
Footnote (e) is contained in the accompanying Notes to Financial Schedules at the end of this release.
Page 9
AMERICAN FINANCIAL GROUP, INC.
ANNUITY SEGMENT
(Dollars
in Millions)
Components of Statutory Premiums
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended
Sept 30, |
|
|
Pct.
Change |
|
|
Nine months ended
Sept 30, |
|
|
Pct.
Change |
|
| |
|
2014 |
|
|
2013 |
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
|
| Annuity Premiums: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Retail Single Premium |
|
$ |
357 |
|
|
$ |
557 |
|
|
|
(36 |
%) |
|
$ |
1,210 |
|
|
$ |
1,426 |
|
|
|
(15 |
%) |
| Financial Institutions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Single Premium |
|
|
395 |
|
|
|
550 |
|
|
|
(28 |
%) |
|
|
1,334 |
|
|
|
1,031 |
|
|
|
29 |
% |
| Education Market - 403(b) |
|
|
46 |
|
|
|
49 |
|
|
|
(6 |
%) |
|
|
145 |
|
|
|
156 |
|
|
|
(7 |
%) |
| Variable Annuities |
|
|
11 |
|
|
|
11 |
|
|
|
— |
|
|
|
36 |
|
|
|
39 |
|
|
|
(8 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Annuity Premiums |
|
$ |
809 |
|
|
$ |
1,167 |
|
|
|
(31 |
%) |
|
$ |
2,725 |
|
|
$ |
2,652 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Core Operating Earnings Before Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended
Sept 30, |
|
|
Pct.
Change |
|
|
Nine months
ended Sept 30, |
|
|
Pct.
Change |
|
| |
|
2014 |
|
|
2013 |
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
|
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net investment income |
|
$ |
287 |
|
|
$ |
259 |
|
|
|
11 |
% |
|
$ |
851 |
|
|
$ |
764 |
|
|
|
11 |
% |
| Other income |
|
|
20 |
|
|
|
17 |
|
|
|
18 |
% |
|
|
57 |
|
|
|
46 |
|
|
|
24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total revenues |
|
|
307 |
|
|
|
276 |
|
|
|
11 |
% |
|
|
908 |
|
|
|
810 |
|
|
|
12 |
% |
|
|
|
|
|
|
|
| Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annuity benefits |
|
|
157 |
|
|
|
140 |
|
|
|
12 |
% |
|
|
491 |
|
|
|
394 |
|
|
|
25 |
% |
| Acquisition expenses |
|
|
41 |
|
|
|
35 |
|
|
|
17 |
% |
|
|
109 |
|
|
|
114 |
|
|
|
(4 |
%) |
| Other expenses |
|
|
23 |
|
|
|
23 |
|
|
|
— |
|
|
|
65 |
|
|
|
66 |
|
|
|
(2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total costs and expenses |
|
|
221 |
|
|
|
198 |
|
|
|
12 |
% |
|
|
665 |
|
|
|
574 |
|
|
|
16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core operating earnings before income taxes |
|
$ |
86 |
|
|
$ |
78 |
|
|
|
10 |
% |
|
$ |
243 |
|
|
$ |
236 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Fixed Annuity Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended
Sept 30, |
|
|
Pct.
Change |
|
|
Nine months ended
Sept 30, |
|
|
Pct.
Change |
|
| |
|
2014 |
|
|
2013 |
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
|
| Core Operating Earnings Before impact of fair value accounting on FIAs |
|
$ |
87 |
|
|
$ |
78 |
|
|
|
12 |
% |
|
$ |
269 |
|
|
$ |
227 |
|
|
|
19 |
% |
| Impact of Fair Value Accounting |
|
|
(1 |
) |
|
|
— |
|
|
|
na |
|
|
|
(26 |
) |
|
|
9 |
|
|
|
na |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core operating earnings before income taxes |
|
$ |
86 |
|
|
$ |
78 |
|
|
|
10 |
% |
|
$ |
243 |
|
|
$ |
236 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Fixed Annuity Reserves* |
|
$ |
22,475 |
|
|
$ |
19,035 |
|
|
|
18 |
% |
|
$ |
21,790 |
|
|
$ |
18,231 |
|
|
|
20 |
% |
|
|
|
|
|
|
|
| Net Interest Spread* |
|
|
2.77 |
% |
|
|
2.89 |
% |
|
|
|
|
|
|
2.83 |
% |
|
|
2.97 |
% |
|
|
|
|
| Net Spread Earned Before Impact of Fair Value Accounting* |
|
|
1.50 |
% |
|
|
1.50 |
% |
|
|
|
|
|
|
1.57 |
% |
|
|
1.51 |
% |
|
|
|
|
| Net Spread Earned After Impact of Fair Value Accounting* |
|
|
1.48 |
% |
|
|
1.50 |
% |
|
|
|
|
|
|
1.41 |
% |
|
|
1.58 |
% |
|
|
|
|
| * |
Excludes fixed annuity portion of variable annuity business. |
Page 10
AMERICAN FINANCIAL GROUP, INC.
Notes to Financial Schedules
| a) |
Components of core net operating earnings (in millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended
Sept 30, |
|
|
Nine months ended
Sept 30, |
|
| |
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
| Core Operating Earnings before Income Taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| P&C insurance segment |
|
$ |
130 |
|
|
$ |
113 |
|
|
$ |
335 |
|
|
$ |
291 |
|
| Annuity segment |
|
|
86 |
|
|
|
78 |
|
|
|
243 |
|
|
|
236 |
|
| Run-off long-term care and life segment |
|
|
1 |
|
|
|
(4 |
) |
|
|
(3 |
) |
|
|
(7 |
) |
| Interest & other corporate expense |
|
|
(30 |
) |
|
|
(39 |
) |
|
|
(108 |
) |
|
|
(123 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core operating earnings before income taxes |
|
|
187 |
|
|
|
148 |
|
|
|
467 |
|
|
|
397 |
|
| Related income taxes |
|
|
60 |
|
|
|
51 |
|
|
|
150 |
|
|
|
129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core net operating earnings |
|
$ |
127 |
|
|
$ |
97 |
|
|
$ |
317 |
|
|
$ |
268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| b) |
Reflects the following effects of special A&E charges during the third quarter and first nine months of 2014 and 2013 (dollars in millions, except per share amounts): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Pretax |
|
|
After-tax |
|
|
EPS |
|
| |
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
| A&E Charge: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| P&C insurance run-off operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Asbestos |
|
$ |
4 |
|
|
$ |
16 |
|
|
$ |
3 |
|
|
$ |
10 |
|
|
|
|
|
|
|
|
|
| Environmental |
|
|
20 |
|
|
|
38 |
|
|
|
12 |
|
|
|
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
24 |
|
|
$ |
54 |
|
|
$ |
15 |
|
|
$ |
35 |
|
|
$ |
0.17 |
|
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Former railroad & manufacturing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Asbestos |
|
$ |
— |
|
|
$ |
2 |
|
|
$ |
— |
|
|
$ |
1 |
|
|
|
|
|
|
|
|
|
| Environmental |
|
|
6 |
|
|
|
20 |
|
|
|
4 |
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6 |
|
|
$ |
22 |
|
|
$ |
4 |
|
|
$ |
14 |
|
|
$ |
0.04 |
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total A&E |
|
$ |
30 |
|
|
$ |
76 |
|
|
$ |
19 |
|
|
$ |
49 |
|
|
$ |
0.21 |
|
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| c) |
Earnings before income taxes include $29 million and $47 million in non-deductible losses attributable to noncontrolling interests related to managed investment entities in the third quarter and first nine months of
2014, respectively, and $12 million of non-taxable income and $30 million in non-deductible losses in the third quarter and first nine months of 2013, respectively. |
| d) |
Shareholders’ Equity at September 30, 2014 includes $602 million ($6.80 per share) in unrealized after-tax gains on fixed maturities and $2 million ($0.02 per share) of retained earnings appropriated to
managed investment entities. Shareholders’ Equity at December 31, 2013 includes $441 million ($4.93 per share) in unrealized after-tax gains on fixed maturities and $49 million ($0.55 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. |
Page 11
| |
• |
|
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, 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 leasing and financing institutions (including collateral and lender-placed mortgage property insurance), surety and fidelity products and trade
credit insurance. |
| |
• |
|
Other includes an internal reinsurance facility. |
Page 12
Exhibit 99.2
|
|
|
|
|
|
| |
American Financial Group, Inc. |
| |
Investor Supplement - Third Quarter 2014 |
| |
October 28, 2014 |
| |
American Financial Group, Inc. |
| |
Corporate Headquarters |
| |
Great American Insurance Group Tower |
| |
301 E Fourth Street |
| |
Cincinnati, OH 45202 |
| |
513 579 6739 |
|
|
|
| American Financial Group, Inc.
Table of Contents - Investor Supplement - Third Quarter 2014 |
|
|
|
|
|
|
|
| Section |
|
Page |
|
|
|
| Table of Contents - Investor Supplement - Third Quarter 2014 |
|
|
2 |
|
| Financial Highlights |
|
|
3 |
|
| Summary of Earnings |
|
|
4 |
|
| Earnings Per Share Summary |
|
|
5 |
|
|
|
| Property and Casualty Insurance Segment |
|
|
|
|
| Property and Casualty Insurance - Summary Underwriting Results (GAAP) |
|
|
6 |
|
| Specialty - Underwriting Results (GAAP) |
|
|
7 |
|
| Property and Transportation - Underwriting Results (GAAP) |
|
|
8 |
|
| Specialty Casualty - Underwriting Results (GAAP) |
|
|
9 |
|
| Specialty Financial - Underwriting Results (GAAP) |
|
|
10 |
|
| Other Specialty - Underwriting Results (GAAP) |
|
|
11 |
|
|
|
| Annuity Segment |
|
|
|
|
| Annuity Earnings (GAAP) |
|
|
12 |
|
| Detail of Annuity Benefits Expense (GAAP) |
|
|
13 |
|
| Net Spread on Fixed Annuities (GAAP) |
|
|
14 |
|
| Annuity Premiums (Statutory) |
|
|
15 |
|
| Fixed Annuity Benefits Accumulated (GAAP) |
|
|
16 |
|
|
|
| Consolidated Balance Sheet / Book Value / Debt |
|
|
|
|
| Consolidated Balance Sheet |
|
|
17 |
|
| Book Value Per Share and Price / Book Summary |
|
|
18 |
|
| Capitalization |
|
|
19 |
|
| Additional Supplemental Information |
|
|
20 |
|
|
|
| Consolidated Investment Supplement |
|
|
|
|
| Total Cash and Investments and Quarterly Net Investment Income |
|
|
21 |
|
| Fixed Maturities - By Security Type - AFG Consolidated |
|
|
22 |
|
| Fixed Maturities - By Security Type Portfolio |
|
|
23 |
|
| Fixed Maturities - Credit Rating and NAIC Designation |
|
|
24 |
|
| Mortgage-Backed Securities - AFG Consolidated |
|
|
25 |
|
| Mortgage-Backed Securities Portfolio |
|
|
26 |
|
| Mortgage-Backed Securities - Credit Rating and NAIC Designation |
|
|
27 |
|
2
|
|
|
| American Financial Group, Inc.
Financial Highlights (in millions, except per share
information) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Highlights |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core net operating earnings |
|
$ |
127 |
|
|
$ |
99 |
|
|
$ |
91 |
|
|
$ |
117 |
|
|
$ |
97 |
|
|
$ |
317 |
|
|
$ |
268 |
|
| Net earnings |
|
|
116 |
|
|
|
106 |
|
|
|
103 |
|
|
|
158 |
|
|
|
83 |
|
|
|
325 |
|
|
|
313 |
|
| Total assets |
|
|
46,552 |
|
|
|
45,355 |
|
|
|
42,770 |
|
|
|
42,087 |
|
|
|
40,947 |
|
|
|
46,552 |
|
|
|
40,947 |
|
| Adjusted shareholders’ equity (a) |
|
|
4,300 |
|
|
|
4,298 |
|
|
|
4,191 |
|
|
|
4,109 |
|
|
|
4,048 |
|
|
|
4,300 |
|
|
|
4,048 |
|
| Property and Casualty net written premiums |
|
|
1,242 |
|
|
|
998 |
|
|
|
755 |
|
|
|
821 |
|
|
|
1,067 |
|
|
|
2,995 |
|
|
|
2,520 |
|
| Annuity statutory premiums |
|
|
809 |
|
|
|
949 |
|
|
|
967 |
|
|
|
1,381 |
|
|
|
1,167 |
|
|
|
2,725 |
|
|
|
2,652 |
|
|
|
|
|
|
|
|
|
| Per share data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core net operating earnings per share |
|
$ |
1.40 |
|
|
$ |
1.07 |
|
|
$ |
1.00 |
|
|
$ |
1.28 |
|
|
$ |
1.06 |
|
|
$ |
3.47 |
|
|
$ |
2.94 |
|
| Diluted earnings per share |
|
|
1.28 |
|
|
|
1.15 |
|
|
|
1.13 |
|
|
|
1.73 |
|
|
|
0.92 |
|
|
|
3.56 |
|
|
|
3.44 |
|
| Adjusted book value per share (a) |
|
|
48.59 |
|
|
|
47.95 |
|
|
|
46.79 |
|
|
|
45.90 |
|
|
|
45.36 |
|
|
|
48.59 |
|
|
|
45.36 |
|
|
|
|
|
|
|
|
|
| Cash dividends per common share |
|
|
0.220 |
|
|
|
0.220 |
|
|
|
0.220 |
|
|
|
1.220 |
|
|
|
0.195 |
|
|
|
0.660 |
|
|
|
0.585 |
|
|
|
|
|
|
|
|
|
| Financial ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annualized core operating return on equity (b) |
|
|
12.3 |
% |
|
|
9.6 |
% |
|
|
9.1 |
% |
|
|
11.8 |
% |
|
|
10.0 |
% |
|
|
10.3 |
% |
|
|
9.4 |
% |
| Annualized return on equity (b) |
|
|
11.1 |
% |
|
|
10.3 |
% |
|
|
10.3 |
% |
|
|
16.0 |
% |
|
|
8.6 |
% |
|
|
10.6 |
% |
|
|
11.0 |
% |
|
|
|
|
|
|
|
|
| Property and Casualty combined ratio - Specialty: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss & LAE ratio |
|
|
67.1 |
% |
|
|
64.6 |
% |
|
|
56.9 |
% |
|
|
62.4 |
% |
|
|
66.1 |
% |
|
|
63.6 |
% |
|
|
61.5 |
% |
| Underwriting expense ratio |
|
|
26.7 |
% |
|
|
32.3 |
% |
|
|
35.3 |
% |
|
|
28.9 |
% |
|
|
27.4 |
% |
|
|
30.8 |
% |
|
|
32.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio - Specialty |
|
|
93.8 |
% |
|
|
96.9 |
% |
|
|
92.2 |
% |
|
|
91.3 |
% |
|
|
93.5 |
% |
|
|
94.4 |
% |
|
|
94.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net spread on fixed annuities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest spread |
|
|
2.77 |
% |
|
|
2.92 |
% |
|
|
2.81 |
% |
|
|
2.86 |
% |
|
|
2.89 |
% |
|
|
2.83 |
% |
|
|
2.97 |
% |
| Net spread earned: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Before impact of fair value accounting |
|
|
1.50 |
% |
|
|
1.64 |
% |
|
|
1.58 |
% |
|
|
1.55 |
% |
|
|
1.50 |
% |
|
|
1.57 |
% |
|
|
1.51 |
% |
| Impact of fair value accounting (c) |
|
|
(0.02 |
%) |
|
|
(0.18 |
%) |
|
|
(0.28 |
%) |
|
|
0.12 |
% |
|
|
0.00 |
% |
|
|
(0.16 |
%) |
|
|
0.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| After impact of fair value accounting |
|
|
1.48 |
% |
|
|
1.46 |
% |
|
|
1.30 |
% |
|
|
1.67 |
% |
|
|
1.50 |
% |
|
|
1.41 |
% |
|
|
1.58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
Excludes appropriated retained earnings and unrealized gains related to fixed maturity investments. |
| (b) |
Excludes appropriated retained earnings and accumulated other comprehensive income. |
| (c) |
Change in fair value of derivatives offset by the estimated related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs. |
3
|
|
|
| American Financial Group, Inc.
Summary of Earnings ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
| Property and Casualty Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Underwriting profit |
|
$ |
70 |
|
|
$ |
29 |
|
|
$ |
58 |
|
|
$ |
75 |
|
|
$ |
62 |
|
|
$ |
157 |
|
|
$ |
124 |
|
| Net investment income |
|
|
76 |
|
|
|
76 |
|
|
|
67 |
|
|
|
67 |
|
|
|
65 |
|
|
|
219 |
|
|
|
196 |
|
| Other expense |
|
|
(16 |
) |
|
|
(8 |
) |
|
|
(17 |
) |
|
|
(11 |
) |
|
|
(14 |
) |
|
|
(41 |
) |
|
|
(29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and Casualty Insurance operating earnings |
|
|
130 |
|
|
|
97 |
|
|
|
108 |
|
|
|
131 |
|
|
|
113 |
|
|
|
335 |
|
|
|
291 |
|
|
|
|
|
|
|
|
|
| Annuity earnings |
|
|
86 |
|
|
|
84 |
|
|
|
73 |
|
|
|
92 |
|
|
|
78 |
|
|
|
243 |
|
|
|
236 |
|
| Run-off Long-Term Care and Life losses |
|
|
1 |
|
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(3 |
) |
|
|
(7 |
) |
| Interest expense of parent holding companies |
|
|
(17 |
) |
|
|
(16 |
) |
|
|
(17 |
) |
|
|
(17 |
) |
|
|
(17 |
) |
|
|
(50 |
) |
|
|
(51 |
) |
| Other expense |
|
|
(13 |
) |
|
|
(21 |
) |
|
|
(24 |
) |
|
|
(28 |
) |
|
|
(22 |
) |
|
|
(58 |
) |
|
|
(72 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pre-tax core operating earnings |
|
|
187 |
|
|
|
142 |
|
|
|
138 |
|
|
|
175 |
|
|
|
148 |
|
|
|
467 |
|
|
|
397 |
|
|
|
|
|
|
|
|
|
| Income tax expense |
|
|
60 |
|
|
|
43 |
|
|
|
47 |
|
|
|
58 |
|
|
|
51 |
|
|
|
150 |
|
|
|
129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core net operating earnings |
|
|
127 |
|
|
|
99 |
|
|
|
91 |
|
|
|
117 |
|
|
|
97 |
|
|
|
317 |
|
|
|
268 |
|
|
|
|
|
|
|
|
|
| Non-core items, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized gains |
|
|
8 |
|
|
|
7 |
|
|
|
12 |
|
|
|
41 |
|
|
|
35 |
|
|
|
27 |
|
|
|
97 |
|
| Significant A&E charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and Casualty Insurance run-off operations |
|
|
(15 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(35 |
) |
|
|
(15 |
) |
|
|
(35 |
) |
| Former Railroad and Manufacturing operations |
|
|
(4 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(14 |
) |
|
|
(4 |
) |
|
|
(14 |
) |
| ELNY guaranty fund assessments charge (a) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings |
|
$ |
116 |
|
|
$ |
106 |
|
|
$ |
103 |
|
|
$ |
158 |
|
|
$ |
83 |
|
|
$ |
325 |
|
|
$ |
313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
The ELNY guaranty fund assessments charge represent guaranty fund assessments in connection with the insolvency and liquidation of Executive Life Insurance Company of New York, an unaffiliated life insurance company.
|
4
|
|
|
| American Financial Group, Inc.
Earnings Per Share Summary (in millions, except per share
information) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Core net operating earnings |
|
$ |
127 |
|
|
$ |
99 |
|
|
$ |
91 |
|
|
$ |
117 |
|
|
$ |
97 |
|
|
$ |
317 |
|
|
$ |
268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings |
|
$ |
116 |
|
|
$ |
106 |
|
|
$ |
103 |
|
|
$ |
158 |
|
|
$ |
83 |
|
|
$ |
325 |
|
|
$ |
313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average number of diluted shares |
|
|
90.873 |
|
|
|
91.593 |
|
|
|
91.621 |
|
|
|
91.438 |
|
|
|
91.014 |
|
|
|
91.360 |
|
|
|
91.176 |
|
|
|
|
|
|
|
|
|
| Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core net operating earnings per share |
|
$ |
1.40 |
|
|
$ |
1.07 |
|
|
$ |
1.00 |
|
|
$ |
1.28 |
|
|
$ |
1.06 |
|
|
$ |
3.47 |
|
|
$ |
2.94 |
|
|
|
|
|
|
|
|
|
| Realized gains |
|
|
0.09 |
|
|
|
0.08 |
|
|
|
0.13 |
|
|
|
0.45 |
|
|
|
0.40 |
|
|
|
0.30 |
|
|
|
1.08 |
|
| Significant A&E charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and Casualty Insurance run-off operations |
|
|
(0.17 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.39 |
) |
|
|
(0.17 |
) |
|
|
(0.39 |
) |
| Former Railroad and Manufacturing operations |
|
|
(0.04 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.15 |
) |
|
|
(0.04 |
) |
|
|
(0.15 |
) |
| ELNY guaranty fund assessments charge (a) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per share |
|
$ |
1.28 |
|
|
$ |
1.15 |
|
|
$ |
1.13 |
|
|
$ |
1.73 |
|
|
$ |
0.92 |
|
|
$ |
3.56 |
|
|
$ |
3.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
The ELNY guaranty fund assessments charge represent guaranty fund assessments in connection with the insolvency and liquidation of Executive Life Insurance Company of New York, an unaffiliated life insurance company.
|
5
|
|
|
| American Financial Group, Inc.
Property and Casualty Insurance - Summary Underwriting Results (GAAP)
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Property and Transportation |
|
$ |
11 |
|
|
$ |
(18 |
) |
|
$ |
6 |
|
|
$ |
17 |
|
|
$ |
16 |
|
|
$ |
(1 |
) |
|
$ |
(5 |
) |
| Specialty Casualty |
|
|
32 |
|
|
|
30 |
|
|
|
38 |
|
|
|
32 |
|
|
|
19 |
|
|
|
100 |
|
|
|
70 |
|
| Specialty Financial |
|
|
21 |
|
|
|
15 |
|
|
|
10 |
|
|
|
17 |
|
|
|
22 |
|
|
|
46 |
|
|
|
50 |
|
| Other Specialty |
|
|
6 |
|
|
|
2 |
|
|
|
5 |
|
|
|
9 |
|
|
|
5 |
|
|
|
13 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Underwriting profit - Specialty |
|
|
70 |
|
|
|
29 |
|
|
|
59 |
|
|
|
75 |
|
|
|
62 |
|
|
|
158 |
|
|
|
131 |
|
|
|
|
|
|
|
|
|
| Other charges, included in loss and LAE |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Underwriting profit - Core |
|
|
70 |
|
|
|
29 |
|
|
|
58 |
|
|
|
75 |
|
|
|
62 |
|
|
|
157 |
|
|
|
124 |
|
|
|
|
|
|
|
|
|
| Special A&E charges, included in loss and LAE |
|
|
(24 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(54 |
) |
|
|
(24 |
) |
|
|
(54 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Underwriting profit - Property and Casualty Insurance |
|
$ |
46 |
|
|
$ |
29 |
|
|
$ |
58 |
|
|
$ |
75 |
|
|
$ |
8 |
|
|
$ |
133 |
|
|
$ |
70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Included in results above: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year catastrophe losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Catastrophe reinstatement premium |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(1 |
) |
|
$ |
— |
|
|
$ |
— |
|
| Catastrophe loss |
|
|
3 |
|
|
|
10 |
|
|
|
12 |
|
|
|
1 |
|
|
|
2 |
|
|
|
25 |
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total current accident year catastrophe losses |
|
$ |
3 |
|
|
$ |
10 |
|
|
$ |
12 |
|
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
25 |
|
|
$ |
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Prior year loss reserve development (favorable) / adverse |
|
$ |
13 |
|
|
$ |
14 |
|
|
$ |
(31 |
) |
|
$ |
(5 |
) |
|
$ |
40 |
|
|
$ |
(4 |
) |
|
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and Transportation |
|
|
97.8 |
% |
|
|
105.5 |
% |
|
|
98.1 |
% |
|
|
95.8 |
% |
|
|
97.1 |
% |
|
|
100.1 |
% |
|
|
100.4 |
% |
| Specialty Casualty |
|
|
93.3 |
% |
|
|
93.6 |
% |
|
|
87.8 |
% |
|
|
89.7 |
% |
|
|
93.4 |
% |
|
|
92.1 |
% |
|
|
91.5 |
% |
| Specialty Financial |
|
|
81.6 |
% |
|
|
87.6 |
% |
|
|
91.0 |
% |
|
|
85.2 |
% |
|
|
82.3 |
% |
|
|
86.7 |
% |
|
|
85.8 |
% |
| Other Specialty |
|
|
78.0 |
% |
|
|
89.0 |
% |
|
|
79.9 |
% |
|
|
60.4 |
% |
|
|
70.7 |
% |
|
|
82.1 |
% |
|
|
71.9 |
% |
| Combined ratio - Specialty |
|
|
93.8 |
% |
|
|
96.9 |
% |
|
|
92.2 |
% |
|
|
91.3 |
% |
|
|
93.5 |
% |
|
|
94.4 |
% |
|
|
94.4 |
% |
|
|
|
|
|
|
|
|
| Other core charges |
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
0.1 |
% |
|
|
(0.1 |
%) |
|
|
0.0 |
% |
|
|
0.3 |
% |
| Special A&E charges |
|
|
2.1 |
% |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
5.7 |
% |
|
|
0.8 |
% |
|
|
2.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio |
|
|
96.0 |
% |
|
|
96.9 |
% |
|
|
92.2 |
% |
|
|
91.4 |
% |
|
|
99.1 |
% |
|
|
95.2 |
% |
|
|
97.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio excl. catastrophe and prior year development |
|
|
94.5 |
% |
|
|
94.4 |
% |
|
|
94.8 |
% |
|
|
91.7 |
% |
|
|
94.8 |
% |
|
|
94.5 |
% |
|
|
96.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE components - property and casualty insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year, excluding catastrophe loss |
|
|
67.8 |
% |
|
|
62.1 |
% |
|
|
59.4 |
% |
|
|
62.8 |
% |
|
|
67.4 |
% |
|
|
63.7 |
% |
|
|
63.3 |
% |
| Prior accident year loss reserve development |
|
|
1.2 |
% |
|
|
1.4 |
% |
|
|
(4.1 |
%) |
|
|
(0.4 |
%) |
|
|
4.2 |
% |
|
|
(0.2 |
%) |
|
|
(0.5 |
%) |
| Current accident year catastrophe loss |
|
|
0.3 |
% |
|
|
1.1 |
% |
|
|
1.6 |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
|
|
0.9 |
% |
|
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE ratio |
|
|
69.3 |
% |
|
|
64.6 |
% |
|
|
56.9 |
% |
|
|
62.5 |
% |
|
|
71.7 |
% |
|
|
64.4 |
% |
|
|
64.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
| American Financial Group, Inc.
Specialty - Underwriting Results (GAAP) ($ in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Gross written premiums |
|
$ |
1,859 |
|
|
$ |
1,291 |
|
|
$ |
1,024 |
|
|
$ |
1,071 |
|
|
$ |
1,768 |
|
|
$ |
4,174 |
|
|
$ |
3,734 |
|
| Ceded reinsurance premiums |
|
|
(617 |
) |
|
|
(293 |
) |
|
|
(269 |
) |
|
|
(250 |
) |
|
|
(701 |
) |
|
|
(1,179 |
) |
|
|
(1,214 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net written premiums |
|
|
1,242 |
|
|
|
998 |
|
|
|
755 |
|
|
|
821 |
|
|
|
1,067 |
|
|
|
2,995 |
|
|
|
2,520 |
|
| Change in unearned premiums |
|
|
(110 |
) |
|
|
(67 |
) |
|
|
(1 |
) |
|
|
38 |
|
|
|
(118 |
) |
|
|
(178 |
) |
|
|
(175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earned premiums |
|
|
1,132 |
|
|
|
931 |
|
|
|
754 |
|
|
|
859 |
|
|
|
949 |
|
|
|
2,817 |
|
|
|
2,345 |
|
|
|
|
|
|
|
|
|
| Loss and LAE |
|
|
760 |
|
|
|
602 |
|
|
|
428 |
|
|
|
537 |
|
|
|
626 |
|
|
|
1,790 |
|
|
|
1,442 |
|
| Underwriting expense |
|
|
302 |
|
|
|
300 |
|
|
|
267 |
|
|
|
247 |
|
|
|
261 |
|
|
|
869 |
|
|
|
772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Underwriting profit |
|
$ |
70 |
|
|
$ |
29 |
|
|
$ |
59 |
|
|
$ |
75 |
|
|
$ |
62 |
|
|
$ |
158 |
|
|
$ |
131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Included in results above: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year catastrophe losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Catastrophe reinstatement premium |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(1 |
) |
|
$ |
— |
|
|
$ |
— |
|
| Catastrophe loss |
|
|
3 |
|
|
|
10 |
|
|
|
12 |
|
|
|
1 |
|
|
|
2 |
|
|
|
25 |
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total current accident year catastrophe losses |
|
$ |
3 |
|
|
$ |
10 |
|
|
$ |
12 |
|
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
25 |
|
|
$ |
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Prior year loss reserve development (favorable) / adverse |
|
$ |
(11 |
) |
|
$ |
14 |
|
|
$ |
(32 |
) |
|
$ |
(5 |
) |
|
$ |
(13 |
) |
|
$ |
(29 |
) |
|
$ |
(70 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE ratio |
|
|
67.1 |
% |
|
|
64.6 |
% |
|
|
56.9 |
% |
|
|
62.4 |
% |
|
|
66.1 |
% |
|
|
63.6 |
% |
|
|
61.5 |
% |
| Underwriting expense ratio |
|
|
26.7 |
% |
|
|
32.3 |
% |
|
|
35.3 |
% |
|
|
28.9 |
% |
|
|
27.4 |
% |
|
|
30.8 |
% |
|
|
32.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio |
|
|
93.8 |
% |
|
|
96.9 |
% |
|
|
92.2 |
% |
|
|
91.3 |
% |
|
|
93.5 |
% |
|
|
94.4 |
% |
|
|
94.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio excl. catastrophe and prior year development |
|
|
94.5 |
% |
|
|
94.4 |
% |
|
|
94.8 |
% |
|
|
91.7 |
% |
|
|
94.8 |
% |
|
|
94.5 |
% |
|
|
96.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE components: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year, excluding catastrophe loss |
|
|
67.8 |
% |
|
|
62.1 |
% |
|
|
59.5 |
% |
|
|
62.8 |
% |
|
|
67.4 |
% |
|
|
63.7 |
% |
|
|
63.3 |
% |
| Prior accident year loss reserve development |
|
|
(1.0 |
%) |
|
|
1.4 |
% |
|
|
(4.2 |
%) |
|
|
(0.5 |
%) |
|
|
(1.4 |
%) |
|
|
(1.0 |
%) |
|
|
(3.1 |
%) |
| Current accident year catastrophe loss |
|
|
0.3 |
% |
|
|
1.1 |
% |
|
|
1.6 |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
|
|
0.9 |
% |
|
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE ratio |
|
|
67.1 |
% |
|
|
64.6 |
% |
|
|
56.9 |
% |
|
|
62.4 |
% |
|
|
66.1 |
% |
|
|
63.6 |
% |
|
|
61.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
| American Financial Group, Inc.
Property and Transportation - Underwriting Results (GAAP)
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Gross written premiums |
|
$ |
995 |
|
|
$ |
489 |
|
|
$ |
376 |
|
|
$ |
447 |
|
|
$ |
1,147 |
|
|
$ |
1,860 |
|
|
$ |
1,945 |
|
| Ceded reinsurance premiums |
|
|
(439 |
) |
|
|
(136 |
) |
|
|
(92 |
) |
|
|
(98 |
) |
|
|
(553 |
) |
|
|
(667 |
) |
|
|
(747 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net written premiums |
|
|
556 |
|
|
|
353 |
|
|
|
284 |
|
|
|
349 |
|
|
|
594 |
|
|
|
1,193 |
|
|
|
1,198 |
|
| Change in unearned premiums |
|
|
(52 |
) |
|
|
(29 |
) |
|
|
17 |
|
|
|
61 |
|
|
|
(77 |
) |
|
|
(64 |
) |
|
|
(87 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earned premiums |
|
|
504 |
|
|
|
324 |
|
|
|
301 |
|
|
|
410 |
|
|
|
517 |
|
|
|
1,129 |
|
|
|
1,111 |
|
|
|
|
|
|
|
|
|
| Loss and LAE |
|
|
407 |
|
|
|
248 |
|
|
|
201 |
|
|
|
307 |
|
|
|
407 |
|
|
|
856 |
|
|
|
835 |
|
| Underwriting expense |
|
|
86 |
|
|
|
94 |
|
|
|
94 |
|
|
|
86 |
|
|
|
94 |
|
|
|
274 |
|
|
|
281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Underwriting profit (loss) |
|
$ |
11 |
|
|
$ |
(18 |
) |
|
$ |
6 |
|
|
$ |
17 |
|
|
$ |
16 |
|
|
$ |
(1 |
) |
|
$ |
(5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Included in results above: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year catastrophe losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Catastrophe reinstatement premium |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(1 |
) |
|
$ |
— |
|
|
$ |
— |
|
| Catastrophe loss |
|
|
1 |
|
|
|
8 |
|
|
|
9 |
|
|
|
— |
|
|
|
— |
|
|
|
18 |
|
|
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total current accident year catastrophe losses |
|
$ |
1 |
|
|
$ |
8 |
|
|
$ |
9 |
|
|
$ |
— |
|
|
$ |
(1 |
) |
|
$ |
18 |
|
|
$ |
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Prior year loss reserve development (favorable) / adverse |
|
$ |
(5 |
) |
|
$ |
22 |
|
|
$ |
(4 |
) |
|
$ |
3 |
|
|
$ |
(1 |
) |
|
$ |
13 |
|
|
$ |
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE ratio |
|
|
80.7 |
% |
|
|
76.4 |
% |
|
|
67.0 |
% |
|
|
74.9 |
% |
|
|
78.8 |
% |
|
|
75.8 |
% |
|
|
75.1 |
% |
| Underwriting expense ratio |
|
|
17.1 |
% |
|
|
29.1 |
% |
|
|
31.1 |
% |
|
|
20.9 |
% |
|
|
18.3 |
% |
|
|
24.3 |
% |
|
|
25.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio |
|
|
97.8 |
% |
|
|
105.5 |
% |
|
|
98.1 |
% |
|
|
95.8 |
% |
|
|
97.1 |
% |
|
|
100.1 |
% |
|
|
100.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio excl. catastrophe and prior year development |
|
|
98.5 |
% |
|
|
96.2 |
% |
|
|
96.4 |
% |
|
|
95.0 |
% |
|
|
97.4 |
% |
|
|
97.3 |
% |
|
|
98.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE components: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year, excluding catastrophe loss |
|
|
81.4 |
% |
|
|
67.1 |
% |
|
|
65.3 |
% |
|
|
74.1 |
% |
|
|
79.1 |
% |
|
|
73.0 |
% |
|
|
73.1 |
% |
| Prior accident year loss reserve development |
|
|
(0.9 |
%) |
|
|
6.6 |
% |
|
|
(1.1 |
%) |
|
|
0.8 |
% |
|
|
(0.2 |
%) |
|
|
1.2 |
% |
|
|
(0.4 |
%) |
| Current accident year catastrophe loss |
|
|
0.2 |
% |
|
|
2.7 |
% |
|
|
2.8 |
% |
|
|
0.0 |
% |
|
|
(0.1 |
%) |
|
|
1.6 |
% |
|
|
2.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE ratio |
|
|
80.7 |
% |
|
|
76.4 |
% |
|
|
67.0 |
% |
|
|
74.9 |
% |
|
|
78.8 |
% |
|
|
75.8 |
% |
|
|
75.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
| American Financial Group, Inc.
Specialty Casualty - Underwriting Results (GAAP) ($ in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Gross written premiums |
|
$ |
707 |
|
|
$ |
655 |
|
|
$ |
507 |
|
|
$ |
459 |
|
|
$ |
461 |
|
|
$ |
1,869 |
|
|
$ |
1,331 |
|
| Ceded reinsurance premiums |
|
|
(171 |
) |
|
|
(156 |
) |
|
|
(176 |
) |
|
|
(138 |
) |
|
|
(136 |
) |
|
|
(503 |
) |
|
|
(428 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net written premiums |
|
|
536 |
|
|
|
499 |
|
|
|
331 |
|
|
|
321 |
|
|
|
325 |
|
|
|
1,366 |
|
|
|
903 |
|
| Change in unearned premiums |
|
|
(50 |
) |
|
|
(32 |
) |
|
|
(18 |
) |
|
|
(11 |
) |
|
|
(36 |
) |
|
|
(100 |
) |
|
|
(78 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earned premiums |
|
|
486 |
|
|
|
467 |
|
|
|
313 |
|
|
|
310 |
|
|
|
289 |
|
|
|
1,266 |
|
|
|
825 |
|
|
|
|
|
|
|
|
|
| Loss and LAE |
|
|
310 |
|
|
|
300 |
|
|
|
172 |
|
|
|
183 |
|
|
|
174 |
|
|
|
782 |
|
|
|
470 |
|
| Underwriting expense |
|
|
144 |
|
|
|
137 |
|
|
|
103 |
|
|
|
95 |
|
|
|
96 |
|
|
|
384 |
|
|
|
285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Underwriting profit |
|
$ |
32 |
|
|
$ |
30 |
|
|
$ |
38 |
|
|
$ |
32 |
|
|
$ |
19 |
|
|
$ |
100 |
|
|
$ |
70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Included in results above: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year catastrophe losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Catastrophe reinstatement premium |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Catastrophe loss |
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
3 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total current accident year catastrophe losses |
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
3 |
|
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Prior year loss reserve development (favorable) / adverse |
|
$ |
7 |
|
|
$ |
(4 |
) |
|
$ |
(24 |
) |
|
$ |
2 |
|
|
$ |
(4 |
) |
|
$ |
(21 |
) |
|
$ |
(42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE ratio |
|
|
63.7 |
% |
|
|
64.3 |
% |
|
|
55.0 |
% |
|
|
59.0 |
% |
|
|
60.3 |
% |
|
|
61.8 |
% |
|
|
57.1 |
% |
| Underwriting expense ratio |
|
|
29.6 |
% |
|
|
29.3 |
% |
|
|
32.8 |
% |
|
|
30.7 |
% |
|
|
33.1 |
% |
|
|
30.3 |
% |
|
|
34.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio |
|
|
93.3 |
% |
|
|
93.6 |
% |
|
|
87.8 |
% |
|
|
89.7 |
% |
|
|
93.4 |
% |
|
|
92.1 |
% |
|
|
91.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio excl. catastrophe and prior year development |
|
|
91.6 |
% |
|
|
94.3 |
% |
|
|
95.1 |
% |
|
|
89.2 |
% |
|
|
94.5 |
% |
|
|
93.5 |
% |
|
|
96.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE components: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year, excluding catastrophe loss |
|
|
62.0 |
% |
|
|
65.0 |
% |
|
|
62.3 |
% |
|
|
58.5 |
% |
|
|
61.4 |
% |
|
|
63.2 |
% |
|
|
62.0 |
% |
| Prior accident year loss reserve development |
|
|
1.3 |
% |
|
|
(0.8 |
%) |
|
|
(7.7 |
%) |
|
|
0.5 |
% |
|
|
(1.2 |
%) |
|
|
(1.7 |
%) |
|
|
(5.0 |
%) |
| Current accident year catastrophe loss |
|
|
0.4 |
% |
|
|
0.1 |
% |
|
|
0.4 |
% |
|
|
0.0 |
% |
|
|
0.1 |
% |
|
|
0.3 |
% |
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE ratio |
|
|
63.7 |
% |
|
|
64.3 |
% |
|
|
55.0 |
% |
|
|
59.0 |
% |
|
|
60.3 |
% |
|
|
61.8 |
% |
|
|
57.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
| American Financial Group, Inc.
Specialty Financial - Underwriting Results (GAAP) ($ in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Gross written premiums |
|
$ |
157 |
|
|
$ |
147 |
|
|
$ |
141 |
|
|
$ |
164 |
|
|
$ |
160 |
|
|
$ |
445 |
|
|
$ |
458 |
|
| Ceded reinsurance premiums |
|
|
(36 |
) |
|
|
(27 |
) |
|
|
(25 |
) |
|
|
(32 |
) |
|
|
(36 |
) |
|
|
(88 |
) |
|
|
(104 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net written premiums |
|
|
121 |
|
|
|
120 |
|
|
|
116 |
|
|
|
132 |
|
|
|
124 |
|
|
|
357 |
|
|
|
354 |
|
| Change in unearned premiums |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
1 |
|
|
|
(13 |
) |
|
|
(3 |
) |
|
|
(9 |
) |
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earned premiums |
|
|
115 |
|
|
|
116 |
|
|
|
117 |
|
|
|
119 |
|
|
|
121 |
|
|
|
348 |
|
|
|
350 |
|
|
|
|
|
|
|
|
|
| Loss and LAE |
|
|
32 |
|
|
|
40 |
|
|
|
45 |
|
|
|
42 |
|
|
|
37 |
|
|
|
117 |
|
|
|
116 |
|
| Underwriting expense |
|
|
62 |
|
|
|
61 |
|
|
|
62 |
|
|
|
60 |
|
|
|
62 |
|
|
|
185 |
|
|
|
184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Underwriting profit |
|
$ |
21 |
|
|
$ |
15 |
|
|
$ |
10 |
|
|
$ |
17 |
|
|
$ |
22 |
|
|
$ |
46 |
|
|
$ |
50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Included in results above: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year catastrophe losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Catastrophe reinstatement premium |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Catastrophe loss |
|
|
— |
|
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total current accident year catastrophe losses |
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
2 |
|
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
3 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Prior year loss reserve development (favorable) / adverse |
|
$ |
(10 |
) |
|
$ |
(2 |
) |
|
$ |
(1 |
) |
|
$ |
(4 |
) |
|
$ |
(4 |
) |
|
$ |
(13 |
) |
|
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE ratio |
|
|
27.7 |
% |
|
|
35.3 |
% |
|
|
37.9 |
% |
|
|
34.2 |
% |
|
|
31.2 |
% |
|
|
33.6 |
% |
|
|
33.3 |
% |
| Underwriting expense ratio |
|
|
53.9 |
% |
|
|
52.3 |
% |
|
|
53.1 |
% |
|
|
51.0 |
% |
|
|
51.1 |
% |
|
|
53.1 |
% |
|
|
52.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio |
|
|
81.6 |
% |
|
|
87.6 |
% |
|
|
91.0 |
% |
|
|
85.2 |
% |
|
|
82.3 |
% |
|
|
86.7 |
% |
|
|
85.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio excl. catastrophe and prior year development |
|
|
90.3 |
% |
|
|
88.6 |
% |
|
|
90.2 |
% |
|
|
87.7 |
% |
|
|
84.8 |
% |
|
|
89.7 |
% |
|
|
88.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE components: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year, excluding catastrophe loss |
|
|
36.4 |
% |
|
|
36.3 |
% |
|
|
37.1 |
% |
|
|
36.7 |
% |
|
|
33.7 |
% |
|
|
36.6 |
% |
|
|
35.6 |
% |
| Prior accident year loss reserve development |
|
|
(9.0 |
%) |
|
|
(1.8 |
%) |
|
|
(0.7 |
%) |
|
|
(3.2 |
%) |
|
|
(3.2 |
%) |
|
|
(3.9 |
%) |
|
|
(2.9 |
%) |
| Current accident year catastrophe loss |
|
|
0.3 |
% |
|
|
0.8 |
% |
|
|
1.5 |
% |
|
|
0.7 |
% |
|
|
0.7 |
% |
|
|
0.9 |
% |
|
|
0.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE ratio |
|
|
27.7 |
% |
|
|
35.3 |
% |
|
|
37.9 |
% |
|
|
34.2 |
% |
|
|
31.2 |
% |
|
|
33.6 |
% |
|
|
33.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
| American Financial Group, Inc.
Other Specialty - Underwriting Results (GAAP) ($ in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Gross written premiums |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Ceded reinsurance premiums |
|
|
29 |
|
|
|
26 |
|
|
|
24 |
|
|
|
18 |
|
|
|
24 |
|
|
|
79 |
|
|
|
65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net written premiums |
|
|
29 |
|
|
|
26 |
|
|
|
24 |
|
|
|
19 |
|
|
|
24 |
|
|
|
79 |
|
|
|
65 |
|
| Change in unearned premiums |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
1 |
|
|
|
(2 |
) |
|
|
(5 |
) |
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earned premiums |
|
|
27 |
|
|
|
24 |
|
|
|
23 |
|
|
|
20 |
|
|
|
22 |
|
|
|
74 |
|
|
|
59 |
|
|
|
|
|
|
|
|
|
| Loss and LAE |
|
|
11 |
|
|
|
14 |
|
|
|
10 |
|
|
|
5 |
|
|
|
8 |
|
|
|
35 |
|
|
|
21 |
|
| Underwriting expense |
|
|
10 |
|
|
|
8 |
|
|
|
8 |
|
|
|
6 |
|
|
|
9 |
|
|
|
26 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Underwriting profit |
|
$ |
6 |
|
|
$ |
2 |
|
|
$ |
5 |
|
|
$ |
9 |
|
|
$ |
5 |
|
|
$ |
13 |
|
|
$ |
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Included in results above: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current accident year catastrophe losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Catastrophe reinstatement premium |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Catastrophe loss |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total current accident year catastrophe losses |
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Prior year loss reserve development (favorable) / adverse |
|
$ |
(3 |
) |
|
$ |
(2 |
) |
|
$ |
(3 |
) |
|
$ |
(6 |
) |
|
$ |
(4 |
) |
|
$ |
(8 |
) |
|
$ |
(14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss and LAE ratio |
|
|
43.4 |
% |
|
|
53.2 |
% |
|
|
45.8 |
% |
|
|
28.3 |
% |
|
|
35.0 |
% |
|
|
47.3 |
% |
|
|
34.6 |
% |
| Underwriting expense ratio |
|
|
34.6 |
% |
|
|
35.8 |
% |
|
|
34.1 |
% |
|
|
32.1 |
% |
|
|
35.7 |
% |
|
|
34.8 |
% |
|
|
37.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio |
|
|
78.0 |
% |
|
|
89.0 |
% |
|
|
79.9 |
% |
|
|
60.4 |
% |
|
|
70.7 |
% |
|
|
82.1 |
% |
|
|
71.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined ratio excl. catastrophe and prior year development |
|
|
85.6 |
% |
|
|
97.1 |
% |
|
|
91.4 |
% |
|
|
87.5 |
% |
|
|
90.1 |
% |
|
|
91.1 |
% |
|
|
95.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
|
|
|
| American Financial Group, Inc.
Annuity Earnings (GAAP) ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Net investment income |
|
$ |
287 |
|
|
$ |
289 |
|
|
$ |
275 |
|
|
$ |
270 |
|
|
$ |
259 |
|
|
$ |
851 |
|
|
$ |
764 |
|
| Guaranteed withdrawal benefit fees |
|
|
9 |
|
|
|
8 |
|
|
|
8 |
|
|
|
7 |
|
|
|
7 |
|
|
|
25 |
|
|
|
18 |
|
| Policy charges and other miscellaneous income |
|
|
11 |
|
|
|
11 |
|
|
|
10 |
|
|
|
14 |
|
|
|
10 |
|
|
|
32 |
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total revenues |
|
|
307 |
|
|
|
308 |
|
|
|
293 |
|
|
|
291 |
|
|
|
276 |
|
|
|
908 |
|
|
|
810 |
|
|
|
|
|
|
|
|
|
| Annuity benefits expense |
|
|
157 |
|
|
|
166 |
|
|
|
168 |
|
|
|
137 |
|
|
|
140 |
|
|
|
491 |
|
|
|
394 |
|
| Acquisition expenses |
|
|
41 |
|
|
|
37 |
|
|
|
31 |
|
|
|
35 |
|
|
|
35 |
|
|
|
109 |
|
|
|
114 |
|
| Other expenses |
|
|
23 |
|
|
|
21 |
|
|
|
21 |
|
|
|
27 |
|
|
|
23 |
|
|
|
65 |
|
|
|
66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total costs and expenses |
|
|
221 |
|
|
|
224 |
|
|
|
220 |
|
|
|
199 |
|
|
|
198 |
|
|
|
665 |
|
|
|
574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core Annuity earnings before income taxes |
|
|
86 |
|
|
|
84 |
|
|
|
73 |
|
|
|
92 |
|
|
|
78 |
|
|
|
243 |
|
|
|
236 |
|
|
|
|
|
|
|
|
|
| ELNY guaranty fund assessments charge before income tax (a) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annuity earnings before income taxes |
|
$ |
86 |
|
|
$ |
84 |
|
|
$ |
73 |
|
|
$ |
92 |
|
|
$ |
78 |
|
|
$ |
243 |
|
|
$ |
231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Detail of core Annuity earnings before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core earnings before income taxes and impact of fair value accounting |
|
$ |
87 |
|
|
$ |
94 |
|
|
$ |
88 |
|
|
$ |
86 |
|
|
$ |
78 |
|
|
$ |
269 |
|
|
$ |
227 |
|
| Impact of fair value accounting (b) |
|
|
(1 |
) |
|
|
(10 |
) |
|
|
(15 |
) |
|
|
6 |
|
|
|
— |
|
|
|
(26 |
) |
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core Annuity earnings before income taxes |
|
$ |
86 |
|
|
$ |
84 |
|
|
$ |
73 |
|
|
$ |
92 |
|
|
$ |
78 |
|
|
$ |
243 |
|
|
$ |
236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
The ELNY guaranty fund assessments charge represent guaranty fund assessments in connection with the insolvency and liquidation of Executive Life Insurance Company of New York, an unaffiliated life insurance company.
|
| (b) |
Change in fair value of derivatives offset by the estimated related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs. |
12
|
|
|
| American Financial Group, Inc.
Detail of Annuity Benefits Expense (GAAP) ($ in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Detail of annuity benefits expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest credited - fixed |
|
$ |
126 |
|
|
$ |
123 |
|
|
$ |
121 |
|
|
$ |
118 |
|
|
$ |
113 |
|
|
$ |
370 |
|
|
$ |
333 |
|
| Interest credited - fixed component of variable annuities |
|
|
2 |
|
|
|
2 |
|
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
5 |
|
|
|
5 |
|
| Change in expected death and annuitization reserve |
|
|
5 |
|
|
|
5 |
|
|
|
4 |
|
|
|
5 |
|
|
|
4 |
|
|
|
14 |
|
|
|
14 |
|
| Amortization of sales inducements |
|
|
7 |
|
|
|
6 |
|
|
|
7 |
|
|
|
7 |
|
|
|
8 |
|
|
|
20 |
|
|
|
23 |
|
| Guaranteed withdrawal benefit reserve |
|
|
12 |
|
|
|
10 |
|
|
|
8 |
|
|
|
10 |
|
|
|
10 |
|
|
|
30 |
|
|
|
28 |
|
| Change in other benefit reserves |
|
|
3 |
|
|
|
5 |
|
|
|
3 |
|
|
|
1 |
|
|
|
2 |
|
|
|
11 |
|
|
|
6 |
|
| Unlockings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subtotal before impact of fair value accounting |
|
|
155 |
|
|
|
151 |
|
|
|
144 |
|
|
|
148 |
|
|
|
139 |
|
|
|
450 |
|
|
|
409 |
|
|
|
|
|
|
|
|
|
| Embedded derivative mark-to-market |
|
|
21 |
|
|
|
78 |
|
|
|
54 |
|
|
|
74 |
|
|
|
33 |
|
|
|
153 |
|
|
|
110 |
|
| Equity option mark-to-market |
|
|
(19 |
) |
|
|
(63 |
) |
|
|
(30 |
) |
|
|
(85 |
) |
|
|
(32 |
) |
|
|
(112 |
) |
|
|
(125 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subtotal impact of fair value accounting |
|
|
2 |
|
|
|
15 |
|
|
|
24 |
|
|
|
(11 |
) |
|
|
1 |
|
|
|
41 |
|
|
|
(15 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total annuity benefits expense |
|
$ |
157 |
|
|
$ |
166 |
|
|
$ |
168 |
|
|
$ |
137 |
|
|
$ |
140 |
|
|
$ |
491 |
|
|
$ |
394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
|
| American Financial Group, Inc. Net
Spread on Fixed Annuities (GAAP) ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Average fixed annuity investments (at amortized cost) |
|
$ |
22,730 |
|
|
$ |
22,098 |
|
|
$ |
21,402 |
|
|
$ |
20,524 |
|
|
$ |
19,519 |
|
|
$ |
22,077 |
|
|
$ |
18,693 |
|
| Average annuity benefits accumulated |
|
|
22,475 |
|
|
|
21,829 |
|
|
|
21,066 |
|
|
|
20,092 |
|
|
|
19,035 |
|
|
|
21,790 |
|
|
|
18,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investments in excess of annuity benefits accumulated |
|
$ |
255 |
|
|
$ |
269 |
|
|
$ |
336 |
|
|
$ |
432 |
|
|
$ |
484 |
|
|
$ |
287 |
|
|
$ |
462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As % of average annuity benefits accumulated (except as noted) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net investment income (as % of investments) |
|
|
5.01 |
% |
|
|
5.18 |
% |
|
|
5.10 |
% |
|
|
5.21 |
% |
|
|
5.27 |
% |
|
|
5.09 |
% |
|
|
5.40 |
% |
| Interest credited |
|
|
(2.24 |
%) |
|
|
(2.26 |
%) |
|
|
(2.29 |
%) |
|
|
(2.35 |
%) |
|
|
(2.38 |
%) |
|
|
(2.26 |
%) |
|
|
(2.43 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest spread on fixed annuities |
|
|
2.77 |
% |
|
|
2.92 |
% |
|
|
2.81 |
% |
|
|
2.86 |
% |
|
|
2.89 |
% |
|
|
2.83 |
% |
|
|
2.97 |
% |
|
|
|
|
|
|
|
|
| Policy charges and other miscellaneous income |
|
|
0.14 |
% |
|
|
0.14 |
% |
|
|
0.13 |
% |
|
|
0.22 |
% |
|
|
0.15 |
% |
|
|
0.13 |
% |
|
|
0.14 |
% |
| Other annuity benefit expenses, net |
|
|
(0.33 |
%) |
|
|
(0.33 |
%) |
|
|
(0.27 |
%) |
|
|
(0.31 |
%) |
|
|
(0.38 |
%) |
|
|
(0.30 |
%) |
|
|
(0.39 |
%) |
| Acquisition expenses |
|
|
(0.69 |
%) |
|
|
(0.64 |
%) |
|
|
(0.55 |
%) |
|
|
(0.75 |
%) |
|
|
(0.72 |
%) |
|
|
(0.63 |
%) |
|
|
(0.80 |
%) |
| Other expenses |
|
|
(0.37 |
%) |
|
|
(0.36 |
%) |
|
|
(0.37 |
%) |
|
|
(0.53 |
%) |
|
|
(0.44 |
%) |
|
|
(0.37 |
%) |
|
|
(0.45 |
%) |
| Change in fair value of derivatives |
|
|
(0.04 |
%) |
|
|
(0.27 |
%) |
|
|
(0.45 |
%) |
|
|
0.22 |
% |
|
|
0.00 |
% |
|
|
(0.25 |
%) |
|
|
0.11 |
% |
| Unlockings |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
(0.04 |
%) |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net spread earned on fixed annuities - core |
|
|
1.48 |
% |
|
|
1.46 |
% |
|
|
1.30 |
% |
|
|
1.67 |
% |
|
|
1.50 |
% |
|
|
1.41 |
% |
|
|
1.58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average annuity benefits accumulated |
|
$ |
22,475 |
|
|
$ |
21,829 |
|
|
$ |
21,066 |
|
|
$ |
20,092 |
|
|
$ |
19,035 |
|
|
$ |
21,790 |
|
|
$ |
18,231 |
|
| Net spread earned on fixed annuities |
|
|
1.48 |
% |
|
|
1.46 |
% |
|
|
1.30 |
% |
|
|
1.67 |
% |
|
|
1.50 |
% |
|
|
1.41 |
% |
|
|
1.58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings on fixed annuity benefits accumulated |
|
$ |
83 |
|
|
$ |
80 |
|
|
$ |
68 |
|
|
$ |
84 |
|
|
$ |
72 |
|
|
$ |
231 |
|
|
$ |
216 |
|
|
|
|
|
|
|
|
|
| Investments in excess of annuity benefits accumulated |
|
$ |
255 |
|
|
$ |
269 |
|
|
$ |
336 |
|
|
$ |
432 |
|
|
$ |
484 |
|
|
$ |
287 |
|
|
$ |
462 |
|
| Net investment income (as % of investments) |
|
|
5.01 |
% |
|
|
5.18 |
% |
|
|
5.10 |
% |
|
|
5.21 |
% |
|
|
5.27 |
% |
|
|
5.09 |
% |
|
|
5.40 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings on investments in excess of annuity benefits accumulated |
|
$ |
3 |
|
|
$ |
3 |
|
|
$ |
5 |
|
|
$ |
6 |
|
|
$ |
6 |
|
|
$ |
11 |
|
|
$ |
18 |
|
|
|
|
|
|
|
|
|
| Variable annuity earnings |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
1 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings before income taxes - core |
|
$ |
86 |
|
|
$ |
84 |
|
|
$ |
73 |
|
|
$ |
92 |
|
|
$ |
78 |
|
|
$ |
243 |
|
|
$ |
236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Detail of net spread earned on fixed annuities - core |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net spread earned core - before impact of fair value accounting |
|
|
1.50 |
% |
|
|
1.64 |
% |
|
|
1.58 |
% |
|
|
1.55 |
% |
|
|
1.50 |
% |
|
|
1.57 |
% |
|
|
1.51 |
% |
| Impact of fair value accounting (a) |
|
|
(0.02 |
%) |
|
|
(0.18 |
%) |
|
|
(0.28 |
%) |
|
|
0.12 |
% |
|
|
0.00 |
% |
|
|
(0.16 |
%) |
|
|
0.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net spread earned core - after impact of fair value accounting |
|
|
1.48 |
% |
|
|
1.46 |
% |
|
|
1.30 |
% |
|
|
1.67 |
% |
|
|
1.50 |
% |
|
|
1.41 |
% |
|
|
1.58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
Change in fair value of derivatives offset by the estimated related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs. |
14
|
|
|
| American Financial Group Annuity
Premiums (Statutory) ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine months ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Retail single premium annuities - indexed |
|
$ |
339 |
|
|
$ |
403 |
|
|
$ |
386 |
|
|
$ |
565 |
|
|
$ |
509 |
|
|
$ |
1,128 |
|
|
$ |
1,314 |
|
| Retail single premium annuities - fixed |
|
|
18 |
|
|
|
25 |
|
|
|
39 |
|
|
|
53 |
|
|
|
48 |
|
|
|
82 |
|
|
|
112 |
|
| Financial institutions single premium annuities - indexed |
|
|
333 |
|
|
|
364 |
|
|
|
366 |
|
|
|
498 |
|
|
|
352 |
|
|
|
1,063 |
|
|
|
604 |
|
| Financial institutions single premium annuities - fixed |
|
|
62 |
|
|
|
95 |
|
|
|
114 |
|
|
|
201 |
|
|
|
198 |
|
|
|
271 |
|
|
|
427 |
|
| Education market - 403(b) fixed and indexed annuities |
|
|
46 |
|
|
|
49 |
|
|
|
50 |
|
|
|
51 |
|
|
|
49 |
|
|
|
145 |
|
|
|
156 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subtotal fixed annuity premiums |
|
|
798 |
|
|
|
936 |
|
|
|
955 |
|
|
|
1,368 |
|
|
|
1,156 |
|
|
|
2,689 |
|
|
|
2,613 |
|
|
|
|
|
|
|
|
|
| Variable annuities |
|
|
11 |
|
|
|
13 |
|
|
|
12 |
|
|
|
13 |
|
|
|
11 |
|
|
|
36 |
|
|
|
39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total annuity premiums |
|
$ |
809 |
|
|
$ |
949 |
|
|
$ |
967 |
|
|
$ |
1,381 |
|
|
$ |
1,167 |
|
|
$ |
2,725 |
|
|
$ |
2,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
| American Financial Group, Inc.
Fixed Annuity Benefits Accumulated (GAAP) ($ in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
|
|
|
|
|
|
|
|
| Beginning fixed annuity reserves |
|
$ |
22,205 |
|
|
$ |
21,453 |
|
|
$ |
20,679 |
|
|
$ |
19,505 |
|
|
$ |
18,564 |
|
|
$ |
20,679 |
|
|
$ |
17,274 |
|
| Premiums |
|
|
798 |
|
|
|
936 |
|
|
|
955 |
|
|
|
1,368 |
|
|
|
1,156 |
|
|
|
2,689 |
|
|
|
2,613 |
|
| Federal Home Loan Bank advances |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200 |
|
| Surrenders, benefits and other withdrawals |
|
|
(426 |
) |
|
|
(408 |
) |
|
|
(375 |
) |
|
|
(408 |
) |
|
|
(381 |
) |
|
|
(1,209 |
) |
|
|
(1,085 |
) |
| Interest and other annuity benefit expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest credited |
|
|
126 |
|
|
|
123 |
|
|
|
121 |
|
|
|
118 |
|
|
|
113 |
|
|
|
370 |
|
|
|
333 |
|
| Embedded derivative mark-to-market |
|
|
21 |
|
|
|
78 |
|
|
|
54 |
|
|
|
74 |
|
|
|
33 |
|
|
|
153 |
|
|
|
110 |
|
| Change in other benefit reserves |
|
|
21 |
|
|
|
23 |
|
|
|
19 |
|
|
|
18 |
|
|
|
20 |
|
|
|
63 |
|
|
|
60 |
|
| Unlockings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ending fixed annuity reserves |
|
$ |
22,745 |
|
|
$ |
22,205 |
|
|
$ |
21,453 |
|
|
$ |
20,679 |
|
|
$ |
19,505 |
|
|
$ |
22,745 |
|
|
$ |
19,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation to annuity benefits accumulated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ending fixed annuity reserves |
|
$ |
22,745 |
|
|
$ |
22,205 |
|
|
$ |
21,453 |
|
|
$ |
20,679 |
|
|
$ |
19,505 |
|
|
$ |
22,745 |
|
|
$ |
19,505 |
|
| Impact of unrealized investment gains on reserves |
|
|
107 |
|
|
|
117 |
|
|
|
97 |
|
|
|
71 |
|
|
|
84 |
|
|
|
107 |
|
|
|
84 |
|
| Fixed component of variable annuities |
|
|
192 |
|
|
|
194 |
|
|
|
194 |
|
|
|
194 |
|
|
|
196 |
|
|
|
192 |
|
|
|
196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annuity benefits accumulated per balance sheet |
|
$ |
23,044 |
|
|
$ |
22,516 |
|
|
$ |
21,744 |
|
|
$ |
20,944 |
|
|
$ |
19,785 |
|
|
$ |
23,044 |
|
|
$ |
19,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annualized surrenders and other withdrawals as a % of beginning reserves |
|
|
7.7 |
% |
|
|
7.6 |
% |
|
|
7.3 |
% |
|
|
8.4 |
% |
|
|
8.2 |
% |
|
|
7.8 |
% |
|
|
8.4 |
% |
16
|
|
|
| American Financial Group, Inc.
Consolidated Balance Sheet ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
06/30/13 |
|
| Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total cash and investments |
|
$ |
35,151 |
|
|
$ |
34,843 |
|
|
$ |
32,727 |
|
|
$ |
31,313 |
|
|
$ |
29,921 |
|
|
$ |
29,262 |
|
| Recoverables from reinsurers |
|
|
3,134 |
|
|
|
3,107 |
|
|
|
2,969 |
|
|
|
3,157 |
|
|
|
3,138 |
|
|
|
3,044 |
|
| Prepaid reinsurance premiums |
|
|
587 |
|
|
|
489 |
|
|
|
438 |
|
|
|
408 |
|
|
|
662 |
|
|
|
520 |
|
| Agents’ balances and premiums receivable |
|
|
901 |
|
|
|
902 |
|
|
|
735 |
|
|
|
739 |
|
|
|
801 |
|
|
|
754 |
|
| Deferred policy acquisition costs |
|
|
858 |
|
|
|
806 |
|
|
|
890 |
|
|
|
975 |
|
|
|
867 |
|
|
|
818 |
|
| Assets of managed investment entities |
|
|
2,946 |
|
|
|
2,799 |
|
|
|
2,723 |
|
|
|
2,888 |
|
|
|
2,779 |
|
|
|
2,973 |
|
| Other receivables |
|
|
1,140 |
|
|
|
527 |
|
|
|
524 |
|
|
|
854 |
|
|
|
1,078 |
|
|
|
422 |
|
| Variable annuity assets (separate accounts) |
|
|
649 |
|
|
|
681 |
|
|
|
666 |
|
|
|
665 |
|
|
|
629 |
|
|
|
608 |
|
| Other assets |
|
|
985 |
|
|
|
1,001 |
|
|
|
913 |
|
|
|
903 |
|
|
|
887 |
|
|
|
828 |
|
| Goodwill |
|
|
201 |
|
|
|
200 |
|
|
|
185 |
|
|
|
185 |
|
|
|
185 |
|
|
|
185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total assets |
|
$ |
46,552 |
|
|
$ |
45,355 |
|
|
$ |
42,770 |
|
|
$ |
42,087 |
|
|
$ |
40,947 |
|
|
$ |
39,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unpaid losses and loss adjustment expenses |
|
$ |
7,645 |
|
|
$ |
7,370 |
|
|
$ |
6,134 |
|
|
$ |
6,410 |
|
|
$ |
6,441 |
|
|
$ |
6,098 |
|
| Unearned premiums |
|
|
2,114 |
|
|
|
1,911 |
|
|
|
1,788 |
|
|
|
1,757 |
|
|
|
2,047 |
|
|
|
1,789 |
|
| Annuity benefits accumulated |
|
|
23,044 |
|
|
|
22,516 |
|
|
|
21,744 |
|
|
|
20,944 |
|
|
|
19,785 |
|
|
|
18,848 |
|
| Life, accident and health reserves |
|
|
2,098 |
|
|
|
2,082 |
|
|
|
2,039 |
|
|
|
2,008 |
|
|
|
2,011 |
|
|
|
2,017 |
|
| Payable to reinsurers |
|
|
673 |
|
|
|
445 |
|
|
|
400 |
|
|
|
508 |
|
|
|
601 |
|
|
|
367 |
|
| Liabilities of managed investment entities |
|
|
2,625 |
|
|
|
2,499 |
|
|
|
2,413 |
|
|
|
2,567 |
|
|
|
2,429 |
|
|
|
2,603 |
|
| Long-term debt |
|
|
1,062 |
|
|
|
912 |
|
|
|
913 |
|
|
|
913 |
|
|
|
913 |
|
|
|
949 |
|
| Variable annuity liabilities (separate accounts) |
|
|
649 |
|
|
|
681 |
|
|
|
666 |
|
|
|
665 |
|
|
|
629 |
|
|
|
608 |
|
| Other liabilities |
|
|
1,564 |
|
|
|
1,781 |
|
|
|
1,700 |
|
|
|
1,546 |
|
|
|
1,381 |
|
|
|
1,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
$ |
41,474 |
|
|
$ |
40,197 |
|
|
$ |
37,797 |
|
|
$ |
37,318 |
|
|
$ |
36,237 |
|
|
$ |
34,776 |
|
|
|
|
|
|
|
|
| Shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
$ |
88 |
|
|
$ |
90 |
|
|
$ |
90 |
|
|
$ |
90 |
|
|
$ |
89 |
|
|
$ |
89 |
|
| Capital surplus |
|
|
1,150 |
|
|
|
1,152 |
|
|
|
1,138 |
|
|
|
1,123 |
|
|
|
1,109 |
|
|
|
1,088 |
|
| Appropriated retained earnings |
|
|
2 |
|
|
|
31 |
|
|
|
49 |
|
|
|
49 |
|
|
|
45 |
|
|
|
33 |
|
| Unappropriated retained earnings |
|
|
2,946 |
|
|
|
2,913 |
|
|
|
2,842 |
|
|
|
2,777 |
|
|
|
2,729 |
|
|
|
2,664 |
|
| Unrealized gains - fixed maturities |
|
|
602 |
|
|
|
656 |
|
|
|
556 |
|
|
|
441 |
|
|
|
449 |
|
|
|
462 |
|
| Unrealized gains - equities |
|
|
124 |
|
|
|
149 |
|
|
|
129 |
|
|
|
121 |
|
|
|
119 |
|
|
|
138 |
|
| Other comprehensive income, net of tax |
|
|
(8 |
) |
|
|
(6 |
) |
|
|
(8 |
) |
|
|
(2 |
) |
|
|
2 |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total shareholders’ equity |
|
|
4,904 |
|
|
|
4,985 |
|
|
|
4,796 |
|
|
|
4,599 |
|
|
|
4,542 |
|
|
|
4,473 |
|
|
|
|
|
|
|
|
| Noncontrolling interests |
|
|
174 |
|
|
|
173 |
|
|
|
177 |
|
|
|
170 |
|
|
|
168 |
|
|
|
165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities and equity |
|
$ |
46,552 |
|
|
$ |
45,355 |
|
|
$ |
42,770 |
|
|
$ |
42,087 |
|
|
$ |
40,947 |
|
|
$ |
39,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
| American Financial Group, Inc.
Book Value Per Share and Price / Book Summary (in
millions, except per share information) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
06/30/13 |
|
|
|
|
|
|
|
|
| Shareholders’ equity |
|
$ |
4,904 |
|
|
$ |
4,985 |
|
|
$ |
4,796 |
|
|
$ |
4,599 |
|
|
$ |
4,542 |
|
|
$ |
4,473 |
|
| Appropriated retained earnings |
|
|
(2 |
) |
|
|
(31 |
) |
|
|
(49 |
) |
|
|
(49 |
) |
|
|
(45 |
) |
|
|
(33 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders’ equity, excluding appropriated retained earnings |
|
|
4,902 |
|
|
|
4,954 |
|
|
|
4,747 |
|
|
|
4,550 |
|
|
|
4,497 |
|
|
|
4,440 |
|
| Unrealized (gains) on fixed maturities |
|
|
(602 |
) |
|
|
(656 |
) |
|
|
(556 |
) |
|
|
(441 |
) |
|
|
(449 |
) |
|
|
(462 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted shareholders’ equity |
|
|
4,300 |
|
|
|
4,298 |
|
|
|
4,191 |
|
|
|
4,109 |
|
|
|
4,048 |
|
|
|
3,978 |
|
| Goodwill |
|
|
(201 |
) |
|
|
(200 |
) |
|
|
(185 |
) |
|
|
(185 |
) |
|
|
(185 |
) |
|
|
(185 |
) |
| Intangibles |
|
|
(63 |
) |
|
|
(66 |
) |
|
|
(27 |
) |
|
|
(22 |
) |
|
|
(26 |
) |
|
|
(29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tangible adjusted shareholders’ equity |
|
$ |
4,036 |
|
|
$ |
4,032 |
|
|
$ |
3,979 |
|
|
$ |
3,902 |
|
|
$ |
3,837 |
|
|
$ |
3,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common shares outstanding |
|
|
88.491 |
|
|
|
89.618 |
|
|
|
89.589 |
|
|
|
89.513 |
|
|
|
89.224 |
|
|
|
88.821 |
|
|
|
|
|
|
|
|
| Book value per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Excluding appropriated retained earnings (a) |
|
$ |
55.39 |
|
|
$ |
55.27 |
|
|
$ |
52.99 |
|
|
$ |
50.83 |
|
|
$ |
50.40 |
|
|
$ |
49.98 |
|
| Adjusted (b) |
|
|
48.59 |
|
|
|
47.95 |
|
|
|
46.79 |
|
|
|
45.90 |
|
|
|
45.36 |
|
|
|
44.78 |
|
| Tangible, adjusted (c) |
|
|
45.61 |
|
|
|
44.99 |
|
|
|
44.42 |
|
|
|
43.59 |
|
|
|
43.00 |
|
|
|
42.38 |
|
|
|
|
|
|
|
|
| Market capitalization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| AFG’s closing common share price |
|
$ |
57.89 |
|
|
$ |
59.56 |
|
|
$ |
57.71 |
|
|
$ |
57.72 |
|
|
$ |
54.06 |
|
|
$ |
48.91 |
|
|
|
|
|
|
|
|
| Market capitalization |
|
$ |
5,123 |
|
|
$ |
5,338 |
|
|
$ |
5,170 |
|
|
$ |
5,167 |
|
|
$ |
4,823 |
|
|
$ |
4,344 |
|
|
|
|
|
|
|
|
| Price / Adjusted book value ratio |
|
|
1.19 |
|
|
|
1.24 |
|
|
|
1.23 |
|
|
|
1.26 |
|
|
|
1.19 |
|
|
|
1.09 |
|
| (a) |
Excludes appropriated retained earnings. |
| (b) |
Excludes appropriated retained earnings and unrealized gains related to fixed maturity investments. |
| (c) |
Excludes appropriated retained earnings, unrealized gains related to fixed maturity investments, goodwill and intangibles. |
18
|
|
|
| American Financial Group, Inc.
Capitalization ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
06/30/13 |
|
|
|
|
|
|
|
|
| AFG senior obligations |
|
$ |
840 |
|
|
$ |
840 |
|
|
$ |
840 |
|
|
$ |
840 |
|
|
$ |
840 |
|
|
$ |
840 |
|
| Borrowings drawn under credit facility |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Obligations of subsidiaries - other |
|
|
12 |
|
|
|
12 |
|
|
|
12 |
|
|
|
12 |
|
|
|
12 |
|
|
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt excluding subordinated debt & debt secured by real estate |
|
$ |
852 |
|
|
$ |
852 |
|
|
$ |
852 |
|
|
$ |
852 |
|
|
$ |
852 |
|
|
$ |
867 |
|
|
|
|
|
|
|
|
| AFG subordinated debentures |
|
|
150 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Obligations of subsidiaries - secured by real estate |
|
|
60 |
|
|
|
60 |
|
|
|
61 |
|
|
|
61 |
|
|
|
61 |
|
|
|
62 |
|
| Payable to subsidiary trusts - subordinated |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Long-term debt |
|
$ |
1,062 |
|
|
$ |
912 |
|
|
$ |
913 |
|
|
$ |
913 |
|
|
$ |
913 |
|
|
$ |
949 |
|
|
|
|
|
|
|
|
| Shareholders’ equity |
|
|
4,904 |
|
|
|
4,985 |
|
|
|
4,796 |
|
|
|
4,599 |
|
|
|
4,542 |
|
|
|
4,473 |
|
| Noncontrolling interests |
|
|
174 |
|
|
|
173 |
|
|
|
177 |
|
|
|
170 |
|
|
|
168 |
|
|
|
165 |
|
| Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Appropriated retained earnings |
|
|
(2 |
) |
|
|
(31 |
) |
|
|
(49 |
) |
|
|
(49 |
) |
|
|
(45 |
) |
|
|
(33 |
) |
| Unrealized gains related to fixed maturity investments |
|
|
(602 |
) |
|
|
(656 |
) |
|
|
(556 |
) |
|
|
(441 |
) |
|
|
(449 |
) |
|
|
(462 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total adjusted capital |
|
$ |
5,536 |
|
|
$ |
5,383 |
|
|
$ |
5,281 |
|
|
$ |
5,192 |
|
|
$ |
5,129 |
|
|
$ |
5,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Obligations of subsidiaries - secured by real estate |
|
|
(60 |
) |
|
|
(60 |
) |
|
|
(61 |
) |
|
|
(61 |
) |
|
|
(61 |
) |
|
|
(62 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total adjusted capital excluding obligations secured by real estate |
|
$ |
5,476 |
|
|
$ |
5,323 |
|
|
$ |
5,220 |
|
|
$ |
5,131 |
|
|
$ |
5,068 |
|
|
$ |
5,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratio of debt to total adjusted capital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Including subordinated debt & debt secured by real estate |
|
|
19.2 |
% |
|
|
16.9 |
% |
|
|
17.3 |
% |
|
|
17.6 |
% |
|
|
17.8 |
% |
|
|
18.6 |
% |
| Excluding subordinated debt & debt secured by real estate |
|
|
15.6 |
% |
|
|
16.0 |
% |
|
|
16.3 |
% |
|
|
16.6 |
% |
|
|
16.8 |
% |
|
|
17.2 |
% |
19
|
|
|
| American Financial Group, Inc.
Additional Supplemental Information ($ in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine months ended |
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
09/30/14 |
|
|
09/30/13 |
|
| Property and Casualty Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Paid Losses (GAAP) |
|
$ |
528 |
|
|
$ |
530 |
|
|
$ |
510 |
|
|
$ |
577 |
|
|
$ |
417 |
|
|
$ |
1,568 |
|
|
$ |
1,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
09/30/14 |
|
|
06/30/14 |
|
|
03/31/14 |
|
|
12/31/13 |
|
|
09/30/13 |
|
|
6/30/2013 |
|
| Statutory Surplus |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and Casualty Insurance |
|
$ |
2,206 |
|
|
$ |
2,227 |
|
|
$ |
1,981 |
|
|
$ |
1,896 |
|
|
$ |
2,133 |
|
|
$ |
2,096 |
|
|
|
|
|
|
|
|
| AFG’s principal annuity subsidiaries (total adjusted capital) |
|
$ |
1,818 |
|
|
$ |
1,751 |
|
|
$ |
1,688 |
|
|
$ |
1,661 |
|
|
$ |
1,590 |
|
|
$ |
1,517 |
|
|
|
|
|
|
|
|
| Allowable dividends without regulatory approval |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and Casualty Insurance |
|
$ |
335 |
|
|
$ |
335 |
|
|
$ |
335 |
|
|
$ |
335 |
|
|
$ |
237 |
|
|
$ |
237 |
|
| Annuity and Run-off |
|
|
275 |
|
|
|
275 |
|
|
|
275 |
|
|
|
275 |
|
|
|
158 |
|
|
|
158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
$ |
610 |
|
|
$ |
610 |
|
|
$ |
610 |
|
|
$ |
610 |
|
|
$ |
395 |
|
|
$ |
395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
| American Financial Group, Inc.
Total Cash and Investments and Quarterly Net Investment Income
September 30, 2014 ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Carrying Value |
|
| |
|
Property and
Casualty
Insurance |
|
|
Annuity and
Run-off |
|
|
Other |
|
|
Consolidate
CLOs |
|
|
Total AFG
Consolidated |
|
|
% of
Investment
Portfolio |
|
| Total cash and investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
657 |
|
|
$ |
260 |
|
|
$ |
393 |
|
|
$ |
— |
|
|
$ |
1,310 |
|
|
|
4 |
% |
| Fixed maturities - Available for sale |
|
|
6,241 |
|
|
|
23,712 |
|
|
|
12 |
|
|
|
— |
|
|
|
29,965 |
|
|
|
85 |
% |
| Fixed maturities - Trading |
|
|
214 |
|
|
|
128 |
|
|
|
— |
|
|
|
— |
|
|
|
342 |
|
|
|
1 |
% |
| Equity securities |
|
|
1,008 |
|
|
|
423 |
|
|
|
43 |
|
|
|
— |
|
|
|
1,474 |
|
|
|
4 |
% |
| Policy loans |
|
|
— |
|
|
|
230 |
|
|
|
— |
|
|
|
— |
|
|
|
230 |
|
|
|
1 |
% |
| Mortgage loans |
|
|
213 |
|
|
|
851 |
|
|
|
— |
|
|
|
— |
|
|
|
1,064 |
|
|
|
3 |
% |
| Real estate and other investments |
|
|
351 |
|
|
|
723 |
|
|
|
10 |
|
|
|
(318 |
) |
|
|
766 |
|
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total cash and investments |
|
$ |
8,684 |
|
|
$ |
26,327 |
|
|
$ |
458 |
|
|
$ |
(318 |
) |
|
$ |
35,151 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Property and
Casualty
Insurance |
|
|
Annuity and
Run-off |
|
|
Other |
|
|
Consolidate
CLOs |
|
|
Total AFG
Consolidated |
|
| Total quarterly net investment income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fixed maturities - Available for sale |
|
$ |
59 |
|
|
$ |
280 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
339 |
|
| Fixed maturities - Trading |
|
|
1 |
|
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
| Equity securities |
|
|
11 |
|
|
|
5 |
|
|
|
— |
|
|
|
— |
|
|
|
16 |
|
| Equity in investees |
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
| Other investments |
|
|
6 |
|
|
|
20 |
|
|
|
— |
|
|
|
(6 |
) |
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross investment income |
|
|
78 |
|
|
|
308 |
|
|
|
— |
|
|
|
(6 |
) |
|
|
380 |
|
|
|
|
|
|
|
| Investment expenses |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total net investment income |
|
$ |
76 |
|
|
$ |
307 |
|
|
$ |
— |
|
|
$ |
(6 |
) |
|
$ |
377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Equity Securities |
|
| |
|
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
|
|
|
|
| Annuity and Run-off |
|
$ |
384 |
|
|
$ |
423 |
|
|
$ |
39 |
|
| Property and Casualty Insurance |
|
|
852 |
|
|
|
1,008 |
|
|
|
156 |
|
| Other |
|
|
43 |
|
|
|
43 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total AFG consolidated |
|
$ |
1,279 |
|
|
$ |
1,474 |
|
|
$ |
195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
|
|
|
| American Financial Group, Inc.
Fixed Maturities - By Security Type - AFG Consolidated
September 30, 2014 ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Amortized
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
|
% of
Fair Value |
|
|
% of
Investment
Portfolio |
|
| US Government and government agencies |
|
$ |
392 |
|
|
$ |
397 |
|
|
$ |
5 |
|
|
|
1 |
% |
|
|
1 |
% |
| States, municipalities and political subdivisions |
|
|
6,132 |
|
|
|
6,399 |
|
|
|
267 |
|
|
|
21 |
% |
|
|
18 |
% |
| Foreign government |
|
|
334 |
|
|
|
343 |
|
|
|
9 |
|
|
|
1 |
% |
|
|
1 |
% |
| Residential mortgage-backed securities |
|
|
4,198 |
|
|
|
4,598 |
|
|
|
400 |
|
|
|
15 |
% |
|
|
13 |
% |
| Commercial mortgage-backed securities |
|
|
2,333 |
|
|
|
2,496 |
|
|
|
163 |
|
|
|
8 |
% |
|
|
7 |
% |
| Asset-backed securities |
|
|
3,604 |
|
|
|
3,621 |
|
|
|
17 |
|
|
|
12 |
% |
|
|
10 |
% |
| Corporate bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Manufacturing |
|
|
2,303 |
|
|
|
2,431 |
|
|
|
128 |
|
|
|
8 |
% |
|
|
7 |
% |
| Banks, lending and credit institutions |
|
|
2,516 |
|
|
|
2,637 |
|
|
|
121 |
|
|
|
9 |
% |
|
|
8 |
% |
| Gas and electric services |
|
|
1,308 |
|
|
|
1,430 |
|
|
|
122 |
|
|
|
5 |
% |
|
|
4 |
% |
| Insurance and insurance related |
|
|
839 |
|
|
|
901 |
|
|
|
62 |
|
|
|
3 |
% |
|
|
3 |
% |
| Other corporate |
|
|
4,792 |
|
|
|
5,054 |
|
|
|
262 |
|
|
|
17 |
% |
|
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total AFG consolidated |
|
$ |
28,751 |
|
|
$ |
30,307 |
|
|
$ |
1,556 |
|
|
|
100 |
% |
|
|
86 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annuity and Run-off |
|
$ |
22,496 |
|
|
$ |
23,840 |
|
|
$ |
1,344 |
|
|
|
79 |
% |
|
|
68 |
% |
| Property and Casualty Insurance |
|
|
6,254 |
|
|
|
6,455 |
|
|
|
201 |
|
|
|
21 |
% |
|
|
18 |
% |
| Other |
|
|
1 |
|
|
|
12 |
|
|
|
11 |
|
|
|
0 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total AFG consolidated |
|
$ |
28,751 |
|
|
$ |
30,307 |
|
|
$ |
1,556 |
|
|
|
100 |
% |
|
|
86 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annualized yield on available for sale fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Excluding investment expense (a) |
|
|
4.87 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net of investment expense (a) |
|
|
4.84 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Approximate average life and duration: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Approximate average life |
|
|
6.5 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Approximate duration |
|
|
5 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
Annualized yield is calculated by dividing investment income for the quarter by the average cost over the quarter. Average cost is the average of the beginning and ending quarter asset balances. |
22
|
|
|
| American Financial Group, Inc.
Fixed Maturities - By Security Type Portfolio
September 30, 2014 ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Amortized
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
|
% of
Fair Value |
|
| Annuity and Run-off: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| US Government and government agencies |
|
$ |
90 |
|
|
$ |
91 |
|
|
$ |
1 |
|
|
|
0 |
% |
| States, municipalities and political subdivisions |
|
|
3,574 |
|
|
|
3,747 |
|
|
|
173 |
|
|
|
17 |
% |
| Foreign government |
|
|
17 |
|
|
|
19 |
|
|
|
2 |
|
|
|
0 |
% |
| Residential mortgage-backed securities |
|
|
3,234 |
|
|
|
3,567 |
|
|
|
333 |
|
|
|
15 |
% |
| Commercial mortgage-backed securities |
|
|
2,088 |
|
|
|
2,241 |
|
|
|
153 |
|
|
|
9 |
% |
| Asset-backed securities |
|
|
2,638 |
|
|
|
2,656 |
|
|
|
18 |
|
|
|
11 |
% |
| Corporate debt |
|
|
10,855 |
|
|
|
11,519 |
|
|
|
664 |
|
|
|
48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Annuity and Run-off |
|
$ |
22,496 |
|
|
$ |
23,840 |
|
|
$ |
1,344 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annualized yield on available for sale fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Excluding investment expense (a) |
|
|
5.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
| Net of investment expense (a) |
|
|
5.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Approximate average life and duration: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Approximate average life |
|
|
7 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Approximate duration |
|
|
5 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Amortized
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
|
% of
Fair Value |
|
| Property and Casualty Insurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| US Government and government agencies |
|
$ |
302 |
|
|
$ |
306 |
|
|
$ |
4 |
|
|
|
5 |
% |
| States, municipalities and political subdivisions |
|
|
2,558 |
|
|
|
2,652 |
|
|
|
94 |
|
|
|
41 |
% |
| Foreign government |
|
|
317 |
|
|
|
324 |
|
|
|
7 |
|
|
|
5 |
% |
| Residential mortgage-backed securities |
|
|
963 |
|
|
|
1,019 |
|
|
|
56 |
|
|
|
16 |
% |
| Commercial mortgage-backed securities |
|
|
245 |
|
|
|
255 |
|
|
|
10 |
|
|
|
4 |
% |
| Asset-backed securities |
|
|
966 |
|
|
|
965 |
|
|
|
(1 |
) |
|
|
15 |
% |
| Corporate debt |
|
|
903 |
|
|
|
934 |
|
|
|
31 |
|
|
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and Casualty Insurance |
|
$ |
6,254 |
|
|
$ |
6,455 |
|
|
$ |
201 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annualized yield on available for sale fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Excluding investment expense (a) |
|
|
4.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
| Net of investment expense (a) |
|
|
3.95 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
| Tax equivalent, net of investment expense (b) |
|
|
4.61 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Approximate average life and duration: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Approximate average life |
|
|
4.5 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Approximate duration |
|
|
3.5 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
Annualized yield is calculated by dividing investment income for the quarter by the average cost over the quarter. Average cost is the average of the beginning and ending quarter asset balances. |
| (b) |
Adjusts the yield on tax-exempt bonds to the fully taxable equivalent yield. |
23
|
|
|
| American Financial Group, Inc.
Fixed Maturities - Credit Rating and NAIC Designation
September 30, 2014 ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
GAAP Data |
|
| By Credit Rating |
|
Amortized
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
|
% of
Fair Value |
|
| Investment grade |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| AAA |
|
$ |
6,542 |
|
|
$ |
6,766 |
|
|
$ |
224 |
|
|
|
22 |
% |
| AA |
|
|
5,857 |
|
|
|
6,081 |
|
|
|
224 |
|
|
|
20 |
% |
| A |
|
|
7,443 |
|
|
|
7,847 |
|
|
|
404 |
|
|
|
26 |
% |
| BBB |
|
|
5,153 |
|
|
|
5,480 |
|
|
|
327 |
|
|
|
18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subtotal - Investment grade |
|
|
24,995 |
|
|
|
26,174 |
|
|
|
1,179 |
|
|
|
86 |
% |
|
|
|
|
|
| BB |
|
|
751 |
|
|
|
787 |
|
|
|
36 |
|
|
|
3 |
% |
| B |
|
|
460 |
|
|
|
477 |
|
|
|
17 |
|
|
|
2 |
% |
| Other |
|
|
2,545 |
|
|
|
2,869 |
|
|
|
324 |
|
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
$ |
28,751 |
|
|
$ |
30,307 |
|
|
$ |
1,556 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies rate a
security, the rating displayed is the second lowest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Statutory Data |
|
| By NAIC Designation |
|
Carrying
Value |
|
|
% of Carrying
Value |
|
|
Amortized
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
| NAIC 1 |
|
$ |
22,332 |
|
|
|
79 |
% |
|
$ |
22,333 |
|
|
$ |
23,561 |
|
|
$ |
1,228 |
|
| NAIC 2 |
|
|
5,236 |
|
|
|
18 |
% |
|
|
5,236 |
|
|
|
5,558 |
|
|
|
322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,568 |
|
|
|
97 |
% |
|
|
27,569 |
|
|
|
29,119 |
|
|
|
1,550 |
|
|
|
|
|
|
|
| NAIC 3 |
|
|
540 |
|
|
|
2 |
% |
|
|
540 |
|
|
|
562 |
|
|
|
22 |
|
| NAIC 4 |
|
|
220 |
|
|
|
1 |
% |
|
|
220 |
|
|
|
231 |
|
|
|
11 |
|
| NAIC 5 |
|
|
33 |
|
|
|
0 |
% |
|
|
33 |
|
|
|
40 |
|
|
|
7 |
|
| NAIC 6 |
|
|
56 |
|
|
|
0 |
% |
|
|
60 |
|
|
|
79 |
|
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
$ |
28,417 |
|
|
|
100 |
% |
|
$ |
28,422 |
|
|
$ |
30,031 |
|
|
$ |
1,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
|
|
|
| American Financial Group, Inc.
Mortgage-Backed Securities - AFG Consolidated
September 30, 2014 ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| By Asset Type |
|
Amortized
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
|
% of
Fair Value |
|
|
% of
Investment
Portfolio |
|
| Residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Agency |
|
$ |
326 |
|
|
$ |
334 |
|
|
$ |
8 |
|
|
|
5 |
% |
|
|
1 |
% |
| Prime (Non-Agency) |
|
|
2,000 |
|
|
|
2,215 |
|
|
|
215 |
|
|
|
31 |
% |
|
|
6 |
% |
| Alt-A |
|
|
972 |
|
|
|
1,081 |
|
|
|
109 |
|
|
|
15 |
% |
|
|
3 |
% |
| Subprime |
|
|
900 |
|
|
|
968 |
|
|
|
68 |
|
|
|
14 |
% |
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subtotal - Residential |
|
|
4,198 |
|
|
|
4,598 |
|
|
|
400 |
|
|
|
65 |
% |
|
|
13 |
% |
| Commercial |
|
|
2,333 |
|
|
|
2,496 |
|
|
|
163 |
|
|
|
35 |
% |
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total AFG consolidated |
|
$ |
6,531 |
|
|
$ |
7,094 |
|
|
$ |
563 |
|
|
|
100 |
% |
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annuity and Run-off |
|
$ |
5,322 |
|
|
$ |
5,808 |
|
|
$ |
486 |
|
|
|
82 |
% |
|
|
16 |
% |
| Property and Casualty Insurance |
|
|
1,208 |
|
|
|
1,274 |
|
|
|
66 |
|
|
|
18 |
% |
|
|
4 |
% |
| Other |
|
|
1 |
|
|
|
12 |
|
|
|
11 |
|
|
|
0 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total AFG consolidated |
|
$ |
6,531 |
|
|
$ |
7,094 |
|
|
$ |
563 |
|
|
|
100 |
% |
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| • |
|
Substantially all of AFG’s MBS securities are either senior tranches of securitizations or collateralized by senior tranches of securitizations. |
| • |
|
The average amortized cost as a percent of par is - Prime 84%; Alt-A 78%; Subprime 86%; CMBS 99%. |
| • |
|
The average FICO score of our residential MBS securities is - Prime 740; Alt-A 712; Subprime 639. |
| • |
|
99.7% of our Commercial MBS portfolio is investment-grade rated (85% AAA) and the average subordination for this group assets is 39%. |
| • |
|
The approximate average life by collateral type is - Residential 5 years; Commercial 4 years. |
25
|
|
|
| American Financial Group, Inc.
Mortgage-Backed Securities Portfolio September 30,
2014 ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annuity and Run-off:
By Asset Type |
|
Amortized
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
|
% of
Fair Value |
|
|
% of
Investment
Portfolio |
|
| Residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Agency |
|
$ |
133 |
|
|
$ |
139 |
|
|
$ |
6 |
|
|
|
2 |
% |
|
|
1 |
% |
| Prime (Non-Agency) |
|
|
1,772 |
|
|
|
1,959 |
|
|
|
187 |
|
|
|
34 |
% |
|
|
7 |
% |
| Alt-A |
|
|
724 |
|
|
|
812 |
|
|
|
88 |
|
|
|
14 |
% |
|
|
3 |
% |
| Subprime |
|
|
605 |
|
|
|
657 |
|
|
|
52 |
|
|
|
11 |
% |
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subtotal - Residential |
|
|
3,234 |
|
|
|
3,567 |
|
|
|
333 |
|
|
|
61 |
% |
|
|
13 |
% |
| Commercial |
|
|
2,088 |
|
|
|
2,241 |
|
|
|
153 |
|
|
|
39 |
% |
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Annuity and Run-off |
|
$ |
5,322 |
|
|
$ |
5,808 |
|
|
$ |
486 |
|
|
|
100 |
% |
|
|
22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and Casualty Insurance:
By Asset Type |
|
Amortized
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
|
% of
Fair Value |
|
|
% of
Investment
Portfolio |
|
| Residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Agency |
|
$ |
193 |
|
|
$ |
195 |
|
|
$ |
2 |
|
|
|
15 |
% |
|
|
2 |
% |
| Prime (Non-Agency) |
|
|
227 |
|
|
|
244 |
|
|
|
17 |
|
|
|
19 |
% |
|
|
3 |
% |
| Alt-A |
|
|
248 |
|
|
|
269 |
|
|
|
21 |
|
|
|
21 |
% |
|
|
3 |
% |
| Subprime |
|
|
295 |
|
|
|
311 |
|
|
|
16 |
|
|
|
25 |
% |
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subtotal - Residential |
|
|
963 |
|
|
|
1,019 |
|
|
|
56 |
|
|
|
80 |
% |
|
|
12 |
% |
| Commercial |
|
|
245 |
|
|
|
255 |
|
|
|
10 |
|
|
|
20 |
% |
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Property and Casualty Insurance |
|
$ |
1,208 |
|
|
$ |
1,274 |
|
|
$ |
66 |
|
|
|
100 |
% |
|
|
15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26
|
|
|
| American Financial Group, Inc.
Mortgage-Backed Securities - Credit Rating and NAIC Designation
September 30, 2014 ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
GAAP data |
|
| By Credit Rating |
|
Amortized
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
|
% of
Fair Value |
|
| Investment grade |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| AAA |
|
$ |
2,840 |
|
|
$ |
3,004 |
|
|
$ |
164 |
|
|
|
42 |
% |
| AA |
|
|
345 |
|
|
|
363 |
|
|
|
18 |
|
|
|
5 |
% |
| A |
|
|
510 |
|
|
|
539 |
|
|
|
29 |
|
|
|
8 |
% |
| BBB |
|
|
228 |
|
|
|
248 |
|
|
|
20 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subtotal - investment grade |
|
|
3,923 |
|
|
|
4,154 |
|
|
|
231 |
|
|
|
58 |
% |
|
|
|
|
|
| BB |
|
|
337 |
|
|
|
350 |
|
|
|
13 |
|
|
|
5 |
% |
| B |
|
|
396 |
|
|
|
411 |
|
|
|
15 |
|
|
|
6 |
% |
| Other |
|
|
1,875 |
|
|
|
2,179 |
|
|
|
304 |
|
|
|
31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
$ |
6,531 |
|
|
$ |
7,094 |
|
|
$ |
563 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies rate a
security, the rating displayed is the second lowest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Statutory data |
|
| By NAIC
Designation |
|
Carrying
Value |
|
|
% of Carrying
Value |
|
|
Amortized
Cost |
|
|
Fair Value |
|
|
Unrealized
Gain (Loss) |
|
| NAIC 1 |
|
$ |
6,140 |
|
|
|
95 |
% |
|
$ |
6,141 |
|
|
$ |
6,755 |
|
|
$ |
614 |
|
| NAIC 2 |
|
|
122 |
|
|
|
2 |
% |
|
|
122 |
|
|
|
124 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,262 |
|
|
|
97 |
% |
|
|
6,263 |
|
|
|
6,879 |
|
|
|
616 |
|
|
|
|
|
|
|
| NAIC 3 |
|
|
44 |
|
|
|
1 |
% |
|
|
44 |
|
|
|
47 |
|
|
|
3 |
|
| NAIC 4 |
|
|
106 |
|
|
|
2 |
% |
|
|
106 |
|
|
|
114 |
|
|
|
8 |
|
| NAIC 5 |
|
|
4 |
|
|
|
0 |
% |
|
|
4 |
|
|
|
11 |
|
|
|
7 |
|
| NAIC 6 |
|
|
25 |
|
|
|
0 |
% |
|
|
26 |
|
|
|
42 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
$ |
6,441 |
|
|
|
100 |
% |
|
$ |
6,443 |
|
|
$ |
7,093 |
|
|
$ |
650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
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
