American Financial Group Announces First Quarter Results
26 4월 2004 - 10:07PM
PR Newswire (US)
American Financial Group Announces First Quarter Results
CINCINNATI, April 26 /PRNewswire-FirstCall/ -- American Financial
Group, Inc. today reported net earnings for the 2004 first quarter
of $73.2 million ($.98 per share), significantly higher than the
$25.1 million ($.36 per share) reported for the first quarter of
last year. The increase results from net realized gains on
investments versus net realized losses in the 2003 period and from
higher earnings from insurance operations. Many investors and
analysts focus on "core earnings" of companies, setting aside items
which are not considered to be part of the ongoing earnings of the
company, such as net realized gains (losses) on investments,
discontinued operations, cumulative effect of accounting changes
and other non recurring items. A reconciliation of this non-GAAP
measure to net earnings is set forth in the accompanying summary of
earnings. Core earnings from insurance operations were $53.4
million ($.72 per share) for the 2004 first quarter compared to
$43.8 million ($.63 per share) for the previous year's first
quarter. While core earnings were up 22%, core earnings per share
were up 14% due to additional shares issued in November 2003. The
2003 results included earnings from AFG's former ownership of
Infinity Property and Casualty Corporation. The increase in the
2004 results was due primarily to higher underwriting margins in
the property and casualty insurance ("P&C") operations as well
as improved operating earnings from the annuity, supplemental
insurance and life operations. Details of the financial results may
be found in the accompanying schedules. Carl H. Lindner, AFG
Chairman and Chief Executive Officer stated, "Our first quarter
results exceeded our expectations and get us off to an excellent
start for the year. As a result, we are revising upward our core
earnings guidance for 2004 to between $2.85 and $3.10 per share.
Our continued growth in shareholders' equity, resulting from
operating earnings as well as the increase from the proposed merger
of Provident Financial Group and National City Corporation, will
contribute to improved financial leverage and liquidity. National
City has indicated that it expects to complete its merger with
Provident during the second quarter of 2004." Business Segment
Results The P&C Group reported an underwriting profit of $30.2
million in the 2004 first quarter, with a combined ratio of 93.8%,
over three points better than the combined ratio for the 2003 first
quarter of 97.1%. The Group's premiums and underwriting results
included Infinity's personal lines through the initial date of sale
in mid-February 2003. The Specialty Group generated strong
underwriting profit of $32.6 million for the 2004 first quarter, an
improvement of $23.2 million over the same period a year ago. The
Group's combined ratio was 93.3% compared to 97.9% in the 2003
first quarter. Gross and net written premiums for the 2004 quarter
grew 19% and 22%, respectively, as compared to the 2003 period,
reflecting the effect of rate increases and volume growth in
certain operations. Rate increases in the specialty operations
averaged about 11% for the first quarter of 2004. Further details
of the Specialty Group operations may be found in the accompanying
schedules. Carl H. Lindner III, AFG Co-President and head of the
P&C Group commented: "The growth and strong underwriting
performance of our Specialty Group in the first quarter exceeded
our initial expectations. Net premium growth was greater than gross
premium growth due to our previously announced plan to retain a
greater percentage of our business written. We are seeing
significant underwriting improvements in our Specialty Financial
and our profitable Specialty Casualty and Property and
Transportation businesses. Our California Workers' Compensation
business continues to report solid underwriting profit. We achieved
double-digit rate increases in the first quarter in our overall
specialty operations. Pricing should remain firm in 2004,
particularly in our casualty markets; however, we are expecting
moderation in rate increases during the latter part of the year. We
now expect average rate increases for 2004 to be close to 8%. We
remain committed to maintaining rate adequacy going forward and
will be diligent in pricing risks appropriately." Mr. Lindner
continued, "Going forward, we are well-positioned as a niche player
in the specialty commercial markets and have a very diversified
portfolio of businesses. We are now targeting net written premium
growth in the mid-teens and improved underwriting profits in our
specialty operations in 2004." The Annuity, Supplemental Insurance
and Life Group reported core net operating earnings of $14.4
million for the first quarter of 2004, compared to $13.6 million in
the 2003 period. The increase in these core operating earnings
reflects improved results in the supplemental insurance operations,
partially offset by the impact of continued low interest rates on
the fixed annuity operations and higher interest expense. The
group's statutory premiums for the 2004 first quarter were 16%
lower than the same period last year. Continuing discipline in
setting commission and interest crediting rates has resulted in
slowed sales of single premium annuities. Based on the current
interest rate environment, the group expects core operating
earnings for 2004 will exceed those reported in 2003 by 20% to 25%.
Further details may also be found in the earnings release issued
today by Great American Financial Resources, Inc. (NYSE:GFR). AFG
owns 82% of GFR common stock and a proportional share of its
earnings is included in AFG's results. Through the operations of
the 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 retirement annuities,
supplemental insurance and life products. 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,
future premiums, revenues and earnings; and rate increases. Actual
results could differ materially from those expected by AFG
depending on certain factors including but not limited to: the
unpredictability of possible future litigation if certain
settlements do not become effective, changes in economic conditions
including interest rates, performance of securities markets, and
the availability of capital, regulatory actions, changes in legal
environment, judicial decisions and rulings, tax law changes,
levels of catastrophes and other major losses, the actual amount of
liabilities associated with certain asbestos and environmental
related insurance claims, adequacy of loss reserves, availability
of reinsurance and ability of reinsurers to pay their obligations,
competitive pressures, including the ability to obtain rate
increases and other changes in market conditions that could affect
AFG's insurance operations. Conference Call The company will hold a
conference call to discuss 2004 first quarter results at 11:30 a.m.
(ET) today. Toll-free telephone access will be available by dialing
1-888-855-5487. Please dial in 5 to 10 minutes prior to the
scheduled start time of the call. A replay of the call will also be
available at around 2:30 p.m. (ET) today until 8:00 p.m. on May 3,
2004. To listen to the replay, dial 1-888-203-1112 and provide the
confirmation code 341565. The conference call will also be
broadcast over the Internet. To listen to the call via the
Internet, go to AFG's website, http://www.amfnl.com/ and follow the
instructions at the Webcast link. (Financial summaries follow) This
earnings release and additional Financial Supplements are available
at AFG's web site: http://www.amfnl.com/ . AMERICAN FINANCIAL
GROUP, INC. AND SUBSIDIARIES SUMMARY OF EARNINGS (In Millions,
Except Per Share Data) Three months ended March 31, 2004 2003
Operating revenues $ 833.2 $ 877.6 Costs and expenses 754.8 812.7
78.4 64.9 Related income taxes 25.0 22.5 Earnings from consolidated
insurance operations 53.4 42.4 Net investee earnings from Infinity
- 1.4 Core earnings from insurance operations 53.4 43.8 Non-core
items, net of tax: Special tax benefits (1) - 5.5 Realized
investment gains (losses) 22.3 (23.6) Discontinued operations (2)
.6 .3 Other (1.3) (.9) Cumulative effect of an accounting change
(3) (1.8) - Net earnings $ 73.2 $ 25.1 Diluted Earnings (Loss) per
Common Share: Core from insurance operations $ .72 $ .63 Special
tax benefits (1) - .08 Realized investment gains (losses) .30 (.34)
Discontinued operations (2) .01 - Other (.02) (.01) Cumulative
effect of an accounting change (3) (.03) - Net earnings available
to common Shares $ .98 $ .36 Average number of Diluted Shares 74.3
69.4 (1) Reflects tax benefits in 2003 relating to the Company's
basis in Infinity Stock. (2) Represents operating results related
to the planned disposal of Transport Insurance Company. (3)
Reflects the implementation of an accounting change related to long
duration contracts mandated by Statement of Position 03-1. March
31, December 31, 2004 2003 Selected Balance Sheet Data: Total Cash
and Investments $14,400 $13,828 Long-term Debt $ 1,033 $837 Payable
to Subsidiary Trusts(Issuers of Preferred Securities) $78 $265
Shareholders' Equity $ 2,271 $ 2,076 Book Value Per Share $ 30.98 $
28.42 Common Shares Outstanding 73.3 73.1 AMERICAN FINANCIAL GROUP,
INC. PROPERTY AND CASUALTY INSURANCE OPERATIONS UNDERWRITING
RESULTS (In Millions) Three months ended March 31, 2004 2003
Property and Casualty Insurance Operations: (a) Gross written
premiums $ 809 $ 858 Net written premiums $ 539 $ 557 Ratios
(GAAP): Loss & LAE ratio 63.6% 68.3% Expense ratio 30.0% 28.7%
Policyholder dividend ratio .2% .1% Combined Ratio (b) 93.8% 97.1%
Specialty Group: Gross written premiums $ 807 $ 677 Net written
premiums $ 537 $ 439 Ratios (GAAP): Loss & LAE ratio 63.0%
64.9% Expense ratio 30.1% 32.8% Policyholder dividend ratio .2% .2%
Combined Ratio 93.3% 97.9% (a) Includes operations of Infinity
Property and Casualty through mid- February 2003, AFG's direct auto
insurance companies through the date of their sale at the end of
April 2003, personal lines operations remaining with AFG, and the
specialty group. (b) Includes other discontinued lines.
SUPPLEMENTAL SPECIALTY GROUP OPERATING INFORMATION (In Millions)
Three months ended March 31, Percentage 2004 2003 Change Gross
Written Premiums: Property & Transportation $ 240 $ 192 25%
Specialty Casualty 363 340 7% Specialty Financial 107 74 44%
California Workers' Compensation 96 70 38% Other 1 1 - $ 807 $ 677
19% Net Written Premiums: Property & Transportation $ 147 $ 125
18% Specialty Casualty 198 166 20% Specialty Financial 91 57 58%
California Workers' Compensation 84 66 27% Other 17 25 (30%) $ 537
$ 439 22% Combined Ratio (GAAP): Property & Transportation
83.5% 96.0% Specialty Casualty 93.8% 100.8% Specialty Financial
100.9% 109.6% California Workers' Compensation 95.2% 92.0%
Aggregate Specialty Group 93.3% 97.9% Notes: 1. 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. 2. Specialty Casualty includes primarily excess and
surplus, general liability, executive and professional liability
and customized programs for small to mid-sized businesses. 3.
Specialty Financial includes risk management insurance programs for
lending and leasing institutions, surety and fidelity bonds and
foreign credit insurance. 4. California Workers' Compensation
consists of a subsidiary that writes workers' compensation
insurance primarily in the state of California. 5. Other includes
an internal reinsurance facility and discontinued lines.
DATASOURCE: American Financial Group, Inc. CONTACT: Anne N. Watson,
Vice President-Investor Relations of American Financial Group,
Inc., +1-513-579-6652 Web site: http://www.amfnl.com/
http://www.greatamericaninsurance.com/
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