American Financial Group, Inc. Announces Exit from Lloyd’s of London Market; Reaffirms 2019 Core Net Operating Earnings Gui...
07 1월 2020 - 2:00AM
Business Wire
American Financial Group, Inc. (NYSE: AFG) announced that it
plans to exit the Lloyd’s of London insurance market in 2020. It
has initiated actions to place its Lloyd’s subsidiaries including
its Lloyd’s Managing Agency, Neon Underwriting Ltd., into run-off.
AFG will work with Neon and Neon’s regulators to ensure that Neon
continues to meet its obligations to policyholders and achieves an
orderly run-off of operations.
The exit from this business will allow AFG to reallocate capital
to its other insurance businesses and opportunities that have the
potential to earn targeted returns on investment. Neon and its
predecessor, Marketform, have failed to achieve AFG’s profitability
objectives since AFG’s purchase of Marketform in 2008. After review
of Neon’s anticipated results for 2019 and its 2020 prospects, AFG
has determined that Neon will not meet AFG’s return expectations.
Neon produced approximately 7% of AFG’s property and casualty net
written premiums in 2019.
AFG estimates that it will incur a non-core after-tax charge
between $50 million and $60 million in the fourth quarter of 2019
for Neon reserve strengthening and expenses related to exit costs
associated with the run-off of this business. Based on information
available at this time, it is expected that the Company will report
approximately $60 million to $75 million in after-tax earnings from
other non-core items in the fourth quarter of 2019, including
realized gains from the mark to market of equity securities and
annuity non-core earnings, which reflect the impact of fair value
accounting on its fixed-indexed annuity business.
After consideration of these items and other results in the
fourth quarter of 2019, AFG reaffirmed its previously announced
2019 core net operating earnings guidance of $8.50 to $8.70 per
share.
About American Financial
Group, Inc.
American Financial Group is an insurance holding company, based
in Cincinnati, Ohio with assets over $65 billion. Through the
operations of Great American Insurance Group, AFG is engaged
primarily in property and casualty insurance, focusing on
specialized commercial products for businesses, and in the sale of
traditional fixed, fixed-indexed and variable-indexed annuities in
the retail, financial institutions, broker-dealer, registered
investment advisor 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, investment
activities and the amount and timing of share repurchases;
recoverability of asset values; expected losses and the adequacy of
reserves for asbestos, environmental pollution and mass tort
claims; rate changes; and improved loss experience.
Actual results and/or financial condition could differ
materially from those contained in or implied by such
forward-looking statements for a variety of reasons including, but
not limited to: changes in financial, political and economic
conditions, including changes in interest and inflation rates,
currency fluctuations and extended economic recessions or
expansions in the U.S. and/or abroad; performance of securities
markets, including the cost of equity index options; new
legislation or declines in credit quality or credit ratings that
could have a material impact on the valuation of securities in
AFG’s investment portfolio; the availability of capital; changes in
insurance law or regulation, including changes in statutory
accounting rules and changes in regulation of the Lloyd’s market,
including modifications to the establishment of capital
requirements for and approval of business plans for syndicate
participation; changes in the legal environment affecting AFG or
its customers; tax law and accounting changes, including the impact
of recent changes in U.S. corporate tax law; 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; disruption caused by cyber-attacks or other
technology breaches or failures by AFG or its business partners and
service providers, which could negatively impact AFG’s business
and/or expose AFG to litigation; development of insurance loss
reserves and establishment of other reserves, particularly with
respect to amounts associated with asbestos and environmental
claims; availability of reinsurance and ability of reinsurers to
pay their obligations; trends in persistency and mortality;
competitive pressures; the ability to obtain adequate rates and
policy terms; changes in AFG’s credit ratings or the financial
strength ratings assigned by major ratings agencies to AFG’s
operating subsidiaries; the impact of the conditions in the
international financial markets and the global economy relating to
AFG’s international operations; and other factors identified in
AFG’s filings with the Securities and Exchange Commission.
The forward-looking statements herein are made only as of the
date of this press release. The Company assumes no obligation to
publicly update any forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20200106005777/en/
Diane P. Weidner, IRCAssistant Vice President – Investor &
Media Relations(513) 369-5713
Websites:www.AFGinc.comwww.GreatAmericanInsuranceGroup.com
American Financial (NYSE:AFG)
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American Financial (NYSE:AFG)
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