- Net earnings per share of $1.96; includes ($0.89) per share
in after-tax non-core items
- Second quarter core net operating earnings of $2.85 per
share, a 19% increase from the prior year period
- Second quarter annualized ROE of 14.3%; core operating ROE
of 20.7%
- Parent company cash and investments of approximately $750
million; excess capital of $1.1 billion at June 30, 2022
- Full year 2022 core net operating earnings guidance
increased to $10.75 - $11.75 per share, from previous guidance of
$10.50 - $11.50 per share
Seventh paragraph, first sentence of release should read: “AFG
had approximately $1.1 billion of excess capital (including parent
company cash and investments of approximately $750 million) at June
30, 2022.” (instead of “AFG had approximately $1.1 billion of
excess capital (including parent company cash and investments of
approximately $1.7 billion) at June 30, 2022.”)
The updated release reads:
AMERICAN FINANCIAL GROUP, INC. ANNOUNCES SECOND QUARTER
RESULTS
- Net earnings per share of $1.96; includes ($0.89) per share
in after-tax non-core items
- Second quarter core net operating earnings of $2.85 per
share, a 19% increase from the prior year period
- Second quarter annualized ROE of 14.3%; core operating ROE
of 20.7%
- Parent company cash and investments of approximately $750
million; excess capital of $1.1 billion at June 30, 2022
- Full year 2022 core net operating earnings guidance
increased to $10.75 - $11.75 per share, from previous guidance of
$10.50 - $11.50 per share
American Financial Group, Inc. (NYSE: AFG) today reported 2022
second quarter net earnings attributable to shareholders of $167
million ($1.96 per share) compared to $1.0 billion ($11.70 per
share) in the 2021 second quarter. Net earnings for the 2022 second
quarter included after-tax non-core realized losses on securities
of $73 million ($0.86 per share loss), and other net after-tax
non-core charges of $3 million ($0.03 per share loss). By
comparison, net earnings in the 2021 second quarter included net
favorable after-tax non-core items aggregating $797 million ($9.31
per share), primarily the gain on sale and earnings from AFG’s
discontinued Annuity operations, which were sold in May 2021. Other
details may be found in the table on the following page. Annualized
return on equity was 14.3% and 72.0% for the second quarters of
2022 and 2021, respectively.
Core net operating earnings were $243 million ($2.85 per share)
for the 2022 second quarter, compared to $205 million ($2.39 per
share) in the 2021 second quarter. The year-over-year increase was
primarily the result of significantly higher Specialty Property and
Casualty (“P&C”) underwriting profit. Additional details for
the 2022 and 2021 second quarters may be found in the table below.
Core net operating earnings for the second quarters of 2022 and
2021 generated annualized returns on equity of 20.7% and 14.7%,
respectively.
Three Months Ended June 30,
Components of
Pretax Core Operating Earnings
2022
2021
2022
2021
2022
2021
In millions, except per share amounts
Before Impact of
Alternative
Core Net Operating
Alternative Investments
Investments
Earnings, as reported
P&C Pretax Core Operating Earnings
$
283
$
225
$
62
$
63
$
345
$
288
Real estate entities and other acquired
from Annuity operations
-
2
-
20
-
22
Other expenses
(14
)
(35
)
-
-
(14
)
(35
)
Holding company interest expense
(23
)
(23
)
-
-
(23
)
(23
)
Pretax Core Operating Earnings
246
169
62
83
308
252
Related provision for income taxes
52
30
13
17
65
47
Core Net Operating Earnings
$
194
$
139
$
49
$
66
$
243
$
205
Core Operating Earnings Per Share
$
2.28
$
1.62
$
0.57
$
0.77
$
2.85
$
2.39
Weighted Avg Diluted Shares
Outstanding
85.3
85.6
85.3
85.6
85.3
85.6
AFG’s book value per share was $47.76 at June 30, 2022. AFG paid
cash dividends of $8.56 per share during the second quarter, which
included an $8.00 per share special dividend. For the three months
ended June 30, 2022, AFG’s growth in book value per share plus
dividends was (0.9%) and year to date, growth in book value per
share plus dividends was (0.2%), reflecting the increased
unrealized loss on fixed maturities from the impact of rising
interest rates and widening credit spreads.
Book value per share, excluding unrealized gains (losses)
related to fixed maturities, was $51.68 at June 30, 2022. For the
three months ended June 30, 2022, AFG’s growth in adjusted book
value per share plus dividends was 3.6%. Year to date, growth in
adjusted book value per share plus dividends was 9.4%
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 table below identifies such items and
reconciles net earnings attributable to shareholders to core net
operating earnings, a non-GAAP financial measure. AFG believes that
its core net operating earnings provides management, financial
analysts, ratings agencies and investors with an understanding of
the results from the ongoing operations of the Company by excluding
the impact of discontinued operations, net realized gains and
losses, and other items that are not necessarily indicative of
operating trends. AFG’s management uses core net operating earnings
to evaluate financial performance against historical results
because it believes this provides a more comparable measure of its
continuing business. Core net operating earnings is also used by
AFG’s management as a basis for strategic planning and
forecasting.
In millions, except per share amounts
Three months ended June 30,
Six months ended June 30,
2022
2021
2022
2021
Components of net earnings:
Core operating earnings before income
taxes
$
308
$
252
$
686
$
510
Pretax non-core
items:
Realized gains (losses) on securities
(93
)
43
(108
)
120
Loss on retirement of debt
(9
)
-
(11
)
-
Other
-
(7
)
-
(7
)
Earnings before income taxes
206
288
567
623
Provision (credit) for income taxes:
Core operating earnings
65
47
140
99
Non-core items
(26
)
1
(30
)
17
Total provision for income taxes
39
48
110
116
Net earnings from continuing
operations
167
240
457
507
Net earnings from discontinued annuity
operations
-
762
-
914
Net earnings
$
167
$
1,002
$
457
$
1,421
Net earnings:
Core net operating earnings(a)
$
243
$
205
$
546
$
411
Non-core
items:
Realized gains (losses) on securities
(73
)
34
(85
)
95
Loss on retirement of debt
(7
)
-
(8
)
-
Other
4
1
4
1
Net earnings from continuing
operations
167
240
457
507
Net earnings from discontinued annuity
operations
-
762
-
914
Net earnings
$
167
$
1,002
$
457
$
1,421
Components of earnings per share:
Core net operating earnings(a)
$
2.85
$
2.39
$
6.41
$
4.78
Non-core
Items:
Realized gains (losses) on securities
(0.86
)
0.40
(1.00
)
1.10
Loss on retirement of debt
(0.08
)
-
(0.10
)
-
Other
0.05
0.02
0.05
0.02
Diluted net earnings per share from
continuing operations
$
1.96
$
2.81
$
5.36
$
5.90
Net earnings from discontinued annuity
operations
-
8.89
-
10.61
Diluted net earnings per share
$
1.96
$
11.70
$
5.36
$
16.51
Footnote (a) is contained in the
accompanying Notes to Financial Schedules at the end of this
release.
Carl H. Lindner III and S. Craig Lindner, AFG’s Co-Chief
Executive Officers, issued this statement: “AFG’s second quarter
results were outstanding. We are pleased to report an annualized
core operating return of nearly 21% in the quarter, including
record second quarter underwriting profit alongside double-digit
premium growth. Strategic positioning of our investment portfolio
enabled us to invest opportunistically, and the returns in our
alternative investment portfolio continued to exceed our
expectations. Our entrepreneurial, opportunistic culture and
disciplined operating philosophy serve us well in this increasing
interest rate environment and favorable P&C market.
“AFG had approximately $1.1 billion of excess capital (including
parent company cash and investments of approximately $750 million)
at June 30, 2022. Returning capital to shareholders in the form of
regular and special cash dividends and through opportunistic share
repurchases is an important and effective component of our capital
management strategy. In addition, our excess capital will be
deployed into AFG’s core businesses as we identify potential for
healthy, profitable organic growth, and opportunities to expand our
specialty niche businesses through acquisitions and start-ups that
meet our target return thresholds.”
Messrs. Lindner continued, “Based on the results reported in the
first half of the year and expectations for the remainder of the
year, we now expect AFG’s core net operating earnings in 2022 to be
in the range of $10.75 to $11.75 per share, an increase from our
previous range of $10.50 to $11.50 per share, reflecting higher
expected underwriting profit in our Specialty Casualty and
Specialty Financial Groups. In addition, our guidance contemplates
the impact of the current interest rate environment on investment
income and assumes an overall annual yield of 10%-12% on
alternative investments for the full year, based on the strong
performance of this portfolio in the first half of 2022. Our
guidance reflects minimal income from alternative investments in
the second half of 2022 as management assumes that continued strong
performance of multi-family housing investments will offset weaker
performance of traditional private equity investments. Furthermore,
our guidance continues to reflect an average crop year.”
AFG’s core earnings per share guidance excludes non-core items
such as realized gains and losses and other significant items that
are not able to be estimated with reasonable precision, or that may
not be indicative of ongoing operations.
Specialty Property and Casualty
Insurance Operations
The Specialty P&C insurance operations reported a record
second quarter underwriting profit of $197 million in the 2022
second quarter, compared to $153 million in the 2021 second
quarter, a 29% increase. Higher year-over-year underwriting profit
in our Specialty Casualty and Specialty Financial Groups was
partially offset by lower underwriting profit in our Property and
Transportation Group.
The second quarter 2022 combined ratio was a very strong 85.8%,
improving 2.1 points from the prior year period. Second quarter
2022 results include $86 million (6.3 points) of favorable prior
year reserve development, compared to $68 million (5.4 points) in
the comparable prior year period. Catastrophe losses added 1.6
points to the combined ratio in the second quarter of 2022,
compared to 0.9 point in the prior year period.
Second quarter 2022 gross and net written premiums were up 10%
and 11%, respectively, when compared to the second quarter of 2021.
Year-over-year growth was reported within each of the Specialty
P&C groups as a result of a combination of new business
opportunities, increased exposures and a good renewal rate
environment. Average renewal pricing across our P&C Group,
excluding workers’ compensation, was up approximately 6% for the
quarter, and up approximately 4% overall. With the exception of
workers’ compensation, we are continuing to achieve renewal rate
increases at or in excess of prospective loss ratio trends in the
majority of our businesses.
Further details about AFG’s Specialty P&C operations may be
found in the accompanying schedules.
The Property and Transportation Group reported an
underwriting profit of $39 million in the second quarter of 2022,
compared to $62 million in the second quarter of 2021, reflecting
large loss activity and higher catastrophe losses in our property
& inland marine business and lower levels of favorable prior
period reserve development when compared to an elevated level of
favorable development in the first half of 2021. Catastrophe losses
in this group, net of reinsurance and inclusive of reinstatement
premiums, were $19 million in the second quarter of 2022, compared
to $7 million in the comparable 2021 period. Overall, the
businesses in the Property and Transportation Group achieved a
92.4% calendar year combined ratio in the second quarter, 5.8
points higher than the comparable period in 2021.
Second quarter 2022 gross and net written premiums in this group
were 13% and 12% higher, respectively, than the comparable prior
year period. The year-over-year growth was primarily attributed to
increased exposures and higher rates in our transportation
businesses and growth in our crop insurance business. All of the
businesses in this group reported growth in gross written premium
during the quarter. Overall renewal rates in this group increased
5% on average in the second quarter of 2022.
The Specialty Casualty Group reported an underwriting
profit of $130 million in the second quarter of 2022, compared to
$71 million in the second quarter of 2021, primarily the result of
higher profitability in our workers’ compensation, excess and
surplus lines, and executive liability businesses. Underwriting
profitability in our workers’ compensation businesses overall
continues to be excellent. The businesses in the Specialty Casualty
Group achieved an exceptionally strong 80.1% calendar year combined
ratio overall in the second quarter, an improvement of 7.8 points
from the comparable period in 2021.
Second quarter 2022 gross and net written premiums increased 6%
and 9%, respectively, when compared to the same prior year period.
Excluding workers’ compensation, gross and net written premiums
grew 6% and 11%, respectively. Factors contributing to
year-over-year premium growth included increased exposures in our
excess and surplus lines business, rate increases and new business
opportunities in several of our targeted market businesses, and
payroll growth in our workers’ compensation business. This growth
was partially offset by lower year-over-year premiums in our
mergers & acquisitions liability business. The majority of the
businesses in this group achieved good renewal pricing and reported
premium growth during the second quarter. Excluding workers’
compensation, renewal pricing for this group was up 7% in the
second quarter and was up 4% overall.
The Specialty Financial Group reported an underwriting
profit of $37 million in the second quarter of 2022, compared to
$21 million in the second quarter of 2021. Improved results in our
trade credit and fidelity / crime businesses were the primary
contributors to the higher year-over-year underwriting
profitability. This group continued to achieve excellent
underwriting margins and reported an exceptionally strong 78.4%
combined ratio for the second quarter of 2022, an improvement of
8.0 points from the comparable period in 2021. Catastrophe losses
for this group, net of reinsurance and inclusive of reinstatement
premiums, were $3 million in the second quarter of 2022, compared
to $2 million in the prior year quarter.
Second quarter 2022 gross and net written premiums in this group
were up 13% and 11%, respectively, when compared to the prior year
period. New business opportunities within our lender services
business, and exposure growth and new business opportunities in our
trade credit and surety businesses contributed to the increase in
the quarter. Renewal pricing in this group was up approximately 2%
for the quarter.
Carl Lindner III stated, "Operating earnings in our P&C
Segment established a new second quarter record for AFG, and I’m
pleased to report double-digit growth in gross and net written
premiums during the quarter. Underwriting margins across our
portfolio of businesses were excellent, with each P&C Group
reporting a combined ratio in the 80’s through the first half of
2022. Our ability to achieve rate increases significantly above
prospective loss ratio trends over the last few years has
contributed to virtually all of our businesses meeting or exceeding
ROE targets.”
Mr. Lindner added, “Based on results through the first six
months, we continue to expect an overall 2022 calendar year
combined ratio in the range of 85% to 87%, and we now expect net
written premiums to be 9% to 13% higher than the $5.6 billion
reported in 2021, an increase from our previous guidance of growth
in the range of 8% to 12%. We expect the market to remain firm
throughout 2022, allowing us to act on business opportunities and
achieve adequate renewal rate increases.”
Further details about AFG’s Specialty P&C operations may be
found in the accompanying schedules and in our Quarterly Investor
Supplement, which is posted on our website.
Investments
Net Investment Income – For the quarter ended June 30,
2022, net investment income was slightly higher than the comparable
2021 period. Both periods included strong earnings from alternative
investments, with an annualized return of approximately 12.4% for
the 2022 quarter and 21.1% for the 2021 quarter. Earnings from
alternative investments may vary from quarter to quarter based on
the reported results of the underlying investments, and generally
are reported on a quarter lag. The average annual return on
alternative investments over the five calendar years ended December
31, 2021 was approximately 13%.
The $62 million in pretax earnings from alternative investments
in the second quarter of 2022 included $38 million in earnings from
the sale of certain multi-family housing investments in a very
favorable market. Excluding the impact of alternative investments,
net investment income in our property and casualty insurance
operations for the three months ended June 30, 2022 increased 18%
year-over-year as a result of the impact of rising interest rates
and higher balances of invested assets.
Non-Core Net Realized Gains (Losses) – AFG recorded
second quarter 2022 net realized losses on securities of $73
million ($0.86 per share loss) after tax, which included $65
million ($0.76 per share loss) in after-tax net losses to adjust
equity securities that the Company continued to own at June 30,
2022, to fair value. By comparison, AFG recorded net realized gains
on securities of $34 million ($0.40 per share) in the comparable
2021 period.
After-tax unrealized losses on fixed maturities were $326
million at June 30, 2022. Our portfolio continues to be high
quality, with 91% of our fixed maturity portfolio rated investment
grade and 98% of our P&C fixed maturity portfolio with a
National Association of Insurance Commissioners’ designation of
NAIC 1 or 2, its highest two categories.
More information about the components of our investment
portfolio may be found in our Quarterly Investor Supplement, which
is posted on our website.
Discontinued Annuity
Operations
In May 2021, AFG completed the sale of its Annuity business to
Mass Mutual for cash proceeds of $3.57 billion. AFG recognized an
after-tax non-core gain on the sale of $656 million ($7.62 per AFG
share) in the first half of 2021. The sale continues to be subject
to tax-related post-closing adjustments, which are not expected to
be material and are expected to be settled in 2022.
Redemption of 3.500% Senior Notes due
2026
On June 3, 2022, the Company redeemed all of its approximately
$375 million in outstanding 3.500% Senior Notes due 2026 under a
make-whole call. The redemption price was 101.757% of the principal
amount of the Notes redeemed plus accrued and unpaid interest to
the Redemption Date. The early redemption of the Notes resulted in
an after-tax non-core loss of approximately $7 million ($0.08 per
share loss) during the second quarter of 2022.
About American Financial Group, Inc.
American Financial Group is an insurance holding company, based
in Cincinnati, Ohio. Through the operations of Great American
Insurance Group, AFG is engaged primarily in property and casualty
insurance, focusing on specialized commercial products for
businesses. 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; 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, including modifications to capital
requirements; the effects of the COVID-19 pandemic; 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 pandemics, 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; 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.
Conference Call
The Company will hold a conference call to discuss 2022 second
quarter results at 11:30 a.m. (ET) tomorrow, Thursday, August 4,
2022. New, simplified event registration and access provides two
ways to access the call.
Participants should register for the call here now, or any time
up to and during the time of the call, and will immediately receive
the dial-in number and a unique pin to access the call. While you
may register at any time up to and during the time of the call, you
are encouraged to join the call 10 minutes prior to the start of
the event.
The conference call and accompanying webcast slides will also be
broadcast live over the internet. To access the event, click the
following link:
https://www.afginc.com/news-and-events/event-calendar.
Alternatively, you can choose Events from the Investor
Relations page at www.AFGinc.com.
A replay of the webcast will be available via the same link on
our website approximately two hours after the completion of the
call.
(Financial summaries follow)
This earnings release and AFG’s Quarterly Investor Supplement
are available in the Investor Relations section of AFG’s website:
www.AFGinc.com.
AMERICAN FINANCIAL GROUP, INC.
AND SUBSIDIARIES
SUMMARY OF EARNINGS AND
SELECTED BALANCE SHEET DATA
(In Millions, Except Per Share
Data)
Three months ended
June 30,
Six months ended
June 30,
2022
2021
2022
2021
Revenues
P&C insurance net earned premiums
$
1,393
$
1,250
$
2,695
$
2,423
Net investment income
168
164
398
352
Realized gains (losses) on:
Securities
(93
)
43
(108
)
120
Subsidiaries
-
4
-
4
Income of managed investment entities:
Investment income
54
44
100
90
Gain (loss) on change in fair value of
assets/liabilities
(15
)
6
(20
)
8
Other income
32
20
62
43
Total revenues
1,539
1,531
3,127
3,040
Costs and expenses
P&C insurance losses &
expenses
1,206
1,104
2,313
2,151
Interest charges on borrowed money
23
23
46
47
Expenses of managed investment
entities
47
39
86
78
Other expenses
57
77
115
141
Total costs and expenses
1,333
1,243
2,560
2,417
Earnings from continuing operations before
income taxes
206
288
567
623
Provision for income taxes
39
48
110
116
Net earnings from continuing
operations
167
240
457
507
Net earnings from discontinued
operations
-
762
-
914
Net earnings
$
167
$
1,002
$
457
$
1,421
Earnings per diluted common share:
Continuing operations
$
1.96
$
2.81
$
5.36
$
5.90
Discontinued operations
-
8.89
-
10.61
Diluted earnings
$
1.96
$
11.70
$
5.36
$
16.51
Average number of diluted shares
85.3
85.6
85.3
86.1
AMERICAN FINANCIAL GROUP, INC.
AND SUBSIDIARIES
SUMMARY OF EARNINGS AND
SELECTED BALANCE SHEET DATA
(In Millions, Except Per Share
Data)
June 30,
December 31,
Selected Balance
Sheet Data:
2022
2021
Total cash and investments
$
14,268
$
15,745
Long-term debt
$
1,542
$
1,964
Shareholders’ equity(b)
$
4,067
$
5,012
Shareholders’ equity (excluding unrealized
gains/losses related to fixed maturities)
$
4,401
$
4,876
Book value per share(b)
$
47.76
$
59.02
Book value per share (excluding unrealized
gains/losses related to fixed maturities)
$
51.68
$
57.42
Common Shares Outstanding
85.2
84.9
Footnote (b) is contained in the
accompanying Notes to Financial Schedules at the end of this
release.
SPECIALTY P&C
OPERATIONS
(Dollars in Millions)
Three months ended June 30,
Pct. Change
Six months ended June 30,
Pct. Change
2022
2021
2022
2021
Gross written premiums
$
2,123
$
1,937
10
%
$
4,059
$
3,553
14
%
Net written premiums
$
1,516
$
1,369
11
%
$
2,884
$
2,574
12
%
Ratios (GAAP):
Loss & LAE ratio
55.4
%
57.2
%
54.3
%
57.0
%
Underwriting expense ratio
30.4
%
30.7
%
30.6
%
31.2
%
Specialty Combined Ratio
85.8
%
87.9
%
84.9
%
88.2
%
Combined Ratio – P&C
Segment
86.0
%
87.9
%
85.0
%
88.2
%
Supplemental
Information:(c)
Gross Written Premiums:
Property & Transportation
$
962
$
851
13
%
$
1,722
$
1,371
26
%
Specialty Casualty
948
897
6
%
1,924
1,801
7
%
Specialty Financial
213
189
13
%
413
381
8
%
$
2,123
$
1,937
10
%
$
4,059
$
3,553
14
%
Net Written Premiums:
Property & Transportation
$
632
$
564
12
%
$
1,133
$
967
17
%
Specialty Casualty
646
592
9
%
1,296
1,180
10
%
Specialty Financial
177
159
11
%
336
320
5
%
Other
61
54
13
%
119
107
11
%
$
1,516
$
1,369
11
%
$
2,884
$
2,574
12
%
Combined Ratio (GAAP):
Property & Transportation
92.4
%
86.6
%
89.3
%
86.1
%
Specialty Casualty
80.1
%
87.9
%
80.4
%
89.0
%
Specialty Financial
78.4
%
86.4
%
80.1
%
85.4
%
Aggregate Specialty Group
85.8
%
87.9
%
84.9
%
88.2
%
Three months ended June 30,
Six months ended June 30,
2022
2021
2022
2021
Reserve Development
(Favorable)/Adverse:
Property & Transportation
$
(30
)
$
(40
)
$
(64
)
$
(83
)
Specialty Casualty
(49
)
(20
)
(98
)
(29
)
Specialty Financial
(15
)
(12
)
(28
)
(20
)
Other Specialty
8
4
15
5
Specialty Group
(86
)
(68
)
(175
)
(127
)
Other
1
1
2
1
Total Reserve Development
$
(85
)
$
(67
)
$
(173
)
$
(126
)
Points on Combined Ratio:
Property & Transportation
(6.0
)
(8.8
)
(6.8
)
(9.8
)
Specialty Casualty
(7.5
)
(3.4
)
(7.6
)
(2.5
)
Specialty Financial
(8.8
)
(7.3
)
(8.5
)
(6.3
)
Aggregate Specialty Group
(6.3
)
(5.4
)
(6.5
)
(5.3
)
Total P&C Segment
(6.1
)
(5.4
)
(6.4
)
(5.3
)
Footnote (c) is contained in the
accompanying Notes to Financial Schedules at the end of this
release.
AMERICAN FINANCIAL GROUP,
INC.
Notes to Financial
Schedules
a) Components of core net operating
earnings (in millions):
Three months ended June 30,
Six months ended June 30,
2022
2021
2022
2021
Core Operating
Earnings before Income Taxes:
P&C insurance segment
$
345
$
288
$
767
$
576
Real estate entities and other acquired
from
Annuity operations*
-
22
-
50
Interest and other corporate expenses
(37
)
(58
)
(81
)
(116
)
Core operating earnings before income
taxes
308
252
686
510
Related income taxes
65
47
140
99
Core net operating earnings
$
243
$
205
$
546
$
411
* Income from real estate entities
acquired from AFG’s Annuity operations through May 31, 2021 (the
effective date of the sale of the Annuity business).
b) Shareholders’ Equity at June 30, 2022 includes $334 million
($3.92 per share) in unrealized after-tax losses related to fixed
maturities compared to $136 million ($1.60 per share) in unrealized
after-tax gains related to fixed maturities at December 31, 2021.
c)
Supplemental Notes:
- Property & Transportation includes primarily
physical damage and liability coverage for buses and trucks and
other specialty transportation niches, inland and ocean marine,
agricultural-related products and other commercial 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 lending and leasing institutions (including equipment
leasing and collateral and lender-placed mortgage property
insurance), surety and fidelity products and trade credit
insurance.
- Other includes an internal reinsurance facility.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220803005914/en/
Diane P. Weidner, IRC Vice President – Investor & Media
Relations 513-369-5713
Websites: www.AFGinc.com
www.GreatAmericanInsuranceGroup.com
American Financial (NYSE:AFG)
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American Financial (NYSE:AFG)
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