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Sep 30, 2021
AFG Q3 2021 Earnings Report
American Financial Group announced third quarter results and declared a special dividend.
Key Takeaways
American Financial Group reported strong Q3 2021 results, with net earnings attributable to shareholders of $219 million ($2.56 per share) compared to $164 million ($1.86 per share) for the 2020 third quarter. Core net operating earnings were $231 million ($2.71 per share) for the 2021 third quarter, compared to $121 million ($1.38 per share) in the 2020 third quarter. The company also declared a special cash dividend of $4.00 per share.
Net earnings per share of $2.56; includes ($0.15) per share in after-tax non-core items
Core net operating earnings of $2.71 per share, a 96% increase from the prior year period
Third quarter annualized ROE of 16.6%; annualized core operating ROE of 17.6%
Announces special cash dividend of $4.00 per share, payable November 22, 2021
AFG
AFG
AFG Revenue by Segment
Revenue by Segment
Net Investment Income Revenue
CapyFin.comRealized Gains on Securities Revenue
CapyFin.comManaged Investment Entities: Investment Income Revenue
CapyFin.comManaged Investment Entities: Gains on FV Changes of Assets/Liabilities Revenue
CapyFin.com Forward Guidance
AFG expects core net operating earnings in 2021 to be in the range of $10.10 to $10.70 per share. The guidance reflects the expectation of an above-average crop year and an annualized return of approximately 10% on alternative investments in the fourth quarter of 2021.
Positive Outlook
- We are extremely pleased with AFG’s performance during the third quarter.
- Our Specialty P&C businesses reported outstanding underwriting margins, and results in our portfolio of alternative investments continued to exceed our expectations.
- Annualized core return on equity was nearly 18%.
- We believe that our disciplined – yet opportunistic – operating philosophy, a lower net catastrophe exposure than our peers, a continued economic recovery and a strong P&C rate environment all contributed to these outstanding results.
- 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.
Challenges Ahead
- Our core earnings per share guidance excludes non-core items such as results of discontinued operations, 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.
- 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 company recorded third quarter 2021 net realized losses on securities of $12 million ($0.15 loss per share) after tax, which included $12 million ($0.15 per share) in after-tax net losses to adjust equity securities that the Company continued to own at September 30, 2021, to fair value.
- 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
Revenue & Expenses
Visualization of income flow from segment revenue to net income