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Sep 30, 2022
AFG Q3 2022 Earnings Report
American Financial Group reported a decrease in net earnings and core net operating earnings for the third quarter of 2022, driven by lower returns in the alternative investment portfolio. The company also announced a special cash dividend.
Key Takeaways
American Financial Group's third quarter 2022 net earnings were $165 million ($1.93 per share) compared to $219 million ($2.56 per share) in the 2021 third quarter. Core net operating earnings were $192 million ($2.24 per share) for the 2022 third quarter, compared to $231 million ($2.71 per share) in the 2021 third quarter. The company announced a special cash dividend of $2.00 per share.
Net earnings per share of $1.93; includes ($0.31) per share in after-tax non-core items.
Core net operating earnings $2.24 per share, includes $0.36 per share of after-tax catastrophe losses.
Specialty P&C combined ratio of 91.1% includes 2.5 points of catastrophe losses.
Announces special cash dividend of $2.00 per share, payable November 22, 2022.
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 2022 core net operating earnings to be in the range of $11.00 to $11.75 per share and an overall 2022 calendar year combined ratio in the range of 86% to 87%. Net written premiums are expected to be 10% to 12% higher than the $5.6 billion reported in 2021.
Positive Outlook
- Expects 2022 core net operating earnings to be in the range of $11.00 to $11.75 per share.
- Assumes an overall annual yield of 12% on alternative investments for the full year.
- Expects an overall 2022 calendar year combined ratio in the range of 86% to 87%.
- Expects net written premiums to be 10% to 12% higher than the $5.6 billion reported in 2021.
- Achieving renewal pricing in excess of prospective loss ratio trends in the vast majority of businesses.
Challenges Ahead
- Guidance reflects minimal income from alternative investments in the fourth quarter of 2022.
- Management assumes that continued strong performance of multi-family housing investments will offset weaker performance of traditional private equity investments.
- Guidance continues to reflect an average crop year.
- Catastrophe losses impacted AFG’s underwriting results for the third quarter of 2022 by $39 million.
- Property and casualty net investment income was approximately 12% lower than the comparable 2021 period.
Revenue & Expenses
Visualization of income flow from segment revenue to net income