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Sep 30, 2023
AFG Q3 2023 Earnings Report
American Financial Group reported third quarter results, highlighted by strong underwriting results and increased investment income.
Key Takeaways
American Financial Group reported a strong third quarter with net earnings of $177 million, or $2.09 per share. Core net operating earnings increased to $208 million, or $2.45 per share, driven by higher net investment income. The company's Specialty P&C operations achieved a combined ratio of 92.2%.
Net earnings per share of $2.09; includes ($0.36) per share in after-tax non-core items
Core net operating earnings $2.45 per share, an increase of 9% from the prior year period
Third quarter annualized ROE of 15.7%; annualized core operating ROE of 18.3%
Board of Directors declares $1.50 per share special dividend, payable November 22, 2023
AFG
AFG
AFG Revenue by Segment
Revenue by Segment
P&C Insurance Net Earned Premiums Revenue
CapyFin.comNet 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.comOther Income Revenue
CapyFin.com Forward Guidance
AFG expects 2023 core net operating earnings to be in the range of $10.15 to $11.15 per share. This reflects expectations of a below average crop year, offset by higher-than-previously expected net investment income. At the midpoint of the range, the revised guidance would produce a core return on equity of approximately 20%.
Positive Outlook
- Expects 2023 core net operating earnings to be in the range of $10.15 to $11.15 per share
- Expectations of higher-than-previously expected net investment income.
- Guidance would produce a core return on equity of approximately 20%.
- Anticipate opportunities to expand specialty niche businesses through acquisitions and start-ups
- Expect net written premiums to be 6% to 8% higher than the $6.2 billion reported in 2022
Challenges Ahead
- Expectations of a below average crop year
- Core earnings per share guidance excludes non-core items such as realized gains and losses
- Higher frequency of catastrophe losses during the quarter
- A&E charge to increase its liabilities for environmental exposures by $15 million
- After-tax unrealized losses related to fixed maturities were $555 million
Revenue & Expenses
Visualization of income flow from segment revenue to net income