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Dec 31, 2024
AFG Q4 2024 Earnings Report
AFG's fourth quarter net earnings decreased slightly, while core net operating earnings increased, driven by higher P&C net investment income and improved returns on alternative investments, partially offset by lower P&C underwriting profit.
Key Takeaways
American Financial Group reported Q4 2024 net earnings of $255 million ($3.03 per share) compared to $263 million ($3.13 per share) in Q4 2023. Core net operating earnings were $262 million ($3.12 per share) for Q4 2024, compared to $238 million ($2.84 per share) in Q4 2023. The increase was driven by higher P&C net investment income, including improved returns on alternative investments, partially offset by lower P&C underwriting profit.
Net earnings per share were $3.03 in the fourth quarter and $10.57 for the full year.
Core net operating earnings per share were $3.12 in the fourth quarter and $10.75 for the full year.
Full year 2024 ROE was 19.0%, and core operating ROE was 19.3%.
Overall average renewal rate increases excluding workers’ compensation of 8%.
Forward Guidance
For 2025, AFG expects core operating earnings per share of approximately $10.50 and a core operating return on equity excluding AOCI of approximately 18%. This assumes 5% growth in net written premiums, a 92.5% calendar year combined ratio, a reinvestment rate of approximately 5.75%, and an 8% return on the alternative investments portfolio. The guidance includes an estimated $60 to $70 million in losses related to the Southern California wildfires.
Positive Outlook
- Expected core operating earnings per share of approximately $10.50.
- Anticipated core operating return on equity excluding AOCI of approximately 18%.
- Assumed 5% growth in net written premiums compared to 2024.
- Targeted calendar year combined ratio of 92.5%.
- Reinvestment rate of approximately 5.75%.
Challenges Ahead
- Guidance does not include earnings guidance
- Assumes a return of approximately 8% on the $2.7 billion portfolio of alternative investments.
- Includes an estimated $60 to $70 million in losses related to the Southern California wildfires.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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