American Financial Group, Inc. Reports Third Quarter 2024 Financial Results
American Financial Group, Inc. (NYSE: AFG) has released its financial results for the third quarter of 2024. The company's financial performance reflects resilience amid elevated catastrophe losses and showcases strategic capital management efforts.
Key Financial Metrics
| Metric | 2024 Q3 | 2023 Q3 | YoY Change | Consensus Estimate |
|---|---|---|---|---|
| Net Earnings | $181 million | $177 million | +2.3% | Not provided |
| Earnings Per Share (EPS) | $2.16 | $2.09 | +3.3% | $2.47 |
| Core Net Operating Earnings (EPS) | $2.31 | $2.45 | -5.7% | Not provided |
AFG's net earnings per share of $2.16 fell short of the Wall Street consensus estimate of $2.47, despite a year-over-year increase of 3.3%. Core net operating earnings per share declined, attributed to higher catastrophe losses associated primarily with Hurricane Helene and reduced favorable prior year reserve development in the Specialty Property and Casualty (P&C) insurance operations.
Revenue Performance by Segment
| Segment | 2024 Q3 Underwriting Profit | 2023 Q3 Underwriting Profit | YoY Change |
|---|---|---|---|
| Specialty P&C Insurance | $117 million | $143 million | -18.2% |
| Property and Transportation Group | $34 million | $42 million | -19.0% |
| Specialty Casualty Group | $76 million | $78 million | -2.6% |
| Specialty Financial Group | $22 million | $29 million | -24.1% |
AFG's Specialty P&C insurance operations were affected by $90 million in catastrophe losses, predominantly from Hurricane Helene, impacting underwriting profits across various segments. Gross and net written premiums saw robust increases, driven notably by the acquisition of Crop Risk Services and favorable renewal rate environments in several business lines.
Key Developments and Operational Highlights
- Annualized ROE for the third quarter stood at 15.2%; core operating ROE was 16.2%.
- Board of Directors declared a $4.00 per share special dividend, payable November 26, 2024.
- Overall, average renewal rate increases, excluding workers' compensation, reached 8%.
Executive Comments
S. Craig Lindner and Carl H. Lindner III, AFG's Co-CEOs, expressed satisfaction with the company's performance, citing an annualized core operating return of 16% and strong underwriting results despite challenges from elevated catastrophe losses. They highlighted a 15% year-over-year increase in net investment income within the P&C sector, emphasizing AFG's continued focus on creating shareholder value through effective capital management.
Dividend and Share Repurchase Program
AFG's Board announced a $4.00 per share special dividend, supplementing the regular quarterly dividend of $0.80 per share. Additionally, the company reiterated its commitment to returning capital to shareholders through regular and special dividends and opportunistic share repurchases as part of its capital management strategy.
Forward Guidance
The company did not provide specific forward guidance but continues to focus on deploying excess capital into core businesses for profitable organic growth and expansion into specialty niches.
Stock Price Movement
Following the earnings release, AFG's stock price increased modestly by approximately 0.50%.
For further details, please refer to AFG's earnings release and Quarterly Investor Supplement available on their website.
For more in-depth analysis and insights, stay tuned with our platform to stay ahead of the market.
