American Financial Group
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Insurers could face pressure if interest rate and recession fears intersect with worsening loss cost trends. -
The firm anticipates renewal rates to rise between 5% and 7% in its specialty P&C operations overall and 6%-8% excluding workers’ comp.
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Specialty P&C NWP in Q1 rose up 13.5% year-over-year to almost $1.4bn, accelerating from a 4.4% increase in Q4.
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The insurer said it still had financial flexibility to grow even after making the dividend of roughly $170mn.
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Co-CEO Carl Lindner said his company has made “some adjustments” in staff compensation in response to higher inflation rates.
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The P&C segment’s fourth quarter combined ratio dropped 10.8 points to 80.8%, compared to 91.6% last year.
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The transaction comes after AFG paid almost $2.1bn in special dividends to shareholders in 2021, following its $3.5bn all-cash divestiture of its annuity business last year, and said it would pursue acquisitions.
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The Inside P&C research team looks forward to the big issues of the new year.
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Assurely will act as an MGA for Great American as the carrier expands its executive liability operations in the small business segment.
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The insurer is currently seeing ‘a steady flow’ of M&A opportunities in the market but would strike a deal only for double-digit returns over time.
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Catastrophe losses at the insurer fell to $31mn from $57mn last year.
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The Inside P&C Select Index outperformed the S&P 500 (5.7% to 2.9%) in August, despite Hurricane Ida making landfall.
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