American Financial Group
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Treaty costs were slightly lower than for 2023 in risk-adjusted terms.
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Insurance Insider US runs you through the earnings results for the day.
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The Inside P&C news team runs you through the earnings results for the day.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The Inside P&C news team runs you through the earnings results for the day.
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Berding will retain his current role as president of American Money Management Corporation, AFG’s investment management services subsidiary.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The commentary follows AFG’s Q1 2023 earnings announcement on Tuesday, in which the carrier reported a 5.2-point deterioration in its P&C operations combined ratio to 89.2%.
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The latest statutory data release shows commercial carriers continued to benefit from the extended pricing cycle and exposure growth propelled by inflation, although growth slowed year-on-year.
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Public D&O and higher excess liability are two areas where the company is “not quite getting” to where it wants to be in terms of rates, co-CEO Carl Lindner said.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The property and transportation division’s CoR deteriorated 9.5 points to 90% in the fourth quarter, driven by its crop insurance operations.
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Amid record high economic inflation, continuing supply chain issues and proliferating nuclear verdicts, carrier CEOs have emphasized the need to keep rate above loss costs during Q3 conference calls.
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On a call with analysts, Lindner said AFG is assuming commercial auto liability loss cost trends at 7%.
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The company’s top line grew 18.7% to $3.15bn, primarily due to growth in the crop insurance business.
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Loss cost trends have been approximately 5% for AFG’s specialty P&C businesses, excluding workers' compensation, and approximately 3% overall throughout 2022.
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The company’s top line grew 9.6% to $2.1bn, but the speed of growth was smaller compared to Q1.
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The sector was hit by a rough first half of 2022, with more to come in the second half of the year.
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Insurers could face pressure if interest rate and recession fears intersect with worsening loss cost trends.
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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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Positive earnings results feed an optimistic outlook for the firm, despite some future challenges.
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The transaction generated a $3bn war chest, much of which AFG has already distributed to shareholders.
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Core operating earnings reached a record $288mn in the quarter, on a combination of improved underwriting results and strong investment returns.
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Following strong year-to-date performance, P&C stocks were down in June after a change of tone in a Fed meeting.
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The Cincinnati-based carrier said it expected the sale of Great American Life Insurance to MassMutual to close on May 28.
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The carrier is the latest major US-listed business to move away from the challenged life insurance space.