AFG’s Specialty P&C insurance segment generates 90.5% CR in Q2’24

American Financial Group (AFG) has posted $209 million in net earnings for the second quarter of 2024, compared to $200 million from the second quarter of 2023.

According to AFG, Q2’24’s net earnings included after-tax non-core losses of $6 million. By comparison, net earnings in Q2’23 included net after-tax non-core items that reduced net income by $2 million.

Moreover, AFG’s Specialty P&C insurance operations generated a 90.5% combined ratio in the second quarter of 2024, representing an improvement of 1.4 points from the 91.9% figure that was posted in the prior year.

The segment also generated an underwriting profit of $151 million for the quarter, a solid increase from $123 million, which was posted in the prior period.

AFG also noted that average renewal pricing across its P&C Group – excluding workers’ compensation – was up by approximately 8% for the quarter, and up approximately 6% overall, consistent with pricing increases achieved in the first quarter of 2024.

Carl H. Lindner III and S. Craig Lindner, AFG’s Co-Chief Executive Officers, commented: “We are pleased to report a second quarter annualized core operating return on equity of 18.5%. Underwriting margins in our specialty P&C insurance businesses were strong, and higher interest rates increased net investment income, excluding alternatives, by 15% year over year. These results, coupled with effective capital management and our entrepreneurial, opportunistic culture and disciplined operating philosophy enable us to continue to create value for our shareholders.

Messrs. Lindner continued: “AFG continued to have significant excess capital at June 30, 2024. Returning capital to shareholders in the form of regular and special cash dividends and through opportunistic share repurchases is an important and effective component of our capital management strategy. In addition, our capital will be deployed into AFG’s core businesses as we identify the potential for healthy, profitable organic growth, and opportunities to expand our specialty niche businesses through acquisitions and start-ups that meet our target return thresholds.”

Carl Lindner III, added: “Underwriting profitability was very strong in our Specialty P&C businesses in the second quarter of 2024, and we continue to feel confident about the strength of our reserves. A continued favorable pricing environment and new business opportunities enabled us to selectively grow our Specialty P&C businesses. Growth in net written premium was about 4% for the first six months of the year, as timing of acreage reporting by farmers and underwriting actions in a few of our businesses tempered growth in the second quarter. We expect growth in net written premiums to be approximately 7% for the full year in 2024.”

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