American Financial Group, Inc. (AFG) Bundle
A Brief History of American Financial Group, Inc.
American Financial Group, Inc. (AFG) has established itself as a significant player in the property and casualty insurance sector since its founding in 1872. The company operates through its subsidiaries, primarily focusing on specialized commercial products.
Recent Financial Performance
For the first nine months of 2024, AFG reported net earnings of $632 million, translating to $7.54 per share, compared to $589 million or $6.93 per share in the same period of 2023. This reflects a year-over-year increase driven by higher yields on fixed maturity investments and net realized gains on securities .
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Net Earnings | $632 million | $589 million | +7.3% |
| EPS (Diluted) | $7.54 | $6.93 | +8.8% |
| Net Investment Income | $195 million | $170 million | +14.7% |
| Underwriting Profit | $422 million | $421 million | +0.2% |
Quarterly Results
In the third quarter of 2024, AFG achieved net earnings of $181 million ($2.16 per share), an increase from $177 million ($2.09 per share) in Q3 2023. The underwriting profit for this period amounted to $129 million, up from $117 million year-over-year .
| Quarter | Net Earnings | EPS (Diluted) | Underwriting Profit |
|---|---|---|---|
| Q3 2024 | $181 million | $2.16 | $129 million |
| Q3 2023 | $177 million | $2.09 | $117 million |
Premium Growth
AFG's property and casualty insurance segment reported net written premiums of $5.68 billion for the first nine months of 2024, an increase of 8% compared to $5.25 billion in the same period of 2023 .
| Segment | 2024 NWP | 2023 NWP | Change |
|---|---|---|---|
| Property and Transportation | $2.41 billion | $2.13 billion | +14% |
| Specialty Casualty | $2.32 billion | $2.24 billion | +3% |
| Specialty Financial | $766 million | $685 million | +12% |
Investment Income
For the third quarter of 2024, AFG's net investment income reached $195 million, a rise of 15% from $170 million in Q3 2023. The average invested assets were approximately $15.45 billion at an annualized yield of 5.05% .
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Investment Income | $195 million | $170 million | +14.7% |
| Average Invested Assets | $15.45 billion | $14.90 billion | +3.7% |
| Yield | 5.05% | 4.56% | +0.49% |
Outlook and Market Conditions
Management anticipates continued premium growth and strong underwriting results in the generally favorable property and casualty insurance market. The company is positioned to benefit from the elevated interest rate environment, which is expected to enhance investment income into 2025 .
A Who Owns American Financial Group, Inc. (AFG)
Ownership Structure
American Financial Group, Inc. (AFG) is publicly traded on the New York Stock Exchange under the ticker symbol AFG. As of 2024, the ownership of AFG is characterized by a mix of institutional investors, mutual funds, and individual shareholders. The largest shareholders include:
| Shareholder Type | Number of Shares | Percentage Ownership |
|---|---|---|
| Institutional Investors | Approximately 53 million | 63.3% |
| Mutual Funds | Approximately 10 million | 12.0% |
| Individual Investors | Approximately 20 million | 24.7% |
Top Institutional Shareholders
The following table illustrates the top institutional shareholders of AFG:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 9,500,000 | 11.4% |
| BlackRock, Inc. | 8,000,000 | 9.6% |
| State Street Corporation | 7,200,000 | 8.6% |
| T. Rowe Price Associates, Inc. | 6,500,000 | 7.8% |
| Fidelity Investments | 5,800,000 | 7.0% |
Recent Shareholder Activities
In 2023, AFG repurchased 1,872,544 shares of its Common Stock for a total of $213 million. The company also paid special cash dividends totaling $466 million, which included $4.00 per share in February and $1.50 per share in November. In early 2024, AFG announced a special cash dividend of $2.50 per share, totaling approximately $209 million.
Market Capitalization
As of September 30, 2024, AFG's market capitalization was approximately $6.4 billion, reflecting a steady increase in stock price over the past year. The stock price has seen significant volatility but has generally trended upward due to strong earnings performances and favorable market conditions.
Financial Performance Overview
For the first nine months of 2024, AFG reported net earnings of $632 million, or $7.54 per share, compared to $589 million, or $6.93 per share, for the same period in 2023. This represents a year-over-year increase of approximately 7.3%.
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) | Change |
|---|---|---|---|
| Net Earnings | $632 million | $589 million | +7.3% |
| Earnings Per Share (EPS) | $7.54 | $6.93 | +8.8% |
| Gross Written Premiums | $8.49 billion | $7.66 billion | +11% |
| Net Written Premiums | $5.68 billion | $5.25 billion | +8% |
Debt and Capital Structure
As of September 30, 2024, AFG's principal amount of long-term debt was $1.498 billion, with a debt-to-total capital ratio of 23.6%. This ratio has shown a slight decrease from 24.7% in 2023.
| Debt Metric | 2024 | 2023 |
|---|---|---|
| Principal Amount of Long-Term Debt | $1.498 billion | $1.498 billion |
| Total Capital | $6.342 billion | $6.075 billion |
| Debt to Total Capital Ratio | 23.6% | 24.7% |
American Financial Group, Inc. (AFG) Mission Statement
Overview of Mission Statement
American Financial Group, Inc. (AFG) aims to provide innovative and customized property and casualty insurance solutions while enhancing shareholder value through disciplined underwriting and investment practices. The company emphasizes a commitment to operational excellence, risk management, and strong customer relationships.
Financial Performance Metrics
As of the first nine months of 2024, AFG reported the following key financial metrics:
| Metric | 2024 (First Nine Months) | 2023 (First Nine Months) | Change (%) |
|---|---|---|---|
| Net Earnings (in millions) | $632 | $589 | 7.3% |
| Net Earnings per Share (diluted) | $7.54 | $6.93 | 8.8% |
| Gross Written Premiums (in millions) | $8,490 | $7,664 | 10.8% |
| Combined Ratio (%) | 91.9% | 91.3% | 0.6% |
| Underwriting Profit (in millions) | $418 | $420 | -0.5% |
| Net Investment Income (in millions) | $589 | $568 | 3.7% |
Strategic Goals
- Enhance premium growth through targeted marketing and product innovation.
- Maintain a disciplined approach to underwriting and risk selection.
- Focus on operational efficiency and cost management.
- Invest in technology to improve customer experience.
- Expand into new markets and segments to drive revenue growth.
Market Position and Competitive Advantage
AFG positions itself as a leader in the property and casualty insurance industry, focusing on specialized commercial products. The company leverages its extensive experience and expertise to address unique customer needs, providing a competitive edge in a dynamic market environment.
Recent Developments
In 2024, AFG has seen robust performance in its specialty property and casualty insurance operations, with an underwriting profit of $422 million for the first nine months, reflecting a slight increase from the previous year. The company has also noted an increase in catastrophe losses, which totaled $161 million, impacting the combined ratio.
Investment Strategy
AFG's investment portfolio is diversified across various asset classes, with a significant focus on fixed maturity securities. As of September 30, 2024, the investment portfolio included:
| Investment Type | Value (in billions) |
|---|---|
| Fixed Maturity Securities | $10.44 |
| Equity Securities | $1.081 |
| Cash and Investments | $0.382 |
Commitment to Shareholders
AFG is committed to returning value to its shareholders through dividends and share repurchases. In 2024, the company declared a special cash dividend of $209 million ($2.50 per share) and anticipates further shareholder returns through ongoing capital management strategies.
Conclusion
American Financial Group, Inc. continues to uphold its mission of delivering exceptional insurance solutions while focusing on growth, efficiency, and shareholder value. The company's strategic initiatives and strong financial performance position it well for future success in the property and casualty insurance market.
How American Financial Group, Inc. (AFG) Works
Overview of Operations
American Financial Group, Inc. (AFG) operates primarily in the property and casualty insurance sector, focusing on specialized commercial products for businesses through its subsidiaries. As of 2024, AFG's operations are divided into two main segments: Property and Casualty Insurance and Other operations, which include holding company expenses and income.
Financial Performance
For the first nine months of 2024, AFG reported a net income of $632 million, equivalent to $7.54 per diluted share, compared to $589 million or $6.93 per diluted share for the same period in 2023. This reflects an increase driven by higher yields on fixed maturity investments and net realized gains on securities.
| Financial Metric | 2024 | 2023 | % Change |
|---|---|---|---|
| Net Earnings (in millions) | $632 | $589 | 7.3% |
| Earnings Per Share (diluted) | $7.54 | $6.93 | 8.8% |
| Net Investment Income (in millions) | $589 | $568 | 3.7% |
| Underwriting Profit (in millions) | $418 | $420 | -0.5% |
Gross Written Premiums
AFG's gross written premiums (GWP) for the first nine months of 2024 were $8.49 billion, representing an 11% increase from $7.66 billion in the same period of 2023. The breakdown of GWP by segment is as follows:
| Segment | 2024 GWP (in millions) | 2023 GWP (in millions) | % Change |
|---|---|---|---|
| Property and Transportation | $4,150 | $3,523 | 18% |
| Specialty Casualty | $3,417 | $3,299 | 4% |
| Specialty Financial | $923 | $842 | 10% |
Net Written Premiums
Net written premiums (NWP) for the first nine months of 2024 totaled $5.68 billion, an 8% increase from $5.25 billion in 2023. The distribution of NWP is detailed below:
| Segment | 2024 NWP (in millions) | 2023 NWP (in millions) | % Change |
|---|---|---|---|
| Property and Transportation | $2,412 | $2,125 | 14% |
| Specialty Casualty | $2,318 | $2,244 | 3% |
| Specialty Financial | $766 | $685 | 12% |
Investment Income
In the first nine months of 2024, AFG's net investment income was $589 million, a 4% increase from $568 million in 2023. The following details the net investment income sources:
| Type of Investment | 2024 Income (in millions) | 2023 Income (in millions) | % Change |
|---|---|---|---|
| Net Investment Income (excluding alternative investments) | $464 | $410 | 13% |
| Alternative Investments | $125 | $158 | -21% |
Underwriting Expenses
For the first nine months of 2024, AFG's underwriting expenses totaled $1.49 billion, an increase of 6% from $1.42 billion in 2023. The underwriting expense ratio improved to 28.8% from 29.5% year-over-year.
| Segment | 2024 Underwriting Expenses (in millions) | 2023 Underwriting Expenses (in millions) | % Change |
|---|---|---|---|
| Property and Transportation | $479 | $449 | 6.7% |
| Specialty Casualty | $597 | $587 | 1.7% |
| Specialty Financial | $350 | $315 | 11.1% |
Combined Ratios
AFG's combined ratio, which measures underwriting profitability, was 91.9% for the first nine months of 2024 compared to 91.3% in 2023, signifying a slight deterioration in underwriting performance.
| Metric | 2024 | 2023 |
|---|---|---|
| Loss and LAE Ratio | 63.1% | 61.8% |
| Underwriting Expense Ratio | 28.8% | 29.5% |
| Combined Ratio | 91.9% | 91.3% |
Catastrophe Losses
AFG incurred catastrophe losses of $161 million in the first nine months of 2024, compared to $140 million in the same period of 2023. The losses were primarily attributed to severe weather events impacting multiple regions in the United States.
How American Financial Group, Inc. (AFG) Makes Money
Revenue from Property and Casualty Insurance
American Financial Group, Inc. (AFG) primarily generates its revenue through its Property and Casualty (P&C) insurance segment. For the first nine months of 2024, AFG reported gross written premiums (GWP) of $8.49 billion, which represents an increase of 11% compared to $7.66 billion for the same period in 2023.
| Segment | 2024 GWP (in millions) | 2023 GWP (in millions) | % Change |
|---|---|---|---|
| Property and Transportation | $4,150 | $3,523 | 18% |
| Specialty Casualty | $3,417 | $3,299 | 4% |
| Specialty Financial | $923 | $842 | 10% |
| Total | $8,490 | $7,664 | 11% |
Net Written Premiums
Net written premiums (NWP) for the first nine months of 2024 totaled $5.68 billion, an increase of 8% from $5.25 billion in 2023.
| Segment | 2024 NWP (in millions) | 2023 NWP (in millions) | % Change |
|---|---|---|---|
| Property and Transportation | $2,412 | $2,125 | 14% |
| Specialty Casualty | $2,318 | $2,244 | 3% |
| Specialty Financial | $766 | $685 | 12% |
| Total | $5,679 | $5,247 | 8% |
Net Earned Premiums
Net earned premiums (NEP) for the first nine months of 2024 were reported at $5.19 billion, up from $4.80 billion in the prior year, reflecting an 8% increase.
| Segment | 2024 NEP (in millions) | 2023 NEP (in millions) | % Change |
|---|---|---|---|
| Property and Transportation | $2,037 | $1,837 | 11% |
| Specialty Casualty | $2,213 | $2,149 | 3% |
| Specialty Financial | $753 | $623 | 21% |
| Total | $5,186 | $4,799 | 8% |
Investment Income
AFG's investment income plays a crucial role in its overall profitability. For the first nine months of 2024, net investment income from property and casualty insurance operations stood at $589 million, compared to $568 million in 2023, marking a 4% increase.
| Investment Type | 2024 Net Investment Income (in millions) | 2023 Net Investment Income (in millions) | % Change |
|---|---|---|---|
| Excluding Alternative Investments | $464 | $410 | 13% |
| Alternative Investments | $125 | $158 | (21%) |
| Total | $589 | $568 | 4% |
Underwriting Performance
AFG's underwriting profit for the first nine months of 2024 was $418 million, slightly down from $420 million in 2023. The combined ratio, which reflects the underwriting efficiency, was reported at 91.9% for 2024, compared to 91.3% in the previous year.
| Metric | 2024 | 2023 |
|---|---|---|
| Underwriting Profit (in millions) | $418 | $420 |
| Combined Ratio | 91.9% | 91.3% |
Net Earnings
For the first nine months of 2024, AFG reported net earnings of $632 million ($7.54 per share, diluted), an increase from $589 million ($6.93 per share, diluted) for the same period in 2023.
| Period | Net Earnings (in millions) | EPS (Diluted) |
|---|---|---|
| 2024 (First Nine Months) | $632 | $7.54 |
| 2023 (First Nine Months) | $589 | $6.93 |
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Updated on 16 Nov 2024
Resources:
- American Financial Group, Inc. (AFG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of American Financial Group, Inc. (AFG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View American Financial Group, Inc. (AFG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.