UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of
The
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): October 26, 2009
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AMERICAN
FINANCIAL GROUP, INC.
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(Exact
name of registrant as specified in its
charter)
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Ohio
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1-13653
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31-1544320
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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One
East Fourth Street, Cincinnati, OH
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45202
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's telephone number,
including area code 513-579-2121
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section
2 - Financial
Information
Item
2.02
Results Of Operations And Financial Condition.
On
October 26, 2009, American Financial Group, Inc. (the "Company") issued a news
release announcing its financial results for the quarter ending September 30,
2009. The news release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Section
8 – Other
Events
Item
8.01
Other Events.
In the
news release, the Company also announced today that its Board of Directors has
approved an increase in the Company's annual dividend from $.52 to $.55 per
share of common stock. The increased dividend, when declared, will be
paid on a quarterly basis of $.1375 per share of common stock beginning in
January of 2010. This fifth consecutive annual dividend increase represents a
six percent increase over the dividend paid in 2009.
Section
9 - Financial Statements and Exhibits
Item
9.01
Financial Statements and Exhibits.
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(a)
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Financial
statements of business acquired. Not
applicable.
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(b)
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Pro
forma financial information. Not
applicable.
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(c)
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Exhibits
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Exhibit No.
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Description
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99.1
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News
Release, dated October 26, 2009, reporting American Financial Group Inc.
second quarter results for the period ended September 30,
2009.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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AMERICAN
FINANCIAL GROUP, INC.
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Date:
October 27, 2009
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By:
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/s/ Karl J. Grafe | |
| Karl J. Grafe | |||
| Vice President | |||
Exhibit
99.1
American
Financial Group, Inc. Announces
Record
Third Quarter and Nine Month Core Net Operating Earnings
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·
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Book Value
$31.49, an increase of 46% since 2008 year
end
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·
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Record Core
Operating Earnings $1.07 per share for the quarter; $3.19 per share
YTD
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·
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Full year
2009 core earnings guidance increased to $4.05 - $4.25 per
share
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·
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Annual
dividend increased 6% to $0.55 per
share
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Cincinnati,
Ohio – October 26, 2009 – American Financial Group, Inc. (NYSE/NASDAQ: AFG)
today reported net earnings attributable to shareholders of $127 million ($1.09
per share) for the 2009 third quarter, compared to $21 million ($0.18 per share)
reported for the 2008 third quarter. Net earnings attributable to
shareholders for the nine month period were $358 million ($3.07 per share),
compared with $157 million ($1.34 per share) in the comparable 2008
period. Results include realized gains of $3 million in the 2009
third quarter and realized losses of $14 million in the first nine months of
2009. Realized losses in the 2008 third quarter and nine month
periods were $94 million and $187 million, respectively.
Core net
operating earnings were a record $124 million ($1.07 per share) for the 2009
third quarter, up 8% from the comparable 2008 period. The increase
reflects improved underwriting results in the specialty property and casualty
insurance (“P&C”) operations. Record core net operating earnings
for the first nine months of 2009 were $372 million ($3.19 per share), compared
with $354 million ($3.03 per share) in 2008. Annualized core
operating return on equity was 16%.
AFG’s net
earnings attributable to shareholders, determined in accordance with generally
accepted accounting principles (“GAAP”), include certain items that may not be
indicative of its ongoing core operations. The following table
identifies such items and reconciles net earnings attributable to shareholders
to core net operating earnings, a non-GAAP financial measure that AFG believes
is a useful tool for investors and analysts in analyzing ongoing operating
trends.
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In
millions, except per share amounts
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Three
months ended
September 30,
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Nine
months ended
September 30,
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||||||||||||||
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2009
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2008
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2009
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2008
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|||||||||||||
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Components
of net earnings attributable to shareholders:
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||||||||||||||||
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Core net operating
earnings(a)
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$ | 124 | $ | 115 | $ | 372 | $ | 354 | ||||||||
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Significant
A&E charges
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- | - | - | (10 | ) | |||||||||||
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Realized
investment gains (losses)
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3 | (94 | ) | (14 | ) | (187 | ) | |||||||||
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Net
earnings attributed to shareholders
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$ | 127 | $ | 21 | $ | 358 | $ | 157 | ||||||||
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Components
of Earnings Per Share:
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||||||||||||||||
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Core net operating
earnings
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$ | 1.07 | $ | 0.98 | $ | 3.19 | $ | 3.03 | ||||||||
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Significant
A&E charges
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- | - | - | (.09 | ) | |||||||||||
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Realized
investment gains (losses)
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.02 | (.80 | ) | (.12 | ) | (1.60 | ) | |||||||||
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Diluted
Earnings Per Share
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$ | 1.09 | $ | 0.18 | $ | 3.07 | $ | 1.34 | ||||||||
Footnotes
are contained in the accompanying Notes To Financial Schedules at the end of
this release.
Page
2
Craig
Lindner and Carl Lindner III, AFG’s Co-Chief Executive Officers, issued this
statement: “We are pleased to have achieved record core operating results in our
insurance operations, notwithstanding a competitive pricing environment and
challenging market conditions in some of the niche insurance markets we
serve. Although premium levels have decreased in 2009 as we expected,
we remain on target to meet or exceed our 2009 operating
objectives. Our commitment to sound underwriting and pricing
fundamentals has been instrumental in achieving healthy returns in almost all of
our businesses.
“More
favorable market conditions have led to a marked improvement in the unrealized
gain (loss) position on AFG’s investment portfolio. At the end of the
2009 third quarter, net unrealized gains on our investment portfolio were $127
million on an after tax basis. As a result of the portfolio market
value improvement and continued strong earnings, AFG’s shareholders’ equity has
grown by $1.2 billion since the end of 2008. We thank God and our
management team for these results during a trying time in our economic
markets.
“Because
of our strong third quarter results, driven primarily by better than expected
underwriting results in our crop operations and favorable development in our
run-off residual value insurance (“RVI”) operations, we have increased our core
net operating earnings guidance for 2009 to be between $4.05 and $4.25 per
share, up from $3.80 to $4.10 per share. Looking forward, we expect
our core earnings in 2010 to be in the range of $3.10 to $3.50 per
share. The 2010 earnings guidance is lower than that for 2009 due to
the level of favorable reserve development recorded in 2009 (especially from
RVI), the above average profitability in our crop operations in 2009, a
continued soft market and lower investment returns expected in
2010. These expected results exclude the effect of significant
catastrophe and crop losses, significant adjustments to asbestos and
environmental reserves, and large gains or losses from asset
sales.”
Additionally,
the Company announced today that its Board of Directors approved an increase in
the company's annual dividend for 2010 from $.52 to $.55 per share of common
stock. The increased dividend, when declared, will be paid on a
quarterly basis of $.1375 per share of common stock. This will be the
fifth consecutive annual dividend increase for the Company. The new
dividend rate represents a six percent increase over the dividend paid in
2009.
Craig
Lindner and Carl Lindner III, AFG's Co-Chief Executive Officers, stated, "This
dividend increase underscores the confidence of the Board and management in the
Company's business and long-term financial outlook. Our primary focus
continues to be increasing shareholder value."
P&C Specialty Core
Results
The
P&C specialty
insurance operations generated an underwriting profit of $108 million in the
2009 third quarter, $36 million higher than the same quarter a year
earlier. The combined ratio for the 2009 third quarter was 83%, an
improvement of 9 points from the 2008 third quarter. Results for the
2009 third quarter include $30 million (5 points) in favorable development
related to the run-off RVI operations, in addition to $47 million (7 points) of
other favorable development. By comparison, favorable reserve
development in the third quarter of 2008 was $57 million (7
points). The absence of large catastrophe losses during the 2009
third quarter contributed to these improved results. Losses from
catastrophes totaled $3 million (less than one half of one point) in the third
quarter of 2009, compared with $38 million (4 points) in the 2008
period.
Gross
written premiums declined by approximately 16% for the quarter when compared to
the 2008 period. Net written premiums for the 2009 third quarter were
35% lower than the same quarter a year earlier, driven primarily by increased
cessions under our crop reinsurance agreement.
Page
3
Underwriting
profit of the P&C specialty insurance operations for the first nine months
of 2009 was $326 million, 22% above the 2008 period. Overall average
renewal rates in the first nine months of 2009 were up slightly when compared
with the same prior year period. Further details of the P&C
Specialty operations may be found in the accompanying schedules.
The Property and Transportation
group reported an underwriting profit of $46 million in the 2009 third quarter,
$34 million higher than the 2008 third quarter. The combined ratio of
81% for the quarter improved 16 points over the 2008 period as a result of
higher underwriting profits in our crop operations and lower catastrophe losses
in our property and inland marine operations. Strong crop yields and
favorable commodity price trends contributed to the results in our crop
operations. This, along with lower catastrophe losses in our property
and inland marine group, helped to produce an 11 point decrease in the combined
ratio of this group during the 2009 nine month period.
Increased
cessions under a crop reinsurance treaty reduced net written premiums for the
quarter and year to date. Additional declines in gross and net
written premiums resulted from lower spring commodity prices, planned volume
reductions in our inland marine operations and soft market conditions in the
property and inland marine and transportation operations. Excluding
crop, 2009 net written premiums for this group decreased 15% and 11% for the
quarter and first nine months of 2009, respectively, when compared to the 2008
periods.
The Specialty Casualty group
reported an underwriting profit of $30 million in the 2009 third quarter, $17
million lower than the third quarter of 2008. Improved underwriting
results in our executive liability operations were more than offset by lower
underwriting profits in our excess and surplus lines, general liability, and
targeted markets operations, primarily as a result of lower levels of favorable
reserve development in 2009. Most of the businesses in this group
continued to generate excellent underwriting profit margins but at a lower level
due to reduced premiums. Declines in gross and net written premiums
for the 2009 third quarter and first nine months are primarily attributable to
lower general liability coverages resulting from the softening in the
homebuilders market and strong competition in the excess and surplus
lines. These declines were partially offset by additional premium
growth from Marketform, a majority-owned Lloyd’s insurer that was acquired in
January 2008 that has served as a platform to expand non-U.S. distribution in
several product lines.
The Specialty Financial group
reported underwriting income of $29 million for the third quarter of 2009,
compared to a loss of $2 million for the same period a year
ago. Favorable trends in used car sales prices resulted in
approximately $30 million of underwriting profit in our run-off RVI
operations. Our remaining RVI reserves relate primarily to Canadian
leases that terminate through the end of 2010. Improved profitability
in our financial institutions operations was more than offset by lower
underwriting profits in our lease and loan operations. Year to date
underwriting income for the Specialty Financial group was $96 million, up from
$20 million in the comparable 2008 period. Gross and net written
premiums were lower for the quarter and year to date periods due to decreased
demand in the automotive lines of business. Earlier this year, a
decision was made to exit certain automotive-related lines of
business. Premium growth in the Financial Institutions and Fidelity
and Crime businesses partially offset these declines.
The California Workers’
Compensation group posted underwriting losses of $2 million in both the
2009 third quarter and first nine month periods, compared to profits of $10
million and $34 million in the same 2008 periods. Combined ratios
increased primarily as a result of the competitive pricing environment in
California. Gross and net premiums decreased for the quarter and nine
month periods in large measure due to the rate reductions in traditional
workers’ compensation business in California and reductions in employer
payrolls. Renewal rates for our California workers compensation
business were up slightly through the first nine months of 2009, however, we
were encouraged to see 6%
Page
4
improvement
in rates during the third quarter. Additionally, the Workers’
Compensation Insurance Rating Bureau (“WCIRB”) has recommended an increase of
22.8% in pure premium rates, effective January 1, 2010. This
recommendation is based on 2009 loss experience and anticipated loss costs
stemming from recent decisions surrounding the permanent disability rating
schedule and is subject to administrative review.
Carl
Lindner III stated: “I’m proud of the overall results produced by our Specialty
P&C Group during the third quarter and first nine months of
2009. We continue to experience favorable reserve development in many
of our operations, and emphasize our disciplined underwriting and continued
focus on price adequacy. We recognize the importance of adequate
pricing, and continue to walk away from businesses that will not produce
appropriate returns. Our teams understand that providing superior
service to policyholders and distribution channel partners is more important
than ever. The depth and breadth of our specialty expertise has
served us well in this marketplace and I believe we will continue to produce
underwriting results that outperform the industry.”
Annuity and Supplemental
Insurance Core Results
The
Annuity and Supplemental Insurance Group generated core operating earnings
before income taxes of $46 million for the 2009 third quarter, slightly lower
than the 2008 third quarter, primarily due to lower earnings in our supplemental
insurance operations. Core operating earnings before taxes for the
first nine months of 2009 of $127 million were 6% higher than the same 2008
period. Improved profitability in the annuity operations in the 2009
nine month period was partially offset by lower earnings in the supplemental
insurance operations.
In the
fourth quarter of each year, the Annuity and Supplemental Insurance Group
performs a comprehensive review of its major actuarial assumptions, including
management's expectation of long-term reinvestment rates. If the
current interest rate environment persists through the end of the year, the
company may be required to write-off deferred acquisition costs ("DAC") related
to its fixed annuity business. Any such write-off is not expected to
have a material impact on AFG’s earnings guidance for the year. Aside
from any potential DAC adjustment, AFG expects that the 2009 full year operating
earnings for the Annuity and Supplemental Insurance Group will be 8% to 10%
higher than 2008.
For the
third quarter of 2009, statutory premiums of $531 million were 11% lower than
the 2008 third quarter, primarily resulting from lower sales of indexed
annuities in the single premium market. For the first nine months of
2009, statutory premiums of $1.4 billion were 13% lower than the comparable 2008
period due to lower sales of products in the single premium market, particularly
indexed annuities. This reduction in premium reflects our disciplined
pricing in this difficult economy.
AFG’s
annuity liabilities remain very stable. AFG continues to experience
very strong persistency due to the two-tier nature and other surrender
protection features in certain of its annuity products.
Investments
AFG
recorded third quarter net realized gains of $3 million after-tax, which include
the offsetting effect of charges of $17 million in after-tax other than
temporary impairments on investments. Realized losses, including
other than temporary impairments, were $94 million after tax in the comparable
2008 period. Our portfolio continues to be high quality, with 92% of
our fixed maturity portfolio rated investment grade.
Page
5
We
continue to believe that there are strong fundamentals in place across our
investments and that our investment strategy will enable us to realize the
underlying values of those investments.
As
previously announced, AFG will record a fourth quarter after-tax gain of
approximately $50 million on the sale of a portion of its common stock
investment in Verisk Analytics, Inc., which went public in an IPO transaction
earlier this month. AFG continues to own approximately 6.7 million
shares (cost basis of approximately $24 million) of Verisk Class B common shares
that are convertible into Class A shares on a share-for-share basis after the
expiration of holding periods.
More
information about the components of our investment portfolio may be found in our
Financial and Investment Supplements, which are posted on our
website.
About American Financial
Group, Inc.
American
Financial Group is an insurance holding company based in Cincinnati, Ohio with
assets in excess of $25 billion. Through the operations of Great
American Insurance Group, AFG is engaged primarily in property and casualty
insurance, focusing on specialized commercial products for businesses, and in
the sale of traditional fixed, indexed and variable annuities and a variety of
supplemental insurance products. Great American Insurance Group’s
roots go back to 1872 with the founding of its flagship company, Great American
Insurance Company.
Forward Looking
Statements
This
press release contains certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
1934. All statements in this press release not dealing with
historical results are forward-looking and are based on estimates, assumptions
and projections. Examples of such forward-looking statements include
statements relating to: the Company's expectations concerning market and other
conditions and their effect on future premiums, revenues, earnings and
investment activities; recoverability of asset values; expected losses and the
adequacy of reserves for asbestos, environmental pollution and mass tort claims;
rate changes; and improved loss experience.
Actual
results and/or financial condition could differ materially from those contained
in or implied by such forward-looking statements for a variety of reasons
including but not limited to: changes in financial, political and economic
conditions, including changes in interest rates and extended economic recessions
or expansions; performance of securities markets; our ability to estimate
accurately the likelihood, magnitude and timing of any losses in connection with
investments in the non-agency residential mortgage market; new legislation
or declines in credit quality or credit ratings that could have a material
impact on the valuation of securities in our investment portfolio; the
availability of capital; regulatory actions (including changes in statutory
accounting rules); changes in legal environment affecting AFG or its customers;
tax law and accounting changes; levels of natural catastrophes, terrorist
activities (including any nuclear, biological, chemical or radiological events),
incidents of war and other major losses; development of insurance loss reserves
and establishment of other reserves, particularly with respect to amounts
associated with asbestos and environmental claims; availability of reinsurance
and ability of reinsurers to pay their obligations; the unpredictability of
possible future litigation; trends in persistency, mortality and morbidity;
competitive pressures, including the ability to obtain adequate rates; changes
in AFG's credit ratings or the financial strength ratings assigned by major
ratings agencies to our operating subsidiaries; and other factors identified in
our filings with the Securities and Exchange Commission.
The
forward-looking statements herein are made only as of the date of this press
release. The Company assumes no obligation to publicly update any
forward-looking statements.
Page
6
Conference
Call
The
company will hold a conference call to discuss 2009 third quarter results at
11:30 a.m. (ET) tomorrow, Tuesday, October 27, 2009. Toll-free
telephone access will be available by dialing 1-888-892-6137
(international dial in 706-758-4386). The pass code for the live call
is 31470471. Please dial in five to ten minutes prior to the
scheduled start time of the call. A replay of the call will also be
available two hours from the conclusion of the call, at approximately 1:30 p.m.
(ET) on October 27, 2009 until 11:59 p.m (ET) on November 3, 2009. To
listen to the replay, dial 1-800-642-1687 (international dial in 706-645-9291)
and provide the confirmation code 31470471.
The
conference call will also be broadcast over the Internet. To listen
to the call, go to the Investor Relations page on AFG’s website, www.AFGinc.com,
and follow the instructions at the Webcast link. An archived webcast
will be available immediately after the call via a link on the Investor
Relations page until November 3, 2009 at 11:59 pm (ET). An archived
audio MP3 file will also be available within 24 hours of the call.
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Contact:
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Diane
P. Weidner
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Web
Sites:
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Asst.
Vice President - Investor Relations
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www.AFGinc.com
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(513)
369-5713
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www.GreatAmericanInsurance.com
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www.GAFRI.com
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-o0o-
(Financial
summaries follow)
This
earnings release and additional Financial Supplements are available in the
Investor Relations section of AFG's web site: www.AFGinc.com.
AMERICAN
FINANCIAL GROUP, INC. AND SUBSIDIARIES
SUMMARY
OF EARNINGS
(In
Millions, Except Per Share Data)
|
Three
months ended
September 30,
|
Nine
months ended
September 30,
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|||||||||||||||
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2009
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2008
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2009
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2008
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|||||||||||||
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Income
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||||||||||||||||
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P&C insurance
premiums
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$ | 622 | $ | 850 | $ | 1,809 | $ | 2,104 | ||||||||
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Life, accident
& health premiums
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112 | 109 | 331 | 326 | ||||||||||||
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Investment
income
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301 | 283 | 900 | 820 | ||||||||||||
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Realized investment
gains (losses)
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4 | (150 | ) | (22 | ) | (293 | ) | |||||||||
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Other
income
|
54 | 78 | 177 | 232 | ||||||||||||
| 1,093 | 1,170 | 3,195 | 3,189 | |||||||||||||
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Costs
and expenses
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||||||||||||||||
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P&C insurance
losses & expenses
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514 | 778 | 1,489 | 1,845 | ||||||||||||
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Annuity, life,
accident & health benefits
& expenses
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236 | 228 | 727 | 682 | ||||||||||||
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Interest &
other financing expenses
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19 | 16 | 48 | 52 | ||||||||||||
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Other
expenses
|
121 | 120 | 354 | 356 | ||||||||||||
| 890 | 1,142 | 2,618 | 2,935 | |||||||||||||
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Operating
earnings before income taxes
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203 | 28 | 577 | 254 | ||||||||||||
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Provision
for income taxes
|
72 | 9 | 204 | 91 | ||||||||||||
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Net
earnings including noncontrolling interests
|
131 | 19 | 373 | 163 | ||||||||||||
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Less:
Net earnings attributable to noncontrolling interests
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(4 | ) | 2 | (15 | ) | (6 | ) | |||||||||
|
Net
earnings attributable to shareholders
|
$ | 127 | $ | 21 | $ | 358 | $ | 157 | ||||||||
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Diluted
Earnings per Common Share
|
$ | 1.09 | $ | 0.18 | $ | 3.07 | $ | 1.34 | ||||||||
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Average
number of Diluted Shares
|
117.2 | 116.9 | 116.9 | 117.0 | ||||||||||||
|
Selected
Balance Sheet Data:
|
Sept. 30,
2009
|
Dec. 31, 2008 |
||||||
|
Total Cash and
Investments
|
$ | 19,628 | $ | 16,871 | ||||
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Long-term Debt,
Including
|
||||||||
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Payable
to Subsidiary Trusts
|
$ | 877 | $ | 1,030 | ||||
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Shareholders’
Equity
|
$ | 3,670 | $ | 2,490 | ||||
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Shareholders’
Equity (Excluding unrealized gains
(losses) on fixed maturities)
|
$ | 3,683 | $ | 3,210 | ||||
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Book Value Per
Share
|
$ | 31.49 | $ | 21.54 | ||||
|
Book Value Per
Share (Excluding unrealized gains
(losses) on fixed maturities)
|
$ | 31.61 | $ | 27.77 | ||||
|
Common Shares
Outstanding
|
116.5 | 115.6 | ||||||
AMERICAN
FINANCIAL GROUP, INC.
P&C
SPECIALTY GROUP UNDERWRITING RESULTS
(In
Millions)
|
Three
months ended
September 30,
|
Pct.
Change
|
Nine
months ended
September 30,
|
Pct.
Change
|
|||||||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||||
|
Gross
written premiums
|
$ | 1,369 | $ | 1,627 | (16% | ) | $ | 3,037 | $ | 3,440 | (12% | ) | ||||||||||||
|
Net
written premiums
|
$ | 620 | $ | 959 | (35% | ) | $ | 1,794 | $ | 2,278 | (21% | ) | ||||||||||||
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Ratios
(GAAP):
|
||||||||||||||||||||||||
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Loss & LAE
ratio
|
48% | 65% | 46% | 56% | ||||||||||||||||||||
|
Expense
ratio
|
35% | 27% | 36% | 31% | ||||||||||||||||||||
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Combined Ratio(Excluding
A&E)
|
83% | 92% | 82% | 87% | ||||||||||||||||||||
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Total Combined
Ratio
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83% | 91% | 82% | 88% | ||||||||||||||||||||
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Supplemental:
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||||||||||||||||||||||||
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Gross
Written Premiums:
|
||||||||||||||||||||||||
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Property &
Transportation
|
$ | 864 | $ | 1,079 | (20% | ) | $ | 1,541 | $ | 1,822 | (15% | ) | ||||||||||||
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Specialty
Casualty
|
311 | 323 | (4% | ) | 935 | 983 | (5% | ) | ||||||||||||||||
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Specialty
Financial
|
137 | 158 | (13% | ) | 409 | 448 | (9% | ) | ||||||||||||||||
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California
Workers’ Compensation
|
57 | 67 | (16% | ) | 154 | 189 | (19% | ) | ||||||||||||||||
|
Other
|
- | - |
NA
|
(2 | ) | (2 | ) |
NA
|
||||||||||||||||
| $ | 1,369 | $ | 1,627 | (16% | ) | $ | 3,037 | $ | 3,440 | (12% | ) | |||||||||||||
|
Net
Written Premiums:
|
||||||||||||||||||||||||
|
Property &
Transportation
|
$ | 236 | $ | 536 | (56% | ) | $ | 662 | $ | 1,044 | (37% | ) | ||||||||||||
|
Specialty
Casualty
|
200 | 210 | (5% | ) | 597 | 636 | (6% | ) | ||||||||||||||||
|
Specialty
Financial
|
116 | 132 | (13% | ) | 349 | 371 | (6% | ) | ||||||||||||||||
|
California
Workers’ Compensation
|
50 | 60 | (17% | ) | 134 | 172 | (22% | ) | ||||||||||||||||
|
Other
|
18 | 21 | - | 52 | 55 | - | ||||||||||||||||||
| $ | 620 | $ | 959 | (35% | ) | $ | 1,794 | $ | 2,278 | (21% | ) | |||||||||||||
|
Combined
Ratio (GAAP):
|
||||||||||||||||||||||||
|
Property &
Transportation
|
81% | 97% | 82% | 93% | ||||||||||||||||||||
|
Specialty
Casualty
|
85% | 77% | 81% | 77% | ||||||||||||||||||||
|
Specialty
Financial
|
77% | 102% | 75% | 95% | ||||||||||||||||||||
|
California
Workers’ Compensation
|
106% | 80% | 102% | 78% | ||||||||||||||||||||
|
Aggregate
Specialty Group
|
83% | 92% | 82% | 87% | ||||||||||||||||||||
Supplemental
Notes:
|
|
1.
|
Property &
Transportation includes primarily physical damage and liability
coverage for buses, trucks and recreational vehicles, inland and ocean
marine, agricultural-related products and other property
coverages.
|
|
|
2.
|
Specialty Casualty
includes primarily excess and surplus, general liability, executive
liability, umbrella and excess liability and customized programs for small
to mid-sized businesses.
|
|
|
3.
|
Specialty Financial
includes risk management insurance programs for lending and leasing
institutions (including collateral and mortgage protection insurance),
surety and fidelity products and trade credit
insurance.
|
|
|
4.
|
California Workers’
Compensation consists of a subsidiary group that writes workers’
compensation insurance primarily in the state of
California.
|
|
|
5.
|
Other includes primarily
an internal reinsurance facility.
|
AMERICAN
FINANCIAL GROUP, INC.
ANNUITY
& SUPPLEMENTAL INSURANCE GROUP
STATUTORY
PREMIUMS
(In
Millions)
|
Three
months ended
September 30,
|
Pct.
Change
|
Nine
months ended
September 30,
|
Pct.
Change
|
|||||||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||||
|
Annuity
premiums:
|
||||||||||||||||||||||||
|
Fixed
annuities
|
$ | 129 | $ | 144 | (10% | ) | $ | 349 | $ | 392 | (11% | ) | ||||||||||||
|
Bank
annuities
|
137 | 138 | (1% | ) | 288 | 291 | (1% | ) | ||||||||||||||||
|
Indexed
annuities
|
140 | 184 | (24% | ) | 387 | 556 | (30% | ) | ||||||||||||||||
|
Variable
annuities
|
17 | 20 | (15% | ) | 68 | 64 | 6% | |||||||||||||||||
| $ | 423 | $ | 486 | (13% | ) | $ | 1,092 | 1,303 | (16% | ) | ||||||||||||||
|
Supplemental
insurance
|
98 | 95 | 3% | 290 | 286 | 1% | ||||||||||||||||||
|
Life
insurance
|
10 | 15 | (33% | ) | 34 | 41 | (17% | ) | ||||||||||||||||
|
Total statutory
premiums
|
$ | 531 | $ | 596 | (11% | ) | $ | 1,416 | $ | 1,630 | (13% | ) | ||||||||||||
AMERICAN
FINANCIAL GROUP, INC.
Notes
To Financial Schedules
GAAP to Non GAAP
Reconciliation:
a)
Components of core net operating earnings:
|
In
millions
|
Three
months ended
September 30,
|
Nine
months ended
September 30,
|
||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
P&C
operating earnings
|
$ | 183 | $ | 153 | $ | 556 | $ | 510 | ||||||||
|
Annuity
& supplemental insurance operating earnings
|
46 | 49 | 127 | 120 | ||||||||||||
|
Interest
& other corporate expense
|
(34 | ) | (26 | ) | (98 | ) | (78 | ) | ||||||||
|
Core
operating earnings before income taxes
|
195 | 176 | 585 | 552 | ||||||||||||
|
Related
income taxes
|
71 | 61 | 213 | 198 | ||||||||||||
|
Core
net operating earnings
|
$ | 124 | $ | 115 | $ | 372 | $ | 354 | ||||||||