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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): February 9, 2010
|
AMERICAN
FINANCIAL GROUP, INC.
|
|
(Exact
name of registrant as specified in its charter)
|
|
Ohio
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1-13653
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31-1544320
|
||
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
|
One
East Fourth Street, Cincinnati, OH
|
45202
|
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
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):
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Section
2 - Financial Information
Item
2.02 Results Of Operations And Financial Condition.
On
February 9, 2010, American Financial Group, Inc. issued a news release
announcing its financial results for the 2009 fourth quarter and full year ended
December 31, 2009. The news release is attached hereto as Exhibit
99.1 and is incorporated herein by reference.
Section
9 - Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits.
|
|
(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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|
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(c)
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Exhibits
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Exhibit No.
|
Description
|
|
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99.1
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News
Release, dated February 9, 2010, reporting American Financial Group Inc.
fourth quarter and full year results for the period ended December 31,
2009.
|
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.
|
AMERICAN
FINANCIAL GROUP, INC.
|
|||
|
Date:
February 10, 2010
|
By:
|
/s/ Karl J. Grafe | |
| Karl J. Grafe | |||
| Vice President | |||
EXHIBIT
99.1
American
Financial Group, Inc. Announces
Record
Twelve Month Core Net Operating Earnings in 2009
|
·
|
Book
Value of $33.35 per share, an increase of 55% since 2008 year
end
|
|
·
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Record
twelve month core net operating earnings of $493 million, $4.23 per
share
|
|
·
|
Full
year 2010 earnings guidance increased to $3.30 - $3.70 per
share
|
|
·
|
Repurchased
5 million shares (avg price $24.79 per share) through February 8th
|
Cincinnati,
Ohio – February 9, 2010 – American Financial Group, Inc. (NYSE/NASDAQ: AFG)
today reported record 2009 fourth quarter net earnings attributable to
shareholders of $161 million ($1.38 per share), compared to $39 million ($.32
per share) reported in the 2008 fourth quarter. Record net earnings attributable
to shareholders for 2009 were $519 million ($4.45 per share), compared to $196
million ($1.67 per share) in 2008. The significant improvement in the
2009 results reflects after-tax net realized gains of $40 million and $26
million in the 2009 fourth quarter and twelve month periods, respectively,
compared to after-tax net realized losses of $83 million and $270 million in the
respective 2008 periods.
Core net
operating earnings were $121 million ($1.04 per share) for the 2009 fourth
quarter compared to $122 million ($1.04 per share) in the 2008 fourth
quarter. Core net operating earnings were a record $493 million
($4.23 per share) for 2009 compared to $476 million ($4.07 per share) for
2008. Core net operating earnings for 2009 and 2008 generated returns
on equity of 16% and 17%, respectively.
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.
|
In
millions, except per share amounts
|
Three
months ended
December 31,
|
Twelve
months ended
December 31,
|
||||||||||||||
|
2009
|
2008
|
2009
|
2008
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|||||||||||||
|
Components
of net earnings attributable to shareholders:
|
||||||||||||||||
|
Core net operating
earnings(a)
|
$ | 121 | $ | 122 | $ | 493 | $ | 476 | ||||||||
|
Signficant A&E
Charges
|
- | - | - | (10 | ) | |||||||||||
|
Realized investment
gains (losses)
|
40 | (83 | ) | 26 | (270 | ) | ||||||||||
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Net
earnings attributable to shareholders
|
$ | 161 | $ | 39 | $ | 519 | $ | 196 | ||||||||
|
Components
of EPS:
|
||||||||||||||||
|
Core net operating
earnings
|
$ | 1.04 | $ | 1.04 | $ | 4.23 | $ | 4.07 | ||||||||
|
Significant A&E
Charges
|
- | - | - | (.09 | ) | |||||||||||
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Realized investment
gains (losses)
|
.34 | (.72 | ) | .22 | (2.31 | ) | ||||||||||
|
Diluted
EPS
|
$ | 1.38 | $ | 0.32 | $ | 4.45 | $ | 1.67 | ||||||||
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, commented: “We
are quite pleased that AFG continued to produce excellent core net operating
earnings in the fourth quarter of 2009. Working with an expectation
that premium levels would be lower this year, our teams have executed
cautiously, yet opportunistically, to address the challenges presented by a soft
rate environment and a depressed economy. We thank God and our
management team for these results, particularly during one of the most
challenging global economies in decades. We believe that AFG’s
ability to produce strong results in this environment demonstrates the value in
our specialized insurance businesses. Additionally, the stabilization
of market conditions has led to a meaningful improvement in the market value of
our investment portfolio, which, coupled with strong earnings, has fueled growth
in shareholders’ equity of $1.3 billion since the end of 2008.
“During
the fourth quarter of 2009, AFG repurchased 3.3 million shares of common stock
at an average price per share of $24.62. An additional 1.7 million
shares were purchased from January 1 through February 8, 2010 at an average
price of $25.12 per share. We believe that purchasing shares at these
prices is an effective use of our excess capital, producing a favorable effect
on our earnings per share and book value per share. Additionally, we
have increased our core earnings guidance for 2010 to be between $3.30 and $3.70
per share, up from $3.10 to $3.50 per share. The 2010 earnings
guidance is lower than 2009 results due to the level of favorable reserve
development recorded in 2009, the above average profitability in our 2009 crop
operations, a continued soft market and lower investment returns expected in
2010. As previously announced, we increased our common stock dividend
by 6% over the 2009 rate, reflecting our confidence in the company’s long-term
financial outlook.”
Business Segment
Results
The
P&C specialty insurance operations generated excellent underwriting profits
for the 2009 fourth quarter and full year of $98 million and $424 million, with
combined ratios of 84% and 82%, respectively. The 2009 fourth quarter
and full year combined ratios improved three points and five points from the
respective 2008 periods primarily as a result of higher crop underwriting
profits. Results for the 2009 fourth quarter include $17 million (3
points) in unfavorable development compared to $58 million (8 points) of
favorable development in 2008. Full year favorable development was
$205 million in 2009 (8 points) compared with $251 million (9 points) in
2008. In addition, catastrophe losses totaled $18 million in 2009
compared to $59 million in 2008.
Gross and
net written premiums were down 12% and 15%, respectively, in the 2009 fourth
quarter compared to the same quarter a year earlier. Full year 2009
gross and net written premiums were 12% and 20% lower, respectively, than in
2008. A soft market, a decision to exit certain automotive related
lines of business, depressed economic conditions and lower crop prices
contributed to declines in gross written premium. Increased cessions
under our crop reinsurance agreement further reduced net written
premium. Gross and net written premiums, excluding crop operations,
decreased 8% and 10% for the year, respectively. Overall average
renewal rates in 2009 were flat when compared with the 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 $115 million in the 2009 fourth quarter, a 25% improvement over the
prior year period. The 2009 full year underwriting profit was $236
million, 51% above 2008. Favorable crop yields and relatively stable
commodity prices resulted in record profitability for our crop operations and
contributed in large measure to these results. Catastrophe losses for
this group were $7 million in 2009 compared to $50 million in 2008. Our other
property and transportation businesses reported strong underwriting profits
notwithstanding soft market conditions.
Page
3
Increased
cessions under a crop reinsurance treaty reduced net written premiums for the
2009 fourth quarter and year. 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, net written premiums for this group decreased 8% and 11% for the 2009
fourth quarter and full year, respectively, when compared to the 2008
periods.
The Specialty Casualty group
reported an underwriting loss of $45 million in the 2009 fourth quarter and a
2009 full year underwriting profit of $63 million. These results were
considerably lower than 2008 primarily due to $48 million and $56 million,
respectively, of pre-tax adverse development in Marketform’s Italian public
hospital medical malpractice business related to 2008 and prior years, which
Marketform has ceased writing. Approximately one-third of this
adverse development is attributable to non-controlling shareholders of
Marketform. Also contributing to these results were higher accident
year losses in a book of targeted program business, lower underwriting profits
in our general liability and excess and surplus lines resulting from a depressed
economy, particularly in the homebuilders’ market, and competitive market
conditions. Other businesses in this group produced excellent
underwriting profit margins, but at lower levels than 2008. Declines
in gross and net written premiums for the 2009 fourth quarter and full year 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 premium growth
from Marketform, our start-up Environmental Division and our Executive Liability
business.
The Specialty Financial group
reported underwriting income of $38 million for the fourth quarter of 2009,
compared to a loss of $65 million for the same period a year
ago. Underwriting income in 2009 for this group was $134 million,
compared to an underwriting loss of $46 million in the comparable 2008
period. Results for the 2009 fourth quarter and full year include
favorable development in our run-off Residual Value Insurance (“RVI”) operations
of $21 million and $90 million, respectively, due to a significant improvement
in used car sale prices during the year. Declines in gross and net
written premiums were primarily the result of AFG’s exit from certain
automotive-related lines of business during 2009. Premium growth in
the Financial Institutions and Fidelity and Crime businesses partially offset
these declines.
The California Workers’
Compensation group reported underwriting profit of $2 million in the 2009
fourth quarter, compared to $11 million in the same 2008 period. For
the year, this group posted a small underwriting loss, compared to an
underwriting gain of $45 million in 2008. These results reflect the
competitive pricing environment in California. Our 2009 accident year
combined ratio was 112%, an increase of 18 points from the prior year period,
primarily as a result of rising average cost of claims. Gross and net
premiums decreased for the quarter and twelve month periods in large measure due
to the rate reductions in traditional workers’ compensation business in
California and reductions in employer payrolls. Our Republic
Indemnity subsidiary filed for an 8% rate increase, effective January 1,
2010. Renewal rates for business written in California were up 3% for
2009.
Carl
Lindner III stated: “The overall results produced by our P&C Group during
the fourth quarter and full year of 2009 exceeded our
expectations. Our emphasis on disciplined underwriting and adequate
pricing continue to result in strong underwriting profits. We believe this
strong performance is further evidence of the benefits of the depth and breadth
of our specialty expertise, which have served us well during times of economic
uncertainty.
“Looking
into 2010, we expect to produce strong underwriting profits, and forecast an
overall calendar year combined ratio in the 88% to 91% range. Our
objective is to achieve a slight increase in the Specialty Group’s overall
average renewal rates in 2010. We expect our specialty P&C net
written premiums to be up 10% to12%, as we return to historical levels of
reinsurance cessions under our crop quota share agreement. Excluding crop, we
expect net written premiums for our P&C operations to increase 2 -
4%.”
Page
4
Annuity and Supplemental
Insurance Core Results
The
Annuity and Supplemental Insurance Group generated core net operating earnings
before income taxes of $35 million for the 2009 fourth quarter, a $3 million
decrease from the comparable 2008 period.
Results
for the fourth quarter included a $13 million pre-tax write-off of deferred
acquisition costs ("DAC") related primarily to our fixed annuity
business. Results for the same period in 2008 included a $10 million
DAC write off related primarily to our variable annuity
business. These charges were recorded in connection with our review
of major actuarial assumptions, including management’s expectation of investment
yields.
Full year
2009 core net operating earnings of $162 million represented an improvement of
$4 million, as higher operating earnings in our annuity operations were offset
by lower results in the long term care segment of our supplemental insurance
operations.
Statutory
premiums of $452 million for the fourth quarter of 2009 were slightly lower than
the fourth quarter of 2008. Increased sales of traditional fixed
annuities were more than offset by lower indexed annuity sales and lower sales
through the bank distribution channel.
For the
full year 2009, statutory premiums of $1.9 billion were 11% lower than the
comparable 2008 period. The decrease was primarily related to lower
sales of indexed annuities.
AFG’s
annuity liabilities remain stable. Due to the two-tier nature and
other surrender protection features in certain of its annuity products, AFG
continues to experience strong persistency in its annuity
businesses.
Investments
AFG
recorded fourth quarter net realized gains of $40 million after-tax, which
include the previously announced gain of $49 million on the sale of a portion of
its common stock investment in Verisk Analytics, Inc. This gain was
partially offset by the net effect of impairments and gains on sales of other
investments. 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. Realized losses, including
impairments, were $83 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 and 95% with a National
Association of Insurance Commissioners’ designation of NAIC 1 or 2, its highest
two categories.
More
favorable market conditions have led to a meaningful improvement in the
unrealized gain (loss) position on AFG’s investment portfolio. At the
end of the 2009 fourth quarter, net unrealized gains on our investment portfolio
were $166 million on an after tax basis, compared to unrealized losses of $683
million a year earlier.
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.
Page
5
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, including
mortgage-backed securities; 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 if certain
settlements of current litigation do not become effective; 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.
Conference
Call
The
company will hold a conference call to discuss the 2009 fourth quarter and full
year earnings at 11:30 a.m. (ET) tomorrow, February 10,
2010. Toll-free telephone access will be available by dialing
1-888-892-6137 (international dial in 706-758-4386). The conference
ID for the live call is 50600945. 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 February 10, 2010 until 11:59 p.m. on February
17, 2010. To listen to the replay, dial 1-800-642-1687 (international
dial in 706-645-9291) and provide the Conference ID 50600945. The
conference call will also be broadcast over the Internet. To listen
to the call via the Internet, go to AFG’s website, www.AFGinc.com, and follow
the instructions at the Webcast link within the Investor Relations
section.
Page
6
Bank of America Merrill
Lynch 2010 Insurance Conference
Carl H.
Lindner III, Co-Chief Executive Officer, and Keith A. Jensen, Senior Vice
President and chief financial officer, will make a company presentation at the
Bank of America Merrill Lynch 2010 Insurance Conference being held at The New
York Palace in New York City, on Tuesday, February 23, 2010 at 1:10 p.m.
(ET). Their presentation will be broadcast live over the Internet via
the Webcast link below within the Investor Relations section of AFG’s website,
www.AFGinc.com.
https://www.veracast.com/webcasts/bas/insurance2010/id13031800.cfm
A replay
of the broadcast will be available for 14 days at the same website approximately
24 hours after the presentation.
|
Contact:
|
Diane
P. Weidner
|
Web
Sites:
|
|
Assistant
Vice President - Investor Relations
|
www.AFGinc.com
|
|
|
(513)
369-5713
|
www.GreatAmericanInsurance.com
|
|
|
www.GAFRI.com
|
-o0o-
(Financial
summaries follow)
This
earnings release and additional Financial and Investment 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
December 31,
|
Twelve
months ended
December 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Income
|
||||||||||||||||
|
P&C insurance
premiums
|
$ | 603 | $ | 763 | $ | 2,412 | $ | 2,867 | ||||||||
|
Life, accident
& health premiums
|
113 | 109 | 444 | 435 | ||||||||||||
|
Investment
income
|
300 | 303 | 1,200 | 1,123 | ||||||||||||
|
Realized investment
gains (losses)
|
60 | (133 | ) | 38 | (426 | ) | ||||||||||
|
Other
income
|
49 | 62 | 226 | 294 | ||||||||||||
| 1,125 | $ | 1,104 | 4,320 | 4,293 | ||||||||||||
|
Costs
and expenses
|
||||||||||||||||
|
P&C insurance
losses & expenses
|
506 | 667 | 1,995 | 2,512 | ||||||||||||
|
Annuity, life,
accident & health benefits
and expenses
|
256 | 250 | 983 | 932 | ||||||||||||
|
Interest &
other financing expenses
|
19 | 18 | 67 | 70 | ||||||||||||
|
Other
expenses
|
109 | 107 | 463 | 463 | ||||||||||||
| 890 | 1,042 | 3,508 | 3,977 | |||||||||||||
|
Operating
earnings before income taxes
|
235 | 62 | 812 | 316 | ||||||||||||
|
Provision
for income taxes
|
78 | 25 | 282 | 116 | ||||||||||||
|
Net
earnings including noncontrolling interests
|
157 | 37 | 530 | 200 | ||||||||||||
|
Less:
Net (earnings) loss attributable to
noncontrolling interests
|
4 | 2 | (11 | ) | (4 | ) | ||||||||||
|
Net
earnings attributable to shareholders
|
$ | 161 | $ | 39 | $ | 519 | $ | 196 | ||||||||
|
Diluted
Earnings per Common Share
|
$ | 1.38 | $ | 0.32 | $ | 4.45 | $ | 1.67 | ||||||||
|
Average
number of Diluted Shares
|
116.6 | 116.6 | 116.8 | 116.7 | ||||||||||||
|
December
31,
|
December
31,
|
|||||||
|
|
2009
|
2008
|
||||||
|
Selected
Balance Sheet Data:
|
||||||||
|
Total Cash and
Investments
|
$ | 19,791 | $ | 16,871 | ||||
|
Long-term
Debt
|
$ | 828 | $ | 1,030 | ||||
|
Shareholders’
Equity
|
$ | 3,781 | $ | 2,490 | ||||
|
Shareholders’
Equity (Excluding unrealized gains(losses)
on fixed maturities)
|
$ | 3,733 | $ | 3,210 | ||||
|
Book Value Per
Share
|
$ | 33.35 | $ | 21.54 | ||||
|
Book Value Per
Share (Excluding unrealized gains(losses)
on fixed maturities)
|
$ | 32.92 | $ | 27.77 | ||||
|
Common Shares
Outstanding
|
113.4 | 115.6 | ||||||
AMERICAN
FINANCIAL GROUP, INC.
P&C
SPECIALTY GROUP UNDERWRITING RESULTS
(In
Millions)
|
Three
months ended
December 31,
|
Pct.
Change
|
Twelve
Months ended
December 31,
|
Pct.
Change
|
|||||||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||||
|
Gross
written premiums
|
$ | 725 | $ | 826 | (12%) | $ | 3,762 | $ | 4,266 | (12%) | ||||||||||||||
|
Net
written premiums
|
$ | 517 | $ | 608 | (15%) | $ | 2,311 | $ | 2,886 | (20%) | ||||||||||||||
|
Ratios
(GAAP):
|
||||||||||||||||||||||||
|
Loss & LAE
ratio
|
57 | % | 57 | % | 49 | % | 56 | % | ||||||||||||||||
|
Expense
ratio
|
27 | % | 30 | % | 33 | % | 31 | % | ||||||||||||||||
|
Combined
Ratio(Excluding A&E)
|
84 | % | 87 | % | 82 | % | 87 | % | ||||||||||||||||
|
Total
Combined Ratio
|
84 | % | 87 | % | 83 | % | 88 | % | ||||||||||||||||
|
Supplemental:
|
||||||||||||||||||||||||
|
Gross
Written Premiums:
|
||||||||||||||||||||||||
|
Property &
Transportation
|
$ | 275 | $ | 338 | (19%) | $ | 1,816 | $ | 2,160 | (16%) | ||||||||||||||
|
Specialty
Casualty
|
265 | 290 | (9%) | 1,200 | 1,273 | (6%) | ||||||||||||||||||
|
Specialty
Financial
|
148 | 148 | - | 557 | 596 | (7%) | ||||||||||||||||||
|
California
Workers’ Compensation
|
40 | 49 | (18%) | 194 | 238 | (19%) | ||||||||||||||||||
|
Other
|
(3 | ) | 1 | - | (5 | ) | (1 | ) | - | |||||||||||||||
| $ | 725 | $ | 826 | (12%) | $ | 3,762 | $ | 4,266 | (12%) | |||||||||||||||
|
Net
Written Premiums:
|
||||||||||||||||||||||||
|
Property &
Transportation
|
$ | 210 | $ | 248 | (16%) | $ | 872 | $ | 1,292 | (33%) | ||||||||||||||
|
Specialty
Casualty
|
158 | 180 | (12%) | 755 | 816 | (7%) | ||||||||||||||||||
|
Specialty
Financial
|
99 | 121 | (19%) | 448 | 492 | (9%) | ||||||||||||||||||
|
California
Workers’ Compensation
|
34 | 41 | (17%) | 168 | 213 | (21%) | ||||||||||||||||||
|
Other
|
16 | 18 | - | 68 | 73 | (6%) | ||||||||||||||||||
| $ | 517 | $ | 608 | (15%) | $ | 2,311 | $ | 2,886 | (20%) | |||||||||||||||
|
Combined
Ratio (GAAP):
|
||||||||||||||||||||||||
|
Property &
Transportation
|
51 | % | 75 | % | 74 | % | 88 | % | ||||||||||||||||
|
Specialty
Casualty
|
124 | % | 72 | % | 92 | % | 75 | % | ||||||||||||||||
|
Specialty
Financial
|
71 | % | 153 | % | 74 | % | 109 | % | ||||||||||||||||
|
California
Workers’ Compensation
|
95 | % | 78 | % | 100 | % | 78 | % | ||||||||||||||||
|
Aggregate Specialty
Group
|
84 | % | 87 | % | 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 an
internal reinsurance facility.
|
AMERICAN
FINANCIAL GROUP, INC.
ANNUITY
& SUPPLEMENTAL INSURANCE GROUP
STATUTORY
PREMIUMS
(In
Millions)
|
Three
months ended
December 31,
|
Pct.
Change
|
Twelve
months ended
December 31,
|
Pct.
Change
|
|||||||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||||
|
Retirement
annuity premiums:
|
||||||||||||||||||||||||
|
Fixed
annuities
|
$ | 145 | $ | 121 | 20% | $ | 494 | $ | 513 | (4% | ) | |||||||||||||
|
Bank
annuities
|
26 | 54 | (52% | ) | 314 | 345 | (9% | ) | ||||||||||||||||
|
Indexed
annuities
|
152 | 171 | (11% | ) | 539 | 727 | (26% | ) | ||||||||||||||||
|
Variable
annuities
|
19 | 27 | (30% | ) | 87 | 91 | (4% | ) | ||||||||||||||||
| 342 | 373 | (8% | ) | 1,434 | 1,676 | (14% | ) | |||||||||||||||||
|
Supplemental
insurance
|
100 | 95 | 5% | 390 | 381 | 2% | ||||||||||||||||||
|
Life
insurance
|
10 | (9 | ) | - | 44 | 32 | 38% | |||||||||||||||||
|
Total statutory
premiums
|
$ | 452 | $ | 459 | (2% | ) | $ | 1,868 | $ | 2,089 | (11% | ) | ||||||||||||
*Reflects
impact of a reinsurance treaty entered into during the third quarter of
2008.
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
December 31,
|
Twelve
months ended
December 31,
|
||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
P&C
operating earnings
|
$ | 185 | $ | 180 | $ | 741 | $ | 690 | ||||||||
|
Annuity
& supplemental insurance operating
earnings
|
35 | 38 | 162 | 158 | ||||||||||||
|
Interest
& other corporate expense
|
(38 | ) | (27 | ) | (136 | ) | (105 | ) | ||||||||
|
Core
operating earnings before income taxes
|
182 | 191 | 767 | 743 | ||||||||||||
|
Related
income taxes
|
61 | 69 | 274 | 267 | ||||||||||||
|
Core
net operating earnings
|
$ | 121 | $ | 122 | $ | 493 | $ | 476 | ||||||||