CINCINNATI - American Financial Group , Inc. (NYSE: NYSE:AFG) released its financial results for the third quarter of 2024, reporting net earnings of $181 million, or $2.16 per share. These results compare favorably to the $177 million, or $2.09 per share, reported in the same quarter of the previous year. The company's core net operating earnings were $194 million, or $2.31 per share, down from $208 million, or $2.45 per share, in the third quarter of 2023.
The company's annualized return on equity (ROE) for the third quarter was 15.2%, with core operating ROE at 16.2%. This performance reflects a decrease from the 2023 third quarter's annualized ROE of 15.7% and core operating ROE of 18.3%.
American Financial Group also declared a special dividend of $4.00 per share, payable on November 26, 2024, to shareholders on record as of November 15, 2024. This special dividend is in addition to the regular quarterly cash dividend of $0.80 per share paid on October 25, 2024.
The decrease in core net operating earnings was primarily due to higher catastrophe losses, particularly from Hurricane Helene, and lower favorable prior year reserve development in the Specialty Property and Casualty (P&C) insurance operations. These were partially offset by higher investment income.
The Specialty P&C insurance operations reported an underwriting profit of $117 million for the quarter, a decrease from $143 million in the 2023 third quarter. Catastrophe losses for the quarter were $90 million, mainly due to Hurricane Helene, compared to $56 million in the same period last year.
Gross and net written premiums for the third quarter increased by 19% and 14%, respectively, compared to the third quarter of 2023, driven by additional premiums from the Crop Risk Services acquisition and a combination of new business opportunities, increased exposures, and favorable renewal rates.
The company's book value per share was $56.10 as of September 30, 2024, with the book value per share excluding accumulated other comprehensive income (AOCI) at $57.71. Growth in book value per share plus dividends was 8.7% for the quarter and 19.3% for the nine months ended September 30, 2024.
The information provided is based on a press release statement from American Financial Group.
In other recent news, American Financial Group (AFG) has reported a strong second-quarter performance, with an 18.5% annualized core operating return on equity. The company's Specialty Property and Casualty insurance businesses showed robust underwriting margins, contributing to a 15% year-over-year increase in Property and Casualty net investment income. AFG's combined ratio improved to 90.5%, reflecting a 1.4 point enhancement from the previous year. Despite strategic reductions in certain high-risk areas, the company's overall renewal rates rose, and it projects a 7% growth in net written premiums for 2024.
AFG has also announced an increase in its regular dividend payout to shareholders. The insurance holding company stated that a dividend of $0.80 per share, a 12.7% increase from the annual dividend rate established in the fourth quarter of 2023, will be distributed to shareholders on record as of October 15, 2024.
In regards to analyst notes, Citi maintained its neutral stance on AFG shares following a previous downgrade from Buy to Neutral. The firm acknowledged AFG's proactive measures in response to the challenging underwriting landscape and highlighted the company's strategic growth in its mortgage loan portfolio. Citi adjusted its earnings per share forecasts for AFG, showing a 2% increase for 2024 and 2025.
Lastly, several Wall Street firms, including TD Securities, BNY Mellon (NYSE:BK), and Truist, have agreed to pay a collective sum exceeding $470 million in settlements with U.S. regulators due to violations of recordkeeping rules by the broker-dealer and investment adviser firms.
InvestingPro Insights
American Financial Group's (NYSE: AFG) recent financial results and strategic decisions align with several key metrics and insights from InvestingPro. The company's strong performance is reflected in its market capitalization of $10.71 billion and a price-to-earnings (P/E) ratio of 11.72 for the last twelve months as of Q2 2024.
One of the standout InvestingPro Tips is that AFG "has maintained dividend payments for 39 consecutive years." This impressive track record of dividend consistency is further emphasized by the company's recent declaration of a special dividend of $4.00 per share, in addition to its regular quarterly dividend. Investors seeking income stability may find this particularly attractive, especially considering the current dividend yield of 5.68%.
Another relevant InvestingPro Tip highlights that AFG "has a perfect Piotroski Score of 9," indicating strong financial health across various metrics. This aligns well with the company's reported annualized return on equity of 15.2% for the third quarter and its ability to navigate challenges such as higher catastrophe losses.
The company's revenue growth of 7.59% over the last twelve months and quarterly growth of 4.2% in Q2 2024 demonstrate its ability to expand its business, which is reflected in the increased gross and net written premiums reported for the third quarter.
It's worth noting that InvestingPro offers additional tips and insights for AFG, with 7 more tips available to subscribers, providing a more comprehensive analysis of the company's financial position and prospects.
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