American Financial Group (AFG) Q2 2024 earnings summary

Executive summary

• Second quarter 2024 net earnings were $209 million ($2.49 per share), up from $200 million ($2.34 per share) year-over-year, with core net operating earnings per share rising 8% to $2.56, driven by higher underwriting profit and investment income.

• Annualized core operating return on equity was 18.5% for Q2 2024, with strong underwriting margins in Specialty P&C.

• Book value per share plus dividends grew 10% year-to-date and 4.7% in Q2 2024.

• Premium growth was modest, impacted by timing in crop business and proactive underwriting in social inflation-exposed lines.

• Net earnings for the first six months of 2024 were $451 million ($5.38 per share), up from $412 million ($4.83 per share) in the prior year.

Financial highlights

• Core net operating earnings for Q2 2024 were $215 million ($2.56 per share), up from $202 million ($2.38 per share) in Q2 2023.

• P&C net investment income (excluding alternatives) rose 15% year-over-year; total P&C net investment income was down 1% due to lower alternative investment returns.

• Combined ratio for Specialty P&C improved to 90.5% (down 1.4 points year-over-year), with 2.3 points of catastrophe losses and 2.3 points of favorable prior year reserve development.

• Gross written premiums rose 2% to $2.41 billion; net written premiums up 1% to $1.69 billion year-over-year.

• Book value per share (excluding AOCI) was $56.19 at June 30, 2024.

Outlook and guidance

• Net written premium growth expected to be approximately 7% for full year 2024, considering seasonality and recent underwriting actions.

• Management expects continued premium growth and strong underwriting results in a favorable property and casualty market.

• Operations are expected to generate significant excess capital, supporting potential special dividends or share repurchases.

• Optimistic about crop year prospects and long-term value creation.

• Forward-looking statements are subject to risks and uncertainties as outlined in SEC filings.