The following is a summary of the American Financial Group, Inc. (AFG) Q1 2024 Earnings Call Transcript:
Financial Performance:
American Financial Group reported Q1 2024 core net operating earnings of $2.76 per share, marking a year-over-year decrease due to lower returns on the company's alternative investment portfolio.
Net written premiums experienced 8% growth year-over-year, while the operating return on equity was reported to be 20% annually.
Property and Casualty net investment income in Q1 2024 was around 1% lower than Q1 2023. Nonetheless, excluding the impact of alternative investments, net investment income saw a 16% increase year-over-year, due to increased interest rates and larger balances of invested assets.
Business Progress:
AFG returned $269 million to shareholders through regular and special dividends in Q1 2024, with projections of generating significant excess capital throughout 2024.
Growth was observed in the Specialty Financial Group, with gross and net written premiums boosting by 26% and 27%, respectively, mainly driven by the financial institutions business which sustained its growth pattern from 2023.
The company remains dedicated to a 6% total return assumption on alternatives for the year, based on a low single-digit return on multifamily properties which account for half of the portfolio.
Amid recent losses in innovative markets, AFG is evaluating new opportunities and has stopped enabling new coverages in some problematic programs. However, its commercial liability combined ratios are expected to grow and improve in the coming years.
More details: American Financial IR
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