American Financial Group, Inc. Announces Fourth Quarter and Full Year Results
-
Net earnings of
$1.84 per share in the fourth quarter and$5.28 per share for the full year -
Fourth quarter core net operating earnings per share of
$2.20 ; up 11% from 2016 -
Core net operating earnings per share of
$6.55 for the full year; up 9% from 2016 - Full year 2017 ROE of 10.3%; 2017 core operating ROE of 12.7%
-
Full year 2018 core net operating earnings guidance between
$7.90 - $8.40 per share
Core net operating earnings were
AFG’s net earnings attributable to shareholders, determined in accordance with U.S. generally accepted accounting principles (“GAAP”), include certain items that may not be indicative of its ongoing core operations. The table below identifies such items and reconciles net earnings attributable to shareholders to core net operating earnings, a non-GAAP financial measure. AFG believes that its core net operating earnings provides management, financial analysts, rating agencies and investors with an understanding of the results from the ongoing operations of the Company by excluding the impact of net realized gains and losses and other special items that are not necessarily indicative of operating trends. AFG’s management uses core net operating earnings to evaluate financial performance against historical results because it believes this provides a more comparable measure of its continuing business. Core net operating earnings is also used by AFG’s management as a basis for strategic planning and forecasting.
In millions, except per share amounts | Three months ended | Twelve months ended | ||||||||||||||
December 31, | December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Components of net earnings attributable to shareholders: | ||||||||||||||||
Core operating earnings before income taxes | $ | 283 | $ | 266 | $ | 865 | $ | 840 | ||||||||
Pretax non-core items: |
||||||||||||||||
Realized gains on securities | 6 | 51 | 5 | 19 | ||||||||||||
Realized gain on sale of subsidiaries | - | - | - | 2 | ||||||||||||
Gain on sale of apartment property | - | - | - | 32 | ||||||||||||
Special A&E charges | - | - | (113 | ) | (41 | ) | ||||||||||
Neon exited lines charge | 18 | - | 18 | (65 | ) | |||||||||||
Loss on early retirement of debt | (40 | ) | - | (51 | ) | - | ||||||||||
Earnings before income taxes | 267 | 317 | 724 | 787 | ||||||||||||
Provision (credit) for income taxes: | ||||||||||||||||
Core operating earnings | 86 | 88 | 275 | 290 | ||||||||||||
Non-core items: | ||||||||||||||||
Tax benefit related to National Interstate merger |
- |
(66 |
) |
- |
(66 |
) |
||||||||||
Tax benefit related to Neon restructuring |
(56 |
) |
(111 |
) |
(56 |
) |
(111 |
) |
||||||||
Tax expense related to change in U.S. corporate tax rate |
83 |
- |
83 |
- |
||||||||||||
Other | (12 | ) | 18 | (55 | ) | 6 | ||||||||||
Total provision (credit) for income taxes | 101 | (71 | ) | 247 | 119 | |||||||||||
Net earnings, including noncontrolling interests | 166 | 388 | 477 | 668 | ||||||||||||
Less net earnings attributable to noncontrolling interests: | ||||||||||||||||
Core operating earnings | - | 2 | 2 | 16 | ||||||||||||
Non-core items | - | 1 | - | 3 | ||||||||||||
Total net earnings attributable to noncontrolling interests | - | 3 | 2 | 19 | ||||||||||||
Net earnings attributable to shareholders | $ | 166 | $ | 385 | $ | 475 | $ | 649 | ||||||||
Net earnings: | ||||||||||||||||
Core net operating earnings(a) | $ | 197 | $ | 176 | $ | 588 | $ | 534 | ||||||||
Non-core items | (31 | ) | 209 | (113 | ) | 115 | ||||||||||
Net earnings attributable to shareholders | $ | 166 | $ | 385 | $ | 475 | $ | 649 | ||||||||
Components of Earnings Per Share: | ||||||||||||||||
Core net operating earnings(a) | $ | 2.20 | $ | 1.98 | $ | 6.55 | $ | 6.03 | ||||||||
Non-core Items: |
||||||||||||||||
Realized gains on securities | 0.04 | 0.36 | 0.03 | 0.16 | ||||||||||||
Realized gain on sale of subsidiaries | - | - | - | 0.01 | ||||||||||||
Gain on sale of apartment property | - | - | - | 0.17 | ||||||||||||
Special A&E charges | - | - | (0.82 | ) | (0.30 | ) | ||||||||||
Neon exited lines charge | 0.19 | - | 0.19 | (0.73 | ) | |||||||||||
Loss on early retirement of debt | (0.29 | ) | - | (0.37 | ) | - | ||||||||||
Tax benefit related to National Interstate merger | - | 0.74 | - | 0.74 | ||||||||||||
Tax benefit related to Neon restructuring | 0.62 | 1.25 | 0.62 | 1.25 | ||||||||||||
Tax expense related to change in U.S. corporate tax rate |
(0.92 | ) | - | (0.92 | ) | - | ||||||||||
Diluted Earnings Per Share | $ | 1.84 | $ | 4.33 | $ | 5.28 | $ | 7.33 |
Footnote (a) is contained in the accompanying Notes to Financial Schedules at the end of this release.
“AFG had approximately
“With the benefit of tax reform, we expect core net operating earnings
in 2018 to be between
Core operating earnings in AFG’s P&C insurance operations were
The Specialty P&C insurance operations generated underwriting profit of
Fourth quarter results in 2017 include 0.6 points in catastrophe losses,
primarily the result of wildfires in
Gross and net written premiums were up 9% and 7%, respectively, in the
2017 fourth quarter compared to the same period in 2016, with each of
our Specialty P&C groups reporting growth during the quarter. Average
renewal pricing across our entire
The
Fourth quarter 2017 gross and net written premiums in this group were
both 8% higher, respectively, than the comparable prior year period. The
increase was primarily attributed to higher crop insurance premiums, as
well as higher premiums in our property & inland marine and
The
Gross and net written premiums increased 8% and 9%, respectively, for
the fourth quarter of 2017 when compared to the same prior year period.
Growth within Neon, resulting from the growth of its portfolio in
targeted classes of business, higher premiums in our workers’
compensation businesses, primarily the result of rate increases in
The
Gross and net written premiums increased by 16% and 1%, respectively, in the 2017 fourth quarter when compared to the same 2016 period. Higher premiums in our lending and leasing businesses, which were largely ceded, were the primary driver of the increase. Renewal pricing in this group was flat during the fourth quarter and decreased approximately 2% overall for the full year of 2017.
Mr. Lindner continued, “We are forecasting an overall calendar year combined ratio in the 92% to 94% range, and we are targeting growth in net written premiums in the range of 3% to 7%.”
Further details about AFG’s Specialty P&C operations may be found in the accompanying schedules and in our Quarterly Investor Supplement, which is posted on our website.
Annuity Segment
As shown in the following table, AFG’s Annuity Segment reported
Components of Annuity Earnings Before Income Taxes |
|||||||||||||||||||||||
Dollars in millions | Three months ended | Pct. | Twelve months ended | Pct. | |||||||||||||||||||
December 31, | Change | December 31, | Change | ||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
Annuity earnings before fair value accounting for FIAs | $ | 108 | $ | 103 | 5 | % | $ | 413 | $ | 395 | 5 | % | |||||||||||
Impact of fair value accounting for FIAs | (11 | ) | 29 | nm |
|
(33 | ) | (27 | ) | nm | |||||||||||||
Pretax annuity earnings |
$ | 97 | $ | 132 | (27 | %) | $ | 380 | $ | 368 | 3 | % | |||||||||||
Annuity Earnings Before Fair Value Accounting for FIAs – AFG’s
Annuity Segment reported quarterly earnings before fair value accounting
for FIAs of
In the fourth quarters of 2017 and 2016, AFG conducted detailed reviews
(“unlocking”) of the major actuarial assumptions underlying its annuity
operations. The review resulted in an unlocking charge of
Impact of Fair Value Accounting for FIAs – Under Generally
Accepted Accounting Principles (GAAP), a portion of the reserves for
FIAs (
The impact of fair value accounting for FIAs includes annuity interest
accreted on this FIA embedded derivative reserve; interest accreted
totaled
In the fourth quarter of 2017, the benefit of a higher stock market was
more than offset by lower than expected interest rates, resulting in a
net
Annuity Premiums – AFG’s Annuity Segment reported statutory
premiums of
2018 Annuity Outlook – AFG expects that 2018 annuity sales will
be up 2% to 6% compared to the
The 2018 guidance assumes (i) interest rates and the stock market rise moderately for the remainder of 2018, (ii) more normalized income from certain investments required to be marked to market through earnings, and (iii) lower impact in 2018 from unusual investment income items such as prepayment of fixed income securities. Fluctuations in the returns on these investments, or large changes in interest rates and/or the stock market, as compared to our expectations, could lead to significant positive or negative impacts on the Annuity Segment’s results.
More information about premiums and the results of operations for our Annuity Segment may be found in AFG’s Quarterly Investor Supplement, which is posted on our website.
Investments
AFG recorded fourth quarter 2017 net realized gains of
For the twelve months ended
More information about the components of our investment portfolio may be found in our Quarterly Investor Supplement, which is posted on our website.
Reduction in the U.S. Corporate Tax Rate and Write-down of Deferred Tax Asset
In the fourth quarter of 2017, AFG recorded a one-time non-core charge
of
Tax Benefit Related to Neon Restructuring
On
Loss on Early Retirement of Debt
In
Neon Exited Lines Charge (Reinsurance to Close (RITC) of Neon’s 2015 Year of Account)
On
About
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, investment activities and the amount and timing of share repurchases; 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 and
inflation rates, currency fluctuations and extended economic recessions
or expansions in the U.S. and/or abroad; performance of securities
markets; new legislation or declines in credit quality or credit ratings
that could have a material impact on the valuation of securities in
AFG’s investment portfolio; the availability of capital; regulatory
actions (including changes in statutory accounting rules); changes in
the legal environment affecting AFG or its customers; tax law and
accounting changes; levels of natural catastrophes and severe weather,
terrorist activities (including any nuclear, biological, chemical or
radiological events), incidents of war or losses resulting from civil
unrest 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;
trends in persistency and mortality; competitive pressures; the ability
to obtain adequate rates and policy terms; changes in AFG’s credit
ratings or the financial strength ratings assigned by major ratings
agencies to AFG’s operating subsidiaries; the impact of the conditions
in the international financial markets and the global economy (including
those associated with the
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 2017 fourth quarter
and full year results at
A replay will be available two hours following the completion of the
call and will remain available until
The conference and accompanying webcast slides will also be broadcast live over the Internet. To listen to the call via the Internet, go to the Investor Relations page on AFG’s website, www.AFGinc.com, and follow the instructions under Webcasts and Presentations.
The archived webcast will be available immediately after the call via
the same link on the Investor Relations page until
(Financial summaries follow)
This earnings release and AFG’s Quarterly Investor Supplement are available in the Investor Relations section of AFG’s website: www.AFGinc.com.
AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES | |||||||||||||
SUMMARY OF EARNINGS AND SELECTED BALANCE SHEET DATA | |||||||||||||
(In Millions, Except Per Share Data) | |||||||||||||
Three months ended | Twelve months ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||
Revenues | |||||||||||||
P&C insurance net earned premiums | $ | 1,225 | $ | 1,144 | $ | 4,579 | $ | 4,328 | |||||
Life, accident & health net earned premiums | 5 | 6 | 22 | 24 | |||||||||
Net investment income | 465 | 429 | 1,831 | 1,696 | |||||||||
Realized gains on: | |||||||||||||
Securities | 6 | 51 | 5 | 19 | |||||||||
Subsidiaries | - | - | - | 2 | |||||||||
Income of managed investment entities: | |||||||||||||
Investment income | 55 | 49 | 210 | 190 | |||||||||
Gain on change in fair value of assets/liabilities |
- | 6 | 12 | 15 | |||||||||
Other income | 52 | 52 | 206 | 224 | |||||||||
Total revenues | 1,808 | 1,737 | 6,865 | 6,498 | |||||||||
Costs and expenses |
|||||||||||||
P&C insurance losses & expenses | 1,061 | 1,040 | 4,362 | 4,111 | |||||||||
Annuity, life, accident & health benefits & expenses | 279 | 222 | 1,091 | 1,019 | |||||||||
Interest charges on borrowed money | 20 | 21 | 85 | 77 | |||||||||
Expenses of managed investment entities | 44 | 42 | 181 | 151 | |||||||||
Other expenses | 137 | 95 | 422 | 353 | |||||||||
Total costs and expenses | 1,541 | 1,420 | 6,141 | 5,711 | |||||||||
Earnings before income taxes |
267 |
317 |
724 |
787 |
|||||||||
Provision (credit) for income taxes(b) | 101 | (71 | ) | 247 | 119 | ||||||||
Net earnings including noncontrolling interests | 166 | 388 | 477 | 668 | |||||||||
Less: Net earnings attributable to noncontrolling interests |
- |
3 |
2 |
19 |
|||||||||
|
|||||||||||||
Net earnings attributable to shareholders | $ | 166 | $ | 385 | $ | 475 | $ | 649 | |||||
Diluted earnings per Common Share | $ | 1.84 | $ | 4.33 | $ | 5.28 | $ | 7.33 | |||||
Average number of diluted shares | 90.1 | 88.8 | 89.8 | 88.5 | |||||||||
December 31, | December 31, | |||||
Selected Balance Sheet Data: |
2017 | 2016 | ||||
Total cash and investments | $ | 46,048 | $ | 41,433 | ||
Long-term debt | $ | 1,301 | $ | 1,283 | ||
Shareholders’ equity(c) | $ | 5,330 | $ | 4,916 | ||
Shareholders’ equity (excluding unrealized gains/losses related to fixed maturities)(c) |
$ |
4,724 |
$ |
4,617 |
||
Book value per share | $ | 60.38 | $ | 56.55 | ||
Book value per share (excluding unrealized | ||||||
gains/losses related to fixed maturities) | $ | 53.51 | $ | 53.11 | ||
Common Shares Outstanding |
88.3 |
86.9 |
Footnotes (b) and (c) are contained in the accompanying Notes to Financial Schedules at the end of this release.
AMERICAN FINANCIAL GROUP, INC. | ||||||||||||||||||||||
SPECIALTY P&C OPERATIONS | ||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||
Three months ended | Pct. | Twelve months ended | Pct. | |||||||||||||||||||
December 31, | Change | December 31, | Change | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Gross written premiums | $ | 1,571 | $ | 1,441 | 9 | % | $ | 6,502 | $ | 5,981 | 9 | % | ||||||||||
Net written premiums | $ | 1,161 | $ | 1,083 | 7 | % | $ | 4,751 | $ | 4,386 | 8 | % | ||||||||||
Ratios (GAAP): | ||||||||||||||||||||||
Loss & LAE ratio | 59.8 | % | 63.7 | % | 62.9 | % | 61.7 | % | ||||||||||||||
Underwriting expense ratio | 27.5 | % | 26.7 | % | 30.2 | % | 30.6 | % | ||||||||||||||
Specialty Combined Ratio | 87.3 | % | 90.4 | % | 93.1 | % | 92.3 | % | ||||||||||||||
Combined Ratio – P&C Segment |
86.0 |
% |
90.4 |
% |
94.7 |
% |
94.5 |
% |
||||||||||||||
Supplemental Information:(d) |
||||||||||||||||||||||
Gross Written Premiums: | ||||||||||||||||||||||
Property & Transportation | $ | 626 | $ | 577 | 8 | % | $ | 2,688 | $ | 2,504 | 7 | % | ||||||||||
Specialty Casualty | 737 | 684 | 8 | % | 3,087 | 2,792 | 11 | % | ||||||||||||||
Specialty Financial | 208 | 180 | 16 | % | 727 | 685 | 6 | % | ||||||||||||||
$ | 1,571 | $ | 1,441 | 9 | % | $ | 6,502 | $ | 5,981 | 9 | % | |||||||||||
Net Written Premiums: | ||||||||||||||||||||||
Property & Transportation | $ | 424 | $ | 394 | 8 | % | $ | 1,765 | $ | 1,672 | 6 | % | ||||||||||
Specialty Casualty | 555 | 510 | 9 | % | 2,280 | 2,036 | 12 | % | ||||||||||||||
Specialty Financial | 156 | 154 | 1 | % | 596 | 572 | 4 | % | ||||||||||||||
Other | 26 | 25 | 4 | % | 110 | 106 | 4 | % | ||||||||||||||
$ | 1,161 | $ | 1,083 | 7 | % | $ | 4,751 | $ | 4,386 | 8 | % | |||||||||||
Combined Ratio (GAAP): | ||||||||||||||||||||||
Property & Transportation | 82.6 | % | 83.9 | % | 91.0 | % | 90.0 | % | ||||||||||||||
Specialty Casualty | 90.0 | % | 97.4 | % | 95.2 | % | 96.1 | % | ||||||||||||||
Specialty Financial | 86.2 | % | 86.0 | % | 89.4 | % | 84.9 | % | ||||||||||||||
Aggregate Specialty Group | 87.3 | % | 90.4 | % | 93.1 | % | 92.3 | % | ||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Reserve Development (Favorable)/Adverse: | ||||||||||||||||
Property & Transportation | $ | (4 | ) | $ | 13 | $ | (40 | ) | $ | (21 | ) | |||||
Specialty Casualty | (52 | ) | 3 | (86 | ) | (13 | ) | |||||||||
Specialty Financial | 1 | (6 | ) | (21 | ) | (23 | ) | |||||||||
Other |
6 | - | 8 | (4 | ) | |||||||||||
Specialty Group Excluding A&E and Neon Charge | (49 | ) | 10 | (139 | ) | (61 | ) | |||||||||
Special A&E Reserve Charge – P&C Run-off |
- | - | 89 | 36 | ||||||||||||
Neon Exited Lines Charge and Other |
(17 | ) | - | (14 | ) | 57 | ||||||||||
Total Reserve Development | $ | (66 | ) | $ | 10 | $ | (64 | ) | $ | 32 | ||||||
Points on Combined Ratio: |
||||||||||||||||
Property & Transportation | (0.8 | ) | 3.0 | (2.3 | ) | (1.2 | ) | |||||||||
Specialty Casualty | (9.2 | ) | 0.5 | (4.0 | ) | (0.7 | ) | |||||||||
Specialty Financial | 0.8 | (4.5 | ) | (3.6 | ) | (4.0 | ) | |||||||||
Aggregate Specialty Group | (4.1 | ) | 0.9 | (3.0 | ) | (1.4 | ) | |||||||||
Total P&C Segment | (5.4 | ) | 0.9 | (1.4 | ) | 0.7 |
Footnote (d) is contained in the accompanying Notes to Financial Schedules at the end of this release.
AMERICAN FINANCIAL GROUP, INC. | ||||||||||||||||||
ANNUITY SEGMENT | ||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||
Components of Statutory Premiums |
||||||||||||||||||
Three months ended | Pct. | Twelve months ended | Pct. | |||||||||||||||
December 31, | Change | December 31, | Change | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Annuity Premiums: |
||||||||||||||||||
Financial Institutions | $ | 427 | $ | 626 | (32 | %) | $ | 2,333 | $ | 2,418 | (4 | %) | ||||||
Retail | 435 | 437 | - | 1,806 | 1,796 | 1 | % | |||||||||||
Education Market | 41 | 40 | 3 | % | 174 | 184 | (5 | %) | ||||||||||
Variable Annuities | 6 | 8 | (25 | %) | 28 | 37 | (24 | %) | ||||||||||
Total Annuity Premiums | $ | 909 | $ | 1,111 | (18 | %) | $ | 4,341 | $ | 4,435 | (2 | %) | ||||||
Components of Annuity Earnings Before Income Taxes |
||||||||||||||||||
Three months ended | Pct. | Twelve months ended | Pct. | |||||||||||||||
December 31, | Change | December 31, | Change | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Revenues: | ||||||||||||||||||
Net investment income | $ | 376 | $ | 346 | 9 | % | $ | 1,458 | $ | 1,356 | 8 | % | ||||||
Other income | 24 | 27 | (11 | %) | 103 | 103 | - | |||||||||||
Total revenues |
400 |
373 |
7 | % | 1,561 | 1,459 | 7 | % | ||||||||||
Costs and Expenses: | ||||||||||||||||||
Annuity benefits |
257 |
160 |
61 |
% |
892 |
800 |
12 |
% |
||||||||||
Acquisition expenses |
15 |
54 |
(72 |
%) |
168 |
181 |
(7 |
%) |
||||||||||
Other expenses |
31 |
27 |
15 |
% |
121 |
110 |
10 |
% |
||||||||||
Total costs and expenses |
303 |
241 |
26 |
% |
1,181 |
1,091 |
8 |
% |
||||||||||
Annuity earnings before income taxes |
$ |
97 |
$ |
132 |
(27 |
%) |
$ |
380 |
$ |
368 |
3 |
% |
||||||
Supplemental Annuity Information |
||||||||||||||||||||||
Three months ended | Pct. | Twelve months ended | Pct. | |||||||||||||||||||
December 31, | Change | December 31, | Change | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Earnings before fair value accounting for FIAs |
$ |
108 |
$ |
103 |
5 |
% |
$ |
413 |
$ |
395 |
5 |
% |
||||||||||
Impact of fair value accounting for FIAs |
(11 |
) |
29 |
nm |
(33 |
) |
(27 |
) |
nm |
|||||||||||||
Earnings before income taxes | $ | 97 | $ | 132 | (27 | %) | $ | 380 | $ | 368 | 3 | % | ||||||||||
|
||||||||||||||||||||||
Average fixed annuity reserves* | $ | 32,680 | $ | 29,250 | 12 | % | $ | 31,526 | $ | 28,146 | 12 | % | ||||||||||
Net interest spread* | 2.62 | % | 2.70 | % | 2.62 | % | 2.73 | % | ||||||||||||||
Net spread earned before fair value accounting for FIAs* |
1.34 |
% |
1.42 |
% |
1.33 |
% |
1.39 |
% |
||||||||||||||
Net spread earned after impact of fair value accounting for FIAs* |
1.21 |
% |
1.82 |
% |
1.23 |
% |
1.29 |
% |
* Excludes fixed annuity portion of variable annuity business.
AMERICAN FINANCIAL GROUP, INC. | ||||||||||||||||
Notes to Financial Schedules | ||||||||||||||||
a) Components of core net operating earnings (in millions): |
||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Core Operating Earnings before Income Taxes: |
||||||||||||||||
P&C insurance segment | $ | 233 | $ | 180 | $ | 660 | $ | 630 | ||||||||
Annuity segment, before fair value accounting for FIAs | 108 | 103 | 413 | 395 | ||||||||||||
Impact of fair value accounting for FIAs | (11 | ) | 29 | (33 | ) | (27 | ) | |||||||||
Run-off long-term care and life segment | 2 | 2 | 6 | 2 | ||||||||||||
Interest & other corporate expense | (49 | ) | (50 | ) | (183 | ) | (176 | ) | ||||||||
Core operating earnings before income taxes | 283 | 264 | 863 | 824 | ||||||||||||
Related income taxes | 86 | 88 | 275 | 290 | ||||||||||||
Core net operating earnings | $ | 197 | $ | 176 | $ | 588 | $ | 534 | ||||||||
b) Excluding the impact of the Neon Exited Lines Charge that was
reported in the second quarter of 2016, the Tax Benefit related to the
National Interstate Merger and the Tax Benefit Related to the Neon
Restructuring reported in the fourth quarter of 2016, AFG’s effective
tax rate for the fourth quarter and twelve months ended
c) Shareholders’ Equity at
d) Supplemental Notes:
- 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.
- Specialty Casualty includes primarily excess and surplus, general liability, executive liability, professional liability, umbrella and excess liability, specialty coverages in targeted markets, customized programs for small to mid-sized businesses and workers’ compensation insurance.
- Specialty Financial includes risk management insurance programs for lending and leasing institutions (including equipment leasing and collateral and lender-placed mortgage property insurance), surety and fidelity products and trade credit insurance.
- Other includes an internal reinsurance facility.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180131006290/en/
Source:
American Financial Group, Inc.
Diane P. Weidner, IRC, 513-369-5713
Asst.
Vice President - Investor Relations
or
Websites:
www.AFGinc.com
www.GreatAmericanInsuranceGroup.com