American Financial Group Posts Profit

NU Online News Service, Feb. 19, 2:23 p.m. EST?American Financial Group reported a 2002 fourth-quarter net increase of $12.7 million, or 18 cents a share, over the period in 2001.

The company reported a fourth-quarter profit of $44.2 million, or 64 cents per share, compared with $31.5 million, or 46 cents per share, one year ago.

The Cincinnati-based insurer stated its revenue rose to $952..9 million from $939.4 million while gross written premiums in its p-c and specialty segments increased.

The company stated its p-c group generated an underwriting profit of $17.2 million in the fourth quarter, excluding an asbestos litigation charge. The group's combined ratio of 97 percent in that quarter reflects a three-point improvement compared with the period in the prior year.

Gross written premiums jumped five percent for the quarter thanks to continued strong growth in the specialty group, which reported an underwriting profit of $7.2 million in the quarter, American Financial said.

Also, earlier this month American Financial?s Infinity p-c unit raised $198 million in an initial public share offering on the Nasdaq Exchange.

American Financial also noted that its latest results included an after-tax charge of $19.5 million related to an asbestos litigation settlement.

Under that agreement, the company's subsidiary, Great American Insurance Company, has agreed to settle asbestos-related coverage litigation from insurance policies issued in the 1970's and 1980's for $123.5 million before tax. But all except $30 million will be covered by previously established reserves and anticipated reinsurance recoverables. As a result, American Financial has recorded a charge of $30 million--$19.5 million after-tax--for the fourth quarter.

Carl H. Lindner, chairman and chief executive officer at American Financial, noted that the company's strategic focus in specialty commercial lines and the favorable trends in commercial insurance markets would contribute to further improvements in its operating earnings in 2003 and beyond.

"Our overall property and casualty operations generated a solid underwriting profit in the 2002 fourth quarter and reported a combined ratio just under 100 percent for the year," Mr. Lindner said.

He noted that, "For the past several years, we have been realigning our mix of business and focusing on rate adequacy. We have continued to tell the market that we were committed to achieving underwriting profits and that we would sacrifice volume for profits. I believe the improvement in our results demonstrates that commitment," he said.

American Financial offers p-c and specialty lines, including workers' compensation, professional liability, ocean and inland marine, and multiperil crop insurance, as well as automotive insurance. The company also owns some 30 percent of banana grower Chiquita Brands International.

Special Reports /

American Financial Group Posts Profit

Related Stories

Recommended For You