American Financial Quarterly Profit Up

American Financial Quarterly Profit Up

NU Online News Service, May 1, 1:15 p.m. EDT?American Financial Group Inc. said higher premiums led to a first-quarter profit of $25.1 million, or 36 cents per share, up from $1.4 million, or two cents per share, for last year's first quarter.

The positive earnings news follows the company announcement earlier this week that it will change its board to give it a majority of independent directors. This change will be in line with an expected new requirement of the New York Stock Exchange where the Cincinnati-based company is listed.

Keith E. Lindner, co-president of the company, will not stand for reelection for a directorship to make room for another independent director. With that spot and two new added seats saved for independent directors, five of the American Financial's nine board members will have independent status.

In its quarterly report, the company said core earnings from insurance operations were $43.8 million for 2003, compared to $36.9 million reported in the 2002 first quarter.

The improvement, American Financial said, was due to significantly improved underwriting results in its property-casualty insurance operations.

American Financial's p-c group posted an underwriting profit of $14.4 million for the quarter, a jump of $23.7 million from one year ago when the company registered a loss. The group's combined ratio improved to 97.4 percent compared with 101.4 percent recorded for first quarter 2002.

The company's specialty group reported an underwriting profit of $9.5 million for the quarter with a combined ratio of 97.9 percent, which also represents an improvement from the 2002 first quarter.

"We are pleased with the continuing positive trend in our operating results. It reflects the effects of our ongoing rate actions and our focus on allocating capital to those businesses with the greatest profit potential," said Carl H. Lindner, chairman and chief executive officer at American Financial Group.

Headquartered in Cincinnati, the company offers specialty lines, including workers' compensation, professional liability, ocean and inland marine, and multiperil crop insurance. American Financial Group also provides auto insurance, especially nonstandard motorist insurance.