American Financial Q1 Profit Up Sharply

American Financial Q1 Profit Up Sharply

NU Online News Service, April 26, 11:55 a.m. EDT?American Financial Group Inc., citing higher earnings from insurance operations and realized investment gains, reported first-quarter net profit of $73.2 million?a nearly threefold rise from $25.1 million recorded for the 2003 period.[@@]

The Cincinnati-based insurer said its core earnings from all insurance units were $53.4 million for the first quarter, a 22 percent increase compared with $43.8 million reported one year ago. The company noted that the increase was due to higher underwriting margins in the property-casualty insurance operations as well as improved operating earnings from the annuity, supplemental insurance and life operations.

Carl Lindner, American Financial Group chief executive officer, said the results "exceeded our expectations and get us off to an excellent start for the year." He also reported that his company is revising up its core-earnings guidance for 2004, to a range of $2.85 and $3.10 on a per-share basis.

Among its insurance operations, American Financial's p-c group had net written premiums of $539 million for the quarter, with a 93.8 combined ratio. In comparison, the group reported $557 million and 97.1 combined ratio a year earlier. (The p-c group's 2004 first-quarter results also include personal lines from Infinity Property and Casualty, through mid-February, when American Financial completed selling its remaining ownership in Birmingham, Ala.-based Infinity.)

In its specialty-group business, American Financial posted net written premiums of $537 million and a 93.3 combined ratio for the quarter, compared with $439 million and 97.9 combined ratio reported a year earlier. American Financial's specialty group includes transportation coverage, specialty casualty and specialty financial, and California workers' compensation business.

The company's earnings increased from its realized investment gains, posting $22.3 million for the quarter. In contrast, the insurer reported realized investment losses of $23.6 million one year ago.

American Financial Group offers p-c and specialty lines, including workers' comp, professional liability, ocean and inland marine, and multiperil crop insurance, as well as auto insurance.