A solid property-casualty specialty operations underwriting profit could not prevent a third-quarter net loss of $26 million for Cincinnati-based American Financial Group Inc.
AFG's net earnings for the comparable year-ago period were $138 million.
The company said the loss reflected an after-tax charge of $122 million resulting from strengthening reserves for asbestos and other environmental exposures from the company's runoff operations.
Property-casualty specialty insurance operations generated an underwriting profit of $43 million in the quarter and a combined ratio of 93.3, an improvement of six points from the same period in 2004.
The company suffered $26 million of after-tax losses from Hurricanes Katrina and Rita, compared with $22.8 million of hurricane losses in the third quarter of 2004.
Overall average rates for the third quarter were down slightly due to a moderating rate environment, compared to the same period a year ago, the company said.
Company chairman Carl Lindner III said that "due to risk selection strategy we've been following for several years, we have experienced remarkably modest underwriting impact from some of the worst hurricane seasons on record."
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