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American Financial Group, Inc. Announces Third Quarter Results
Net earnings per share of $1.62 includes ($0.25) per share of after-tax A&E reserve strengthening, ($0.23) per share related to Annuity non-core items and ($0.15) per share in after-tax realized losses on securities.
Third quarter core net operating earnings of $2.25 per share
Third quarter annualized ROE of 11.0%; annualized core operating ROE of 15.3%
Full year 2019 core net operating earnings guidance revised to a narrowed range of $8.50 to $8.70 per share
CINCINNATI October 29, 2019 American Financial Group, Inc. (NYSE: AFG) today reported 2019 third quarter net earnings attributable to shareholders of $147 million ($1.62 per share) compared to $204 million ($2.26 per share) for the 2018 third quarter. Net earnings for the quarter includeafter-tax charges of $23 million ($0.25 per share) to strengthen the Companys asbestos and environmental (A&E) reserves and $14 million ($0.15 per share) in after-tax realized losses on securities, including $20 million ($0.22 per share) in holding losses to adjust equity securities to fair value. Net earnings for the third quarter of 2019 also included a negative impact of $21 million ($0.23 per share) for annuity non-core items, including the impact of fair value accounting for fixed-indexed annuities (FIAs), the unlocking of actuarial assumptions and other items related to changes in the stock market and interest rates. Comparatively, net earnings in the 2018 third quarter included net after-tax non-core earnings of $6 million ($0.07 per share). Other details may be found in the table below. Book value per share was $70.14 per share at September 30, 2019. Annualized return on equity was 11.0% and 16.3% for the third quarters of 2019 and 2018, respectively.
Core net operating earnings were $205 million ($2.25 per share) for the 2019 third quarter, compared to $198 million ($2.19 per share) in the 2018 third quarter. Higher underwriting profit in our Specialty Property and Casualty (P&C) insurance operations and higher P&C net investment income were partially offset by lower core operating earnings in our Annuity Segment. In connection with AFGs new definition of annuity core operating earnings, AFGs core net operating earnings for the third quarter of 2019 exclude the impact of items that are not necessarily indicative of operating trends, and include an expense for the amortization of FIA option costs, which AFG believes better reflects the cost of funds for FIAs and AFGs evaluation of the financial performance of its Annuity business. Book value per share, excluding unrealized gains related to fixed maturities, was $59.65 per share at September 30, 2019. Core net operating earnings for the third quarters of 2019 and 2018 generated annualized returns on equity of 15.3% and 15.8%, respectively.
As previously announced, beginning with the second quarter of 2019, AFG changed the way it defines annuity core operating earnings to exclude the impact of items that are not necessarily indicative of operating trends. Core net operating earnings for periods prior to the change have not been adjusted, however results for the three and nine month periods ended September 30, 2018 are reconciled to historically reported Annuity Segment core operating earnings on page 5 of this release. As a result, reported core net operating earnings for periods beginning with the second quarter of 2019 are not directly comparable to prior year periods.
AFGs 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
The following information was filed by American Financial Group Inc (AFG) on Wednesday, October 30, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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