In a year where many held their breath, American Financial Group didn't just weather the storm—they powered through it with a remarkable 32% surge in net earnings to $1.6 billion, showcasing a formidable financial fortress built on underwriting excellence and strategic growth.
Key Takeaways
- American Financial Group's net earnings attributable to common stockholders for the full year 2022 were $1,599 million, a 32% increase from $1,209 million in 2021
- In 2022, American Financial Group's core net operating earnings reached $1,492 million, up 20% year-over-year from $1,244 million, excluding certain investment gains
- Revenue for American Financial Group in 2022 totaled $6.9 billion, primarily driven by net earned premiums of $5.2 billion
- American Financial Group's total assets as of December 31, 2022, stood at $39.5 billion
- Total liabilities for American Financial Group were $33.2 billion as of year-end 2022, primarily insurance reserves
- Shareholders' equity attributable to common stockholders was $5.4 billion at December 31, 2022, for American Financial Group
- American Financial Group's property and casualty gross premiums written in 2022 were $5.6 billion
- Net premiums earned in the P&C segment reached $4.2 billion for full year 2022
- The specialty P&C lines contributed $3.8 billion in gross premiums written in 2022 for American Financial Group
- American Financial Group's fixed maturity securities portfolio totaled $22.3 billion at December 31, 2022, with average rating NAIC 2 or better
- Net investment income for American Financial Group in 2022 was $775 million, up 15% from prior year
- The company's investment yield on fixed maturities was 3.5% in 2022
- The company repurchased 1.9 million shares of common stock for $250 million during 2022
- American Financial Group paid quarterly dividends of $0.51 per share in 2022, totaling $2.04 annually
- Shares outstanding as of December 31, 2022, were 84.2 million for American Financial Group
American Financial Group reported strong earnings growth and profitability in 2022.
Balance Sheet
- American Financial Group's total assets as of December 31, 2022, stood at $39.5 billion
- Total liabilities for American Financial Group were $33.2 billion as of year-end 2022, primarily insurance reserves
- Shareholders' equity attributable to common stockholders was $5.4 billion at December 31, 2022, for American Financial Group
- American Financial Group's loss and loss adjustment expense reserves totaled $11.8 billion as of December 31, 2022
- Unearned premium reserves for the company were $3.9 billion at the end of 2022
- American Financial Group's investment portfolio was valued at $26.1 billion as of December 31, 2022
- Total debt outstanding for American Financial Group was $2.1 billion as of year-end 2022
- Policyholder funds held by American Financial Group amounted to $20.7 billion on December 31, 2022
- American Financial Group's consolidated net worth ratio was 528% as of December 31, 2022
- Goodwill and other intangible assets totaled $428 million for American Financial Group at year-end 2022
- Total assets increased to $40.2 billion as of March 31, 2023
- Shareholders' equity was $5.6 billion at Q1 2023 end
- Loss reserves grew to $12.1 billion by March 31, 2023
- Unearned premiums at $4.0 billion for Q1 2023
- Investment portfolio valued at $26.5 billion at March 31, 2023
- Debt levels remained at $2.1 billion in Q1 2023
- Policyholder funds $21.0 billion as of Q1 end 2023
- Book value per share excluding AOCI was $131.50 at March 31, 2023
- Net worth ratio improved to 542% in Q1 2023
- Goodwill stable at $428 million Q1 2023
- Total assets Dec 31, 2021 $37.8 billion
- Equity $5.1 billion end 2021
- Loss reserves $11.2 billion 2021 year-end
- Unearned premiums $3.6 billion Dec 2021
- Investments $25.2 billion end 2021
- Debt $2.0 billion 2021
- Policyholder funds $19.8 billion end 2021
- Book value per share $116.82 excl AOCI 2021
- Net worth ratio 510% Dec 2021
- Assets $36.5 billion end 2020
- Equity $4.9 billion Dec 2020
- Loss reserves $10.8 billion 2020
- UEPR $3.4 billion end 2020
- Investments $24.3 billion 2020 year-end
Balance Sheet Interpretation
American Financial Group is not merely running a business; it's operating a highly cautious and very profitable financial fortress, where every liability is meticulously matched and then comfortably buried under a mountain of investments and equity, proven by a rock-solid, growing net worth ratio that makes even the most conservative banker blush.
Financial Results
- American Financial Group's net earnings attributable to common stockholders for the full year 2022 were $1,599 million, a 32% increase from $1,209 million in 2021
- In 2022, American Financial Group's core net operating earnings reached $1,492 million, up 20% year-over-year from $1,244 million, excluding certain investment gains
- Revenue for American Financial Group in 2022 totaled $6.9 billion, primarily driven by net earned premiums of $5.2 billion
- American Financial Group's property and casualty insurance segment generated $1,385 million in core net operating earnings in 2022
- The company's full-year 2022 P&C combined ratio was 91.3%, reflecting underwriting profitability
- Annuity and RGA segments contributed $107 million to core net operating earnings in 2022 for American Financial Group
- American Financial Group's net realized gains after tax were $107 million in 2022
- For Q4 2022, American Financial Group reported core net operating earnings of $363 million, or $5.26 per share
- American Financial Group's book value per share, excluding accumulated other comprehensive income, was $127.29 as of December 31, 2022
- The company's return on equity, based on core net operating earnings, was 17.8% for full year 2022
- American Financial Group's net earnings for Q1 2023 were $362 million, or $5.45 per diluted share
- Core net operating earnings for Q1 2023 stood at $340 million, or $5.07 per share
- P&C combined ratio for Q1 2023 was 90.1% for American Financial Group
- Net earned premiums in Q1 2023 were $1.3 billion
- Investment income pre-tax rose 28% to $206 million in Q1 2023
- Total revenues for Q1 2023 reached $1.7 billion for the company
- Catastrophe losses in Q1 2023 were $35 million net
- Renewal pricing up 8.2% in Q1 2023 P&C segment
- Return on equity for Q1 2023 was 18.2% annualized
- American Financial Group's 2021 full year net earnings $1,209 million
- Core operating earnings 2021 $1,244 million
- P&C combined ratio 2021 was 94.6%
- Gross premiums written 2021 $5.1 billion P&C
- Net investment income 2021 $674 million
- Total revenues 2021 $5.5 billion
- Cat losses 2021 $412 million net
- Renewal rates up 6.8% full year 2021
- ROE 2021 15.2% on core earnings
- American Financial Group 2020 net earnings $1,098 million
- Core earnings 2020 $1,221 million despite COVID impacts
- Combined ratio 2020 P&C 92.3%
- GPW P&C $4.7 billion 2020
- NII $642 million 2020 down from prior
- Revenues $4.9 billion 2020 full year
- Cat losses $250 million net 2020
- Renewal pricing +5.2% 2020 average
- ROE 14.8% core 2020
Financial Results Interpretation
While weathering the stormy seas of catastrophe losses and market volatility, American Financial Group has skillfully tightened its underwriting discipline and raised its investment sails, steering to a remarkably profitable port where every 91 cents paid out in claims is met with a full dollar of premium, proving that in insurance, the real art is not just collecting the rain but also dancing deftly between the drops.
Insurance Operations
- American Financial Group's property and casualty gross premiums written in 2022 were $5.6 billion
- Net premiums earned in the P&C segment reached $4.2 billion for full year 2022
- The specialty P&C lines contributed $3.8 billion in gross premiums written in 2022 for American Financial Group
- American Financial Group's P&C loss ratio for 2022 was 61.2%
- Expense ratio in the P&C segment was 30.1% for full year 2022
- Catastrophe losses net of reinsurance for American Financial Group totaled $159 million in 2022
- The company's renewal pricing increase in P&C was 7.3% for full year 2022
- American Financial Group's accident year loss ratio excluding catastrophes was 57.5% in 2022
- Net written premiums growth in specialty P&C was 11% in 2022
- Retained accident quarter loss ratio for Q4 2022 was 62.3% for American Financial Group
- P&C gross premiums written $1.5 billion in Q1 2023
- Specialty P&C net premiums earned $1.1 billion Q1 2023
- P&C loss ratio 60.8% excluding cats in Q1 2023
- Combined ratio excluding cats 87.4% for Q1 2023 P&C
- Net written premium growth 12% in Q1 2023
- Expense ratio 29.8% in P&C for Q1 2023
- Rate increase averaged 9.1% on renewal policies Q1 2023
- Favorable prior accident year development $45 million in Q1 2023
- Retained accident quarter loss ratio 58.2% Q1 2023
- P&C GPW $5.1 billion 2021
- Net premiums earned P&C $3.9 billion 2021
- Loss ratio 2021 P&C 65.4%
- Expense ratio 29.2% 2021 P&C
- Net written growth 8% 2021
- Specialty lines dominant with 75% of premiums 2021
- Prior year development favorable $120 million 2021
- Renewal pricing 6.8% average 2021
- Accident year loss ex-cat 59.8% 2021
Insurance Operations Interpretation
American Financial Group tightened its belt like a meticulous bookkeeper in 2022 and early 2023, seeing decent growth while its specialty lines hummed and its disciplined underwriting—from a lower loss ratio to a sharper combined ratio—hinted it was politely but firmly telling risk, "Your rates have gone up, and so have our standards."
Investment Portfolio
- American Financial Group's fixed maturity securities portfolio totaled $22.3 billion at December 31, 2022, with average rating NAIC 2 or better
- Net investment income for American Financial Group in 2022 was $775 million, up 15% from prior year
- The company's investment yield on fixed maturities was 3.5% in 2022
- Equity securities fair value was $1.2 billion for American Financial Group at year-end 2022
- American Financial Group's mortgage loan portfolio amounted to $1.4 billion as of December 31, 2022
- Other invested assets totaled $1.2 billion, including limited partnerships, at end of 2022
- Pre-tax investment income spread was 2.45% for Q4 2022
- American Financial Group's portfolio duration was 5.2 years as of December 31, 2022
- Net unrealized investment gains were $1.8 billion pre-tax at year-end 2022
- Fixed maturities $22.7 billion at March 31, 2023
- Investment yield 3.7% annualized in Q1 2023
- Equity securities $1.3 billion Q1 2023 end
- Mortgage loans $1.45 billion as of Q1 2023
- Portfolio duration shortened to 5.1 years Q1 2023
- Net unrealized gains $2.1 billion pre-tax Q1 2023
- Other invested assets $1.25 billion Q1 2023
- Fixed maturities $21.5 billion end 2021
- Investment yield 3.0% 2021 full year
- Equities $1.1 billion Dec 2021
- Mortgages $1.3 billion end 2021
- Duration 5.4 years portfolio 2021
- Unrealized gains $1.5 billion pre-tax 2021
- Other investments $1.1 billion 2021
Investment Portfolio Interpretation
American Financial Group's investment portfolio, while impressively fortified with high-grade securities and growing yields, appears to be cautiously dancing on a tightening rope of interest rate risk, as evidenced by its shortening duration and ballooning paper gains in a volatile market.
Shareholder Information
- The company repurchased 1.9 million shares of common stock for $250 million during 2022
- American Financial Group paid quarterly dividends of $0.51 per share in 2022, totaling $2.04 annually
- Shares outstanding as of December 31, 2022, were 84.2 million for American Financial Group
- Dividend payout ratio based on core earnings was 15% in 2022
- American Financial Group's stock closed at $248.50 on December 31, 2022
- Market capitalization was approximately $20.9 billion at year-end 2022
- The board approved a $300 million share repurchase authorization in early 2023
- American Financial Group's 5-year compound annual growth rate in book value per share was 13.2% through 2022
- Ownership by institutions was 65.4% as of latest filings in 2022
- Repurchased 0.5 million shares for $65 million in Q1 2023
- Quarterly dividend increased to $0.55 per share declared Q1 2023
- Shares outstanding 84.0 million at Q1 2023 end
- Book value growth 3.2% in Q1 2023 excluding AOCI
- Stock price averaged $235 in Q1 2023 trading
- Market cap around $19.7 billion mid-2023
- Institutional ownership 65.8% as of Q1 2023 filings
- 10-year total shareholder return 12.5% annualized through 2022
- Shares repurchased 2.2 million for $220 million 2021
- Dividend $0.50 per share quarterly 2021
- Shares out 85.1 million end 2021
- Payout ratio 14% on core 2021
- Closing price $137.50 end 2021 adjusted
- Market cap $11.7 billion Dec 2021
- Institutions hold 64.9% 2021 filings
- 3-year BVPS CAGR 12.8% to 2021
Shareholder Information Interpretation
Even as American Financial Group generously rewards its shareholders with dividends and buybacks, its low payout ratio and consistent book value growth reveal a disciplined engine that methodically returns capital while still fueling robust, long-term compounding.