We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
American Financial (AFG) Q2 Earnings Top on Solid Underwriting
Read MoreHide Full Article
American Financial Group, Inc. (AFG - Free Report) reported second-quarter 2024 net operating earnings per share of $2.56, which beat the Zacks Consensus Estimate by 1.2%. The bottom line increased 8% year over year.
American Financial’s results reflected higher premiums, lower catastrophe losses and improved underwriting profit at Property & Transportation Group, Specialty Casualty Group and Specialty Financial Group, partially offset by lower net investment income.
American Financial Group, Inc. Price, Consensus and EPS Surprise
Total revenues of $1.8 billion rose 4% year over year in the quarter. The growth came on the back of higher property & casualty (P&C) insurance net earned premiums and other income. However, the top line missed the Zacks Consensus Estimate by 10.7%.
Net investment income decreased 5% year over year to $188 million in the quarter under review. The figure was lower than our estimate of $205.4 million but beat the Zacks Consensus Estimate of $184.9 million.
Total cost and expenses increased 2.8% year over year to $1.6 billion due to higher P&C insurance losses and expenses and other expenses. The figure was lower than our estimate of $1.8 billion.
Segmental Update
The Specialty P&C Insurance segment generated $1.7 billion in net written premiums, which rose 1.5% year over year. The growth was reported within Property & Transportation Group, Specialty Casualty Group, Specialty Financial of the Specialty P&C groups as a result of a combination of new business opportunities, increased exposures, and a good renewal rate environment, partially offset by later reporting of crop premiums. Average renewal pricing across P&C Group, excluding workers’ compensation, increased 8% for the quarter.
Net written premiums in Property & Transportation Group grew 2% year over year to $681 million in the quarter. The figure was lower than our estimate of $686.3 million.
Net written premiums at Specialty Casualty Group increased 2% year over year to $704 million. The figure was lower than our estimate of $764.4 million.
Further, net written premiums at Specialty Financial rose 3% year over year to $248 million. The figure was lower than our estimate of $317.8 million.
Net written premiums at Other divisions decreased 11% year over year to $59 million. The figure was lower than our estimate of $73 million.
Pre-tax core operating earnings of the P&C Insurance segment of $319 million in the second quarter increased 6.7% year over year.
Specialty P&C Insurance segment’s underwriting profit jumped 22.8% year over year to $151 million in the quarter. The increase was due to higher year-over-year underwriting profit at Property & Transportation Group, Specialty Casualty Group and Specialty Financial Group. The figure was lower than our estimate of $188 million.
The combined ratio improved 140 basis points (bps) year over year to 90.5% at the Specialty Group due to an improvement of 120 bps in Specialty Casualty, 130 bps in Property & Transportation Group and 530 bps in Specialty Financial.
Catastrophe losses were $36 million, narrower than the year-ago loss of $51 million.
Financial Update
American Financial exited the second quarter with total cash and investments of $15.3 billion, which remained unchanged from the 2023-end level. The figure was lower than our estimate of $15.7 billion.
As of Jun 30, 2024, long-term debt totaled $1.4 billion, which remained unchanged from the level at the end of 2023.
As of Jun 30, 2024, the company’s book value per share (excluding accumulated other comprehensive income) was $56.19, up 2.7% from the 2023-end level.
Annualized return on equity came in at 18% for the second quarter, expanding 10 bps year over year.
Prudent Capital Deployment
American Financial paid cash dividends of 71 cents per share during the second quarter.
2024 Guidance
American Financial expects growth in net written premiums to be 7%.
Zacks Rank
American Financial currently carries a Zacks Rank #4 (Sell).
Cincinnati Financial Corporation (CINF - Free Report) reported second-quarter 2024 operating income of $1.29 per share, which surpassed the Zacks Consensus Estimate by 33%. The bottom line increased 7% year over year. Total operating revenues in the quarter under review were $2.4 billion, which improved 10.8% year over year. However, the top line missed the consensus mark by 1.5%.
Net written premiums climbed 14% year over year to $2.4 billion. Investment income, net of expenses, increased 10% year over year to $242 million and missed our estimate of $246.2 million. The Zacks Consensus Estimate was pegged at $252 million. Total benefits and expenses of Cincinnati Financial increased 11.2% year over year to $2.1 billion. Our estimate was $2.2 billion. In its P&C insurance business, CINF witnessed an underwriting income of $35 million, which decreased 26% from the year-ago period. Our estimate was pegged at an income of $1.5 million.
CNA Financial Corporation (CNA - Free Report) reported second-quarter 2024 core earnings of $1.19 per share, which missed the Zacks Consensus Estimate by 1.6%. However, the bottom line increased 5.3% year over year. Total operating revenues of CNA Financial were $3.1 billion, up 6.7% year over year. The top line beat the Zacks Consensus Estimate by 1.3%. Net written premiums of Property & Casualty Operations increased 6% year over year to $2.6 billion.
Net investment income rose 7.4% year over year to $618 million. Our estimate for net investment was $601.1 million. The Zacks Consensus Estimate was pegged at $592.3 million. Total claims, benefits and expenses increased 7.3% to $2.6 billion. Our estimate was $2.5 billion. Catastrophe losses were $82 million, wider than a loss of $68 million in the year-ago quarter. Underwriting income declined 10.1% year over year to $124 million. Our estimate was $175.3 million.
Palomar Holdings, Inc. (PLMR - Free Report) reported second-quarter 2024 operating income of $1.25 per share, which beat the Zacks Consensus Estimate by 11.6%. The bottom line increased 45.3% year over year. Total revenues improved 47.2% year over year to $131 million. The top line beat the Zacks Consensus Estimate by 9.2%. Gross written premiums increased 40.4% year over year to $385.2 million. Our estimate was $362.7 million. Net earned premiums increased 47.1% year over year to $122.3 million. Our estimate was $109.2 million. The Zacks Consensus Estimate is pegged at $117.7 million.
Net investment income increased 43.7% year over year to $8 million. The Zacks Consensus Estimate is pegged at $8.2 million. Our estimate was $8.9 million. Palomar recorded an underwriting income of $25.6 million, which increased 47% from the year-ago quarter’s income of $17.4 million. Our estimate was $23.2 million. Adjusted underwriting income was $32.9 million, up 42.5% year over year. Total expenses of $97.6 million increased 45% year over year. Our estimate was $87.2 million.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
American Financial (AFG) Q2 Earnings Top on Solid Underwriting
American Financial Group, Inc. (AFG - Free Report) reported second-quarter 2024 net operating earnings per share of $2.56, which beat the Zacks Consensus Estimate by 1.2%. The bottom line increased 8% year over year.
American Financial’s results reflected higher premiums, lower catastrophe losses and improved underwriting profit at Property & Transportation Group, Specialty Casualty Group and Specialty Financial Group, partially offset by lower net investment income.
American Financial Group, Inc. Price, Consensus and EPS Surprise
American Financial Group, Inc. price-consensus-eps-surprise-chart | American Financial Group, Inc. Quote
Behind the Headlines
Total revenues of $1.8 billion rose 4% year over year in the quarter. The growth came on the back of higher property & casualty (P&C) insurance net earned premiums and other income. However, the top line missed the Zacks Consensus Estimate by 10.7%.
Net investment income decreased 5% year over year to $188 million in the quarter under review. The figure was lower than our estimate of $205.4 million but beat the Zacks Consensus Estimate of $184.9 million.
Total cost and expenses increased 2.8% year over year to $1.6 billion due to higher P&C insurance losses and expenses and other expenses. The figure was lower than our estimate of $1.8 billion.
Segmental Update
The Specialty P&C Insurance segment generated $1.7 billion in net written premiums, which rose 1.5% year over year. The growth was reported within Property & Transportation Group, Specialty Casualty Group, Specialty Financial of the Specialty P&C groups as a result of a combination of new business opportunities, increased exposures, and a good renewal rate environment, partially offset by later reporting of crop premiums. Average renewal pricing across P&C Group, excluding workers’ compensation, increased 8% for the quarter.
Net written premiums in Property & Transportation Group grew 2% year over year to $681 million in the quarter. The figure was lower than our estimate of $686.3 million.
Net written premiums at Specialty Casualty Group increased 2% year over year to $704 million. The figure was lower than our estimate of $764.4 million.
Further, net written premiums at Specialty Financial rose 3% year over year to $248 million. The figure was lower than our estimate of $317.8 million.
Net written premiums at Other divisions decreased 11% year over year to $59 million. The figure was lower than our estimate of $73 million.
Pre-tax core operating earnings of the P&C Insurance segment of $319 million in the second quarter increased 6.7% year over year.
Specialty P&C Insurance segment’s underwriting profit jumped 22.8% year over year to $151 million in the quarter. The increase was due to higher year-over-year underwriting profit at Property & Transportation Group, Specialty Casualty Group and Specialty Financial Group. The figure was lower than our estimate of $188 million.
The combined ratio improved 140 basis points (bps) year over year to 90.5% at the Specialty Group due to an improvement of 120 bps in Specialty Casualty, 130 bps in Property & Transportation Group and 530 bps in Specialty Financial.
Catastrophe losses were $36 million, narrower than the year-ago loss of $51 million.
Financial Update
American Financial exited the second quarter with total cash and investments of $15.3 billion, which remained unchanged from the 2023-end level. The figure was lower than our estimate of $15.7 billion.
As of Jun 30, 2024, long-term debt totaled $1.4 billion, which remained unchanged from the level at the end of 2023.
As of Jun 30, 2024, the company’s book value per share (excluding accumulated other comprehensive income) was $56.19, up 2.7% from the 2023-end level.
Annualized return on equity came in at 18% for the second quarter, expanding 10 bps year over year.
Prudent Capital Deployment
American Financial paid cash dividends of 71 cents per share during the second quarter.
2024 Guidance
American Financial expects growth in net written premiums to be 7%.
Zacks Rank
American Financial currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Cincinnati Financial Corporation (CINF - Free Report) reported second-quarter 2024 operating income of $1.29 per share, which surpassed the Zacks Consensus Estimate by 33%. The bottom line increased 7% year over year. Total operating revenues in the quarter under review were $2.4 billion, which improved 10.8% year over year. However, the top line missed the consensus mark by 1.5%.
Net written premiums climbed 14% year over year to $2.4 billion. Investment income, net of expenses, increased 10% year over year to $242 million and missed our estimate of $246.2 million. The Zacks Consensus Estimate was pegged at $252 million. Total benefits and expenses of Cincinnati Financial increased 11.2% year over year to $2.1 billion. Our estimate was $2.2 billion. In its P&C insurance business, CINF witnessed an underwriting income of $35 million, which decreased 26% from the year-ago period. Our estimate was pegged at an income of $1.5 million.
CNA Financial Corporation (CNA - Free Report) reported second-quarter 2024 core earnings of $1.19 per share, which missed the Zacks Consensus Estimate by 1.6%. However, the bottom line increased 5.3% year over year. Total operating revenues of CNA Financial were $3.1 billion, up 6.7% year over year. The top line beat the Zacks Consensus Estimate by 1.3%. Net written premiums of Property & Casualty Operations increased 6% year over year to $2.6 billion.
Net investment income rose 7.4% year over year to $618 million. Our estimate for net investment was $601.1 million. The Zacks Consensus Estimate was pegged at $592.3 million. Total claims, benefits and expenses increased 7.3% to $2.6 billion. Our estimate was $2.5 billion. Catastrophe losses were $82 million, wider than a loss of $68 million in the year-ago quarter. Underwriting income declined 10.1% year over year to $124 million. Our estimate was $175.3 million.
Palomar Holdings, Inc. (PLMR - Free Report) reported second-quarter 2024 operating income of $1.25 per share, which beat the Zacks Consensus Estimate by 11.6%. The bottom line increased 45.3% year over year. Total revenues improved 47.2% year over year to $131 million. The top line beat the Zacks Consensus Estimate by 9.2%. Gross written premiums increased 40.4% year over year to $385.2 million. Our estimate was $362.7 million. Net earned premiums increased 47.1% year over year to $122.3 million. Our estimate was $109.2 million. The Zacks Consensus Estimate is pegged at $117.7 million.
Net investment income increased 43.7% year over year to $8 million. The Zacks Consensus Estimate is pegged at $8.2 million. Our estimate was $8.9 million. Palomar recorded an underwriting income of $25.6 million, which increased 47% from the year-ago quarter’s income of $17.4 million. Our estimate was $23.2 million. Adjusted underwriting income was $32.9 million, up 42.5% year over year. Total expenses of $97.6 million increased 45% year over year. Our estimate was $87.2 million.