Cincinnati, Ohio-based American Financial Group Inc. (AFG) reported net earnings for the 2005 second quarter of $81.6 million ($1.04 per share), significantly above the $55.9 million ($.75 per share) reported for the second quarter of last year. The increase results primarily from improved earnings in the insurance operations and higher realized gains on investments.
Through its Great American Insurance Group, AFG specializes in specialized commercial property/casualty insurance, and in the sale of retirement annuities, supplemental insurance and life products.
Second-quarter core operating earnings per share were 21% above last year’s second quarter results and ahead of expectations. Excellent underwriting results were sustained by the specialty P&C operations and the operating earnings of the annuity, supplemental and life insurance operations continued to improve.
The P&C specialty insurance operations generated an underwriting profit of $60.5 million in the 2005 second quarter, 90% above the same quarter last year. The combined ratio improved to 89.4%, 4.6 points better than the 2004 second quarter. Gross written premiums for the 2005 quarter were approximately 5% lower than the same period a year ago.
While certain specialty operations experienced solid volume growth, overall premium levels for the specialty insurance operations were impacted by the moderating rate environment. Overall average rates in the 2005 second quarter were up slightly compared to the same period a year earlier. Net written premiums for the 2005 quarter were 4% above the 2004 period, reflecting continued reductions in premiums ceded under reinsurance agreements.
The Specialty Insurance Group’s combined ratio for the first six months of 2005 was 90.8%, an improvement of 2.8 points from the 2004 period. For the 2005 six month period, gross written premiums were at about the same level as the same period a year earlier while net written premiums were about 7% higher.
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