American Financial Group, Inc. Announces First Quarter Results

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American Financial Group, Inc. (NYSE: AFG) today reported 2021 first quarter net earnings attributable to shareholders of $419 million ($4.84 per share) compared to a net loss of $301 million ($3.34 per share loss) for the 2020 first quarter. Net earnings for the 2021 first quarter include after-tax non-core items totaling $213 million ($2.46 per share). As previously announced, the results of AFG's Annuity operations are reported as discontinued operations beginning with the first quarter of 2021, in accordance with generally accepted accounting principles (GAAP), which included adjusting prior period results to reflect these operations as discontinued. AFG's first quarter 2021 results included $152 million ($1.76 per share) in earnings from discontinued annuity operations and $61 million ($0.70 per share) in after-tax non-core net realized gains on securities. By comparison, the net loss attributable to shareholders in the 2020 first quarter included $426 million ($4.70 per share loss) in adverse after-tax non-core items. Other details may be found in the table on the following page. AFG's book value per share was $78.53 as of March 31, 2021. Annualized return on equity was 29.9% and (23.1%) for the first quarters of 2021 and 2020, respectively.

Core net operating earnings were $206 million ($2.38 per share) for the 2021 first quarter, compared to $125 million ($1.36 per share) in the 2020 first quarter. The year-over-year increase was the result of substantially higher underwriting profit in the Specialty Property and Casualty ("P&C") insurance operations and significantly higher P&C net investment income. Improved results from AFG's $1.5 billion of alternative investments that are marked to market through core operating earnings were partially offset by lower other property and casualty net investment income, primarily due to lower short-term interest rates. Additional details for the 2021 and 2020 first quarters may be found in the table below. Core net operating earnings for the first quarters of 2021 and 2020 generated annualized returns on equity of 14.7% and 9.6%, respectively.

Three Months Ended March 31,

Components of Pretax Core Operating Earnings

2021

2020(a)

2021

2020(a)

2021

2020(a)

In millions, except per share amounts

Before Impact of

Alternative Investments

Core Net Operating

Alternative Investments

Investments, net of DAC

Earnings, as reported

P&C Pretax Core Operating Earnings

$

211

$

178

$

77

$

3

$

288

$

181

Real estate entities and other to be acquired from

Annuity operations

(1

)

-

29

6

28

6

Other expenses

(34

)

(17

)

-

-

(34

)

(17

)

Holding company interest expense

(24

)

(17

)

-

-

(24

)

(17

)

Pretax Core Operating Earnings

152

144

106

9

258

153

Related provision for income taxes

30

26

22

2

52

28

Core Net Operating Earnings

$

122

$

118

$

84

$

7

$

206

$

125

Core Operating Earnings Per Share

$

1.41

$

1.28

$

0.97

$

0.08

$

2.38

$

1.36

Weighted Avg Diluted Shares Outstanding

86.6

91.1

86.6

91.1

86.6