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Business Wire
07-05-2025
- Business
- Business Wire
Global Indemnity Group, LLC Reports First Quarter 2025 Results
WILMINGTON, Del.--(BUSINESS WIRE)--Global Indemnity Group, LLC (NYSE:GBLI) (the 'Company') today reported a net loss available to common shareholders of $4.1 million or ($0.30) per share for the three months ended March 31, 2025 which includes net loss attributed to California Wildfire events in January 2025 ('California Wildfires') of $12.2 million after tax. Highlights of Consolidated Results for the Three Months Ended March 31, 2025 Excluding California Wildfires, net income available to common shareholders was $8.1 million or $0.58 per share in 2025. Net investment income increased 2% to $14.8 million in 2025 as compared to the same period in 2024. Book yield on the fixed maturities portfolio increased to 4.5% at March 31, 2025 from 4.3% at March 31, 2024. Annualized investment return was 5.4% for 2025. Gross written premiums, increased 6% to $98.7 million in 2025; Excluding terminated products, gross written premiums increased 16% to $98.4 million in 2025 compared to $85.0 million in 2024. InsurTech grew 20% to $15.0 million in 2025 compared with $12.5 million in 2024 from organic agency growth, new agency appointments and new products. Wholesale Commercial grew 6% to $64.9 million compared to $61.1 million in 2024; excluding audit premiums, policy year premiums are higher by 14% in 2025. Assumed Reinsurance increased 275% to $10.9 million in 2025 compared to $2.9 million in 2024 due to new treaties incepting during 2024 and 2025. Current accident year underwriting loss of $10.3 million for 2025 compared to $5.3 million of underwriting income for the same period in 2024. Excluding California Wildfires, the current accident year underwriting income would have been in line with 2024 at $5.3 million in 2025. Current accident year combined ratio was 111.5% in 2025 compared to 94.9% in 2024. Excluding California Wildfires, the current accident year combined ratio would have been 94.8% in 2025 compared to 94.9% for the same period in 2024. Net losses and loss adjustment expenses related to prior accident years were less than $0.1 million in 2025 and 2024. Shareholders' equity was $687.1 million at March 31, 2025 compared to $689.1 million at December 31, 2024. Book value per common share is $47.85 at March 31, 2025 compared to $49.98 at December 31, 2024. As of March 31, 2025 As of December 31, 2024 Select Balance Sheet Data: Cash and invested assets, net $ 1,431.8 $ 1,440.7 Total assets $ 1,713.6 $ 1,731.3 Shareholders' equity $ 687.1 $ 689.1 Book value per share $ 47.85 $ 49.98 Book value per share plus cumulative dividends and excluding AOCI $ 56.08 $ 58.14 Shares Outstanding (in millions) 14.3 13.7 Expand Changes in Common Shareholders' Equity and Book Value per Share (Dollars and shares in millions, except per share data) Balance at December 31, 2024 $ 685.1 13.7 $ 49.98 Net loss (4.0 ) — (0.30 ) Fair value of fixed maturities 3.6 — 0.26 Stock compensation / share issuance (1) 3.5 0.6 (1.74 ) Dividends (5.1 ) — (0.35 ) Balance at March 31, 2025 $ 683.1 14.3 $ 47.85 Expand (1) includes 550,000 class A common shares designated as class A-2 common shares issued on March 6, 2025 for services performed in connection with the Company's internal corporate reorganization. Expand Segment Data for the Three Months Ended March 31, 2025 and 2024 As previously reported, the Company executed an extensive internal business reorganization that marked a significant milestone, positioning the Company for growth and enhanced operational efficiency, increased statutory capital, and more efficient capital management resulting from de-stacking of the insurance companies. As a result of this reorganization, the Company's reportable segments are now structured under two holding companies: Penn-America Underwriters, LLC consists of (i) three agencies: Penn-America Insurance Services, LLC, J.H. Ferguson, LLC, which includes the Vacant Express division, and Collectibles Insurance Services, LLC that source, underwrite, and service policies and (ii) two strategic insurance product and service businesses: Liberty Insurance Adjustment Agency, Inc. a claims adjustment and claims service business and Kaleidoscope Insurance Technologies, Inc., a proprietary insurance software and services provider. Belmont Holdings GX, Inc. includes five state-regulated insurance carriers: Penn-Patriot Insurance Company, Diamond State Insurance Company, Penn-Star Insurance Company, Penn-America Insurance Company, and United National Insurance Company, each of which are rated 'A' (Excellent) by AM Best. The appointment of Praveen Reddy as President and Chief Executive Officer of Penn-America Underwriters, LLC, marks the beginning of the Company's investment in Penn-America Underwriters to further develop the capabilities of its current agencies and service companies. In the first quarter of 2025, the Company realigned the composition of its reportable segments to reflect changes in how the Company now manages its operations. As a result of these changes, the Company has three reportable segments: Agency and Insurance Services consists of (i) three agencies: Penn-America Insurance Services, LLC, J.H. Ferguson, LLC, which includes the Vacant Express division, and Collectibles Insurance Services, LLC that source, underwrite, and service policies and (ii) two strategic insurance product and service businesses: Liberty Insurance Adjustment Agency, Inc. a claims adjustment and claims service business and Kaleidoscope Insurance Technologies, Inc., a proprietary insurance software and services provider. Belmont Insurance Companies - Core ('Belmont Core'), previously known as the Penn-America segment, consists of insurance company operations for ongoing direct insurance products and assumed reinsurance products, which are offered in the excess and surplus lines marketplace. Belmont Insurance Companies - Non-Core ('Belmont Non-Core'), previously known as the Non-Core Operations segment, consists of insurance company operations for lines of business that have been de-emphasized or are no longer being written. The primary activities of Belmont Non-Core are servicing the run-off of polices/treaties, adjusting claims and estimating loss reserves on de-emphasized and terminated business. Segment Data for the Three Months Ended March 31, 2025 and 2024 (Dollars in thousands) Segment Written Premiums For the Three Months Ended March 31, Belmont Core Belmont Non-Core Total 2025 2024 2025 2024 2025 2024 Direct written premiums $ 87,467 $ 91,132 $ 87 $ 92 $ 87,554 $ 91,224 Assumed written premiums 10,922 2,916 199 (652 ) 11,121 2,264 Gross written premiums $ 98,389 $ 94,048 $ 286 $ (560 ) $ 98,675 $ 93,488 Net written premiums $ 95,634 $ 92,596 $ 230 $ (511 ) $ 95,864 $ 92,085 Expand Direct Written Premium Produced by Agency and Insurance Services Segment For the Three Months Ended March 31, 2025 2024 % Change Wholesale Commercial $ 64,884 61,056 6.3% InsurTech 15,020 12,508 20.1% Direct written premiums excluding specialty products 79,904 73,564 8.6% Specialty Products 7,563 17,568 (57.0%) Total direct written premiums $ 87,467 $ 91,132 (4.0%) Expand Assumed Written Premium Produced by Belmont Segments For the Three Months Ended March 31, 2025 2024 % Change Belmont Core $ 10,922 $ 2,916 274.6% Belmont Non-Core 199 (652 ) 130.5% Total assumed written premiums $ 11,121 $ 2,264 391.2% Expand GLOBAL INDEMNITY GROUP, LLC CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars and shares in thousands, except per share data) For the Three Months Ended March 31, 2025 2024 Gross written premiums $ 98,675 $ 93,488 Net written premiums $ 95,864 $ 92,085 Net earned premiums $ 93,316 $ 96,579 Net investment income 14,782 14,520 Net realized investment gains 136 847 Other income 417 345 Total revenues 108,651 112,291 Net losses and loss adjustment expenses 66,738 53,384 Acquisition costs and other underwriting expenses 37,507 38,269 Corporate expenses 9,500 6,373 Income (loss) before income taxes (5,094 ) 14,265 Income tax expense (benefit) (1,105 ) 2,899 Net income (loss) (3,989 ) 11,366 Less: preferred stock distributions 110 110 Net income (loss) available to common shareholders $ (4,099 ) $ 11,256 Per share data: Net income (loss) available to common shareholders (1) Basic $ (0.30 ) $ 0.83 Diluted $ (0.30 ) $ 0.82 Weighted-average number of shares outstanding Basic 13,867 13,579 Diluted 13,867 13,687 Cash distributions declared per common share $ 0.35 $ 0.35 Combined ratio analysis: Loss ratio 71.5 % 55.3 % Expense ratio 40.2 % 39.6 % Combined ratio 111.7 % 94.9 % Expand (1) For the quarter ended March 31, 2025, 'weighted average shares outstanding - basic' was used to calculate 'diluted earnings per share' due to a net loss for the period. Expand GLOBAL INDEMNITY GROUP, LLC CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited) March 31, 2025 ASSETS Fixed maturities: Available for sale, at fair value (amortized cost: $1,323,666 and $1,394,639; net of allowance for expected credit losses of $0 at March 31, 2025 and December 31, 2024) $ 1,315,399 $ 1,381,908 Equity securities, at fair value 12,408 12,284 Other invested assets 23,915 29,413 Total investments 1,351,722 1,423,605 Cash and cash equivalents 81,146 17,009 Premium receivables, net of allowance for expected credit losses of $3,475 at March 31, 2025 and $3,530 at December 31, 2024 67,844 75,088 Reinsurance receivables, net of allowance for expected credit losses of $8,992 at March 31, 2025 and December 31, 2024 69,542 66,855 Funds held by ceding insurers 24,920 30,026 Deferred income taxes 22,899 22,459 Deferred acquisition costs 41,689 41,136 Intangible assets 14,015 14,103 Goodwill 4,820 4,820 Prepaid reinsurance premiums 3,436 3,320 Receivable for securities — 52 Income tax receivable 605 825 Lease right of use assets 9,102 9,295 Other assets 21,866 22,660 Total assets $ 1,713,606 $ 1,731,253 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Unpaid losses and loss adjustment expenses $ 794,848 $ 800,391 Unearned premiums 186,076 183,411 Reinsurance balances payable 2,786 8,181 Payable for securities purchased 1,098 — Contingent commissions 3,386 6,826 Lease liabilities 9,860 10,371 Other liabilities 28,501 32,924 Total liabilities $ 1,026,555 $ 1,042,104 Shareholders' equity: Series A cumulative fixed rate preferred shares, $1,000 par value; 100,000,000 shares authorized, shares issued and outstanding: 4,000 and 4,000 shares, respectively, liquidation preference: $1,000 per share and $1,000 per share, respectively 4,000 4,000 Common shares: no par value; 900,000,000 common shares authorized; class A common shares issued: 11,768,844 and 11,202,355, respectively (inclusive of class A common shares designated as class A-2 common shares of 550,000 and 0, respectively); class A common shares outstanding: 10,481,076 and 9,914,587, respectively (inclusive of class A common shares designated as class A-2 common shares of 550,000 and 0, respectively); class B common shares issued and outstanding: 3,793,612 and 3,793,612, respectively — — Additional paid-in capital (1) 463,072 459,578 Accumulated other comprehensive income (loss), net of tax (6,913 ) (10,410 ) Retained earnings (1) 259,584 268,673 Class A common shares in treasury, at cost: 1,287,768 and 1,287,768 shares, respectively (32,692 ) (32,692 ) Total shareholders' equity 687,051 689,149 Total liabilities and shareholders' equity $ 1,713,606 $ 1,731,253 Expand (1) Since the Company's initial public offering in 2003, the Company has returned $634 million to shareholders, including $522 million in share repurchases and $112 million in dividends/distributions. Expand GLOBAL INDEMNITY GROUP, LLC SELECTED INVESTMENT DATA (Dollars in millions) Market Value as of Fixed maturities $ 1,315.4 $ 1,381.9 Cash and cash equivalents 81.1 17.0 Total fixed maturities and cash and cash equivalents 1,396.5 1,398.9 Equities and other invested assets 36.4 41.7 Total cash and invested assets, gross 1,432.9 1,440.6 Receivable/(payable) for securities sold/(purchased) (1.1 ) 0.1 Total cash and invested assets, net $ 1,431.8 $ 1,440.7 Expand Total Pre-Tax Investment Return For the Three Months Ended March 31, (Unaudited) 2025 2024 Net investment income $ 14.8 $ 14.5 Net realized investment gains 0.1 0.8 Net unrealized investment gains 4.4 3.6 Net realized and unrealized investment return 4.5 4.4 Total investment return $ 19.3 $ 18.9 Average total cash and invested assets $ 1,436.2 $ 1,403.9 Total annualized investment return % 5.4 % 5.4 % Expand (1) Operating income (loss), net of tax, excludes preferred shareholder distributions of $0.1 million for each of the three months ended March 31, 2025 and 2024. (2) The operating income (loss) per share calculation is net of preferred shareholder distributions of $0.1 million for each of the three months ended March 31, 2025 and 2024. Expand Note Regarding Operating Income (Loss) Operating income (loss), a non-GAAP financial measure, is equal to net income (loss) excluding after-tax net realized investment gains and other unique charges not related to operations. Operating income (loss) is not a substitute for net income (loss) determined in accordance with GAAP, and investors should not place undue reliance on this measure. Reconciliation of non-GAAP financial measures and ratios The tables below reconcile the non-GAAP financial measures or ratios, which excludes the impact of prior accident year adjustments and the California Wildfires, to its most directly comparable GAAP measure or ratio. The Company believes the non-GAAP financial measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends in the Company's segments may be obscured by prior accident year adjustments and the California Wildfires. These non-GAAP financial measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and do not reflect the overall underwriting profitability of the Company. For the Three Months Ended March 31, Consolidated current accident year underwriting income excluding California Wildfires Underwriting income (loss) (1) $ (10,512 ) $ 5,271 Effect of prior accident year 184 1 Current accident year underwriting income (loss) (10,328 ) 5,272 California Wildfires net losses and loss adjustment expenses 15,600 — Current accident year underwriting income excluding California Wildfires (2) $ 5,272 $ 5,272 Belmont Core underwriting income excluding California Wildfires Underwriting income (loss) (1) $ (11,582 ) $ 5,635 California Wildfires net losses and loss adjustment expenses 15,600 — Underwriting income excluding California Wildfires (2) $ 4,018 $ 5,635 Consolidated underwriting income excluding California Wildfires Underwriting income (loss) (1) $ (10,512 ) $ 5,271 California Wildfires net losses and loss adjustment expenses 15,600 — Underwriting income excluding California Wildfires (2) $ 5,088 $ 5,271 Net income available to common shareholders excluding California Wildfires Net income (loss) available to common shareholders (1) $ (4,099 ) $ 11,256 California Wildfires net losses and loss adjustment expenses (net of tax) (3) 12,216 — Net income available to common shareholders excluding California Wildfires (2) $ 8,117 $ 11,256 Operating income excluding California Wildfires Operating income (loss) (4) $ (4,095 ) $ 10,692 California Wildfires net losses and loss adjustment expenses (net of tax) (3) 12,216 — Operating income (loss) excluding California Wildfires (2) $ 8,121 $ 10,692 Current accident year combined ratio excluding California Wildfires Combined ratio (1) 111.7 % 94.9 % Effect of prior accident year (0.2 %) — Current accident year combined ratio 111.5 % 94.9 % Impact of California Wildfires (16.7 %) — Current accident year combined ratio excluding California Wildfires (2) 94.8 % 94.9 % Expand (1) Most directly comparable GAAP measure / ratio (2) Non-GAAP financial measure / ratio (3) Represents net losses and loss adjustment expenses of $15.6 million less tax benefit of $3.4 million which was calculated using the estimated annual effective tax rate of 21.7%. (4) See previous table for reconciliation of operating income (loss) to net income (loss) which is the most directly comparable GAAP measure. Expand About Global Indemnity Group, LLC and its subsidiaries Global Indemnity Group, LLC (NYSE:GBLI) is a publicly listed holding company for property and casualty insurance-related businesses. Global Indemnity holds controlling interests in: Penn-America Underwriters, LLC consists of (i) three agencies: Penn-America Insurance Services, LLC, J.H. Ferguson, LLC, which includes the Vacant Express division, and Collectibles Insurance Services, LLC that source, underwrite, and service policies and (ii) two strategic insurance product and service businesses: Liberty Insurance Adjustment Agency, Inc. a claims adjustment and claims service business and Kaleidoscope Insurance Technologies, Inc., a proprietary insurance software and services provider. Belmont Holdings GX, Inc. includes five state-regulated insurance carriers: Penn-Patriot Insurance Company, Diamond State Insurance Company, Penn-Star Insurance Company, Penn-America Insurance Company, and United National Insurance Company, each of which are rated 'A' (Excellent) by AM Best. Belmont Asset Management ('BAM'), works with property & casualty insurance companies to enhance investment portfolio performance. For more information, visit the Company's website at Forward-Looking Information The forward-looking statements contained in this press release 1 do not address a number of risks and uncertainties. Investors are cautioned that Global Indemnity's actual results may be materially different from the estimates expressed in, or implied, or projected by, the forward looking statements. These statements are based on estimates and information available to us at the time of this press release. All forward-looking statements in this press release are based on information available to Global Indemnity as of the date hereof. Please see Global Indemnity's filings with the Securities and Exchange Commission for a discussion of risks and uncertainties which could impact the Company and for a more detailed explication regarding forward-looking statements. Global Indemnity does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. [1] Disseminated pursuant to the "safe harbor" provisions of Section 21E of the Security Exchange Act of 1934.
Business Wire
06-05-2025
- Business
- Business Wire
American Financial Group, Inc. Announces First Quarter Results
CINCINNATI--(BUSINESS WIRE)--American Financial Group, Inc. (NYSE: AFG) today reported 2025 first quarter net earnings of $154 million ($1.84 per share) compared to $242 million ($2.89 per share) for the 2024 first quarter. Net earnings included after-tax non-core net realized gains on securities of $2 million ($0.03 per share) in the 2025 first quarter and $11 million ($0.13 per share) in the 2024 first quarter. Annualized return on equity was 13.3% and 21.2% for the first quarters of 2025 and 2024, respectively, and is calculated excluding accumulated other comprehensive income (AOCI). Other details may be found in the table on the following page. Core net operating earnings were $152 million ($1.81 per share) for the 2025 first quarter compared to $231 million ($2.76 per share) in the 2024 first quarter. The year-over-year decrease reflects lower property and casualty (P&C) insurance underwriting profit and lower returns in AFG's alternative investment portfolio. Additional details for the 2025 and 2024 first quarters may be found in the table below. Core net operating earnings for the first quarters of 2025 and 2024 generated annualized returns on equity of 13.1% and 20.2%, respectively, which is calculated excluding AOCI. AFG's book value per share was $52.50 at March 31, 2025. AFG paid cash dividends of $2.80 per share during the first quarter, including a $2.00 per share special dividend paid in March. For the three months ended March 31, 2025, AFG's growth in book value per share plus dividends was 4.0%. Book value per share excluding AOCI was $54.63 per share at March 31, 2025, compared to $56.03 at the end of 2024. For the three months ended March 31, 2025, AFG's growth in book value per share excluding AOCI plus dividends was 2.5%. AFG's net earnings, determined in accordance with U.S. generally accepted accounting principles (GAAP), include certain items that may not be indicative of its ongoing core operations. The table below identifies such items and reconciles net earnings to core net operating earnings, a non-GAAP financial measure. AFG believes that its core net operating earnings provides management, financial analysts, ratings agencies, and investors with an understanding of the results from the ongoing operations of the Company by excluding the impact of net realized gains and losses and other items that are not necessarily indicative of operating trends. AFG's management uses core net operating earnings to evaluate financial performance against historical results because it believes this provides a more comparable measure of its continuing business. Core net operating earnings is also used by AFG's management as a basis for strategic planning and forecasting. Footnote (a) is contained in the accompanying Notes to Financial Schedules at the end of this release. Expand S. Craig Lindner and Carl H. Lindner III, AFG's Co-Chief Executive Officers, issued this statement: 'Our first quarter results were solid in the face of elevated industry catastrophe losses and heightened levels of economic volatility. In addition, we returned over $290 million to our shareholders during the first quarter of 2025 through a combination of regular dividends, special dividends and share repurchases. Our entrepreneurial, opportunistic culture and disciplined operating philosophy continue to serve us well in environments such as these, and position us for long-term success.' Messrs. Lindner continued: 'AFG continued to have significant excess capital at March 31, 2025. Returning capital to shareholders in the form of regular and special cash dividends and through opportunistic share repurchases is an important and effective component of our capital management strategy. In addition, our capital will be deployed into AFG's core businesses as we identify the potential for healthy, profitable organic growth, and opportunities to expand our specialty niche businesses through acquisitions and start-ups that meet our target return thresholds.' Specialty Property and Casualty Insurance Operations The Specialty P&C insurance operations generated a 94.0% combined ratio in the first quarter of 2025, 3.9 points higher than the 90.1% reported in the first quarter of 2024. First quarter 2025 results include 4.5 points related to catastrophe losses, due primarily to losses from the California wildfires. By comparison, catastrophe losses added 2.3 points to the combined ratio in the 2024 first quarter. First quarter 2025 results benefited from 1.3 points of favorable prior year reserve development, compared to 3.3 points in the first quarter of 2024. Underwriting profit was $94 million for the 2025 first quarter compared to $154 million in the comparable 2024 period. Higher year-over-year underwriting profit in our Specialty Financial Group was more than offset by lower underwriting profit in our Property and Transportation and Specialty Casualty Groups. First quarter 2025 gross and net written premiums were 2% and 1% lower, respectively, than the comparable period in 2024. We continue to achieve year-over-year premium growth in selected businesses as a result of a combination of new business opportunities, a good renewal rate environment, and increased exposures. However, strategic decisions to optimize long-term results, including the non-renewal of certain under-performing accounts, and proactive underwriting measures to address the impact of social inflation and competitive market conditions in selected lines of business tempered growth in the quarter. Average renewal pricing across our P&C Group, excluding workers' compensation, was up approximately 7% for the quarter. Including workers' compensation, renewal rates were up 5% overall. We believe we are achieving overall renewal rate increases in excess of prospective loss ratio trends to meet or exceed targeted returns. Historically, AFG has reported results from its internal reinsurance facility that assumes business from several of our Specialty P&C businesses as the Specialty-Other Group. Beginning in the first quarter of 2025, we are presenting the results of the business assumed by our internal reinsurance facility within the same groups as the ceding businesses. The overall results for AFG's Specialty Property & Casualty Insurance Operations are not impacted by this reclassification. Comparable prior year results have been recast accordingly. We believe this presentation better reflects the performance of the underlying operating businesses, is consistent with how management views and evaluates results, and enhances our financial reporting. The Property and Transportation Group reported an underwriting profit of $37 million in the first quarter of 2025 compared to $60 million in the first quarter of 2024. The decrease was due primarily to lower year-over-year underwriting profit in our crop insurance business and the impact of particularly strong 2024 results in our property & inland marine business. Catastrophe losses in this group were $10 million in the first quarter of 2025, compared to $9 million in the first quarter of 2024. The businesses in the Property and Transportation Group achieved a 92.5% calendar year combined ratio overall in the first quarter of 2025, 4.0 points higher than the 88.5% reported in the comparable 2024 period. First quarter 2025 gross and net written premiums in this group were both 6% lower than the comparable prior year period. The decrease was primarily due to the non-renewal of a few large policies in our agricultural and transportation businesses coupled with elevated pricing competition in our transportation businesses. These decreases were partially offset by new business opportunities, a favorable rate environment and higher exposures. Overall renewal rates in this group increased approximately 7% on average in the first quarter of 2025. The Specialty Casualty Group reported an underwriting profit of $20 million in the first quarter of 2025 compared to $61 million in the comparable 2024 period, reflecting lower underwriting profit in our workers' compensation and executive liability businesses and higher catastrophe losses. Underwriting profitability in our workers' compensation and executive liability businesses continues to be strong despite the lower year-over-year profitability. Catastrophe losses for this group were $27 million in the first quarter of 2025 compared to $19 million in the prior year quarter. The businesses in the Specialty Casualty Group achieved a 97.6% calendar year combined ratio in the first quarter of 2025, 5.4 points higher than the 92.2% reported in the comparable period in 2024. First quarter 2025 gross and net written premiums decreased 3% and 4%, respectively, when compared to the same prior year period. The lower year-over-year premiums were primarily attributed to our excess liability, executive liability, and workers' compensation businesses, and were partially offset by higher year-over-year premiums in our mergers & acquisitions business and new business opportunities and favorable renewal pricing in several of our other businesses. Excluding our workers' compensation businesses, renewal rates in this group were up 9%; overall renewal rates in this group were up about 6% in the first quarter of 2025. The Specialty Financial Group reported an underwriting profit of $37 million in the first quarter of 2025, compared to $33 million in the comparable 2024 period. Favorable prior year reserve development and improved accident year results were partially offset by higher year-over-year catastrophe losses. Catastrophe losses for this group were $35 million in the first quarter of 2025 and were attributed primarily to the California wildfires. By comparison, catastrophe losses in this group in the first quarter of 2024 were $7 million. This group continued to achieve excellent underwriting margins and reported an 87.0% combined ratio for the first quarter of 2025, only 0.4 points higher than the comparable period in 2024 despite the elevated catastrophe losses. Gross and net written premiums increased by 16% and 18%, respectively, in the 2025 first quarter when compared to the same 2024 period, primarily due to growth in our financial institutions business. Renewal pricing in this group was up approximately 2% in the first quarter. Carl Lindner III stated, 'Our Specialty P&C businesses performed well during the first quarter of 2025 despite elevated catastrophe losses stemming from the California wildfires. Maintaining underwriting discipline has been paramount, as several of our businesses faced heightened price competition during the quarter. We achieved strong rate increases in our most social inflation-exposed lines of businesses and non-renewed several larger accounts with unfavorable loss experience. While these actions moderated our growth this quarter, they have positioned us for future success. We continue to expect premium growth for the full year in 2025. The vast majority of the businesses in our diversified Specialty P&C portfolio met or exceeded our targeted returns.' Further details about AFG's Specialty P&C operations may be found in the accompanying schedules and in our Quarterly Investor Supplement, which is posted on our website. Investments Net Investment Income – Excluding the impact of alternative investments, net investment income in our property and casualty insurance operations for the three months ended March 31, 2025, increased 6% year-over-year as a result of the impact of rising interest rates and higher balances of invested assets. Property and casualty net investment income including the impact of alternative investments was approximately 17% lower than the comparable 2024 period. The annualized return on alternative investments was approximately 1.8% for the 2025 first quarter compared to 9.0% for the prior year quarter, due primarily to a decline in the fair value of several underlying investments within our traditional private equity portfolio. Earnings from alternative investments may vary from quarter to quarter based on the reported results of the underlying investments and generally are reported on a quarter lag. Elevated economic uncertainty affecting broad-based equity markets could continue to temper returns in AFG's traditional private equity portfolio in 2025. The average annual return on alternative investments over the five calendar years ended December 31, 2024, was approximately 12%. Longer term, we continue to remain optimistic regarding the prospects of attractive returns from our alternative investment portfolio, with an expectation of annual returns averaging 10% or better. In March 2025, AFG announced that it had reached agreements to sell the Charleston Harbor Resort & Marina. Assuming the successful completion of the diligence period and satisfaction of other customary conditions, the transaction is expected to close in the third quarter of 2025. AFG currently expects to recognize an after-tax core operating gain of approximately $100 million ($1.20 per share) on the sale. This transaction was not contemplated in AFG's original business plan assumptions. Non-Core Net Realized Gains (Losses) – AFG recorded first quarter 2025 net realized gains of $2 million ($0.03 per share) after tax, which included $5 million ($0.06 per share) in after-tax net gains to adjust equity securities that the Company continued to own at March 31, 2025, to fair value. By comparison, AFG recorded first quarter 2024 net realized gains of $11 million ($0.13 per share) after tax. After-tax unrealized losses related to fixed maturities were $148 million at March 31, 2025. Our portfolio continues to be high quality, with 95% of our fixed maturity portfolio rated investment grade and 96% of our P&C fixed maturity portfolio with a National Association of Insurance Commissioners' designation of NAIC 1 or 2, its highest two categories. More information about the components of our investment portfolio may be found in our Quarterly Investor Supplement, which is posted on our website. About American Financial Group, Inc. American Financial Group is an insurance holding company, based in Cincinnati, Ohio. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses. Great American Insurance Group's roots go back to 1872 with the founding of its flagship company, Great American Insurance Company. Forward Looking Statements This press release, and any related oral statements, contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this press release not dealing with historical results are forward-looking and are based on estimates, assumptions, and projections. Examples of such forward-looking statements include statements relating to: the Company's expectations concerning market and other conditions and their effect on future premiums, revenues, earnings, investment activities and the amount and timing of share repurchases or special dividends; recoverability of asset values; expected losses and the adequacy of reserves for asbestos, environmental pollution and mass tort claims; rate changes; and improved loss experience. Actual results and/or financial condition could differ materially from those contained in or implied by such forward-looking statements for a variety of reasons including, but not limited to: the risks and uncertainties AFG describes in the 'Risk Factors' section of its most recent Annual Report on Form 10-K, as updated by its other reports filed with the Securities and Exchange Commission; whether or not the sale of Charleston Harbor Resort & Marina closes and AFG's net gain as a result of the sale; changes in financial, political and economic conditions, including changes in interest and inflation rates, currency fluctuations and extended economic recessions or expansions in the U.S. and/or abroad; performance of securities markets; new legislation or declines in credit quality or credit ratings that could have a material impact on the valuation of securities in AFG's investment portfolio; the availability of capital; changes in insurance law or regulation, including changes in statutory accounting rules, including modifications to capital requirements; changes in the legal environment affecting AFG or its customers; tax law and accounting changes; levels of natural catastrophes and severe weather, terrorist activities (including any nuclear, biological, chemical or radiological events), incidents of war or losses resulting from pandemics, civil unrest and other major losses; disruption caused by cyber-attacks or other technology breaches or failures by AFG or its business partners and service providers, which could negatively impact AFG's business or reputation and/or expose AFG to litigation; development of insurance loss reserves and establishment of other reserves, particularly with respect to amounts associated with asbestos and environmental claims; availability of reinsurance and ability of reinsurers to pay their obligations; competitive pressures; the ability to obtain adequate rates and policy terms; changes in AFG's credit ratings or the financial strength ratings assigned by major ratings agencies to AFG's operating subsidiaries; and the impact of the conditions in the international financial markets and the global economy relating to AFG's international operations. The forward-looking statements herein are made only as of the date of this press release. The Company assumes no obligation to publicly update any forward-looking statements. Conference Call The Company will hold a conference call to discuss 2025 first quarter results at 11:30 a.m. (ET) tomorrow, Wednesday, May 7, 2025. There are two ways to access the call. Participants should register for the call here now, or any time up to and during the time of the call, and will immediately receive the dial-in number and a unique pin to access the call. While you may register at any time up to and during the time of the call, you are encouraged to join the call 10 minutes prior to the start of the event. The conference call and accompanying webcast slides will also be broadcast live over the internet. To access the event, click the following link: Alternatively, you can choose Events from the Investor Relations page at A replay of the webcast will be available via the same link on our website approximately two hours after the completion of the call. Footnote (b) is contained in the accompanying Notes to Financial Schedules at the end of this release. Expand AMERICAN FINANCIAL GROUP, INC. SPECIALTY P&C OPERATIONS (Dollars in Millions) Three months ended March 31, Pct. Change 2025 2024 Gross written premiums $ 2,291 $ 2,336 (2 %) Net written premiums $ 1,611 $ 1,634 (1 %) Ratios (GAAP): Loss & LAE ratio 61.0 % 58.6 % Underwriting expense ratio 33.0 % 31.5 % Specialty Combined Ratio 94.0 % 90.1 % Combined Ratio – P&C Segment 94.1 % 90.1 % Supplemental Information: (c) Gross Written Premiums: Property & Transportation $ 897 $ 959 (6 %) Specialty Casualty 1,068 1,097 (3 %) Specialty Financial 326 280 16 % $ 2,291 $ 2,336 (2 %) Net Written Premiums: Property & Transportation $ 563 $ 597 (6 %) Specialty Casualty 772 803 (4 %) Specialty Financial 276 234 18 % $ 1,611 $ 1,634 (1 %) Combined Ratio (GAAP): Property & Transportation 92.5 % 88.5 % Specialty Casualty 97.6 % 92.2 % Specialty Financial 87.0 % 86.6 % Aggregate Specialty Group 94.0 % 90.1 % Three months ended March 31, 2025 2024 Reserve Development (Favorable)/Adverse: Property & Transportation $ (19 ) $ (46 ) Specialty Casualty 12 (11 ) Specialty Financial (13 ) 6 Specialty Group (20 ) (51 ) Other - 1 Total Reserve Development $ (20 ) $ (50 ) Points on Combined Ratio: Property & Transportation (3.9 ) (8.8 ) Specialty Casualty 1.6 (1.4 ) Specialty Financial (4.6 ) 2.4 Aggregate Specialty Group (1.3 ) (3.3 ) Total P&C Segment (1.3 ) (3.2 ) Expand Footnote (c) is contained in the accompanying Notes to Financial Schedules at the end of this release. Expand AMERICAN FINANCIAL GROUP, INC. Notes to Financial Schedules a) Components of core net operating earnings (in millions): Expand b) Shareholders' Equity at March 31, 2025, includes ($179) million ($2.13 per share loss) in Accumulated Other Comprehensive Income (Loss) compared to ($240 million) ($2.85 per share loss) in Accumulated Other Comprehensive Income (Loss) at December 31, 2024. c) Supplemental Notes: Property & Transportation includes primarily physical damage and liability coverage for buses and trucks and other specialty transportation niches, inland and ocean marine, agricultural-related products and other commercial property coverages. Specialty Casualty includes primarily excess and surplus, general liability, executive liability, professional liability, umbrella and excess liability, specialty coverages in targeted markets, customized programs for small to mid-sized businesses and workers' compensation insurance. Specialty Financial includes risk management insurance programs for lending and leasing institutions (including equipment leasing and collateral and lender-placed mortgage property insurance), surety and fidelity products and trade credit insurance. Expand
Yahoo
23-04-2025
- Business
- Yahoo
SmartFinancial Inc (SMBK) Q1 2025 Earnings Call Highlights: Strong Loan and Deposit Growth Amid ...
Net Income: $11.3 million or $0.67 per diluted share. Tangible Book Value: $23.61 per share including AOCI impacts; $24.76 excluding AOCI impacts. Loan Growth: 9% annualized pace for Q1. Deposit Growth: 10% quarter-over-quarter annualized. Nonperforming Assets: 19 basis points. Total Revenue: $46.8 million. Net Interest Margin: 3.21%. Non-Interest Income: $8.6 million. Non-Interest Expenses: Just over $32 million. Loan-to-Deposit Ratio: 83%. Average Portfolio Yield: 5.97%. Provision Expense for Credit Losses: $979,000. Net Charge-Offs: 0.01% on an annualized basis. Allowance for Credit Losses: 0.96% of total loans. Effective Tax Rate: Approximately 17%. Consolidated TCE Ratio: 7.6%. Total Risk-Based Capital Ratio: 11.2%. Warning! GuruFocus has detected 1 Warning Sign with SMBK. Release Date: April 22, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. SmartFinancial Inc (NYSE:SMBK) reported a strong start to 2025 with a net income of $11.3 million or $0.67 per diluted share. The company achieved a 9% annualized growth in loans and a 10% growth in deposits, demonstrating solid balance sheet growth. Tangible book value increased to $23.61 per share, reflecting a 9% annualized growth quarter-over-quarter. Non-interest income was robust at $8.6 million, driven by strong insurance and mortgage banking revenues. The company maintained a low loan-to-deposit ratio of 83%, providing flexibility to fund future growth. The net interest margin slightly decreased to 3.21%, reflecting the impact of prior quarter rate cuts. There was a minor reduction in non-interest-bearing deposits, affecting the deposit composition. The weighted average yield on new loan originations decreased slightly, impacting overall portfolio yield. Operating expenses remained flat at $32.3 million, indicating limited cost reduction efforts. The company faces competitive pressure in loan pricing, which could impact future growth margins. Q: Can you talk about what you're seeing at a ground level with your customers and why you believe in your ability to hit loan growth targets? A: William Carroll, President and CEO, stated that despite market volatility, their markets remain strong. They are in constant communication with clients, who report stable business conditions. Rhett Jordan, Chief Credit Officer, added that clients are optimistic and not seeing significant impacts from tariffs, maintaining positive business outlooks. Q: How should we think about expectations around leveraging the balance sheet and the loan-to-deposit ratio? A: William Carroll explained that they have room to grow prudently, focusing on maintaining strong returns and appropriate loan structures. Ronald Gorczynski, CFO, mentioned they have about $150 million in cash that could be lent out, indicating potential for balance sheet growth without drastic changes. Q: What are your thoughts on share repurchases given the current stock price? A: Ronald Gorczynski noted they have $1.5 million left in their current authorization for share repurchases. William Carroll added that traditionally, they consider buybacks closer to book value, and they are positioned to make purchases if needed. Q: How would potential Fed rate cuts impact your margin guidance? A: Ronald Gorczynski stated that being slightly liability sensitive, they would benefit slightly from rate cuts. They anticipate a neutral to positive impact on margins if rate cuts occur earlier than expected. Q: Can you discuss the competitive landscape for new loan pricing? A: William Carroll mentioned that new loan production is coming in around 7%, with some competitive pressure in the market. They are maintaining their pricing and structure, which has not deterred growth. Rhett Jordan added that they are seeing some competitors pushing pricing aggressively. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
21-04-2025
- Business
- Yahoo
American Financial Group Inc (AFG) Q4 2024 Earnings Call Highlights: Strong Returns and ...
Core Net Operating Earnings Per Share (Full-Year 2024): $10.75 Core Operating Return on Equity (Full-Year 2024): 19.3% Capital Returned to Shareholders (2024): $791 million Special Dividends (2024): $6.50 per share Regular Common Stock Dividends (2024): $246 million Growth in Book Value Per Share (Excluding AOCI, 2024): 19.6% Fourth-Quarter Core Net Operating Earnings Per Share (2024): $3.12 Annualized Fourth-Quarter Core Return on Equity (2024): 21.9% Property and Casualty Net Investment Income (Full-Year 2024): $784 million Combined Ratio (Fourth-Quarter 2024): 89% Net Written Premiums Growth (Full-Year 2024): 7% Average Renewal Pricing (Excluding Workers' Comp, Fourth-Quarter 2024): Up 8% Specialty Financial Group Combined Ratio (Fourth-Quarter 2024): 80.7% Net Written Premiums Growth (Fourth-Quarter 2024): 1% Investment Portfolio (End of 2024): $15.9 billion Warning! GuruFocus has detected 4 Warning Sign with WTFC. Release Date: February 05, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. American Financial Group Inc (NYSE:AFG) reported a strong annual core operating return on equity of 19.3% for 2024. Net written premiums grew by 7% during the year, showcasing robust business growth. AFG returned $791 million to shareholders in 2024, including significant special and regular dividends. The company achieved a 19.6% growth in book value per share, excluding AOCI plus dividends, in 2024. AFG's specialty property and casualty businesses reported a strong combined ratio of 89% for the fourth quarter of 2024. AFG experienced adverse prior-year development in its specialty casualty group, particularly in social inflation-exposed businesses. The company faced a higher combined ratio of 92.5% projected for 2025, reflecting anticipated challenges. AFG's property and transportation group saw a 6% decrease in gross and net written premiums in the fourth quarter of 2024. The company anticipates losses related to the Southern California wildfires, estimated between $60 million to $70 million. AFG's commercial auto liability segment is still working towards achieving an underwriting profit, facing challenges from social inflation. Q: Can you provide more details on the losses from the California wildfires? A: The losses are primarily from our property-oriented businesses, including lender-placed property, property in marine, and nonprofit businesses with property exposures in California. - Carl Lindner, Co-CEO Q: Could you elaborate on the expense ratio pressures mentioned? A: The higher expense ratio is due to growth in businesses like our financial institution business, which has a higher commission ratio compared to others like workers' comp. We focus on overall return rather than just the expense ratio. - Brian Hertzman, CFO Q: Can you explain the casualty reserve development in the quarter? A: The adverse development is mainly from an excess liability unit focusing on larger entities like Fortune 500 companies. We assess each business quarterly and adjust reserves based on loss ratio trends. - Carl Lindner, Co-CEO Q: Regarding the 92.5% combined ratio guide for 2025, are you expecting higher workers' comp and casualty loss ratios? A: Yes, we anticipate a higher workers' comp loss ratio due to tempered expectations for favorable development. However, we expect improved loss ratios in other casualty businesses due to underwriting actions and rate increases. - Brian Hertzman, CFO Q: How should we view the growth potential in specialty casualty given the strong rate increases? A: Excluding workers' comp, we are growing at high-single digits. We could see additional growth if workers' comp pricing stabilizes. - Carl Lindner, Co-CEO Q: What is the impact of crop yield changes on your 2025 guidance? A: The main change was due to lower-than-expected soybean yields in certain states, which affected our 2024 results. We are still settling claims, and this variability impacts our guidance. - Carl Lindner, Co-CEO Q: Can you discuss the commercial auto line's profitability and social inflation impact? A: We are achieving small underwriting profits in commercial auto overall, with strong ROE. We are focused on improving margins, especially in commercial auto liability, which is affected by social inflation. - Carl Lindner, Co-CEO Q: How are you addressing increased severity in older accident years? A: We adjust loss picks based on increased severity observed in older years and apply these trends to more recent years. This is offset by positive impacts from rate increases and underwriting actions. - Brian Hertzman, CFO For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
08-02-2025
- Business
- Yahoo
CNO Financial Group Inc (CNO) Q4 2024 Earnings Call Highlights: Record Growth and Strategic ...
Operating Earnings Per Diluted Share: $3.97, an increase of 28% year-over-year. Total New Annualized Premium: Up 7% across the enterprise for the full year. Shareholder Returns: $349 million returned to shareholders, a 50% increase over 2023. Book Value Per Diluted Share (excluding AOCI): $37.19, up 10%. Consumer Division NAP: Up 5% for the full year. Medicare Supplement NAP: Up 26% for the year. Medicare Advantage Policies Sold: Up 14% for the year. Long Term Care NAP: Up 35% for the year. Annuity Collected Premiums: Up 13% for the year. Brokerage and Advisory Client Assets: Up 28% to $4.1 billion. Producing Agent Count: Up 8% for the year. Worksite Division Insurance Sales: Up 16% for the full year. Critical Illness Sales: Up 24% for the year. Accident Sales: Up 13% for the year. Hospital Indemnity Sales: Up 20% for the year. New Money Rate: 6.72%, marking the eighth consecutive quarter above 6%. Net Investment Income: Up 16% for the quarter and 9% for the year. Consolidated Risk-Based Capital Ratio: 383% at quarter end. Available Holdco Liquidity: $372 million at quarter end. Excess Cash Flow to Holding Company: $284 million for the year. Leverage (Adjusted): 25.6% at quarter end. Warning! GuruFocus has detected 6 Warning Sign with EGP. Release Date: February 07, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. CNO Financial Group Inc (NYSE:CNO) delivered its 10th consecutive quarter of sales growth and its most productive year ever for the banker live field force. Operating earnings per diluted share increased by 28%, with a 40% increase when excluding significant items. Capital and liquidity were well above target levels, with $349 million returned to shareholders, a 50% increase over 2023. The consumer division saw a 5% increase in total new annualized premium, with significant growth in Medicare supplement and Medicare Advantage policies. The worksite division achieved record full-year insurance sales, up 16%, and record fourth-quarter insurance sales, up 23%. Live production was down for the year, driven by high lead costs in direct-to-consumer television advertising. The expense ratio was at the high end of the guided range due to incentive compensation accruals. The favorable impact on insurance product margins from reserve releases due to higher mortality is not expected to continue. The company is facing pressure on fee income due to a sales mix shift to smaller Medicare Advantage providers. The upcoming technology modernization initiative is expected to cost approximately $170 million over three years, which may put pressure on expenses. Q: How should we think about buybacks in relation to the free cash flow guidance? A: Paul McDonough, CFO: You should consider the free cash flow guidance together with the excess cash position relative to our minimum Holdco liquidity at the end of 2024. This gives a sense of share purchase capacity in 2024, absent more compelling uses of that capital. Q: How much additional geographic expansion opportunity is there for CNO? A: Gary Bagiwani, CEO: There is significant potential, particularly in our worksite business. Our consumer division has a well-developed national footprint, but our worksite division is considerably smaller. We see a lot more upside in geographic expansion. Q: Can you provide more details on the additional Bermuda opportunities being considered? A: Paul McDonough, CFO: We are closely evaluating opportunities and prioritizing them. Our focus has been on establishing the team in Bermuda and developing relationships, including with the Bermuda Monetary Authority. We are now looking to leverage that platform beyond the initial treaty. Q: Could you give a breakdown of the tech investments and their use cases? A: Paul McDonough, CFO: The primary focus is converting legacy policy admin platforms to cloud-based SaaS solutions. This will allow us to evolve with the changing AI landscape and adopt new technologies more fully. Gary Bagiwani, CEO: This investment is about building a new foundation to offer consumers and agents the technology and flexibility they expect. Q: What gives you confidence in achieving the three-year ROE improvement guidance? A: Gary Bagiwani, CEO: We are careful about the commitments we make publicly. We have a strong belief in our ability to execute against our guidance, supported by our track record. Paul McDonough, CFO: Sales growth and higher interest rates are compounding tailwinds. We have line of sight on initiatives that will drive ROE expansion over the next three years. Q: Is there a concern about the regulatory environment in Bermuda affecting reinsurance treaties? A: Paul McDonough, CFO: We do not foresee this being an issue. Bermuda operates effectively with a regulatory regime that works well and has capacity for growth. Many companies have moved business there, and we expect that trend to continue. Q: What are the drivers for the excess cash flow outlook of $200 million to $250 million? A: Paul McDonough, CFO: It reflects the dynamics of the business, including the pace of organic growth, the economic climate, and the degree of risk in our investment portfolio. These factors will determine whether we reach the higher or lower end of the range. Q: How do you view the long-term benefits of the IT initiative? A: Paul McDonough, CFO: While not a cost-saving program, the IT initiative will create a stable platform for leveraging current technology, enabling long-term growth. We expect our expense ratio to come down over time as we develop more operating leverage. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. 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