American Financial Group: A Bear’s Perspective!

American Financial Group delivered a mixed performance in their second quarter of 2024, reflecting strength in several areas alongside areas of strategic pullback. The company reported an 18.5% annualized core operating return on equity, denoting a robust utilization of equity in achieving profits. Their specialty property and casualty (P&C) businesses continued to show strength with underwriting margins outperforming expectations due to higher rates, driving a 15% year-over-year increase in P&C net investment income excluding alternatives. However, there are nuances within different segments of their operations that merit attention for a comprehensive investment perspective.