American Financial Group, Inc. (AFG): Initiation of Coverage –  Strong Market Position in Specialty Insurance

American Financial Group exhibited a solid performance in the first quarter of 2024, delivering an operating return on equity of 20%, with net written premiums increasing by 8% year-over-year. Co[1]CEOs Carl and Craig Lindner credited the organization’s specialty insurance operations and investment strategies for its continued success over the competition, underscoring the company’s disciplined operating philosophy and effective management of their investment portfolio. During the quarter, American Financial Group reported core net operating earnings of $2.76 per share, indicating a decrease from the previous year, largely due to a reduced return on the company’s alternative investment portfolio compared to its exceptional performance the prior year. Despite a slight 1% year-over-year decrease in Property & Casualty net investment income, the investment income has grown by 16% when excluding the alternative investments, benefiting from higher interest rates and increased balances of invested assets.