Thursday, August 01, 2002

American Financial records solid second quarter


Earnings

By Cliff Peale, cpeale@enquirer.com
and Jeff McKinney, jmckinney@enquirer.com
The Cincinnati Enquirer

        American Financial Group Inc. earned $12.1 million, or 17 cents a share, in the second quarter as its rate increases and focus on profitable businesses continued to take hold.

        During the same quarter last year, the Cincinnati-based insurer lost $3.7 million, or 6 cents a share.

        Earnings from insurance businesses were 62 cents a share, meeting most Wall Street expectations. Company officials said they would continue their strategy of giving up volume to focus on profitable lines of business.

        “We think it's prudent to keep our powder dry in these businesses,” co-president Carl Lindner III said.

        AFG's specialty group, selling lines like workers' compensation insurance in California and directors and officers' liability policies, posted an underwriting profit for the third consecutive quarter, while the property-and-casualty group and the personal-lines group posted small underwriting losses.

        Net written premiums were flat in specialty lines and slightly down in the other divisions, reflecting AFG's focus on profitability over volume.

        In another report:

        Ohio Casualty Corp.: The Fairfield-based property and casualty insurer made $13.1 million, or 21 cents a share, down from $16.7 million, or 28 cents a share, in last year's second quarter, as the insurer's efforts to slowly boost profitability continue to kick in.

        After-tax operating income, which is net income minus investment gains or losses, was $6.09 million, or 11 cents a share. That compares with an operating loss of $10.9 million, or 18 cents a share, during last year's second quarter.

        “The overall results for the quarter are consistent with the operating-income targeted results for full year 2000,” said Dan Carmichael, Ohio Casualty president and chief executive. “Better-than-usual second-quarter catastrophe losses offset the poor New Jersey private-passenger auto results.”

        The latest results come after Ohio Casualty took aggressive actions recently by focusing on increasing profitability and cutting expenses, including exiting unprofitable business and boosting underwriting results.

       



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