AFG - Earnings call transcript Q2 2022 | American Financial Group, Inc.

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Operator

Good day, ladies and gentlemen. Thank you for standing by, and welcome to American Financial Group's Second Quarter 2022 Results Conference Call. [Operator Instructions] Please be advised that today's conference may be recorded. I would now like to hand the conference over to your speaker host, Diane Weidner, Vice President of Investor Relations. Please go ahead.

Diane Weidner

to Call. Group's welcome Earnings Quarter and Conference Results morning, American Second Financial XXXX Good our second released We XXXX afternoon. quarter results yesterday

Our referenced Lindner, American Brian morning during by webcast Co-CEOs and of today's website of Relations investor Lindner joined posted AFG's portions These Hertzman, release, this I'm section. be AFG's Investor under and III presentation will Financial materials Carl Group, call. on CFO. the press are supplement and Craig

draw over discussion to to the your turn would X webcast. attention notes I our I Slide on Before the Carl, of

be matters forward-looking. materially results differ meaning the remarks a in release. core net to and and/or questions. attributable to is involve earnings this or of of Securities uncertainties found you're with responses to non-GAAP earnings, forward-looking A shareholders also risks can filings of of operating financial include We to are if reading in finally, condition reconciliation from our to And Some earnings which operating included uncertainties and Commission, earnings be transcript on for to net our in it our these be may discussed or call, may are please certain note statements. that AFG's the actual financial as authorized our accuracy, or a factual transcription available of These not statements. alter errors intent today that A website. materially a the reviewed or measure, cause and contain it result, references may in and risks net could description statements Exchange detailed core these that could

III the Carl turn to to pleased Lindner I'm to results. discuss our over Now call

Carl Lindner

investment quarter to XXXX be outstanding. share results, continued exceed We're portfolio XX% to to the quarter Brian our which an premium of opportunistically, to the invest Strategic enabled financial including questions. report our pleased pleased We're AFG's and in investment glad your expectations. record and double-digit us second after core alongside returns the during growth. to quarter second portfolio positioning our underwriting performance I morning. return annualized of profit was Craig, highlights of to quarter, nearly in operating AFG's will respond second Good alternative

AFG's Our entrepreneurial, disciplined increasing Property positioned thank to these Craig now environment God, I'll and strong our performance employees Craig turn achieve results, and this and interest and rate investment at to us well XX. have financial over culture us in for overall and through Casualty results. the favorable of June philosophy second team, all management our operating helping our exceptionally market. to walk opportunistic I discussion quarter and talented us position

Craig Lindner

of for was Slides quarter core profit you, in $X.XX our per The operations. Thank second X quarter. per summary net Carl. share share, turn of $X.XX P&C higher primarily reported in Please Specialty earnings for the operating information result the earnings the and to to of insurance X compared increase significantly AFG XXXX. underwriting

on Slide June securities net losses annualized million, operating quarter that after mentioned, second or $X.XX securities equity $X.XX of a mark-to-market on $XX we this the Included in $XX you'll the very equity Carl As see non-core share tax included to strong per On XX.X%. per that earnings is return in continued after core X, was the realized of losses share, quarter. own number in from tax million, in at or XX.

and discuss AFG's portfolio, about few financial performance position a capital the AFG's to share Now of and liquidity. comments I'd like investment

December years X environment XXXX. the of approximately P&C quarter, XXXX, During the the from XX, we years XX, fixed and at equivalents, interest and cash to portfolio, presented our duration the increased opportunities rate on X.X maturity increasing act second including to approximately continued at by June cash

at X.X% of maturity fixed X.X% maturity favorably is of rate portfolio fixed and compares the approximately quarter. to the end reinvestment book the second approximately Our yield

portfolio from to benefit tied interest continue one-month In or to three-month rates. floating securities, addition, indices, are our rate rising which of most of

a as months return results portfolio the quarter the XXXX investments in in alternative return three in included ended period than The in the very sale approximately years $XX pretax housing the from periods of was in X XXXX XXXX, investments June for of the market. earnings over from to held XXXX certain XX% For annualized of both X from to quarter We XX, these XX.X% excess slightly earnings and investments. the net $XX The investment strong of period. million that an average investments million in our annual was on XXXX assets XX.X% very included comparable compared favorable quarter. multi-family for income alternative achieved alternative second higher

net come Excluding insurance will our in updated but income our of alternative XX% overall the a Casualty a XXXX, in embedded months investments, about XX, to of and increased Property result the going impact the our take back for three for interest guidance higher balances rising XXXX ended as to to minutes few now investment I'm of assets. rates of assumptions income operations drivers of Carl guidance. investment year-over-year talk and invested June impact increased the

First overall XX% of maturities rate to benefit guidance for of the opportunities. our portfolio regards investments annual alternative of full investments, in reinvestment this year, from performance XXXX. of on an on to yield all, assumes XX% first higher we'll environment, fixed from the half the strong and both the our alternative based to continue interest With floating-rate

performance will multi-family investments, equity environment. alternative from second XXXX, investments offset continued housing be Our macro-economic we minimal the weaker from as of guidance may under half pressure private which performance assume traditional that income in reflects investments of the strong of

portfolio. multi-family represents alternative of housing approximately XX% our reminder, tied a As investment investments to

position you'll with find a maturity see portfolio As on turn where X, fixed summary its X, and of Please XXXX. highest with categories. Slide NAIC XX% financial rated be an our maturity to of designation you or XX, investment portfolio June AFG's X continues P&C XX% two can our to portfolio at X, of Slide fixed quality, investment of our high grade Group

of Our at $XXX approximately excess XX, June $X.X capital and approximately included cash million. This was number investments parent billion XXXX. company

$XXX the million plus we share shareholders regular quarter. Book quarterly through per per $X.XX nine-tenths declined a in $X.XX in share of our per the value During payment special share a May. returned our second in the dividend dividend quarter, and dividends to paid of point

have losses dividends related the operations in in to of per in total AFG in in fixed position. exposure sale to compared of of period. paid unrealized Year sale limited a cash portfolio share combination growth the some proceeds dividends, deployed Excluding May our adjusted companies when traded business $XX.XX duration dividends purchase paid our of and date, value achieved in we in during publicly a the these somewhat maturity of helped stocks from short of X.X% share per Through maturities, the share performance plus special XXXX. be share quarter. Verikai, repurchases, our of special and its $X.XX to while fixed dividends The we since Annuity this excess annuity of of to the to strong common peer capital per second $XX.XX the debt special continuing redemption billion and a book

restrictive or excess underlying current share is discuss our capital to assumptions to million staying will available additional available of AFG's $XXX repurchases still of special dividends turn expect on we back through to all P&C expectations to capital guideline. the million while capital guidance, end XXXX. acquisitions, to and within excess XXXX of our for results for most for the to discuss now our I call debt have growth Carl the AFG's potential While of based and internal operations $XXX

Carl Lindner

Thanks, exceeding Casualty new webcast, the quarter AFG, quarter of segment an X established a our turn Slides second I'm that which on return record Craig. results. targets. and for meeting and X of earnings second to equity our Operating in businesses and pleased Property Please are virtually overview the all or include of

As X, Specialty operations profit Specialty increase XXXX, XX% profit. Groups record in new $XXX second second Group. underwriting in the quarter Casualty Transportation million, underwriting was and a year-over-year, of generated profit $XXX also Property lower our you'll offset Financial the Specialty of see the partially a to and Slide profit an million in quarter Higher underwriting by P&C underwriting our year-over-year for setting compared on insurance

compared growth workers' P&C for comp, opportunities The about and XXXX, in respectively, net for X.X losses to excluding strong attributable year pace X.X in which improving XX.X%, XX% quarter, exposures from in rate ratio approximately favorable Results the of approximately ratio in increases. and comp to and gross prospective Specialty exposures was rate points the XXXX crop, new businesses the of in the of XXXX. points result written combined XXXX P&C change our a XX%, written as a period. increases slowed Property prior second quarter second renewal year about X% portfolio opportunities, prior excess rate very throughout environment. to or catastrophe Group, quarter gross X.X points business that rate increased for Average overall. X% was reserve and aggregate, businesses a in estimated considerably of across combination the premium new majority business renewal the quarter growth is good and and excluding Property and of was XX%, Specialty of year-over-year drivers the XX% Even be our this and second up And prior trends, to attributable about X% quarter been lines, Casualty included quarter. excluding and Specialty development. vary in of businesses. pricing the though the at Year-over-year our across a reported of within growth our Casualty has up increases year of Groups workers' X% of some continue overall renewal about in loss have In The increased each premiums

for forward of current about automatic in As that premium trend, exposures prospective ratio when environment, light on move reminder, view we a costs and legal going it's increases in economic talk on loss with inflation. the adjusted loss our the

loss arrive to payrolls compensation. other from cost and X% trend such remove Now loss benefit ratio workers' of overall, excluding as and X.X% at underlying we an among we prospective that's property values, exposure inflation-sensitive prospective trend, when growth closer estimate the our considerations,

meaningfully trends. in about that we've continue these achieved of the ratio and few were excess increases we to which years, of we mind, good loss things With achieve feel that the rate very last in over level

period. half frequency to Several of businesses lower XXXX, points a net in group, XXXX, reflecting in catastrophe development higher Group when reserve premiums, a quarter million this compared XXXX. XXXX. $XX lower and first the development Catastrophe property $X claims achieved favorable catastrophe inclusive losses XXXX. in larger XX.X% in of levels were quarter X.X level our to X business and and review reported 'XX overall marine compared second Property business reinstatement and I'd in quarter and an prior $XX couple of to in of turn million comparable to the With the the Group inland year and of groups. the the in each and of million second $XX in Property half Transportation year of Now of ratio our to the reinsurance in of the compared and of the combined from underwriting development, lower the higher quarter, losses highlights COVID-XX-related favorable in from of businesses to benefited higher losses an second of Specialty calendar losses of than period first comparable profit million Transportation like the favorable Casualty in Property few Slide second XXXX elevated a

gross increased rates written year-over-year The to quarter. XX% net exposures this higher, premiums to business. when XX% X% businesses increased were primarily in group this XXXX higher second crop in and in the Second in reported on for XXXX. in and in attributed quarter. growth compared All our quarter transportation was and second XXXX our group during and the written renewal gross Overall the average premiums businesses this quarter growth of rates insurance growth the group respectively,

up condition, discovery excellent Industry to and reports good is as the line much X% corn nation's down crop of Corn of year last X% is from with really are and isolated decent dry currently Now exception as time. areas, indicate approximately some great Current crops commodity the approximately in spring soybean pricing XX% are at and our in corn crop of results with prices. soybeans is business, XX% of shape. and in this in insurance shape. far soybean

'XX compensation, average businesses exceptionally improvement the an Group Assuming we Specialty that compared year in in achieved second the strong year. August, or underwriting workers' rainfall XX.X% reported from 'XX. to period, adequate an quarter in profit Casualty our there's of in to of crop ratio combined quarter, The excess and comparable an Specialty point result the throughout XXXX businesses. The profitability $XXX surplus million points second the higher liability of overall primarily would $XX calendar million better in Casualty executive the period lines, Group and X.X the comparable an in

Second to the X% net increased written X%, same period. prior when and year quarter premiums and XXXX gross compared respectively,

respectively. when market premium this included growth reported exposures Now liability partially written business. group businesses, growth increased and for exclude workers' for was were net in this of premium workers' year-over-year the our The overall and the increases and rate business XX%, quarter. X% gross X% this business, to in good And excess second several mergers and payroll growth this acquisitions renewal group, second Factors rates up pricing workers' businesses pricing Renewal compensation, compensation lines excluding businesses, our quarter. and business. growth surplus lower targeted during our renewal you up of offset majority of This in was -- and in achieved opportunities overall premiums and grew group X%. year-over-year in our contributing -- in premiums our new by compensation the

exceptionally the in the underwriting compared to continued profit strong profitability. primary quarter underwriting for underwriting trade to combined an higher Group, of XXXX, Financial businesses an $XX XXXX, of and in an second XX.X% reported second of crime improvement 'XX. second an the credit our million profit contributors the million $XX quarter / Specialty they This fidelity on the Improved from quarter period. margins ratio Moving the reported year-over-year were which eight of of in is excellent and results of points achieve to group underwriting to comparable the

Second prior respectively, quarter up written the premiums XXXX when compared XX%, XX% to period. were and gross and year net

and quarter. lender business within quarter. services growth the New in the in trade in the for business our business, to approximately opportunities increase credit up opportunities surety our contributed new X% pricing this was group and exposure and businesses Renewal

you'll through $XX.XX exposure a and ongoing guidance be reported Now to growth, with see the XX, Overall, opportunities an Based of results continue full-page we favorable both on arising if you continued turn summary property Slide to strong from casualty for rate outlook. and growth. XXXX market, our at of of $XX.XX $XX.XX now expect $X.XX per quarter, in of in AFG's net XXXX share, to expect second midpoint the range core of $XX.XX increase share the the we operating previous per to to earnings an our per share. increases

Casualty reflects Our Specialty and revised higher Groups and the Financial an expectations regarding guidance year. in expected full our crop investment Craig assumptions shared Specialty and profit average year income. call, in underwriting our Earlier

midpoint in higher from now the Net estimate. combined a be and of are expect percentage Property overall Specialty point Casualty of reported Group to written premiums to continue XX% XXXX We for X billion ratio and XX%. between our increase the expected $X.X is the to an XXXX, XX% X% previous which than

the ratio to This XX% we Property Looking Based a our now in range of XX% on in average growth of earnings the XX% premiums estimated year. net expect XX%, now range assume to for of the in group from crop previously. XX% range to XX% an We be for improvement in first continues the the of half combined guidance estimate our results year, sub-segment. at this Transportation and to the for Group. each to written

Group ratio Casualty is in XX% an to the expected combined XX%. now produce Specialty of Our range to outstanding

businesses Our group, the for workers' continued continued in year overall. including strong our results guidance assumes all businesses calendar across profitability comp this

guidance. our the comp to workers' our expect rate loss consistent than be the results, book, experience are this initial in tempered favorable to of XXXX will of result in by XX% growth line Premium We decreases be which with premiums X% written net higher business.

to first of compensation, XXXX XX%, range combined workers' now in improvement results excluding the this are Both on be down Specialty and continue be expect to in to we to now to ratio X% group premiums Group range X.X%] range be XX%. Excluding now X% operations premiums from we be Based group an range in we the ranges higher. guidance. X% Financial the to increases now the in expect this expect comp, through of expect renewal to Specialty rates X% in of X% months, XX%, and six written X% P&C rates our for the XX% increase net expect previous And of we to renewal to We the midpoint X% and between to at the between our overall. X%. from

So Craig of creation. for that culture, financial happy and balance your report our of of today's quarter, value XXXX. call. with record position our opportunistic questions. proven We flexibility, for I strong second these you. and sheet to results proud Brian the combined lines and Q&A We'll Thank exceptionally to pleased are remainder entrepreneurial, long-term us strong And the now we're the I very Craig our very open believe and of for portion well and be the respond would to

Operator

question Morgan first coming our And with Instructions] line Michael from the Phillips [Operator of Stanley.

Michael Phillips

you. detail impacts on hoping it exposed of kind might run you those of you was what recessionary you like. would through of your highlight environments? those, what businesses? morning think I Thank you kind have to Good kind And could are as I segments most of whatever business guess everybody.

Carl Lindner

any than others I'm part not more of in sure if be any there's that our that. would -- one business exposed

big of writer, down Main more not cycle something opposite the impacted business might instance, commercial property maybe in space that package non-profit multi-peril, really think others. probably not commercial of But the if targeted like package which a within pretty for would In small- we're particularly We're we're have package industry we're slow within don't more small fact, could pretty the in Street lender, I comparison be business. I be in that that businesses to in that, some are others. think and things foreclosures that and lender-placed get But since huge package medium-sized than an business. the area overall, to some well the would like the correlate type commercial to there area

be So those would my thoughts.

Michael Phillips

you Okay, assuming August. comments I enthusiastic pretty you it thank in better you. positive year, on crop like or -- gave think said what rainfall average but or sounds Then

of few So next continues happen, doesn't if much how there do I downside or drought if mean be maybe months? you the think could for kind that the weeks

Carl Lindner

When Well, crop country. like now, this prices commodity some take And in the are it optimistic conditions look right rainfall the starting I'm across very said, you this good at like I you at we're week, when seems getting look August, in point. at shape. a

very point, can lot tell at I'm at third we optimistic conference So call. but a this the quarter whole you more

Michael Phillips

Okay, fair much. enough. Thank you very

Operator

And Sandler. with our of question line Newsome from coming next Paul Piper the

Paul Newsome

inflation as congrats as you commentary. the of Is myself morning, a well inflation confused? myself increases rate of your getting from that -- Good it quarter. essentially confused Apologies, inflation claims sounds And on the about little excluding exposure versus the got I way a or with like numbers, rate characterizing fair business. I just within am effect your it of are book

Brian Hertzman

were would up. values up of we go premiums because what the of loss our trends, exposure Brian, is things trend impact where or loss that payroll So, what cost be goes this clarify we're favorable comments, changes, up to automatic sort we look at in -- when property the ratio the Carl's to by loss clarify offset go trying trying ratio

we were as been giving and from exposure when about have that changes. into built favorable X.X% loss trend, X% is number ratio giving sort So of a

that when change, commented workers' without our costs to exposure it X% excluding X.X%. take just loss and of to overall comp ratio you change trend, it loss goes So Carl the

we talk without increases talking exposure. when about about So When ratio loss for we adjust renewal where trend, I rate we're strictly about increases, that's we guess, talk exposure. rate an

Carl Lindner

number And kind comparable There that to comparable some out that we of I there. Yes. commentary a we Evan others. our that make number out want could have put is there and or from we sure investors, -- a could just

the ratio liability from of or second to year. -- or loss think ratio changed in we've haven't been of Tweaked or loss that. much is we've of But loss been the trend the pretty I trends the kind the a side. since first trends those been been prospective since beginning one at have year. that loss the cost beginning ratio level thing quarter cost that little We've of prospective significant bit using loss we trends

Paul Newsome

Okay.

we're I about apt. prospective So exposure -- from piece impact particular because is any would an mean My on rate. or have effectively of I the effectively loss -but everyone trend that exposure you much that -- I amount think versus it's think going of just what that books that opinions rate very AFG to upon is the guess in not about means increase or your -- have Do effective affect how an conversation

Carl Lindner

think gave you. just to kind Brian of I that

Brian Hertzman

the So we the on ratio. look will at exposure loss part

want take -- that you cost exposure. you without X% when if So X.X%, exposure to prospective changes, trend loss our into goes is account

I would So of ratio on the ratio points the it's loss about loss X.X the in favorable change is exposure X.X%. way that sort on say is by the

Carl Lindner

excluding -- comp Yes,

Paul Newsome

so it? Is rate. thinking assuming to every that is be Is -- all effectively I is -- equivalent should how -- about point that that's it's

Carl Lindner

that. to rate is what rate loss match way exceed we the in look we're to trying I the ratio business, necessary at again, trends or run think, the continue to

about of So excluding ratio trend comp, the -- ratio in the a and quarter, about versus rate X% second X%. we in trend loss got loss

within the instance, our business period it's, not you reported cost which D&O -- lines that, public in time, the where we're are we the only a about XX% there trends area add of seen other we've over when of It's of of percent more the our But many. all focused portfolio And you D&O public but price of That D&O. our in some part seeing we're the has of down D&O. So the on of might of to D&O, business book. where think something. that, -- been rates public industry, there are what's going of are media, a D&O XX loss Again, to an our but when below they're opportunistic I public XX first be XX% as know in D&O, was for so was in that industry, two-year player decline a kind couple public time and or D&O, competitors happen. that parts book,

I XXXX think the in Fortune and whole we XXX, a in seen the kind other those is that area are the excess our I've Fortune see probably more lot the and would we deceleration liability. be that liability, of Those D&O book competition areas major -- the biggest rate would that on Fortune that XXXX disconnect. excess see public

mean Specialty in ratio what I Casualty combined case, you saw was. Now our our

combined Specialty if reporting you're XXs the in low XXs room little the in the trends change bit. or have in certainly if a if that some or So you whatever, -- Casualty you're overall ratio

loss So ratio pleased. at I our exceeding continue to of Again, continue be our be trends. or to very businesses majority the

positioned. happy very we're with how I'm So

Paul Newsome

that's No That's Thank helpful you. great. me. to

Sorry about my confusion. own

Carl Lindner

problem. No

Operator

line coming question of Peters from James. C. Our Gregory next the with Raymond

C. Gregory Peters

got the result, or to and be and question Financial, your you record afternoon, low excess said when for combined if the look I Good Specialty it just and talked thanks and there the ratio a Specialty competitors just the answers. liability. more company's about you right? to results mean D&O, -- the a competition? competition XX guess record XX. Casualty as like Casualty I about follow-up, a begs It's the you Specialty you talked That's -- Carl, history in just everyone, guidance in is isn't why new in at for XX

Carl Lindner

So it's result. doubt about Yes. strong a no There's it.

C. Gregory Peters

other really in that change not two any So you're mentioned, outside those of you the landscape competitive in seeing the lines businesses?

Carl Lindner

light you by have I business. thought, type only we kind on business social would have is a in is stick would think we written others D&O, that in gotten of of competitive are not backlog didn't haven't side. I little to inflation that public SPAC probably be less reason -- Those into claims with a in market. I Greg, growth than kind We blessed look I why SPAC think particularly D&O just there's two of because get than have one we of the We're kind the of D&O more -- SPACs. with our think where out things the

in So that you easy. it's there's I've crime, property your real specialization knowledge cars things like you're / know and on the head if FIS, specialize biggest things seen I areas what think those or it to difference. two that competitively handed you you fidelity -- can get in, in things and casinos lender-placed takes and doing don't armored And like we

our I businesses ability remember and in D&O continue results feel we great in in So particularly the we've We've can to liability long Specialty Casualty, results. the in segment have about the expertise Financial as Financial areas that Specialty XXs very that. as as had comfortable Specialty our differentiate think and to we have excess I write. ourselves a the company, great and been -- and in I for

here liability particularly underwriting and have and I done great and many, there, returns bumps results, think, area well. others, And a for many years. different than overall, in excess great always made but few we've the had umbrella

culture comfortable, the very long businesses, our we'll I term, we have way So I think those feel of and great continue approach social results to regardless inflation.

C. Gregory Peters

for should about? there want Transportation underlying did it and we too thinking of be to this, color. a there's in business? just Is there anomalies losses. much you Or anything Property of Thanks is comment the the the that that make I but of Okay. don't couple

Carl Lindner

you large I the activity. was everybody as year bumps there think some and loss In two mentioned. in quarter things can of last I the knows, there than quarter. The were second catastrophe level Yeah, losses have property some business, higher by quarter were

Property months segment high XXs. ratio in still is a the Transportation and the through reporting Now combined is six

ratio positive fourth and most the are I that year about on speaks in kind earnings of crop to if that. boot, So And our really as -- business. optimistic -- take very combined think itself booked quarter crop shape, and there. for of the our in We're guidance we the

half last the of the on Property look when the also. and impact at an combined you has that So ratio Transportation year

C. Gregory Peters

sense. Makes

side insurance give the alternative multi-family all going on of Can because just come the sense XX% the speak under what of some to in XX% you well. have the talked For looks about not us the And what's that that's in you like? market. the of companies that's a overview composition for multi-family, of done

Craig Lindner

The kind don't rates. it of And the rental very in multi-family. just of good guidance that private is the the we got more year-over-year, Greg. have have is on, very we traditional strong XX% we We've visibility visibility has some great in the that increases And portfolio gave, have Sure. equity. very, visibility piece I because in conservatism that on on alternative believe, that don't

in types We are things. capital not those tech, big investors of or venture

So it's is the we here balance if very the of that tech or stabilizes the for do little investment my with better. in year, a diversified somewhat But could hope market venture capital. very portfolio

C. Gregory Peters

and it. time. Got the you detail Thank your for

Craig Lindner

Sure.

Operator

Instructions] the Shields line next Our [Operator question KBW. coming from of with Meyer

Meyer Shields

questions, Thanks. can. Two if quick I

from for any major your last you when changes current exposure look year? First, crop, geographic at

Carl Lindner

Yeah, not significant. anything. anything Not

Meyer Shields

Okay. Fair enough.

or you could I question, specifically. the update competition intensity on, guess, of Second just was us I in hoping transportation, pricing trends

Diane Weidner

please? question, your repeat you could Meyer,

Meyer Shields

how the are transportation the know people auto, broadly market know trying to transportation about but National just nervous commercial get I'm competition to a translates don't Interstate? sense market. in Yes. I rate I of that the in

Carl Lindner

the has marginally business think I more competitive. gotten Yeah,

landscape little is transitioning I a think bit. the competition

the side liability severity hard -- levels, frequency rate. the there's a but our of the all results it's pretty market markets than pockets are us less profit. things auto points commercial I that defensive a we're still the of social is some auto line, we're our even markets the liability couple take in of auto auto, to on in pre-pandemic making, the bottom that. a has shown severity overall also and has combined making of But But just in business, and aspect case, and The probably be inflation lot still mode improved 'XX have ratio a bit of think in little underwriting commercial commercial -- in but commercial better in that. as

that. X% liability took I auto think in in the commercial quarter, in we still rate

get X we're rate continue too liability different Interstate company of think actions and -- to We've will doesn't I of the be continue auto probably that or XX I market early increase. areas. enthusiastic taken market in the But hard something the need hope and is I yes, in a because in rate. So, National underwriting years had we commercial that think

gives So I that hope you some perspective.

Meyer Shields

Oh then portfolio? does. is And by if statutory excess fixed GAAP for absolutely the accounting, When influenced more it about last capital, we or one I maturity talk can. question, specifically that

Brian Hertzman

capital what excess capital The influences question about was how excess or the -- --

Meyer Shields

else when changes, words, healthy other maturity In that does rates that? you've got nothing rise, and change fixed but a portfolio, Yeah. interest

Brian Hertzman

So yeah.

debt look particularly we that is in total we the at guideline to on And I those numbers, having when debt capital include maturities. capital gains So that previously, our with does internal think capital to losses S&P, mentioned we of that the or XX%. mentioned ratios -- fixed around number ratio unrealized

unrealized when the loss on capital that ratio. to put debt So does increases, it pressure

excess to of the the interest expectations far shareholders, year. as piece about talked we've our that is that numbers sort the as distribution end we available of by of capital for of be might rates that's think where reflective of All

you think example about If excess our what as an of just capital, happen. can

you If earnings, the the $X.X last the unrealized. million and sort from then that rest of forma over dividend and $XX then billion. million dividend, then a you pro of normal our special that our shared of during was billion, about just excess the so pro of the billion. dividend, capital have our retirement kind quarter in we is over end March, when the special number of now about at at $X you we're number you change a in forma $X that But quarter, little capital the the debt was And was that $XXX after think and for have

So of can is going change the the billion -- earnings is in billion dividend. excess really you the bulk see of $X to just from $X.X the biggest the

Meyer Shields

helpful. very you. That's Perfect. Okay. Thank

Operator

the Lederer Now from of next line Charles question Research. with coming the Wolfe

Charles Lederer

how the any businesses releases quarter, year, the Casualty to provide color in particularly could on wondering recent quarters? within you reserve that accident whether Specialty or by and compares Just if

Brian Hertzman

This years. workers' units been -- executive consistent that from other We back Specialty about drivers to the mainly that's recent liability And in as development In accident areas talked our the as be well. XXXX. That's in favorable with Charlie. in really still development in fairly years that's Thanks, performer of driver quarter, strong to business Carl like consistent are significant Brian. of past. earlier the being comp pretty seeing out our in And a continues and the quarter. the XXXX development that is Casualty, ranges business big

segment, executive recently, other out and then that the out comp. workers' areas if as more coming I you seeing of developments liability look And majority coming well. the some think of of good development our we're at

Charles Lederer

I it. Thank That's all you. Got had.

Operator

And question coming Group. Rudy line our the The next Miller Miller from with

Rudy Miller

couple a questions. just Gentlemen, of ma'am. you, Thank quick

But point I feel with to biggest American questions. is of think of What's the more your does I is, job year a challenge like One going management usual, is would macro at company. for great you forward? question two do ask the As a your Financial this challenge? Group what biggest

Carl Lindner

Carl. This is

taking now to think, I think almost being to challenge is that the market that heads offered of businesses I really I digit, on them as opportunities hitting to to opportunity our And this are for unusual of biggest our the double recognize business there's that take in it. with right our grow that, want returns all an of business make, -- is right different are advantage to double XX just digit. our grow advantage continue

Rudy Miller

and in AFG's seeing invested increases environment are clients And maintaining in companies employees I'd or we're employee cetera? are happening having How in How turnover. in, to -- that are today's good ability et could employee we're maintain you Follow-up we're many give good you still question. if by hard turnover to challenges in involved historical you. affected and the as any increase that, appreciative. quality be are you being is Thank employees. of And on maintain you employees, having salaries, color workforce me the a

Craig Lindner

This is Rudy. Craig,

pleased significantly. decision increases we give a the stayed should that They're turnover compared somewhat pretty of have comparable. not that what were that I'd made other given company but extremely to a say turnover that really amount all, the levels seeing about up companies we've been a pleased We've and extremely from of slightly or historically, importance done other with know up as said, historical and stable, very First levels, I above inflation very as we existed that pick small industries, the in rates the turnover that salaries environment, rates. year we we're this but historical above

Rudy Miller

I'll you, really point. I appreciated, are shareholders the final Once just one that. certainly, what guys the I the making insurance accomplished excellent best you think again, and one I in teams think, management for make dividend the and and appreciate has an Thank of are that's current comment. And the you Well, under environment dividends program, the sir. special much industry. company

Craig Lindner

Thank you.

Operator

further back now I'm at any questions this for I Diane closing remarks. call would showing time. the like to no over to turn Weidner

Diane Weidner

report our thank all quarter. and as you all this you you talking We you, out joining as us on morning day. Thank second we third forward with to have great all for results. we a discussed Hope look quarter again

Operator

Thank that conference and your gentlemen, the Ladies does participation. you for for today. conclude

You now disconnect. may

American Financial (AFG) 6 Aug 222022 Q2 Earnings call transcript