AFG - Earnings call transcript Q2 2024 | American Financial Group, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the 2024 Second Quarter American Financial Group Earnings Results Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Diane Weidner, Vice President of Investor Relations. Please go ahead.

Diane P. Weidner

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

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

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

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

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

Carl Lindner

our XXXX then strong highlights report Specialty after remarks and were XX.X%. XX% pleased and businesses a it few in impacted Second investment Craig a of We'll up taken for timing I second your details. in manage Q&A, recognition through our businesses. equity Underwriting Property actions an Property return insurance I'll on of some I'll by will in begin some higher Brian social to by the to and a underwriting later. was the more and respond open proactively business inflation my operating alternatives, Craig, exposures by questions. I'm of Well, walk income, most margins including quarter where good core will about and annualized quarter, I we've crop morning. few more increased our talk in little to year-over-year. Growth which and sharing AFG's quarter rates bit things, net Casualty Casualty premium excluding that exposed

results, continue and coupled our I to of thank Craig and create to the Our helping some great turn achieve for strong entrepreneurial enable culture now our details. God, operating management the us discussion with to us philosophy operating walk team to shareholders. our Craig management for to employees these effective us talented value through results. I'll capital and and our disciplined opportunistic over

Craig Lindner

in information investment the Slides AFG you, alternative to compared higher portfolio meaningfully prior X net operating X share $X.XX of reported Please a earnings earnings core the XXXX to turn of summary quarter. Thank Carl. for per for offset second excluding returns higher period. investments, quarter, the lower profit year partially investment when AFG's P&C P&C by underwriting alternative in and income, were and

The billion $XX.X comments and and an position liquidity. financial details Now performance our surrounding investment about I'd portfolio presented are Slides X of investment capital to share like to AFG's turn AFG's and few and on overview X. a

and higher our three net of increased XX, investment and as for income income rates Property alternative net Casualty year-over-year XXXX for of June insurance the investment months the of result the approximately operations impact lower balances second quarter, X% invested P&C a was XXXX the period results than XX% and comparable at Looking higher excluding assets. ended interest investments,

you'll of will environment, investment private in in of P&C the rate was approximately duration invest invested alternative attractive on quarter. Longer traditional optimistic current annualized able to portfolio the equity X.X% years quarter second our of position and fixed Slide cash alternative annual continue you investment favorably yield to In term, XX, the financial returns ended investments our in portfolio, investments average XXXX X.X% June Slide interest portfolio returns portfolio to return fixed maturities. at and for Within related quarter. both on during XX, XX, multifamily rates P&C of regarding produced XX% portfolio, to was on averaging XXXX. As annualized or prospects our maturities compare maturity better. an X% we the alternative the is from of calendar second the at return years with December expectation P&C prior annual find cash of was XXXX. approximately summary we're and alternative quarter investment X.X%. Currently, our The including our yields mid-single-digit equivalents, portfolio a for approximately our investments earned the at where five X, our for X.X XX% fixed the compared fixed of see year The over AFG's returns approximately XX%. Please remain to maturity XXXX. The on X, investments June our turn XXXX, securities

shareholders million the share returned per our through During to our $X.XX quarter, of payment regular the $XX dividend. quarterly we

We over to dividends which remainder opportunity XXXX expect significant special ample capital our for the next year. repurchases of generate share provides continue operations or the to throughout excess

measure is We total in of an creation plus performance the view growth over by continue to term. as value measured book long important value dividends

excluding June our over plus results XX%. I'll turn the share, months growth in now per XXXX, AFG's For to call the dividends ended AOCI discuss value to back approximately P&C the was book operations. XX, Carl six of

Carl Lindner

Thank you, Craig.

the & experienced to very widespread Property own disruption. related we from and we cover systems ago. have few exposure briefly business outage to Casualty pleased event that operations wanted Group Before report weeks little the We CrowdStrike results, loss our I I'm to a discuss claims believe minimal to

discussion second our an quarter Turning and to webcast, I'll X our the to the which be overview quarter. results. of of Slides referring X include

Slide on you'll in As in an reserve second reported from and XXXX, XXXX XX.X% points second losses prior quarter of Property of combined to for compared X.X compared second generated XXXX points points businesses Casualty favorable insurance improvement of the catastrophe quarter X second quarter from a include quarter. Results points strong X.X of the what of the 'XX. X, Specialty we of quarter X.X the in year second quarter ratio the in to see in second development X.X 'XX. points benefited our the Results

strength businesses, good our and year development reserves pleased commercial adverse especially our more to offset some to workers' of casualty executive see favorable feel about agricultural, are comp continue in prior selected than other which property, We liability, and the development from businesses.

and compared quarter Second to in period the respectively, X% net when XXXX up same XXXX. gross were X%, written premiums and

be expect our to We a which was excluding workers' XXXX. Average inflation healthy year in the factors workers' to X% renewal we're for good Property business continue across Including comp extent, believe consecutive seasonality growth achieving proactive X% overall. reporting overall consideration, in growth rate these to growth the quarter. approach increases rate quarters, premium or for of was affects rates and to X% partially we and opportunities, net offset meet in Casualty Group, businesses. achieve rate of environment. This social timing returns. our comp, result year-over-year exposures were the line renewal combination we and exposed ratio premiums a of by a pricing targeted increases for to of with recognition Both premium a measures trends overall and written a a Taking XX previous up in renewal exceed are our up managing acreage, full into excess as exposures quarter. We've lesser and loss business the of renewal reported renewal prospective increased new crop later

to overall X reported period. calendar Property like each I'd quarter so our the improvement X.X release the year the combined summary group. Casualty the are review XXXX included in here. Specialty ratio in an I'll businesses of achieved Group XXXX, a few of and our from focus points second to Transportation XX.X% in results XX.X% turn Details earnings comparable in and a The of highlights business from Now on Property Slide to

were was primarily growth XXXX increased written a net in quarter and than premium exposures auto premiums crop opportunities, quarter. which third to and quarter favorable crop was business gross impacts higher premiums X% This because crop acreage, offset the experienced Year-over-year of the group new both the CRS early timing will commercial in this businesses. Later Second more the attributed in in reverse acreage timing additional of more year year. period. This prior of environment reporting our opposite rate pronounced difference timing associated premium XXXX. The difference acquisition. than scenario the the we reporting last second comparable with

and by in this written the continues gross and those year. The the crop, Excluding X% about two monitor have growing of some up to affecting any could to the X%, grew regions premiums respectively. years growing this net prior better of At crop be country. point, than we're in the optimistic season, drought in significantly were experiencing year. that widespread heat. areas results providing that while more to our use moisture Actually, Beryl some this And drought significant pushed the crop have Hurricane about concerns we country current moisture, crops the relief don't we group Midwest

quarter to increases pleased Overall demonstrating than spring in liability follows renewal first achieved increase this group up profits discovery this pricing achieved about it rates future's point business in rate the XX% group the This rates a of rates on This within year. I'm in in commitment in achieving line. the quarter, increased business. is with price for auto commodity the adequacy ranges. second this where in line the in our X average in commercial first quarter the our current particularly year the lower prices, While XX% than X% acceptable rate of lower underwriting our is this of XXXX, XXth of second pricing were of and line quarter. remains

achieved an in as period liability operations. produced with strength XXXX. I'm and lines of workers' our quarter margins executive by a combined the very Now in the from an ratio especially Specialty improvement X.X our XXXX, compensation well of second calendar XX.X% surplus Group businesses and our in continued the as comparable within points XX.X% year reported excellent those underwriting strong in Casualty business excess of pleased our the

increased rates offset a result to this the Second premiums overall in business on increases as policy quarter opportunities, reduces premium net The planned around a of was compared group written X/X by period. Approximately measure XXXX the the and X% respectively in businesses, growth reported year and new growth exposed same significant our social growth. this retention. of rate some which strong inflation caution of partially group and impact year-over-year X%, prior of gross businesses of when higher

For several insureds. and non-renewed increased example, our entity the where loss experience. non-renewed had required retention generally reduced for or we services have accounts in our large business, several poor we we In capacity housing public social programs business, in

We of to more chose excess in also facultative business see use through reinsurance placements. the business liability our

tempered Although to be growth, these these we actions. prudent activities underwriting believe

Financial group rates approximately the rate businesses, quarter the quarter. achieve social excellent in lower renewal this businesses. Specialty the our improvement the of X workers' pleased with second Group Compensation public and excess an continue exposed renewal renewal achieve excess reported and for an second Workers' for our XX.X% ratio quarter Excluding of X%, businesses quarter year. I'm during the to points we period XXXX. social first Overall margins services and comparable in comp XX% combined in this about that mentioned, about the first that quarter, increases X.X XXXX, including of rates were underwriting including of in were point up consistent up from than X% to continued those group entity, I liability this inflation of several

this the previous up business. Renewal in quarter, gross XXXX to was offset for point decision pause coverage compared prior Net X in written when approximately period. year partially pricing in this were Growth quarter premiums the premiums group up our in our written financial quarter. markets was to Second lower innovative new writing the the about by flat. X% respectively, X% business were institutions of intellectual than group, property-related

as Our it reinsurance facility Specialty small, our typically small. other that don't group, discuss we although on earnings calls includes is internal our

we've notably that recently, businesses certain otherwise risk. Over us opt they us. More their corporately development business. been a adverse many attributed been has cede to strategy that successful Group our here for have recorded to time, those our of business those has in other years, this more leaders when profitable keep net retained Specialty group units, business some the individual in specialty enabled this Casualty would had Over most unit more historically to

second combined these course, also of in Of included Specialty overall XX.X% results ratio. Group quarter our are

perspective, into results for for this the be internal group's pleased in simply year, record and reinsurance XX%. Craig combined creation. are facility proven results Specialty of our were we're of however, that if would of Casualty still second results and value strong year the For I ratio long-term the these quarter, to second our quarter under proud track the pushed report calendar

Our to year today's now to the to of build call. remainder portfolio. experience to continue for specialty for I We're to be questions. knowledge in-house Craig, P&C our and our and skillfully happy value opportunistic team the strategic and any and insurance the professionals beyond. We'll this have And Brian $XX shareholders long-term for has their been on our exercised Q&A the management respond marketplace. And both billion positioned well investment navigate open investment in of lines would

Operator

[Operator Michael Zaremski line from BMO. Instructions] of Our first of the question comes

Michael Zaremski

guess I clearly, little question, unless or But an kind level good you on unpack negative some it's analyst bit the be details. want less high as overall of sometimes results more items. First any excellent. of focused a items trying to to But

loss a in trend So Does you prices where causing in loss, social the of you're to social versus pull just pulling are pulling then in pricing excess there trend, especially certain in business, mean if inflationary quarter the continue I or loss inflationary lines, back? And what's but either isn't guess maybe certain that's lines of meeting now trend that in guess terms ago I the or more uncertainty back see of right two lines? lines back. loss there's certain that changed

Carl Lindner

Yes.

we lines we're clearly, we're like trends past our what loss reviews, have actuarial ratio ratio the matter certain that of or are lines. do businesses, loss accounts had, over what couple social all given I or all seeing. upward. I rate what the market do think Again, even think to But lot that the think years yes, rate adjusting fastidiously it's will accept. we're double-digit of commercial And some continually that at a I trends moved that. terms, terms like price mentioned. liability of of in quarter-by-quarter our businesses above that at the in the getting no we're the particularly I getting, price exposed or there in of you of according quarterly And or and longer the

some of time. as our may Our though, is seen, competitors. I part be to less in time the really and over, best we've over underwriting XX-year time, a X-year, that aggressive other results may and do think -- there sheet of period over appetite than be time have that reason, X-year, of you've that our deck XX-year of the a from returns we had

that. given we're adjustments that. So I we for in Where do reason and given think appetite that we to a our a to there's make need see line business, going of our in areas or

Michael Zaremski

have an high pricing you in really auto pretty levels. this, trending kind Could that's update might just how you of had give recent in quarters currently accelerated said us to And portfolio? the commercial on --

Carl Lindner

Sure.

line underwriting the in that, about I our profit of of look to that script think In our small I breakeven a in liability mentioned in XX%. results increases liability a quarter, It's commercial small XX% auto that on underwriting were auto just a year-to-date, we're the top case, auto commercial overall commercial when at that. loss kind we in overall. has

with solid where loss We're good, we're workers' liability the really the commercial auto ratio Interstate, So of underwriting part is profit. with focused focused the are business trends the National higher. particularly business comp are on really

price getting think double-digit I looking plus also that auto reason, commercial And increase. adjustments other wanting that's for think particular, make to we're and serious about why liability in auto time. We're commercial underwriting over results. to our we're our I improve

business, very in return. a we're return the at underwriting comp equity have solid a the good transportation And we Now a business. small workers' breakeven, with that making profit on in

are like our that. the a overall we'd guys and is tell help? that Does X an I profit and industry. X more in underwriting results see we're me company, to probably commercial But points or auto better at liability auto than commercial think what the underwriting-focused of our the would solid

Michael Zaremski

there data releases terms Yes, seasonality happened? what there crop crop, material of seasonality? your if is material And amount the lastly, we were this a can on looking releases that of the us, so unusual releases commentary, that and reserve in what reserve the just back quarter, good. you heard on crop if can remind is And were But if helps. see returns -- we prospectively on wood, crop

Carl Lindner

Brian I crop additional add here that, and also. add some Yes. on in can color color a on minute can

Brian Hertzman

Sure.

the profit year. the ground So at profit that's and book to margins the in out the corn for tend the the come the for on products and that business crop, we soybeans, of crops of of end the when main sort

So of it the we're booking settled crop that. heavily to crop there's into fourth when after still tends weighted lot business quarter. But to a be our profit, be

So settle. we the some sometimes and development to up still little end that, typically the because conservative with we're of tended things in booking have a And of at that some products first reserves takes And of significant area lead quarter the that coverages favorable in has like year. of some of year. the to our subsequent like bit then the longer to amount a

of particular So prior settlements some this bit development final little In a in this of was or of the can year. year from this case, year, that favorable than higher favorable the be development the adverse level second quarter there last the kind year. crop

development have quarter. in favorable it's and the a of in good coming little off about chunk talk than it typical second bit the Transportation that's a been crop, more So would Property Group, when of we and

Carl Lindner

a on bit add USDA corn August maybe overall. I'll percentages, more report you X much excellent as look the higher of When at good were they last soybean the little and latest Yes. crop year. what and color they're and

As corn's of against an average commodity far soybeans, down looking as deductible rainfall weighed just morning XX%. was I on the XX.X%, this XX.X%. And that's around prices, business excluding current our

So impact seeing you XX% too of to to price that. in it have until declines get as tendency losses start would we a or concerned on your so closer don't

business think, X% think our the or positive which additional results point with think year, than prior the this wheat, is I better I same at is thing year, things of in this maybe X% much winter I is rainfall.

asking was rainfall was Craig, it's -- somebody I how we in do far reason might Hurricane and And my as me Debby, particular and brother, that today on probably write as a think me asking us. We much business about the crop nonevent Florida. impact is one think

that from have We -- actually out affected offsets -- comes a Debby. we exposure any come amount the have insignificant So an of don't in that. area our very premiums Debby of almost that

the So again, a color we're Overall, I year. bit very there. additional little think crop optimistic about

Operator

question next Raymond Peters line James. of comes Our Gregory from of the

Charles Peters

one And or of the component. Property could the color your pieces any business? business your think I development to and development -- of I'm finance Transportation moving in the you the wondering out in specialty you answers, if So favorable favorable casualty the of impact the either crop previous spoke in you called there. provide

Brian Hertzman

This Greg. Brian. is Sure,

has are both a in So source have comp The we quarters. -- historically net Casualty of amount favorable business, to available, a been to for favorable favorable recent development there group, overall. what continue there, relative things in similar development do us on directions. be the going And going development we which have workers'

quarter units. We material a that areas. in less in of second of we areas sort that's even offsetting a excess because development, adverse particularly development mentioned, of other of executive normal that but in development. was are Carl wasn't overall. line we a any in bit business and things quarter modest only business quarter, of There other had -- amount The the liability than there. that an typical is of amount a of liability fairly the of adverse kind little favorable had really favorable quarter this kind like business, that larger as had different But XXXX, development is amount mentioned some But

the of So workers' inflation couple takedowns the of it's accident of not other course in a business just blips offsetting it's that comp we social normal things, exposed couple in there. small there out years were businesses a units have across huge in

feel reserves nothing there that but really where pleased we and our ins material overall overall, about are outs, we segment, favorable there. and development So category. In are that have in Financial individually good a the were

some some going in amount, but down to So development they and and none it those large we lines, net are had a direction. others, some favorable adverse just very either amounts in small of

Charles Peters

for extended maybe just on Gosh, Specialty results a an producing then segment. time. of step the Financial excellent pretty And been back period stable it's and results

you a sure result Just less go you of it. trigger had does that we Financial be on Specialty the guys? planning, lookout like a loss in curious than really look desirable Financial? we've might for not inside what year through should Specialty Because kind bad when events I'm what And for

Carl Lindner

to your event when larger helps have approach results, a can a helps That's in cause not do as that obviously, type limit way a Assurant some is do FIS of some a great the certain lender-placed With extent, business goes you a to I one different it's be worse a a major good. sliding a our if -- be maybe our like soften little downside we hurricane to the is kind commission way pointed our in we years down. Conversely, or in to out different business business scale property given of commission in in the ceding would than kind an aberration of kind Well, lender-placed it ratio goes really we think year, -- tied if others and there why Brian's where and But commission in producers, that. loss property. We ceding agreements of ratio that to of year because that. have expense up. years, it the

the be of thing be because that gross a think Financial main size property premium. business. will I That plus So the $XXX million written on there would lender-placed driver be today of business the that Specialty in would

Charles Peters

last what's on would my you're of information and casualty maybe just little I with decision favorable, some provide about you behind inside can pricing willing, a different what mentioned going the utilize that be, more you you could, in used. circumstances. question your business, extent the about Maybe on you but view, talk building Carl, to facultative decision. And a is us believe comments, reinsurance guess, Maybe product, it the I the the use obviously, like was from maybe just to for the was that and where certain

Carl Lindner

excess businesses of are we first part -- to large pricing that. Happy Well, that. major Yes. asking have our a of our all, address you you're in of riders of that our on of think the I at When overall, both in business, think. I kind of look couple kind on increase of price seeing we're me -- businesses double-digit liability that

and be both profile. our by reinsurance, risks if risk, we'd development. of XXX, the has XXXX in on that that one of the want seen particular, emphasis we've unfavorable the more depending business. business, -- Fortune business reserve in have on loss downsize maybe in exposure, type facultative bigger We Fortune risk to certain we businesses, on using businesses, But risk a more That's

from away exposures. that's think other strategy tower risk, heavy auto moving particularly also the with liability I along that carriers have to been move we, commercial have farther up is. Obviously, what potentially the

that be price doing a that. obviously, kind things of examples and So of we're in the excess besides few would those liability,

Operator

of question next the Lederer Our Charlie from of comes Citigroup. line

Charles Lederer

or current to some it's can due to whether prospective what The about taken? the you've that, of improvement the ex-cat Casualty, accident loss year you accelerated talk in the changes Specialty quarter, it's trends drove actions loss ratio, if underwriting in

Brian Hertzman

is year of Sure, is targeted Brian. out coming the This businesses. ratio ex-cat of casualty Charlie. the loss for The markets improvement our accident driver biggest in

last pooled our the rate getting we talked Human pricing we entity year, last there public and well about improved that So the a in have in like insured business that's making writing or leading looking decisions not our our workers' And public targeted quarter where insurance, is areas example, picks in over we've cautious retention accident higher profitability about by on entity business, little coverage only in we of Services markets year bit at increases as, comp, good our in some taking retentions. for they actions were that been there. been are all we've underwriting been to we so as requiring business. Offsetting talked retentions, business being Specialty our that

costs going know in been our you As being just of well there, as business a have where as decreases on cautious rate there we're is costs. Florida, portion on -- forward medical

So the big actions is, driver really of the would the underwriting the is I say, markets. in targeted improvement there pricing and

Charles Lederer

innovative X markets that? you how in kind Specialty X you in on or The quarters? big guess mentioned business, top still can help for line I about, the playing And a of is over do long headwind you the headwinds Financial, the runway out? us see of how think I that pause next the that guess,

Brian Hertzman

Sure.

financial. in So there's a on few things going

really our quarter with a of more And The of business lender-placed institutions in the is. business first thing I'll year, and leveled there that now growing second that in continued it's off. that the a business insurance biggest where that's started is is on financial remind last you to significantly

different risk the it business also not We been year, not number coverages that's mentioned our past, products well business mitigation small two things growth we -- of as second on for year, expense product businesses. markets the kind and environmental-related an in much will a on innovative that protection financial a write but already more the last and coverages of pause, But institutions of half compensatory only there. And paused coming there, the as just flat really -- maintaining happened the well we property-related that with products, had defense look in of there that's growth as makes the as real new some intellectual big of business that segment. for be a us. in property intellectual IP because it innovative IP-related growth and kind the where think infringement, you So FIS that markets risk, we that of we sort we kind it's patent not when unemployment of title in as coverages, products. They're is at business, of out the the

Charles Lederer

kind -- also in that guess, guess the your is I collateral are Is in statements, there's of patent curious, American great Insurance guess. line the infringement I separate -- the business? Is that protection. so we the Or Just in that -- businesses like for business? I that? what a statutory IP -- just

Brian Hertzman

probably We at on that figure you there with you follow look that sure But up maybe right that out in have can to the later. answer. give to all up make we that rolls Diane to

Charles Lederer

Just lender-placed talk I about exposure I peak can the you in about, how the wind season? feeling of lastly, cat into business guess, you're guess, just heading kind

Carl Lindner

our and average XXX We manage [indiscernible]. XXX-year lender-placed I roughly, our our X have would modeling in business, today, Diane not kind property is And points? only look through exposure of projected overall be X exposures, but our at X or those points when what, hurricane X you in still and we Brian -- mean

Brian Hertzman

it looks equity. at Yes. X in Yes, of shareholders' X% event, like even XXX-year about

not that's material at be happen. should that to So going something AFG, overly

Carl Lindner

lender-placed property our don't the in said, that That risk just lollygag and pick. we we business, around

lower, to the be business exposure like a others. cat would our our of We Southeast lower to profile our desire coastal or cover a the Florida, continue less retention clearly, have place. exposure to lower that over industry try still Coast accounts time. We million from relative generally with exposure. comfortable is cat feel generally -- pick of We and bond over what have it to than added the as the cat the in has months, past with write. have that risk we exposures. that But tremendously that And business we at grown our $XX to XX We for Texas reasonable

Operator

comes Paul of Our the next from question Piper of Sandler. Newsome line

Jon Paul Newsome

to of hoping a bigger picture was ask questions. couple maybe I

Is the sort bit bit talked a a perspective? peers challenge -- of little couple challenges that commercial into and your any segments the that on your the peers in competitive. gotten little of thoughts expanding One new talent your of do perhaps about it's Or a new of specialty world talent? and more talked have you of

Carl Lindner

first guess, keep it -- a much all, that. in think, would company and I attract That the turnover our I overall challenge, continual good compensation peers I both our others a a industry people, from to is within in said, than standpoint, macro providing be and of our lower think as packages general. in right

handle. of one think I a number over that past personnel. another some our key we've had business at we units time the where we've XX couple of lost couldn't But nothing years or

years businesses, our about for have company business we a in person being each of of succession those one not to all development strategically very we what ideas businesses. And every of fairly plans successors, year so, we're develop lead of what years, or only each out of potential fastidious our do reviews need every people with we very do the reviews for developing every of laying XX, As XX specific to of businesses. XX do businesses detailed -- detailed fairly the of those -- into -- they couple how

that's is that and succession some our do peers. one we little that that more different helped So us planning bit I of could be than intensive think thing a

Jon Paul Newsome

of question. likely will update And versus use Maybe go. and and flow Special then capital and where an bigger you future cash dividends management think your thoughts picture the buybacks versus M&A sit on another most

Craig Lindner

is this Paul, Sure. Craig.

the in looking And past, we said, always a stated Carl group at. our deals flow of M&A we're selective. is As there's as that pretty

is is deal just you're potential return with but not acquisitions. right easy at where the are that today, accretive, they looking that rates do to very constantly expect a is interest We which

share further get hurricane repurchases in little are the make expected the we're additional of that year. As I we dividends. balance said is on we've before But want what and season final to we that along decisions the today probably possibility add And that. you have certainly special consistent capital build significant a things two to of with the of amount past, in looking through a always know, excess considering. we're those and at

Operator

Jefferies. Our of Andersen the Andrew next question comes from of line

Andrew Andersen

mentioned what talk accident Could maybe some there? excess adverse from liability. had was you size the on years You development magnitude and about that

Brian Hertzman

small years. it's over amounts accident So multiple

the a all. just development -- several those to so years. from bit amount 'XX, at largest in adverse it covers little 'XX a overall. line of a bit of It's So not huge had It's any that some little individual business

big was accident So it's a across not real years. amount. It spread dollar multiple

Andrew Andersen

that impact about default frequency been IP have so, collateral reserves? the increased rates the trends peers on And margins some any if you about, can talk and underlying has there reaction protection I guess, that on the is product, there? been And you're seeing that or talking to in

Brian Hertzman

business our with seeing amount what So limited We're us it's small reacting a in of for very products. we're exposure. individual to a

So to occur decline losses reacting a their of we that cover wouldn't the to a default but products comment loan value or if who loan. We're experiences, collateral, time. the competitors' available well is the the on able at information there in not we're on in as that as have the the the business do

strengthened have monitoring but us. months six big business closely, We're area We it this that this in in first the a reserves of real year. not is for

Operator

of Keefe, question & Meyer line comes from next Shields the Our of Woods. Bruyette,

Meyer Shields

A first. small questions couple of

current of when and and rate do trend auto, for the commercial be loss think reliability? Within at you'll commercial in increases target margins you level

Carl Lindner

returns. We're over maintain far. have to question, that the liability rate, everyone solid we're a for XXth now. I perspective trends commercial or thought it's tenth considering our of That's up ratio and taking But margins of continuing auto right year with that double-digit good good have with at been having would even years many in of in gone -- rate loss would adequate kind have we take so to the we're

-- underwriting drive doing had there price can, wise to we'll a hopeful see I you. answer an that the for improvement. action that XX I'm and next towards everything months wish both specific I'm profit. over we're I underwriting So positive we some

Meyer Shields

press there The this was year in issue an year development. improved than adjusted reserve workers' sort true-up Last to workers' translating compensation obviously, last into year year, profitability of mentioned and other any there release Was accident better approach year-over-year. profitability comp?

Brian Hertzman

No, we year we experienced just the than not favorable second really. level did of Last year, in development this in lower the quarter. quarter, a second

the last year, favorable it quarters. was been happening development. more recent it quarter So of just quarter consistent lower a was with It's second what's level year of a of this more in second -- the was

year this So overall, is year because workers' that. than comp last of profitability better

Carl Lindner

Yes.

in our ratio a pleased, comp last XX% at year still overall year, second And than workers' months, excellent. underwriting As profit. results X a far rate still they're quarter combined decline the as even be 'XX will and for with solid We but accident Florida. there still think higher

overall year. Summit's Florida, down months. maybe think that X I XX% with profit projecting, prices rate an still I through are But we're in even saw decline accident underwriting this

a at that's the think comp. strategic National and I business So comp Interstate positive. And

The some an on results calendar think X other X comp price X% and California underwriting seeing good the through increase -- California got in book to underwriting a actually, continue getting in the which first And there the business. our is large business comp we months, a we're strategic have increase that positive. only our was I we first months. And businesses that through loss year months. are accident one price has was through some X

business and excellent continue overall, -- are be that. to an with flat think the within of decline, X% results very pretty So about comp I price overall the with premiums our pleased in

ratio overall be all, results. And very a our all comp, competitive with workers' Very yes, favorable. workers' to the continue prospective trends comp very business. So be very in loss in happy happy continue to with

Meyer Shields

late you about final question, I then the, the acreage report. And guess, talked

earned of the that crop, side was premiums a of seasonality the impact significant did have earned premium written for things? that I delayed. on Given understand

Brian Hertzman

earning of It premium. should not the the affect

crop earn So the premium season. growing business the the we starting in

the and that with in quarter third corn the earned premium products soybeans and will is what So consistent. our being you'll find the be is biggest and of most

-- it's the just a the July to July is -- affect the just soybean June so the on earn. almost premium flip and like it's reporting, corn timing, from won't So it

Operator

Instructions] Janney [Operator the Scott. next Our line Montgomery question Bob Farnam of of comes from

Robert Farnam

the lines market. had question excess I on surplus a and

market it trying relative for I'm in has -- few years? and to how to Just submission past an the been the flow get environment maybe the in competitive today today idea that where is

Carl Lindner

what has us been flow submission for over been some pretty with it consistent think past has XX I months. the

Robert Farnam

the from anything that yet encroachment note? seeing no of market admitted So you're

Carl Lindner

increases And even reported are No, the to that aggressive migration our E&S kinds Again, side. Florida, California, I getting seeing we're that. lot are on don't in in in to market that. not we're property submissions a back some property admitted both I competitors think the of are submission maybe of as that, think as coastal the any tied Texas of strong

Robert Farnam

one just workers' And on on question continuing quick comp.

seeing being of with point? inflation inflation medical any change have conservative Just broader to like medical at an the kind of you're expectations. it sounds in maybe But seen you're to idea So this what trying actually have your medical relative you indices.

Carl Lindner

this point. at really Not

Operator

Our Citigroup. next Lederer from of of line Charlie question comes the

Charles Lederer

about couple a a your this I it you of you've just valuation? the think I don't talk attractive any given little year, just Just kind for done so can use -- is Craig. of guess, guess, I really slowed reason buybacks bit. that for

Craig Lindner

our soft, where -- when There we periods you has been of What to our been at is of market repurchases, of look I that was trading like to We picked the to constantly think would was good. at the record we've is thought peers. today pretty we looking a timing have Yes, kind long-term significant I you say stock something a some It where Charlie. shares. that repurchased number were get think if is we're we a very value to do underlying discount discount trying what large our at.

taking I we're mean, at. a are look that -- something repurchases So

Charles Lederer

X% just of you estate. you expectation. longer-term us is I real the think if [indiscernible] still about multifamily the was it. then is you the can update guide I I But the you're year mentioned XX% the guess And thinking how I on other kind portfolio. the for my don't for said on question guess, just know outlook

Craig Lindner

return for you I X% generated our to what plan first return. we of Sure. a the X% guidance, year. X the didn't we year, give a the I we our say what but would we the is The put into mean was put -- into plan, assumption months guidance in

months, that's lot fine. of underlying ownership. perspective the multifamily interest-related amount. The though get several very changes by absorbed. job for of growth, has very still high of or of the -- strong my supply, in we general even But for or bit. The piece, of cost give markets -- certainly, We're partners us. We're for opposed be properties that with the with operations place. It's or at the probably supply new growth, income of our would be are operating marks taken think population housing, talk in don't So bulk We're related new the the doing that to multifamily. the let doing optimistic interest properties earlier rates We do to multifamily the that about the year fine, will the very very with new you negative still interest small take in of so of outperformed marks behind deterioration a a shortage The of the for really me the longer-term XX the and but new a do in in year another marks, months rate -- we are any have where X a building flattish, to group the decline that projecting There's the supply take little home markets. about strong lot first just what as we going prospects. our a operations. do a should our even least incurred

our And portfolio. so prospects long-term of we're very optimistic about the multifamily

Operator

of Our line next question BMO. from the comes Zaremski of Michael

Michael Zaremski

follow-up Craig. for -- A quick to

been understanding curious, real estate Just in side. have think great that I there's you all investors the the

that or value, if sized in -- your estate reflected the your mark-to-market gains of willing if versus aren't kind you're of you in up that's what portfolio are your think ever real to share curious you've carrying kind to Just willing share? something

Craig Lindner

helpful. the multifamily if could for that's I year, you the on give marks

negative In the we losses said, higher to that million the to But quarter, quarter, incurred first resulted rates. pretax, million That large pretax. of it rates, the It's so recently. in mark-to-market for marks in second higher are year $XX reversed $X million things we the here you I deterioration of have $XX around size incurred cap As around to year-to-date. not interest was which operations. related has this related

Michael Zaremski

properties there just weren't sold gains or be realized some partially of also have they the that I'm that marked been fully your -- estate And in who curious, large have balance peers owned real some opportunistic wouldn't very on any and sheet.

mark-to-market that, my you more values assets you're of much marked some sold? if think portfolio don't that's on lower appraisal question -- is they your reflective at might their So that are what than be in were values today

Craig Lindner

properties is to So I you say are owned would our in multifamily what partnerships.

of property. We review have general the value partners, a and regular of the they're doing

are less those that outside marina current a Beach value. believe several The significantly name are large by the we on properties. than So have the Marina. Marina. of major have then ones And of We market the other a mark-to-market We books Palm Sailfish basis. for do those Harbor in real right regular on estate our are Charleston Resort

Operator

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

Diane P. Weidner

We second us to talking you quarter. the the and bit to day. this look Have more our all a forward next little you of morning joining about Thank great share with for story all for for quarter. opportunity a

Operator

today's Thank you for the This program. participation conclude your in does conference.

disconnect. now may You

American Financial (AFG) 7 Aug 242024 Q2 Earnings call transcript