American Financial Group, Inc. : history, ownership, mission, how it works & makes money

A Brief History of American Financial Group, Inc.

American Financial Group, Inc. (AFG), founded in 1872, has established itself as a significant player in the U.S. insurance and financial services industry. Initially starting as a company to provide surety bonds, AFG has evolved into a diversified organization with a strong focus on property and casualty insurance. As of 2022, the company reported total assets of approximately $62.1 billion.

Throughout its history, AFG has made strategic acquisitions to bolster its market position. Notable was the acquisition of Great American Insurance Group in 1994, which expanded its lines of insurance significantly. In 2019, AFG completed the acquisition of the annuity and life insurance business of Voya Financial for $1.1 billion, further diversifying its portfolio.

AFG operates primarily through Great American Insurance Company and its subsidiaries, which focus on specialized commercial insurance and variable annuities. The company’s revenues have shown considerable growth; for instance, in 2021, AFG reported $4.1 billion in net income, an increase from $2.7 billion in 2020.

In 2022, AFG declared a quarterly dividend of $0.56 per share, reflecting the company’s commitment to returning value to its shareholders. The company’s stock, traded under the ticker symbol AFG on the New York Stock Exchange, has shown resilience, with an annual return of around 15% over the past five years.

Currently, AFG continues to focus on its core strengths in property and casualty insurance while leveraging technology and data analytics to improve efficiency and customer service. The company’s long-term strategy emphasizes sustainable growth through careful underwriting and expanding its specialty insurance lines.

American Financial Group's reputation in the industry is reflected in its strong financial ratings; for instance, A.M. Best has rated AFG at A+ (Superior) for its financial stability. This positions AFG favorably among competitors in the insurance market.

Overall, AFG's evolution from a surety bond company to a comprehensive financial services provider illustrates its adaptability and strategic vision, playing a critical role in its ongoing success in a competitive landscape.

A Who Owns American Financial Group, Inc.

American Financial Group, Inc. (AFG) is a publicly traded insurance and investment company listed on the New York Stock Exchange under the ticker symbol AFG. As of the end of Q3 2023, AFG's market capitalization stood at approximately $11.9 billion.

Ownership of AFG is comprised of institutional investors, mutual funds, and individual shareholders. The latest data from recent filings provides insight into significant ownership stakes, as highlighted in the following table:

As per the latest SEC filings, the largest institutional shareholder is The Vanguard Group, holding approximately 10.1 million shares, which accounts for about 29.5% of the total shares outstanding. Another significant player is BlackRock, which owns around 8.0 million shares, representing roughly 23.7% of the total.

In terms of insider ownership, AFG’s executives and board members collectively own about 1.6 million shares. Notable insiders include CEO Carl H. Lindner III, who has a significant stake, and other executives who align their interests with shareholders through equity ownership.

Recent trends in stock performance show a positive trajectory, with AFG’s stock price at approximately $465.00 as of mid-October 2023. This reflects a year-to-date increase of approximately 15% compared to the previous year, underlining a robust performance partly driven by sustained profitability in their core insurance business.

The company reported Q3 2023 earnings of $1.72 per share, a year-over-year increase of 12%. Revenue for the quarter was reported at $1.5 billion, demonstrating a solid growth trajectory.

In summary, American Financial Group, Inc.'s ownership is a mix of institutional, mutual fund, and individual investors, with substantial stakes held by leading asset management firms. AFG's continued performance and shareholder alignment further solidify its position in the financial sector.

American Financial Group, Inc. Mission Statement

American Financial Group, Inc. (AFG) operates as a diversified financial services holding company, specializing in property and casualty insurance and the sale of investment products. The company's mission focuses on delivering superior results for its shareholders, providing exceptional service to policyholders, and developing strong relationships with the communities it serves.

AFG's mission emphasizes a commitment to operational excellence, risk management, and sustainable growth. The company's objective is to maintain a strong financial foundation while supporting its policyholders with tailored insurance solutions.

As of the third quarter of 2023, AFG reported total assets of $14.5 billion and total shareholders' equity of $4.8 billion. The company generated a net income of $663 million in 2022, reflecting a return on equity (ROE) of 13.8%.

The insurance segment is crucial to AFG's mission. In 2022, the Property and Casualty Insurance segment contributed approximately $9.2 billion in gross premiums written, supporting AFG's goal of providing quality insurance coverage. The Company operates through its various subsidiaries, including Great American Insurance Company and its affiliates, which enhance its market position and operational efficiency.

In alignment with its mission, AFG continuously invests in technology and innovation to improve customer service and operational capability. As of 2023, the company allocated over $200 million toward technology upgrades and enhancing cybersecurity measures to protect sensitive policyholder information.

AFG also prioritizes community involvement and corporate responsibility. In 2022, it donated approximately $5 million to local charities and initiatives, reflecting its commitment to giving back to the communities that contribute to its success. The company's employee volunteer programs further support this mission, with over 2,000 hours logged by employees in various community service activities during the year.

The company's strategic focus on maintaining a robust financial profile and delivering excellent insurance products positions it to navigate market challenges effectively while fulfilling its mission of enhancing shareholder value and community engagement.

How American Financial Group, Inc. Works

American Financial Group, Inc. (AFG) operates primarily in the insurance and financial services sector. As of 2023, AFG's operations are divided mainly between its property and casualty insurance segments and its annuity and life insurance businesses.

Property and Casualty Insurance Segment

The property and casualty segment is a significant revenue driver for AFG. In the second quarter of 2023, AFG reported premiums totaling $1.7 billion, reflecting a growth of 6% year-over-year. The net income from this segment was approximately $250 million.

Key Financial Metrics:

Annuity and Life Insurance Segment

The annuity segment is another crucial component of AFG's business model. In the second quarter of 2023, the total annuity sales reached $1.1 billion, a growth of 10% compared to the previous year. Life insurance premiums accounted for approximately $350 million during the same period.

Key Financial Metrics:

Investment Portfolio

A significant aspect of AFG's financial performance relies on its investment portfolio, which totaled approximately $46 billion as of June 30, 2023. The allocation includes bonds, equities, and alternative investments, with an average yield of 4.5%.

Investment Allocation:

Recent Performance and Stock Trends

As of October 2023, AFG's stock has shown resilience amidst market fluctuations. The company’s stock price was approximately $140, reflecting a year-to-date increase of 15%. The market capitalization stood at around $12 billion with a P/E ratio of 12.5.

• Market Capitalization: $12 billion
• Year-to-Date Stock Performance: +15%
• P/E Ratio: 12.5
• Dividend Yield: 2.2%

American Financial Group continues to balance its focus on profitability and growth while navigating regulatory environments and market challenges within the insurance and financial sectors.

How American Financial Group, Inc. Makes Money

American Financial Group, Inc. (AFG) generates revenue primarily through its insurance and investment operations. The company operates in two main segments: Property and Casualty Insurance, and Annuity and Life Insurance products.

Property and Casualty Insurance

AFG's Property and Casualty Insurance segment includes various commercial and personal insurance products. In 2022, this segment reported a direct written premium of approximately $5.39 billion, marking a 6% increase from the previous year. The company’s underwriting performance is notable, with an overall combined ratio of 93% for the same period, indicating effective cost management.

Investment Income

Investment income significantly contributes to AFG's profitability. The company reported total investment income of $711 million in 2022. The investment portfolio is diversified, with a fair value of approximately $60.5 billion as of year-end 2022. The breakdown of the investment portfolio is as follows:

In 2023, AFG continues to focus on achieving an annual investment yield of approximately 4.0%.

Annuity and Life Insurance Products

The Annuity and Life Insurance segment contributed significantly to AFG’s revenue, with a direct written premium of about $3.1 billion in 2022. The company provides fixed, indexed, and variable annuities. In the first half of 2023, AFG reported a 10% increase in sales for fixed indexed annuities, reflecting growing consumer demand.

Recent Financial Performance

For the full year 2022, AFG reported net income of $1.2 billion, resulting in a return on equity (ROE) of 12%. The earnings per share (EPS) stood at $6.75, showcasing strong profitability.

Market Position and Outlook

American Financial Group's market strategy includes maintaining a competitive advantage through effective underwriting practices and diversified investment. The projected market growth for the property and casualty insurance segment is around 5% annually through 2025, driven by increasing demand for insurance products and competitive pricing strategies.

Overall, American Financial Group, Inc. leverages its diversified business model, focusing on both insurance operations and investment income to create a robust revenue stream. The company’s solid financial performance indicates its resilience and strategic approach in the financial services sector.