Fitch Publishes Unrated Issuer Report on American Financial Group, Inc.
August 31 2015 - 9:15AM
Business Wire
Fitch Ratings has published an Unrated Issuer Report (UIR) on
American Financial Group, Inc. (AFG). UIRs provide analytical
perspective and transparency on key issues that impact an
organization's creditworthiness but without providing a credit
rating or rating-like opinion.
In addition to highlighting what Fitch considers to be AFG's
main credit issues and trends, the report takes a closer look
at:
--Franchise and market position;
--Profitability and debt servicing capabilities.
AFG's property and casualty (P/C) business has a distinct
franchise as a top 15 commercial lines underwriter. AFG has
demonstrated an ability to protect its specialty P/C market niches
through strong distribution relationships. Fitch views AFG's
annuity segment as possessing a less attractive credit profile than
the P/C segment due to its relatively small scale and more tenuous
distribution relationships verses larger and more diversified
peers. Also the inherent interest rate risk of annuity operations
creates uncertainty tied to business retention and earnings
stability.
AFG has historically reported consistent underwriting profits
with little catastrophe impact, but the combined ratio slipped to
an average of 95.6% for 2012 - 2014 from 88.1% in 2009 - 2011.
Overall operating ROEs and coverage are now improving, driven by
rebounding P/C underwriting performance since the low point in 2012
and the steadily growing contribution from the annuity segment.
Fitch also expects net investment income in the P/C segment to
continue modest improvement with steady investment yields and
modest invested assets growth.
A peer analysis and a summary of market-based indicators round
out the UIR.
UIRs are not solicited by the issuer, and Fitch receives no
compensation from the issuer for the provision of an UIR. While a
UIR is typically based primarily on public information, Fitch
analysts may ask questions of an issuer's management while
preparing the report. The level of management participation, if
any, can vary significantly from case to case.
Additional information is available at
'www.fitchratings.com'.
For more information on Unrated Issuer Reports please go to:
http://www.fitchratings.com/web_content/product/unrated_reports.pdf.
American Financial Group, Inc. (Stabilized Property/Casualty
Performance with Less Defensible Annuity Franchise)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=869702
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2015 Outlook: U.S. Property/Casualty Insurance (Competitive
Forces Promoting Earnings Decline)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=830988
Investment Risk and Returns -- Property/Casualty
(Re)Insurers
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=716845
Property/Casualty Insurers' Midyear 2013 Financial Results
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=716843
U.S. Property/Casualty Insurer Expense Analysis
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=722938
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Fitch RatingsPrimary AnalystMartha M. Butler, CFASenior
Director+1-312-368-3191Fitch Ratings, Inc.70 W. MadisonChicago, IL
60602orSecondary AnalystDouglas M Pawlowski, CFASenior
Director+1-312-368-2054orMedia Relations:Alyssa Castelli, +1
212-908-0540alyssa.castelli@fitchratings.com