We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Retain American Financial (AFG) in Your Portfolio?
Read MoreHide Full Article
American Financial Group, Inc. (AFG - Free Report) has been benefiting from rate increases, higher retentions in renewal business, a rise in average renewal pricing, rate increases, stronger underwriting profit and improved guidance.
Growth Projections
The Zacks Consensus Estimate for AFG’s 2024 earnings is pegged at $11.74 per share, indicating a 10.3% increase from the year-ago reported figure on 16.3% higher revenues of $8.36 billion.
Zacks Rank & Price Performance
AFG currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 8.8% against the industry’s increase of 27.1%.
Image Source: Zacks Investment Research
Business Tailwinds
The Property and Casualty (P&C) Insurance segment of American Financial should benefit from business opportunities, growth in the surplus lines and excess liability businesses, rate increases and higher retentions in renewal business, which boost premium growth.
For 2023, in the Specialty P&C Insurance segment, growth in net written premiums is expected in the range of 5-8%, suggesting an increase of 2 points at the midpoint of the previous range of 3-6%. AFG continues to expect net written premiums to be 5-9% higher than 2022 results in Specialty Casualty Group.
Growth in net written premiums for Specialty Financial Group is expected in the range of 23% to 27%, up significantly from the previous range of 6% to 10%, as a result of the opportunistic growth in financial institutions business.
The property and casualty insurer witnessed average renewal pricing across the entire P&C Group. AFG intends to maintain satisfactory rates in P&C renewal pricing going forward. Average renewal pricing across P&C Group, excluding workers’ compensation, was up approximately 5% overall. Based on results through the first half of 2023, American Financial continues to expect renewal rates to increase between 3% and 5% in the Specialty Property and Casualty operations overall.
AFG’s combined ratio has been better than the industry average for more than two decades. The underwriting profit of the insurer is likely to increase on the back of higher profit in the workers’ compensation, excess and surplus, executive liability, mergers and acquisitions liability businesses and higher underwriting profit in the trade credit and financial institutions businesses.
American Financial has successfully increased its dividends in each of the last 14 years. The robust operating profitability at the P&C segment, stellar investment performance and effective capital management support effective shareholders return.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Chubb Limited (CB - Free Report) and CincinnatiFinancial Corporation (CINF - Free Report) . While Axis Capital sports a Zacks Rank #1 (Strong Buy), Chubb and Cincinnati Financial carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has gained 13.1%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.41 and $9.31, indicating a year-over-year increase of 44.7% and 10.7%, respectively.
Chubb has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 3.36%. CB has climbed 15.2% in the past year.
The Zacks Consensus Estimate for CB’s 2023 and 2024 earnings per share is pegged at $18.18 and $19.86, indicating a year-over-year increase of 19.2% and 9.2%, respectively.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 25.25%. In the past year, CINF has gained 14%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5 and $5.88, indicating a year-over-year increase of 17.9% and 17.6%, respectively.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should You Retain American Financial (AFG) in Your Portfolio?
American Financial Group, Inc. (AFG - Free Report) has been benefiting from rate increases, higher retentions in renewal business, a rise in average renewal pricing, rate increases, stronger underwriting profit and improved guidance.
Growth Projections
The Zacks Consensus Estimate for AFG’s 2024 earnings is pegged at $11.74 per share, indicating a 10.3% increase from the year-ago reported figure on 16.3% higher revenues of $8.36 billion.
Zacks Rank & Price Performance
AFG currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 8.8% against the industry’s increase of 27.1%.
Image Source: Zacks Investment Research
Business Tailwinds
The Property and Casualty (P&C) Insurance segment of American Financial should benefit from business opportunities, growth in the surplus lines and excess liability businesses, rate increases and higher retentions in renewal business, which boost premium growth.
For 2023, in the Specialty P&C Insurance segment, growth in net written premiums is expected in the range of 5-8%, suggesting an increase of 2 points at the midpoint of the previous range of 3-6%. AFG continues to expect net written premiums to be 5-9% higher than 2022 results in Specialty Casualty Group.
Growth in net written premiums for Specialty Financial Group is expected in the range of 23% to 27%, up significantly from the previous range of 6% to 10%, as a result of the opportunistic growth in financial institutions business.
The property and casualty insurer witnessed average renewal pricing across the entire P&C Group. AFG intends to maintain satisfactory rates in P&C renewal pricing going forward. Average renewal pricing across P&C Group, excluding workers’ compensation, was up approximately 5% overall. Based on results through the first half of 2023, American Financial continues to expect renewal rates to increase between 3% and 5% in the Specialty Property and Casualty operations overall.
AFG’s combined ratio has been better than the industry average for more than two decades. The underwriting profit of the insurer is likely to increase on the back of higher profit in the workers’ compensation, excess and surplus, executive liability, mergers and acquisitions liability businesses and higher underwriting profit in the trade credit and financial institutions businesses.
American Financial has successfully increased its dividends in each of the last 14 years. The robust operating profitability at the P&C segment, stellar investment performance and effective capital management support effective shareholders return.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Chubb Limited (CB - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . While Axis Capital sports a Zacks Rank #1 (Strong Buy), Chubb and Cincinnati Financial carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has gained 13.1%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.41 and $9.31, indicating a year-over-year increase of 44.7% and 10.7%, respectively.
Chubb has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 3.36%. CB has climbed 15.2% in the past year.
The Zacks Consensus Estimate for CB’s 2023 and 2024 earnings per share is pegged at $18.18 and $19.86, indicating a year-over-year increase of 19.2% and 9.2%, respectively.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 25.25%. In the past year, CINF has gained 14%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5 and $5.88, indicating a year-over-year increase of 17.9% and 17.6%, respectively.