Fitch Publishes Unrated Issuer Report on American Financial Group, Inc.

CHICAGO--(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

Related Research

2015 Outlook: U.S. Life Insurance

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=840868

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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View source version on businesswire.com: http://www.businesswire.com/news/home/20150831005704/en/

Fitch Ratings
Primary Analyst
Martha M. Butler, CFA
Senior Director
+1-312-368-3191
Fitch Ratings, Inc.
70 W. Madison
Chicago, IL 60602
or
Secondary Analyst
Douglas M Pawlowski, CFA
Senior Director
+1-312-368-2054
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
[email protected]

Source: Fitch Ratings

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