(RTTNews) - Monday after the bell, American Financial Group, Inc. (AFG: News ) reported a sharp increase in profit for the third quarter, primarily due to realized gains from investment compared to a huge loss from investment in the year-ago quarter. Earnings for the quarter were above analysts' consensus. The company also raised its full year 2009 core earnings guidance.

American Financial profit surged to $127 million or $1.09 per share from $21 million or $0.18 per share in the year-ago period due to realized investment gains of $4 million this quarter, compared to realized investment losses of $150 million in the year-ago quarter.

Core net operating earnings went up 8% to $124 million from $115 million in the prior-year period due to improved underwriting results in the specialty property and casualty insurance or P&C operations, said the company. On a per share basis, core earnings increased to $1.07 from $0.98 in the year-earlier quarter. Analysts polled by Thomson Reuters expected earnings of $0.92 for the quarter. Analysts' estimates typically exclude one-time items.

The increase in earnings reflects improved underwriting results in the specialty property and casualty insurance operations.

AFG's gross written premiums declined by 16% to $1.36 billion from $1.62 billion, while net written premiums went down by 35% to $620 million from $959 million in the year-ago period due to increased cessions under crop reinsurance agreements.

Company's investment income went up to $301 million from $283 million in the year-ago period and AFG's shareholders' equity grew by $1.2 billion since 2008.
Total income for the quarter was $1.09 billion, compared to $1.17 billion in the same period last year.

Segment-wise, P&C specialty insurance operations generated an underwriting profit of $108 million, up by $36 million from the year-ago period. The Property and Transportation group reported an underwriting profit of $46 million, up by $34 million from the year-ago quarter.

The Specialty Casualty group reported an underwriting profit of $30 million, lower by $17 million from the year-earlier quarter, while The Specialty Financial group reported underwriting income of $29 million for the quarter, compared to a loss of $2 million in the year-ago period. Run-off RVI operations recorded underwriting profit of $30 million due to favourable trends in used car sales, while Annuity and Supplemental Insurance Group generated earnings of $46 million; lower than the year-ago period.

To receive FREE breaking news email alerts for American Financial Group and others in your portfolio

 1   2   Next Page