American Financial Group Inc.AFG

Morningstar Rating

Stock Research and Analysis

by Drew Woodbury

After years of subpar returns, profitability has been on the mend at American Financial Group, especially within its core property-casualty segment. AFG has improved its risk selection but is still subject to the cyclicality of the insurance market. Read more

Bulls Say

Improving profitability may be a sign that underwriters at AFG have begun to select and price better risks.

Annuity products and supplemental insurance provide a revenue stream not subject to the cyclicality of the property-casualty insurance industry.

By focusing on fixed and indexed annuities, AFG has avoided the burden of the minimum return guarantees offered by many of its competitors. Read more

Bears Say

AFG hasn't been able to consistently generate an underwriting profit. In the absence of an insurance profit the company must rely exclusively on investment income and realized net gains.

AFG is essentially a family run organization; management may not always act in the interest of common shareholders.

AFG holds risky mortgage-backed securities in its investment portfolio. Future losses or write-downs may be possible. Read more

Strategy

AFG focuses its property-casualty insurance underwriting on specialty niche markets. These markets are often too small or risky for larger carriers to touch and therefore are less competitive. The firm Read more

Management

AFG is firmly led by the Lindner family, who was responsible for founding the company. Brothers Carl Lindner III and Craig Lindner serve as co-CEOs, while their father, Carl Lindner, serves as chairman. While we believe that these three members of the Read more

Profile

Organized as a holding company since 1995, AFG operates a large portfolio of insurance businesses focusing on specialty property and casualty insurance. It also owns smaller Read more

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