American Financial Group

The sector was hit by a rough first half of 2022, with more to come in the second half of the year.

Insurers could face pressure if interest rate and recession fears intersect with worsening loss cost trends.

The firm anticipates renewal rates to rise between 5% and 7% in its specialty P&C operations overall and 6%-8% excluding workers’ comp.

Specialty P&C NWP in Q1 rose up 13.5% year-over-year to almost $1.4bn, accelerating from a 4.4% increase in Q4.

The insurer said it still had financial flexibility to grow even after making the dividend of roughly $170mn.

Co-CEO Carl Lindner said his company has made “some adjustments” in staff compensation in response to higher inflation rates.

The P&C segment’s fourth quarter combined ratio dropped 10.8 points to 80.8%, compared to 91.6% last year.

The transaction comes after AFG paid almost $2.1bn in special dividends to shareholders in 2021, following its $3.5bn all-cash divestiture of its annuity business last year, and said it would pursue acquisitions.

The Inside P&C research team looks forward to the big issues of the new year.

Assurely will act as an MGA for Great American as the carrier expands its executive liability operations in the small business segment.

The insurer is currently seeing ‘a steady flow’ of M&A opportunities in the market but would strike a deal only for double-digit returns over time.

Catastrophe losses at the insurer fell to $31mn from $57mn last year.