Big Banks Still a Force in Insurance Industry
3. American Financial Group
Shares of American Financial Group of Cincinnati, Ohio closed at $30.31 Wednesday, up 23% year-to-date.
The company reported second-quarter net income of $100 million or 97 cents a share, increasing from $88 million or 93 cents the previous quarter but down from $132.1 million or $1.09 a share during the second quarter of 2009. The company's weather-related insurance losses increased year-over-year, while investment income declined.
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According to SNL and based on combined statutory filings for American Financial Group's subsidiaries, the first-quarter ROE before policyholder dividends and income taxes was 41.29% and the ROA was 11.57%.
Based on the first-quarter statutory filings, American Financial Group's combined insurance subsidiaries saw an annualized 17.93% increase in cash and invested assets during the first quarter, and combined capital and surplus increased at a rate of 12.68%.
Shares were trading for 0.8 times tangible book value according to SNL and just 8.1 times the consensus earnings estimate for 2011.
Only three analysts cover the shares, and two recommend buying, while the other has a sell rating.
