This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

American Financial Group, Inc. Announces Preliminary Estimate Of Long Term Care Charge Driven By Continued Low Interest Rate Environment

American Financial Group, Inc. (NYSE/NASDAQ: AFG) today released preliminary results of its periodic review of its closed block of long-term care insurance, including the impact of the previously announced external actuarial study. Preliminary results indicate the Company will be required to record an after-tax charge of $80 to $100 million ($0.88 to $1.09 per diluted common share) to write off deferred acquisition costs and strengthen reserves on this block of business. This charge is primarily due to lower projected future investment rates resulting from the continued low interest rate environment and assumes no material change in the interest rate environment between now and when full year 2012 results are announced. This charge will be excluded from core net operating earnings. As a result, AFG reaffirmed its previously announced 2012 core net operating earnings guidance of $3.10 to $3.30 per share.

The charge also reflects changes in claims, expense and persistency assumptions, including the impact of data from the external study, which supplemented the Company’s internal analysis of claim experience relative to broader industry trends. After the charge, the Company expects that its long-term care subsidiaries will continue to remain adequately capitalized and will not require a capital contribution from AFG.

Full year core net operating earnings will include the results of the review (“unlocking”) of major actuarial assumptions, including investment rates, on the Company’s annuity business. Preliminary results indicate this review will result in an after-tax charge of less than $15 million ($0.16 per diluted common share), which is reflected in the earnings guidance above.

Final results of both the long-term care periodic review and the annuity DAC unlocking will be included in the announcement of full year 2012 results to be issued in January 2013.

About American Financial Group, Inc.

American Financial Group is an insurance holding company, based in Cincinnati, Ohio with assets in excess of $35 billion. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of fixed and fixed-indexed annuities in the education, bank and individual markets. Great American Insurance Group’s roots go back to 1872 with the founding of its flagship company, Great American Insurance Company.

Stock quotes in this article: AFG 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs