American Financial Group, Inc. (AFG) 2023 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the American Financial Group Third Quarter 2023 Results Conference Call.

各位好，感謝您耐心等候。歡迎參加美國金融集團（American Financial Group）2023 年第三季業績電話會議。

(Operator Instructions)

（接線員指示）

Please be advised, today's conference is being recorded. I would now like to hand the conference over to your speaker today, Diane Weidner, Vice President, Investor Relations. Please go ahead.

敬請注意，今天的會議將被錄音。現在我想把會議交給今天的講者——投資人關係副總裁 Diane Weidner。請開始。

Good morning, and welcome to American Financial Group's Third Quarter 2023 Earnings Results Conference Call. We released our 2023 third quarter results yesterday afternoon.

各位早安，歡迎參加美國金融集團 2023 年第三季盈餘結果電話會議。我們已於昨天下午發布 2023 年第三季業績。

Our press release, investor supplement and webcast presentation are posted on AFG's website under the Investor Relations section. These materials will be referenced during portions of today's call.

我們的新聞稿、投資人補充資料與網路直播簡報已發布於 AFG 官網的投資人關係專區。今天電話會議的部分內容將引用這些資料。

I'm joined this morning by Carl Lindner III and Craig Lindner, Co-CEOs of American Financial Group, and Brian Hertzman, AFG's CFO. Before I turn the discussion over to Carl, I would like to draw your attention to the notes on Slide 2 of our webcast. Some of the matters to be discussed today are forward-looking. These forward-looking statements involve certain risks and uncertainties that could cause our actual results and/or our financial condition to differ materially from these statements.

今天早上與我一同出席的有 American Financial Group 共同執行長 Carl Lindner III 與 Craig Lindner，以及 AFG 財務長 Brian Hertzman。在我把討論交給 Carl 之前，請各位留意我們網路直播第 2 張投影片的註記。今天將討論的部分事項屬於前瞻性陳述。這些前瞻性陳述涉及若干風險與不確定性，可能導致我們的實際結果及／或財務狀況與這些陳述存在重大差異。

A detailed description of these risks and uncertainties can be found in AFG's filings with the Securities and Exchange Commission, which are also available on our website. We may include references to core net operating earnings, a non-GAAP financial measure, in our remarks or responses to questions. A reconciliation of net earnings attributable to shareholders to core net operating earnings is included in our earnings release. If you are reading a transcript of this call, please note that it may not be authorized or reviewed for accuracy, and as a result, it may contain factual or transcription errors that could materially alter the intent or meaning of our statements.

關於這些風險與不確定性的詳細說明，請參閱 AFG 向美國證券交易委員會（SEC）提交的文件，亦可於我們網站取得。我們在發言或回答問題時，可能會提及核心淨營運盈餘（core net operating earnings），此為非 GAAP 財務衡量指標。股東應占淨利與核心淨營運盈餘之間的調節表已包含於我們的盈餘新聞稿中。若您正在閱讀本次電話會議逐字稿，請注意該逐字稿可能未經授權或審閱以確認正確性，因此可能包含事實或轉錄錯誤，並可能對我們陳述的意圖或含義造成重大影響。

Now I'm pleased to turn the call over to Carl Lindner III to discuss our results.

現在我很高興把電話會議交給 Carl Lindner III，請他說明我們的業績。

Good morning. I'll begin my remarks by sharing a few highlights from AFG's 2023 third quarter, after which Craig and I will walk through more details. We'll then open it up for Q&A, where Craig, Brian and I will respond to your questions.

各位早安。我將先分享 AFG 2023 年第三季的幾項重點，之後 Craig 和我會進一步說明更多細節。接著我們將開放問答，由 Craig、Brian 與我回答各位的問題。

I am pleased to report strong underwriting results during the quarter despite elevated catastrophe losses. Higher interest rates contributed to meaningfully higher year-over-year investment income, culminating in a very strong annualized third quarter core operating return on equity of 18.3%.

我很高興報告，本季在巨災損失仍處於高位的情況下，我們仍取得強勁的核保成果。利率上升帶動投資收益較去年同期顯著提高，使第三季核心營運股東權益報酬率（年化）達到非常強勁的 18.3%。

Our entrepreneurial, opportunistic culture and disciplined operating philosophy continue to serve us well in a favorable property and casualty market and a dynamic economic environment. These factors, coupled with a commitment to effective capital management, enable us to continue to create long-term value for our shareholders. Craig and I thank God, our talented management team, and our great employees for helping us to achieve these results.

我們具企業家精神、善於把握機會的文化，以及嚴謹的營運理念，持續在有利的產險市場與多變的經濟環境中發揮效益。這些因素，加上我們對有效資本管理的承諾，使我們得以持續為股東創造長期價值。Craig 和我感謝上帝、我們優秀的管理團隊，以及所有傑出的員工，協助我們達成這些成果。

I'll now turn the discussion over to Craig to walk us through AFG's third quarter results, investment performance, and to discuss our overall financial position at September 30.

接下來我把討論交給 Craig，請他帶領我們回顧 AFG 第三季業績、投資表現，並說明截至 9 月 30 日的整體財務狀況。

Thanks, Carl. Please turn to Slides 3 and 4 for a summary of earnings information for the quarter. AFG reported core net operating earnings of $2.45 per share in the 2023 third quarter. Higher year-over-year net investment income was partially offset by lower underwriting profit in our Specialty Property and Casualty insurance operations.

謝謝你，Carl。請翻到第 3 與第 4 張投影片，查看本季盈餘資訊摘要。AFG 在 2023 年第三季的核心淨營運盈餘為每股 2.45 美元。投資淨收益較去年同期增加，但部分被我們專業型產險（Specialty Property and Casualty）保險營運較低的核保利潤所抵銷。

Now I'd like to turn to an overview of AFG's investment performance, financial position and share a few comments about AFG's capital and liquidity.

接下來我想概述 AFG 的投資表現與財務狀況，並就 AFG 的資本與流動性分享幾點看法。

The details surrounding our $14.8 billion investment portfolio are presented on Slides 5 and 6. The higher interest rate environment contributed to significantly higher year-over-year investment income.

關於我們 148 億美元投資組合的細節，請參閱第 5 與第 6 張投影片。較高的利率環境促使投資收益較去年同期顯著提升。

Looking at results for the third quarter, Property and Casualty net investment income was 17% higher than the comparable 2022 period. Excluding the impact of alternative investments, net investment income in our P&C insurance operations for the three months ended September 30, 2023, increased 33% year-over-year.

就第三季結果而言，產險（P&C）投資淨收益較 2022 年同期增加 17%。若排除替代性投資的影響，截至 2023 年 9 月 30 日止三個月，我們 P&C 保險營運的投資淨收益年增 33%。

As you'll see on Slide 6, approximately 68% of our portfolio is invested in fixed maturities. In the current interest rate environment, we're able to invest in high-quality, medium-duration fixed maturity securities at yields of approximately 6.0%. Current reinvestment rates compare favorably to the 4.68% yield earned on fixed maturities in our P&C portfolio during the third quarter of 2023 and 3.63% earned for the full year in 2022.

如第 6 張投影片所示，我們的投資組合約 68% 配置於固定到期證券。在目前利率環境下，我們能以約 6.0% 的殖利率投資於高品質、中等存續期間的固定到期證券。目前再投資利率，相較於 2023 年第三季我們 P&C 投資組合固定到期證券所賺取的 4.68% 殖利率，以及 2022 年全年賺取的 3.63%，更具吸引力。

We have a long-standing commitment to quality, with 93% of this portfolio rated investment grade and 96% of the P&C portfolio rated NAIC 1 or 2, and have strategically managed duration to take advantage of market opportunities. We expect the yield earned on our P&C fixed maturity portfolio to increase by about 10 basis points in the fourth quarter of 2023 compared to the 4.68% earned in the third quarter of 2023.

我們長期致力於投資品質，其中 93% 的投資組合評等為投資等級，且 P&C 投資組合中 96% 的評等為 NAIC 1 或 2；同時我們也策略性管理存續期間，以把握市場機會。我們預期 2023 年第四季 P&C 固定到期投資組合的賺取殖利率，將較 2023 年第三季的 4.68% 提高約 10 個基點。

Our third quarter 2023 P&C net investment income includes an annualized return on alternative investments of 4.2% compared to a 7.1% return for the 2022 third quarter. Third quarter 2023 alternative investment returns were lower in both the multi-family and private equity components of this portfolio. The average annual return on AFG's alternative investments over the five years ended December 31, 2022, was approximately 14%. Our guidance for 2023 continues to reflect a return of approximately 9% on our $2.4 billion portfolio of alternative investments.

我們 2023 年第三季 P&C 投資淨收益包含替代性投資年化報酬率 4.2%，相較之下 2022 年第三季為 7.1%。2023 年第三季替代性投資報酬在本投資組合中的多戶住宅（multi-family）與私募股權（private equity）兩個部分皆較低。截至 2022 年 12 月 31 日止五年，AFG 替代性投資的平均年化報酬約為 14%。我們對 2023 年的指引仍反映：對 24 億美元替代性投資組合的報酬約為 9%。

Please turn to Slide 7, where you'll find a summary of AFG's financial position at September 30, 2023. Our excess capital was approximately $660 million at the end of the third quarter. This number included parent company cash and investments of approximately $364 million. During the quarter, we returned $138 million to our shareholders through the payment of a regular $0.63 per share quarterly dividend and $86 million in share repurchases.

請翻到第 7 張投影片，您將看到截至 2023 年 9 月 30 日 AFG 財務狀況摘要。第三季末我們的超額資本約為 6.60 億美元，其中包含母公司現金與投資約 3.64 億美元。本季我們透過支付每股 0.63 美元的例行季度股利，以及回購股票 8,600 萬美元，合計向股東返還 1.38 億美元。

As part of our earnings release, we declared a special cash dividend of $1.50 per share, payable on November 22, 2023, to shareholders of record on November 13, 2023. The aggregate amount of this special dividend will be approximately $126 million. This special dividend is in addition to the Company's regular quarterly cash dividend of $0.71 per share, which was recently increased 12.5% over the previously declared rate and paid on October 25, 2023. With this special dividend, the Company has declared $5.50 per share in special dividends in 2023.

作為我們盈餘新聞稿的一部分，我們宣告每股 1.50 美元的特別現金股利，將於 2023 年 11 月 22 日支付給 2023 年 11 月 13 日登記在冊的股東。此特別股利的總金額約為 1.26 億美元。此特別股利是額外加在公司例行的每股 0.71 美元季度現金股利之上；該例行股利近期已較先前宣告的水準提高 12.5%，並已於 2023 年 10 月 25 日支付。加計本次特別股利，公司於 2023 年已宣告每股 5.50 美元的特別股利。

Looking at a longer-term horizon, AFG has declared $43.50 per share in special dividends since the end of 2020, representing $3.7 billion returned to shareholders. Carl and I consider these special dividends an important component of total shareholder return. In addition, we paid nearly $600 million in regular dividends and repurchased approximately $500 million in common shares over this period. We expect our operations to continue to generate significant excess capital throughout the remainder of 2023, and into 2024, which provides ample opportunity for additional share repurchases or special dividends over the next year.

從較長期的角度來看，自 2020 年底以來，AFG 已宣告每股 43.50 美元的特別股利，代表向股東返還 37 億美元。Carl 和我認為，這些特別股利是股東總報酬的重要組成。此外，在此期間我們支付了近 6 億美元的例行股利，並回購約 5 億美元普通股。我們預期在 2023 年剩餘期間以及 2024 年，我們的營運將持續產生可觀的超額資本，為未來一年進一步回購股票或發放特別股利提供充足空間。

For the three months ended September 30, 2023, AFG's growth in book value per share plus dividends was 1.9%, and year to date, growth in book value per share plus dividends was 11.9%. Excluding unrealized losses related to fixed maturities, we achieved growth in adjusted book value per share plus dividends of 3.1% during the third quarter, and 11.3% year to date.

截至 2023 年 9 月 30 日止三個月，AFG 每股帳面價值加計股利的成長為 1.9%；年初至今，每股帳面價值加計股利的成長為 11.9%。若排除與固定到期證券相關的未實現損失，第三季我們達成調整後每股帳面價值加計股利成長 3.1%，年初至今成長 11.3%。

I'll now turn the call back over to Carl to discuss the results of our P&C operations and our expectations for the remainder of 2023.

接下來我把電話會議交回 Carl，請他說明我們 P&C 營運的結果，以及我們對 2023 年剩餘期間的展望。

Thanks, Craig. Please turn to Slides 8 and 9 of the webcast, which include an overview of our third quarter results. As you'll see on Slide 8, third quarter 2023 Property and Casualty operating earnings increased 3% year-over-year. Underwriting margins continue to be strong and are generating desired returns in nearly all of our Specialty Property and Casualty businesses. And we're growing our Specialty Property and Casualty businesses through increasing exposures, new opportunities, and a continued favorable pricing environment.

謝謝你，Craig。請翻到網路直播第 8 與第 9 張投影片，其中包含我們第三季業績概覽。如第 8 張投影片所示，2023 年第三季產險（Property and Casualty）營運盈餘較去年同期增加 3%。核保利差持續強勁，並在我們幾乎所有專業型產險業務中創造符合目標的報酬。此外，我們也透過提高承保曝險、把握新機會，以及持續有利的定價環境，推動專業型產險業務成長。

The Specialty Property and Casualty insurance operations generated an underwriting profit of $143 million, compared to $158 million in the third quarter of 2022, a 9% decrease. Higher year-over-year underwriting profit in our Property and Transportation and Specialty Financial Groups was more than offset by lower underwriting profit in our Specialty Casualty Group. The third quarter 2023 combined ratio was a strong 92.2%, 1.1 points higher than the 91.1% reported in the comparable prior year period.

專業財產與意外險保險業務的承保利潤為1.43億美元，較2022年第三季的1.58億美元下降9%。我們財產與運輸以及專業金融事業群的承保利潤年增，已被專業意外險事業群承保利潤下降所抵銷。2023年第三季綜合比率表現強勁，為92.2%，較可比的前一年同期所報告的91.1%高出1.1個百分點。

Results for the 2023 third quarter include 3.0 points in catastrophe losses, a half a point higher than last year's third quarter, and 2.3 points of favorable prior year reserve development, eight-tenths of a point lower than the comparable period.

2023年第三季的結果包含3.0個百分點的巨災損失，較去年第三季高出0.5個百分點，並包含2.3個百分點的有利前期年度準備金發展，較可比期間低0.8個百分點。

Gross written premiums were flat, and net written premiums were up 4% when compared to the third quarter of 2022. As we discussed last quarter, earlier plantings of corn and soybeans pushed some crop insurance premium into 2023's second quarter versus the third. Our 2023 crop premiums also reflect the impact of less favorable spring commodity futures pricing and related volatility in 2023 compared to 2022. Excluding the crop business, gross and net written premiums grew by a healthy 7% and 10%, respectively, when compared to the prior year period.

與2022年第三季相比，簽單保費總額持平，簽單保費淨額成長4%。如同我們上季所討論，玉米與黃豆較早播種使部分農作物保險保費由第三季移轉至2023年第二季。我們2023年的農作物保費亦反映出相較於2022年，2023年春季商品期貨定價較不利及相關波動對保費的影響。若排除農作物業務，與前一年同期相比，簽單保費總額與簽單保費淨額分別健康成長7%與10%。

Average renewal pricing across our Property & Casualty Group, excluding workers' comp, was up approximately 7% for the quarter, two points higher than the previous quarter. Including workers' comp, renewal rates were up approximately 5%, or one point higher than renewal increases reported in the prior quarter. This is our 29th consecutive quarter to report overall renewal rate increases and we're achieving renewal rate increases in excess of prospective loss ratio trends to meet or exceed targeted returns.

本季我們財產與意外險事業群（不含勞工補償）的平均續保定價約上升7%，較前一季高出2個百分點。若包含勞工補償，續保費率約上升5%，較前一季所報告的續保增幅高出1個百分點。這是我們連續第29季報告整體續保費率上升，且我們達成的續保費率增幅高於預期損失率趨勢，以達成或超越目標報酬。

Now I'd like to turn to Slide 9 to review a few highlights from each of our Specialty Property and Casualty business groups. Improved underwriting results in our Property and Transportation Group were the result of higher underwriting profit in our transportation, property and inland marine, and ocean marine businesses, which was partially offset by lower profitability in our agricultural business.

接下來請看第9頁投影片，我將回顧我們各專業財產與意外險業務事業群的幾項重點。財產與運輸事業群承保結果改善，主要來自運輸、財產與內陸海運，以及海運業務的承保利潤提高，但部分被農業業務獲利能力下降所抵銷。

Third quarter 2023 gross and net written premiums in this group were 8% and 6% lower, respectively, than the comparable prior year period because of the earlier plantings of corn and soybeans and the impact of spring commodity futures pricing and related volatility on premiums in our crop insurance business, as I discussed earlier. Excluding our crop business, gross and net written premiums grew by 2% and 4%, respectively, when compared to the 2022 third quarter.

如我先前所述，由於玉米與黃豆較早播種，以及春季商品期貨定價與相關波動對我們農作物保險業務保費的影響，該事業群2023年第三季簽單保費總額與簽單保費淨額分別較可比的前一年同期下降8%與6%。若排除農作物業務，與2022年第三季相比，簽單保費總額與簽單保費淨額分別成長2%與4%。

Most of the remaining businesses in this group reported growth in gross and net written premiums during the quarter as a result of higher rates, new business opportunities and organic growth. We continue to stay focused on rate adequacy, particularly in our property business. Just as important as rate, we're closely monitoring insured values to ensure that premiums appropriately reflect inflationary considerations.

本季該事業群其餘多數業務的簽單保費總額與簽單保費淨額均呈現成長，主要受惠於較高費率、新業務機會與內生成長。我們持續聚焦於費率充足性，特別是在財產險業務方面。同樣重要的是，除了費率之外，我們也密切監控承保標的價值，以確保保費能適當反映通膨因素。

Overall renewal rates in this group increased 6% on average in the third quarter of 2023, consistent with the pricing achieved in this group for the second quarter of 2023. I'm pleased we're continuing to achieve rate increases in niches like commercial auto liability, which are in the high single digits.

該事業群2023年第三季整體續保費率平均上升6%，與2023年第二季在該事業群所達成的定價一致。我很高興我們在商用汽車責任等利基領域仍持續達成高個位數的費率上調。

The month of October is the discovery period for the majority of our corn and all of our soybean business. Harvest pricing for corn and soybeans settled 17% and 7% lower than spring discovery prices, respectively. Crop maturity is ahead of last year and the harvest is underway with approximately 71% and 85% of corn and soybean crops harvested, respectively. Both are ahead of five-year averages. Yield variability will be important to our final results. Based on what we know about harvest pricing, coupled with the impact from hail damage throughout the Western Corn Belt over the past couple of months that impacted our private products, we're now expecting a below-average crop year.

10月是我們大多數玉米業務以及全部黃豆業務的發現期（discovery period）。玉米與黃豆的收穫期定價分別較春季發現價格下跌17%與7%。作物成熟度較去年提前，收割已展開，玉米與黃豆的收割進度分別約為71%與85%，兩者皆高於五年平均。產量的變異性將對我們最終結果至關重要。根據我們對收穫期定價的掌握，再加上過去幾個月西部玉米帶的冰雹損害對我們私人產品造成的影響，我們目前預期今年將是低於平均的作物年度。

The Specialty Casualty Group reported lower year-over-year underwriting profit, reflecting lower levels of favorable prior year reserve development in our workers' comp businesses, higher catastrophe losses and lower underwriting profit in our targeted markets business, which was impacted by a large property loss in our programs business.

專業意外險事業群的承保利潤年減，反映出我們勞工補償業務有利前期年度準備金發展的水準較低、巨災損失較高，以及目標市場業務承保利潤下降；其中目標市場業務受到我們方案（programs）業務中一筆大型財產損失的影響。

The businesses in the Specialty Casualty Group achieved a strong 89.4% calendar year combined ratio overall in the third quarter, 6.8 points higher than the exceptionally strong results achieved in the comparable prior year period. Underwriting margins at this level produced returns in the mid-twenties for this group, and we continue to be very pleased with these results.

專業意外險事業群旗下業務在第三季整體達成強勁的89.4%曆年綜合比率，較可比前一年同期所取得的極為強勁結果高出6.8個百分點。此一水準的承保利差為該事業群帶來約20%中段的報酬，我們對這些結果仍感到非常滿意。

Third quarter 2023 gross and net written premiums increased 4% and 7%, respectively, when compared to the same prior year period. Factors contributing to the year-over-year growth included payroll growth in our workers' comp businesses, along with new business opportunities, strong policy retention and rate increases in several of our targeted market businesses, as well as new opportunities and higher policy renewals in our excess and surplus lines business. This growth was partially offset by lower year-over-year premiums in our mergers and acquisitions liability and executive liability businesses.

與前一年同期相比，2023年第三季簽單保費總額與簽單保費淨額分別成長4%與7%。推動年增的因素包括：我們勞工補償業務的薪資基數成長，以及多項目標市場業務的新業務機會、強勁的保單留存與費率上調；同時，我們超額與剩餘線（excess and surplus lines）業務亦有新機會與較高的保單續保。上述成長部分被併購責任與高階主管責任業務保費年減所抵銷。

Renewal pricing for this group, excluding our workers' comp businesses, was up approximately 8% in the third quarter. Rates were up 5% including workers' comp. Both measures reflect a two-point improvement over the renewal pricing in the previous quarter. I'm especially pleased with continued strong rate increases achieved in our public entity, excess liability and social services businesses.

該事業群第三季續保定價（不含勞工補償業務）約上升8%。若包含勞工補償，費率上升5%。兩項指標皆較前一季的續保定價改善2個百分點。我尤其高興我們在公部門、超額責任與社會服務業務持續取得強勁的費率上調。

Now the Specialty Financial Group reported higher year-over-year underwriting profit in the third quarter, primarily the result of lower catastrophe losses within our financial institutions business. This group reported a strong combined ratio of 87.6% for the third quarter of 2023, an improvement of 3.7 points over the prior year period.

接著，專業金融事業群在第三季的承保利潤年增，主要是因金融機構業務的巨災損失較低所致。該事業群2023年第三季綜合比率表現強勁，為87.6%，較前一年同期改善3.7個百分點。

Third quarter 2023 gross and net written premiums were up 39% and 48%, respectively, when compared to the prior year period. While nearly all businesses in this group reported year-over-year growth, our financial institutions business was the primary driver of the higher premiums, which resulted from growth in the mortgage protection and residential investor businesses. The growth in this business is an example of where we're acting on opportunities presented by the tightening property market and improving policy terms. Overall renewal rates in this group were up about 5% for the third quarter.

與前一年同期相比，2023年第三季簽單保費總額與簽單保費淨額分別成長39%與48%。雖然該事業群幾乎所有業務皆呈現年增，但金融機構業務是保費上升的主要驅動力，成長來自房貸保障與住宅投資人業務的擴張。此一成長案例顯示，我們正把握財產險市場趨緊與保單條款改善所帶來的機會。該事業群第三季整體續保費率約上升5%。

Turning to our A&E reserves, during the third quarter of 2023, we completed our annual ground-up review of our asbestos and environmental exposures related to the run-off operations within the Property and Casualty Group. No new trends were identified, and claims activity was generally consistent with our expectations. As a result, there was no net change to the Property and Casualty Group's A&E reserves. We continue to enjoy robust survival ratios, which are well above the industry averages, and which are one measure of the strength of our A&E reserves.

接著談到我們的A&E準備金，於2023年第三季，我們完成了對財產與意外險事業群中停辦（run-off）業務之石綿與環境曝險的年度自下而上全面檢視。未發現新的趨勢，理賠活動整體與我們的預期大致一致。因此，財產與意外險事業群的A&E準備金淨額沒有變動。我們持續維持強健的存續比率（survival ratios），顯著高於業界平均，這也是衡量我們A&E準備金強度的其中一項指標。

We also assessed the adequacy of our asbestos and environmental reserves for our historic railroad and manufacturing operations. As a result of this study, AFG recorded a special non-core A&E charge to increase its liabilities for environmental exposures by $15 million or $12 million after-tax due to the change -- primarily to the changes in the scope and costs of investigation and an increase in estimated remediation costs at a number of sites.

我們也評估了歷史鐵路與製造業營運相關之石綿與環境準備金的充足性。根據此研究，AFG認列一筆特殊的非核心A&E費用，以將其環境曝險負債增加1,500萬美元（稅後1,200萬美元），主要係因調查範圍與成本的變動，以及多個場址的估計整治成本上升所致。

Now please turn to Slide 10, where you'll see a full-page summary of our 2023 outlook. Overall, we continue to expect an ongoing favorable Property and Casualty market, with growth arising from new business opportunities, continued rate increases and increasing exposures.

現在請翻到第10頁投影片，您將看到我們2023年展望的整頁摘要。整體而言，我們仍預期財產與意外險市場將持續有利，成長將來自新業務機會、持續的費率上調以及曝險增加。

Based on the results reported in the first nine months of the year and expectations for the remainder of the year, we continue to estimate AFG's 2023 core net operating earnings to be in the range of $10.15 to $11.15 per share. Our guidance reflects our updated expectations of a below-average crop year, offset by higher than previously expected net investment income. At the midpoint, our guidance suggests a strong full year 2023 core return on equity of about 20%.

根據今年前九個月所報告的結果以及對今年剩餘期間的預期，我們仍估計AFG 2023年核心淨營運盈餘將落在每股10.15至11.15美元的區間。我們的指引反映了我們對低於平均作物年度的最新預期，但由高於先前預期的淨投資收益所抵銷。以區間中點計算，我們的指引顯示2023年全年核心股東權益報酬率約為20%，表現強勁。

As Craig noted, we continue to assume a return on alternative investments for the full year of 2023 of approximately 9%, compared to 13.2% earned on these investments in 2022.

如 Craig 所指出，我們仍假設 2023 全年替代性投資的報酬率約為 9%，相較於 2022 年這些投資所取得的 13.2%。

We now expect a 2023 combined ratio for the Specialty Property and Casualty Group overall between 90% and 92%, revised upward one point at the midpoint from our previous guidance due to our updated expectation of a lower-than-average crop year. Our guidance for growth in the Specialty Property & Casualty's net written premiums is now estimated to be slightly higher and in the range of 6% to 8%. Excluding crop, we now expect 2023 year-over-year growth in the range of 7% to 10%.

我們目前預期 2023 年專業財產與意外險事業群整體的綜合比率將介於 90% 至 92% 之間；由於我們更新後預期作物年度將低於平均水準，因此相較先前指引，中位數上修 1 個百分點。我們對專業財產與意外險的淨簽單保費成長指引，現估略為提高至 6% 至 8% 的區間。若排除作物，我們目前預期 2023 年年增率將介於 7% 至 10%。

Now looking at each sub-segment. Based on our results through the third quarter and expectation of a below-average crop year, we now expect a combined ratio in the range of 92% to 95% in our Property and Transportation Group. We continue to expect net written premiums for this group to be in a range of flat to up 2%. As noted last quarter, growth for the year will be tempered by the non-renewal of about $50 million in premiums related to underperforming transportation accounts and growth in our alternative risk transfer business, which has higher premium cessions, along with the lower crop premiums due to the impact of lower spring commodity prices and related volatility on crop rates.

接著看各個子分部。根據我們截至第三季的結果，以及對作物年度低於平均的預期，我們目前預期財產與運輸事業群的綜合比率將介於 92% 至 95%。我們仍預期該事業群的淨簽單保費將介於持平至成長 2%。如上季所述，全年成長將受到約 5,000 萬美元與表現不佳的運輸帳戶相關保費不續保的影響，以及我們替代性風險移轉業務的成長（該業務的保費分出比例較高），再加上因春季商品價格較低及相關波動對作物費率的影響而導致作物保費下降。

We continue to expect our Specialty Casualty Group to produce a combined ratio in the range of 85% to 88%. Our guidance continues to assume strong profitability in our workers' comp businesses overall, but at a higher calendar year combined ratio when compared to the exceptional results reported in the prior year. We continue to expect net written premiums to be 5% to 9% higher than 2022 results.

我們仍預期專業意外險事業群的綜合比率將介於 85% 至 88%。我們的指引仍假設整體勞工補償（workers' comp）業務具備強勁獲利能力，但以曆年綜合比率來看，將高於前一年所報告的卓越結果。我們仍預期淨簽單保費將較 2022 年結果高出 5% 至 9%。

And we now estimate the Specialty Financial Group's combined ratio to be in the range of 88% to 91%, an improvement from the previous range of 89% to 93%. We've increased our guidance for growth in net written premiums for this group to be in the range of 28% to 32%, up five points from our previous guidance, primarily as a result of market opportunities in our financial institutions business.

我們目前估計專業金融事業群的綜合比率將介於 88% 至 91%，較先前 89% 至 93% 的區間有所改善。我們也將該事業群淨簽單保費成長指引上調至 28% 至 32%，較先前指引提高 5 個百分點，主要是因為我們金融機構業務的市場機會。

Based on the results through the first nine months of the year, we continue to expect renewal rates to increase between 3% and 5% overall. Excluding workers' comp, we now expect renewal rate increases to be in the range of 5% to 7%.

根據今年前九個月的結果，我們仍預期整體續保費率將上升 3% 至 5%。若排除勞工補償，我們目前預期續保費率上升幅度將介於 5% 至 7%。

Craig and I are proud of our proven track record of long-term value creation. We believe that our strong balance sheet and financial flexibility position us very well as we close out 2023 and look forward to 2024. We'll now open the lines for the Q&A portion of today's call. And Craig and Brian and I will be happy to respond to your questions.

Craig 和我為我們在長期價值創造方面經過驗證的紀錄感到自豪。我們相信，強健的資產負債表與財務彈性，使我們在結束 2023 年並展望 2024 年時具備非常良好的定位。接下來我們將開放線路進入今天電話會議的問答環節。Craig、Brian 和我都很樂意回覆各位的問題。

(Operator Instructions)

（接線員指示）

Our first question comes from the line of Meyer Shields with KBW.

我們的第一個問題來自 KBW 的 Meyer Shields。

Hi, good morning. It's Jing on for Meyer. Thank you for taking my questions. My first question will be on -- just curious on the A&E reserve charge. Is that onetime only for this quarter?

嗨，早安。我是 Jing，代 Meyer 提問。謝謝讓我提問。我的第一個問題是關於——我想了解 A&E 準備金提列的費用。這是否僅為本季的一次性項目？

This is Brian. On A&E, we monitor our A&E exposures, both in our Property and Casualty operations and in our run-off railroad and manufacturing operations every quarter. And then on an annual basis, we do an in-depth review of those reserves. So this charge in this quarter is related to that annual deep review of the exposures in the run-off railroad manufacturing operations. So it is the first charge of that size we've had in a number of years, but we do monitor it all the time. So there's always the possibility of expense there, but this is coming out of that annual once-a-year deep review.

我是 Brian。關於 A&E，我們每一季都會監控 A&E 風險曝險，涵蓋我們的財產與意外險營運，以及我們已停止承保（run-off）的鐵路與製造業營運。並且每年我們都會對這些準備金進行一次深入檢視。因此，本季的這筆費用與對已停止承保的鐵路與製造業營運曝險所做的年度深度檢視有關。這是我們多年來首次出現如此規模的提列，但我們一直都在持續監控。所以未來仍然可能發生相關費用，但這次是源自每年一次的深度檢視。

^ Got you. So for next year, would it be like similar charges? Just curious.

＾了解。所以明年也會有類似的提列嗎？只是想確認一下。

We wouldn't -- I mean, we don't know of anything right now that's not recorded. But those can change over time. And we have had charges in other years. The reason we do the annual review is to sort of catch anything that might be out there, but it's impossible to predict what might happen in future periods.

我們不會——我的意思是，我們目前不知道有任何尚未入帳的事項。但這些情況可能會隨時間改變。我們在其他年度也曾有過提列。我們之所以做年度檢視，就是為了捕捉可能存在的任何問題，但未來期間可能發生什麼，確實很難預測。

Gotcha, thank you. My second question is on the renewal pricing still trending up. Can you break down the way on rates and exposures?

了解，謝謝。我的第二個問題是關於續保定價仍在上升。你們能否拆解一下費率與曝險的影響？

This is Brian again. So when we talk about renewal pricing, we're giving you just the pricing increase, not the exposure increase. So the exposure increases would help to increase premium growth beyond what we're giving you just for rate. So what we're giving for rate is just the price component.

我還是 Brian。當我們談續保定價時，我們提供的是純粹的價格上調幅度，而不是曝險增加。曝險增加會使保費成長高於我們僅就費率所提供的數字。因此，我們提供的費率數字只包含價格因素。

Oh, sorry about that. Okay. Thank you.

喔，不好意思。了解。謝謝。

Our next question comes from the line of Michael Zaremski with BMO.

下一個問題來自 BMO 的 Michael Zaremski。

Hey, good afternoon. Just curious, I heard the commentary on workers' comp profitability won't be the -- likely won't be as profitable, but still very profitable as last year. Is that something new? Or is that just -- is that what you've been -- what you reminded us last quarter when I think you made some revisions? And maybe just on work comp is -- is pricing -- has anything changed pricing-wise since last quarter? Obviously, higher interest rates are a great tailwind to you all in that line. And some of your peers, too, a long-winded question, have said that they're not really seeing any change in medical trend, but keeping a close eye on it.

嗨，午安。我想確認一下，我聽到你們提到勞工補償的獲利不會——可能不會像去年那麼高，但仍會非常獲利。這是新的說法嗎？還是——這就是你們一直以來的看法——你們上季在我記得你們做了一些修正時也提醒過我們？另外就勞工補償而言——自上季以來，定價方面有任何變化嗎？顯然利率上升對你們在這條線別是很大的順風，你們的一些同業也是。再補充一個較長的問題：有些同業表示他們在醫療趨勢上沒有看到太大變化，但仍密切關注。

Yes. I think my commentary is pretty consistent throughout the year in that as of the last quarter. This quarter is just a reminder that we have excellent workers' comp results. They're just not going to be at the same levels as 2022 in that lower prior year favorable development is the significant factor there.

是的。我認為我的說法在今年以來、包括上季，都相當一致。本季只是再次提醒：我們的勞工補償結果非常出色，只是不會達到 2022 年的同等水準，主要因素是前期年度有利發展（prior year favorable development）較少。

On the loss ratio trend side, yes, I think we're seeing the same as others. There's not big changes there in that overall. They seem to be a reasonable perspective loss ratio trend. I mean, we still think that our overall prospective loss ratio trend is probably down with the exposure change of about 4% down, maybe 2% or so. So those seem to be reasonable.

在損失率趨勢方面，是的，我認為我們看到的情況與其他公司相同，整體而言沒有太大的變化。看起來損失率趨勢的觀點是合理的。我的意思是，我們仍認為整體的預期損失率趨勢可能是下降的，隨著曝險變動約下降 4%，大概再下降 2% 左右。因此這些看起來都算合理。

Our California business is the -- Republic is the only business that's performing at an underwriting loss today in that. The other businesses, Summit, Strategic Comp, National Interstate's workers' comp business, all have excellent results in that. We feel good about our reserve position, and workers' comp remains a very competitive market with the results in the industry.

我們在加州的業務——Republic——是目前唯一呈現承保虧損的業務。其他業務，包括 Summit、Strategic Comp、以及 National Interstate 的勞工補償業務，結果都非常優異。我們對準備金部位感到放心，而在產業結果的背景下，勞工補償仍是一個競爭非常激烈的市場。

Pricing, not -- pricing is down about 4% year-to-date when you look at our overall workers' comp business. Not sure that's much different than any of the previous couple of quarters. I hope that's helpful.

定價方面，若看我們整體勞工補償業務，今年迄今定價約下降 4%。不確定這是否與前幾季有太大不同。希望這有幫助。

Yes. That's helpful. And maybe switching gears a little bit to casualty ex-workers' comp. I know -- I think it was last quarter, you talked about, right, and not just you, all others as well have been talking about a bit of a higher trend line in certain lawsuit inflationary lines like public entity, commercial auto. I know you changed your expectations there a bit. But I'm kind of just curious as -- I know it's only been one quarter, but has anything changed? I mean, we can see pricing seems to be actually moving in the right direction. I don't know if you want to call out if you guys been trying to add to your reserves or anything?

是的，很有幫助。再稍微換個方向談一下非勞工補償的意外險。我知道——我想是上季，你們提到，對，不只你們，其他公司也都在談某些訴訟通膨較高的線別，例如公共機構（public entity）、商用車險（commercial auto），趨勢線有點上升。我知道你們也稍微調整了那邊的預期。但我想了解的是——我知道才過一季——有任何變化嗎？我的意思是，我們看到定價似乎確實朝正確方向走。我不確定你們是否想特別說明你們是否嘗試增加準備金之類的？

Yes. I think the positive, say, it's a heavy public entity renewal period. And I think the good news is it reflects what I -- I think what I talked about on the last call about the changes that we've been putting into place on that particular business in that. And seeing the strong price increases was particularly strong, double-digit in the period in that. But that's as well as decreasing limits, raising retentions and being really appropriate and being involved in heavily on -- with mock trials and monitoring counsel and being heavily involved in active claims. So we're doing quite a few things. But yes, the third quarter is very pleased, in particular with the strong public entity price increase there and -- which drove the overall segment up.

是的。我想正面的部分是——可以說——第三季是公共機構業務的續保高峰期。我認為好消息是，這反映了我——我想我在上次電話會議提到的，我們在該特定業務上所推動的各項調整。我們在該期間看到強勁的費率上調，特別明顯，達到雙位數的增幅。但同時也包括降低承保限額、提高自留額（retentions），並確保做法適切；此外，我們也更深度參與——透過模擬審判（mock trials）、監控律師（counsel），並積極介入理賠案件管理。我們做了相當多的事情。不過是的，第三季我們非常滿意，尤其是公共機構業務強勁的費率上調——這也帶動了整體分部的上升。

Okay. And just lastly, with the inclusion of the crop acquisition, I know you've given guidance on it, too, but just curious now that you've maybe learned a little bit more, is -- when we think of not this year, but next year and outer years, is a normal crop year -- has that changed due to the acquisition or just maybe other variables?

好的。最後再問一下，關於納入作物收購案，我知道你們也已提供相關指引，但我只是好奇，現在你們可能又多了解了一些——當我們思考不是今年，而是明年以及更往後的年度時，一個正常的作物年度——這是否因為收購案或其他變數而有所改變？

Well, yes, I mean, the dollar amount will change just because there's going to be a lot more business. But -- yes, the profit margins, I don't -- I think our criteria will probably be pretty much the same.

嗯，是的，我的意思是，金額會改變，因為業務量會大很多。但是——是的，利潤率方面，我不——我認為我們的標準大概仍會差不多。

Thank you.

謝謝。

Thank you. Our next question comes from the line of Andrew Andersen with Jefferies.

謝謝。下一個問題來自 Jefferies 的 Andrew Andersen。

Hey, good afternoon. Just looking at reserves in the quarter and reserve development, can you kind of help us think about how social inflation impacted movements this quarter? Has your view of social inflation changed?

嗨，下午好。就本季的準備金與準備金發展來看，你們能否協助我們理解社會通膨如何影響本季的變動？你們對社會通膨的看法有改變嗎？

This is Brian. So we're still being very mindful of social inflation and think that it is something that the industry as a whole is going to be monitoring for a long time. So when you look at our Casualty segment, the lower levels of overall favorable development reflect two things.

我是 Brian。我們仍然非常留意社會通膨，並認為這是整個產業在很長一段時間內都會持續監控的事項。所以當你看我們的意外險（Casualty）部門時，整體有利發展較低反映了兩件事。

One is the lower levels of favorable development coming out of workers' comp that we talked about earlier. And then also, we're not seeing favorable development in the social inflation exposed businesses that we might have seen in previous periods.

第一是我們先前提到的，來自勞工補償險（workers' comp）的有利發展水準較低。第二是，我們在先前期間可能看得到的、暴露於社會通膨的業務上之有利發展，現在沒有看到。

So I would say, there's an absence of favorable development. There are ins and outs, where some units have had some unfavorable development. But overall, I would say, social inflation is reducing our favorable development as much as it would be increasing any adverse development.

所以我會說，這是一種有利發展的缺乏。當然有進有出，有些單位出現了一些不利發展。但整體而言，我會說社會通膨降低我們的有利發展，其程度不亞於它可能增加任何不利發展的程度。

Okay. And on the workers' comp business, can you kind of help us -- you mentioned the loss ratio trend and some of the pricing in the calendar year view, but how should we think about where you're booking workers' comp accident year picks compared to last year?

了解。那在勞工補償險業務方面，你能否協助我們——你提到損失率趨勢以及以曆年觀點看的部分定價，但我們應該如何看待你們今年所提列的勞工補償險事故年度（accident year）假設，相較於去年？

Sure. So a couple of things are going on there. One is, as Carl mentioned, there are rate decreases happening in workers' comp. So that puts some pressure on the accident year. And then even though we haven't been experiencing medical cost inflation, we're mindful of that and being careful to consider that, as we set current year accident pick. So the accident year loss ratio in workers' comp would be a little bit higher for those two things, but still producing those ROEs when you look at the business overall that Carl mentioned earlier.

當然。那裡有幾件事同時在發生。第一，如 Carl 所提到，勞工補償險正在降費率，所以這會對事故年度造成一些壓力。第二，即使我們尚未經歷醫療成本通膨，我們仍對此保持警覺，並在設定當年度事故年度假設時謹慎納入考量。因此，勞工補償險的事故年度損失率會因這兩點而略高一些，但整體業務在你看 ROE 時，仍能產生 Carl 先前提到的那些報酬。

Okay. Thank you.

好的，謝謝。

Thank you. Our next question comes from the line of Gregory Peters with Raymond James.

謝謝。下一個問題來自 Raymond James 的 Gregory Peters。

Well good afternoon, everyone. I thought I'd start with my first question, going back to Craig's presentation on the investment portfolio and the performance. And I think, Craig, you mentioned that the fixed income yields are now up to around 6.0%, which is a nice lift from where it was a year ago. Can you maybe step back and give us some perspective on how -- because of the higher yield environment, you might be altering allocations where you have new money going into whether it's industry group or sector type? And also as investments come up and mature, how you're allocating those inside the portfolio?

各位下午好。我想先從第一個問題開始，回到 Craig 對投資組合與績效的簡報。我想 Craig 你提到固定收益殖利率現在大約到 6.0%，相較一年前有不錯的提升。你能否退一步，給我們一些觀點：在較高殖利率環境下，你們是否會調整新資金投入的配置——不論是產業群組或類別/部門？另外，當投資到期時，你們在投資組合內部會如何再配置？

Sure, Greg. I wouldn't say that we are significantly altering our allocations. I'd say, certainly, fixed income is more attractive than it's been in a long time. So probably a bit heavier weighting to medium-term fixed maturity investments versus certain other asset classes. But I wouldn't expect us to change the allocations at a very significant way. We do think on the real estate side as an example, there are going to be some really interesting opportunities over the next couple of years. And time will tell whether we're right on how things are going to evolve there. But we do think that there's going to be an opportunity to get some extraordinary returns in the real estate market. I don't think you should expect to see a significant change, though, in the allocation in the investment portfolio.

當然，Greg。我不會說我們正在大幅調整配置。我會說，固定收益確實比很長一段時間以來都更具吸引力。所以相較某些其他資產類別，可能會稍微提高中期固定到期（fixed maturity）投資的比重。但我不預期我們會以非常顯著的方式改變配置。舉例來說，在不動產方面，我們認為未來幾年會有一些非常有趣的機會。時間會證明我們對那裡的演變是否判斷正確。但我們確實認為，不動產市場將有機會取得一些非凡的報酬。不過，我不認為你應該預期投資組合的配置會出現顯著變化。

Okay. Fair enough. It makes sense. And then I guess, pivot back to Carl. And let's focus on the Property business -- Property and Transportation business ex-crop. I think you called out in your comments, an underperforming book of transportation business, maybe it was $50 million that you're re-underwriting. Can you give us some perspective within your Property and Transportation business of how the competitive landscape is? Do you feel like there's more pressure from competition at this juncture? Or do you feel like it's status quo? Any updated perspective would be helpful.

好的，合理。這很有道理。接著我想轉回 Carl，聚焦在財產險——以及運輸險（不含作物）業務。我想你在評論中提到，有一個表現不佳的運輸險業務組合，可能是 5,000 萬美元，你們正在重新核保。你能否就你們的財產與運輸險業務談談競爭態勢？你覺得目前競爭壓力更大嗎？還是覺得大致維持現狀？任何更新的觀點都會有幫助。

Are you asking me to focus on commercial auto in particular? Is that...

你是要我特別聚焦在商用車險（commercial auto）嗎？是那個……

Well, yes, commercial auto would be one topic. But inside Property and Transportation, there are other businesses on top of just commercial auto outside of crop. So just the -- I'm just focused on ex-crop business inside Property and Transportation.

嗯，是的，商用車險會是一個主題。但在財產與運輸險裡，除了不含作物的商用車險之外，還有其他業務。所以我只是聚焦在財產與運輸險中不含作物的業務。

Yes. I mean, there's a number of different businesses. Our transportation business is a significant part. I think it's a mixed picture within the transportation business. There are some parts of the business that seem to be more competitive, others that seem to be tightening. And with competitors -- some competitors like Nationwide and others leaving part of the space in that.

是的。我的意思是，裡面有許多不同的業務。我們的運輸險業務占比很大。我認為運輸險業務內部呈現混合的情況。有些部分看起來競爭更激烈，其他部分則似乎在收緊。而且在競爭者方面——有些競爭者像 Nationwide 等正在退出其中一部分市場。

Our business continues to perform well and has for years. That said, on the commercial auto liability part, it's not where we want it to be. It's probably 101-ish or so through nine months. And for that reason, we're continuing to take strong commercial auto liability rate increases of about 10% year-to-date versus a prospective loss ratio trend of about 7% or so in that.

我們的業務持續表現良好，而且多年來一直如此。話雖如此，在商用車責任險（commercial auto liability）這一塊，表現還不是我們想要的水準。到九個月為止大概是 101 左右。因此，我們持續對商用車責任險採取強勁的費率調升，今年迄今約 10%，相較之下，預期損失率趨勢大約是 7% 左右。

We have -- and when you put our businesses together in that space, mid-single-digit net written premium growth through nine months in that. So that's kind of that part of the business -- parts of the business like our nonstandard aviation or property and inland marine or ocean marine, there seems to continue to be opportunities in those areas for growth. And we continue to have good results in those businesses in that. So I think that speaks to some of the larger businesses within the Property and Transportation, excluding crop.

我們——當你把我們在該領域的各項業務合在一起看，到九個月為止，淨簽單保費（net written premium）成長是中個位數百分比。這就是那部分業務的大致情況——像我們的非標準航空險（nonstandard aviation）或財產與內陸海運險（inland marine）或海運險（ocean marine）等業務，這些領域似乎仍持續有成長機會。而且我們在這些業務上也持續有良好結果。所以我想這反映了財產與運輸險（不含作物）中一些較大的業務。

Great. Well, thanks for the detail.

很好，謝謝你提供這些細節。

Sure.

當然。

(Operator Instructions)

（接線員指示）

Our next question comes from the line of Paul Newsome of Piper Sandler. Paul Newsome, your line is now open. Please check your mute button.

下一個問題來自 Piper Sandler 的 Paul Newsome。Paul Newsome，您的線路已開通。請檢查您的靜音按鈕。

And I'm currently showing no other questions at this time. I'd like to turn the call back over to Diane Weidner for closing remarks.

目前我這邊顯示沒有其他問題。接下來我想把電話交回給 Diane Weidner 做結語。

Thank you, and thank you all for joining us today as we've walked through our third quarter 2023 results. If you have any other questions, feel free to reach out to our IR department, and we look forward to talking with you next quarter. This concludes our call for today. Thank you.

謝謝，也謝謝各位今天加入我們，一起回顧我們 2023 年第三季的業績。如果你們還有其他問題，歡迎聯繫我們的投資人關係（IR）部門，我們期待在下個季度再與各位交流。今天的電話會議到此結束。謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以掛線。