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American Financial Group Q4 net income falls

American Financial Group (AFG) reported net earnings attributable to shareholders of $133m, or $1.23 per share for the fourth quarter of 2010, compared to $161m, or $1.38 per share for the same quarter of 2009.

Gross written premiums for the fourth quarter 2010 were $761m, compared to $725m for the same corresponding year of 2009.

Net earnings attributable to shareholders for the year 2010 were $479m, or $4.33 per share, compared to $519m or $4.45 per share in the comparable 2009 period.

The results reflect after-tax net realized gains of $22m and $46m in the 2010 fourth quarter and full year, respectively, compared to after-tax net realized gains of $40m and $26m in the comparable 2009 periods.

The core net operating earnings were $111m for the fourth quarter of 2010, compared to $121m in the fourth quarter of 2009.

The company said improved results in the annuity and supplemental insurance group were more than offset by lower underwriting profit and lower investment income in the specialty property and casualty insurance operations.

Core net operating earnings were $433m for the year 2010, down from the $493m reported in the last year.

The property and casualty specialty insurance operations generated strong underwriting profit for the fourth quarter of 2010 and full year of $94m and $308m, respectively.

American Financial Group co-CEO’s Carl Lindner and Craig Lindner said AFG continued to produce strong core net operating earnings in the fourth quarter of 2010.

"We continue to evaluate effective ways to deploy our excess capital to achieve appropriate returns on shareholders’ equity. During 2010, AFG repurchased 10.3m shares of its common stock at an average price of $28.46 per share.

"Growth in AFG’s book value per share is a key strategic benchmark in measuring value creation for our shareholders. Since the end of 2007, AFG has grown its book value per share, excluding appropriated retained earnings and unrealized gains (losses) on fixed maturities, by 39%," Lindner said.