In an extraordinary move to dole out more cash to its
shareholders, property and casualty insurer,
American Financial Group Inc.
) announced payment of a special one-time dividend. The $90
million one-time dividend payment, which comes to $1.00 for each
share, will be paid on Dec 24, 2013 to shareholders of record on
Dec 16, 2013.
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This one-time dividend is an addition to the regular dividend of
22 cents per share which was recently paid by American Financial
on Oct 25, 2013.
During Aug 2013, American Financial increased its annual
dividend by 12.8% to 88 cents per share, which represented the
eighth consecutive year of dividend hikes.
The move by this Zacks Rank #3 (Hold) insurer reflects its solid
financial position and adequate financial flexibility. The
company had excess capital of approximately $900 million at
Sep30, 2013. American Financial Group has been able to add to its
cash pile, given a quieter catastrophe season this year, which
saved million of dollars in claims losses. Moreover, the company
has also been witnessing a favorable operating climate in most of
its business lines, allowing it to write more business.
American Financial is also diligent in managing its capital by
way of share buyback from time to time.
Favorable operating trends have seen similar moves by other
industry players. Last month
) with Zacks Rank #1 (Strong Buy) announced an extraordinary cash
dividend of $3.00 per share, While other players
EMC Insurance Group Inc.
Aspen Insurance Holdings Ltd.
) also increased quarterly dividend by 9.5% and 5.9%
Given excess capacity available with insurers, we expect more
treats for the shareholders of this industry.