American Financial Offers Prelim. Estimate of LT Care Charge Driven by Continued Low Interest Rates, Sees $0.88-1.09/Share Charge

American Financial Group, Inc. (NYSE/NASDAQ: AFG) today released preliminaryresults of its periodic review of its closed block of long-term careinsurance, including the impact of the previously announced external actuarialstudy. Preliminary results indicate the Company will be required to record anafter-tax charge of $80 to $100 million ($0.88 to $1.09 per diluted commonshare) to write off deferred acquisition costs and strengthen reserves on thisblock of business. This charge is primarily due to lower projected futureinvestment rates resulting from the continued low interest rate environmentand assumes no material change in the interest rate environment between nowand when full year 2012 results are announced. This charge will be excludedfrom core net operating earnings. As a result, AFG reaffirmed its previouslyannounced 2012 core net operating earnings guidance of $3.10 to $3.30 pershare.The charge also reflects changes in claims, expense and persistencyassumptions, including the impact of data from the external study, whichsupplemented the Company's internal analysis of claim experience relative tobroader industry trends. After the charge, the Company expects that itslong-term care subsidiaries will continue to remain adequately capitalized andwill 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, onthe Company's annuity business. Preliminary results indicate this review willresult in an after-tax charge of less than $15 million ($0.16 per dilutedcommon share), which is reflected in the earnings guidance above.Final results of both the long-term care periodic review and the annuity DACunlocking will be included in the announcement of full year 2012 results to beissued in January 2013.