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Cincinnati Financial Poised for Growth, Cat Loss a Drag
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On Aug 12, we issued an updated research report on Cincinnati Financial Corp. (CINF - Free Report) .
Cincinnati Financial’s second-quarter 2016 earnings outperformed the Zacks Consensus Estimate by 9.6%. However, the bottom line deteriorated 31.3% year over year, primarily due to weak underwriting results and higher expenses. Nonetheless, higher premiums earned and investment income aided revenue improvement.
Cincinnati Financial remains focused to appoint agencies, one of the several strategic initiatives adopted in 2014, which will present it with opportunities to increase its market share. To that end, the company plans to appoint about 100 agencies in 2016. Of these, 44 agencies have already been appointed in the first half of the year. Moreover, the P&C insurer appointed another 64 agencies to specifically market personal lines insurance products. Thus, the company is confident that its agent-focused business model will drive long-term premium growth.
In addition, the company has plans to appoint agencies that will focus on high net worth personal lines clients. The company envisions $25 million in high net worth new business written premiums for. For the same, the company has started cementing its relationships with agents who will write high net worth accounts in California and Colorado later this year. Notably, in the first half of 2016, these agencies generated $14 million in high net worth new business written premiums.
However, exposure to catastrophe remains a concern as it weighs on underwriting results and leads to earnings volatility.
The Zacks Consensus Estimate has been witnessing upward revisions for 2016 and 2017 over the last 30 days. The same for 2016 inched up 1.7% to $2.95 per share and rose 1.8% to $4.71 per share for 2017.
Zacks Rank and Stocks to Consider
Currently, Cincinnati Financial holds a Zacks Rank #2 (Buy). Some better-ranked stocks include Allied World Assurance Company Holdings, AG (AWH - Free Report) , Argo Group International Holdings, Ltd. and National Interstate Corporation (NATL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Cincinnati Financial Poised for Growth, Cat Loss a Drag
On Aug 12, we issued an updated research report on Cincinnati Financial Corp. (CINF - Free Report) .
Cincinnati Financial’s second-quarter 2016 earnings outperformed the Zacks Consensus Estimate by 9.6%. However, the bottom line deteriorated 31.3% year over year, primarily due to weak underwriting results and higher expenses. Nonetheless, higher premiums earned and investment income aided revenue improvement.
Cincinnati Financial remains focused to appoint agencies, one of the several strategic initiatives adopted in 2014, which will present it with opportunities to increase its market share. To that end, the company plans to appoint about 100 agencies in 2016. Of these, 44 agencies have already been appointed in the first half of the year. Moreover, the P&C insurer appointed another 64 agencies to specifically market personal lines insurance products. Thus, the company is confident that its agent-focused business model will drive long-term premium growth.
In addition, the company has plans to appoint agencies that will focus on high net worth personal lines clients. The company envisions $25 million in high net worth new business written premiums for. For the same, the company has started cementing its relationships with agents who will write high net worth accounts in California and Colorado later this year. Notably, in the first half of 2016, these agencies generated $14 million in high net worth new business written premiums.
However, exposure to catastrophe remains a concern as it weighs on underwriting results and leads to earnings volatility.
The Zacks Consensus Estimate has been witnessing upward revisions for 2016 and 2017 over the last 30 days. The same for 2016 inched up 1.7% to $2.95 per share and rose 1.8% to $4.71 per share for 2017.
Zacks Rank and Stocks to Consider
Currently, Cincinnati Financial holds a Zacks Rank #2 (Buy). Some better-ranked stocks include Allied World Assurance Company Holdings, AG (AWH - Free Report) , Argo Group International Holdings, Ltd. and National Interstate Corporation (NATL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>