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Cincinnati Financial Provides Q2 Catastrophe Loss Estimates
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Cincinnati Financial Corporation (CINF - Free Report) has released its preliminary loss estimates for second-quarter 2020. The insurer is estimated to incur pre-tax catastrophe loss of about $231 million, stemming from exposure to severe storms and civil unrest. Combined ratio is expected to deteriorate by about 1650 basis points (bps) based on the projected P&C earned premiums.
The estimated loss can be attributed to the occurrence of two multi-state storms in early April, each of which caused losses of approximately $50 million, and damaged property due to civil unrest resulting in losses of $29 million, and takes into account $8 million for Cincinnati Global Underwriting Ltd.
Second-quarter catastrophe loss is projected to be nearly $122 million for the Commercial Lines Insurance segment, $91 million for personal lines insurance segment, $3 million for the excess and surplus lines insurance segment and $15 million for Cincinnati Global.
Cincinnati Financial projects second-quarter pandemic-related losses and expenses of approximately $65 million, indicating an impact on the second-quarter combined ratio of around 460 bps.
The estimated loss comprises about $15 million for Cincinnati Re and $9 million for Cincinnati Global, $6 million for credit losses related to uncollectible premiums, $19 million for legal expenses in defense of business interruption claims and $16 million in underwriting expenses for the previously announced Stay-at-Home policyholder credit on April and May personal auto policies.
The above-estimated losses and expenses from catastrophe-related claims and the pandemic are expected to result in combined ratio in the range of 102% to 104%. Net written premium growth is estimated to be between 5% and 6% for the quarter.
The Zacks Consensus Estimate for second-quarter earnings is currently pegged at 62 cents, indicating a decline of 27.1% from the year-ago quarter reported figure. We expect estimates to move south once analysts start incorporating loss estimates into their numbers.
Being a property and casualty insurer, Cincinnati Financial is exposed to natural and man-made catastrophic events, which affect results and make its earnings volatile. In the first quarter of 2020, catastrophe loss increased 78% year over year to $123 million, which affected both net income and property casualty underwriting income of the company. Combined ratio also deteriorated 550 bps to 98.5%.
Cincinnati Financial is set to report its second-quarter earnings on Jul 27 after market close. Per our proven model, a company needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to deliver an earnings surprise. Cincinnati Financial has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Several property and casualty insurers are coming up with their second-quarter catastrophe loss estimates. Chubb Limited (CB - Free Report) estimated second-quarter global net catastrophe loss of $1.807 billion pretax or $1.15 billion after tax, net of reinsurance including reinstatement premiums.
Arch Capital Group (ACGL - Free Report) estimated second quarter pre-tax net catastrophe losses in the range of $205 million to $225 million across its property casualty insurance and reinsurance segments, net of reinsurance recoveries and reinstatement premiums.
Selective Insurance Group (SIGI - Free Report) estimated preliminary second-quarter 2020 pre-tax net catastrophe losses of approximately $83 million.
Shares of Cincinnati Financial, carrying a Zacks Rank #3 (Hold), have lost 30.1% year to date compared with the industry’s decline of 16%. Earning new business through agencies, strategic initiatives, along with a robust capital position, should help shares bounce back.
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Cincinnati Financial Provides Q2 Catastrophe Loss Estimates
Cincinnati Financial Corporation (CINF - Free Report) has released its preliminary loss estimates for second-quarter 2020. The insurer is estimated to incur pre-tax catastrophe loss of about $231 million, stemming from exposure to severe storms and civil unrest. Combined ratio is expected to deteriorate by about 1650 basis points (bps) based on the projected P&C earned premiums.
The estimated loss can be attributed to the occurrence of two multi-state storms in early April, each of which caused losses of approximately $50 million, and damaged property due to civil unrest resulting in losses of $29 million, and takes into account $8 million for Cincinnati Global Underwriting Ltd.
Second-quarter catastrophe loss is projected to be nearly $122 million for the Commercial Lines Insurance segment, $91 million for personal lines insurance segment, $3 million for the excess and surplus lines insurance segment and $15 million for Cincinnati Global.
Cincinnati Financial projects second-quarter pandemic-related losses and expenses of approximately $65 million, indicating an impact on the second-quarter combined ratio of around 460 bps.
The estimated loss comprises about $15 million for Cincinnati Re and $9 million for Cincinnati Global, $6 million for credit losses related to uncollectible premiums, $19 million for legal expenses in defense of business interruption claims and $16 million in underwriting expenses for the previously announced Stay-at-Home policyholder credit on April and May personal auto policies.
The above-estimated losses and expenses from catastrophe-related claims and the pandemic are expected to result in combined ratio in the range of 102% to 104%. Net written premium growth is estimated to be between 5% and 6% for the quarter.
The Zacks Consensus Estimate for second-quarter earnings is currently pegged at 62 cents, indicating a decline of 27.1% from the year-ago quarter reported figure. We expect estimates to move south once analysts start incorporating loss estimates into their numbers.
Being a property and casualty insurer, Cincinnati Financial is exposed to natural and man-made catastrophic events, which affect results and make its earnings volatile. In the first quarter of 2020, catastrophe loss increased 78% year over year to $123 million, which affected both net income and property casualty underwriting income of the company. Combined ratio also deteriorated 550 bps to 98.5%.
Cincinnati Financial is set to report its second-quarter earnings on Jul 27 after market close. Per our proven model, a company needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to deliver an earnings surprise. Cincinnati Financial has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Several property and casualty insurers are coming up with their second-quarter catastrophe loss estimates. Chubb Limited (CB - Free Report) estimated second-quarter global net catastrophe loss of $1.807 billion pretax or $1.15 billion after tax, net of reinsurance including reinstatement premiums.
Arch Capital Group (ACGL - Free Report) estimated second quarter pre-tax net catastrophe losses in the range of $205 million to $225 million across its property casualty insurance and reinsurance segments, net of reinsurance recoveries and reinstatement premiums.
Selective Insurance Group (SIGI - Free Report) estimated preliminary second-quarter 2020 pre-tax net catastrophe losses of approximately $83 million.
Shares of Cincinnati Financial, carrying a Zacks Rank #3 (Hold), have lost 30.1% year to date compared with the industry’s decline of 16%. Earning new business through agencies, strategic initiatives, along with a robust capital position, should help shares bounce back.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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