We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cat Loss to Weigh on Cincinnati Financial (CINF) Q2 Earnings
Read MoreHide Full Article
Cincinnati Financial Corporation (CINF - Free Report) is slated to report second-quarter 2020 results on Jul 27, after market close. The company delivered a negative earnings surprise of 23.64% in the last reported quarter.
Let’s see how things have shaped up for this announcement.
Factors to Consider
Premiums in the to-be reported quarter are likely to have risen on better pricing, renewal price increases, higher level of insured exposure and disciplined expansion of Cincinnati Re. Also, the company’s agent-focused business model is likely to have been a positive. The company estimates second-quarter net written premium to grow between 5% and 6%.
The Zacks Consensus Estimate for revenues is pegged at $1.6 billion, indicating an upside of 5.9% from the year-ago reported figure.
Cincinnati Financial expects pre-tax catastrophe loss of about $231 million, stemming from exposure to severe storms and civil unrest. 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; damaged property due to civil unrest, resulting in losses of $29 million, and takes into account $8 million for Cincinnati Global Underwriting Ltd.
Combined ratio is expected to deteriorate by about 1650 basis points (bps) based on the projected P&C earned premiums.
By segment, 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 company estimates second-quarter combined ratio in the range of 102% to 104%, attributable to losses and expenses from catastrophe-related claims and the pandemic. The Zacks Consensus Estimate for combined ratio of the Commercial Line Insurance segment is 101, indicating a decline of 200 basis points from the year-ago quarter while the same for Personal Lines Insurance is pegged at 109, implying a drop of 1000 basis points from the year- ago quarter.
Total benefits and expenses are likely to have increased mainly due to higher insurance loss and contract holders’ benefits, underwriting, acquisition and insurance expenses. This, in turn, might have weighed on operating margin.
The Zacks Consensus Estimate for second-quarter 2020 earnings per share is pegged at 41 cents, indicating a decline of 51.7% from the year-ago quarter’s reported figure.
Cincinnati Financial Corporation Price and EPS Surprise
Our proven model does not conclusively predict an earnings beat for Cincinnati Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case as you can see below.
Earnings ESP: Cincinnati Financial has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 41 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Cincinnati Financial currently carries a Zacks Rank of 3.
Stocks to Consider
Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
Selective Insurance Group (SIGI - Free Report) has an Earnings ESP of +12.14% and a Zacks Rank #3.
Allstate Corporation (ALL - Free Report) has an Earnings ESP of +3.01% and a Zacks Rank of 3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021. Click here for the 6 trades >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Cat Loss to Weigh on Cincinnati Financial (CINF) Q2 Earnings
Cincinnati Financial Corporation (CINF - Free Report) is slated to report second-quarter 2020 results on Jul 27, after market close. The company delivered a negative earnings surprise of 23.64% in the last reported quarter.
Let’s see how things have shaped up for this announcement.
Factors to Consider
Premiums in the to-be reported quarter are likely to have risen on better pricing, renewal price increases, higher level of insured exposure and disciplined expansion of Cincinnati Re. Also, the company’s agent-focused business model is likely to have been a positive. The company estimates second-quarter net written premium to grow between 5% and 6%.
The Zacks Consensus Estimate for revenues is pegged at $1.6 billion, indicating an upside of 5.9% from the year-ago reported figure.
Cincinnati Financial expects pre-tax catastrophe loss of about $231 million, stemming from exposure to severe storms and civil unrest. 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; damaged property due to civil unrest, resulting in losses of $29 million, and takes into account $8 million for Cincinnati Global Underwriting Ltd.
Combined ratio is expected to deteriorate by about 1650 basis points (bps) based on the projected P&C earned premiums.
By segment, 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 company estimates second-quarter combined ratio in the range of 102% to 104%, attributable to losses and expenses from catastrophe-related claims and the pandemic. The Zacks Consensus Estimate for combined ratio of the Commercial Line Insurance segment is 101, indicating a decline of 200 basis points from the year-ago quarter while the same for Personal Lines Insurance is pegged at 109, implying a drop of 1000 basis points from the year- ago quarter.
Total benefits and expenses are likely to have increased mainly due to higher insurance loss and contract holders’ benefits, underwriting, acquisition and insurance expenses. This, in turn, might have weighed on operating margin.
The Zacks Consensus Estimate for second-quarter 2020 earnings per share is pegged at 41 cents, indicating a decline of 51.7% from the year-ago quarter’s reported figure.
Cincinnati Financial Corporation Price and EPS Surprise
Cincinnati Financial Corporation price-eps-surprise | Cincinnati Financial Corporation Quote
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Cincinnati Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case as you can see below.
Earnings ESP: Cincinnati Financial has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 41 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Cincinnati Financial currently carries a Zacks Rank of 3.
Stocks to Consider
Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
American Financial Group (AFG - Free Report) has an Earnings ESP of +21.45% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Selective Insurance Group (SIGI - Free Report) has an Earnings ESP of +12.14% and a Zacks Rank #3.
Allstate Corporation (ALL - Free Report) has an Earnings ESP of +3.01% and a Zacks Rank of 3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>