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Cincinnati Financial Corporation (CINF - Free Report) reported first-quarter 2021 operating income of $1.37 per share, which beat the Zacks Consensus Estimate by 30.5%. Moreover, the bottom line improved 63.1% year over year.
The company’s earnings witnessed higher premiums, lower expenses and improved combined ratio.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Total operating revenues in the quarter under review were $1.7 billion, up 5.9% year over year. This improvement was driven by 6% higher premiums earned and a 5% rise in investment income. The top line also outpaced the Zacks Consensus Estimate by 7.9%.
Net written premiums improved 12% from the prior-year quarter to $1.7 billion, reflecting premium growth initiatives and price increases. Growth included a contribution of 6% from Cincinnati Re.
Total benefits and expenses of Cincinnati Financial decreased 1.2% year over year to $1.5 billion, primarily due to lower underwriting, acquisition and insurance expenses and other operating expenses.
Combined ratio — a measure of underwriting profitability — improved 730 basis points (bps) year over year to 91.2%.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $887 million grew 3% year over year. This upside can primarily be attributed to solid premiums earned. It reported underwriting profit of $130 million against the prior-year quarter’s underwriting loss of $20 million. The combined ratio also improved 1710 bps year over year to 85.4%.
Personal Lines Insurance: Total revenues of $377 million rose 5% year over year owing to 5% increase in premiums earned. The segment incurred underwriting loss of $3 million against the prior-year quarter’s profit of $21 million. The combined ratio deteriorated 680 bps year over year to 101.1%.
Excess and Surplus Lines Insurance: Total revenues of $89 million climbed 13% year over year, aided by 14% higher earned premiums. However, the segment’s underwriting profit of $8 million declined 11% year over year. The combined ratio deteriorated 290 bps year over year to 92%. Life Insurance: Total revenues were $111 million, up 50% year over year.
Financial Update
As of Mar 31, 2021, cash and cash equivalents were $947 million, up 5.2% from the 2020-end level.
Total assets of $28.3 billion increased 2.8% from the figure at 2020 end.
Long-term debt amounted to $788 million, which remained flat compared with the figure at 2020 end.
Cincinnati Financial’s debt-to-capital ratio was 7.1% as of Mar 31, 2021, contracting 10 bps from 2020 end.
As of Mar 31, 2021, its book value per share was $69.16, up 3.2% from the figure at 2020 end.
Zacks Rank
Cincinnati Financial currently carries a Zacks Rank #4 (Sell).
The Progressive Corporation’s (PGR - Free Report) first-quarter 2021 earnings per share of $1.72 missed the Zacks Consensus Estimate of $1.78.
The Travelers Companies’ (TRV - Free Report) first-quarter 2021 earnings per share of $2.73 beat the Zacks Consensus Estimate of $2.44.
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2021 earnings per share of $1.08 beat the Zacks Consensus Estimate by 21.3%.
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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Cincinnati Financial (CINF) Q1 Earnings & Revenues Beat
Cincinnati Financial Corporation (CINF - Free Report) reported first-quarter 2021 operating income of $1.37 per share, which beat the Zacks Consensus Estimate by 30.5%. Moreover, the bottom line improved 63.1% year over year.
The company’s earnings witnessed higher premiums, lower expenses and improved combined ratio.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Cincinnati Financial Corporation price-consensus-eps-surprise-chart | Cincinnati Financial Corporation Quote
Operational Update
Total operating revenues in the quarter under review were $1.7 billion, up 5.9% year over year. This improvement was driven by 6% higher premiums earned and a 5% rise in investment income. The top line also outpaced the Zacks Consensus Estimate by 7.9%.
Net written premiums improved 12% from the prior-year quarter to $1.7 billion, reflecting premium growth initiatives and price increases. Growth included a contribution of 6% from Cincinnati Re.
Total benefits and expenses of Cincinnati Financial decreased 1.2% year over year to $1.5 billion, primarily due to lower underwriting, acquisition and insurance expenses and other operating expenses.
Combined ratio — a measure of underwriting profitability — improved 730 basis points (bps) year over year to 91.2%.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $887 million grew 3% year over year. This upside can primarily be attributed to solid premiums earned. It reported underwriting profit of $130 million against the prior-year quarter’s underwriting loss of $20 million. The combined ratio also improved 1710 bps year over year to 85.4%.
Personal Lines Insurance: Total revenues of $377 million rose 5% year over year owing to 5% increase in premiums earned. The segment incurred underwriting loss of $3 million against the prior-year quarter’s profit of $21 million. The combined ratio deteriorated 680 bps year over year to 101.1%.
Excess and Surplus Lines Insurance: Total revenues of $89 million climbed 13% year over year, aided by 14% higher earned premiums. However, the segment’s underwriting profit of $8 million declined 11% year over year. The combined ratio deteriorated 290 bps year over year to 92%.
Life Insurance: Total revenues were $111 million, up 50% year over year.
Financial Update
As of Mar 31, 2021, cash and cash equivalents were $947 million, up 5.2% from the 2020-end level.
Total assets of $28.3 billion increased 2.8% from the figure at 2020 end.
Long-term debt amounted to $788 million, which remained flat compared with the figure at 2020 end.
Cincinnati Financial’s debt-to-capital ratio was 7.1% as of Mar 31, 2021, contracting 10 bps from 2020 end.
As of Mar 31, 2021, its book value per share was $69.16, up 3.2% from the figure at 2020 end.
Zacks Rank
Cincinnati Financial currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
The Progressive Corporation’s (PGR - Free Report) first-quarter 2021 earnings per share of $1.72 missed the Zacks Consensus Estimate of $1.78.
The Travelers Companies’ (TRV - Free Report) first-quarter 2021 earnings per share of $2.73 beat the Zacks Consensus Estimate of $2.44.
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2021 earnings per share of $1.08 beat the Zacks Consensus Estimate by 21.3%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>