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Cincinnati Financial Corporation (CINF - Free Report) reported first-quarter 2022 operating income of $1.58 per share, which outpaced the Zacks Consensus Estimate by 6.8%. The bottom line improved 15.3% year over year.
Cincinnati Financial’s results benefited from improved revenues, strong underwriting results and improved combined ratio, partly offset by escalating costs.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Total operating revenues in the quarter under review were $1.9 billion, which improved 9.3% year over year. This improvement was driven by higher earned premiums and investment income. Also, the top line surpassed the consensus mark of $1.7 billion by 10.9%.
Net written premiums climbed 12% year over year to $1.9 billion, attributable largely to price increases and premium growth initiatives. Investment income, net of expenses increased 6% year over year to $156 million, owing to growth in equity portfolio dividends and growth in interest income from fixed-maturity securities.
Total benefits and expenses of Cincinnati Financial increased about 8% year over year to $1.6 billion, primarily due to higher insurance losses and contract holders’ benefits and underwriting, acquisition and insurance expenses.
In its property & casualty (P&C) insurance business, Cincinnati Financial witnessed an underwriting profit of $165 million, which surged 24% year over year.
The combined ratio — a measure of underwriting profitability — improved 130 basis points (bps) year over year to 89.9.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $963 million increased 9% year over year. This upside was primarily driven by 9% premiums earned. Underwriting profit of $76 million decreased 42% year over year. The combined ratio deteriorated 690 bps year over year to 92.3.
Personal Lines Insurance: Total revenues of $403 million increased 7% year over year on account of a 7% increase in premiums earned. Underwriting profit of $65 million rebounded from a loss of $3 million incurred in the prior-year quarter. The combined ratio improved 1720 bps year over year to 83.9.
Excess and Surplus Lines Insurance: Total revenues of $112 million grew 26% year over year, aided by 26% higher earned premiums. Underwriting profit improved 100% year over year to $16 million. The combined ratio improved 610 bps year over year to 85.9.
Life Insurance: Total revenues were $115 million, up 4% year over year, courtesy of 2% higher earned premiums and 4% increased investment income. Total benefits and expenses increased 4% year over year to $102 million due to higher contract holders’ benefits and underwriting expenses incurred.
Financial Update
As of Mar 31, 2022, Cincinnati Financial had total assets worth $30.3 billion, down 3.6% from the level at 2021 end.
Total debt amounted to $838 million as of Mar 31, 2022, up 0.1% from the 2021-end level. Cincinnati Financial’s debt-to-capital ratio was 6.5% as of Mar 31, 2022, down 50 bps from the end of 2021.
As of Mar 31, 2022, Cincinnati Financial’s book value per share was $75.43, up 9% from 2021 end.
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
RLI’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%. RLI’s gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.
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Cincinnati Financial (CINF) Q1 Earnings, Revenues Top, Rise Y/Y
Cincinnati Financial Corporation (CINF - Free Report) reported first-quarter 2022 operating income of $1.58 per share, which outpaced the Zacks Consensus Estimate by 6.8%. The bottom line improved 15.3% year over year.
Cincinnati Financial’s results benefited from improved revenues, strong underwriting results and improved combined ratio, partly offset by escalating costs.
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 $1.9 billion, which improved 9.3% year over year. This improvement was driven by higher earned premiums and investment income. Also, the top line surpassed the consensus mark of $1.7 billion by 10.9%.
Net written premiums climbed 12% year over year to $1.9 billion, attributable largely to price increases and premium growth initiatives. Investment income, net of expenses increased 6% year over year to $156 million, owing to growth in equity portfolio dividends and growth in interest income from fixed-maturity securities.
Total benefits and expenses of Cincinnati Financial increased about 8% year over year to $1.6 billion, primarily due to higher insurance losses and contract holders’ benefits and underwriting, acquisition and insurance expenses.
In its property & casualty (P&C) insurance business, Cincinnati Financial witnessed an underwriting profit of $165 million, which surged 24% year over year.
The combined ratio — a measure of underwriting profitability — improved 130 basis points (bps) year over year to 89.9.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $963 million increased 9% year over year. This upside was primarily driven by 9% premiums earned. Underwriting profit of $76 million decreased 42% year over year. The combined ratio deteriorated 690 bps year over year to 92.3.
Personal Lines Insurance: Total revenues of $403 million increased 7% year over year on account of a 7% increase in premiums earned. Underwriting profit of $65 million rebounded from a loss of $3 million incurred in the prior-year quarter. The combined ratio improved 1720 bps year over year to 83.9.
Excess and Surplus Lines Insurance: Total revenues of $112 million grew 26% year over year, aided by 26% higher earned premiums. Underwriting profit improved 100% year over year to $16 million. The combined ratio improved 610 bps year over year to 85.9.
Life Insurance: Total revenues were $115 million, up 4% year over year, courtesy of 2% higher earned premiums and 4% increased investment income. Total benefits and expenses increased 4% year over year to $102 million due to higher contract holders’ benefits and underwriting expenses incurred.
Financial Update
As of Mar 31, 2022, Cincinnati Financial had total assets worth $30.3 billion, down 3.6% from the level at 2021 end.
Total debt amounted to $838 million as of Mar 31, 2022, up 0.1% from the 2021-end level. Cincinnati Financial’s debt-to-capital ratio was 6.5% as of Mar 31, 2022, down 50 bps from the end of 2021.
As of Mar 31, 2022, Cincinnati Financial’s book value per share was $75.43, up 9% from 2021 end.
Zacks Rank
Cincinnati Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Performance of Some Other P&C Insurers
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
RLI’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%. RLI’s gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.