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Cincinnati Financial (CINF) Q4 Earnings Top on Higher Premiums
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Cincinnati Financial Corporation (CINF - Free Report) reported fourth-quarter 2023 operating income of $2.28 per share, which surpassed the Zacks Consensus Estimate by 18.1%. The bottom line surged 79.5% year over year.
Total operating revenues in the quarter under review were $2.3 billion, which improved 10.8% year over year. Also, the top line beat the consensus mark by 1%.
The strong quarterly results benefited from higher premiums, net investment income and improved combined ratio. Improved Underwriting profit and lower catastrophe losses in the property and casualty segment added to the upside. Higher expenses partially offset the positives.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Earned premiums climbed 10% year over year to $2.1 billion and beat our estimate by 1.2%. It was driven by premium growth initiatives, price increases and a higher level of insured exposures.
Investment income, net of expenses increased 15% year over year to $239 million and beat our estimate of $226.6 million. The growth was driven by an increase in bond interest income and a rise in stock portfolio dividends. The Zacks Consensus Estimate was pegged at $227 million.
Total benefits and expenses of Cincinnati Financial increased 2.1% year over year to $1.9 billion, primarily due to higher underwriting, acquisitions and insurance expenses and interest expense. Our estimate for the metric was $2 billion.
In its property & casualty insurance business, CINF witnessed an underwriting income of $252 million against an underwriting income of $93 million in the year-ago period. Our estimate of underwriting income was pegged at $135.3 million.
The combined ratio — a measure of underwriting profitability — improved 740 basis points (bps) year over year to 87.5. Our estimate was pinned at 93.3. The Zacks Consensus Estimate was pegged at 92.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $1.1 billion increased 4% year over year, which missed the Zacks Consensus Estimate by 1.7%. Our estimate was $1.13 billion. This upside was primarily driven by 4% premiums earned.
Underwriting income was $85 million, which surged more than five-fold year over year. The combined ratio improved 670 bps year over year to 92.2. Our estimate was pegged at 93.6.
Personal Lines Insurance: Total revenues of $561 million increased 26% year over year on account of a 26% rise in premiums earned. Our estimate was $517.9 million, while the Zacks Consensus Estimate was pegged at $544 million.
Underwriting profit was $88 million, which increased more than three-fold year over year. The metric beat our estimate of $77.1 million.
The combined ratio improved 1,100 bps year over year to 84.7. Our estimate was 85.3, while the Zacks Consensus Estimate was pegged at 91.
Excess and Surplus Lines Insurance: Total revenues of $149 million grew 20% year over year, aided by 19% higher earned premiums. Our estimate was $147.3 million, while the Zacks Consensus Estimate was pegged at $143 million.
Underwriting profit increased nearly three-fold year over year to $16 million. Our estimate was pinned at $14.8 million. The combined ratio improved 650 bps year over year to 89.8. Our estimate was 90.6.
Life Insurance: Total revenues were $121 million, up 3% year over year, driven by 7% higher earned premiums, 7% higher investment income, net of expenses and higher fee revenues. The Zacks Consensus Estimate was pegged at $80 million. Our estimate was $79.6 million. Total benefits and expenses increased 14% year over year to $109 million due to higher contract holders’ benefits and underwriting expenses incurred.
Financial Update
As of Dec 31, 2023, Cincinnati Financial had total assets worth $32.8 billion, up 10.2% from 2022-end.
Total debt was $815 million as of Dec 31, 2023, down 2.9% from 2022-end. The company’s debt-to-capital ratio was 6.3% as of Dec 31, 2023, which improved 110 bps from the end of 2022.
As of Dec 31, 2023, CINF’s book value per share was $77.06, up 14.7% from 2022-end.
Dividend Update
The board of directors approved a dividend of 81 cents per share for the first quarter of 2024, reflecting an 8% increase. The dividend will be paid out on Apr 15 to shareholders of record as of Mar 19, 2024.
Full-Year Update
For 2023, operating income was $6.03 per share, which improved 42% year over year. The metric beat our estimate of $5.52 per share.
Adjusted revenues for the year amounted to $8.9 billion, which beat our estimate of $8.8 billion. The top line increased 10.6% year over year.
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. TRV witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and catastrophe losses.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. PGR’s premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Progressive’s combined ratio improved 520 bps from the prior-year quarter’s level to 88.7.
W.R. Berkley Corporation’s (WRB - Free Report) fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year. Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned, as well as improved net investment income. The top line beat the consensus estimate by 1.3%.
W.R. Berkley’s net premiums written were $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion. Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio remained flat year over year at 88.4.
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Cincinnati Financial (CINF) Q4 Earnings Top on Higher Premiums
Cincinnati Financial Corporation (CINF - Free Report) reported fourth-quarter 2023 operating income of $2.28 per share, which surpassed the Zacks Consensus Estimate by 18.1%. The bottom line surged 79.5% year over year.
Total operating revenues in the quarter under review were $2.3 billion, which improved 10.8% year over year. Also, the top line beat the consensus mark by 1%.
The strong quarterly results benefited from higher premiums, net investment income and improved combined ratio. Improved Underwriting profit and lower catastrophe losses in the property and casualty segment added to the upside. Higher expenses partially offset the positives.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Cincinnati Financial Corporation price-consensus-eps-surprise-chart | Cincinnati Financial Corporation Quote
Operational Update
Earned premiums climbed 10% year over year to $2.1 billion and beat our estimate by 1.2%. It was driven by premium growth initiatives, price increases and a higher level of insured exposures.
Investment income, net of expenses increased 15% year over year to $239 million and beat our estimate of $226.6 million. The growth was driven by an increase in bond interest income and a rise in stock portfolio dividends. The Zacks Consensus Estimate was pegged at $227 million.
Total benefits and expenses of Cincinnati Financial increased 2.1% year over year to $1.9 billion, primarily due to higher underwriting, acquisitions and insurance expenses and interest expense. Our estimate for the metric was $2 billion.
In its property & casualty insurance business, CINF witnessed an underwriting income of $252 million against an underwriting income of $93 million in the year-ago period. Our estimate of underwriting income was pegged at $135.3 million.
The combined ratio — a measure of underwriting profitability — improved 740 basis points (bps) year over year to 87.5. Our estimate was pinned at 93.3. The Zacks Consensus Estimate was pegged at 92.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $1.1 billion increased 4% year over year, which missed the Zacks Consensus Estimate by 1.7%. Our estimate was $1.13 billion. This upside was primarily driven by 4% premiums earned.
Underwriting income was $85 million, which surged more than five-fold year over year. The combined ratio improved 670 bps year over year to 92.2. Our estimate was pegged at 93.6.
Personal Lines Insurance: Total revenues of $561 million increased 26% year over year on account of a 26% rise in premiums earned. Our estimate was $517.9 million, while the Zacks Consensus Estimate was pegged at $544 million.
Underwriting profit was $88 million, which increased more than three-fold year over year. The metric beat our estimate of $77.1 million.
The combined ratio improved 1,100 bps year over year to 84.7. Our estimate was 85.3, while the Zacks Consensus Estimate was pegged at 91.
Excess and Surplus Lines Insurance: Total revenues of $149 million grew 20% year over year, aided by 19% higher earned premiums. Our estimate was $147.3 million, while the Zacks Consensus Estimate was pegged at $143 million.
Underwriting profit increased nearly three-fold year over year to $16 million. Our estimate was pinned at $14.8 million. The combined ratio improved 650 bps year over year to 89.8. Our estimate was 90.6.
Life Insurance: Total revenues were $121 million, up 3% year over year, driven by 7% higher earned premiums, 7% higher investment income, net of expenses and higher fee revenues. The Zacks Consensus Estimate was pegged at $80 million. Our estimate was $79.6 million. Total benefits and expenses increased 14% year over year to $109 million due to higher contract holders’ benefits and underwriting expenses incurred.
Financial Update
As of Dec 31, 2023, Cincinnati Financial had total assets worth $32.8 billion, up 10.2% from 2022-end.
Total debt was $815 million as of Dec 31, 2023, down 2.9% from 2022-end. The company’s debt-to-capital ratio was 6.3% as of Dec 31, 2023, which improved 110 bps from the end of 2022.
As of Dec 31, 2023, CINF’s book value per share was $77.06, up 14.7% from 2022-end.
Dividend Update
The board of directors approved a dividend of 81 cents per share for the first quarter of 2024, reflecting an 8% increase. The dividend will be paid out on Apr 15 to shareholders of record as of Mar 19, 2024.
Full-Year Update
For 2023, operating income was $6.03 per share, which improved 42% year over year. The metric beat our estimate of $5.52 per share.
Adjusted revenues for the year amounted to $8.9 billion, which beat our estimate of $8.8 billion. The top line increased 10.6% year over year.
Zacks Rank
Cincinnati Financial currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. TRV witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and catastrophe losses.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. PGR’s premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Progressive’s combined ratio improved 520 bps from the prior-year quarter’s level to 88.7.
W.R. Berkley Corporation’s (WRB - Free Report) fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year. Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned, as well as improved net investment income. The top line beat the consensus estimate by 1.3%.
W.R. Berkley’s net premiums written were $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion. Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio remained flat year over year at 88.4.