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Is a Beat in the Cards for Cincinnati Financial in Q3 Earnings?

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Cincinnati Financial Corporation (CINF - Free Report) is scheduled to report third-quarter 2024 earnings on Oct. 24, after market close. The insurer delivered an earnings surprise in each of the last four reported quarters, the average beat being 27.01%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Factors to Note

Premiums are likely to have benefited from improved exposure, better pricing, increased property casualty agency and new business written premiums, higher standard lines new business and higher premiums from Cincinnati Re in the to-be-reported quarter. We expect earned premiums to be $2.2 billion, up 11.4% from the year-ago reported figure. The Zacks Consensus Estimate is pegged at $2.2 billion, indicating an improvement of 11.3% from the year-ago quarter’s reported figure.

Premiums at Personal Lines are likely to have benefited from rate increases, a higher level of insured exposures and other factors, such as higher policy retention rates and changes in policy deductibles or mix of business. The Zacks Consensus Estimate for Personal Lines revenues is pegged at $671 million, indicating an improvement of 27.1% from the year-ago quarter’s reported figure.

Improved agency renewal and new business written premiums due to higher renewal pricing are likely to have aided Excess and Surplus lines premiums. The Zacks Consensus Estimate for Excess and Surplus lines revenues is pegged at $152 million, indicating an improvement of 11.8% from the year-ago quarter’s reported figure. 

Net investment income is likely to have improved on strong cash flow from operating activities coupled with higher bond yields, as well as an increase in interest income from fixed-maturity securities. We expect investment income to be $248.7 million, up 10.5% from the year-ago reported quarter. 

The Zacks Consensus Estimate for third-quarter revenues is pegged at $2.53 billion, suggesting an increase of 11.5% from the prior-year quarter. 

Total benefits and expenses are likely to have increased mainly due to higher insurance losses and contract holders' benefits, underwriting, acquisition and insurance expenses, interest expense and other operating expenses. We expect total expenses to rise 15.6% to $2.3 billion.

Cincinnati Financial is expected to have benefited from better pricing and increased exposure, which are likely to have aided underwriting profitability. We expect the combined ratio to be 97.6 in the to-be-reported quarter. 

The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.46, indicating a decrease of 12% from the prior-year quarter.

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Cincinnati Financial this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. 

Earnings ESP: Cincinnati Financial has an Earnings ESP of +10.72%. This is because the Most Accurate Estimate of $1.62 is pegged higher than the Zacks Consensus Estimate of $1.46. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cincinnati Financial currently carries a Zacks Rank #3.

Other Stocks to Consider

Here are three other insurance stocks you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:

Arch Capital Group (ACGL - Free Report) has an Earnings ESP of +7.91% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2024 earnings is pegged at $1.98, indicating a year-over-year decrease of 14.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

ACGL’s earnings beat estimates in each of the last four reported quarters.

American Financial Group, Inc. (AFG - Free Report) has an Earnings ESP of +1.91% and carries a Zacks Rank of 3 at present. The Zacks Consensus Estimate for third-quarter 2024 earnings is pegged at $2.51, implying an increase of 2.4% from the year-ago reported figure.

AFG’s earnings beat estimates in two of the last four reported quarters while missing in the other two.

Axis Capital Holdings Limited (AXS - Free Report) has an Earnings ESP of +2.87% and carries a Zacks Rank of 3 at present. The Zacks Consensus Estimate for third-quarter 2024 earnings is pegged at $2.50, implying an increase of 6.8% from the year-ago reported figure.

AXS’s earnings beat estimates in each of the last four reported quarters.

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