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Cincinnati Financial Corporation (CINF - Free Report) reported third-quarter 2024 operating income of $1.42 per share, which missed the Zacks Consensus Estimate by 2.7%. The bottom line decreased 14% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The quarterly results of CINF were aided by higher bond interest income, premium growth initiatives, price increases and a higher level of insured exposures. However, the upside was partly offset by poor underwriting income and escalating expenses.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Total operating revenues in the quarter under review were $2.5 billion, which improved 13% year over year. This improvement was driven by higher earned premiums and investment income. Also, the top line beat the consensus mark by 1.3%.
Net written premiums climbed 17% year over year to $2.3 billion. 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 $258 million and beat our estimate of $248.7 million. The growth was driven by a 21% increase in bond interest income. The Zacks Consensus Estimate was pegged at $250 million.
Total benefits and expenses of Cincinnati Financial increased 16.4% year over year to $2.3 billion, primarily due to higher insurance losses and contract holders' benefits and underwriting, acquisition and insurance expenses. Our estimate was $2.2 billion.
In its property & casualty (P&C) insurance business, CINF witnessed an underwriting income of $62 million, which decreased 45% from the year-earlier period. Our estimate of underwriting income was pegged at $54.5 million.
The combined ratio — a measure of underwriting profitability — deteriorated 300 basis points (bps) year over year to 97.4. Our estimate was pinned at 97.6. The Zacks Consensus Estimate was pegged at 97.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $1.1 billion increased 7% year over year, which matched the Zacks Consensus Estimate. Our estimate was $1.2 billion. This upside was primarily driven by 7% premiums earned. Underwriting income was $81 million, which increased 56% year over year. Our estimate was pinned at $49.7 million. The combined ratio improved 220 bps year over year to 93. Our estimate was pegged at 96.1.
Personal Lines Insurance: Total revenues of $680 million increased 29% year over year on account of a 29% rise in premiums earned and 100% increase in fee revenues. Our estimate was $632.8 million, while the Zacks Consensus Estimate was pegged at $671 million.
Underwriting loss was $69 million against an underwriting profit of $1 million in the year-earlier period. Our estimate was pinned at a loss of $8.1 million. The combined ratio deteriorated 1,040 bps year over year to 110.3. Our estimate was 101.4, while the Zacks Consensus Estimate was pegged at 100.
Excess and Surplus Lines Insurance: Total revenues of $157 million grew 15% year over year, aided by 16% higher earned premiums. Our estimate was $140.6 million, while the Zacks Consensus Estimate was pegged at $152 million.
Underwriting profit decreased 43% year over year to $8 million. Our estimate was pinned at $12.5 million. The combined ratio deteriorated 480 bps year over year to 95.3. Our estimate was 91.7.
Life Insurance: Total revenues were $129 million, up 3% year over year, driven by 5% higher earned premiums and 4% higher investment income, net of expenses. The Zacks Consensus Estimate was pegged at $81 million. Our estimate was $78.4 million. Total benefits and expenses increased 11% year over year to $103 million due to higher contract holders’ benefits and underwriting expenses incurred.
Financial Update
As of Sept. 30, 2024, Cincinnati Financial had total assets worth $37 billion, up 12.9% from the level at 2023-end.
Total debt was $815 million as of Sept. 30, 2024, which remained unchanged from the 2023-end level. The company’s debt-to-capital ratio was 5.6% as of Sept. 30, 2024, which improved 70 bps from the end of 2023.
As of Sept. 30, 2024, CINF’s book value per share was $88.32, up 14.6% from 2023-end.
Selective Insurance Group, Inc. (SIGI - Free Report) reported third-quarter 2024 operating income of $1.40 per share, which missed the Zacks Consensus Estimate by 17.1%. The bottom line decreased 7% from the year-ago quarter. Total revenues of $1.2 billion increased 13.9% from the year-ago quarter’s figure. However, the top line missed the Zacks Consensus Estimate by 0.4%. On a year-over-year basis, net premiums written increased 9% to $1.15 billion. The figure was higher than our estimate of $1.2 billion.
Net investment income earned, before-tax, increased 17% year over year to $117.8 million. The figure was higher than our estimate of $117.3 million. The Zacks Consensus Estimate was pegged at $114 million. After-tax net underwriting income was $4.1 million, which plunged 83% year over year. Pre-tax catastrophe losses more than doubled year over year to $148.8 million.
The Travelers Companies (TRV - Free Report) reported third-quarter 2024 core income of $5.24 per share, which beat the Zacks Consensus Estimate by 38.2%. Travelers’ total revenues increased 10.7% from the year-ago quarter to $11.84 billion, primarily driven by higher premiums, net investment income, fee income and other revenues. The top-line figure beat the Zacks Consensus Estimate by 1.4%.
Net written premiums increased 8% year over year to a record $11.31 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.5 billion. Net investment income increased 18% year over year to $904 million. The figure was higher than our estimate of $868.7 million. The Zacks Consensus Estimate was pegged at $883 million. Catastrophe loss was $939 million, pre-tax, wider than a loss of $850 million, pre-tax, incurred in the year-ago quarter.
W.R. Berkley Corporation’s (WRB - Free Report) third-quarter 2024 operating income of 93 cents per share beat the Zacks Consensus Estimate by 1.1%. The bottom line improved 3.3% year over year. W.R. Berkley’s net premiums written were a record $3.1 billion, up 7.3% year over year. The figure was $3.1 billion. Operating revenues came in at $3.4 billion, up 10.9% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line missed the consensus estimate by 0.8%.
Net investment income surged 19.5% to a record $323.8 million. The figure was lower than our estimate of $382.1 million. The Zacks Consensus Estimate was $343 million. Total expenses increased 12.1% to $2.9 billion. The figure matched our estimate. The loss ratio deteriorated 50 bps to 62.4, while the expense ratio deteriorated 20 bps year over year to 28.5.
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Cincinnati Financial Q3 Earnings Miss, Revenues Top, Premiums Rise Y/Y
Cincinnati Financial Corporation (CINF - Free Report) reported third-quarter 2024 operating income of $1.42 per share, which missed the Zacks Consensus Estimate by 2.7%. The bottom line decreased 14% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The quarterly results of CINF were aided by higher bond interest income, premium growth initiatives, price increases and a higher level of insured exposures. However, the upside was partly offset by poor underwriting income and escalating expenses.
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 $2.5 billion, which improved 13% year over year. This improvement was driven by higher earned premiums and investment income. Also, the top line beat the consensus mark by 1.3%.
Net written premiums climbed 17% year over year to $2.3 billion. 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 $258 million and beat our estimate of $248.7 million. The growth was driven by a 21% increase in bond interest income. The Zacks Consensus Estimate was pegged at $250 million.
Total benefits and expenses of Cincinnati Financial increased 16.4% year over year to $2.3 billion, primarily due to higher insurance losses and contract holders' benefits and underwriting, acquisition and insurance expenses. Our estimate was $2.2 billion.
In its property & casualty (P&C) insurance business, CINF witnessed an underwriting income of $62 million, which decreased 45% from the year-earlier period. Our estimate of underwriting income was pegged at $54.5 million.
The combined ratio — a measure of underwriting profitability — deteriorated 300 basis points (bps) year over year to 97.4. Our estimate was pinned at 97.6. The Zacks Consensus Estimate was pegged at 97.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $1.1 billion increased 7% year over year, which matched the Zacks Consensus Estimate. Our estimate was $1.2 billion. This upside was primarily driven by 7% premiums earned.
Underwriting income was $81 million, which increased 56% year over year. Our estimate was pinned at $49.7 million. The combined ratio improved 220 bps year over year to 93. Our estimate was pegged at 96.1.
Personal Lines Insurance: Total revenues of $680 million increased 29% year over year on account of a 29% rise in premiums earned and 100% increase in fee revenues. Our estimate was $632.8 million, while the Zacks Consensus Estimate was pegged at $671 million.
Underwriting loss was $69 million against an underwriting profit of $1 million in the year-earlier period. Our estimate was pinned at a loss of $8.1 million.
The combined ratio deteriorated 1,040 bps year over year to 110.3. Our estimate was 101.4, while the Zacks Consensus Estimate was pegged at 100.
Excess and Surplus Lines Insurance: Total revenues of $157 million grew 15% year over year, aided by 16% higher earned premiums. Our estimate was $140.6 million, while the Zacks Consensus Estimate was pegged at $152 million.
Underwriting profit decreased 43% year over year to $8 million. Our estimate was pinned at $12.5 million. The combined ratio deteriorated 480 bps year over year to 95.3. Our estimate was 91.7.
Life Insurance: Total revenues were $129 million, up 3% year over year, driven by 5% higher earned premiums and 4% higher investment income, net of expenses. The Zacks Consensus Estimate was pegged at $81 million. Our estimate was $78.4 million. Total benefits and expenses increased 11% year over year to $103 million due to higher contract holders’ benefits and underwriting expenses incurred.
Financial Update
As of Sept. 30, 2024, Cincinnati Financial had total assets worth $37 billion, up 12.9% from the level at 2023-end.
Total debt was $815 million as of Sept. 30, 2024, which remained unchanged from the 2023-end level. The company’s debt-to-capital ratio was 5.6% as of Sept. 30, 2024, which improved 70 bps from the end of 2023.
As of Sept. 30, 2024, CINF’s book value per share was $88.32, up 14.6% from 2023-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 Other P&C Insurers
Selective Insurance Group, Inc. (SIGI - Free Report) reported third-quarter 2024 operating income of $1.40 per share, which missed the Zacks Consensus Estimate by 17.1%. The bottom line decreased 7% from the year-ago quarter. Total revenues of $1.2 billion increased 13.9% from the year-ago quarter’s figure. However, the top line missed the Zacks Consensus Estimate by 0.4%. On a year-over-year basis, net premiums written increased 9% to $1.15 billion. The figure was higher than our estimate of $1.2 billion.
Net investment income earned, before-tax, increased 17% year over year to $117.8 million. The figure was higher than our estimate of $117.3 million. The Zacks Consensus Estimate was pegged at $114 million. After-tax net underwriting income was $4.1 million, which plunged 83% year over year. Pre-tax catastrophe losses more than doubled year over year to $148.8 million.
The Travelers Companies (TRV - Free Report) reported third-quarter 2024 core income of $5.24 per share, which beat the Zacks Consensus Estimate by 38.2%. Travelers’ total revenues increased 10.7% from the year-ago quarter to $11.84 billion, primarily driven by higher premiums, net investment income, fee income and other revenues. The top-line figure beat the Zacks Consensus Estimate by 1.4%.
Net written premiums increased 8% year over year to a record $11.31 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.5 billion. Net investment income increased 18% year over year to $904 million. The figure was higher than our estimate of $868.7 million. The Zacks Consensus Estimate was pegged at $883 million. Catastrophe loss was $939 million, pre-tax, wider than a loss of $850 million, pre-tax, incurred in the year-ago quarter.
W.R. Berkley Corporation’s (WRB - Free Report) third-quarter 2024 operating income of 93 cents per share beat the Zacks Consensus Estimate by 1.1%. The bottom line improved 3.3% year over year. W.R. Berkley’s net premiums written were a record $3.1 billion, up 7.3% year over year. The figure was $3.1 billion. Operating revenues came in at $3.4 billion, up 10.9% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line missed the consensus estimate by 0.8%.
Net investment income surged 19.5% to a record $323.8 million. The figure was lower than our estimate of $382.1 million. The Zacks Consensus Estimate was $343 million. Total expenses increased 12.1% to $2.9 billion. The figure matched our estimate. The loss ratio deteriorated 50 bps to 62.4, while the expense ratio deteriorated 20 bps year over year to 28.5.