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Cincinnati Financial (CINF) Q1 Earnings Top, Revenues Up Y/Y

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Cincinnati Financial Corporation (CINF - Free Report) reported first-quarter 2019 operating income of $1.05 per share, which beat the Zacks Consensus Estimate of 94 cents by 11.7%. Also, the bottom line improved 45.8% year over year.

The results reflect price increases and premium growth initiatives.

Including net realized investment gain of $3.17 per share, net income of $4.22 per share marked a reversal from the year-ago loss of 19 cents per share.

Cincinnati Financial Corporation Price, Consensus and EPS Surprise

Operational Update    

Total operating revenues in the quarter under review were $1.5 billion, up 5.7% year over year. This improvement was driven by 6% higher premiums earned and a 5% rise in investment income.

Total benefits and expenses of Cincinnati Financial increased 61.4% year over year to $1.3 billion, primarily due to higher insurance loss and contract holders’ benefits plus underwriting, acquisition and insurance expenses plus other operating expenses.

Combined ratio — a measure of underwriting profitability — improved 490 basis points (bps) year over year to 93%.

Quarterly Segment Update

Commercial Lines Insurance: Total revenues of $811 million grew 12% year over year. This upside was primarily driven by solid premiums earned. Underwriting profit of $76 million increased more than fivefold. Combined ratio improved 750 bps year over year to 90.8%.

Personal Lines Insurance: Total revenues of $345 million rose 6% year over year owing to 6% increase in premiums earned. The segment incurred underwriting loss of $4 million, narrower than $9 million loss incurred in the year-ago quarter. Combined ratio improved 190 bps year over year to 101.3%.

Excess and Surplus Lines Insurance: Total revenues of $64 million rose 14% year over year, aided by 13% higher earned premiums. The segment’s underwriting profit of $11 million dropped 39% year over year. Combined ratio deteriorated 1470 bps year over year to 83.5%.

Life Insurance: Total revenues were $100 million, 5% up year over year. Total benefits and expenses increased 11% year over year to $92 million.

Financial Update

As of Mar 31, 2019, Cincinnati Financial had total assets worth $23.4 billion, up 6.5% from the level at 2018 end.
Cincinnati Financial’s debt-to-capital ratio was 8.7% as of Mar 31, 2019, improved 80 bps from 9.5% at the end of 2018.

As of Mar 31, 2019, Cincinnati Financial’s book value per share was a record high of $52.88, up 9% year over year.

Zacks Rank

Cincinnati Financial currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Among other players from the property and casualty industry, RLI Corp (RLI - Free Report) , The Progressive Corporation (PGR - Free Report) and The Travelers Companies Inc. (TRV - Free Report) beat the respective Zacks Consensus Estimate for earnings.

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