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Cincinnati Financial (CINF) Q2 Earnings & Revenues Beat

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Cincinnati Financial Corporation (CINF - Free Report) reported second-quarter 2019 operating income of 85 cents per share, which beat the Zacks Consensus Estimate by 32.8%. Also, the bottom line improved 4.9% year over year.

The results reflect price increases and premium growth initiatives.

Operational Update    

Total operating revenues in the quarter under review were $1.549 billion, up 6.6% year over year. This improvement was driven by 7% higher premiums earned and 4% rise in investment income. Revenues surpassed the Zacks Consensus Estimate by 1.4%.

Net written premiums increased 9%, reflecting price increases and premium growth initiatives.

Total benefits and expenses of Cincinnati Financial increased 6.9% year over year to $1.4 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 70 basis points (bps) year over year to 96.5%.

Cincinnati Financial Corporation Price, Consensus and EPS Surprise

Quarterly Segment Update

Commercial Lines Insurance: Total revenues of $824 million grew 1.5% year over year. This upside was primarily driven by solid premiums earned. Underwriting profit of $12 million dropped 74.5% year over year. Combined ratio deteriorated 440 bps year over year to 98.6%.

Personal Lines Insurance: Total revenues of $349 million rose 5% year over year owing to 5% increase in premiums earned. The segment reported underwriting profit of $5 million, which marked a rebound from the year-ago loss of $32 million. Combined ratio improved 1120 bps year over year to 98.9%.

Excess and Surplus Lines Insurance: Total revenues of $67 million rose 16% year over year, aided by 18% higher earned premiums. The segment’s underwriting profit of $17 million surged 31% year over year. Combined ratio improved 150 bps year over year to 76.1%.

Life Insurance: Total revenues were $105 million, up 2% year over year. Total benefits and expenses increased 17.3% year over year to $95 million.

Financial Update

As of Jun 30, 2019, Cincinnati Financial had total assets worth $24.3 billion, up nearly 11% from the level at 2018 end.

Cincinnati Financial’s debt-to-capital ratio was 8.3% as of Jun 30, 2019, up 120 bps from end of 2018.

As of Jun 30, 2019, Cincinnati Financial’s book value per share was at a record high of $55.92, up 16.3% from 2018 end

Zacks Rank

Cincinnati Financial currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Of the insurance industry players that have reported second-quarter results so far, The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings. However, The Travelers Companies, Inc. (TRV - Free Report) missed the same.

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