By Michael Loney

Feb 10 - Cincinnati Financial Corporation has reported a comfortable earnings beat for the fourth quarter, with results that included a 2.8 point improvement in combined ratio to 84.7 percent despite higher catastrophe losses.

• $3.14 Q4 operating EPS beats $1.90 consensus, up from $2.28 in Q4 2023

• UW profit up 40% to $352mn in Q4; CR improves 2.8 pts to 84.7%

• NPW up 17% to $2.24bn in Q4 compared with $1.92bn in prior year period

• Commercial lines NPW up 7.7%, personal lines up 30%, E&S up 14%

Non-Gaap operating income increased to $497mn in the quarter, up from $359mn in the fourth quarter of 2023.

The $3.14 operating income per share comfortably beat the $1.90 consensus estimate of 11 analysts as per MarketWatch, and was up from $2.28 in Q4 2023.

Underwriting profit increased to $352mn in the quarter, up 40 percent from $252mn in Q4 2023.

The 84.7 percent Q4 2024 property casualty combined ratio was a 2.8 point improvement from 87.5 percent for the fourth quarter of 2023.

Current accident year catastrophe losses represented 5.0 points on the combined ratio while there was a 1.0 point benefit from prior year cat losses. This compared with 1.9 points of current accident year cat losses and 0.6 point benefit from prior-year cat losses in Q4 2023.

Net written premiums (NWP) grew 17 percent in the quarter to $2.24bn, from $1.92bn in the prior-year period. Cincinnati Financial said the increase reflected price increases, premium growth initiatives and a higher level of insured exposures.

The company said that the contribution to growth from Cincinnati Re and Cincinnati Global in total was 2 percentage points for Q4 2024.

The commercial lines combined ratio improved 7.7 points to 84.5 percent while this segment’s NWP increased 8 percent to $1.14bn.

The personal lines combined ratio improved 4.5 points to 80.2 percent while NWP increased 30 percent to $753mn.

Excess and surplus line combined ratio deteriorated 3.3 points to 93.1 percent while NWP grew 14 percent to $171mn.

For the full-year 2024, underwriting profit of $580mn was up 45 percent from $401mn in 2023.

The 2024 property casualty combined ratio of 93.4 percent was a 1.5 point improvement from 94.9 percent in 2023.

NWP increased 15 percent to $9.24bn in 2024, including commercial lines up 8 percent to $4.69bn, personal lines up 30 percent to $3.00bn, and excess and surplus lines up 15 percent to $654mn.

The contribution to growth from Cincinnati Re and Cincinnati Global in total was 1 point for the full year.

"Our 2024 year-end results show the importance and success of the initiatives we've undergone over the past decade to appropriately balance growth and profitability, ensuring we have the financial strength to answer the call of agents and insureds when a disaster strikes,” said Stephen Spray, president and CEO of Cincinnati Financial.

Spray described the property casualty underwriting Q4 results as “excellent” fourth-quarter.

He also said that the full-year 2024 combined ratio benefited from “sound underwriting judgement and catastrophe losses staying in line with the prior year”.

“Our 2024 core combined ratio on a current accident year before catastrophe loss basis was 1.9 points better than full-year 2023,” he said.

He added: "Cincinnati Re and Cincinnati Global Underwriting Ltd continue to perform as planned and were very profitable in 2024, remaining nimble and taking advantage of market opportunities as they arise."

Spray also noted that “our first-quarter results will be impacted due to the California wildfires”, but did not provide any more detail.