Cincinnati Financial Corporation CINF 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.

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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.

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 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 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 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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