Net income: $820 million in Q3 2024.
Non-GAAP operating income: $224 million in the third quarter, a decrease of $37 million from the prior year.
Combined ratio: 97.4% in the third quarter of 2024, an increase of 3.0 points year-on-year.
Growth in property casualty net premiums written: 17% in the quarter.
Commercial lines net written premium growth: 11%, combined ratio 93.0%.
Personal insurance net premium written growth: 29%, with a composite ratio of 110.3%.
Growth in net premiums written for excess and surplus lines: 23%, combined ratio 95.3%.
Cincinnati Re Premium Net Revenue Growth: 5%, Composite Ratio 95.6%.
Cincinnati’s global net written premium growth: 12%, with a composite ratio of 66.6%.
Life insurance net income: $20 million for the quarter.
Investment income growth: 15% in the third quarter of 2024.
Bond interest income growth: 21% in the third quarter.
Cash flow from operating activities: $2 billion in the first nine months of 2024, up 36% year over year.
Value Creation Rate (VCR): 9.0% for Q3 2024, 17.8% for nine months.
Stockholder dividends paid: $365 million in the first nine months of 2024.
Shares repurchased: Approximately 1.1 million shares at an average price of approximately $112 per share.
Book value per share: $88.32 at quarter end.
Release date: October 25, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
Cincinnati Financial Corp. (NASDAQ:CINF) reported strong premium growth, with consolidated casualty net premiums written increasing 17% in the quarter.
The company achieved a value creation rate of 9.0% in the third quarter, contributing 17.8% of the nine-month total.
Cincinnati Financial Corp. (NASDAQ:CINF) maintained its strong financial position with record book value of $88.32 per share and consolidated stockholders’ equity of nearly $14 billion on a GAAP basis.
Third-quarter investment income increased 15%, supported by a 21% increase in debt interest income.
The company continues to grow its distributor network by identifying suitable expansion opportunities and maintaining strong relationships with distributors.
The composite ratio of property damage accidents increased by 3.0 points from the previous year to 97.4% due to an increase in disaster losses.
Non-GAAP operating income decreased $37 million from the prior year, impacted by an increase in after-tax abnormal losses of $86 million.
In the Personal Lines segment, the combined ratio increased by 10.4 percentage points to 110.3% due to an increase in catastrophe losses.
Cincinnati Financial Corp. (NASDAQ:CINF) reported unfavorable funding trends in excess and surplus lines due to increased catastrophe losses and a slight increase in unfavorable funding in prior accident years. did.
Dividend income decreased 1% due to equity sales reflecting portfolio rebalancing activity.
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Q: Can you explain the increase in commercial catastrophe loss picks and its causes? A: Chief Financial Officer Michael Sewell said the increase was due to a cautious approach in response to higher-than-expected loss payouts and litigation reserves. He explained that this was due to an increase in reserves. The severity of this increase is more important than the frequency, and industry uncertainties such as social inflation and abuse of the legal system have increased IBNR reserves.
Q: What is causing the large increase in commercial catastrophe premiums despite high loss ratios? A: CEO Stephen Spray attributes strong premium growth to strong pricing and He said it was due to insurance underwriting practices. They leverage sophisticated pricing tools and focus on risk disaggregation, allowing them to maintain strong pricing amid uncertainty.
Q: Has there been a change in investment strategy due to the recent significant divestment of the investment portfolio? A: CEO Steven Spray confirmed that there will be no change in investment philosophy with the new leadership. Chief Information Officer Steve Soloria said the sale was a strategic move to take advantage of a strong stock market, reinvest in fixed income amid high interest rates and maintain a balanced portfolio approach. He added that it was a great move.
Q: Please elaborate on the growth potential of the excess lines and redundant lines segment. A: CEO Stephen Spray said he sees significant growth potential in the E&S division with expanded expertise, teams and product offerings. We are also increasing our agency agreements, strengthening our ability to win more business in this area.
Q: How is the company managing consumer start-up business growth, especially in the current market opportunity? A: CEO Stephen Spray believes in strong agency relationships and sophisticated pricing. He highlighted the use of configuration models to capitalize on personalized market opportunities. They focus on both the mid-market and high-net-worth segments, ensuring that they account for the appropriate proportion of risk for each.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
