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Mar 31, 2020
Cincinnati Financial Q1 2020 Earnings Report
Cincinnati Financial experienced a net loss due to a decrease in the fair value of equity securities and a decrease in net investment gains.
Key Takeaways
Cincinnati Financial Corporation reported a net loss of $1.226 billion for the first quarter of 2020, compared to a net income of $695 million in the first quarter of 2019. Non-GAAP operating income decreased by 20% to $137 million, and book value per share decreased by 17.4% since year-end. The company's performance was impacted by a decrease in net investment gains and weather-related catastrophe losses.
First-quarter 2020 net loss was $1.226 billion, or $7.56 per share.
Non-GAAP operating income decreased by 20% to $137 million, or 84 cents per share.
Book value per share at March 31, 2020, was $50.02, a decrease of 17.4% since year-end.
The combined ratio for property casualty was 98.5%.
Cincinnati Financial
Cincinnati Financial
Cincinnati Financial Revenue by Segment
Revenue by Segment
Commercial Lines Revenue
CapyFin.comPersonal Lines Revenue
CapyFin.comE&S Lines Revenue
CapyFin.comLife Insurance Revenue
CapyFin.com Forward Guidance
Cincinnati Financial is focused on supporting stakeholders and managing risks during the COVID-19 pandemic, while also addressing claims from an active storm season and maintaining financial strength.
Positive Outlook
- Robust business continuity plans allowed for a quick transition to remote work.
- Options for policyholder relief include stay-at-home credits and waived fees.
- A dividend of 60 cents per share was paid to shareholders.
- Pricing segmentation, product diversification, and geographic diversification are yielding benefits.
- The equity portfolio holds $2.5 billion in appreciated value before taxes.
Challenges Ahead
- The COVID-19 pandemic is causing personal and professional suffering.
- The pandemic may lead to securities market disruption and decreased economic activity.
- There is a risk of legislation extending business interruption insurance without physical damage.
- Commercial property policies do not cover business interruption claims without direct physical damage.
- Some loss events, like global pandemics, are not insured due to their size and scope.
Revenue & Expenses
Visualization of income flow from segment revenue to net income