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Mar 31, 2021
Cincinnati Financial Q1 2021 Earnings Report
Cincinnati Financial reported a net income of $620 million, or $3.82 per share, compared to a net loss of $1.226 billion, or $7.56 per share, in the first quarter of 2020.
Key Takeaways
Cincinnati Financial Corporation reported a strong first quarter in 2021, marked by a significant increase in net income and non-GAAP operating income. The company's combined ratio improved, and net written premiums grew, reflecting price increases and premium growth initiatives. The book value per share also saw an increase.
First-quarter net income was $620 million, or $3.82 per share, compared to a net loss of $1.226 billion, or $7.56 per share, in the first quarter of 2020.
Non-GAAP operating income increased by 62% to $222 million, or $1.37 per share, compared to $137 million, or 84 cents per share, in the first quarter of last year.
Book value per share at March 31, 2021, was $69.16, up $2.12 since year-end.
The property casualty combined ratio for the first quarter of 2021 was 91.2%, improved from 98.5% for the first quarter of 2020.
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's ample capital allows the company to execute on long-term strategies and continue to pay dividends to shareholders through the normal variability of investment and insurance markets.
Positive Outlook
- Board of directors expressed confidence in financial strength by raising the cash dividend.
- Value creation ratio was 4.1% for the first quarter, on track to meet annual average target of 10% to 13%.
- Achieved best first-quarter combined ratio result in eight years.
- Pricing segmentation and product and geographic diversification initiatives are proving effective.
- Current accident year combined ratio before catastrophe losses improved 5.3 points compared with last year’s first quarter to a satisfactory 86.2%.
Challenges Ahead
- Severe winter weather impacted communities from Washington state to the East Coast, leading to significant catastrophe losses.
- Experienced nearly $150 million in catastrophe losses in the first quarter of 2021, contributing 10.4 points to the combined ratio.
- Economic factors do not yet indicate a full recovery from pandemic effects, impacting new business written by agencies.
- Unfavorable prior accident year reserve development in excess and surplus lines due to an updated estimate for salaries and expenses to adjust claims.
- Less favorable mortality experience in the life insurance subsidiary due in part to higher pandemic-related death claims.
Revenue & Expenses
Visualization of income flow from segment revenue to net income