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Cincinnati Financial
🇺🇸 NASDAQ:CINF
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Jun 30, 2020

Cincinnati Financial Q2 2020 Earnings Report

Cincinnati Financial reported second-quarter results with net income increasing but non-GAAP operating income decreasing due to catastrophe losses and pandemic-related effects.

Key Takeaways

Cincinnati Financial Corporation reported a significant increase in net income for the second quarter of 2020, primarily driven by gains in the fair value of equity securities. However, non-GAAP operating income decreased due to catastrophe losses and pandemic-related impacts. The company remains focused on business fundamentals and core underwriting.

Second-quarter net income increased to $909 million, or $5.63 per share, compared to $428 million, or $2.59 per share, in the second quarter of 2019.

Non-GAAP operating income decreased by 49% to $71 million, or $0.44 per share, compared to $140 million, or $0.85 per share, in the second quarter of the previous year.

The combined ratio for the second quarter of 2020 was 103.1%, up from 96.5% in the second quarter of 2019.

Book value per share decreased to $57.56 at June 30, 2020, down $2.99 or 5.0% since year-end.

Total Revenue
$2.71B
Previous year: $1.91B
+41.9%
EPS
$0.44
Previous year: $0.85
-48.2%
Combined Ratio
103.1%
Previous year: 96.5%
+6.8%
Book Value per Share
$57.6
Net Written Premiums
$1.56B
Previous year: $1.48B
+5.6%
Gross Profit
$2.71B
Previous year: $1.91B
+41.9%
Cash and Equivalents
$706M
Previous year: $803M
-12.1%
Free Cash Flow
$441M
Previous year: $268M
+64.6%
Total Assets
$25.5B
Previous year: $24.3B
+4.6%

Cincinnati Financial

Cincinnati Financial

Cincinnati Financial Revenue by Segment

Forward Guidance

Cincinnati Financial is maintaining a long-term perspective with its investment philosophy and remains focused on its insurance business. The company is confident in its ability to provide cash for investment and earnings that support future shareholder dividends and add to book value.

Positive Outlook

  • The company will proactively manage risks.
  • The company will promptly pay covered claims.
  • The company will deliver long-term value for shareholders.
  • Commercial, personal and excess insurance pricing rose at a percentage in the mid-single digits.
  • The company has a dedicated team and experienced claims associates.

Challenges Ahead

  • The company experienced a $41 million underwriting loss in the second quarter.
  • Catastrophe-related losses totaled $231 million.
  • Pandemic-related loss and expense effects totaled $65 million.
  • The impact of catastrophe losses this quarter was higher than the five-year second-quarter average.
  • The 2018 Financial Accounting Standards Board's rule change continues to produce increased volatility in the company’s results.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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