Loading...
•
Sep 30, 2021
Cincinnati Financial Q3 2021 Earnings Report
Cincinnati Financial reported a decrease in net income but an increase in non-GAAP operating income, driven by improvements in the property casualty combined ratio and growth in net written premiums.
Key Takeaways
Cincinnati Financial Corporation reported a decrease in net income, primarily due to lower net investment gains, but experienced significant growth in non-GAAP operating income driven by improvements in its insurance business. The company's book value per share increased, and it maintained a strong balance sheet.
Third-quarter net income decreased to $153 million, or 94 cents per share, compared to $484 million, or $2.99 per share, in the third quarter of 2020.
Non-GAAP operating income increased by 232% to $209 million, or $1.28 per share, compared to $63 million, or 39 cents per share, in the third quarter of last year.
The property casualty combined ratio improved to 92.6% from 103.6% in the third quarter of 2020.
Book value per share increased to $73.49 at September 30, 2021, up $6.45 since year-end.
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
The company did not provide specific forward guidance but highlighted ongoing efforts in pricing segmentation, collaboration between sales, underwriting, and analytics, and a strong balance sheet providing flexibility for business growth and shareholder dividends.
Positive Outlook
- Continued efforts in pricing segmentation across organization
- Strong collaboration between associates in sales, underwriting and analytics
- Achieved strong non-GAAP operating income results
- Maintaining consistent approach to setting reserves
- Strong balance sheet gives flexibility to pursue business growth and pay shareholder dividends
Challenges Ahead
- Catastrophe losses for the quarter outpaced the 5-year average
- Net income decrease primarily due to the after-tax net effect of a decrease in net investment gains
- Life insurance subsidiary net income decreased
- Increase in the underwriting expense ratio primarily due to higher levels of profit-sharing commissions for agencies
- Claims on average are remaining open longer than previously expected.
Revenue & Expenses
Visualization of income flow from segment revenue to net income