Advertisement
Canada markets open in 9 hours 17 minutes

  • S&P/TSX

    22,011.72
    +139.76 (+0.64%)
     

  • S&P 500

    5,070.55
    +59.95 (+1.20%)
     

  • DOW

    38,503.69
    +263.71 (+0.69%)
     

  • CAD/USD

    0.7319
    -0.0002 (-0.02%)
     

  • CRUDE OIL

    83.42
    +0.06 (+0.07%)
     

  • Bitcoin CAD

    91,057.84
    +106.77 (+0.12%)
     

  • CMC Crypto 200

    1,434.15
    +19.39 (+1.37%)
     

  • GOLD FUTURES

    2,342.50
    +0.40 (+0.02%)
     

  • RUSSELL 2000

    2,002.64
    +35.17 (+1.79%)
     

  • 10-Yr Bond

    4.5980
    -0.0250 (-0.54%)
     

  • NASDAQ futures

    17,733.25
    +126.50 (+0.72%)
     

  • VOLATILITY

    15.69
    -1.25 (-7.38%)
     

  • FTSE

    8,044.81
    +20.94 (+0.26%)
     

  • NIKKEI 225

    38,401.54
    +849.38 (+2.26%)
     

  • CAD/EUR

    0.6833
    -0.0003 (-0.04%)
     

Cincinnati Financial Tops Q2 Earnings on Underwriting Profit - Analyst Blog

Zacks Equity Research
Updated

Cincinnati Financial Corp. CINF reported second-quarter 2015 operating income of 83 cents per share, which breezed past the Zacks Consensus Estimate of 38 cents. Results also improved 80.4% year over year. The stellar performance came on the back of solid underwriting results in the reported quarter.

Cincinnati Financial Corporation - Earnings Surprise | FindTheBest

 

Net income per share came in at $1.06 compared with 51 cents in the year-ago quarter.

Behind the Headlines

Total revenue in the reported quarter grossed $1.3 billion, up 8.4% year over year. The top-line improvement was driven by higher premiums earned (up 5%) and investment income (up 3%).

ADVERTISEMENT

Total benefits and expenses of Cincinnati Financial decreased 3.5% year over year to $1.1 billion due to lower insurance losses and policyholder benefits.

Combined ratio – a measure of underwriting profitability – improved 850 basis points (bps) year over year to 92.4%.  

Cincinnati Financial had 1,493 agency relationships as of Jun 30, 2015 compared with 1,466 at the end of 2014.

Quarterly Segment Update

Commercial Lines Insurance: Total revenue of $746 million was up 4% year over year as a result of an increase in premiums earned. Underwriting profit was $97 million compared with $28 million in the year-ago quarter. Combined ratio improved by 910 bps year over year.

Personal Lines Insurance: Premium earned increased 5% year over year to $272 million owing to higher renewal written premiums. The segment reported underwriting loss of $25 million, narrower than an underwriting loss of $40 million incurred in the year-ago quarter. Combined ratio was 109.2% signifying underwriting loss though it improved 660 bps year over year.

Excess and Surplus Lines Insurance: The segment’s earned premiums of $42 million was up 24% year over year. Underwriting profit improved to $11 million compared with $5 million in the year-ago quarter. Combined ratio improved 900 bps year over year to 76%.

Life Insurance: Premiums earned in the segment decreased 2% year over year to $52 million, primarily due to a 25% fall in Universal life insurance premiums. Total benefits and expenses decreased 1% year over year to $74 million.

Financial Update

As of Jun 30, 2015, Cincinnati Financial had assets worth $18.9 billion, up 0.7% from that as of Dec 31, 2014.

Cincinnati Financial’s debt-to-capital ratio was 11.4% as of Jun 30, 2015 compared with 11.3% as of year-end 2014.

As of Jun 30, 2015, Cincinnati Financial’s book value per share was $39.60, down 1.3% year over year.

Zacks Rank

Cincinnati Financial currently carries a Zacks Rank #4 (Sell).

Performance by Other Property and Casualty Insurers

The Chubb Corporation CB reported second-quarter operating income of $2.08 per share, which surpassed the Zacks Consensus Estimate by 11.2% and improved 22% year over year.

RLI Corporation RLI posted operating earnings of 77 cents per share for the second quarter that beat the Zacks Consensus Estimate by nearly 38%. Earnings of this property & casualty insurer improved about 17% year over year.  

ACE Limited ACE posted second-quarter operating earnings of $2.40 per share, which outperformed the Zacks Consensus Estimate by about 3.9%. Earnings, however, were down year over year by a couple of cents.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
RLI CORP (RLI): Free Stock Analysis Report
 
CHUBB CORP (CB): Free Stock Analysis Report
 
ACE LIMITED (ACE): Free Stock Analysis Report
 
CINCINNATI FINL (CINF): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research