Cincinnati Financial Corporation CINF reported first-quarter 2021 operating income of $1.37 per share, which beat the Zacks Consensus Estimate by 30.5%. Moreover, the bottom line improved 63.1% year over year.
The company’s earnings witnessed higher premiums, lower expenses and improved combined ratio.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Cincinnati Financial Corporation price-consensus-eps-surprise-chart | Cincinnati Financial Corporation Quote
Total operating revenues in the quarter under review were $1.7 billion, up 5.9% year over year. This improvement was driven by 6% higher premiums earned and a 5% rise in investment income. The top line also outpaced the Zacks Consensus Estimate by 7.9%.
Net written premiums improved 12% from the prior-year quarter to $1.7 billion, reflecting premium growth initiatives and price increases. Growth included a contribution of 6% from Cincinnati Re.
Total benefits and expenses of Cincinnati Financial decreased 1.2% year over year to $1.5 billion, primarily due to lower underwriting, acquisition and insurance expenses and other operating expenses.
Combined ratio — a measure of underwriting profitability — improved 730 basis points (bps) year over year to 91.2%.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $887 million grew 3% year over year. This upside can primarily be attributed to solid premiums earned. It reported underwriting profit of $130 million against the prior-year quarter’s underwriting loss of $20 million. The combined ratio also improved 1710 bps year over year to 85.4%.
Personal Lines Insurance: Total revenues of $377 million rose 5% year over year owing to 5% increase in premiums earned. The segment incurred underwriting loss of $3 million against the prior-year quarter’s profit of $21 million. The combined ratio deteriorated 680 bps year over year to 101.1%.
Excess and Surplus Lines Insurance: Total revenues of $89 million climbed 13% year over year, aided by 14% higher earned premiums. However, the segment’s underwriting profit of $8 million declined 11% year over year. The combined ratio deteriorated 290 bps year over year to 92%.
Life Insurance: Total revenues were $111 million, up 50% year over year.
As of Mar 31, 2021, cash and cash equivalents were $947 million, up 5.2% from the 2020-end level.
Total assets of $28.3 billion increased 2.8% from the figure at 2020 end.
Long-term debt amounted to $788 million, which remained flat compared with the figure at 2020 end.
Cincinnati Financial’s debt-to-capital ratio was 7.1% as of Mar 31, 2021, contracting 10 bps from 2020 end.
As of Mar 31, 2021, its book value per share was $69.16, up 3.2% from the figure at 2020 end.
Cincinnati Financial currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
The Progressive Corporation’s PGR first-quarter 2021 earnings per share of $1.72 missed the Zacks Consensus Estimate of $1.78.
The Travelers Companies’ TRV first-quarter 2021 earnings per share of $2.73 beat the Zacks Consensus Estimate of $2.44.
W.R. Berkley Corporation’s WRB first-quarter 2021 earnings per share of $1.08 beat the Zacks Consensus Estimate by 21.3%.
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