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Cincinnati Financial (CINF) Q2 Earnings Top on Higher Premiums
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Cincinnati Financial Corporation (CINF - Free Report) reported second-quarter 2024 operating income of $1.29 per share, which surpassed the Zacks Consensus Estimate by 33%. The bottom line increased 7% year over year.
The quarterly results of CINF were aided by premium growth initiatives, price increases and higher interest income from fixed-maturity securities. However, the upside was partly offset by poor underwriting income and escalating expenses.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Total operating revenues in the quarter under review were $2.4 billion, which improved 10.8% year over year. This improvement was driven by higher earned premiums, investment income and other revenues. However, the top line missed the consensus mark by 1.5%.
Net written premiums climbed 14% year over year to $2.4 billion, driven by premium growth initiatives, price increases and a higher level of insured exposures, as well as contribution to growth from Cincinnati Re and Cincinnati Global.
Investment income, net of expenses, increased 10% year over year to $242 million and missed our estimate of $246.2 million. It was due to an increase in interest income from fixed-maturity securities and a decrease in equity portfolio dividends. The Zacks Consensus Estimate was pegged at $252 million.
Total benefits and expenses of Cincinnati Financial increased 11.2% year over year to $2.1 billion, primarily due to higher insurance losses and contract holders' benefits, underwriting, acquisition and insurance expenses, interest expenses and other operating expenses. Our estimate was $2.2 billion.
In its property & casualty (P&C) insurance business, CINF witnessed an underwriting income of $35 million, which decreased 26% from the year-ago period. Our estimate was pegged at an income of $1.5 million.
The combined ratio — a measure of underwriting profitability — deteriorated 90 basis points (bps) year over year to 98.5. Our estimate was pinned at 100.1.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $1.1 billion increased 4% year over year, which matched our estimate as well as the Zacks Consensus Estimate. This upside was primarily driven by 4% premiums earned.
Underwriting income was $10 million, which decreased 70% year over year. The combined ratio deteriorated 220 bps year over year to 99.1. Our estimate was pegged at 100.6.
Personal Lines Insurance: Total revenues of $632 million increased 28% year over year on account of a 28% rise in premiums earned. Our estimate was $592.1 million, while the Zacks Consensus Estimate was pegged at $648.3 million.
The company reported an underwriting loss of $42 million, wider than the underwriting loss of $36 million in the year-earlier period. Our estimate was pegged at a loss of $53.5 million. The combined ratio improved 70 bps year over year to 106.9. Our estimate was 109.2.
Excess and Surplus Lines Insurance: Total revenues of $152 million grew 14% year over year, aided by 14% higher earned premiums. Our estimate was $162.4 million, while the Zacks Consensus Estimate was pegged at $152.4 million.
Underwriting profit decreased 27% year over year to $8 million. Our estimate was pinned at $20.3 million. The combined ratio deteriorated 320 bps year over year to 95.4. Our estimate was 88.
Life Insurance: Total revenues were $123 million, down 3% year over year. The Zacks Consensus Estimate was pegged at $78.7 million. Our estimate was $81.4 million. Total benefits and expenses decreased 8% year over year to $92 million due to lower contract holders’ benefits incurred.
Financial Update
As of Jun 30, 2024, Cincinnati Financial had total assets worth $34.8 billion, up 6.2% from the level at the end of 2023.
Total debt was $815 million as of Jun 30, 2024, which remained unchanged from the 2023-end level. The company’s debt-to-capital ratio was 6% as of Jun 30, 2024, which improved 30 bps from the end of 2022.
As of Jun 30, 2024, CINF’s book value per share was $81.79, up 6.1% from 2023-end.
Zacks Rank
Cincinnati Financial currently carries a Zacks Rank #4 (Sell).
The Progressive Corporation’s (PGR - Free Report) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. Combined ratio improved 850 bps from the prior-year quarter’s level to 91.9.
The Travelers Companies, Inc. (TRV - Free Report) reported second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion. The top-line figure, however, missed the Zacks Consensus Estimate by 1%. Net written premiums increased 8% year over year to a record $11.1 billion. The figure was higher than our estimate of $10.4 billion.
Net investment income increased 24.2% year over year to $885 million. The figure was higher than our estimate of $852.14 million. The Zacks Consensus Estimate was pegged at $861.2 million. Catastrophe loss was $1.51 billion, pre-tax, wider than a loss of $1.18 million, pre-tax, incurred in the year-ago quarter. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter.
RLI Corp. (RLI - Free Report) reported second-quarter 2024 operating earnings of $1.72 per share, beating the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year. Operating revenues for the reported quarter were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the Zacks Consensus Estimate of $403 million. Gross premiums written increased 11% year over year to $563.4 million. Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. The Zacks Consensus Estimate was pegged at $37.4 million. Total expenses increased 9.5% year over year to $314.8 million. Our estimate was $331.7 million. Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 bps year over year to 81.5. The Zacks Consensus Estimate for the metric was pegged at 95.3, while our estimate was 89.9.
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Cincinnati Financial (CINF) Q2 Earnings Top on Higher Premiums
Cincinnati Financial Corporation (CINF - Free Report) reported second-quarter 2024 operating income of $1.29 per share, which surpassed the Zacks Consensus Estimate by 33%. The bottom line increased 7% year over year.
The quarterly results of CINF were aided by premium growth initiatives, price increases and higher interest income from fixed-maturity securities. However, the upside was partly offset by poor underwriting income and escalating expenses.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Cincinnati Financial Corporation price-consensus-eps-surprise-chart | Cincinnati Financial Corporation Quote
Operational Update
Total operating revenues in the quarter under review were $2.4 billion, which improved 10.8% year over year. This improvement was driven by higher earned premiums, investment income and other revenues. However, the top line missed the consensus mark by 1.5%.
Net written premiums climbed 14% year over year to $2.4 billion, driven by premium growth initiatives, price increases and a higher level of insured exposures, as well as contribution to growth from Cincinnati Re and Cincinnati Global.
Investment income, net of expenses, increased 10% year over year to $242 million and missed our estimate of $246.2 million. It was due to an increase in interest income from fixed-maturity securities and a decrease in equity portfolio dividends. The Zacks Consensus Estimate was pegged at $252 million.
Total benefits and expenses of Cincinnati Financial increased 11.2% year over year to $2.1 billion, primarily due to higher insurance losses and contract holders' benefits, underwriting, acquisition and insurance expenses, interest expenses and other operating expenses. Our estimate was $2.2 billion.
In its property & casualty (P&C) insurance business, CINF witnessed an underwriting income of $35 million, which decreased 26% from the year-ago period. Our estimate was pegged at an income of $1.5 million.
The combined ratio — a measure of underwriting profitability — deteriorated 90 basis points (bps) year over year to 98.5. Our estimate was pinned at 100.1.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $1.1 billion increased 4% year over year, which matched our estimate as well as the Zacks Consensus Estimate. This upside was primarily driven by 4% premiums earned.
Underwriting income was $10 million, which decreased 70% year over year. The combined ratio deteriorated 220 bps year over year to 99.1. Our estimate was pegged at 100.6.
Personal Lines Insurance: Total revenues of $632 million increased 28% year over year on account of a 28% rise in premiums earned. Our estimate was $592.1 million, while the Zacks Consensus Estimate was pegged at $648.3 million.
The company reported an underwriting loss of $42 million, wider than the underwriting loss of $36 million in the year-earlier period. Our estimate was pegged at a loss of $53.5 million. The combined ratio improved 70 bps year over year to 106.9. Our estimate was 109.2.
Excess and Surplus Lines Insurance: Total revenues of $152 million grew 14% year over year, aided by 14% higher earned premiums. Our estimate was $162.4 million, while the Zacks Consensus Estimate was pegged at $152.4 million.
Underwriting profit decreased 27% year over year to $8 million. Our estimate was pinned at $20.3 million. The combined ratio deteriorated 320 bps year over year to 95.4. Our estimate was 88.
Life Insurance: Total revenues were $123 million, down 3% year over year. The Zacks Consensus Estimate was pegged at $78.7 million. Our estimate was $81.4 million. Total benefits and expenses decreased 8% year over year to $92 million due to lower contract holders’ benefits incurred.
Financial Update
As of Jun 30, 2024, Cincinnati Financial had total assets worth $34.8 billion, up 6.2% from the level at the end of 2023.
Total debt was $815 million as of Jun 30, 2024, which remained unchanged from the 2023-end level. The company’s debt-to-capital ratio was 6% as of Jun 30, 2024, which improved 30 bps from the end of 2022.
As of Jun 30, 2024, CINF’s book value per share was $81.79, up 6.1% from 2023-end.
Zacks Rank
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 - Free Report) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. Combined ratio improved 850 bps from the prior-year quarter’s level to 91.9.
The Travelers Companies, Inc. (TRV - Free Report) reported second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion. The top-line figure, however, missed the Zacks Consensus Estimate by 1%. Net written premiums increased 8% year over year to a record $11.1 billion. The figure was higher than our estimate of $10.4 billion.
Net investment income increased 24.2% year over year to $885 million. The figure was higher than our estimate of $852.14 million. The Zacks Consensus Estimate was pegged at $861.2 million. Catastrophe loss was $1.51 billion, pre-tax, wider than a loss of $1.18 million, pre-tax, incurred in the year-ago quarter. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter.
RLI Corp. (RLI - Free Report) reported second-quarter 2024 operating earnings of $1.72 per share, beating the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year. Operating revenues for the reported quarter were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the Zacks Consensus Estimate of $403 million. Gross premiums written increased 11% year over year to $563.4 million. Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. The Zacks Consensus Estimate was pegged at $37.4 million. Total expenses increased 9.5% year over year to $314.8 million. Our estimate was $331.7 million. Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 bps year over year to 81.5. The Zacks Consensus Estimate for the metric was pegged at 95.3, while our estimate was 89.9.