Cincinnati Financial Corp. ( CINF )
reported second quarter 2012 operating earnings of 17 cents per
share, striding ahead of the Zacks Consensus Estimate of 11 cents.
Earnings rebounded from the loss of 58 cents incurred in the
year-ago quarter. Operating income came in at $28 million reversing
the year ago loss of $94 million.
Including net realized investment gains and losses of $4 million
or 3 cents per share the company reported a net income of $32
million or 20 cents per share improving significantly from net loss
of $50 million or 31 cents per share in the year-ago quarter.
The quarter benefited from strong property casualty
Revenue for the quarter stood at $1.02 billion, up 4.6% year
over year, also considerably ahead of the Zacks Consensus Estimate
of $0.998 billion. The increase in total revenue was primarily led
by higher premiums earned during the quarter.
Investment income increased marginally by 1% over the prior-year
quarter to $100 million.
Total benefits and expenses decreased 7.7% year over year to
$991 million due to lower insurance loss and benefits, including
interest expenses and other expenses.
The Commercial Lines Insurance segment recorded
written premium of $626 million, up 16.6% from the prior-year
quarter, reflecting growth in renewal written premium. Lower loss
and loss expenses narrowed the underwriting loss in this segment to
$20 million from a loss of $129 million in the prior-year
Combined ratio, a measure of insurer's profitability, improved
2070 basis points year over year to 103.5% owing to lower
Premiums written in the Personal Lines
Insurance segment increased 19% year over year to $250
million, aided by an increase in renewals. Despite a higher
top line, the segment posted underwriting loss of $55 million.
Nevertheless, it was considerably lower than the loss of $142
million suffered in the year-ago quarter. The combined ratio
improved 5340 basis points year over year to 126.1% during the
Premiums written in the Excess and Surplus Lines
Insurance segment amounted to $27 million, up 28.6% year
over year. The growth was largely driven by persistent increase in
average renewal price in the high single-digit range. The combined
ratio deteriorated 3480 basis points year over year to 110.7%
during the second quarter.
Earned premiums in the Life Insurance segment
increased 18.6% year over year to $51 million, on the back of an
11% increase in Term life insurance.
Book value per share, a measure of net worth, was up 2.5% year
on year but down 1.3% sequentially to $31.66 as of June 30, 2012.
The company's total assets were valued at $16.09 billion,
increasing 2.9% over 2011-end, while shareholders' equity was $5.14
billion, reflecting a 2.2% increase from $5.03 billion as of
December 31, 2011.
On July 16, 2012, Cincinnati Financial paid a cash dividend of
40.25 cents per share to shareholders of record as on June 20,
Cincinnati Financial closely competes with The Chubb
Corp. ( CB ) and The Travelers Companies
Inc. ( TRV ). Chubb Corp. reported second quarter
operating earnings of $1.37 per share, significantly ahead of the
Zacks Consensus Estimate of $1.15 per share. Earnings also compare
favorably with $1.27 per share reported during the prior-year
Travelers reported earnings of $1.26 per share in the second
quarter of 2012, lagging the Zacks Consensus Estimate of $1.38 per
share. Results rebounded from the loss of 88 cents incurred in the
Total revenue in the quarter under review was $6.4 billion, flat
with the year-ago quarter, driven by the increase in premiums
earned, partially offset by decrease in net investment income.
Revenue surpassed the Zacks Consensus Estimate of $6.3 billion.
Cincinnati Financial currently retains a Zacks #2 Rank, which
translates into a short-term Buy rating. However, we maintain a
long-term Neutral recommendation on its shares.
CHUBB CORP (CB): Free Stock Analysis Report
CINCINNATI FINL (CINF): Free Stock Analysis
TRAVELERS COS (TRV): Free Stock Analysis Report
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