Cincinnati Financial Corp.
) reported first-quarter 2014 operating earnings of 46 cents per
share, below the Zacks Consensus Estimate of 55 cents. Earnings
also declined 41.0% year over year.
Catastrophe loss incurred in the reported quarter led to the
earnings miss at Cincinnati Financial.
Revenues during the reported quarter amounted to $1.19
billion, up 8% year over year. The increase was driven by higher
premiums earned (up 10%) and higher investment income (up
Net Investment income increased 6.0% year over year to $103.0
Total benefits and expense increased 20.8% year over year to
$1.1 billion, induced by a rise in insurance and policy holder
benefits, and higher underwriting and acquisition
Combined ratio - a measure of underwriting profitability -
deteriorated to 100.3% from 91.2%.
Cincinnati Financial had 1450 agency relationships as of March
31, 2014 compared to 1439 agency relationships at the end of
Quarterly Segment Update
Commercial Lines Insurance
: This segment produced total revenue of $693 million, up 10%
year over year, led by a 6% increase in net premiums written to
$771 million. However, despite top-line growth, higher loss
and underwriting expenses dragged down the underwriting profit to
$2 million from $58 million in the year-ago quarter.
Personal Lines Insurance
: Premium earned increased 10% year over year to $254 million led
by higher premium in personal lines business. Despite the
top-line improvement, the segment produced underwriting loss of
$7 million compared with underwriting profit of $20 million in
the prior-year quarter.
Excess and Surplus Lines Insurance:
This segment produced earned premium of $33 million, up 22% year
over year. The segment reported an underwriting profit of $4
million, compared to breakeven results in the year-ago
: Premiums earned in the segment increased 14% year over year to
$48 million. Total benefit and expense increased 25% year over
year to $71 million.
As of Mar 31, 2014, Cincinnati Financial had assets worth
$17.9 billion, up 1.6% from Dec 31, 2013.
Cincinnati Financial's debt-to-capital ratio remained
unchanged sequentially at 12.7%.
As of March 31, 2014, book value per share of Cincinnati
Financial was $37.73, up 7% year over year.
While the quarter suffered from cat loss, results reflected
steady top-line growth with premium increase coming from all the
segments of the company. In the upcoming quarters, we
expect Cincinnati Financial to exhibit overall growth from
pricing increase and growth in agent network.
Among other players,
W.R. Berkley Corp.
The Travelers Companies, Inc.
) all reported first-quarter 2014 earnings ahead of their
respective Zacks Consensus Estimate.
ASSURANT INC (AIZ): Free Stock Analysis
CINCINNATI FINL (CINF): Free Stock Analysis
TRAVELERS COS (TRV): Free Stock Analysis
BERKLEY (WR) CP (WRB): Free Stock Analysis
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