Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you provide insights on the loss picks in commercial casualty and whether there have been any changes to your view of loss trends given the trajectory of the current accident year loss ratio?
A: Steven Justus Johnston, Chairman & CEO of Cincinnati Financial, responded that they are confident with the loss picks and are reflecting uncertainty. He noted that while there are positive rate trends exceeding loss cost trends in commercial casualty, they are recognizing additional uncertainty in their loss picks for the first quarter.
Q: Regarding workers' compensation, has there been a change in the initial loss pick due to the decrease in pricing?
A: Johnston explained that the trends in workers' compensation have been consistent, with rates under pressure but strong historical performance. They are recognizing the uncertainty from rate decreases with a slightly higher loss pick for the current year.
Q: Could you clarify why the underlying loss ratio for commercial lines improved excluding Cincinnati Re and Global?
A: Johnston pointed out that the improvement was noted in the first three segments (Commercial Lines, Personal Lines, and Excess and Surplus Lines), and the mention of excluding Cincinnati Re and Global was to simplify the understanding of consolidated figures. He emphasized the strong performance and reshaping of Cincinnati Re's portfolio to reduce risk and volatility.
Q: How is the underlying loss ratio for Cincinnati Re and Global expected to behave given the business mix shifts?
A: Johnston confirmed that due to the shift towards more proportional reinsurance, the underlying loss ratio might appear higher but with reduced volatility, indicating a less risky portfolio.
Q: What are your expectations for the profitability and pricing trends in personal auto insurance?
A: Johnston expressed confidence in the pricing and profitability across Personal Lines, including auto insurance. He noted that the pricing has been effective, and they anticipate reaping benefits from the current pricing strategies.
Q: Can you discuss the growth and performance of commercial auto, particularly in terms of new units versus rate-driven growth?
A: Stephen Michael Spray, President of The Cincinnati Insurance Company, mentioned that growth in commercial auto is driven by both rate increases and new business. He highlighted their disciplined approach to pricing and risk selection, which has positioned the commercial auto book favorably amidst challenging industry conditions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
