On July 25, 2024, Cincinnati Financial Corp (CINF, Financial) released its 8-K filing for the second quarter of 2024. Cincinnati Financial Corp is a property and casualty insurance company that generates income through written premiums. A select group of independent agencies actively markets the company's business, home, and automotive insurance within their communities. These agents offer the company's personal lines as well as its standard market, excess, and surplus commercial line policies in many regions in the United States. Cincinnati Financial also offers leasing and financing services. The company operates in segments: Commercial lines insurance, Personal lines insurance, and Excess and surplus lines insurance, Life insurance, and Investments. The vast majority of the company's revenue is generated through commercial lines, followed by personal lines.
Performance Overview
Cincinnati Financial Corp (CINF, Financial) reported a net income of $312 million, or $1.98 per share, for Q2 2024, compared to $534 million, or $3.38 per share, in Q2 2023. This decline was primarily due to a $235 million decrease in net investment gains, partially offset by a $17 million increase in after-tax investment income. Despite this, the company saw a 7% increase in non-GAAP operating income to $204 million, or $1.29 per share, surpassing the analyst estimate of $1.27 per share.
Revenue and Earnings
For the second quarter, Cincinnati Financial Corp (CINF, Financial) reported total revenues of $2,544 million, a 2% decrease from $2,605 million in the same period last year. This was above the analyst estimate of $2,448.74 million. Earned premiums rose by 11% to $2,156 million, while net investment income increased by 10% to $242 million.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Income | $312 million | $534 million | (42%) |
| Non-GAAP Operating Income | $204 million | $191 million | 7% |
| Total Revenues | $2,544 million | $2,605 million | (2%) |
| Book Value per Share | $81.79 | $70.33 | 16% |
Insurance Operations
The property casualty combined ratio for Q2 2024 was 98.5%, up from 97.6% in Q2 2023. Net written premiums grew by 14% to $2,459 million, driven by price increases, premium growth initiatives, and higher insured exposures. New business written premiums increased by 34% to $407 million.
Investment and Balance Sheet Highlights
Pretax investment income rose by 10% to $242 million, including an 18% increase in bond interest income. The fair value of total investments increased by 2% during the quarter. The company reported $27.455 billion in consolidated cash and total investments as of June 30, 2024, a 5% increase from year-end 2023.
Commentary
"Contributions from both our underwriting and investment operations helped us record strong non-GAAP operating income results, with year-over-year growth of 7% for the second quarter and 43% for the first six months of 2024," said Stephen M. Spray, president and chief executive officer.
Analysis
Despite a decline in net income due to investment losses, Cincinnati Financial Corp (CINF, Financial) demonstrated resilience with a notable increase in non-GAAP operating income and strong growth in written premiums. The company's ability to maintain a stable combined ratio and improve its book value per share underscores its robust operational performance. However, the decrease in total revenues and net investment gains highlights the challenges faced in the current economic environment.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Cincinnati Financial Corp for further details.
