Cincinnati Financial Q1 Loss Narrower Than Expected, Revenues Rise Y/Y

Cincinnati Financial Corporation CINF reported first-quarter 2025 operating loss of 24 cents per share, narrower than the Zacks Consensus Estimate of a loss of 61 cents. CINF had reported an operating income of $1.72 per share in the prior-year quarter. The year-over-year decrease of $309 million was primarily due to a $356 million increase in after-tax catastrophe losses.

Total operating revenues in the quarter under review were $2.6 billion, which missed the Zacks Consensus Estimate by 2.5%. The top line, however, improved 13.3% year over year. This increase was driven by higher earned premiums, other revenues and investment income. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The insurer’s results reflected poor underwriting income, wider catastrophe losses and escalating expenses. The downside was offset by higher premiums and improved net investment income.

Operational Update 

Net written premiums climbed 11% year over year to $2.5 billion, attributable largely due to premium growth initiatives, price increases and a higher level of insured exposures, as well as the contribution from Cincinnati Re and Cincinnati Global Underwriting Ltd.

Investment income, net of expenses, increased 14% year over year to $280 million, as bond interest grew 24% and stock portfolio dividends declined 7%. The figure was higher than our estimate of $274.8 million.

Total benefits and expenses of Cincinnati Financial increased 36% year over year to $2.7 billion, primarily because of higher insurance losses and contract holders' benefits, underwriting, acquisition and insurance expenses and other operating expenses. The figure matched our estimate.

Cincinnati Financial Corporation Price, Consensus and EPS Surprise

Cincinnati Financial Corporation price-consensus-eps-surprise-chart | Cincinnati Financial Corporation Quote

In its property & casualty insurance business, Cincinnati Financial recorded an underwriting loss of $298 million against the year-ago income of $131 million. The figure was narrower than our estimate of $322.5 million underwriting loss.

Combined ratio — a measure of underwriting profitability — deteriorated 1,970 basis points (bps) year over year to 113.3%. The deterioration was due to natural catastrophe losses, which were three times the 10-year first-quarter average.

Quarterly Segment Update

Commercial Lines Insurance: Total revenues of $1.2 billion increased 9% year over year. The figure matched our estimate and the Zacks Consensus Estimate. The segment reported an underwriting income of $97 million, which more than doubled year over year. The combined ratio improved 460 bps year over year to 91.9%.

Personal Lines Insurance: Total revenues of $699 million rose 19% year over year due to a 19% increase in premiums earned. Our estimate was $757.5 million, while the Zacks Consensus Estimate was pegged at $763 million. The segment reported an underwriting loss of $357 million against the year-ago income of $37 million. The combined ratio deteriorated 5,740 bps year over year to 151.3%.

Excess and Surplus Lines Insurance: Total revenues of $163 million grew 16% year over year, aided by 17% higher earned premiums. The metric matched the Zacks Consensus Estimate and but was higher than our estimate of $155.9 million. The segment’s underwriting profit increased 67% year over year to $20 million. The combined ratio improved 360 bps to 88.3%.

Life Insurance: Total revenues were $130 million, up 4% year over year. The Zacks Consensus Estimate was pegged at $99 million. Our estimate was $83.7 million. Total benefits and expenses increased 3% year over year to $104 million.

Financial Update

As of March 31, 2025, Cincinnati Financial had total assets worth $37.2 billion, which increased 2.1% from 2024-end. The total debt of $815 million remained flat from 2024-end.

Cincinnati Financial’s debt-to-capital ratio was 5.6% as of March 31, 2025, which deteriorated 10 bps from 2023-end.

As of March 31, 2025, its book value per share was a record high of $87.78, up 9% year over year. 

Zacks Rank

Cincinnati Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Property and Casualty Insurers

Selective Insurance Group, Inc. SIGI reported first-quarter 2025 operating income of $1.76 per share, which missed the Zacks Consensus Estimate by 6.8%. The bottom line increased 32.3% from the year-ago quarter. Total revenues of $1.3 billion increased 10% from the year-ago quarter’s figure. The top line missed the Zacks Consensus Estimate by 0.9%.

On a year-over-year basis, net premiums written increased 7% to $1.2 billion. Average renewal pure price expanded 220 basis points year over year to 10.3%. The figure matched our estimate. Net investment income increased 12% year over year to $95.6 million. After-tax net underwriting income was $36.1 million, which more than doubled year over year. Net catastrophe losses of $43.4 million were narrower than the year-ago loss of $55.2 million.

RLI Corp. RLI reported first-quarter 2025 operating earnings of 92 cents per share, which beat the Zacks Consensus Estimate by 4.5%. The bottom line, however, decreased 9.2% from the prior-year quarter. Operating revenues for the reported quarter were $436 million, up 10.7% year over year, driven by higher net premiums earned and net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.9%.

Gross premiums written increased 5% year over year to $491 million. This uptick can be attributed to the solid performance of the Casualty segment (up 13.5%). Our estimate was $577.9 million. Net investment income increased 12% year over year to $36.7 million. The Zacks Consensus Estimate was pegged at $38.6 million, while our estimate for the metric was $38.9 million. The investment portfolio’s total return was 1.3% in the quarter.

W.R. Berkley Corporation’s WRB first-quarter 2025 operating income of $1.01 per share matched the Zacks Consensus Estimate. The bottom line, however, declined 2.9% year over year. The insurer suffered due to higher catastrophe losses. Operating revenues came in at $3.5 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income, higher insurance service fees and other income. The top line beat the consensus estimate by 2.2%.

W.R. Berkley’s net premiums written were $3.1 billion, up 9.9% year over year. The figure was higher than our estimate of $3 billion. Catastrophe losses of $111.1 million in the quarter were wider than $30 million incurred in the year-ago quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 210 bps year over year to 90.9. The Zacks Consensus Estimate was 91.

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