Cincinnati Financial Corporation CINF reported fourth-quarter 2024 operating income of $3.14 per share, which surpassed the Zacks Consensus Estimate by 65.3%. The bottom line increased 38% year over year.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Total operating revenues in the quarter under review were $2.6 billion, which improved 14.7% year over year. Also, the top line beat the consensus mark by 1.1%.
The strong quarterly results benefited from higher premiums, net investment income, underwriting profit and improved combined ratio. Higher expenses partially offset the positives.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Earned premiums climbed 15% year over year to $2.3 billion and matched our estimate. It was driven by premium growth initiatives, price increases and a higher level of insured exposures.
Investment income, net of expenses increased 17% year over year to $280 million and beat our estimate of $247.7 million. The growth was driven by a 28% increase in interest income from fixed-maturity securities and a 4% decrease in equity portfolio dividends. The Zacks Consensus Estimate was pegged at $266 million.
Total benefits and expenses of Cincinnati Financial rose 10.3% year over year to $2 billion, primarily due to higher insurance losses and contract holders’ benefits, underwriting, acquisition and insurance expenses and other operating expenses. Our estimate for the metric was $2.2 billion.
In its property & casualty insurance business, CINF witnessed an underwriting income of $352 million, which increased 40% from the year-ago period. Our estimate of underwriting income was pegged at $176.9 million.
The combined ratio — a measure of underwriting profitability — improved 280 basis points (bps) year over year to 84.7. Our estimate was pinned at 92.4.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $1.2 billion increased 7% year over year, which matched our estimate as well as the Zacks Consensus Estimate. This upside was primarily driven by 7% premiums earned.
Underwriting income was $181 million, which doubled year over year. The combined ratio improved 770 bps year over year to 84.5. Our estimate was pegged at 94.3, while the Zacks Consensus Estimate was pegged at 92.
Personal Lines Insurance: Total revenues of $727 million increased 30% year over year on account of a 30% rise in premiums earned. Our estimate was $672.8 million, while the Zacks Consensus Estimate was pegged at $713 million.
Underwriting profit was $145 million, which increased 65% year over year. The metric beat our estimate of $88.6 million.
The combined ratio improved 450 bps year over year to 80.2. Our estimate was 87, while the Zacks Consensus Estimate was pegged at 94.
Excess and Surplus Lines Insurance: Total revenues of $169 million grew 13% year over year, aided by 14% higher earned premiums. Our estimate was $169.5 million, while the Zacks Consensus Estimate was pegged at $166 million.
Underwriting profit decreased 25% year over year to $12 million. Our estimate was pinned at $18 million. The combined ratio deteriorated 330 bps year over year to 93.1. Our estimate was 89.9, while the Zacks Consensus Estimate was pegged at 91.
Life Insurance: Total revenues were $132 million, up 9% year over year, driven by 1% higher earned premiums and 2% higher investment income, net of expenses. Our estimate was $68.3 million, while the Zacks Consensus Estimate was pegged at $95 million. Total benefits and expenses decreased 10% year over year to $98 million due to lower contract holders’ benefits incurred.
Financial Update
As of Dec. 31, 2024, Cincinnati Financial had total assets worth $36.5 billion, up 11.4% from 2023-end.
Long-term debt was $790 million as of Dec. 31, 2024, which remained unchanged from 2023-end. The company’s debt-to-capital ratio was 5.5% as of Dec. 31, 2024, which improved 80 bps from the end of 2023.
As of Dec. 31, 2024, CINF’s book value per share was $89.11, up 16% from 2023-end, bolstered by record net pretax investment income of more than $1 billion for the year.
Dividend Update
The board of directors raised the regular quarterly cash dividend by 7% to 87 cents per share. The dividend will be payable on April 15, 2025, to shareholders of record as of March 24.
Full-Year Update
For 2024, operating income was $7.58 per share, which improved 26% year over year. The metric beat our estimate by 19.7%.
Adjusted revenues for the year amounted to $9.95 billion, which beat our estimate by 0.3%. The top line increased 12% year over year.
Zacks Rank
Cincinnati Financial currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
AXIS Capital Holdings Limited AXS posted fourth-quarter 2024 operating income of $2.97 per share, which beat the Zacks Consensus Estimate by 10.8%. The bottom line increased 1% year over year. Total operating revenues of $1.6 billion missed the Zacks Consensus Estimate by 2.8%. The top line rose 6.7% year over year on higher net investment income and higher premiums earned. Net premiums written increased 14% to $1.2 billion, attributable to a 9% increase in the Insurance segment and a 64% surge in the Reinsurance segment.
Net investment income increased 5% year over year to $195.8 million, driven by income from fixed maturities portfolio due to increased yields, partially offset by lower returns on alternative investments. The Zacks Consensus Estimate was pegged at $190 million. Our estimate was $188.7 million. Total expenses in the quarter under review increased 38.4% year over year to $1.2 billion. Our estimate was pegged at $1.3 billion. Catastrophe and weather-related losses and net of reinsurance were $64 million, attributable to Hurricane Helene and other weather-related events.
NMI Holdings Inc. NMIH reported fourth-quarter 2024 operating net income per share of $1.07, which missed the Zacks Consensus Estimate by 3.6%. The bottom line increased 5.9% year over year. NMI Holdings’ total operating revenues of $167 million increased 10.6% year over year on higher net premiums earned (up 8%) and net investment income (up 25%). Revenues, however, missed the Zacks Consensus Estimate by 1.7%. Primary insurance in force increased 7% to $210.2 billion.
Annual persistency was 84.6%, down 150 basis points (bps) year over year. New insurance written was $11.9 billion, up 34% year over year. Underwriting and operating expenses totaled $31.1 million, up 5% year over year. Insurance claims and claim expenses were $17.3 million, up 110% year over year. The loss ratio of 12% deteriorated 580 bps year over year. Expense ratio improved 70 bps year over year while the combined ratio of 34 deteriorated 580 bps year over year.
American Financial Group, Inc. AFG reported fourth-quarter 2024 net operating earnings per share of $3.12, which missed the Zacks Consensus Estimate by 2.5%. The bottom line increased 9.9% year over year. Total revenues of $2.1 billion increased 7.2% year over year. The growth came on the back of higher P&C insurance net earned premiums and net investment income. The top line beat the Zacks Consensus Estimate by 3.5%.
Net investment income climbed 22% year over year to $194 million in the quarter under review. The figure was higher than our estimate of $166.9 million and beat the Zacks Consensus Estimate of $188 million. Total cost and expenses increased 4.6% year over year to $1.8 billion due to higher P&C insurance losses and expenses. Our estimate was also $1.8 billion.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
