It has been about a month since the last earnings report for Cincinnati Financial (CINF) . Shares have added about 10.1% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Cincinnati Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Cincinnati Financial Q4 Ea ...

Cincinnati Financial (CINF) shares ended the last trading session 5.2% higher at $117.79. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.1% loss over the past four weeks.Cincinnati Financial continues to witness growth in the Commercial Lines Insurance segment, led by price increases and several growth initiatives which include expansion of Cincinnati Re and Cincinnati Global. Additional agency appointments, the ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) Cincinnati Financial is an Ohio-based holding company primarily engaged in property casualty insurance through independent agencies - The company's lead subsidiary, The Cincinnati Insurance Company, was founded in 1950, and its main business is property casualty insurance marketed through independent insurance agencies in 46 states[12](index=12&type=chunk) - The company's strategy is built on three competitive advantages: commitment to independent agencies, financial strength, and a local decision-making structure[19](index=19&type=chunk) - Key strategic initiatives are grouped into two areas: managing insurance profitability through enhanced underwriting and efficiency, and driving premium growth by penetrating markets and expanding operations like Cincinnati Re and Cincinnati Global[20](index=20&type=chunk) [Our Business and Our Strategy](index=6&type=section&id=Our%20Business%20and%20Our%20Strategy) The company's strategy emphasizes independent agency relationships, strong financial ratings, and a decentralized operating structure Agency Data (as of Dec 31) | Agency Data | 2023 | 2022 | | :--- | :--- | :--- | | Property casualty agency relationships | 2,080 | 1,984 | | Property casualty reporting locations | 3,116 | 2,861 | | New relationship appointments | 206 | 146 | | Active states | 46 | 46 | - The company maintains a strong capital position with a debt-to-total-capital ratio of **6.3%** at year-end 2023. Long-term debt was **$790 million**[47](index=47&type=chunk) Insurer Financial Strength Ratings | Rating Agency | Standard Market P&C | Life Insurance | E&S Insurance | Outlook | | :--- | :--- | :--- | :--- | :--- | | A.M. Best | A+ (Superior) | A+ (Superior) | A+ (Superior) | Stable | | Fitch Ratings | A+ (Strong) | A+ (Strong) | - | Stable | | Moody's | A1 (Good) | - | - | Stable | | S&P Global | A+ (Strong) | A+ (Strong) | - | Stable | - As of the end of 2023, the company employed **5,426 associates**, with a low voluntary turnover rate of **6%**[170](index=170&type=chunk) [Our Segments](index=14&type=section&id=Our%20Segments) The company operates five segments: Commercial, Personal, E&S, Life, and Investments, with Commercial Lines as the largest premium contributor Net Written Premiums by Segment (in millions) | Segment | 2023 | 2022 | 2021 | % of Total 2023 | | :--- | :--- | :--- | :--- | :--- | | Commercial lines insurance | $4,336 | $4,159 | $3,811 | 51.5% | | Personal lines insurance | $2,302 | $1,831 | $1,594 | 27.4% | | Excess and surplus lines insurance | $570 | $502 | $426 | 6.8% | | Life insurance | $364 | $339 | $346 | 4.3% | | Other (Cincinnati Re & Global) | $838 | $815 | $648 | 10.0% | | **Total net written premiums** | **$8,410** | **$7,646** | **$6,825** | **100.0%** | [Other](index=25&type=section&id=Other) The 'Other' segment includes Cincinnati Re, Cincinnati Global, and CFC Investment Company, detailing their respective premiums and receivables - Cincinnati Re's net written premiums totaled **$558 million** in 2023, down from **$585 million** in 2022. The portfolio consists of property (**32%**), casualty (**48%**), and specialty (**20%**) exposures[90](index=90&type=chunk) - Cincinnati Global's net written premiums grew to **$280 million** in 2023 from **$230 million** in 2022. The majority of premiums were for U.S. and international property exposures[164](index=164&type=chunk) - CFC Investment Company, the commercial leasing and financing subsidiary, had receivables of **$108 million** at year-end 2023, up from **$92 million** at year-end 2022[75](index=75&type=chunk) [Regulation](index=26&type=section&id=Regulation) The company's U.S. insurance operations are state-regulated, subject to holding company rules and federal laws, with foreign operations under U.K. regulations - The company is regulated as an insurance holding company system, requiring annual financial disclosures and oversight of transactions between subsidiaries[83](index=83&type=chunk) - Federal legislation affecting the company includes privacy laws (Gramm-Leach-Bliley Act), the Terrorism Risk Insurance Act (TRIA), and anti-money laundering statutes[84](index=84&type=chunk) - Foreign operations in the U.K. are regulated by The Prudential Regulation Authority (PRA) and The Financial Conduct Authority (FCA), and are subject to Solvency II capital and risk management requirements[152](index=152&type=chunk)[166](index=166&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from agent reliance, catastrophes, competition, reserve estimation, market volatility, inflation, and regulatory changes [Risks related to insurance operations](index=30&type=section&id=Risks%20related%20to%20insurance%20operations) Insurance operations face risks from agent reliance, catastrophe losses, reserve estimation uncertainty, and international regulatory exposures - The company's reliance on independent, non-exclusive agents means it must maintain strong relationships and offer competitive products to prevent agents from favoring competitors[102](index=102&type=chunk) - The company is exposed to significant catastrophe risk. Probable maximum loss estimates for a single hurricane event, net of reinsurance and taxes, are **$570 million** for a 1-in-100-year event and **$848 million** for a 1-in-250-year event[107](index=107&type=chunk) - Loss reserves, the company's largest liability, are based on estimates and are inherently uncertain. Inadequacies could arise from unforeseen trends, inflation, or changes in the legal environment, potentially impacting earnings[143](index=143&type=chunk)[144](index=144&type=chunk) - International operations through Cincinnati Global expose the company to additional regulations, including the U.K.'s Solvency II regime, and risks such as currency fluctuations and political instability[149](index=149&type=chunk) [Risks related to investments or other financial matters](index=37&type=section&id=Risks%20related%20to%20investments%20or%20other%20financial%20matters) Investment and financial risks include market volatility, interest rate sensitivity, and holding company dividend dependency - Financial market volatility and economic downturns could adversely affect the company's investment portfolio, which is a key component of its book value and net income[452](index=452&type=chunk)[453](index=453&type=chunk) - Rising interest rates have an adverse effect on shareholders' equity due to the falling value of the company's fixed-maturity portfolio, which made up **55.7%** of total investments at year-end 2023[454](index=454&type=chunk) - As a holding company, Cincinnati Financial's cash flow for paying dividends and debt service is dependent on dividends from its operating subsidiaries, which are subject to regulatory restrictions[459](index=459&type=chunk)[478](index=478&type=chunk) [General risk factors](index=39&type=section&id=General%20risk%20factors) General risks include inflation, technology failures, cyberattacks, evolving regulations (ESG, AI), and data security breaches - Elevated inflation negatively impacts underwriting profits by increasing the cost of claims for auto and property repairs, and also reduces the fair value of the company's investment portfolio[460](index=460&type=chunk)[479](index=479&type=chunk) - The business is dependent on its technology systems. Failures, outages, or security breaches could compromise its ability to conduct business, serve customers, and pay claims[461](index=461&type=chunk)[511](index=511&type=chunk) - Changes in laws and regulations, including new rules on the use of AI, ESG standards, and tax laws, could adversely affect the company's business by increasing costs or restricting its ability to price risks adequately[463](index=463&type=chunk)[464](index=464&type=chunk)[481](index=481&type=chunk) - A breach of data security could expose the company to litigation, fines, and reputational damage, as it is subject to numerous evolving federal, state, and international privacy laws[513](index=513&type=chunk) [Cybersecurity](index=43&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity is managed within the enterprise risk program, overseen by the audit committee, with the CISO leading efforts - Cybersecurity is managed within the overall enterprise risk program, with oversight from the board of directors' audit committee, which receives quarterly reports on risks and controls[488](index=488&type=chunk)[490](index=490&type=chunk) - The Chief Information Security Officer, with over **25 years of experience**, leads the cybersecurity efforts in collaboration with the Chief Information Officer and Chief Risk Officer[516](index=516&type=chunk) - The company's incident response process is modeled after NIST frameworks. Incidents are evaluated, documented, and shared with the audit committee, which received **four updates** on cybersecurity matters in 2023[493](index=493&type=chunk)[518](index=518&type=chunk) [Properties](index=44&type=section&id=Item%202.%20Properties) The company owns its headquarters and a subsidiary building, and leases additional office spaces in the U.S. and London - The company owns its headquarters building in Fairfield, Ohio, with **1,508,200 square feet** of space, recorded at a value of **$133 million** as of December 31, 2023[494](index=494&type=chunk) - The company leases office space in London, U.K., for its Cincinnati Global operations and also leases various office spaces across the U.S.[520](index=520&type=chunk) [Legal Proceedings](index=44&type=section&id=Item%203.%20Legal%20Proceedings) The company and its subsidiaries are not involved in any material litigation beyond routine insurance-related cases - The company states that it is not involved in any material litigation outside of the ordinary course of business[521](index=521&type=chunk) Part II [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=45&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) CINF stock underperformed benchmarks over five years, with the company repurchasing shares under an authorized program - The five-year total return for CINF stock was **52.2%**, compared to **107.2%** for the S&P 500 Index and **99.6%** for the S&P Composite 1500 Property & Casualty Insurance Index[498](index=498&type=chunk) - During 2023, the company repurchased **600,000 shares** at an average price of **$110.99 per share**[527](index=527&type=chunk) - As of December 31, 2023, **6,726,785 shares** remained available for repurchase under the company's authorized programs[527](index=527&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A covers financial condition, operational results, VCR performance, segment analysis, critical estimates, and capital resources [Executive Summary](index=48&type=section&id=Executive%20Summary) The Executive Summary highlights the improved VCR driven by investments and outlines key long-term objectives Value Creation Ratio (VCR) Performance | Period | 2023 | 3-Year Avg. | 5-Year Avg. | | :--- | :--- | :--- | :--- | | VCR | 19.5% | 10.2% | 15.2% | - The 2023 VCR improved by **34.1 percentage points** from 2022, mainly due to a **17.9 point** contribution from equity securities and a **12.0 point** contribution from fixed-maturity securities[533](index=533&type=chunk)[562](index=562&type=chunk) - The company's five-year compound annual growth rate for net written premiums was **9.9%**, exceeding the industry average of **6.9%**[536](index=536&type=chunk) - The company has increased its annual cash dividend for **63 consecutive years** through 2023[567](index=567&type=chunk) [Critical Accounting Estimates](index=53&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates include property casualty loss reserves, life policy reserves, and fair value measurements - Property casualty loss and loss expense reserves are the company's most significant accounting estimate, with gross reserves totaling **$8.975 billion** at year-end 2023[578](index=578&type=chunk) - The company established a reasonably likely range for net loss and loss expense reserves of **$7.926 billion** to **$8.704 billion** at year-end 2023, carrying net reserves of **$8.613 billion** within that range[333](index=333&type=chunk) - Life policy reserves for term and whole life are sensitive to market value discount rates; a **100 basis point decrease** would increase reserves and decrease AOCI by **$200 million**[620](index=620&type=chunk) - The company uses a three-level hierarchy for fair value measurements, with substantially all of its **$24.780 billion** investment portfolio classified as Level 1 or Level 2, indicating reliance on observable market data[600](index=600&type=chunk) [Financial Results](index=61&type=section&id=Financial%20Results) This section details consolidated and segment financial performance, highlighting premium growth, improved combined ratio, and investment gains Consolidated Property Casualty Insurance Highlights (in millions) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net Written Premiums | $8,046 | $7,307 | $6,479 | | Underwriting Profit | $401 | $140 | $731 | | GAAP Combined Ratio | 94.9% | 98.1% | 88.3% | Income (Loss) Before Income Taxes by Segment (in millions) | Segment | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Commercial lines insurance | $168 | $38 | $598 | | Personal lines insurance | ($4) | $18 | $97 | | Excess and surplus lines insurance | $54 | $48 | $44 | | Life insurance | $41 | $27 | $12 | | Investments | $1,900 | ($795) | $3,018 | | Other | $117 | ($30) | ($71) | [Liquidity and Capital Resources](index=94&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and capital, supported by operating cash flow and extensive reinsurance programs - At year-end 2023, the parent company had **$4.858 billion** in cash and marketable securities. Its primary sources of cash are dividends from subsidiaries and investment income[295](index=295&type=chunk) - The insurance subsidiaries generated **$1.831 billion** in cash flow from operations in 2023, driven by premium collections exceeding claim payments and expenses[307](index=307&type=chunk) - Total capital stood at **$12.913 billion** at year-end 2023, with shareholders' equity of **$12.098 billion** and a debt-to-total-capital ratio of **6.3%**[326](index=326&type=chunk) - For 2024, the company purchased a property catastrophe reinsurance treaty with a limit up to **$1.2 billion**, retaining the first **$200 million** of any loss[382](index=382&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=113&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk stems from interest rate and equity price fluctuations, impacting its investment portfolios - The company's fixed-maturity portfolio had an effective duration of **4.3 years** at year-end 2023. A **100-basis-point change** in interest rates would result in an approximate **4.3% change** in the portfolio's fair value[419](index=419&type=chunk) Interest Rate Sensitivity on Fixed-Maturity Portfolio (Fair Value in millions) | Interest Rate Change | -200 bps | -100 bps | No Change | +100 bps | +200 bps | | :--- | :--- | :--- | :--- | :--- | :--- | | **At Dec 31, 2023** | $14,962 | $14,375 | $13,791 | $13,179 | $12,543 | Equity Price Sensitivity on Equity Portfolio (Fair Value in millions) | Market Price Change | -20% | -10% | No Change | +10% | +20% | | :--- | :--- | :--- | :--- | :--- | :--- | | **At Dec 31, 2023** | $8,791 | $9,890 | $10,989 | $12,088 | $13,187 | [Financial Statements and Supplementary Data](index=119&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's consolidated GAAP financial statements, including balance sheets, income, and cash flows Consolidated Balance Sheet Highlights (in millions) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Investments | $25,357 | $22,425 | | Total Assets | $32,769 | $29,732 | | Total Liabilities | $20,671 | $19,170 | | Total Shareholders' Equity | $12,098 | $10,562 | Consolidated Income Statement Highlights (in millions) | Account | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Total Revenues | $10,013 | $6,563 | $9,626 | | Total Benefits and Expenses | $7,737 | $7,257 | $5,928 | | Net Income (Loss) | $1,843 | ($487) | $2,968 | Consolidated Cash Flow Highlights (in millions) | Account | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $2,052 | $2,052 | $1,981 | | Net cash used in investing activities | ($1,608) | ($933) | ($1,057) | | Net cash used in financing activities | ($801) | ($994) | ($685) | Part III [Directors, Executive Officers and Corporate Governance](index=183&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section incorporates information on directors, executive officers, and corporate governance from the 2024 Proxy Statement - Information regarding directors, corporate governance, and delinquent Section 16(a) reports is incorporated by reference from the company's 2024 Proxy Statement[1025](index=1025&type=chunk) [Executive Compensation](index=185&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates executive compensation details, including the Compensation Discussion and Analysis, from the 2024 Proxy Statement - Details on executive compensation are incorporated by reference from the company's 2024 Proxy Statement[1028](index=1028&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=185&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates security ownership information for beneficial owners and management from the 2024 Proxy Statement - Information on security ownership by principal shareholders and management is incorporated by reference from the 2024 Proxy Statement[1043](index=1043&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=186&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section incorporates information on related party transactions and director independence from the 2024 Proxy Statement - Details on related transactions and director independence are incorporated by reference from the 2024 Proxy Statement[1044](index=1044&type=chunk) [Principal Accounting Fees and Services](index=186&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This section incorporates details on principal accounting fees and services from the 'Audit-Related Matters' section of the 2024 Proxy Statement - Information regarding fees paid to the principal accountant is incorporated by reference from the 2024 Proxy Statement[1134](index=1134&type=chunk) Part IV [Exhibit and Financial Statement Schedules](index=187&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K report - This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including supplementary schedules for investments, insurance information, and reinsurance[1153](index=1153&type=chunk)

Cincinnati Financial Corporation (CINF) remains well-poised for growth, driven by a higher level of insured exposures, rate increase, agent-focused business model, consistent cash flow and a solid capital position.Growth ProjectionsThe Zacks Consensus Estimate for Cincinnati Financial’s 2024 earnings is pegged at $6.16 per share, indicating a 2.1% increase from the year-ago reported figure on 9.2% higher revenues of $9.71 billion.The consensus estimate for 2025 earnings is pegged at $6.77 per share, indicat ...

Cincinnati Financial Corporation (NASDAQ:CINF) Q4 2023 Earnings Conference Call February 7, 2024 11:00 AM ET Company Participants Dennis McDaniel - Investor Relations Officer Steve Johnston - Chairman and Chief Executive Officer Mike Sewell - Executive Vice President and Chief Financial Officer Steve Spray - President Conference Call Participants Michael Phillips - Oppenheimer Mike Zaremski - BMO Greg Peters - Raymond James Grace Carter - Bank of America Operator Good day and welcome to the Cincinnati Finan ...

Cincinnati Financial Corporation (CINF) reported fourth-quarter 2023 operating income of $2.28 per share, which surpassed the Zacks Consensus Estimate by 18.1%. The bottom line surged 79.5% year over year.Total operating revenues in the quarter under review were $2.3 billion, which improved 10.8% year over year. Also, the top line beat the consensus mark by 1%.The strong quarterly results benefited from higher premiums, net investment income and improved combined ratio. Improved Underwriting profit and lowe ...

For the quarter ended December 2023, Cincinnati Financial (CINF) reported revenue of $2.31 billion, up 10.8% over the same period last year. EPS came in at $2.28, compared to $1.27 in the year-ago quarter.The reported revenue represents a surprise of +0.98% over the Zacks Consensus Estimate of $2.29 billion. With the consensus EPS estimate being $1.93, the EPS surprise was +18.14%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall ...

Cincinnati Financial (CINF) came out with quarterly earnings of $2.28 per share, beating the Zacks Consensus Estimate of $1.93 per share. This compares to earnings of $1.27 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 18.14%. A quarter ago, it was expected that this insurer would post earnings of $1.07 per share when it actually produced earnings of $1.66, delivering a surprise of 55.14%.Over the last four quarters, the com ...

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Cincinnati Financial (CINF) , which belongs to the Zacks Insurance - Property and Casualty industry.This insurer has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 61.60%.For the last reported quarter, Cincinnati Financial came out wi ...

Cincinnati Financial Corporation (CINF) is scheduled to report fourth-quarter 2023 earnings on Feb 6, after market close. The insurer delivered an earnings surprise in the three reported quarters of 2023.Factors to NotePremiums are likely to have benefited from growth initiatives, increased exposure, better pricing, increased property casualty agency and new business written premiums, higher standard lines new business and higher premiums from Cincinnati Re. The Zacks Consensus Estimate for earned premium i ...