Cincinnati Financial(US:CINF)2024-10-24 20:10Financial Performance - Total revenues for Q3 2024 increased by $1.509 billion (83%) compared to Q3 2023, driven by higher earned premiums, investment income, and net investment gains [61]. - Net income for Q3 2024 was $820 million, a significant increase of $919 million compared to a net loss of $99 million in Q3 2023 [63]. - Comprehensive income for Q3 2024 reached $1.140 billion, up from a loss of $300 million in Q3 2023, marking a substantial recovery [61]. - Cash dividends declared per share increased by 8% to $0.81 in Q3 2024 compared to $0.75 in Q3 2023, continuing a 63-year trend of annual dividend increases [65]. - Total revenues for the first nine months of 2024 were $6,293 million, an 11% increase from $5,669 million in the same period of 2023 [76]. - Cash flow from operations increased by 39% to $836 million for the three months ended September 30, 2024, compared to $602 million in the same period of 2023 [136]. Assets and Equity - Total assets as of September 30, 2024, increased by 13% to $37.009 billion compared to $32.769 billion at year-end 2023 [66]. - Shareholders' equity rose by 14% to $13.804 billion, with book value per share increasing by 15% to $88.32 [67]. - The debt-to-total-capital ratio improved to 5.6% from 6.3% at year-end 2023, indicating stronger financial stability [67]. - The debt-to-total-capital ratio was reported at 5.6% as of September 30, 2024 [72]. - As of September 30, 2024, the company held $5.419 billion in cash and cash equivalents and invested assets at the parent company level [72]. Investment Performance - Investment income, net of expenses, for Q3 2024 was $258 million, a 15% increase from $225 million in Q3 2023 [61]. - Pretax investment income for the first nine months of 2024 was $745 million, reflecting a 14% increase compared to the same period in 2023 [71]. - Total investment gains and losses reported in net income reached $758 million for Q3 2024, a significant increase from a loss of $456 million in Q3 2023 [125]. - The average yield on fixed-maturity securities acquired during the first nine months of 2024 was 5.68%, higher than the 6.15% average yield for the same period in 2023 [122]. - Dividend income decreased by $1 million to $68 million in Q3 2024, while it increased by $4 million to $209 million for the first nine months of 2024 [124]. Underwriting Performance - The underwriting profit for the third quarter of 2024 was $62 million, a decrease of $50 million compared to the third quarter of 2023, primarily due to an increase in catastrophe losses [75]. - The combined ratio for Q3 2024 rose to 97.4%, an increase of 3.0 percentage points from 94.4% in Q3 2023 [78]. - Catastrophe losses contributed 13.0 percentage points to the combined ratio in Q3 2024, compared to 9.1 percentage points in Q3 2023 [84]. - The underwriting profit for Q3 2024 was $81 million, a 56% increase from $52 million in Q3 2023 [92]. - The combined ratio improved by 2.2 percentage points to 93.0% in Q3 2024, with a decrease of 1.3 points in catastrophe losses [96]. Premiums and Growth - Earned premiums for Q3 2024 were $2,217 million, a 13% increase from $1,957 million in Q3 2023 [80]. - Net written premiums for Q3 2024 increased by $336 million, reaching $2,293 million, a 17% growth compared to Q3 2023 [81]. - Consolidated property casualty net written premium growth for the first nine months of 2024 was 14%, exceeding the industry average growth rate of 10% reported by A.M. Best [71]. - Agency renewal written premiums for Q3 2024 were $1,795 million, reflecting a 16% increase from $1,549 million in Q3 2023 [80]. - Personal lines earned premiums increased by 29% to $678 million in Q3 2024 compared to $527 million in Q3 2023 [100]. Catastrophe Losses - Catastrophe losses for Q3 2024 were $282 million, up 66% from $170 million in the third quarter of 2023 [89]. - The total losses incurred for the third quarter of 2024 were $1,266 million, a 19% increase from $1,067 million in the same period of 2023 [89]. - Catastrophe losses accounted for 26.6 percentage points of the combined ratio in Q3 2024, compared to 13.9 points in Q3 2023 [104]. - The personal lines underwriting expense ratio improved due to premium growth outpacing expense growth [104]. - The company plans to remain prudent in reserving for estimated ultimate losses until long-term loss cost trends become clearer [104]. Reserves and Liabilities - The incurred but not reported (IBNR) portion of net loss and loss expense reserves increased by $917 million compared to year-end 2023 [77]. - Total gross reserves increased by $891 million compared to December 31, 2023, primarily due to commercial casualty and homeowner lines of business [146]. - As of September 30, 2024, total gross reserves for property casualty insurance amounted to $9.866 billion, with commercial lines accounting for 63.5% of the total [147]. - Life policy and investment contract reserves were reported at $3.069 billion, slightly up from $3.068 billion at year-end 2023 [148]. - The company discussed its life insurance reserving practices in detail in its 2023 Annual Report, indicating a focus on transparency and accuracy in financial reporting [149].