Cincinnati Financial(CINF) - 2025 Q2 - Quarterly Results

Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures This section defines key non-GAAP financial measures and statutory accounting rules used by management to evaluate business performance and trends - Non-GAAP operating income is a key performance metric that excludes after-tax investment gains and losses and other significant non-recurring items from net income[9] - The value creation ratio measures shareholder value creation by combining book value per share growth with dividend yield, reflecting long-term progress[11] - Statutory accounting rules, defined by the NAIC, are used for insurance company regulation and differ from GAAP, providing data for industry comparisons[8][11] - Written premium, a statutory accounting measure, represents the amount recorded for policies issued and is analyzed by management to assess business efforts[11] Consolidated Financial Statements Consolidated Statements of Income – Six Months Ended June 30, 2025 For H1 2025, total revenues reached $5.81 billion, with net income decreasing to $595 million from $1.07 billion year-over-year Consolidated Income Statement Highlights (Six Months Ended June 30) | Indicator (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $5,814 | Not Provided | | Total Expenses | $5,087 | Not Provided | | Income Before Income Taxes | $727 | Not Provided | | Net Income | $595 | $1,067 | Consolidated Statements of Income – Three Months Ended June 30, 2025 Q2 2025 saw total revenues of $3.25 billion and net income of $685 million, more than doubling the prior year's $312 million Consolidated Income Statement Highlights (Three Months Ended June 30) | Indicator (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $3,248 | Not Provided | | Total Expenses | $2,393 | Not Provided | | Income Before Income Taxes | $855 | Not Provided | | Net Income | $685 | $312 | Consolidated Property Casualty Insurance Operations Losses Incurred Detail Total consolidated losses incurred for H1 2025 increased to $2.94 billion from $2.29 billion, driven by higher catastrophe losses Consolidated Losses Incurred (Six Months Ended June 30, in millions) | Loss Category | 2025 | 2024 | | :--- | :--- | :--- | | Total large losses incurred | $206 | $281 | | Losses incurred but not reported | $601 | $783 | | Other losses excluding catastrophe losses | $1,429 | $1,418 | | Catastrophe losses | $838 | $339 | | Total losses incurred | $2,943 | $2,291 | Loss Ratio Detail The consolidated total loss ratio rose to 63.1% from 56.3% in H1 2025, primarily due to an increased catastrophe loss ratio Consolidated Loss Ratio Detail (Six Months Ended June 30) | Loss Ratio Component | 2025 | 2024 | | :--- | :--- | :--- | | Total large loss ratio | 4.0% | 2.9% | | Losses incurred but not reported | 10.5% | 10.2% | | Other losses excluding catastrophe losses | 30.6% | 34.9% | | Catastrophe losses | 18.0% | 8.3% | | Total loss ratio | 63.1% | 56.3% | Loss Claim Count Detail Non-catastrophe large loss claims (over $2 million) increased to 54 in H1 2025 from 40, with Commercial Lines dominating Non-Catastrophe Large Loss Claim Count (Six Months Ended June 30) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Commercial Lines | 35 | 26 | | Personal Lines | 19 | 13 | | Excess & Surplus Lines | 0 | 1 | | Consolidated Total | 54 | 40 | Loss and Loss Expense Analysis This section analyzes gross, ceded, and net loss and loss expense components, including paid losses and reserve changes, for P&C lines For the Six Months Ended June 30, 2025 Total net loss and loss expense incurred for H1 2025 was $3.47 billion, including $2.25 billion in net paid losses Net Loss and Loss Expense Analysis (Six Months Ended June 30, 2025, in millions) | Component | Amount | | :--- | :--- | | Net Paid Losses | $2,253 | | Change in Net Case Reserves | $118 | | Change in Net IBNR Reserves | $572 | | Change in Net Loss Expense Reserves | $139 | | Total Net Loss and Loss Expense Incurred | $3,474 | For the Three Months Ended June 30, 2025 Q2 2025 net loss and loss expense incurred totaled $1.59 billion, comprising $1.05 billion in net paid losses Net Loss and Loss Expense Analysis (Three Months Ended June 30, 2025, in millions) | Component | Amount | | :--- | :--- | | Net Paid Losses | $1,049 | | Change in Net Case Reserves | $83 | | Change in Net IBNR Reserves | $183 | | Change in Net Loss Expense Reserves | $75 | | Total Net Loss and Loss Expense Incurred | $1,587 | Quarterly Property Casualty Data by Segment Consolidated Consolidated net written premiums grew 11% to $5.23 billion in H1 2025, but the GAAP combined ratio deteriorated to 103.8% Consolidated P&C Performance (Six Months Ended June 30) | Indicator (in millions, except ratios) | 2025 | 2024 | | :--- | :--- | :--- | | Net Written Premiums | $5,228 | $4,707 | | Earned Premiums | $4,661 | $4,067 | | GAAP Combined Ratio | 103.8% | 96.1% | | Catastrophe Loss Contribution | 18.4% | 8.6% | Commercial Lines Commercial Lines net written premiums rose 9% to $2.62 billion in H1 2025, with the GAAP combined ratio improving to 92.4% Commercial Lines Performance (Six Months Ended June 30) | Indicator (in millions, except ratios) | 2025 | 2024 | | :--- | :--- | :--- | | Net Written Premiums | $2,615 | $2,409 | | Earned Premiums | $2,391 | $2,189 | | GAAP Combined Ratio | 92.4% | 97.9% | | Catastrophe Loss Contribution | 5.4% | 7.8% | Personal Lines Personal Lines net written premiums grew 17% to $1.65 billion in H1 2025, but the GAAP combined ratio surged to 124.9% due to catastrophes Personal Lines Performance (Six Months Ended June 30) | Indicator (in millions, except ratios) | 2025 | 2024 | | :--- | :--- | :--- | | Net Written Premiums | $1,652 | $1,414 | | Earned Premiums | $1,502 | $1,219 | | GAAP Combined Ratio | 124.9% | 100.6% | | Catastrophe Loss Contribution | 40.0% | 15.0% | Excess & Surplus Lines Excess & Surplus Lines net written premiums grew 13% to $370 million in H1 2025, with the GAAP combined ratio improving to 89.8% Excess & Surplus Lines Performance (Six Months Ended June 30) | Indicator (in millions, except ratios) | 2025 | 2024 | | :--- | :--- | :--- | | Net Written Premiums | $370 | $326 | | Earned Premiums | $336 | $290 | | GAAP Combined Ratio | 89.8% | 93.7% | | Catastrophe Loss Contribution | 0.9% | 1.2% | Statutory Statements of Income Consolidated Cincinnati Insurance Companies Consolidated statutory net underwriting loss of $258 million in H1 2025 led to a 65% drop in net income to $125 million Statutory Income Highlights (Six Months Ended June 30, in millions) | Indicator | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Premiums Written | $5,055 | $4,558 | 11% | | Net Underwriting Profit (Loss) | $(258) | $52 | nm | | Net Income (Statutory) | $125 | $354 | (65%) | | Policyholders' Surplus | $8,850 | $7,732 | 14% | The Cincinnati Life Insurance Company Cincinnati Life Insurance Company reported a 9% increase in statutory net income to $48 million in H1 2025, with surplus up 21% Statutory Life Insurance Highlights (Six Months Ended June 30, in millions) | Indicator | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Premiums Written | $172 | $179 | (4%) | | Net Investment Income | $100 | $94 | 6% | | Net Income (Statutory) | $48 | $44 | 9% | | Policyholders' Surplus | $556 | $460 | 21% | Other Quarterly Data Quarterly Data - Other This section presents H1 2025 data for Cincinnati Re, Cincinnati Global, and noninsurance operations, detailing premiums and loss ratios Cincinnati Re Performance (Six Months Ended June 30, 2025) | Indicator (in millions, except ratios) | Amount | | :--- | :--- | | Net Written Premiums | $418 | | Earned Premiums | $303 | | Total Loss and Loss Expense Ratio | 84.5% | Cincinnati Global Performance (Six Months Ended June 30, 2025) | Indicator (in millions, except ratios) | Amount | | :--- | :--- | | Net Written Premiums | $173 | | Earned Premiums | $129 | | Total Loss and Loss Expense Ratio | 48.4% | - Noninsurance operations, including the parent company and CFC Investment Company, incurred a total loss of $39 million for the first six months of 2025[69][72]