Cincinnati Financial Corporation is expected to include pretax catastrophe losses of approximately $231 million in the second quarter, adding 16.5% to the quarterly combined ratio based on estimated property casualty earned premiums.
Two multi-state storms in early April each caused approximately $50 million in losses, in addition to catastrophe losses from several less severe storms.
Damaged property due to the US riots resulted in $29 million in losses, including $8 million for Cincinnati Global Underwriting.
The estimate for total second-quarter 2020 catastrophe losses incurred includes approximately $122 million for the commercial lines insurance segment; $91 million for the personal lines insurance segment; $3 million for the excess and surplus lines insurance segment; and $15 million for Cincinnati Global.
The company also estimates second-quarter 2020 pandemic-related incurred losses and expenses to total approximately $65 million, impacting the quarterly combined ratio by approximately 4.6%.
Estimated losses and expenses from catastrophe-related claims and the pandemic are expected to bring the company’s second-quarter 2020 property casualty combined ratio to approximately 102% to 104%.
Net written premium growth is estimated to be between 5% and 6% for the quarter.
During the second quarter of 2020 the company’s investment portfolio improved. A net investment gain attributable primarily to the equity security portfolio, plus changes in unrealized gains for the fixed-maturity security portfolio, on a pretax basis totaled approximately $1.6 billion.
“Cincinnati Insurance was built to withstand challenging quarters thanks to our strong balance sheet and resilient business model,” said Steven J. Johnston, chairman, president and CEO.
Our field claims associates rose to the occasion this spring, serving policyholders with empathy in the midst of the global pandemic.
“They continued to thoroughly and quickly review claims to determine the appropriate payment based on the policy contract. Our solid financial position ensures our ability to help the families and businesses in our agents’ communities on the road to recovery after a covered loss.”