Insurer Cincinnati Financial Corporation has reported a third quarter 2023 property and casualty (P&C) underwriting profit of $112 million and a combined ratio of 94.4%, a significant improvement on the 103.9% posted in Q3 2022.
Within its insurance operations, there was 12% growth in Q3 2023 net written premiums, including price increases, premium growth initiatives, and a higher level of insured exposures.
Further, new business written premiums in Q3 2023 hit $313, up 19% year-on-year.
The firm states that agencies appointed since the beginning of 2022 contributed $26 million or 8% of total new business written premiums.
The firm’s life insurance arm achieved Q3 2023 net income of $25 million, showcasing an increase 0f $2 million from the prior year’s quarter, and 2% growth in Q3 2023 term life insurance earned premiums.
On the asset side of the balance sheet, pre-tax investment income rose 17% to $32 million, including a 19% increase in bond interest income and a 5% increase in stock portfolio dividends.
Revenues also increased year-on-year, to $1.8 billion in Q3 2023 from $1.4 billion a year earlier.
Despite the improved insurance result, the firm has reported a net loss of $99 million for the quarter, which is an improvement on the loss of $416 million seen a year earlier, driven by the recognition of a $362 million third-quarter 2023 after-tax reduction in the fair value of equity securities still held.
Steven J. Johnston, Chairman and Chief Executive Officer, commented: “Non-GAAP operating income for the third quarter was $261 million, up significantly compared to last year’s third quarter, driven by underwriting profits as well as pretax investment income that increased 17% for the quarter.
“Our insurance business continues to perform well as we navigate a challenging market. Our property casualty insurance business reported $112 million of underwriting profit in the third quarter, continuing our improving trend for the year and taking our nine-month underwriting profit to $149 million, more than triple last year’s nine-month results.
“Our combined ratio of 94.4% – 9.5 points better than last year’s third-quarter result – helped to bring our nine-month ratio to 97.5%. On a nine-month basis, our current accident year combined ratio before catastrophe losses – sometimes referred to as our core combined ratio – improved 1.7 points to 89.4% compared with last year. Our life insurance operation recorded $65 million in net income through September 30, increasing 27% compared to the same period of 2022.”
Johnston continued: “We are growing with discipline and precision. We believe that the investments we’ve made in pricing and risk management expertise, along with our geographic and product diversification over the past decade, put us in a strong position to understand and take advantage of opportunities for profitable growth.
“In the first nine months of 2023, property casualty net written premiums grew 9%. Our personal lines and excess and surplus lines business continued to write a healthy amount of new business, growing 39% and 25%, respectively. We believe commercial market opportunities in the third quarter were generally more attractive than the first half of the year, allowing us to record $148 million in new business written premiums, nearly matching last year’s third-quarter result while maintaining underwriting discipline.
“We expect to further enhance our growth opportunities as we continue to appoint new agencies and enter new states. So far in 2023, we’ve added 193 new agency reporting locations, bringing that total number above 3,000 for the first time. And, we plan to open Nevada for commercial lines business in the fourth quarter.”
