Cincinnati Financial Corporation has reported a net loss of $418 million for the third quarter of 2022, compared to a net income of $153 million from the third quarter of 2021.
The loss was mainly due to the company recognising a $557 million third-quarter 2022 after-tax reduction in the fair value of equity securities still held.
Cincinnati’s property & casualty (P&C) segment saw an underwriting loss of $66 million, compared to a profit of $121 million from the same period last year.
Additionally, the segments combined ratio for the quarter was 103.9%, compared to 92.6% from the third quarter of 2021.
At the same time, the segments loss and loss expenses went up 36% to $1.34 billion, compared to $988 million from same period last year.
Despite this, the P&C segment’s net written premiums increased by 14% to $1.75 billion, compared to $1.53 from the third quarter of 2021.
Commercial lines saw an underwriting profit of $11 million, compared to an underwriting profit of $182 million in Q3 21.
This led to a significantly weaker combined ratio of 99%, compared to 80.6% from the same period last year.
However, despite this, the segments net written premiums for the quarter were $984 million, a 10% increase from $895 million from prior year quarter.
Steven J. Johnston, chairman and chief executive officer, commented: “Investment income in the third quarter of 2022 continued to contribute to a positive operating profit. Steady cash flow from 10 consecutive years of underwriting profit helps fuel our investment approach, allowing us to continually invest new money in both the equity and fixed-maturity securities markets.
“As previously announced, losses from Hurricane Ian pushed our third-quarter combined ratio to 103.9%. Confident in our balance sheet, we were able to focus on what was important: outstanding claims service. I applaud the efforts of our associates who worked quickly to comfort those who had experienced loss and get them moving toward recovery.
“Our property casualty insurance business remains profitable for the year so far, recording a 99.2% combined ratio through the end of September, within our long-term goal of a 95% to 100% combined ratio.
“For both the third quarter and first nine months of the year, our combined ratios before catastrophes rose compared to 2021’s excellent results. These ratios, which filter out much of the effects of severe weather, continue to include increased uncertainty of estimated ultimate losses, due in part to elevated paid losses reflecting economic or other forms of inflation.”
