Cincinnati Financial Corporation has reported a net income of $225 million in Q1 of 2023, compared with a net loss of $266 million in the same period last year.
This marks a $491 million increase, which Cincinnati says reflects the after-tax net effect of a $610 million increase in net investment gains and a $138 million decrease in after-tax property casualty underwriting income.
Cincinnati saw an underwriting loss of $10 million in Q1 as pre-announced catastrophe losses nudged the firm’s combined ratio to 100.7%, up from 89.9% in 2022.
On this note, Steven J. Johnston, Cincinnati Financial Chairman and CEO, said, “Our first-quarter 2023 combined ratio of 100.7% included 12.8 percentage points related to natural catastrophe losses, more than double our five-year historical first-quarter average.
“The increase in weather-related catastrophes masked the steady improvements we are making to our underlying business.
“Before catastrophe loss effects, our property casualty combined ratio improved by 0.2 points to 87.9% compared with last year’s first quarter.
“The current accident year combined ratio before catastrophe loss effects also improved, lowering 0.1 points to 90.1% compared with full-year 2022.
“We continued to build on our record of 34 consecutive years of overall favourable reserve development with first-quarter net favourable reserve development on prior accident years up 0.7 points compared with first-quarter 2022.”
According to Johnston, rising income in Cincinnati’s investment portfolio offset the underwriting loss as the firm “helped policyholders recover from widespread spring storms.”
Q1 2023 pretax investment income climbed 14% or $25 million, including a 14% increase for bond interest income and a 2% increase for stock portfolio dividends.
Meanwhile, Cincinnati reported a 6% growth in Q1 net written premiums, up to $2.02 billion, including price increases, premium growth initiatives and a higher level of insured exposures.
Q1 2023 property casualty new business written premiums were up 3% to $251 million, with the firm suggesting that agencies appointed since the beginning of 2022 contributed $13 million, or 5% of total new business written premiums.
Johnston added, “The main driver for our growth continues to come from the excellent relationships we develop and nurture with our agencies.
“To keep the momentum going, we continue to look for opportunities to appoint new agents while still delivering the superior service that our agents value.
“So far this year, we’ve appointed 66 agencies that sell most or all of our property casualty products.”
