Primary insurer Cincinnati Financial has reported a third quarter net income of $484 million, up from $248 million in the prior year period.
This increase was primarily due to the after-tax net effect of a $352 million increase in net investment gains and partially offset by a $106 million decrease in after-tax property casualty underwriting income, including $152 million from catastrophe losses.
The company’s property casualty combined ratio for the quarter was 103.6%, up from 94.2% for the third quarter of 2019.
A 3% growth in Q3 net written premiums reflects price increases and premium growth initiatives.
“As previously announced, a Midwestern derecho in August, along with multiple hurricanes and wildfires, brought considerable losses to our policyholders,” said Steven J. Johnston, chairman, president and CEO.
“Investment income continued to contribute to a positive operating profit, supported by a 10% growth in dividends from our stock portfolio and an increase of 3% in the interest from our bond portfolio.
Johnston added that catastrophe events in the third quarter nearly tripled the company’s 10-year average of 6.2 points, contributing 18.3 points to its 103.6% combined ratio.
“During the third quarter, there was no change to our estimate of $71 million for pandemic-related losses or expenses incurred for the first six months of 2020, other than increasing estimated losses for Cincinnati Global Underwriting Ltd.TM by less than $1 million.
“With three-quarters of the year behind us, we believe our 101.8% combined ratio is within reach of our long-term target of 95% to 100%.”
