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Investment gains help boost Cincinnati’s Q3 net income to $484mn

27th October 2020 - Author: Charlie Wood

Primary insurer Cincinnati Financial has reported a third quarter net income of $484 million, up from $248 million in the prior year period.

cincinnati-insurance-logoThis 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%.”

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