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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.

RMS

“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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