Cincinnati Financial Reports Net Loss Of $418mn In Q2
Cincinnati Financial Reports Net Loss Of $418mn In Q2
In contrast to the third quarter of 2021, when Cincinnati Financial Corporation reported a net profit of $153 million, the third quarter of 2022 saw a net loss of $418 million.
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The company’s $557 million third-quarter 2022 after-tax decrease in the fair value of equity securities still held was the primary cause of the loss.
An underwriting loss of $66 million was recorded by Cincinnati’s property and casualty (P&C) business, as opposed to a profit of $121 million during the same time last year.
Additionally, the segment’s combined ratio for the quarter was 103.9%, compared to 92.6% from the third quarter of 2021.
At the same time, the segment’s loss and loss expenses went up 36% to $1.34 billion, compared to $988 million from the same period last year.
Cincinnati Financial Reports Net Loss Of $418mn In Q2
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.
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However, despite this, the segment’s net written premiums for the quarter were $984 million, a 10% increase from $895 million from the 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.
Cincinnati Financial Reports Net Loss Of $418mn In Q2
“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.
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“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.”
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