Cincinnati Financial publishes fourth quarter and full-year 2023 results

Cincinnati Financial Corporation has reported its financial results for the fourth quarter and full year of 2023.

The company saw a fourth-quarter net income of $1.183 billion, or $7.50 per share, an increase from the previous year’s $1.013 billion, or $6.41 per share. This rise was attributed to an $824 million after-tax gain in the fair value of equity securities still held during the fourth quarter of 2023. The full-year net income for 2023 was $1.843 billion, or $11.66 per share, marking a recovery from a net loss of $487 million, or $3.06 per share, in 2022.

The company also reported a 78% increase in fourth-quarter non-GAAP operating income to $359 million, or $2.28 per share, up from $202 million, or $1.28 per share, in the previous year’s quarter. The full-year non-GAAP operating income rose by 42% to $952 million, or $6.03 per share, from $672 million, or $4.24 per share, with a notable increase in after-tax property casualty underwriting profit of $206 million.

Cincinnati Financial results for FY2023

Insurance operations showed robust performance with a fourth-quarter 2023 property casualty combined ratio of 87.5%, improved from 94.9% in the same quarter of 2022. The full-year combined ratio stood at 94.9%, with net written premiums increasing by 10%. The fourth quarter also saw 13% growth in net written premiums, driven by price increases, premium growth initiatives, and a higher level of insured exposures.

The company’s new business for property casualty in the fourth quarter amounted to $310 million, with contributions from agencies appointed since the beginning of 2022 accounting for $28 million, or 9%, of the total new business written premiums.

The life insurance subsidiary contributed $10 million to the fourth-quarter net income and witnessed 4% growth in term life insurance earned premiums. The full-year non-GAAP operating income for the life insurance segment rose by 22%.

Additionally, Cincinnati Financial Corporation reported growth in both fourth-quarter and full-year net written premiums for property casualty, emphasizing premium growth initiatives and a higher level of insured exposures. The company appointed 300 new agencies in 2023, including 84 specializing in personal lines products.

The fourth-quarter combined ratio showed a 7.4 percentage-point improvement from 2022, including a decrease in losses from catastrophes. The full-year combined ratio also improved, reflecting a decrease in catastrophe losses and favorable prior accident year reserve development.

Commercial lines net written premiums grew by 5% and 4% in the fourth quarter and full year, respectively, mainly due to higher agency renewal written premiums. The company also reported an 18% increase in fourth-quarter new business written premiums, showcasing careful underwriting policies in a competitive market environment, it said.

Despite a slight decrease in full-year new business written by agencies, the company also saw an increase from newly appointed agencies since the beginning of 2022.

“Cincinnati Re and Cincinnati Global Underwriting Ltd.SM continue to perform as planned and were very profitable in 2023, with a 77% combined ratio in total,” Cincinnati Financial CEO and chairman Steven J. Johnston said. “Their unique risk profile helps diversify earnings and both are good examples of how we take advantage of market opportunities as they arise.”

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