10-QPeriod: Q1 FY2011

CINCINNATI FINANCIAL CORP Quarterly Report for Q1 Ended Mar 31, 2011

Filed April 27, 2011For Securities:CINF

Summary

Cincinnati Financial Corporation (CINF) reported a decrease in net income for the first quarter of 2011 to $62 million ($0.38 per diluted share) from $68 million ($0.42 per diluted share) in the same period of 2010. This decline was primarily attributed to weaker property casualty underwriting results, which saw an increase in underwriting losses to $29 million from $18 million year-over-year. Despite this, total revenues grew by 5% to $929 million, driven by a 5% increase in earned premiums to $782 million, reflecting growth in both commercial and personal lines of insurance. Investment income remained stable at $131 million, and realized investment gains improved to $12 million from $8 million. The company's balance sheet showed growth in total assets to $15.37 billion and shareholders' equity to $5.12 billion, with book value per share increasing to $31.40. The company continued to focus on long-term value creation through initiatives aimed at improving insurance profitability and driving premium growth, including the use of predictive analytics for pricing and underwriting. Financial strength remains a priority, with strong insurer financial strength ratings maintained across its subsidiaries.

Financial Highlights

31 data points
Beta

Revenue

$929.00M

Net Income

$61.00M

6.6% Net Margin

EPS (Diluted)

$0.38

Total Assets

$15.37B

Cash & Equivalents

$379.00M

Free Cash Flow

$55.00M

Financial Statements
Beta
Revenue$929.00M
Interest Expense$13.00M
Net Income$61.00M
EPS (Basic)$0.38
EPS (Diluted)$0.38
Shares Outstanding (Basic)162.94M
Shares Outstanding (Diluted)163.67M

Key Highlights

  • 1Net income decreased by 9% to $62 million in Q1 2011 from $68 million in Q1 2010.
  • 2Earned premiums increased by 5% to $782 million, driven by growth in commercial and personal lines of insurance.
  • 3Property casualty underwriting loss widened to $29 million from $18 million year-over-year, primarily due to increased catastrophe losses.
  • 4Total revenues increased by 5% to $929 million.
  • 5Shareholders' equity grew by 2% to $5.12 billion, with book value per share rising to $31.40.
  • 6Realized investment gains increased to $12 million from $8 million, while investment income was stable at $131 million.
  • 7The company maintained strong insurer financial strength ratings across its subsidiaries.

Frequently Asked Questions

The decrease in net income was primarily driven by weaker property casualty underwriting results, which experienced an increase in underwriting losses due to higher catastrophe losses.

Earned premiums saw a healthy increase of 5% to $782 million, indicating growth in the company's core insurance operations, particularly in commercial and personal lines.

The company continues to focus on its investment strategy to balance income generation and long-term book value growth. Investment income remained stable, and realized investment gains improved. The company maintains a well-diversified investment portfolio.

Cincinnati Financial Corporation maintained strong insurer financial strength ratings and its balance sheet shows growth in shareholders' equity and book value per share. The debt-to-total-capital ratio improved slightly. Liquidity is supported by subsidiary dividends, investment income, and insurance underwriting operations.