10-QPeriod: Q3 FY2013

CINCINNATI FINANCIAL CORP Quarterly Report for Q3 Ended Sep 30, 2013

Filed October 24, 2013For Securities:CINF

Summary

Cincinnati Financial Corporation (CINF) reported a solid third quarter in 2013, demonstrating robust growth in earned premiums across its property casualty segments. Net income for the quarter was $131 million, a significant increase from $111 million in the prior year. This growth was driven by improved underwriting profitability in the property casualty business, largely due to lower catastrophe losses and better current accident year loss experience. The company also saw an increase in investment income and realized investment gains. Shareholders' equity grew to $5.816 billion, and book value per share increased to $35.51. The company continued its commitment to shareholder returns by increasing its quarterly dividend for the 53rd consecutive year. CINF's financial position remains strong, with a well-diversified investment portfolio and a debt-to-total-capital ratio of 13.3%. The company's strategic initiatives focused on improving insurance profitability and driving premium growth are showing positive traction, positioning CINF for continued long-term value creation.

Financial Highlights

35 data points
Beta

Revenue

$1.15B

Net Income

$131.00M

11.4% Net Margin

EPS (Diluted)

$0.79

Total Assets

$17.34B

Cash & Equivalents

$511.00M

Free Cash Flow

$285.00M

Financial Statements
Beta
Revenue$1.15B
Interest Expense$13.00M
Net Income$131.00M
EPS (Basic)$0.80
EPS (Diluted)$0.79
Shares Outstanding (Basic)163.70M
Shares Outstanding (Diluted)165.60M

Key Highlights

  • 1Earned premiums increased by 12% year-over-year for the third quarter, driven by growth in property casualty segments.
  • 2Net income rose to $131 million in Q3 2013 from $111 million in Q3 2012, representing an 18% increase.
  • 3Property casualty underwriting profit improved significantly, benefiting from lower catastrophe losses and better current accident year loss experience.
  • 4Shareholders' equity grew by 7% year-to-date to $5.816 billion, resulting in a book value per share of $35.51.
  • 5The company announced its 53rd consecutive annual increase in cash dividends, demonstrating a strong commitment to shareholder returns.
  • 6The debt-to-total-capital ratio remained healthy at 13.3%, indicating a strong capital structure.
  • 7Investment income increased slightly, and realized investment gains saw a substantial rise of 120% year-over-year for the quarter.

Frequently Asked Questions

Revenue growth was primarily driven by a 12% increase in earned premiums, largely due to improved performance in the commercial and personal lines property casualty insurance segments.

Catastrophe losses were lower in the third quarter of 2013 compared to the same period in 2012. This reduction contributed significantly to the improvement in property casualty underwriting profit.

The company's investment portfolio remains well-diversified. While the low interest rate environment presents challenges for fixed-maturity yields, the company believes its diversified common stock portfolio of blue-chip, dividend-paying companies offers long-term growth potential. Realized investment gains also saw a notable increase in the quarter.

Cincinnati Financial Corporation demonstrated its commitment to shareholder returns by increasing its quarterly cash dividend for the 53rd consecutive year. The company also has an ongoing share repurchase program in place.