Summary
Cincinnati Financial Corporation (CINF) filed an 8-K on April 16, 2007, to announce anticipated strong first-quarter 2007 results. The company expects its GAAP combined ratio for the first quarter to be below 91%, a significant improvement from the 92.0% combined ratio reported in the first quarter of 2006. This positive outlook is driven by better-than-expected property casualty underwriting results and a notable reduction in estimated catastrophe losses for the current quarter, partly offset by a decrease in the estimate for prior year catastrophe losses. Furthermore, CINF has raised its full-year profitability outlook, now projecting a 2007 GAAP combined ratio at or below the low end of its previously announced target of 97% to 99%. The company also reported that investment income growth is expected to be in line with its full-year target, and that it repurchased approximately $64 million of its common stock during the first quarter. Investors can look forward to the full first-quarter results on May 2, 2007.
Key Highlights
- 1Anticipates a first-quarter 2007 GAAP combined ratio below 91%, an improvement from 92.0% in Q1 2006.
- 2Projected first-quarter 2007 catastrophe losses are estimated at $16 million pretax, or $3 million net, representing a minimal 0.4 percentage point impact on the combined ratio.
- 3Full-year 2007 profitability outlook improved, with a projected GAAP combined ratio at or below the low end of the 97%-99% target range.
- 4Full-year 2006 catastrophe losses were $175 million net, contributing 5.5 percentage points to the combined ratio.
- 5Investment income growth for Q1 2007 is expected to be in line with the full-year target of 6.5% to 7.0%.
- 6Repurchased approximately 1.5 million shares of common stock for $64 million during the first quarter.
- 7Full first-quarter results and conference call are scheduled for May 2, 2007.