Cincinnati Financial Corp reports best Q1 combined ratio in eight years

Cincinnati Financial Corporation clawed its way back to profitability in the first quarter of 2021, having made a sizable loss during the same period of 2020.

Cincinnati Financial reported a Q1 net profit of $620 million, compared with its $1.23 billion loss in Q12020.

The combined ratio for the property and casualty (P&C) insurance operation, which includes its reinsurance business, Cincinnati Re, fell to 91.2 percent, from 98.5 percent in the same quarter in 2020. It was Cincinnati’s best Q1 combined ratio for eight years.

P&C insurance reported net written premiums of $1.69 billion in Q1, up from $1.52 billion in Q1 2020, an increase of 12 percent. This largely reflected premium growth initiatives and price increases, it said, with 6 percent of the growth coming from Cincinnati Re.

Steven Johnston, chairman, president and chief executive, highlighted the challenge of severe winter weather in the US, which in Texas alone led to more than $50 million in claims from 600 primary P&C policyholders.

“Altogether, we experienced nearly $150 million in catastrophe losses in the first quarter of 2021, contributing 10.4 points to our combined ratio, considerably higher than our first-quarter 10-year average of 6.3 points,” Johnston said.

“Producing a 91.2 percent combined ratio demonstrates the power of our initiatives to balance growth with profitability through pricing segmentation and product and geographic diversification.”

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