CINCINNATI, July 16, 2012 /PRNewswire/ -- Cincinnati Financial Corporation (Nasdaq: CINF) today estimated its second-quarter 2012 property casualty combined ratio will be in the range of 108 percent to 112 percent, with continued strong core underwriting profits partially offsetting significant storm-related losses. The Cincinnati Insurance Companies' property casualty underwriting results affect consolidated net income, which also includes contributions from investment operations and life insurance operations.
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The company expects the quarter's results to include property casualty pretax natural catastrophe losses of approximately $140 million to $160 million, with approximately two-thirds of that total from its commercial lines insurance segment. Approximately three-fourths of the 2012 second-quarter catastrophe losses were caused by two storms. In late April, Cincinnati Insurance catastrophe response teams assisted policyholders mainly in St. Louis, Louisville and Nashville; and in late June, additional claims representatives responded to affected policyholders across Midwest and Mid-Atlantic states.
The estimated impact of total catastrophe losses on the second-quarter 2012 combined ratio is expected to be approximately 17 to 19 percentage points, based on estimated property casualty earned premiums. That impact is less than half of the 40 catastrophe points reported in the 2011 second quarter. It rises slightly above the company's historical five-year averages of 16.9 points for the second quarter. The full-year average for the five years ended December 31, 2011 was 6.3 points.
Steven J. Johnston, president and chief executive officer, commented, "For the third consecutive quarter, our non-catastrophe property casualty underwriting results trended favorably, mitigating some of the storm impact. We expect to continue benefitting from improved pricing precision and loss cost containment, as well as improving market conditions. Healthy new business and renewal price increases contributed to second-quarter property casualty net written premium growth of approximately 18 percent, but approximately 6 percent of the growth was due to second-quarter 2011 premiums being reduced by $38 million used to reinstate our property catastrophe reinsurance coverage.
"The growth of our property casualty business continues to improve our geographical diversification over time. Agencies appointed over the past 18 months, including those from our newer states of Connecticut, Oregon, Colorado, Wyoming and Texas, contributed two-thirds of the second-quarter increase in standard market property casualty new business written premiums. We are expanding our business while absorbing storm losses and responding to all claims with high quality service."
Investment Portfolio Listing as of June 30, 2012
The company today posted a preliminary listing of its fixed-maturity and equity portfolio as of June 30, 2012, on its website at www.cinfin.com/investors. The consolidated portfolio listing with market values and amortized cost is available in PDF format and in a spreadsheet format with details of securities ownership by the parent and each subsidiary company.
Johnston concluded, "Our investment operations support our company's exceptional financial flexibility, balancing the need for current income with the potential for long-term appreciation."
Cincinnati Financial plans to report final results for the first quarter on Thursday, July 26, 2012, after the close of regular trading on the Nasdaq Stock Market. A conference call to discuss the results will be held at 11 a.m. ET on Friday, July 27, 2012, with a live, audio-only Internet broadcast available at www.cinfin.com/investors.
Cincinnati Financial Corporation offers business, home and auto insurance, our main business, through The Cincinnati Insurance Company and its two standard market property casualty companies. The same local independent insurance agencies that market those policies may offer products of our other subsidiaries, including life and disability income insurance, annuities and surplus lines property and casualty insurance. For additional information about the company, please visit www.cinfin.com.
P.O. Box 145496
6200 South Gilmore Road
Cincinnati, Ohio 45250-5496
Fairfield, Ohio 45014-5141
This is our "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by the forward-looking statements in this report. Some of those risks and uncertainties are discussed in our 2011 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 26.
Factors that could cause or contribute to such differences include, but are not limited to:
Further, the company's insurance businesses are subject to the effects of changing social, economic and regulatory environments. Public and regulatory initiatives have included efforts to adversely influence and restrict premium rates, restrict the ability to cancel policies, impose underwriting standards and expand overall regulation. The company also is subject to public and regulatory initiatives that can affect the market value for its common stock, such as measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain.
SOURCE Cincinnati Financial Corporation