Cincinnati Financial Corporation has announced that its consolidated Q4 results are expected to include pretax catastrophe losses of approximately $141m.
The catastrophe loss estimate includes $161m from Winter Storm Elliott, net of reinsurance and excluding any effects of reinstatement premiums assumed or ceded, in addition to less severe storms and favourable loss reserve development on previous catastrophe events, primarily ones that occurred in 2022.
The company notes that its 5-year historical average contribution of catastrophe losses to the combined ratio for Q4 is 3.9 percentage points.
Cincinnati’s estimate for total Q4 2022 catastrophe losses incurred also includes approximately $100m for the commercial lines insurance segment; $38m for the personal lines insurance segment; $2m for the excess and surplus lines insurance segment and $1m in total for Cincinnati Re and Cincinnati Global Underwriting LtdSM.
The estimated losses and expenses from catastrophe-related claims are expected to bring the company’s Q4 2022 property casualty combined ratio to approximately 95%.
According to the announcement, the combined ratio before catastrophe losses for the quarter was approximately 2.5 percentage points better than that ratio for the first nine months of 2022 but continued to reflect increased uncertainty of estimated ultimate losses, due in part to elevated paid losses reflecting economic or other forms of inflation.
Net written premium growth is estimated to be approximately 10% for the quarter.
A rising stock market helped Q4 2022 earnings as net income is estimated to be between $6.37 and $6.43 per share, with non-GAAP operating income ranging from $1.24 to $1.30 on a per share basis, the company added.
Steven J. Johnston, chairman and CEO, commented: “We keep a long-term view when managing our business and creating value for shareholders of Cincinnati Financial. Increasing the dividend signals the board’s confidence in our ability to maintain the profitable growth of our insurance business while also continuing to return capital to shareholders.
“Cincinnati Financial shareholders have consistently benefited from increased dividends in each of the past 62 years, and this board action lays the foundation for continuing that record for a 63rd year.”
Cincinnati Financial plans to report final results for Q4 2022 on February 6, after the close of regular trading on the Nasdaq Stock Market.
