Cincinnati Financial swings to profit on lower catastrophe losses
The property-casualty insurer posted first-quarter operating income of $2.10 a share after a year-earlier loss.
Cincinnati Financial (CINF) returned to profitability in the first quarter, reporting non-GAAP operating income of $330 million, or $2.10 a share, after a year-earlier loss of $37 million, or $0.24 a share. The $367 million improvement was driven by a $233 million decrease in after-tax catastrophe losses, marking a sharp reversal from the elevated claims that weighed on results in early 2025.
The quarter stood out for its underwriting discipline and pricing power, even as new business growth slowed. Earned premiums rose 11% year-over-year to $2.604 billion, while the property-casualty combined ratio improved 17.7 percentage points to 95.6%. The current accident year combined ratio before catastrophe losses also tightened, falling 3.0 points to 87.5%. Despite the stronger pricing environment, property-casualty new business written premiums declined 11% to $339 million, with agencies appointed since the beginning of 2025 contributing just $23 million, or 7%, of the total.
Net income for the quarter reached $274 million, or $1.75 a share, compared with a net loss of $90 million, or $0.57 a share, in the prior-year period. Net written premiums grew 7% to $2.668 billion, though 2 percentage points of that growth stemmed from first-quarter 2025 net reinstatement premiums. Agency renewal written premiums rose 7% to $2.045 billion, reflecting sustained demand for rate increases across commercial and personal lines.
Commercial lines net written premiums grew 3% to $1.359 billion, with renewal pricing increases near the high end of the low-single-digit range. However, the segment’s combined ratio worsened 6.7 points to 98.6%, including a 6.0-point increase in catastrophe losses. Personal lines fared better, with net written premiums up 15% to $775 million on high-single-digit rate increases, though new business premiums fell 40% to $76 million. The personal lines combined ratio improved 54.5 points to 96.8%, aided by a 41.9-point decrease in catastrophe losses.
Excess and surplus lines net written premiums rose 8% to $182 million, with renewal pricing increases in the mid-single-digit range and new business premiums up 9%. The segment’s combined ratio worsened 1.0 point to 89.3%, driven by less favorable reserve development. Pretax investment income climbed 14% to $318 million, supported by a 12% increase in bond interest income and a 13% rise in stock portfolio dividends.
Book value per share declined $0.75 sequentially to $101.60, while the value creation ratio improved to 0.2% from -0.5% in the first quarter of 2025. The company appointed 108 new agencies in the first three months of 2026, down from 420 in full-year 2025. Parent company cash and marketable securities edged lower to $5.550 billion at quarter-end.
The company did not provide updated full-year guidance, leaving its prior outlook for a property-casualty combined ratio below 96% and earned premium growth in the mid-single digits unchanged.