Cincinnati Financial Corporation (CINF) provides business, home and auto insurance through a series of subsidiaries that are marketed through independent insurance agents in 45 states.
The company generated 57% of its revenue from commercial lines insurance, 24% from personal lines insurance, 6% from excess and surplus lines insurance, 5% from life insurance and 8% from other sources in 2020. In terms of geographic diversification, the company’s largest markets were Ohio (14.8%), Illinois (5.4%) and North Carolina (5%).
Mixed Earnings, but Robust Pricing
Cincinnati Financial reported fourth-quarter revenue that rose by 5.6% to $1.52 billion, missing consensus estimates by $110 million, with non-GAAP earnings of $1.61 per share, beating consensus estimates by 41 cents per share.
MKM Partners analyst Harry Fong noted that investors are anticipating the higher pricing moves stemming from 2020 may extend longer than expected for insurance players, including CINF, as companies try to recoup prior-year losses.
The company raised its quarterly dividend by 5% to $0.63 per share, which represents a 2.4% forward yield. The dividend is payable on April 15, 2021 to shareholders on record as of March 17, 2021.
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