Cincinnati Financial Blazes a Trail with Strong Q4 Results Amidst Challenging Times
Cincinnati Financial continued its impressive run in the fourth quarter of 2024, delivering strong results amidst challenging times. The company's President and Chief Executive Officer, Steve Spray, took to the stage during their Fourth Quarter and Full Year 2024 Earnings Conference Call, where he expressed gratitude to those impacted by the devastating L.A. wildfires and acknowledged the hard work of first responders, agents, and claims associates.
The quarter saw significant improvements across various key areas, with a better combined ratio and excellent growth in premiums and investment income contributing to a boosted net income. Net income for the fourth quarter stood at $405 million, with recognition of $107 million on an after-tax basis for the decrease in fair value of equity securities still held. The result was a double-digit growth in operating income.
Cincinnati Financial's 84.7% fourth-quarter 2024 property casualty combined ratio marked a 2.8 percentage point improvement over the same period last year, bringing the full-year combined ratio to an outstanding 93.4%, a 1.5-point better performance than in 2023. The accident year 2024 combined ratio before catastrophe losses improved by 1.9 percentage points compared with accident year 2023, including a 5-point improvement for the fourth quarter.
The company's underwriters continued to employ pricing precision tools to support their risk segmentation efforts on a policy-by-policy basis, resulting in another quarter of strong premium growth. Estimated average renewal price increases were similar to the third quarter of 2024, with commercial lines moving slightly lower and excess and surplus lines remaining in the high single-digit range.
Cincinnati Financial's personal lines segment also performed well, with personal auto experiencing low double-digit growth and homeowner growth in the high single-digit range. New business growth produced by agencies representing Cincinnati Insurance continued at a nice pace, with nearly 1/3 of the growth for the year coming from agencies appointed since the beginning of 2023.
The company's policy retention rates in 2024 were similar to last year, with the Commercial Lines segment up slightly but still in the upper 80% range. This strong performance is a testament to Cincinnati Financial's commitment to delivering superior service to its agents and policyholders.
