Financial stock under pressure: Cincinnati Financial Corporation (NASDAQ: CINF)

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Cincinnati Financial Corporation (NASDAQ: CINF) stock fell over 3.3% on 25th October, 2019 (as of 12:35 pm GMT-4; Source: Google finance) as the company in the third quarter of FY 19 has reported the net income of $248 million against $553 million in the third quarter of 2018. There has been $305 million decline in the net income for the third-quarter 2019, mainly due to the after-tax net effect of a $291 million decline in the net investment profit and $56 million of other non-recurring items, which is partially offset by a $32 million rise in after-tax property casualty underwriting income. After adjustments, the company has reported 31% rise in non-GAAP operating income to $179 million compared with $137 million in the third quarter of last year. The company posted the 31% increase in Non-GAAP operating income for the third quarter to $179 million, due to the underwriting profits as well as pretax investment income that grew 5% over last year’s third quarter. The book value per share at September 30, 2019 stood at $57.37, a record high, up 19.3% since year-end.

For Insurance Operations, the company posted third-quarter 2019 property casualty combined ratio of 94.2%, which has improved from 96.8% for the third quarter of 2018. The property casualty new business written premiums were up 25% during the quarter to $192 million. Further, at the end of September, the book value had reached a record high, after increasing 19.3% since December 31, 2018. Consolidated cash and total investments rose to approximately $20 billion, that includes $3.6 billion in unrealized gains on stocks. The company has posted 8% increase in the property casualty net written premiums during the quarter, including the contribution of 3% from Cincinnati Global Underwriting.

Additionally, at the end of September, the company had consolidated cash and total investments of $19.85 billion, which is an increase of 13% from $17.516 billion at year-end 2018. The company’s bond portfolio at September 30, 2019 stood at $11.600 billion, that have an average rating of A3/A. Fair value increased $280 million during the third quarter of 2019, that includes $208 million in net purchases of fixed-maturity securities. The company’s equity portfolio stood at $7.176 billion, was 37.7% of total investments, including $3.628 billion in appreciated value before taxes at September 30, 2019. In the third-quarter 2019, there has been 2% increase in fair value of $164 million or 2%.

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