Earnings call transcript Q4 2022

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Operator

Good day, and welcome to the Cincinnati Financial Corporation Fourth Quarter and Full-Year 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Dennis McDaniel, Investor Relations Officer. ahead. go Please

Dennis McDaniel

news menu Dennis any joining is is year Cincinnati Thank issued Financial. earnings with results, in website, Hello. our supplemental our for shortest cinfin.com/investors. year-end McDaniel our of for financial a we yesterday, us call. full on route To the the please fourth link documents, you our conference along This on to Late at release find quarter XXXX portfolio. including these navigation visit information quarterly left. The the results package, copies the investment of far our investor and

Officer, their this Steve remarks, the on may hear some the may Solaria, Johnston; and Insurance's On in President Chief time, investors from Investment Steve Hoffer. ask Vice Officer, Finance, from call room Theresa with Claims that Schambow, made questions. others Steve Spray, then Chief After Executive be Vice Executive Officer, including first President, prepared you'll President of and Financial Cincinnati and Mark participating responses Chairman Officer, call, Chief Corporate At and and Senior Sewell. by us, Mike Chief

note that today forward-looking. risks is Statutory and data Also, the reconciled to of attention rules measures non-GAAP forward-looking and matters some not to GAAP. accounting with release are in statutory reconciliation news the a our to various risks certain respect be filings and release. we SEC. is with to statements discussed was provided accordance therefore the accounting prepared involve with to With your direct of These uncertainties. these please uncertainties, First, and our news

Steve. Now I'll turn the over to call

Steve Johnston

financial areas about see in today thank positive our and morning, XXXX (ph) future results more joining several us bullish results. that were We below hear expectations. are our somewhat despite you about our prospects momentum Good to and for

volatility inflation us industry, affecting and addition to losses catastrophe the and market year Challenges from the in investment of elevated higher portfolios. natural casualty property during the the included valuation events for

maintain in view our company's supports Our confidence coupled to our a long-term with allows us execute experience the and we adversity, managing plans. financial strength as

just outstanding $XXX Net quarter or year's after-tax largely income for $X fourth due XXXX last $XXX our fourth fair billion, less in XX% quarter, basis less portfolio. million benefit than on equity value to over of securities that's the million in of an held the was

losses an higher of for million quarter fourth income a was operating from Non-GAAP million the catastrophe down $XXX after-tax that $XX on million year ago, $XXX basis. were including

XX.X% year, XX.X% percentage Our quarter ratio for amongst ever the of recorded. casualty combined the ratios fourth fourth points XX.X quarter property we've higher was the than last combined which was best

XXXX On to combined also period of XX.X% with longer-term each think prior as important. ratio of catastrophe basis, respective the X.X and year-end. excluding the each year for points percentage a accident five the was comparisons We better than years losses, compares accident year measured are with favorably average our current that

fourth from quarter throughout in our on development On reserves XXXX XXXX, for they and we estimated have prior favorable increased accident our as the accident points XXXX, year. current points pressured increased percentage losses the ratio year X.X a contributing losses. ratio the also year less ultimate Inflation both for reserve combined years results to for as catastrophe and impact basis, larger negative a calendar than for experienced X.X for combined

policies pricing premium by and into risk expectations factors areas actions and pricing, including increased underwriters with inflationary premium in increases criteria, underwriting adjusting improve of rate as selection for such trends they factor responded changes and We've as to selection exposure.

year combined to with mid-XX% the We improve a XXXX results successfully prudent GAAP believe range. and low underwriting growth can balance in we ratio next business to

in changes results conditions We more. ultimately property property our insurance variables XXXX policy can and rate the believe will recognize casualty casualty be or growth significant the affect some X% that or that we pricing trends market of also industry report. that influence premium We weather

In we've been recent quarters, noted that elevated. loss experience umbrella commercial has

Although, in to less was XXXX. quarter, degree a still than earlier elevated it fourth in the

While our year as strengthening estimated below XXXX. year on for not commercial basis strong ratio through is still an end average below is the XXXX after development for and XX% a business as recent profitability with year accident previously years XXXX umbrella through combined The during we on XXXX. XX% reserves calendar good, basis

good very segmentation. was growth pricing premium incorporate to and Overall continues

Cincinnati that for do us. work serving ones and to also at we more write excellent appointed inadequate accounts retain underwriters addressing an outstanding They agencies are profitable while Our have pricing. Insurance job that business determine producing

property net factor XXXX, year of and a premiums quarter quarter increase rose XX% full XX% portion for renewal for XX% premiums that the we in from written written casualty with levels fourth Consolidated as the insured a significant inflation. in higher exposures includes fourth elevated

average renewal range, price percentage quarter. digit In Commercial the the to in continued addition increases, segment to higher exposures increases estimated Lines our third experience mid-single Insurance than

Our at end homeowner increases continued both high Excess renewal auto higher in than of high-single the Insurance digit were the lines price Personal low-single in the Surplus and average and the Lines third segment with quarter. range. digits

continue January rate disclosed, rise. our beginning rate XX%. expect averaged policies the we be have we increases previously increase full XXXX, an that will year rates premium of effect personal As X, double-digit for auto low effective premium personal for approximately line premium Based auto rate expect written of average will filings XXXX our to we business on

to range. end rates our segment, retention Commercial the with to in segment from rising range. Policy Lines mid-XX% In improved XXXX moving XX% low higher our year the Lines Personal upper

than written higher were a Commercial above and quarter quarter both X%. and segment approximately highlight growth The year we losses was effects premiums full XXXX by combined Insurance and profitability and aim year grew segment. on ratio reflects net Lines both elevated and to catastrophe XXXX for XX%. Its year where premium fourth That's ago. for full inflation Moving the that

year and written our the profit Its XXXX, target. year inflation XX% continued For combined XX% we by above full and was approximately the full reflected segment, XX% produced our net personal ratio worth net near-term is high lines expansion premium effects our of for elevated our quarter planned likewise as for grew and agencies. business

We taken blend that long-term and proven confidence and have to results our we will both for commercial improve have actions strategy near-term lines. personal

grew a XX%. ratio XX.X% XXXX Global net premiums of another with Excess and XX% with premiums a healthy Our Re of net combined good year written ratio growing premium year of growth. segment growing Global Cincinnati combined Re XX.X% Cincinnati had and net combined Surplus XX%. written each finished with full the result, written a XXXX XX.X%. Line ratio, by Cincinnati a had combined year with Cincinnati XXXX

year property Our and again life grew full up primary term premiums net income year, of X%. insurance earned to each year of insurance January of life our subsidiary continued its we renewed good our million, that from On X this part performance transfer a $XX casualty XX% by with of reinsurers. treaties ago XXXX risk

supports retaining cost capital ceded and reinsurance strong rising risk premiums. managing of additional Our

of coverage for For casualty treaty than change main and losses approximately XXXX, $XXX this layers in treaty's primary conditions rate while new was coverage are XX%. for is retaining treaties, effect of terms property of million -- and our averaged to per what greater between risk The our to a objective year catastrophe a $X.X The XXXX other share million balance that premium fairly XXXX, adding protect sheet. for our layer increases treaty is billion. than of $XX similar

$XXX with event In the million compared next million. the XXXX, that for billion compared magnitude. we'll of $XXX event next catastrophe million the XXXX we catastrophe $XXX in losses we'll share totaling all event Should retain for and a the with XXXX retained million a first we of retain XXXX $XXX of the of in experience first million the losses, share and $XXX of an $XXX million when $X.X

$XXX these expect to ceded $XXX ceded approximately in higher million in treaties XXXX. premiums XX% these actual We or approximately than premiums XXXX the of $XX treaties million, million total for for be

quite an Investments we area Our trends. will details. is Mike on to some longer-term well, provide investment perform to department eye keep another and where like continued

the XXXX, equity shareholder ended was the portfolio, years annual five than for compound XXX XXX For XX.X%, with better S&P example, return basis points our total Index.

of financial primary before quarter valuation losses and VCR The gains portfolio long-term contribution negative X.X% XX.X%. creation investment or fourth for the stock XX.X% year year improved was both our VCR XX.X% the the the for for from with the for of Net I'll to markets. X.X% VCR full XX.X% of ratio, the investment income favorable conclude mixed, quarter, value unfavorable favorably year for XXXX. quarter contributed measure for XXXX our but to performance. our full due positive and A bond challenges by the to

within is XX% annual a typical for range Although over that's five target below year, annual our the to average past years XX.X% the of average XX%. expectations our

will for add important Financial comments Sewell, several evaluating Chief our Now other about Officer, performance. our Mike financial points

Michael Sewell

totaled thanks for the with compared Steve, securities all million. to income year the Dividend XXXX rose periods you, to full X% $XX and continued you for Investment purchased quarter for today. an same the last for XX% pace, grow equity XXXX outstanding Thank fourth up during of at income year. X% joining quarter. of and us Net

rise in was a XX% ago. was yield X.XX% during to and average the bonds income for fixed full yield basis XXXX. than portfolio the continue fourth of of taxable for pretax points X.XX% year interest the Bond to higher The quarter. tax-exempt The up pretax average XX year total purchased maturity

were to $XXX investment bond $XXX of holdings. emphasize the in was XXXX changes the portfolio. billion bond nearly for of gain continue with totaling fixed net fourth for securities purchases investing million. portfolio The We aggregate our unrealized gains during during Valuation including year in our for the quarter both net in effects, favorable additional overall an and stock before our $X.X tax million quarter maturity

end $X.X net in $XXX position equity fixed a of million. value in the XXXX, portfolio maturity was investment billion, portfolio gain was net of loss the of total portfolio position approximately net billion. while a appreciated was $X.X At The

we flow, Cash yields flow from the operating contributed a interest addition X% Cash the a for up for almost year $X.X generated in billion, high from year amount, in rising increase income reported XXXX X% to to ago. record full activities year. bond

fourth quarter XX%. year, rose of this it the For

to Turning expense management.

lower points appropriately in for full commissions. XXXX reflecting year underwriting Our make The casualty profit-sharing to accruals than percentage agency our property X.X last was investments objective is strategic with business. ratio expense to year expense control continuing lower balance

loss amounts of estimated our Regarding reserves. net and loss of the consistent and in expense approach reserves, loss net half the target upper actuarially range remains

of years. net now million have on $XX prior accident We favorable had development

reserves As we and business. updated and new losses such case do each quarter, line then and and estimated expenses information we as by ultimate of year accident loss consider losses paid

portion IBNR expense net reserve addition loss The XXXX, XX% balance quality was loss million $X.XXX of of sheet. the During further year was reserve from of indication and reserves billion, that net property a balance our $XXX casualty a end increase the at in the increase XXXX. our

favorable combined XXXX, year million years experienced accident prior on development, property benefited in million X.X that by casualty full ratio percentage we net points. reserve $XXX favorable $XXX For Of net that development of unfavorable lines million the in a included $XX commercial $XX unfavorable commercial casualty casualty. from million other favorable business, for commercial of net including net an coverages amount and the our umbrella $XX million of for

by and aggregate for net for million XXXX a $XX basis accident million to favorable prior in XXXX for the favorable full all-lines included an On XXXX, accident for year $XX XXXX, XXXX. $XX development reserve unfavorable years $XXX favorable million for year, million

equity to also we plenty also flexibility capital in offset intended we management is our plans. to and remains and We compensation repurchased consistent, believe still approach through believe financial strength have maintenance that shares shares of shape. that issued Our great include

$XXX.XX. at average repurchased shares quarter XXX,XXX fourth over per of XXXX, the of price share an During we just

a value Life main $X.XX. Property and life past, per value of quarter with increased in insurance increased I'll insurance book represent underwriting non-insurance of summary drivers the contributions of value book They casualty creation book income, operations the $X.XX. As the net $X.XX. to Investment our added conclude than value fourth share. other ratio. by items

book increased And per to for during gains fourth investment value share per book share. The for share $X.XX. by increased equity we losses net value income the portfolio and share fixed dividends Net $XX.XX book a in Net losses quarter investment to the value the by per and per declared effect increase of $X.XX was shareholders. $X.XX. portfolio gains $X

over Now the to back call Steve. I'll turn

Steve Johnston

confident associates efforts and value strength, future. produce from continue we'll challenges insurance to and see result geographic expand force, be offerings. a our our for faced service-oriented delivering that and number still -- benefits consider an in and product refine our and We of precision into our When underwriting Agency footprint bolsters able recorded and I'm to shareholder experienced XXXX belief segmentation continually profit business. Premier our pricing our we'll our That you Mike. far our efforts the future Thanks, financial to

Our cash expressed and Board last dividend of quarterly a year of X% month, confidence the rising our Directors dividend shares stage by it that XX for increasing setting payments.

not for XX by a stage dividend sets So for a traded increasing publicly matched U.S. believe just year. can seven consecutive paying XX We companies. that's that the the dividend other years. be That for straight that's only the record

with reminder, Spray, Steve a Schambow Hoffer. questions. and Soloria, As Mike today are Cole, call please Theresa me Marc the and open Steve for

Operator

question-and-answer line Thank our go Newsome And first will is [Operator session. with you. Perhaps And Piper Hello, the question Sandler. come Please muted. will from we now Instructions] begin Paul. your ahead. today Paul

Paul Newsome

morning. Good

Steve Johnston

Good morning, worries. Paul. No

Paul Newsome

on the and the Congratulations year quarter.

Steve Johnston

Thank you.

Paul Newsome

thoughts year? here income any given the a view which the buys equities changing much portfolio -- the the allocation course well? us had on and as more within give I yield on many could that income, how little different on of interest versus bit was you investment improve terms doing in your last over And the higher the of or color those fixed rates, hoping what you've you're could years

Steve Soloria

Paul, this here. Soloria is Steve

forward, forward. of even the maintain of the benefits. allocation over but we'll the continue moving remain virtually Just increase rates and disciplined our an moving advantage We'll same. in in our allocation try so, of stay taken and to in year will the terms do keel to course We've the

the as of year rate about X.X%. year mentioned about or ago, we that kind the blended In aggregates Comparing X%. for terms a of was were at year-over-year, year, last previously,

So up the purchases over on we XXX picked about points basis year.

Looking think the over a of some the us yields benefit forward, nice will for the Fed see eight begins year, down to course as booked next bit a slow pullback we to we've yield but the probably hopefully years. increases, in rate moving of purchase the we'll the pretty which forward, XX

Paul Newsome

you on to for the everyone mind prospective can sufficient question, what in of second do give the us is line thoughts pricing doing inflation the a some what is inflation further think uptick side you to improves. the social of Obviously, as Maybe commercial you're claims in you inflation perceive house. overcome with And business. the top as

Steve Johnston

Yeah. And Paul. we do Thanks, see is inflation. This the Steve.

of a and at XX prospective as we our be years. think mentioned, just And try that now had favorably be reserves our our we we as As a have part pricing set to reserves we developed and very lines. about getting very over of inflation. for position and increases net for we're of the personal look are it. how that, combination do in we the prudent And pure and part to pace net that that our here my rate rates I keep in exposure our And think that and fixed a from increases went also both rates in I commercial call exceed we comes

Paul Newsome

benefit than or do of at plus rate think even actually less exposure the lower it's you do the claims pure point? the this pure combination you the inflation So essentially is think underlying than rate

Steve Johnston

combination of And a the of exposure premium both intertwined certain the and terms think of to overall that they're forth. we're the the costs does kind so base I building and inflation in charge. the to contemplate able degree, two,

Paul Newsome

Always guys. help appreciate you. [Multiple the Thank Speakers]

Steve Johnston

you, Paul. Thank

Operator

Zaremski question from Mike go next will ahead. our And with BMO. come Please

Mike Zaremski

I you thank for the down first kind the Thanks. it I’ll a -- Good I’ll reinsurance through sit more. question to everybody. and afternoon, of paper bit need, This think on about renewals and Hey. limit, need commentary

points back been, closer X it you few historical last if talked I the on a off on this asking in back given be over the Obviously, kind comes on directionally I to of to guidance think, 'XX, catastrophe the math. could about the points. you've years, slide. found I think but us it's I'm X So to load, But bit XX,

two historical any new of going been catastrophe with have of on is years kind be and going and splitting kind to kind given would of what become way I great? last So just cause few the or should normal those of guess, what reinsurance the what's of to be your kind the guidance retentions between we increased in there discuss, load help and the just thinking just what you

Steve Johnston

losses. then puts Sure, accident I we've really of what points. grown loss again. really a what years. is Mike. or decade -- focus also we've is significantly. And And is This ex-cat balance able Steve our do And been number model over on the that we think what is our to to down our over have and done ratio of more to all we a push And sheet year

us enviable as we're as through rise puts and in getting that's CAT what look well think, now balance on book, we position, rates at our And our price that as a sheet that in program. of of terms protection reinsurance we adequacy I can right think our

And cat so showing overall we both also position we're reserve ex-cat that managing and terms cat do think a our in managing the on good XX our feel exposure guidance in accident in favorable while we don't of I loss the that of across a give ratio, development company. years year

Mike Zaremski

Okay. to in ratio talked in kind talking That's -- past, Is And about be I the about just clear, of combined XXX. XX guess the you've past, target is the there to just also is with changed think low I'm to more versus like ratio? mid-XXs. then long-term income higher a of one or costs mine insurance the is, given or an target about what's has how maybe short-term to offset you a taking place there the anything the investment

Steve Johnston

the in shorter is changed. longer-term to through the looking what cycles mid-XXs to in XX XXX XXXX. term The has low Nothing target for right. all You're we're a is for

Mike Zaremski

property just get you'll in portfolio. front It like pushing feels and front to you're commercial readjusting commercial to side -- exposure side commercial the that And inflationary the sticking of trends. on Got moving -- of in on there's in terms of the of side, Okay. property rate get the it. maybe

on previous as picks umbrella loss side, how your had You elevated but that re-upped you the commercial in though, said remain things as kind not elevated, quarters. of

social over to maybe three the Anything months the anything and CINCI insights inflationary side has kind re-shift of last the commercial the that issues? industry's business been you've reflective kind into given that's you portfolio maybe the learned or need of on of to maybe the just of overall umbrella distinct not just piece

Steve Spray

if Great question. is Spray. Steve -- we rate. look just Mike, and every look trends I've we that it can past, the that Yeah. really rather line. effects we seeing. be any on at entire whatsoever, book We at we're Like as deck. said though, elevated in all driver inflation think needs umbrella the I seems loss do see single commented large random last quarter, see The on still hands to excess the

risk We on are But every underwrite inflation. own the into cover getting its to single that merits. rate book we

And of we the the vast, vast write. umbrella excess policies majority or

the we As a company, too. write underlying

the we each and look specific fleets. are risk, So at know we We own I each venues, said, at pricing, risk. looking risk, specific merits, on conditions. terms, the like We the underwrite its

to how to determine out So much capacity there. we want put

-- the needs that it it's but we needs and risk book -- So rate. of by a scenario risk a it's again, do,

Mike Zaremski

growth you commercial want lastly sure any there's too initiatives -- laid lines, pushing on sticking BOP call to it adjustments through pricing incremental out or I that growth really Okay. coming that's small a initiatives and And you 'XX? there's I'm Is is from some maybe a power initiative just with would anything about or mostly other prepared there maybe believe remarks. exposure maybe out? outlook about in the thinking and the commercial

Steve Spray

I Mike. think here, it's -- again, Steve

the of all it's above. think I

I think exposure. it's

our is retentions think strong. Steve remain I rate. to, it alluded

that feedback going rapidly. pretty is business You talked game, synergy early couldn't call happier we That's still rollout well. agents, our rollout small from the going our in the but about be extremely platform We with that. is

lot a there. of we So see good prospects

we're on there lines, think to you we're market company now a about middle personal growth. and High market. that we're been position in and continues worth both feel confident in profitable a of net see E&S middle worth. good strong premium. very, and net the results total the and both that has good player, outstanding as growth Our is And our strong net high I very Personal well, strong high and worth lines produce XX%

been has there trajectory extraordinary growth the So too.

Mike Zaremski

answers. things. Exciting Okay. the you Thank for

Steve Spray

Thanks, Mike.

Operator

question ahead. Please come go next our Dwelle And RBC. will Mark from with

Mark Dwelle

Good couple questions. A Yeah. morning. of

of First, for total The question. within kind a dividend full little level this just numbers also up year. investment a of the in income income bit and is was quarter is high mean, average particular as there have as driving XX%, Is than increases dividend rate think they I anything been -- are. but corporate maybe that I other don't in that the

Steve Soloria

factors early is We special a on was usually this And have over couple year, of which was excess Mark, of Steve that the companies a the special course about expected. of paid $X this in dividend, the unique the in year. have did pay in had then We two dividends. Solaria. but CME did paid December, million. well they pays we year dividend LyondellBasell what

in dividend So special factored the increase dividends two really those year-over-year. into income really,

Mark Dwelle

Okay. I'm just for is guess. reiteration, something question, it talking in reinsurance what think just write And the it's Steven, I treaty, was that. this I trying the comments your and Thanks about to heard. I a second

$XXX the aggregate that billion or new you treaty $X -- would of versus -- a in single total billion million have So losses, you of event exposure that that's on million. loss? is of Is losses if a $X $XXX

Steve Johnston

question, good No, and bit. will clarify I Yeah. that a

on make to kind an things So apples-to-apples comparison. I to wanted of put sure

So goes this billion. to $X.X year's program XXXX up

to feel so as equity up grown, we more our but are premium GAAP the move grown, a buy has up to position equity in top end. the our we a we our we program a wanted at And have moved grown, bit bit, has has

it would you're hypothetical exposure. and XXXX of for XXXX both basis, we right And of I loss an for XXXX. So years put on on apples-to-apples a used billion year, kind $XXX to have $X.X the million

for $XXX program. and XXXX the that XXXX the include to attachment point million with $XXX would million -- plus that compares co-participations up So in the

Mark Dwelle

on to per an aggregate And for or the that's a then, on that's basis year loss? just full event again, clarify,

Steve Johnston

event. Per

Mark Dwelle

Per event. Got it.

your that cost Financial it $X if in So -- figures, for comparison. of storms be each Cincinnati there a those double would again, respective year, were storms then billion billion two just $X

Steve Johnston

Right.

the have in We contracts. reinstatement provisions

Mark Dwelle

Right.

course. Of

Thanks of is then Re, what And and Cincinnati just business catastrophe Okay. proportion liability remind as or that. question that compared All right. lines? to for specialty property can within -- property another you oriented me being

Steve Johnston

Yes. I over have to and know date don't interesting. And necessarily it. date, in inception property, XXXX to it's inception a a but you both given the And little our our year for XXXX We full premium. percentage, target it's are XX% really pretty close. of from

lower For casualty, that XX% year a it's range. the for it's right in for over a bit XX% XX%. And year-to-date, about probably the for that in little specialty, little than

across time. range XX% time, XX% like that so and XX% or they XX%, XX-ish it for more in XXX%, plus -- to I very across for XX didn't get so and make So quite consistent been it's property for up. casualty add better

Mark Dwelle

renewals Any percentages? outlook might to your share those skew like you'd X on how January

Steve Johnston

No.

I benefiting a And seeing but see we've like terms very there, talented got in the people, this. firming firming shining cost that from in rates X's, you up. very and read like think you conditions thing and that of Re, market Cincinnati a they buyers we one are the about. through little and nice we're reinsurance, experienced a people January bit that the go a it's hedge of have -- as it's It's little almost early on

Mark Dwelle

the that. Appreciate answers. for Thanks Okay.

Steve Johnston

Mark. you, Thank

Operator

ahead. (ph) with from America. will Our Bank Carter Greg Instructions] next question Please [Operator come of go

Grace Carter

everyone. Hi,

Steve Johnston

Good morning, Grace.

Grace Carter

we underpin go I Good the premium macro plus about thinking wondering morning. you keep the for for Like if about could was guidance. I'm just guidance hearing XXXX. over macro growth potential that slowdown. assumptions in that X% a

Steve Johnston

point. a for net Insurance rent in XX% That's that's At good year, we've since XXXX. growth had percentage it highest this the Yeah. since premium

always And us. a predicting underwriting. point our in do we it's possible disciplined but with so that be giving be want first or you Profit as guidance that We're recognize slowdown. out, necessarily on it, there could to comes we not

we And the we our what we're terms is less in have very we all growth our that little year, that I technology so a areas growth, back we than just you our across to that this we're points temper it for full relationship we feel for bring it have, say we up, guidance wouldn't with cognizant the that still for of are but business bit the was did predicting of have, are the though very optimistic of where seeing, bullish little be we about a even agents, bit the models sure. from the but year,

Grace Carter

Thank loss ratios were they improved nine property for quarter, in you. the the looking the And of at homeowners bit versus and attritional year. commercial first a months the

So is lines those volatility change lines just can any wondering, those you've the in that I or this frequency sort for of if was severity see? is or there given of if observed regarding just trend just kind normal of variability

Steve Johnston

our paying also that volatility on going and to been underwriting, And in predates loss everybody but there's that terms see example. nice And do pricing. it's I hard of for of property. in you some can umbrella, is of lot I that's say chipping there it know see, of And think off. it's a sure throughout company I'm work our addressing the Grace, underwriters work the here and really in control, hard addressing

Grace Carter

Thank you.

Steve Johnston

Thank you.

Operator

And our your line Mike. BMO. next will question Zaremski from ahead. Hello, Please come go muted. with is Mike Perhaps

Mike Zaremski

seeking Sorry. Thanks me in. for

improving maybe to there thinking both. wood and obvious, ratio commercial But out in about going the ratio the specific Are were and goals lines to outer it's property we're to combined maybe commercial thinking just the there back of they're casualty about So company. combined the you'd of most kind call business like when I’m for chop years?

you offer the like isn't look wrong, numbers. plus I relative guess, are, levels pricing inflationary to that disclosure high The are levels know, when digit at guess pricing, I don't we the I'm maybe I us that levels. at extremely mid-single

you curious over have feel So couple to chop you where kind the wood of most just coming the years. of

Steve Johnston

Yeah.

improvement, We areas our haven't and we're the pricing because loss on team part effort. to than company-wide a claims to one across and level. And at in profit Every it's really lower big operating is any the from provided control it the board of it's it. seeing underwriting underwriting that focused of

the inflation. reflecting the in are the on We increase property exposure, in

trying cat in also that the to accident that pure with that. exposure cat we're getting net top of to feel diversification reflect in and of year geographic a we are the really wood doing numbers in gave we're a and And terms comments. that underwriting We good that that spot rate ex and the hit we're on is our

Mike Zaremski

within we of there are that should we of kind cognizant multiyear improvement, think the when there's nuances kind policies of? coming element than about or or that comps of Okay. the of just less And there some just be Any keeping should in multiyear be kind are we policies -- were there there's Thank of in trajectory easier maybe you. potential or past. that getting portfolio mind

Steve Spray

the adequately really of least on adequate. really we the is results. we focus Yeah, on getting those and Mike, segmenting drive probably change rubber Steve That's with those the book, Spray. business to average rate agents the of is just but focusing too, so them of to And priced. our they doesn't working the meeting rate are where as the question, then your underwriters in is goes that the also and have that's the those tools for And front on net really prior terms, that us, it kind story tell retention to policies, conditions and feel segmentation in helping full road,

Mike Zaremski

That’s you. helpful. it. Thank Got

Operator

ahead. And Meyer Shields KBW. with from go question will come Please our next

Meyer Shields

perspective, expect wondering faster if to is be Mark's Historically, to temporary to got question I'm of been take very it a reasonable cat seems okay. And now Thanks. year? capabilities, you've Cincinnati to methodical advantage maybe property reinsurance from like I'm and reaction that's has Lloyd's company. a opportunities that going slightly try different this

Steve Johnston

Yes, qualitatively Meyer. both the think strategic beginning. excellent at That And that of these the quickly quantitatively to areas, is as react have been particularly of and one-by-one part at types opportunities, decision point. looking these an Re, was I and they a Cincinnati on in both basis policies, a I in position are in to think and

Steve Spray

a it's Spray, question. great too, Steve Meyer. add, I because I might might -- Hey, this is just

I point. think great a it's

have company, kind agents I that us in As our well. founded flexibility we've of our 'XX, grow to provide capacity and agents homeowner and lot an on and policyholders E&S has E&S they gives to that point a as we're now issuing the flexibility to that solutions. think started CSU, learned where the for our and And business we and able back continued as basis

I happen I -- agents go our would we or for much call the call is to think same forward And what effective and them think just more to we access going give that I'll thing Lloyd's. as

is agency company that a everything we develop So strategy. focused on as

bringing and flexibility, so is today agents moving the And more capabilities in certainly forward. more the plans

Meyer Shields

Okay. Perfect. to That's very helpful. Related question agencies. with the regard

growth forcing back for expectations to is on the I reinsurance One they're of volatility have based or say, phenomenon the that property-related is underlie primary let's seeing? banding is carriers. some like was of And that companies the that necessarily the theories wondering, mutual 'XX? conversations regional capital the agents, And of don't of, around that your that a market kind that's with lot is a been the seeing

Steve Spray

business think insurance and X/X I'd it to insurance and how there's a is any then with basis. little frankly, -- regional to local feedback us, probably that's there, there hearing renewals mutual what for think we a early is X/X the tell (ph) is something do out a a going we that not carriers. of companies great you, impact X/X, about, I a lot but lot tell quite and day-to-day yet. of on compete It's

the instances impact full couple that of It's but it's seen great put the something to more the a something think will We've regional lack too that be. on. we're early the some a certainly a little either carriers, maybe tell seen -- it's question, what on costs I our have -- or anecdotally, reinsurance, of pressure keeping we've eye where

Meyer Shields

Okay. little looking the Fantastic. color a And on excess I within can. lines. one specifically was just reserve and question, more surplus I last if for development,

Michael Sewell

-- Mike Yeah. consecutive let net Great, years favorable of of our proud Meyer. is of And development. we're This really Sewell. years start XX me off,

on So quarter I'm a going were thinking are with that. about up related on you a or But year-to-date basis to open basis, you to E&S, looking?

Meyer Shields

I lot. in seaman right I'm number but So call word, volatility the the guess, mostly, that's to awful -- quarterly going it the on

Michael Sewell

reserve it for the E&S Thinking of But say, about the for strengthening. accident year-to-date for favorable $X except year 'XX. really so development. the of that, let's basis, on basis, the we million saw on On quarter, a the $X it business, years favorable was million year-to-date accident a was recent it all more

And so we and did see favorable development for before. XXXX, XXXX, XXXX

is, quarters trend. wouldn't say at look two consistent a quarter, as would a as a approach. I What I we one follow

move. got paid things you'll are other the factors. looking work. we've reserves develop, They're But case at same professionals see how actuarial the losses doing some So the that the

so And great think consistent the really a approach. work follow that I And we do. actuaries our it's pretty just

trend. quarter-to-quarter So on I that, that at is and sort wouldn't a a some say look it of basis necessarily

Meyer Shields

Okay. That’s so you Thank perfect. much.

Michael Sewell

for the you question. Thank

Operator

this I'd closing to to for Steve remarks. turn will any back our conclude question-and-answer the like And over session. call Johnston

Steve Johnston

XXXX us job, you, with Thank look forward speaking first today. you great day. all for our thank and you call. again to Cole. joining quarter Excellent on We Have a

Operator

has Thank today's conference presentation. now for attending concluded. The you

lines disconnect You this at may your time. now

Cincinnati Financial (CINF) 7 Feb 232022 Q4 Earnings call transcript