Ohio-based insurer Cincinnati Financial Corp. (CFC) reported third-quarter 2003 net income of $104 million, or 64 cents per diluted share, compared with $72 million, or 44 cents per share, in the third quarter of 2002.
Net income per share included net realized investment gains of 6 cents in third quarter 2003 versus net realized investment losses of 7 cents in the comparable 2002 period. As the result of a settlement negotiated with a vendor, third-quarter 2003 pretax results included the recovery of $23 million of the $39 million one-time, pretax charge incurred in the third quarter of 2000 to write off previously capitalized software development costs.
Revenues from pretax investment income, the primary source of profits, rose 3.3 percent to $117 million. Total third-quarter revenues advanced $105 million, or 14.4 percent, to $836 million.
“We are on track for record full-year 2003 revenue and income and the best property/casualty profitability we have recorded in more than 10 years,” said John J. Schiff Jr., CFC chairman and CEO. “Third-quarter operating income before the recovery reached 49 cents compared with 51 cents a year earlier, with near-record catastrophe losses reducing after-tax earnings by 17 cents versus 2 cents a year ago and with higher property casualty agency profit-based commissions. Overall, our property casualty operations are solid, and that is what we seek to achieve.”
Third-quarter catastrophe losses, net of reinsurance, were $41 million, slightly above the company’s preliminary estimate, contributing 6.1 percentage points to the combined ratio. For the third quarter of 2002, catastrophe losses were $5 million, contributing just 0.8 percentage points to the combined ratio.
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