Cincinnati Financial Corporation (NASDAQ:CINF) Q3 2023 Earnings Call Transcript

Meyer Shields: Okay. That’s very helpful. I completely understood. Second question, a couple of companies have talked about moderating rent cost inflation, specifically for auto physical damage. And I was wondering whether you’re seeing that in the third quarter as well?

Steven Johnston: We have seen it in just certain areas within physical damage. As we look at replacement vehicles, rental cars, that sort of thing. But again, we’re still kind of looking at inflation on a — how it’s been cumulatively since 2021 as we use that data to forecast the loss cost and the premium needed in the prospective periods. And so we’re being cautious, I think, in terms of where we are with our inflation rates, but we do feel that we’re getting ahead of our loss cost trends. We are ahead of our loss cost trends with our pricing. And I think we benefited that while we had a stay-at-home credit during 2020. We did not actually — we bring that through the expense ratio. We did not actually decrease the auto rates. And I think that’s helping us now as we contemplate inflation and our pricing.

Operator: The next question is from Fred Nelson, a Private Investor.

Unidentified Analyst: I got a call last night from a lady pushing 90, thanking me for Cincinnati Financial and I told her that I would refer that today on the phone on the conference call, and she didn’t even know you had one. But the question is battery-operated vehicles of all types, has that changed the pricing of insurance, replacement costs and accidents? Do you have any comments you can share?

Steven Johnston: Yes. Fred, this is Steve Johnston. I think what we just have to do is make sure that we contemplate the costs involved. As we go to having more electronic vehicles in the fleet, there will be more of that cost in the battery. They are less complex, I believe, in terms of all the different parts that are involved. So it is different. It will create a challenge to stay on top of — as we calculate those costs in price, but we feel that we’re up to the task. And please thank your friend to call us. We appreciate your comments.

Unidentified Analyst: Well, thank you. The battery operated calls I have people in the farming business with pickup trucks and other machinery and they say it’s not an easy thing to work with. And they’ll ask the question about insurance soon so thank you for the best you do. I really appreciate it.

Steven Johnston: Well, thank you, Fred. It’s always good to hear from you.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Steve Johnston for any closing remarks.

Steven Johnston: Thank you, Gary, and thank you to all for joining us today. We look forward to speaking with you again on our fourth quarter call.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.