Cincinnati Financial Corporation (NASDAQ:CINF) Q4 2022 Earnings Call Transcript

Steve Spray: I think it is probably a little early to tell what the 1/1 (ph) renewals and then 4/1 and 6/1, how that’s going to impact quite frankly, any carriers. I’d tell you, insurance is — for us, insurance is a local business there, and there’s a lot of great regional mutual companies out there that we compete with on a day-to-day basis. It’s something we do think about, but not hearing a lot of feedback yet. We’ve seen — anecdotally, we’ve seen a couple of instances where the reinsurance, either the lack of or the costs have put pressure on some maybe a little more regional carriers, but I think it’s too early to tell what the full impact will be. It’s certainly something that — it’s a great question, something that we’re keeping our eye on.

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

Michael Sewell: Yeah. Great, Meyer. This is Mike Sewell. And let me start off, we’re really proud of our 34 years of — consecutive years of net favorable development. So I’m going to open up with that. But related to E&S, were you thinking about on a year-to-date basis or on a quarter basis, are you looking?

Meyer Shields: So mostly, I guess, on the — I’m going to call it volatility in that’s the right word, but the quarterly number seaman awful lot.

Michael Sewell: On that, so for the E&S business, let’s say, for the quarter, we saw a $4 million of reserve strengthening. But on a year-to-date basis, it was $9 million of favorable development. Thinking about it on the year-to-date basis, it was really favorable for all the accident years except the more recent accident year ’21. And so we did see favorable development for 2020, 2019, 2019 and before. What I would say is, we follow a consistent approach. I wouldn’t look at one quarter, two quarters as a as a trend. So you’ll see some things move. But we’ve got the same actuarial professionals that are doing the work. They’re looking at how the case reserves develop, the paid losses other factors. And so we really just follow the great work that our actuaries do. And I think it’s a pretty consistent approach. So I wouldn’t necessarily look at it on a quarter-to-quarter basis and say that, that is some sort of a trend.

Meyer Shields: Okay. That’s perfect. Thank you so much.

Michael Sewell: Thank you for the question.

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

Steve Johnston: Thank you, Cole. Excellent job, and thank you all for joining us today. We look forward to speaking with you again on our first quarter 2023 call. Have a great day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines at this time.