Free Trial

Cincinnati Financial Q2 2023 Earnings Call Transcript


View Latest SEC 10-K Filing

Participants

Corporate Executives

  • Dennis McDaniel
    Investor Relations Officer
  • Steven J. Johnston
    Chairman & Chief Executive Officer
  • Michael J. Sewell
    Executive Vice President, Chief Financial Officer & Treasurer
  • Stephen M. Spray
    President

Presentation

Operator

Good morning, ladies and gentlemen, and welcome to the Cincinnati Financial Corporation Second Quarter 2023 Earnings Conference Call. [Operator Instruction] Please note, this event is being recorded.

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

Dennis McDaniel
Investor Relations Officer at Cincinnati Financial

Hello, this is Dennis McDaniel at Cincinnati Financial. Thank you for joining us for our second quarter 2023 earnings conference call. Late yesterday, we issued a news release on our results, along with our supplemental financial package, including our quarter-end investment portfolio. To find copies of any of these documents, please visit our investor website, cinfin.com/investors. The shortest route to the information is the quarterly results link in the navigation menu on the far left.

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

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

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

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Good morning, and thank you for joining us today to hear more about our results.

Net income of $534 million for the second quarter of 2023 was quite a change from the net loss of more than $800 million for last year's second quarter. As we've noted in the past, large income swings can occur as gains and losses from securities still held in our equity portfolio run through net income. Last year, we saw a reduction in portfolio fair value. In this year, we've recognized a significant investment gain. We believe the value of our equity portfolio will continue to grow over the long-term. As of June 30th, it had $6.1 billion in appreciated value, increasing 8% since the end of the first quarter.

Non-GAAP operating income of $191 million for the quarter more than doubled the $94 million from a year ago. Despite catastrophe losses that were $11 million higher on an after tax basis. Our 97.6% second quarter 2023 property casualty combined ratio was 5.6 percentage points better than last year's second quarter, including a decrease of 0.4 points for catastrophe losses. The 90.4% ex-CAT accident year combined ratio for the second quarter was 2.4 percentage points better than the same period a year ago. And this is another important indicator of improved performance. Despite the increase in catastrophe losses and ongoing elevated inflation effects, we continue to see reasons for confidence about performance for the second half of the year.

Pricing continued to accelerate during the second quarter of this year and we also worked to address inflation in other ways, such as changing factors that adjust premiums to account for rising property costs. We reported improved underwriting performance ratios in just about every major line of business, compared with the first quarter of this year.

On a current accident year basis measured at June 30th, before catastrophe losses, our 2023 consolidated property casualty loss and loss expense ratio improved from 2022 by 4.5 percentage points on a case-incurred basis, which included 0.6 point improvement on a paid basis. For the same period, we increased the incurred but not reported or IBNR component of the ratio by 4.7 points as we continue to recognize uncertainty regarding ultimate losses remaining prudent in our reserve estimates until longer-term loss cost trends become more clear.

Similar to the first quarter, we earned a small underwriting profit for our commercial umbrella lines in the second quarter. In our commercial casualty line of business, in total, had an estimated combined ratio of approximately 90%. Our underwriters continue to do an excellent job in risk selection and pricing. Importantly, agents appointed by Cincinnati Insurance continued to produce profitable business for us in an outstanding fashion. Underwriters emphasize retention of profitable accounts addressing ones that we determine have inadequate pricing, while also seeking profitable new business.

Estimated average renewal price increases for the second quarter were higher than the first quarter for each of our major lines of business. Our commercial lines insurance segment averaged near the low-end of the high single digit percentage range, while our excess and surplus lines insurance segment moved higher in the high single digit range. Personal lines for the second quarter included auto in the high single digit range and homeowner in the mid single digit range.

In terms of net written premiums, consolidated property casualty growth was 9% for the second quarter of 2023. That included 11% increase in second quarter renewal written premiums with a significant portion from higher levels in insurance exposures as we factor in elevated inflation.

Next, I'll briefly highlight premium growth and profitability by insurance segment. Commercial lines grew second quarter 2023 net written premiums 3%, reflecting disciplined, particularly for commercial umbrella risks. Its combined ratio was 9.4 percentage points better than a year ago, including 1.5 points from lower catastrophe losses. We see the second quarter, a 10% reduction in new business written premiums as an expected result of pricing and underwriting discipline.

Personal lines grew net written premiums 23% with growth in middle-market accounts in addition to Cincinnati Private Client business for the high net worth clients in our agencies. Its combined ratio was 4.5 percentage points better than a year ago, despite an increase of 0.6 points from catastrophe losses. Excess and surplus lines had a combined ratio of 92.2% and net written premiums grew 16%. Its combined ratio was 7.1 percentage points higher than a year ago, including a 9.9 point increase in the IBNR component.

Both Cincinnati Re and Cincinnati Global continued to enhance our profitability. Cincinnati Re had a strong 73.7% combined ratio for the second quarter of 2023. Its net written premiums essentially matched last year's second quarter. While casualty premiums decreased as a result of fewer attractive opportunities in certain segments of the market, property net written premiums increased by 27%, largely due to a combination of higher pricing and market opportunities. Cincinnati Global's combined ratio was 88.3% with net written premiums continuing strong growth at 19%.

Our life insurance subsidiary continued to report excellent results in the second quarter with net income up 91% from last year and term life insurance earned premium growth of 4%.

As I usually do, I'll conclude with the value creation ratio, our primary measure of long-term financial performance. Our second quarter 2023 VCR was 4.0%, another strong result. Net income before investment gains or losses contributed 1.8%, while favorable valuation of our investment portfolio added another 2.2%.

Now, our chief financial officer, Mike Sewell, will highlight other important factors about our financial performance.

Michael J. Sewell
Executive Vice President, Chief Financial Officer & Treasurer at Cincinnati Financial

Thank you, Steve. And thanks for all of you for joining us today.

Investment income continued at a strong pace up 13% for the second quarter 2023 versus last year's second quarter. As expected, dividend income decreased 3% for the quarter due to two items we touched on last quarter. First, we are seeing dividend rates increase more slowly. Second, in last year's second quarter, we received a $5 million special dividend from one of our stock holdings that didn't repeat this year.

Net equity security purchases for the first half of 2023 totaled $93 million. Bond interest income rose 19% in the second quarter compared with the second quarter of 2022. We added more fixed-maturity securities to our investment portfolio with net purchases totaling $732 million for the first six months of the year.

The second quarter pre-tax average yield of 4.34% for the fixed maturity portfolio was 34 basis points higher than a year ago. The average pre-tax yield for the total of purchased taxable and tax-exempt bonds during the second quarter of 2023 was 5.88%. Valuation changes in aggregate for equity portfolio during the second quarter of 2023 were favorable but were unfavorable for the bond portfolio.

Before tax effects, the net gain for the equity portfolio was $459 million, while the net loss for the bond portfolio was $158 million. At the end of the quarter, total investment portfolio net appreciated value was approximately $5.3 billion. The equity portfolio was in a net gain position of $6.1 billion, while the fixed maturity portfolio was in a net loss position of $838 million.

Strong cash flow again contributed to investment income growth in addition to rising bond yields, boosting interest income. Cash flow from operating activities for the first six months of 2023 was $825 million, up 9% from a year ago. We continue to emphasize expense management with a balance between controlling expenses and making strategic investments in our business. The second quarter 2023 property casualty underwriting expense ratio was 0.2 percentage points lower than last year as premium growth outpaced growth in total expenses.

Next, I'll comment on loss reserves. We continue to use a consistent approach that targets net amounts in the upper half of the actuarially estimated range of net loss and loss expense reserves. As we do each quarter, we considered new information, such as paid losses, and then case reserves and then updated estimated ultimate losses and loss expenses by accident year and line of business.

For the first half of 2023, our net increase in property casualty loss and loss expense reserves was $452 million, including $358 million for the IBNR portion. During the second quarter, we experienced a $101 million of property casualty net favorable reserve development on prior accident years that benefited the combined ratio by 5.5 percentage points. On an all lines basis by accident year, net reserve development for the first six months of 2023 included favorable $99 million for 2022, unfavorable $5 million for 2021, favorable $49 million for 2020, and a favorable $17 million in aggregate for accident years prior to 2020.

Regarding capital management, our approach remain consistent as we paid dividends to shareholders and repurchased shares that include maintenance intended to offset shares issued through equity compensation plans. We still believe our financial flexibility is outstanding and our financial strength is in excellent shape. During the second quarter of 2023, we repurchased approximately 398,000 shares at an average price per share of $104.48. We also paid $117 million in dividends to shareholders during the quarter.

As usual, I'll conclude with a summary of second quarter contributions to book value per share. They represent the main drivers of our value creation ratio. Property casualty underwriting increased book value by $0.24. Life insurance operations increased book value, $0.15. Investment income other than life insurance and net of non-insurance items added $0.86. Net investment gains and losses for the fixed-income portfolio decreased book value by $0.81. Net investment gains and losses for the equity portfolio increased book value by $2.31. And we declared $0.75 per share in dividends to shareholders. The net effect was a book value increase of $2 per share during the second quarter to $70.33 per share.

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

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Thanks, Mike. We are in a challenging insurance market. And I'm proud of the way our associates are navigating it. We believe we are taking the necessary actions to continue delivering profitable growth through all insurance cycles. In the last month, two third-party organizations agreed. S&P affirmed our high financial strength ratings and we were also again included on the Ward's 50 list, recognizing our growth, profitability and shareholder return. We are one of only four companies named 32 times to the Property-Casualty Ward's 50 since the analysis began in 1991.

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

Questions and Answers

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Paul Newsome with Piper Sandler. Please go ahead.

Paul Newsome
Analyst at Piper Sandler Companies

Good morning. Congrats on the quarter.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Thanks, Paul.

Paul Newsome
Analyst at Piper Sandler Companies

I wanted to ask maybe a little detail on the source of the competition that's been hampering the new business production in commercial. Happy if you name names, but if you give us a sense of just kind of what kind of companies, sort of products, etc., that's keeping you more disciplined?

Stephen M. Spray
President at Cincinnati Financial

Paul, it's Steve Spray. I would reiterate kind of what Steve said there in his closing prepared remarks, just that it's a challenging market. This business, as I've said in the past, it's local. You get various competitors in different states that just have a different view of risk. I think from my perspective, it's been more about our underwriters and our field reps just continuing to execute working with our agents on disciplined pricing and underwriting. It's profit first here or segmenting the business. But from time to time, you'll see carriers that maybe have a different view of the risk. And we've just got the tools today that we didn't have in the past to be able to be disciplined about it. And just couldn't be more proud of the team, both on the new business front, our field reps and our renewal underwriters and the way they are executing.

And I would add that it's a dynamic market. We're seeing it change on a daily basis. And at the end of the second quarter, we did see, I would say, the market coming more to us on the -- from on the pricing side and on new business. It's one month of an end of a quarter, so it may not make a trend, but we did see some improvement in new business towards the tail end of the second quarter. Hopefully, that answers your question, Paul.

Paul Newsome
Analyst at Piper Sandler Companies

I mean, it's definitely getting there. Just maybe a little bit mistaking, but I was kind of going through the supplement, and I noticed that recent commercial business. There's a little bit less sort of the loss IBNR booked up in the quarter. Anything anomalous there that you want to call out in that number? [Speech Overlap]

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Paul, this is Steve. Sure. Paul, this is Steve. And actually, on a dollar basis, our IBNR did increase. It's just our premium increased a little bit faster. And I think last year, second quarter of last year, I think we've -- I think we've seen the situation with inflation and recognize the leveraged effect of inflation on higher limits and umbrella in particular, and we're strong to address that last year. So I think, again, we still had more dollars added to IBNR this quarter, just slightly less on -- as a ratio of earned premium.

Paul Newsome
Analyst at Piper Sandler Companies

Great. Thank you as always for all the help. Appreciate it.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Thank you, Paul.

Operator

The next question comes from Greg Peters with Raymond James. Please go ahead.

Greg Peters
Analyst at Raymond James

Well, good morning, everyone.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Hi, Greg.

Greg Peters
Analyst at Raymond James

So, I guess, I'm going to focus on -- the first question would be in the commercial casualty component of your financial supplement. And if you look at the total loss and loss expense ratio really began to show some nice improvement in the second quarter. And obviously, it's a longer tail line of business. And I'm just curious, it seems like now with the loss ratio having improved this would be a time to perhaps start writing more of that business, and yet we see it moving in the opposite direction. So maybe you could -- and I know you've provided some previous comments on it, maybe you could just give us some added context?

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Yes. Good question, Greg. And I think the two are kind of related. I think the improvement is a result of the discipline that we're showing in pricing and underwriting and particularly in our umbrella line of business. The other side of that is, as Steve mentioned, is we are more disciplined in the market. It makes us a little bit harder to compete on a price basis with some others that don't have that same view of risk. So I think the two go together and would really just -- I can't add much to Steve's earlier response in terms of how we're handling that competitive market.

Greg Peters
Analyst at Raymond James

Right. Thanks. I wanted to pivot just on property, whether it's inside the commercial or in the personal line space because I feel like the rate is a combination of factors, including insured to value numbers being reset. And so I'm -- when I look, for example, in your personal lines, your net written premium in homeowners is up 27% in the second quarter. I'm wondering how much of that is pure rate versus actual just getting the insured to value numbers right? Or maybe I'm looking at this wrong way? I don't know. It seems like a valid question though.

Stephen M. Spray
President at Cincinnati Financial

Yes. Greg, Steve Spray. On -- specifically on commercial property and personal property and homeowner, it's about two-thirds exposure, about a third rate would be a good way to look at it.

Greg Peters
Analyst at Raymond James

Okay. That's helpful. I guess, the final question I have, recognizing those that are going to want to ask questions would just be before you had previously mapped out sort of an expectation for the combined ratio for the year, I'm just wondering how you're thinking about that range in the context of the second quarter results as we think about the second half of the year? That's my last question.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Hey, Greg, this is Steve Johnston. And I think we're still where we were at that -- when we first came out with it at the first quarter, we don't think it's -- we think it's reasonable that we would be able to be in the low to mid 90s combined ratio, 8% growth. But we have those caveats of that, the weather and the market conditions are volatile and that will play out over the second half. I think the key point is, is we are just very confident in the movement of the ex-CAT core portion of the book. It's improving nicely and that's really our focus at this point. But again, I think we're still where we were with the information that we gave in the first quarter.

Greg Peters
Analyst at Raymond James

Excellent. Thanks for the answers.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Thank you.

Operator

The next question comes from Mike Zaremski with BMO. Please go ahead.

Mike Zaremski
Analyst at BMO Capital Markets

Hey, good afternoon. Curious, any insights into pricing power into July? And also just curious, have you guys been a bit surprised at some of the pricing power that you've experienced given there is strong interest rate tailwinds that are a good guy or does it make sense that we're seeing kind of broader industry pricing inflect accelerate a bit?

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

This is Steve Johnston. And it is -- it's just -- it's an execution of our business model that makes us feel good and that we are -- have great relationships with our agents. We tend to communicate and try to communicate where we are risk by risk early in the process of a renewal and just feel the execution that makes us so proud of our field people as they're out in the field, balancing discipline with being responsive to our agents' needs has boded well for us and we see it continuing to do so as we go into the second half.

Mike Zaremski
Analyst at BMO Capital Markets

Okay. You mentioned that the -- I think in the prepared remarks, the umbrella components of your portfolio kind of eked out a small underwriting profit. Just curious is umbrella, given kind of what you've known -- what you've experienced over the last year or two or maybe more -- maybe it's more also just prone to social inflation. Is umbrella -- are you kind of targeting a better combined ratio for that versus the broader segment it's in? Yes. Over -- I think over the last '22 -- the end of '22 and prior, Mike, again, this is Steve Spray, our combined ratio in umbrella was running around 80%. The last -- like you said the last couple of years have been challenging. It's jurisdictional. It could be state by state, it's risk by risk. And that loss ratio, like Steve said in the prepared remarks, we've been profitable here for the first half and obviously in the second quarter. We've been very deliberate about improving that line of business. And I would say, yes, we expect that loss ratio to improve from where it is today. I'll give you maybe a little bit more color on that, too. In the second quarter, our commercial umbrella net written premium was down 9 points, which contributed a 2-point drag on the overall commercial lines net written premium. So it's been deliberate. Like Steve said, we get out early and often with our agents to make sure that there's no surprises and work with them on pricing terms, conditions, reducing limits in some specific jurisdictions or specific risks that we think we -- that have been challenging for us. Okay, that's helpful. And that, maybe lastly, switching gears to personal lines. I think, on last quarter's call, you talked about -- or maybe it wasn't a call, but I think you guys have talked about you being one of the -- now that the biggest writers in terms of new business in, for example, the state of California as others have been retrenching. Maybe you can kind of give us an update on what you are seeing in terms of kind of industry dynamics, competitive wise and personal lines and why you feel good about growing into some of these states where some competitors have had trouble kind of getting the pricing they need to keep up with loss inflation and very -- comes from the standpoint of understanding you have a very profitable personal lines book.

Stephen M. Spray
President at Cincinnati Financial

Yes. Thanks, Mike. Steve Spray again. Yes, we feel really good and are bullish about personal lines, both on the high net worth and then the middle market business. The high net worth now or what we -- Cincinnati Private Client has become about 55% of our business. I would start with the fact that the team we have, the amount of expertise that we have selectively had joined from the outside and then the long-term associates we've had in building out that expertise not only on product but on marketing, on claims

I think we have been very well received across the country by our agents. And specifically growing it in states that you mentioned where there's been quite a bit of industry disruption. And we have definitely seen quite a bit of disruption, especially for the high net worth business. And as an example, one way we were able to deal with that is we were able to pivot in California as a specific example, and move to writing homeowner business on an excess and surplus lines basis.

And I think it goes true to Cincinnati over time as we've been able to be there for our agents and be there for the policyholders in their community, provide we think measured capacity. We are in this high net worth business for the long-term. We look at everything we do over the long-term. And feel like we're positioned really well to continue to grow that business and grow it profitably. We have some work to do. Inflation has impacted the entire book, but we're confident in the underwriting and especially the pricing actions we've taken to improve those results.

Dennis McDaniel
Investor Relations Officer at Cincinnati Financial

Thank you, Mike. And we'll take our next question if we have one?

Operator

The next question is from Meyer Shields with KBW.

Meyer Shields
Analyst at KBW

Great, thanks. Good morning, everyone.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Good morning, Meyer. I guess -- hi. A couple of quick questions, I guess. Steve, you talked about pricing accelerating pretty much every line of business sequentially. Was there any change in your internal view of trend from first quarter to second quarter? Yes. Meyer, this is Steve. I don't really think so. I think we are seeing -- it's very granular. We look at it by line, by state and so forth. And so you will see some movement in directions at a very detailed level. But -- for the most part, I think we're seeing a similar view of trends first quarter to second quarter.

Meyer Shields
Analyst at KBW

Okay. Perfect. I'm not 100% sure this is a good question. But when I look at the loss ratio detail, [Indecipherable] higher provisions for IBNR in personal lines than commercial lines. And I was wondering, is that a function of just bad weather? Or is there something else driving that?

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

I think probably, Meyer, it's the growth as much as anything. There's faster growth in the personal line space right now.

Meyer Shields
Analyst at KBW

Yes. Okay. Perfect. That makes sense. And then one last question, if I can, it's a little more detailed. But have you disclosed which lines of business saw the reserve release from accident year '22?

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

That has not been part of our disclosure, Meyer.

Meyer Shields
Analyst at KBW

Okay. Fair enough.

Operator

The next question comes from Grace Carter with Bank of America. Please go ahead.

Grace Carter
Analyst at Bank of America

Hi, everyone.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Good morning, Grace.

Grace Carter
Analyst at Bank of America

Looking at the commercial property underlying loss ratio, that experienced quite a bit of improvement, both sequentially and year-over-year. Obviously, that line can be really volatile, but I was just curious the extent to which that was maybe impacted by the classification of CAT versus non-CAT in the quarter and pricing flowing through and just the extent to which we should extrapolate that going forward? Thanks.

Stephen M. Spray
President at Cincinnati Financial

I can -- Grace, it's Steve Spray. I can take a shot at that. We have individual state plans, both for all lines -- for all lines and segments. But in commercial lines specifically, and we -- the first thing we look at, I think, at every state is just the cat profile. We do believe you can underwrite and price for cat, you have to. And I would think terms, conditions, percentage deductibles for cat. We've got the tools to understand what the -- what our average annual loss looks like. We priced to that. So I think you're seeing improvement just because of the discipline that we've put both in the cat and the non-cat. I don't know if anybody else wants to add anything as far as numbers.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

I think, you handled it quite well, Steve.

Grace Carter
Analyst at Bank of America

Okay. And I guess, looking at the workers' comp underlying loss ratio. That ticked up a bit versus what we're used to seeing. I was curious if there is anything kind of one-off there or if you've seen a change in loss trend or if that's just the accumulated impact of lower pricing in that line over time?

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Grace, this is Steve Johnston. I do think that that just accumulation of the lower pricing over time it just does have a compounding effect. We've been very disciplined. As you can see, there have been a decrease in our writings there as we've maintained discipline over a period of time, so that we feel particularly as an account underwriter that we're in a good spot overall.

Grace Carter
Analyst at Bank of America

Thank you. And then, I guess, finally, just talking about commercial casualty pretty broadly umbrella and -- I mean the underlying loss ratio there did see some improvement as well as a pretty favorable impact from reserve releases. I'm just trying to square that versus some of the commentary that we've heard over the past few quarters over being pretty cautious in that part of the business. Did you all get any new information in the quarter regarding loss cost trends that gives you some more confidence regarding where that line is going? Or is this just kind of the impact of the actions that you've taken in that book over the past several quarters? Thank you.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

I think your last point is what it is. It's been the action over the last several quarters and trying to get out early and start to address the inflation and the leveraged effect of inflation.

Grace Carter
Analyst at Bank of America

Thank you.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Thank you.

Operator

[Operator Instructions] Our next question comes from Fred Nelson, a private investor. Please go ahead.

Fred Nelson
Analyst at Private Investor

Yes. Two things that are really -- all of you that are on the call have worked with the company needs to know that with the philosophy of Cincinnati Financial of rising dividends and integrity and honesty, you cannot -- I cannot tell you the number of people that have told me that it's allowed them to do things in their lives with their kids and grandkids that they never dreamed possible. And I just want to say thank you to all of you for that philosophy because it's really, really important in our country. The thing that I'd like to know is the number of shares outstanding at the end of the period. It says you divide the shareholders' equity for the number of shares out there to get the book value, and I would appreciate if you could tell me how many shares are outstanding at the end of the period to get the book value?

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Well, thank you, Fred. This is Steve Johnston. And first off, I really want to thank you for your comments. It just really makes my day. It makes all of our days. You're talking to everybody here in the company. And we really appreciate your comments. I believe the number of shares outstanding is 158.6 million.

Fred Nelson
Analyst at Private Investor

At the end of the period?

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

At the end of the period.

Fred Nelson
Analyst at Private Investor

So you divide -- how many shares?

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

I think it's 158.6 million..

Fred Nelson
Analyst at Private Investor

And if you divide that into the shareholder equity value of 11,030 million, you get $70.33.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Yes. I believe that's right.

Michael J. Sewell
Executive Vice President, Chief Financial Officer & Treasurer at Cincinnati Financial

That's right, Fred.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

I may have transposed it. I think it's 156.8 million not 158.6 million. I was going from -- I was going from memory and somebody slipped a piece of paper to me here. So I apologize for the transposing the shares.

Fred Nelson
Analyst at Private Investor

I appreciate what you just said because that's the figure I got with my old math.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Okay. Good. The old math is always the best, Fred.

Fred Nelson
Analyst at Private Investor

One of my people that live with Cincinnati has done [Indecipherable] her model was TYG, thank you, God.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

There you go. There you go. Thank you so much.

Fred Nelson
Analyst at Private Investor

You deserve it. We all do.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Thank you.

Grace Carter
Analyst at Bank of America

Bye-bye.

Steven J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Thank you. Bye.

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 J. Johnston
Chairman & Chief Executive Officer at Cincinnati Financial

Thank you, Vaishnavi, and thank you all for joining us today. We look forward to speaking with you again on our third quarter call.

Operator

[Operator Closing Remarks]

Alpha Street Logo

 


Featured Articles and Offers

Recent Videos

CPI News Breakdown: Key Market Moves to Follow
Understanding Oversold Stocks
Inside Pelosi’s Latest Stock Moves

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines

More Earnings Resources from MarketBeat

Upcoming Earnings: