Cincinnati Financial's Strategic Initiatives To Drive Growth

On Sep 11, 2016, we issued an updated research report on Cincinnati Financial Corp. (NASDAQ:CINF) .

Cincinnati Financial has been undertaking strategic initiatives to ramp up its operational performance. Recently, the company announced personnel changes at the Commercial Line insurance segment to expand and drive greater returns from its Commercial Line business, which generates a major portion of its revenues. Additionally, the insurer extended the availability of its Executive Capstone program for high net worth clients in California through its lead property casualty insurance subsidiary – The Cincinnati Insurance Company.

Also, Cincinnati Financial appoints agencies to increase its market share. In fact, the insurer plans to appoint about 100 agencies this year. The company also has plans to appoint agencies that will focus on high net worth personal lines clients as the company is eyeing $25 million in written premiums from this business in 2016.

Cincinnati Re, the reinsurance team of Cincinnati Financial with a sturdy track of generating underwriting profit, has entered into several diversified treaties to boost its premium revenues. Out of these, seven became effective by the end of 2015. If treaties remain effective through the entirety of the agreed term, the company is expected to generate an additional $30 million of premiums over the next year.

Given its operational strength, Cincinnati Financial enjoys a robust capital position. This helps the company to engage in shareholders friendly moves as well as pursue strategic initiatives.

Driven by these positives, the Zacks Rank #2 (Buy) property and casualty insurer witnessed a rise in the Zacks Consensus Estimate over the last 60 days. The same for 2016 and 2017 increased by a dime each and is currently pegged at $3.10 and $2.90, respectively.

However, exposure to catastrophe remains a concern as it weighs on underwriting results and leads to earnings volatility.

Other Stocks to Consider

Investors interested in the property and casualty industry can consider Allied World Assurance Company Holdings, AG (NYSE:AWH) , National Interstate Corporation (NASDAQ:NATL) and NMI Holdings, Inc. (NASDAQ:NMIH) . All these sport Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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