Cincinnati Financial, the Fairfield, Ohio-based property and casualty insurer, recorded a notable improvement in fourth-quarter profitability, the company said on Monday. The uptick was supported by stronger premium revenue and increased income from its investment portfolio.
For the three months ended December 31, Cincinnati Financial reported net income of $676 million, or $4.29 per share, compared with $405 million, or $2.56 per share, in the same quarter a year earlier. The carrier said earned premiums rose 10% to $2.59 billion in the quarter, reflecting continued demand for insurance products amid ongoing economic and geopolitical uncertainty.
Investment income also contributed to the result, climbing 9% year-over-year to $305 million. The company attributed higher investment returns to increased interest payments from its bond holdings. In addition, Cincinnati Financial recorded a $145 million after-tax investment gain in the quarter, a swing from a $92 million after-tax investment loss reported in the prior-year period.
Despite the stronger financial performance, Cincinnati Financial's shares fell by more than 2% in after-hours trading on Monday. The stock has climbed nearly 13.7% so far in 2025, a gain described as trailing the broader S&P 500 benchmark.
The results come as the insurance industry shows signs of resilience. The company noted that consumers and businesses have continued to purchase policies even as macroeconomic and geopolitical tensions disrupt other sectors. The broader industry backdrop was referenced as well, with recent reports that industry bellwether Travelers posted profit that exceeded Wall Street expectations last month on the strength of underwriting and investment returns.
Market context and takeaways
The quarter highlighted two primary drivers of Cincinnati Financial's improved bottom line: the rise in earned premiums and the boost from investment income, particularly higher interest from bonds and a positive, material after-tax investment gain. The combination of underwriting revenue and investment returns underpinned the year-over-year profit increase.
Share movement after the announcement suggests investors weighed the results against recent price performance and broader market trends. While the company achieved higher profitability, short-term market reactions reflected a mix of factors, including expectations priced into the stock prior to the announcement.
Overall, the quarter illustrates the role of premiums and fixed-income returns in supporting insurer earnings in the current environment.