Cincinnati Financial Corp. (NASDAQ:CINF) Q4 2018 Earnings Conference Call Transcript
Feb 07, 2019 • 11:00 am ET
Good morning. My name is Katherine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter and Full Year 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)
Thank you. I'd now like to turn the call over to Mr. Dennis McDaniel, Investor Relations Officer at Cincinnati Financial. You may begin your conference.
Dennis E. McDaniel
Hello. This is Dennis McDaniel and we thank you for joining us for our fourth quarter and full year 2018 earnings conference call.
Late yesterday, we issued a news release on our results, along with our supplemental financial package, including our year 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 Steve Johnston, President and Chief Executive Officer; and then from 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 Chief Investment Officer, Marty Hollenbeck; and Cincinnati Insurance's Executive Vice President, J. F. Scherer; Chief Claims Officer, Marty Mullen; Chief Insurance Officer, Steve Spray; Senior Vice President of Corporate Finance, Theresa Hoffer; and Chairman of the Board, Ken Stecher.
Firstly, 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
Good morning and thank you for joining us today to hear more about our fourth quarter results. Operating results for the fourth quarter of 2018 represent a strong finish, despite reporting a net loss of $452 million because of the accounting requirement for changes in the fair value of equity securities.
Non-GAAP operating income improved for the quarter and on a full year basis, it was 21% higher than 2017. We are encouraged by our 2018 financial results and continue to be confident in our strategy and in our ability to execute it well. Improved operating performance for the fourth quarter and the full year 2018 again reflected steady efforts to carefully underwrite and price policies, provide outstanding claims service, manage investments and support our agencies.
Our fourth quarter 93.9% combined ratio helped lower full year 2018 to 96.4%, 1.1 points better than 2017. Slightly more favorable catastrophe weather effects in 2018 contributed one-tenth of a point, while improved underwriting was reflected in various underlying measures. We