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Back of Napkin

Cincinnati Financial Corporation CINF

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Cincinnati Financial posted its best earnings quarter on record and lost money underwriting insurance at the same time.

More than half the company's book value is an unrealized gain on a portfolio of stocks it does not control, and that is the real business here.

CINF · price with moving averages

Daily · 6MWeekly · 3Y
$90$117$145$172$200 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Cincinnati writes commercial and personal property-casualty insurance through roughly 2,400 independent agencies across 46 states, plus excess and surplus lines, life insurance and assumed reinsurance. It does not sell direct. The agent is the customer, and the company competes by being the carrier the agency wants to place business with rather than by being the cheapest quote on a comparison screen.

Underneath the insurance sits something unusual. Cincinnati invests float in common stocks to a degree almost no other public insurer does. Of $33.2B of investments, $13.2B is equities, and the five largest positions alone are worth $3.4B. Apple, Microsoft, Lam Research, Broadcom and AbbVie are the top holdings. That is a choice made decades ago and never reversed, and it explains almost every quarter this company prints.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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