What happened

For the week, shares of the property and casualty insurer Cincinnati Financial (CINF -0.96%) traded 10% higher as of market close Thursday, according to data provided by S&P Global Market Intelligence, after the company reported earnings results for the fourth quarter of 2022 on Monday.

So what

Cincinnati Financial reported adjusted earnings per share of $1.27 on total revenue of about $3.1 billion in the fourth quarter of 2022. Adjusted earnings slightly missed analyst estimates, while revenue came in line with estimates.

It was an action-packed quarter for Cincinnati Financial, which dealt with a winter storm that impacted policyholders in 44 states across the U.S. and Washington, D.C., resulting in $158 million in losses. But on the bright side, independent agents under the Cincinnati Financial brand generated $1 billion of new business for the first time ever.

The company's combined ratio, which looks at incurred losses and expenses divided by earned insurance premiums, came in just under 95%. For the year, the company had a combined ratio of 98.1%, making it the 11th year in a row that Cincinnati Financial has recorded an underwriting profit.

In 2023, management is guiding for premiums to grow by 8%. It also believes the company can improve its combined ratio to the low- to mid-90% range.

Now what

Cincinnati Financial has a long history of strong performance and despite difficult conditions in the fourth quarter, results were not too bad. The guidance for 2023 is also looking up and better than the Street expected.

The other thing Cincinnati Financial has going for it is that it's a Dividend King, meaning it has paid out and grown its dividend for at least 50 consecutive years. Cincinnati has now done this for 61 years. All of these reasons make the stock a good investment.