UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
 
Date of Report: October 28, 2014
(Date of earliest event reported)
 
 
CINCINNATI FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
 
Ohio
0-4604
31‑0746871
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
 
 
 
6200 S. Gilmore Road, Fairfield, Ohio
45014‑5141
(Address of principal executive offices)
(Zip Code)
 
 
Registrant’s telephone number, including area code: (513) 870-2000
 
N/A
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))


Item 2.02 Results of Operations and Financial Condition.

On October 28, 2014, Cincinnati Financial Corporation issued the attached news release titled “Cincinnati Financial Reports Third-Quarter 2014 Results,” furnished as Exhibit 99.1 hereto and incorporated herein by reference. On October 28, 2014, the company also distributed the attached information titled “Supplemental Financial Data,” furnished as Exhibit 99.2 hereto and incorporated herein by reference. This report should not be deemed an admission as to the materiality of any information contained in the news release or supplemental financial data.




In accordance with general instruction B.2 of Form 8-K, the information furnished in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.




Item 9.01 Financial Statements and Exhibits.

(c)     Exhibits

Exhibit 99.1 – News release dated October 28, 2014, “Cincinnati Financial Reports Third-Quarter 2014 Results”

Exhibit 99.2 – Supplemental Financial Data for the period ending September 30, 2014 distributed October 28, 2014.



Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
CINCINNATI FINANCIAL CORPORATION
 
 
 
 
 
 
Date: October 28, 2014
/S/Michael J. Sewell
 
Michael J. Sewell, CPA
 
Chief Financial Officer, Senior Vice President and Treasurer
 
 




Exhibit 99.1 3Q14
 
The Cincinnati Insurance Company n The Cincinnati Indemnity Company
The Cincinnati Casualty Company n The Cincinnati Specialty Underwriters Insurance Company
The Cincinnati Life Insurance Company n CFC Investment Company n CSU Producer Resources Inc.

Investor Contact: Dennis E. McDaniel, 513-870-2768
CINF-IR@cinfin.com

Media Contact: Betsy E. Ertel, 513-603-5323
Media_Inquiries@cinfin.com

Cincinnati Financial Reports Third-Quarter 2014 Results

Cincinnati, October 28, 2014 – Cincinnati Financial Corporation (Nasdaq: CINF) today reported:
•
Third-quarter 2014 net income of $183 million, or $1.11 per share, compared with $131 million, or 79 cents per share, in the third quarter of 2013.
•
$24 million or 21 percent rise in operating income* to $140 million, or 85 cents per share, up from $116 million, or 70 cents per share, in the third quarter of last year.
•
$52 million increase in third-quarter 2014 net income reflected the after-tax net effect of two primary items: $21 million improvement in the contribution from property casualty underwriting, including a favorable effect of $27 million from lower natural catastrophe losses; plus a $28 million increase from net realized investment gains.
•
$39.01 book value per share at September 30, 2014, up 4.8 percent from December 31, 2013.
•
8.4 percent value creation ratio for the first nine months of 2014, compared with 9.8 percent for the same period of 2013.

Financial Highlights
(In millions except per share data)
Three months ended September 30,
Nine months ended September 30,
 
2014
 
2013
 
% Change
 
2014
 
2013
 
% Change
Revenue Highlights
 
 
 
 
 
 
 
 
 
 
 
 
   Earned premiums
 
$
1,071

 
$
992

 
8

 
$
3,157

 
$
2,877

 
10

   Investment income, pretax
 
138

 
133

 
4

 
409

 
392

 
4

   Total revenues
 
1,280

 
1,152

 
11

 
3,683

 
3,359

 
10

Income Statement Data
 
 
 
 
 
 
 
 
 
 
 
 
   Net income
 
$
183

 
$
131

 
40

 
$
358

 
$
395

 
(9
)
   Realized investment gains, net
 
43

 
15

 
187

 
66

 
51

 
29

   Operating income*
 
$
140

 
$
116

 
21

 
$
292

 
$
344

 
(15
)
Per Share Data (diluted)
 
 
 
 
 
 
 
 
 
 
 
 
   Net income
 
$
1.11

 
$
0.79

 
41

 
$
2.17

 
$
2.39

 
(9
)
   Realized investment gains, net
 
0.26

 
0.09

 
189

 
0.40

 
0.31

 
29

   Operating income*
 
$
0.85

 
$
0.70

 
21

 
$
1.77

 
$
2.08

 
(15
)
 
 
 
 
 
 
 
 
 
 
 
 
 
   Book value
 
 
 
 
 
 
 
$
39.01

 
$
35.51

 
10

   Cash dividend declared
 
$
0.44

 
$
0.42

 
5

 
$
1.32

 
$
1.235

 
7

   Weighted average shares outstanding
 
165.0

 
165.6

 
0

 
165.0

 
165.3

 
0


*
The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures defines and reconciles measures presented in this release that are not based on U.S. Generally Accepted Accounting Principles.
**
Forward-looking statements and related assumptions are subject to the risks outlined in the company’s safe harbor statement.


CINF 3Q14 Release 1

Insurance Operations Third-Quarter Highlights
•
91.0 percent third-quarter 2014 property casualty combined ratio, improved from 93.7 percent for
third-quarter 2013.
•
1 percent growth in third-quarter net written premiums, reflecting a previously announced challenge to report growth for our largest property casualty segment.
•
$125 million third-quarter 2014 property casualty new business written premiums, down $16 million. Agencies appointed since the beginning of 2013 contributed $7 million or 6 percent of total new business written premiums.
•
4 cents per share contribution from life insurance operating income, down 2 cents from third-quarter 2013.
Investment and Balance Sheet Highlights
•
4 percent or $5 million rise in third-quarter 2014 pretax investment income, with strong growth in stock portfolio dividends and slight growth in interest income.
•
1 percent three-month rise in fair value of invested assets plus cash at September 30, 2014, including a 1 percent increase for the equity portfolio and a 1 percent increase for the bond portfolio.
•
$1.772 billion parent company cash and marketable securities at September 30, 2014, up 16 percent from
year-end 2013.

Strong Third-Quarter Operating Income
Steven J. Johnston, president and chief executive officer, commented: “Strong third-quarter net and operating income has us in good shape heading into the fourth quarter. A 17 percent increase in dividend income from our high-quality stock investments plus a 1 percent increase in interest income from our bond portfolio led to a 4 percent increase in third-quarter 2014 investment income versus a year ago. Positive contributions from our underwriting and investment operations together drove our nine-month value creation ratio of 8.4 percent, on track to reach our longer-term objective of a 10 percent to 13 percent annual average.

“Our property casualty insurance business achieved $94 million of underwriting profit in the third-quarter, more than offsetting the six-month underwriting loss and taking our nine-month underwriting profit to $86 million. Our combined ratio of 91.0 percent – 2.7 points better than last year’s third-quarter result – brought the nine-month ratio into profitable territory at 97.3 percent. Before catastrophes, the ratio improved from the first-half 2014 result for both the third quarter and nine months to 89.8 and 90.2 percent, respectively.

“In total, catastrophe losses contributed just 1.2 percentage points to the third-quarter combined ratio, while favorable development on our reserves for prior accident years before catastrophes provided a benefit of 2.0 percentage points. Our consistent approach to reserves produced nine-month favorable reserve development before catastrophes in line with the benefit reported for full-year 2013.”

Ongoing Growth Potential
“Nine-month net written premium growth of 6 percent is ahead of reported industry numbers and on track to reach our long-term goals. As expected, our commitment to maintaining pricing and improving profitability slowed third-quarter growth to 1 percent overall, with growth for personal lines and excess and surplus lines premiums offsetting a decrease in commercial lines business. Other factors affecting year-over-year growth comparisons were record-high new business premiums in last year’s third quarter coupled with a higher than usual estimate of premiums for policies in effect but not yet processed at this time last year.

“Our field marketing representatives regularly consult with each of our appointed agencies, making sure we are doing what it takes to earn a prominent place for Cincinnati in their agency growth plans. So far this year, we’ve appointed 75 new agencies to represent us in their communities. As we develop those new relationships, we typically see a steady increase in business, writing an average of 10 percent of an agency’s total premiums after 10 years. That gives us confidence in our future opportunities to grow our business, as newer agency relationships mature and as we identify more agencies that share our desire to grow steadily and profitably.”

Profitability Initiatives Driving Results
“We continue to develop our ability to optimally segment our business and price risks accordingly. The way we analyze each risk, decide whether to issue a policy and price it determines future profit trends. It boils down to executing on our strategies policy-by-policy, considering data from our models, the local perspective of our agents and information collected in person by our field representatives through our ambitious inspection program and their visits with policyholders.

“Overall, renewal pricing held steady, with average increases for our commercial accounts near the high end of the low-single-digit range; renewal pricing for personal lines and excess and surplus lines increased on average in the mid-single-digit range. We are pleased that our commercial policy retention rate is holding steady as we keep our more profitable accounts and get more aggressive with higher pricing on renewal policies we believe to be underpriced. We believe pricing precision and discipline continue to improve the quality of our overall book.”

CINF 3Q14 Release 2


Insurance Operations Highlights
Consolidated Property Casualty Insurance Operations
(In millions)
Three months ended September 30,
 
Nine months ended September 30,
 
 
2014
 
2013
 
% Change
 
2014
 
2013
 
% Change
Earned premiums
 
$
1,025

 
$
954

 
7

 
$
3,010

 
$
2,753

 
9

Fee revenues
 
2

 
1

 
100

 
5

 
3

 
67

   Total revenues
 
1,027

 
955

 
8

 
3,015

 
2,756

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
622

 
593

 
5

 
2,005

 
1,700

 
18

Underwriting expenses
 
311

 
301

 
3

 
924

 
883

 
5

   Underwriting profit
 
$
94

 
$
61

 
54

 
$
86

 
$
173

 
(50
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
60.7
 %
 
62.2
 %
 
(1.5
)
 
66.6
 %
 
61.7
 %
 
4.9

     Underwriting expenses
 
30.3

 
31.5

 
(1.2
)
 
30.7

 
32.1

 
(1.4
)
           Combined ratio
 
91.0
 %
 
93.7
 %
 
(2.7
)
 
97.3
 %
 
93.8
 %
 
3.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
958

 
$
915

 
5

 
$
2,888

 
$
2,639

 
9

Agency new business written premiums
 
125

 
141

 
(11
)
 
381

 
415

 
(8
)
Other written premiums
 
(46
)
 
(25
)
 
(84
)
 
(113
)
 
(69
)
 
(64
)
   Net written premiums
 
$
1,037

 
$
1,031

 
1

 
$
3,156

 
$
2,985

 
6

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
61.5
 %
 
59.5
 %
 
2.0

 
62.8
 %
 
60.8
 %
 
2.0

     Current accident year catastrophe losses
 
1.6

 
6.7

 
(5.1
)
 
7.7

 
6.0

 
1.7

     Prior accident years before catastrophe losses
 
(2.0
)
 
(3.0
)
 
1.0

 
(3.3
)
 
(4.2
)
 
0.9

     Prior accident years catastrophe losses
 
(0.4
)
 
(1.0
)
 
0.6

 
(0.6
)
 
(0.9
)
 
0.3

           Loss and loss expense ratio
 
60.7
 %
 
62.2
 %
 
(1.5
)
 
66.6
 %
 
61.7
 %
 
4.9

 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before catastrophe
  losses
 
91.8
 %
 
91.0
 %
 
0.8

 
93.5
 %
 
92.9
 %
 
0.6

 
 
 
 
 
 
 
 
 
 
 
 
 

•
$6 million or 1 percent growth of third-quarter 2014 property casualty net written premiums and nine-month growth of 6 percent. Lower third-quarter 2014 growth reflected an expected modest decrease in net written premiums for our largest property casualty segment.
•
$16 million or 11 percent decrease in third-quarter 2014 new business premiums written by agencies, compared with a record-high amount a year ago. Key factors affecting these results included disciplined pricing and the impact of underwriting profitability initiatives, as well as contributions from new agency appointments and other growth initiatives. Nine-month new business premiums decreased $34 million, offsetting a $15 million increase from standard market property casualty production from agencies appointed since the beginning of 2013 and an increase of $9 million for excess and surplus lines.
•
1,469 agency relationships in 1,868 reporting locations marketing property casualty insurance products at September 30, 2014, compared with 1,450 agency relationships in 1,823 reporting locations at year-end 2013. Seventy-five new agency appointments were made during the first nine months of 2014.
•
2.7 percentage-point third-quarter 2014 combined ratio improvement, driven by a 4.5 point decrease for losses from natural catastrophes. For the nine-month 2014 period, the 3.5 percentage-point combined ratio increase largely reflected a 2.0 point increase for natural catastrophe losses and a 1.4 point increase for noncatastrophe weather-related losses.
•
2.4 percentage-point third-quarter 2014 benefit from favorable prior accident year reserve development of $25 million, compared with 4.0 points or $38 million for third-quarter 2013. Nine-month 2014 benefit of 3.3 points before prior year catastrophe losses trailed the nine-month 2013 benefit of 4.2 points.

CINF 3Q14 Release 3

•
2.0 percentage-point increase, to 62.8 percent, for the nine-month 2014 ratio of current accident year losses and loss expenses before catastrophes, largely due to a 1.4 percentage-point rise in the ratio for noncatastrophe weather-related losses and a 0.2 point increase in the ratio for current accident year losses of $1 million or more per claim.
•
1.2 and 1.4 percentage-point improvement in the third-quarter and nine-month underwriting expense ratios, largely due to higher earned premiums and ongoing expense management efforts.

CINF 3Q14 Release 4


Commercial Lines Insurance Operations
(In millions)
Three months ended September 30,
 
Nine months ended September 30,
 
 
2014
 
2013
 
% Change
 
2014
 
2013
 
% Change
Earned premiums
 
$
720

 
$
680

 
6

 
$
2,126

 
$
1,956

 
9

Fee revenues
 
1

 
1

 
0

 
3

 
2

 
50

   Total revenues
 
721

 
681

 
6

 
2,129

 
1,958

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
428

 
421

 
2

 
1,358

 
1,185

 
15

Underwriting expenses
 
226

 
217

 
4

 
674

 
638

 
6

   Underwriting profit
 
$
67

 
$
43

 
56

 
$
97

 
$
135

 
(28
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
59.4
 %
 
61.9
 %
 
(2.5
)
 
63.9
 %
 
60.6
 %
 
3.3

     Underwriting expenses
 
31.3

 
31.8

 
(0.5
)
 
31.7

 
32.6

 
(0.9
)
           Combined ratio
 
90.7
 %
 
93.7
 %
 
(3.0
)
 
95.6
 %
 
93.2
 %
 
2.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
651

 
$
632

 
3

 
$
2,033

 
$
1,865

 
9

Agency new business written premiums
 
89

 
102

 
(13
)
 
274

 
299

 
(8
)
Other written premiums
 
(36
)
 
(15
)
 
(140
)
 
(84
)
 
(39
)
 
(115
)
   Net written premiums
 
$
704

 
$
719

 
(2
)
 
$
2,223

 
$
2,125

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
61.3
 %
 
57.9
 %
 
3.4

 
61.4
 %
 
60.2
 %
 
1.2

     Current accident year catastrophe losses
 
1.4

 
6.0

 
(4.6
)
 
6.5

 
5.1

 
1.4

     Prior accident years before catastrophe losses
 
(2.9
)
 
(1.4
)
 
(1.5
)
 
(3.5
)
 
(4.0
)
 
0.5

     Prior accident years catastrophe losses
 
(0.4
)
 
(0.6
)
 
0.2

 
(0.5
)
 
(0.7
)
 
0.2

           Loss and loss expense ratio
 
59.4
 %
 
61.9
 %
 
(2.5
)
 
63.9
 %
 
60.6
 %
 
3.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before catastrophe
  losses
 
92.6
 %
 
89.7
 %
 
2.9

 
93.1
 %
 
92.8
 %
 
0.3

 
 
 
 
 
 
 
 
 
 
 
 
 

•
$15 million or 2 percent decrease in third-quarter 2014 commercial lines net written premiums, driven by lower new business and other written premiums. Nine-month net written premiums rose 5 percent.
•
$19 million and $168 million rise in third-quarter and nine-month renewal written premiums included commercial lines renewal pricing changes, increasing in the third quarter of 2014 on average near the high end of the low-single-digit range, in addition to rising insured exposures.
•
$13 million or 13 percent decrease in third-quarter 2014 new business written by agencies, down from a record-high amount a year ago and reflecting a $6 million decrease for our workers’ compensation line of business. For the nine-month period, the $25 million new business decrease included $15 million for workers’ compensation.
•
$21 million decrease in third-quarter 2014 other written premiums, primarily due to a higher than usual estimate a year ago for premiums in the pipeline for policies in effect but not yet processed.
•
3.0 percentage-point third-quarter 2014 combined ratio improvement, driven by a 4.4 point decrease for losses from natural catastrophes. For the nine-month 2014 period, the 2.4 percentage-point combined ratio increase reflected a 1.6 point increase for natural catastrophe losses and a 1.4 point increase for noncatastrophe weather-related losses.
•
3.3 percentage-point third-quarter 2014 benefit from favorable prior accident year reserve development of $24 million, compared with 2.0 points or $13 million for third-quarter 2013. Nine-month 2014 benefit of 3.5 points before prior year catastrophe losses was slightly less than the nine-month 2013 benefit of 4.0 points.
•
1.2 percentage-point increase, to 61.4 percent, for the nine-month 2014 ratio of current accident year losses and loss expenses before catastrophes, reflecting a 1.4 percentage-point rise in the ratio for noncatastrophe weather-related losses and a 0.7 point increase in the ratio for current accident year losses of $1 million or more per claim.

CINF 3Q14 Release 5


Personal Lines Insurance Operations
(In millions)
Three months ended September 30,
 
Nine months ended September 30,
 
 
2014
 
2013
 
% Change
 
2014
 
2013
 
% Change
Earned premiums
 
$
263

 
$
244

 
8

 
$
775

 
$
712

 
9

Fee revenues
 
1

 
—

 
nm

 
2

 
1

 
100

   Total revenues
 
264

 
244

 
8

 
777

 
713

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
177

 
155

 
14

 
592

 
462

 
28

Underwriting expenses
 
73

 
75

 
(3
)
 
218

 
218

 
0

   Underwriting (loss) profit
 
$
14

 
$
14

 
0

 
$
(33
)
 
$
33

 
nm

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
67.4
 %
 
63.7
 %
 
3.7

 
76.3
 %
 
64.8
 %
 
11.5

     Underwriting expenses
 
27.6

 
30.8

 
(3.2
)
 
28.2

 
30.7

 
(2.5
)
           Combined ratio
 
95.0
 %
 
94.5
 %
 
0.5

 
104.5
 %
 
95.5
 %
 
9.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
278

 
$
258

 
8

 
$
772

 
$
704

 
10

Agency new business written premiums
 
23

 
28

 
(18
)
 
68

 
86

 
(21
)
Other written premiums
 
(7
)
 
(8
)
 
13

 
(21
)
 
(24
)
 
13

   Net written premiums
 
$
294

 
$
278

 
6

 
$
819

 
$
766

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
62.7
 %
 
63.0
 %
 
(0.3
)
 
65.8
 %
 
61.5
 %
 
4.3

     Current accident year catastrophe losses
 
2.6

 
9.1

 
(6.5
)
 
12.2

 
9.2

 
3.0

     Prior accident years before catastrophe losses
 
2.7

 
(6.3
)
 
9.0

 
(0.5
)
 
(4.4
)
 
3.9

     Prior accident years catastrophe losses
 
(0.6
)
 
(2.1
)
 
1.5

 
(1.2
)
 
(1.5
)
 
0.3

           Loss and loss expense ratio
 
67.4
 %
 
63.7
 %
 
3.7

 
76.3
 %
 
64.8
 %
 
11.5

 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before catastrophe
  losses
 
90.3
 %
 
93.8
 %
 
(3.5
)
 
94.0
 %
 
92.2
 %
 
1.8

 
 
 
 
 
 
 
 
 
 
 
 
 

•
$16 million or 6 percent increase in third-quarter 2014 personal lines net written premiums, largely due to higher renewal written premiums that reflect rate increases. Nine-month net written premiums increased 7 percent.
•
$5 million or 18 percent decrease in third-quarter new business written by agencies, declining as expected due to underwriting actions such as higher premium rates and expanded use of higher deductibles, age of roof limitations and more precise pricing.
•
0.5 percentage-point rise in the third-quarter 2014 combined ratio, as unfavorable prior accident year reserve development before catastrophe losses offset a 5.0 point decrease for losses from natural catastrophes. For the nine-month 2014 period, the 9.0 percentage-point combined ratio increase included a 3.3 point rise for natural catastrophe losses, a 1.6 point rise for noncatastrophe weather-related losses and a 3.9 point rise from less favorable prior accident year reserve development before catastrophe losses.
•
2.1 percentage-point third-quarter 2014 effect from unfavorable prior accident year reserve development of $5 million, compared with a favorable effect or benefit of 8.4 points or $21 million for third-quarter 2013. Nine-month 2014 benefit before prior year catastrophe losses of 0.5 points was less than the nine-month 2013 benefit of 4.4 points.
•
4.3 percentage-point increase, to 65.8 percent, for the nine-month 2014 ratio of current accident year losses and loss expenses before catastrophes, in part due to higher noncatastrophe weather-related losses.


CINF 3Q14 Release 6


Excess and Surplus Lines Insurance Operations
(In millions)
Three months ended September 30,
 
Nine months ended September 30,
 
 
2014
 
2013
 
% Change
 
2014
 
2013
 
% Change
Earned premiums
 
$
42

 
$
30

 
40

 
$
109

 
$
85

 
28

 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
17

 
17

 
0

 
55

 
53

 
4

Underwriting expenses
 
12

 
9

 
33

 
32

 
27

 
19

   Underwriting profit
 
$
13

 
$
4

 
225

 
$
22

 
$
5

 
340

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
41.8
 %
 
56.0
 %
 
(14.2
)
 
51.0
 %
 
62.5
 %
 
(11.5
)
     Underwriting expenses
 
28.4

 
30.7

 
(2.3
)
 
28.9

 
31.7

 
(2.8
)
           Combined ratio
 
70.2
 %
 
86.7
 %
 
(16.5
)
 
79.9
 %
 
94.2
 %
 
(14.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
29

 
$
25

 
16

 
$
83

 
$
70

 
19

Agency new business written premiums
 
13

 
11

 
18

 
39

 
30

 
30

Other written premiums
 
(3
)
 
(2
)
 
(50
)
 
(8
)
 
(6
)
 
(33
)
   Net written premiums
 
$
39

 
$
34

 
15

 
$
114

 
$
94

 
21

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
57.8
 %
 
67.2
 %
 
(9.4
)
 
70.2
 %
 
68.7
 %
 
1.5

     Current accident year catastrophe losses
 
(0.7
)
 
3.4

 
(4.1
)
 
1.4

 
1.6

 
(0.2
)
     Prior accident years before catastrophe losses
 
(15.4
)
 
(13.7
)
 
(1.7
)
 
(20.8
)
 
(7.9
)
 
(12.9
)
     Prior accident years catastrophe losses
 
0.1

 
(0.9
)
 
1.0

 
0.2

 
0.1

 
0.1

           Loss and loss expense ratio
 
41.8
 %
 
56.0
 %
 
(14.2
)
 
51.0
 %
 
62.5
 %
 
(11.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before catastrophe
  losses
 
86.2
 %
 
97.9
 %
 
(11.7
)
 
99.1
 %
 
100.4
 %
 
(1.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 

•
$5 million or 15 percent growth in third-quarter 2014 excess and surplus lines net written premiums and a nine-month growth rate of 21 percent. Average renewal pricing increased in the mid-single-digit range during the third quarter.
•
$2 million or 18 percent increase in third-quarter new business written by agencies, rising in part due to enhanced service to agencies from an increase in our excess and surplus lines field marketing representatives.
•
16.5 and 14.3 percentage-point improvement in third-quarter and nine-month 2014 combined ratios, primarily due to a lower ratio for third-quarter current accident year loss experience and more favorable prior accident year reserve development for the nine-month period.
•
15.3 percentage-point third-quarter 2014 benefit from favorable prior accident year reserve development of $6 million, compared with a favorable 14.6 points or $4 million for third-quarter 2013. Nine-month 2014 benefit before prior year catastrophe losses of 20.8 points was much more than the nine-month 2013 benefit of 7.9 points.


CINF 3Q14 Release 7


Life Insurance Operations
(In millions)
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013
 
% Change
 
2014
 
2013
 
% Change
Term life insurance
 
$
34

 
$
32

 
6

 
$
99

 
$
92

 
8

Universal life insurance
 
5

 
(1
)
 
nm

 
25

 
8

 
213

Other life insurance, annuity, and disability income products
 
7

 
7

 
0

 
23

 
24

 
(4
)
    Earned premiums
 
46

 
38

 
21

 
147

 
124

 
19

Investment income, net of expenses
 
36

 
35

 
3

 
108

 
104

 
4

Other income
 
1

 
1

 
0

 
4

 
3

 
33

Total revenues, excluding realized investment gains and losses
 
83

 
74

 
12

 
259

 
231

 
12

Contract holders’ benefits incurred
 
64

 
49

 
31

 
176

 
141

 
25

Operating expenses incurred
 
8

 
11

 
(27
)
 
42

 
36

 
17

    Total benefits and expenses
 
72

 
60

 
20

 
218

 
177

 
23

Net income before income tax and realized investment gains and losses
 
11

 
14

 
(21
)
 
41

 
54

 
(24
)
Income tax
 
4

 
5

 
(20
)
 
15

 
19

 
(21
)
Net income before realized investment gains and losses
 
$
7

 
$
9

 
(22
)
 
$
26

 
$
35

 
(26
)
 
 
 
 
 
 
 
 
 
 
 
 
 

•
$8 million or 21 percent increase in third-quarter 2014 earned premiums, including a 6 percent increase for term life insurance, our largest life insurance product line. Three- and nine-month growth rates for term life insurance were similar. The unlocking of interest rate and other actuarial assumptions for our universal life insurance contracts during the third quarter of both 2014 and 2013 slowed the amortization of unearned front-end loads, reducing universal life insurance premiums with a corresponding decrease to operating expenses as more expenses were deferred to future periods.
•
$29 million in nine-month 2014 fixed annuity deposits received, matching the same period of 2013. Cincinnati Life does not offer variable or equity-indexed annuities.
•
$9 million decrease in nine-month 2014 profit, primarily due to less favorable mortality experience.
•
$60 million or 7 percent nine-month 2014 increase to $893 million in GAAP shareholders’ equity for The Cincinnati Life Insurance Company, largely reflecting an increase in fair value of the fixed-maturity portfolio due to a decrease in interest rates.



CINF 3Q14 Release 8


Investment and Balance Sheet Highlights
Investment Operations
(In millions)
 
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013
 
% Change
 
2014
 
2013
 
% Change
Investment income, net of expenses
 
$
138

 
$
133

 
4

 
$
409

 
$
392

 
4

Investment interest credited to contract holders
 
(21
)
 
(21
)
 
0

 
(62
)
 
(60
)
 
(3
)
Realized investment gains, net
 
65

 
22

 
195

 
101

 
77

 
31

      Investment operations profit, pretax
 
$
182

 
$
134

 
36

 
$
448

 
$
409

 
10

 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
   Interest
 
$
105

 
$
104

 
1

 
$
312

 
$
309

 
1

   Dividends
 
35

 
30

 
17

 
101

 
87

 
16

   Other
 
—

 
1

 
(100
)
 
2

 
2

 
0

   Less investment expenses
 
2

 
2

 
0

 
6

 
6

 
0

      Investment income, net of expenses, pretax
 
138

 
133

 
4

 
409

 
392

 
4

      Less income taxes
 
32

 
32

 
0

 
97

 
95

 
2

      Investment income, net of expenses, after-tax
 
$
106

 
$
101

 
5

 
$
312

 
$
297

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
      Effective tax rate
 
23.3
%
 
24.1
%
 
(0.8
)
 
23.7
%
 
24.2
%
 
(0.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 Average invested assets plus cash and cash
 equivalents
 
$
13,964

 
$
12,908

 
—

 
$
13,792

 
$
12,607

 
—

      Average yield pretax
 
3.95
%
 
4.12
%
 
(0.17
)
 
3.95
%
 
4.15
%
 
(0.20
)
      Average yield after-tax
 
3.04

 
3.13

 
(0.09
)
 
3.02

 
3.14

 
(0.12
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective fixed-maturity tax rate
 
26.6
%
 
27.2
%
 
(0.6
)
 
27.0
%
 
27.1
%
 
(0.1
)
Average fixed-maturity at amortized cost
 
$
8,822

 
$
8,465

 
—

 
$
8,781

 
$
8,362

 
—

Average fixed-maturity yield pretax
 
4.76
%
 
4.91
%
 
(0.15
)
 
4.74
%
 
4.93
%
 
(0.19
)
Average fixed-maturity yield after-tax
 
3.49

 
3.58

 
(0.09
)
 
3.46

 
3.59

 
(0.13
)
 
 
 
 
 
 
 
 
 
 
 
 
 

•
$5 million or 4 percent rise in third-quarter 2014 pretax investment income, including 17 percent growth in equity portfolio dividends and 1 percent growth in interest income.
•
$120 million or 4 percent third-quarter 2014 decrease in pretax net unrealized investment portfolio gains, including a $54 million decrease for the equity portfolio. That net decrease included the offsetting effect of $65 million of pretax net realized gains from investment portfolio security sales or called bonds during the third quarter of 2014, including $59 million from the equity portfolio.

CINF 3Q14 Release 9


(In millions except share data)
 
At September 30,
 
At December 31,
 
2014
 
2013
Balance sheet data:
 
 
 
 
   Invested assets
 
$
14,255

 
$
13,564

   Total assets
 
18,474

 
17,662

   Short-term debt
 
49

 
104

   Long-term debt
 
790

 
790

   Shareholders’ equity
 
6,376

 
6,070

   Book value per share
 
39.01

 
37.21

   Debt-to-total-capital ratio
 
11.6
%
 
12.8
%

•
$14.667 billion in consolidated cash and invested assets at September 30, 2014, up 5 percent from $13.997 billion at year-end 2013.
•
$9.522 billion bond portfolio at September 30, 2014, with an average rating of A2/A. Fair value increased $139 million or 1 percent during the third quarter of 2014.
•
$4.666 billion equity portfolio was 32.7 percent of invested assets, including $1.969 billion in pretax net unrealized gains at September 30, 2014. Third-quarter 2014 growth in fair value of $61 million or 1 percent.
•
$4.364 billion of statutory surplus for the property casualty insurance group at September 30, 2014, up $38 million from $4.326 billion at year-end 2013, after declaring $300 million in dividends to the parent company. The ratio of net written premiums to property casualty statutory surplus for the 12 months ended September 30, 2014, was 0.9-to-1, unchanged from year-end 2013.
•
Value creation ratio of 8.4 percent for first nine months of 2014 included 4.8 percent from net income before net realized investment gains and 3.6 percent from investment portfolio realized gains and changes in unrealized gains.

For additional information or to register for our conference call webcast, please visit cinfin.com/investors.
 
About Cincinnati Financial
Cincinnati Financial Corporation offers business, home and auto insurance, our main business, through The Cincinnati Insurance Company and its two standard market property casualty companies. The same local independent insurance agencies that market those policies may offer products of our other subsidiaries, including life and disability income insurance, fixed annuities and surplus lines property and casualty insurance. For additional information about the company, please visit cinfin.com.

Mailing Address:                        Street Address:
P.O. Box 145496                        6200 South Gilmore Road
Cincinnati, Ohio 45250-5496                    Fairfield, Ohio 45014-5141



CINF 3Q14 Release 10

Safe Harbor Statement
This is our “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995. Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by the forward-looking statements in this report. Some of those risks and uncertainties are discussed in our 2013 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 31.
Factors that could cause or contribute to such differences include, but are not limited to:
•
Unusually high levels of catastrophe losses due to risk concentrations, changes in weather patterns, environmental events, terrorism incidents or other causes
•
Increased frequency and/or severity of claims or development of claims that are unforeseen at the time of policy issuance
•
Inadequate estimates or assumptions used for critical accounting estimates
•
Declines in overall stock market values negatively affecting the company’s equity portfolio and book value
•
Domestic and global events resulting in capital market or credit market uncertainty, followed by prolonged periods of economic instability or recession, that lead to:
◦
Significant or prolonged decline in the value of a particular security or group of securities and impairment of the asset(s)
◦
Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities
◦
Significant rise in losses from surety and director and officer policies written for financial institutions or other insured entities
•
Prolonged low interest rate environment or other factors that limit the company’s ability to generate growth in investment income or interest rate fluctuations that result in declining values of fixed-maturity investments, including declines in accounts in which we hold bank-owned life insurance contract assets
•
Recession or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies
•
Difficulties with technology or data security breaches, including cyberattacks, that could negatively affect our ability to conduct business and our relationships with agents, policyholders and others
•
Disruption of the insurance market caused by technology innovations, such as driverless cars, that could decrease consumer demand for insurance products
•
Delays or performance inadequacies from ongoing development and implementation of underwriting and pricing methods, including telematics and other usage-based insurance methods, or technology projects and enhancements expected to increase our pricing accuracy, underwriting profit and competitiveness
•
Increased competition that could result in a significant reduction in the company’s premium volume
•
Changing consumer insurance-buying habits and consolidation of independent insurance agencies that could alter our competitive advantages
•
Inability to obtain adequate reinsurance on acceptable terms, amount of reinsurance purchased, financial strength of reinsurers and the potential for nonpayment or delay in payment by reinsurers
•
Inability to defer policy acquisition costs for any business segment if pricing and loss trends would lead management to conclude that segment could not achieve sustainable profitability
•
Inablity of our subidiaries to pay dividends consistent with current or past levels
•
Events or conditions that could weaken or harm the company’s relationships with its independent agencies and hamper opportunities to add new agencies, resulting in limitations on the company’s opportunities for growth, such as:
◦
Downgrades of the company’s financial strength ratings
◦
Concerns that doing business with the company is too difficult
◦
Perceptions that the company’s level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace
◦
Inability or unwillingness to nimbly develop and introduce coverage product updates and innovations that our competitors offer and consumers expect to find in the marketplace
•
Actions of insurance departments, state attorneys general or other regulatory agencies, including a change to a federal system of regulation from a state-based system, that:
◦
Impose new obligations on us that increase our expenses or change the assumptions underlying our critical accounting estimates
◦
Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations
◦
Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business
◦
Add assessments for guaranty funds, other insurance related assessments or mandatory reinsurance arrangements; or that impair our ability to recover such assessments through future surcharges or other rate changes
◦
Increase our provision for federal income taxes due to changes in tax law
◦
Increase our other expenses

CINF 3Q14 Release 11

◦
Limit our ability to set fair, adequate and reasonable rates
◦
Place us at a disadvantage in the marketplace
◦
Restrict our ability to execute our business model, including the way we compensate agents
•
Adverse outcomes from litigation or administrative proceedings
•
Events or actions, including unauthorized intentional circumvention of controls, that reduce the company’s future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002
•
Unforeseen departure of certain executive officers or other key employees due to retirement, health or other causes that could interrupt progress toward important strategic goals or diminish the effectiveness of certain longstanding relationships with insurance agents and others
•
Events, such as an epidemic, natural catastrophe or terrorism, that could hamper our ability to assemble our workforce at our headquarters location
Further, the company’s insurance businesses are subject to the effects of changing social, global, economic and regulatory environments. Public and regulatory initiatives have included efforts to adversely influence and restrict premium rates, restrict the ability to cancel policies, impose underwriting standards and expand overall regulation. The company also is subject to public and regulatory initiatives that can affect the market value for its common stock, such as measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain.

* * *

CINF 3Q14 Release 12


Cincinnati Financial Corporation
Condensed Consolidated Balance Sheets and Statements of Income (unaudited)
(In millions)
 
 
 
September 30,
December 31,
 
 
 
 
 
2014
 
2013
Assets
 
 
 
 
 
 
 
   Investments
 
 
 
 
$
14,255

 
$
13,564

   Cash and cash equivalents
 
 
 
 
412

 
433

   Premiums receivable
 
 
 
 
1,447

 
1,346

   Reinsurance recoverable
 
 
 
 
549

 
547

   Other assets
 
 
 
 
1,811

 
1,772

      Total assets
 
 
 
 
$
18,474

 
$
17,662

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
   Insurance reserves
 
 
 
 
$
6,919

 
$
6,701

   Unearned premiums
 
 
 
 
2,128

 
1,976

   Deferred income tax
 
 
 
 
777

 
673

   Long-term debt and capital lease obligations
 
 
 
 
829

 
835

   Other liabilities
 
 
 
 
1,445

 
1,407

      Total liabilities
 
 
 
 
12,098

 
11,592

 
 
 
 
 
 
 
 
Shareholders’ Equity
 
 
 
 
 
 
 
   Common stock and paid-in capital
 
 
 
 
1,602

 
1,588

   Retained earnings
 
 
 
 
4,409

 
4,268

   Accumulated other comprehensive income
 
 
 
 
1,658

 
1,504

   Treasury stock
 
 
 
 
(1,293
)
 
(1,290
)
      Total shareholders’ equity
 
 
 
 
6,376

 
6,070

      Total liabilities and shareholders’ equity
 
 
 
 
$
18,474

 
$
17,662

 
 
 
 
 
 
 
 
(In millions except per share data)
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013
 
2014
 
2013
Revenues
 
 
 
 
 
 
 
   Earned premiums
$
1,071

 
$
992

 
$
3,157

 
$
2,877

   Investment income, net of expenses
138

 
133

 
409

 
392

   Realized investment gains, net
65

 
22

 
101

 
77

   Other revenues
6

 
5

 
16

 
13

      Total revenues
1,280

 
1,152

 
3,683

 
3,359

 
 
 
 
 
 
 
 
Benefits and Expenses
 
 
 
 
 
 
 
   Insurance losses and policyholder benefits
686

 
642

 
2,181

 
1,841

   Underwriting, acquisition and insurance expenses
319

 
312

 
967

 
919

   Interest expense
13

 
13

 
40

 
40

   Other operating expenses
3

 
3

 
10

 
12

      Total benefits and expenses
1,021

 
970

 
3,198

 
2,812

 
 
 
 
 
 
 
 
Income Before Income Taxes
259

 
182

 
485

 
547

 
 
 
 
 
 
 
 
Provision for Income Taxes
76

 
51

 
127

 
152

 
 
 
 
 
 
 
 
Net Income
$
183

 
$
131

 
$
358

 
$
395

 
 
 
 
 
 
 
 
Per Common Share:
 
 
 
 
 
 
 
   Net income—basic
$
1.12

 
$
0.80

 
$
2.19

 
$
2.42

   Net income—diluted
1.11

 
0.79

 
2.17

 
2.39



CINF 3Q14 Release 13


Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures
(See attached tables for 2014 reconciliations; prior-period reconciliations available at cinfin.com/investors.)
Cincinnati Financial Corporation prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Statutory data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners’ (NAIC) Accounting Practices and Procedures Manual, and therefore is not reconciled to GAAP data.
Management uses certain non-GAAP and non-statutory financial measures to evaluate its primary business areas – property casualty insurance, life insurance and investments. Management uses these measures when analyzing both GAAP and non-GAAP measures to improve its understanding of trends in the underlying business and to help avoid incorrect or misleading assumptions and conclusions about the success or failure of company strategies. Management adjustments to GAAP measures generally: apply to non-recurring events that are unrelated to business performance and distort short-term results; involve values that fluctuate based on events outside of management’s control; or relate to accounting refinements that affect comparability between periods, creating a need to analyze data on the same basis.
•
Operating income: Operating income is calculated by excluding net realized investment gains and losses (defined as realized investment gains and losses after applicable federal and state income taxes) from net income. Management evaluates operating income to measure the success of pricing, rate and underwriting strategies. While realized investment gains (or losses) are integral to the company’s insurance operations over the long term, the determination to realize investment gains or losses in any period may be subject to management’s discretion and is independent of the insurance underwriting process. Also, under applicable GAAP accounting requirements, gains and losses can be recognized from certain changes in market values of securities without actual realization. Management believes that the level of realized investment gains or losses for any particular period, while it may be material, may not fully indicate the performance of ongoing underlying business operations in that period.
For these reasons, many investors and shareholders consider operating income to be one of the more meaningful measures for evaluating insurance company performance. Equity analysts who report on the insurance industry and the company generally focus on this metric in their analyses. The company presents operating income so that all investors have what management believes to be a useful supplement to GAAP information.
•
Value creation ratio: This is a measure of shareholder value creation that management believes captures the contribution of the company’s insurance operations, the success of its investment strategy and the importance placed on paying cash dividends to shareholders. The value creation ratio measure is made up of two primary components: (1) rate of growth in book value per share plus (2) the ratio of dividends declared per share to beginning book value per share. Management believes this non-GAAP measure is a useful supplement to GAAP information, providing a meaningful measure of long-term progress in creating shareholder value. It is intended to be all-inclusive regarding changes in book value per share, and uses originally reported book value per share in cases where book value per share has been adjusted, such as adoption of Accounting Standards Updates with a cumulative effect of a change in accounting.
•
Statutory accounting rules: For public reporting, insurance companies prepare financial statements in accordance with GAAP. However, insurers also must calculate certain data according to statutory accounting rules as defined in the NAIC’s Accounting Practices and Procedures Manual, which may be, and has been, modified by various state insurance departments. Statutory data is publicly available, and various organizations use it to calculate aggregate industry data, study industry trends and compare insurance companies.
•
Written premium: Under statutory accounting rules, property casualty written premium is the amount recorded for policies issued and recognized on an annualized basis at the effective date of the policy. Management analyzes trends in written premium to assess business efforts. Earned premium, used in both statutory and GAAP accounting, is calculated ratably over the policy term. The difference between written and earned premium is unearned premium.

CINF 3Q14 Release 14


Cincinnati Financial Corporation
Balance Sheet Reconciliation
(Dollars are per outstanding share)
 
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013
 
2014
 
2013
Value creation ratio:
 
 
 
 
 
 
 
 
   End of period book value
 
$
39.01

 
$
35.51

 
$
39.01

 
$
35.51

   Less beginning of period book value
 
38.77

 
34.83

 
37.21

 
33.48

   Change in book value
 
0.24

 
0.68

 
1.80

 
2.03

   Dividend declared to shareholders
 
0.44

 
0.42

 
1.32

 
1.235

   Total contribution to value creation ratio
 
$
0.68

 
$
1.10

 
$
3.12

 
$
3.265

 
 
 
 
 
 
 
 
 
Contribution to value creation ratio:
 
 
 
 
 
 
 
 
From change in book value*
 
0.6
%
 
2.0
%
 
4.8
%
 
6.1
%
From dividends declared to shareholders**
1.2

 
1.2

 
3.6

 
3.7

Value creation ratio
 
1.8
%
 
3.2
%
 
8.4
%
 
9.8
%
 
 
 
 
 
 
 
 
 
* Change in book value divided by the beginning of period book value
 
 
** Dividend declared to shareholders divided by beginning of period book value
 
 

 Net Income Reconciliation
 
(In millions except per share data)
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2014
 
2013
 
2014
 
2013
   Net income
 
$
183

 
$
131

 
$
358

 
$
395

   Realized investment gains, net
 
43

 
15

 
66

 
51

   Operating income
 
140

 
116

 
292

 
344

   Less catastrophe losses
 
(8
)
 
(36
)
 
(139
)
 
(92
)
   Operating income before catastrophe losses
 
148

 
152

 
431

 
436

   Less noncatastrophe weather losses
 
(29
)
 
(25
)
 
(98
)
 
(65
)
   Operating income before catastrophe and
    noncatastrophe weather losses
 
$
177

 
$
177

 
$
529

 
$
501

 
 
 
 
 
 
 
 
 
Diluted per share data:
 
 
 
 
 
 
 
 
   Net income
 
$
1.11

 
$
0.79

 
$
2.17

 
$
2.39

   Realized investment gains, net
 
0.26

 
0.09

 
0.40

 
0.31

   Operating income
 
0.85

 
0.70

 
1.77

 
2.08

   Less catastrophe losses
 
(0.05
)
 
(0.21
)
 
(0.84
)
 
(0.56
)
   Operating income before catastrophe losses
 
0.90

 
0.91

 
2.61

 
2.64

   Less noncatastrophe weather losses
 
(0.17
)
 
(0.15
)
 
(0.59
)
 
(0.39
)
   Operating income before catastrophe and
    noncatastrophe weather losses
 
$
1.07

 
$
1.06

 
$
3.20

 
$
3.03

 
 
 
 
 
 
 
 
 




CINF 3Q14 Release 15

Cincinnati Financial Corporation
Property Casualty Reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
Three months ended September 30, 2014
 
Consolidated
Commercial
Personal
E&S
Premiums:
 
 
 
 
 
 
 
 
 
 
 
 
   Written premiums
 
$
1,037

 
 
$
704

 
 
$
294

 
 
$
39

 
   Unearned premiums change
 
(12
)
 
 
16

 
 
(31
)
 
 
3

 
   Earned premiums
 
$
1,025

 
 
$
720

 
 
$
263

 
 
$
42

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statutory ratios:
 
 
 
 
 
 
 
 
 
 
 
 
   Statutory combined ratio
 
91.3
 %
 
 
91.6
 %
 
 
93.7
 %
 
 
75.8
 %
 
   Contribution from catastrophe losses
 
1.2

 
 
1.0

 
 
2.0

 
 
(0.6
)
 
   Statutory combined ratio excluding catastrophe losses
 
90.1
 %
 
 
90.6
 %
 
 
91.7
 %
 
 
76.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commission expense ratio
 
18.9
 %
 
 
19.0
 %
 
 
17.0
 %
 
 
29.1
 %
 
   Other expense ratio
 
11.7

 
 
13.2

 
 
9.3

 
 
4.9

 
   Statutory expense ratio
 
30.6
 %
 
 
32.2
 %
 
 
26.3
 %
 
 
34.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP ratio:
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio
 
91.0
 %
 
 
90.7
 %
 
 
95.0
 %
 
 
70.2
 %
 
   Contribution from catastrophe losses
 
1.2

 
 
1.0

 
 
2.0

 
 
(0.6
)
 
   Prior accident years before catastrophe losses
 
(2.0
)
 
 
(2.9
)
 
 
2.7

 
 
(15.4
)
 
   GAAP combined ratio excluding catastrophe losses and prior
 
 
 
 
 
 
 
 
 
 
 
 
       years reserve development
 
91.8
 %
 
 
92.6
 %
 
 
90.3
 %
 
 
86.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
Nine months ended September 30, 2014
 
Consolidated
Commercial
Personal
E&S
Premiums:
 
 
 
 
 
 
 
 
 
 
 
 
   Written premiums
 
$
3,156

 
 
$
2,223

 
 
$
819

 
 
$
114

 
   Unearned premiums change
 
(146
)
 
 
(97
)
 
 
(44
)
 
 
(5
)
 
   Earned premiums
 
$
3,010

 
 
$
2,126

 
 
$
775

 
 
$
109

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statutory ratios:
 
 
 
 
 
 
 
 
 
 
 
 
   Statutory combined ratio
 
96.3
 %
 
 
94.2
 %
 
 
103.9
 %
 
 
82.2
 %
 
   Contribution from catastrophe losses
 
7.1

 
 
6.0

 
 
11.0

 
 
1.6

 
   Statutory combined ratio excluding catastrophe losses
 
89.2
 %
 
 
88.2
 %
 
 
92.9
 %
 
 
80.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commission expense ratio
 
18.1
 %
 
 
17.7
 %
 
 
18.2
 %
 
 
27.2
 %
 
   Other expense ratio
 
11.6

 
 
12.6

 
 
9.4

 
 
4.0

 
   Statutory expense ratio
 
29.7
 %
 
 
30.3
 %
 
 
27.6
 %
 
 
31.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP ratio:
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio
 
97.3
 %
 
 
95.6
 %
 
 
104.5
 %
 
 
79.9
 %
 
   Contribution from catastrophe losses
 
7.1

 
 
6.0

 
 
11.0

 
 
1.6

 
   Prior accident years before catastrophe losses
 
(3.3
)
 
 
(3.5
)
 
 
(0.5
)
 
 
(20.8
)
 
   GAAP combined ratio excluding catastrophe losses and prior
 
 
 
 
 
 
 
 
 
 
 
 
       years reserve development
 
93.5
 %
 
 
93.1
 %
 
 
94.0
 %
 
 
99.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on dollar amounts in thousands.


CINF 3Q14 Release 16
Exhibit 99.2 3Q14


Cincinnati Financial Corporation
Supplemental Financial Data
for the period ending September 30, 2014

6200 South Gilmore Road
Fairfield, Ohio 45014-5141
cinfin.com

Investor Contact:
Media Contact:
Shareholder Contact:
Dennis E. McDaniel
Betsy E. Ertel
Molly A. Grimm
513-870-2768
513-603-5323
513-870-2697

 
A.M. Best
Fitch
Moody's
Standard &
 Poor's
Cincinnati Financial Corporation
 
 
 
 
Corporate Debt
a-
BBB+
A3
BBB
 
 
 
 
 
The Cincinnati Insurance Companies
 
 
 
 
Insurer Financial Strength
 
 
 
 
 
 
 
 
 
Property Casualty Group
 
 
 
 
      Standard Market Subsidiaries:
A+
—
A1
A
             The Cincinnati Insurance Company
A+
A+
A1
A
             The Cincinnati Indemnity Company
A+
A+
A1
A
             The Cincinnati Casualty Company
A+
A+
A1
A
      Surplus Lines Subsidiary:
 
 
 
 
             The Cincinnati Specialty Underwriters Insurance Company
A
—
—
—
 
 
 
 
 
The Cincinnati Life Insurance Company
A
A+
—
A

Ratings are as of October 27, 2014, under continuous review and subject to change and/or affirmation. For the current ratings, select Financial Strength on cinfin.com.
The consolidated financial statements and financial exhibits that follow are unaudited. These consolidated financial statements and exhibits should be read in conjunction with the consolidated financial statements and notes included with our periodic filings with the U.S. Securities and Exchange Commission. The results of operations for interim periods may not be indicative of results to be expected for the full year.

CINF Third-Quarter 2014 Supplemental Financial Data
1


 
Cincinnati Financial Corporation
 
Supplemental Financial Data
 
for the period ending September 30, 2014
 
 
 
 
 
Page
 
Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures
3
 
 
 
Consolidated
 
 
Quick Reference
4
 
CFC and Subsidiaries Consolidation – Nine Months Ended September 30, 2014
5
 
CFC and Subsidiaries Consolidation – Three Months Ended September 30, 2014
6
 
CFC Insurance Subsidiaries – Selected Balance Sheet Data
7
 
 
 
Consolidated Property Casualty Insurance Operations
 
 
Statutory Statements of Income
8
 
Consolidated Cincinnati Insurance Companies – Losses Incurred Detail
9
 
Consolidated Cincinnati Insurance Companies – Loss Ratio Detail
10
 
Consolidated Cincinnati Insurance Companies – Loss Claim Count Detail
11
 
Direct Written Premiums by Line of Business and State
12
 
Quarterly Property Casualty Data – Commercial Lines
13
 
Quarterly Property Casualty Data – Personal Lines and Excess & Surplus Lines
14
 
Loss and Loss Expense Analysis – Nine Months Ended September 30, 2014
15
 
Loss and Loss Expense Analysis – Three Months Ended September 30, 2014
16
 
 
 
Reconciliation Data
 
 
Quarterly Property Casualty Data – Consolidated
17
 
Quarterly Property Casualty Data – Commercial Lines
18
 
Quarterly Property Casualty Data – Personal Lines
19
 
Quarterly Property Casualty Data – Excess & Surplus Lines
20
 
 
 
Life Insurance Operations
 
 
Statutory Statements of Income
21



CINF Third-Quarter 2014 Supplemental Financial Data
2


Definitions of Non-GAAP Information and
Reconciliation to Comparable GAAP Measures
Cincinnati Financial Corporation prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Statutory data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners' (NAIC) Accounting Practices and Procedures Manual, and therefore is not reconciled to GAAP data.
Management uses certain non-GAAP and non-statutory financial measures to evaluate its primary business areas - property casualty insurance, life insurance and investments. Management uses these measures when analyzing both GAAP and non-GAAP measures to improve its understanding of trends in the underlying business and to help avoid incorrect or misleading assumptions and conclusions about the success or failure of company strategies. Management adjustments to GAAP measures generally: apply to non-recurring events that are unrelated to business performance and distort short-term results; involve values that fluctuate based on events outside of management's control; or relate to accounting refinements that affect comparability between periods, creating a need to analyze data on the same basis.
•
Operating income: Operating income is calculated by excluding net realized investment gains and losses (defined as realized investment gains and losses after applicable federal and state income taxes) from net income. Management evaluates operating income to measure the success of pricing, rate and underwriting strategies. While realized investment gains (or losses) are integral to the company's insurance operations over the long term, the determination to realize investment gains or losses in any period may be subject to management's discretion and is independent of the insurance underwriting process. Also, under applicable GAAP accounting requirements, gains and losses can be recognized from certain changes in market values of securities without actual realization. Management believes that the level of realized investment gains or losses for any particular period, while it may be material, may not fully indicate the performance of ongoing underlying business operations in that period.
For these reasons, many investors and shareholders consider operating income to be one of the more meaningful measures for evaluating insurance company performance. Equity analysts who report on the insurance industry and the company generally focus on this metric in their analyses. The company presents operating income so that all investors have what management believes to be a useful supplement to GAAP information.
•
Value creation ratio: This is a measure of shareholder value creation that management believes captures the contribution of the company's insurance operations, the success of its investment strategy and the importance placed on paying cash dividends to shareholders. The value creation ratio measure is made up of two primary components: (1) rate of growth in book value per share plus (2) the ratio of dividends declared per share to beginning book value per share. Management believes this non-GAAP measure is a useful supplement to GAAP information, providing a meaningful measure of long-term progress in creating shareholder value. It is intended to be all-inclusive regarding changes in book value per share, and uses originally reported book value per share in cases where book value per share has been adjusted, such as adoption of Accounting Standards Updates with a cumulative effect of a change in accounting.
•
Statutory accounting rules: For public reporting, insurance companies prepare financial statements in accordance with GAAP. However, insurers also must calculate certain data according to statutory accounting rules as defined in the NAIC's Accounting Practices and Procedures Manual, which may be, and has been, modified by various state insurance departments. Statutory data is publicly available, and various organizations use it to calculate aggregate industry data, study industry trends and compare insurance companies.
•
Written premium: Under statutory accounting rules, property casualty written premium is the amount recorded for policies issued and recognized on an annualized basis at the effective date of the policy. Management analyzes trends in written premium to assess business efforts. Earned premium, used in both statutory and GAAP accounting, is calculated ratably over the policy term. The difference between written and earned premium is unearned premium.



CINF Third-Quarter 2014 Supplemental Financial Data
3


Cincinnati Financial Corporation
Quick Reference
 
—
Third Quarter 2014
(all data shown is for the three months ended or as of September 30, 2014)
 
 
 
 
 
 
 
 
 
 
9/30/2014
 
Year over year change %
 
 
9/30/2014
 
Year over year change %
Revenues:
 
 
 
 
Benefits and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial lines net written premiums
$
704

 
(2
)
 
Commercial lines loss and loss expenses
$
428

 
2

Personal lines net written premiums
294

 
6

 
Personal lines loss and loss expenses
177

 
14

Excess & surplus lines net written premiums
39

 
15

 
Excess & surplus lines loss and loss expenses
17

 
0

   Property casualty net written premiums
1,037

 
1

 
Life and health contract holders' benefits incurred
64

 
31

Life and accident and health net written premiums
52

 
4

 
Underwriting, acquisition and insurance expenses
319

 
2

Annuity net written premiums
8

 
1

 
Interest expenses
13

 
0

   Life, annuity and accident and health net written premiums
60

 
4

 
Other operating expenses
3

 
0

Commercial lines net earned premiums
720

 
6

 
Total benefits & expenses
1,021

 
5

Personal lines net earned premiums
263

 
8

 
Income before income taxes
259

 
42

Excess & surplus lines net earned premiums
42

 
40

 
Total income tax
76

 
49

Property casualty net earned premiums
1,025

 
7

 
 
 
 
 
Fee revenue
3

 
50

 
Balance Sheet:
 
 
 
Life and accident and health net earned premiums
46

 
21

 
 
 
 
 
Investment income
138

 
4

 
Fixed maturity investments
$
9,522

 
 
Realized gains on investments
65

 
195

 
Equity securities
4,666

 
 
Other revenue
3

 
0

 
Other invested assets
67

 
 
Total revenues
1,280

 
11

 
  Total invested assets
$
14,255

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expense reserves
$
4,435

 
 
 
 
 
 
 
Life policy and investment contract reserves
2,484

 
 
Income:
 
 
 
 
Long-term debt and capital lease obligations
829

 
 
 
 
 
 
 
Shareholders' equity
6,376

 
 
Operating income
$
140

 
21

 
 
 
 
 
Net realized investment gains and losses
43

 
187

 
Key ratios:
 
 
 
Net income
183

 
40

 
 
 
 
 
 
 
 
 
 
Commercial lines GAAP combined ratio
90.7
%
 
 
 
 
 
 
 
Personal lines GAAP combined ratio
95.0

 
 
 
 
 
 
 
Excess & surplus lines GAAP combined ratio
70.2

 
 
 
 
 
 
 
Property casualty GAAP combined ratio
91.0

 
 
Per share (diluted):
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial lines STAT combined ratio
91.6
%
 
 
Operating income
$
0.85

 
21

 
Personal lines STAT combined ratio
93.7

 
 
Net realized investment gains and losses
0.26

 
189

 
Excess & surplus lines STAT combined ratio
75.8

 
 
Net income
1.11

 
41

 
Property casualty STAT combined ratio
91.3

 
 
Book value
39.01

 
10

 
 
 
 
 
Weighted average shares outstanding, in millions
165.0

 
0

 
Value creation ratio
1.8
%
 
 

CINF Third-Quarter 2014 Supplemental Financial Data
4


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Nine Months Ended September 30, 2014
 
 
 
 
 
 
 
(In millions)
CFC
CONSOL P&C
CLIC
CFC-I
ELIM
Total
Revenues
 
 
 
 
 
 
  Premiums earned:
 
 
 
 
 
 
    Property casualty
$
—

$
3,142

$
—

$
—

$
(1
)
$
3,141

    Life
—

—

186

—

—

186

    Accident health
—

—

5

—

—

5

    Premiums ceded
—

(132
)
(43
)
—

—

(175
)
      Total earned premium
—

3,010

148

—

(1
)
3,157

  Investment income
33

268

108

—

—

409

  Realized gain on investments
26

69

6

—

—

101

  Fee revenue
—

5

4

—

—

9

  Other revenue
12

1

—

5

(11
)
7

Total revenues
$
71

$
3,353

$
266

$
5

$
(12
)
$
3,683

 
 
 
 
 
 
 
Benefits & expenses
 
 
 
 
 
 
  Losses & policy benefits
$
—

$
2,032

$
228

$
—

$
(1
)
$
2,259

  Reinsurance recoveries
—

(27
)
(52
)
—

1

(78
)
  Underwriting, acquisition and insurance expenses
—

924

43

—

—

967

  Interest expense
39

—

—

1

—

40

  Other operating expenses
21

—

—

1

(12
)
10

Total expenses
$
60

$
2,929

$
219

$
2

$
(12
)
$
3,198

 
 
 
 
 
 
 
Income before income taxes
$
11

$
424

$
47

$
3

$
—

$
485

 
 
 
 
 
 
 
Provision (benefit) for income taxes
 
 
 
 
 
 
  Current operating income
$
(9
)
$
85

$
(7
)
$
1

$
—

$
70

  Capital gains/losses
9

25

2

—

—

36

  Deferred
(4
)
3

22

—

—

21

Total provision (benefit) for income taxes
$
(4
)
$
113

$
17

$
1

$
—

$
127

 
 
 
 
 
 
 
Operating income (loss)
$
(2
)
$
267

$
26

$
2

$
—

$
293

 
 
 
 
 
 
 
Net income - current year
$
15

$
311

$
30

$
2

$
—

$
358

 
 
 
 
 
 
 
Net income - prior year
$
5

$
349

$
38

$
2

$
1

$
395

*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding.
 
 
 


CINF Third-Quarter 2014 Supplemental Financial Data
5


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Three Months Ended September 30, 2014
 
 
 
 
 
 
 
(In millions)
CFC
CONSOL P&C
CLIC
CFC-I
ELIM
Total
Revenues
 
 
 
 
 
 
  Premiums earned:
 
 
 
 
 
 
    Property casualty
$
—

$
1,070

$
—

$
—

$
(1
)
$
1,069

    Life
—

—

59

—

—

59

    Accident health
—

—

2

—

—

2

    Premiums ceded
—

(45
)
(14
)
—

—

(59
)
      Total earned premium
—

1,025

47

—

(1
)
1,071

  Investment income
12

90

36

—

—

138

  Realized gain on investments
16

47

2

—

—

65

  Fee revenue
—

2

1

—

—

3

  Other revenue
5

—

—

2

(4
)
3

Total revenues
$
33

$
1,164

$
86

$
2

$
(5
)
$
1,280

 
 
 
 
 
 
 
Benefits & expenses
 
 
 
 
 
 
  Losses & policy benefits
$
—

$
635

$
80

$
—

$
(1
)
$
714

  Reinsurance recoveries
—

(13
)
(16
)
—

1

(28
)
  Underwriting, acquisition and insurance expenses
—

310

9

—

—

319

  Interest expense
12

—

—

1

—

13

  Other operating expenses
7

—

—

—

(4
)
3

Total expenses
$
19

$
932

$
73

$
1

$
(4
)
$
1,021

 
 
 
 
 
 
 
Income (loss) before income taxes
$
14

$
232

$
13

$
1

$
(1
)
$
259

 
 
 
 
 
 
 
Provision (benefit) for income taxes
 
 
 
 
 
 
  Current operating income
$
(3
)
$
51

$
(3
)
$
—

$
—

$
45

  Capital gains/losses
5

17

1

—

—

23

  Deferred
—

1

7

—

—

8

Total provision for income taxes
$
2

$
69

$
5

$
—

$
—

$
76

 
 
 
 
 
 
 
Operating income (loss)
$
1

$
133

$
7

$
1

$
(1
)
$
141

 
 
 
 
 
 
 
Net income (loss) - current year
$
12

$
163

$
8

$
1

$
(1
)
$
183

 
 
 
 
 
 
 
Net income - prior year
$
2

$
117

$
11

$
1

$
—

$
131

*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding.
 
 
 


CINF Third-Quarter 2014 Supplemental Financial Data
6


Cincinnati Financial Corporation Insurance Subsidiaries
Selected Balance Sheet Data
 
 
 
 
 
 
 
 
 
(In millions)
 
 
12/31/2014
9/30/2014
6/30/2014
3/31/2014
12/31/2013
9/30/2013
6/30/2013
3/31/2013
Cincinnati Insurance Consolidated
 
 
 
 
 
 
 
 
   Fixed maturities (fair value)

$
6,344

$
6,215

$
6,111

$
6,094

$
6,039

$
5,994

$
6,083

   Equities (fair value)

3,121

3,094

3,022

2,990

2,710

2,658

2,645

   Fixed maturities - pretax net unrealized gain

379

414

361

312

344

359

532

   Equities - pretax net unrealized gain

1,387

1,434

1,349

1,318

1,086

1,040

1,019

   Loss and loss expense reserves - STAT

4,112

4,129

4,037

3,945

3,919

3,888

3,826

   Equity - GAAP

5,480

5,481

5,384

5,324

5,188

5,143

5,288

   Surplus - STAT

4,364

4,332

4,308

4,325

4,173

4,142

4,131

 
 
 
 
 
 
 
 
 
The Cincinnati Life Insurance Company
 
 
 
 
 
 
 
 
   Fixed maturities (fair value)

$
3,102

$
3,091

$
2,989

$
2,946

$
2,906

$
2,900

$
2,979

   Equities (fair value)

8

8

14

13

13

13

18

   Fixed maturities - pretax net unrealized gain

195

225

186

148

169

181

285

   Equities - pretax net unrealized gain

3

3

6

6

6

6

8

   Equity - GAAP

893

901

867

833

835

828

869

   Surplus - STAT

228

224

232

247

256

272

268

 
 
 
 
 
 
 
 
 


CINF Third-Quarter 2014 Supplemental Financial Data
7


Consolidated Cincinnati Insurance Companies
Statutory Statements of Income
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
(Dollars in millions)
2014
2013
Change
% Change
2014
2013
Change
% Change
Underwriting income
 
 
 
 
 
 
 
 
Net premiums written
$
1,037

$
1,031

$
6

1

$
3,156

$
2,985

$
171

6

Unearned premiums increase
12

77

(65
)
(84
)
146

232

(86
)
(37
)
Earned premiums
$
1,025

$
954

$
71

7

$
3,010

$
2,753

$
257

9

 
 
 
 
 
 
 
 
 
Losses incurred
$
512

$
493

$
19

4

$
1,690

$
1,441

$
249

17

Allocated loss expenses incurred
52

42

10

24

142

86

56

65

Unallocated loss expenses incurred
58

58

—

nm

173

173

—

nm

Other underwriting expenses incurred
313

307

6

2

924

891

33

4

Workers compensation dividend incurred
4

4

—

nm

12

12

—

nm

 
 
 
 
 
 
 
 
 
     Total underwriting deductions
$
939

$
904

$
35

4

$
2,941

$
2,603

$
338

13

Net underwriting profit
$
86

$
50

$
36

72

$
69

$
150

$
(81
)
(54
)
 
 
 
 
 
 
 
 
 
Investment income
 
 
 
 
 
 
 
 
Gross investment income earned
$
92

$
91

$
1

1

$
276

$
268

$
8

3

Net investment income earned
91

89

2

2

272

263

9

3

Net realized capital gains
30

12

18

150

58

40

18

45

     Net investment gains (net of tax)
$
121

$
101

$
20

20

$
330

$
303

$
27

9

 
 
 
 
 
 
 
 
 
     Other income
$
2

$
1

$
1

100

$
5

$
4

$
1

25

 
 
 
 
 
 
 
 
 
Net income before federal income taxes
$
209

$
152

$
57

38

$
404

$
457

$
(53
)
(12
)
Federal and foreign income taxes incurred
$
49

$
43

$
6

14

$
89

$
124

$
(35
)
(28
)
     Net income (statutory)
$
160

$
109

$
51

47

$
315

$
333

$
(18
)
(5
)
*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding.
*nm - Not meaningful
*Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the
  appropriate regulatory bodies.

    

CINF Third-Quarter 2014 Supplemental Financial Data
8


Consolidated Cincinnati Insurance Companies
Losses Incurred Detail
(In millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
3/31/13
6/30/14
6/30/13
9/30/14
9/30/13
12/31/14
12/31/13
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000

$
7

$
11

$
—

$
7

$
5

$
11

$
—

$
12

$
11

$
19

$
16


$
23

Current accident year losses $1,000,000-$5,000,000

51

52

23

58

48

31

31

74

62

125

110


167

Large loss prior accident year reserve development

(6
)
17

10

(8
)
3

24

23

27

47

21

52


44

   Total large losses incurred

$
52

$
80

$
33

$
57

$
56

$
66

$
54

$
113

$
120

$
165

$
178


$
234

Losses incurred but not reported

17

(17
)
21

50

22

23

27

5

50

22

72


123

Other losses excluding catastrophe losses

432

436

427

358

361

349

344

863

694

1,295

1,054


1,412

Catastrophe losses

11

112

86

29

54

75

10

197

84

208

137


166

   Total losses incurred

$
512

$
611

$
567

$
494

$
493

$
513

$
435

$
1,178

$
948

$
1,690

$
1,441


$
1,935

Commercial Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000

$
7

$
11

$
—

$
7

$
5

$
11

$
—

$
12

$
11

$
19

$
16


$
23

Current accident year losses $1,000,000-$5,000,000

45

47

18

43

35

28

27

64

55

109

89


132

Large loss prior accident year reserve development

(7
)
15

10

(5
)
4

14

23

25

37

18

41


36

   Total large losses incurred

$
45

$
73

$
28

$
45

$
44

$
53

$
50

$
101

$
103

$
146

$
146


$
191

Losses incurred but not reported

8

(35
)
22

35

41

28

22

(12
)
50

(4
)
91


125

Other losses excluding catastrophe losses

282

292

282

241

227

228

225

574

454

856

682


923

Catastrophe losses

7

59

58

10

36

45

2

116

46

123

82


93

   Total losses incurred

$
342

$
389

$
390

$
331

$
348

$
354

$
299

$
779

$
653

$
1,121

$
1,001


$
1,332

Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—


$
—

Current accident year losses $1,000,000-$5,000,000

6

4

4

14

12

3

3

8

6

14

19


32

Large loss prior accident year reserve development

2

2

—

(3
)
—

8

—

2

8

4

10


7

   Total large losses incurred

$
8

$
6

$
4

$
11

$
12

$
11

$
3

$
10

$
14

$
18

$
29


$
39

Losses incurred but not reported

3

9

(5
)
9

(27
)
(5
)
—

4

(5
)
7

(32
)

(22
)
Other losses excluding catastrophe losses

144

138

138

116

130

109

113

276

222

420

349


466

Catastrophe losses

4

52

27

19

17

29

8

79

37

83

54


72

   Total losses incurred

$
159

$
205

$
164

$
155

$
132

$
144

$
124

$
369

$
268

$
528

$
400


$
555

Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—


$
—

Current accident year losses $1,000,000-$5,000,000

—

1

1

1

1

—

1

2

1

2

2


3

Large loss prior accident year reserve development

(1
)
—

—

—

(1
)
2

—

—

2

(1
)
1


1

   Total large losses incurred

$
(1
)
$
1

$
1

$
1

$
—

$
2

$
1

$
2

$
3

$
1

$
3


$
4

Losses incurred but not reported

6

9

4

6

8

—

5

13

5

19

13


20

Other losses excluding catastrophe losses

6

6

7

1

4

12

6

13

18

19

23


23

Catastrophe losses

—

1

1

—

1

1

—

2

1

2

1


1

   Total losses incurred

$
11

$
17

$
13

$
8

$
13

$
15

$
12

$
30

$
27

$
41

$
40


$
48

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. The sum of quarterly amounts may not equal the full year as each is computed independently.


CINF Third-Quarter 2014 Supplemental Financial Data
9


Consolidated Cincinnati Insurance Companies
Loss Ratio Detail
 
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
3/31/13
6/30/14
6/30/13
9/30/14
9/30/13
12/31/14
12/31/13
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000

0.7
 %
1.1
 %
—
 %
0.7
 %
0.6
 %
1.2
 %
—
%
0.6
 %
0.6
 %
0.6
 %
0.6
 %
 
0.6
 %
Current accident year losses $1,000,000-$5,000,000

4.8

5.0

2.3

6.0

5.0

3.5

3.4

3.8

3.4

4.2

4.0

 
4.5

Large loss prior accident year reserve development

(0.5
)
1.7

1.1

(0.8
)
0.2

2.6

2.7

1.4

2.7

0.7

1.8

 
1.2

   Total large losses incurred

5.0
 %
7.8
 %
3.4
 %
5.9
 %
5.8
 %
7.3
 %
6.1
%
5.8
 %
6.7
 %
5.5
 %
6.4
 %
 
6.3
 %
Losses incurred but not reported

1.7

(1.6
)
2.2

5.3

2.2

2.5

3.1

0.2

2.8

0.8

2.6

 
3.3

Other losses excluding catastrophe losses

42.3

43.4

43.6

37.4

38.2

38.3

38.6

43.5

38.5

43.0

38.3

 
38.0

Catastrophe losses

1.0

11.1

8.7

3.0

5.5

8.2

1.1

9.9

4.7

6.9

5.0

 
4.5

   Total losses incurred

50.0
 %
60.7
 %
57.9
 %
51.6
 %
51.7
 %
56.3
 %
48.9
%
59.4
 %
52.7
 %
56.2
 %
52.3
 %
 
52.1
 %
Commercial Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000

1.0
 %
1.6
 %
—
 %
1.0
 %
0.8
 %
1.7
 %
—
%
0.8
 %
0.9
 %
0.9
 %
0.8
 %
 
0.9
 %
Current accident year losses $1,000,000-$5,000,000

5.9

6.5

2.6

6.2

5.1

4.4

4.2

4.6

4.3

5.1

4.5

 
5.0

Large loss prior accident year reserve development

(0.9
)
2.1

1.4

(0.7
)
0.5

2.2

3.7

1.8

2.8

0.9

2.2

 
1.4

   Total large losses incurred

6.0
 %
10.2
 %
4.0
 %
6.5
 %
6.4
 %
8.3
 %
7.9
%
7.2
 %
8.0
 %
6.9
 %
7.5
 %
 
7.3
 %
Losses incurred but not reported

1.1

(4.8
)
3.2

5.1

6.0

4.3

3.5

(0.9
)
3.9

(0.2
)
4.6

 
4.8

Other losses excluding catastrophe losses

39.6

41.0

40.6

35.6

33.6

35.4

35.6

40.8

35.7

40.2

34.8

 
35.0

Catastrophe losses

0.8

8.3

8.3

1.6

5.2

6.9

0.3

8.3

3.6

5.8

4.2

 
3.5

   Total losses incurred

47.5
 %
54.7
 %
56.1
 %
48.8
 %
51.2
 %
54.9
 %
47.3
%
55.4
 %
51.2
 %
52.7
 %
51.1
 %
 
50.6
 %
Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000

—
 %
—
 %
—
 %
—
 %
—
 %
—
 %
—
%
—
 %
—
 %
—
 %
—
 %
 
—
 %
Current accident year losses $1,000,000-$5,000,000

2.5

1.7

1.4

5.7

5.0

1.3

1.3

1.5

1.3

1.8

2.6

 
3.4

Large loss prior accident year reserve development

0.8

0.6

0.3

(1.2
)
(0.2
)
3.3

—

0.5

1.7

0.7

1.3

 
0.7

   Total large losses incurred

3.3
 %
2.3
 %
1.7
 %
4.5
 %
4.8
 %
4.6
 %
1.3
%
2.0
 %
3.0
 %
2.5
 %
3.9
 %
 
4.1
 %
Losses incurred but not reported

1.3

3.5

(2.0
)
3.9

(11.1
)
(2.2
)
0.1

0.8

(1.1
)
0.9

(4.5
)
 
(2.3
)
Other losses excluding catastrophe losses

54.1

53.6

54.5

46.6

53.6

45.8

48.9

54.0

47.4

54.1

49.1

 
48.5

Catastrophe losses

1.7

20.0

10.6

7.6

6.7

12.4

3.3

15.4

7.9

10.7

7.5

 
7.5

   Total losses incurred

60.4
 %
79.4
 %
64.8
 %
62.6
 %
54.0
 %
60.6
 %
53.6
%
72.2
 %
57.2
 %
68.2
 %
56.0
 %
 
57.8
 %
Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000

—
 %
—
 %
—
 %
—
 %
—
 %
—
 %
—
%
—
 %
—
 %
—
 %
—
 %
 
—
 %
Current accident year losses $1,000,000-$5,000,000

—

3.1

3.2

3.3

3.6

—

4.2

3.1

2.0

1.9

2.6

 
2.7

Large loss prior accident year reserve development

(1.3
)
—

(0.3
)
(0.1
)
(4.3
)
7.8

—

(0.1
)
4.0

(0.5
)
1.0

 
0.8

   Total large losses incurred

(1.3
)%
3.1
 %
2.9
 %
3.2
 %
(0.7
)%
7.8
 %
4.2
%
3.0
 %
6.0
 %
1.4
 %
3.6
 %
 
3.5
 %
Losses incurred but not reported

14.6

25.7

13.1

19.7

25.9

1.0

19.6

19.6

10.1

17.7

15.7

 
16.8

Other losses excluding catastrophe losses

15.3

15.1

21.6

3.5

15.9

41.4

22.9

18.3

32.5

17.1

26.6

 
20.3

Catastrophe losses

(0.7
)
2.7

3.0

(1.7
)
2.4

1.9

0.4

2.8

1.1

1.4

1.6

 
0.7

   Total losses incurred

27.9
 %
46.6
 %
40.6
 %
24.7
 %
43.5
 %
52.1
 %
47.1
%
43.7
 %
49.7
 %
37.6
 %
47.5
 %
 
41.3
 %
*Certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts.


CINF Third-Quarter 2014 Supplemental Financial Data
10


Consolidated Cincinnati Insurance Companies
Loss Claim Count Detail
 
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
3/31/13
6/30/14
6/30/13
9/30/14
9/30/13
12/31/14
12/31/13
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year reported claim count greater
   than $5,000,000

1

2

—

1

1

2

—

2

2

3

3

 
4

Current accident year reported claim count
   $1,000,000 - $5,000,000

31

34

15

31

29

21

18

52

41

83

72

 
108

Prior accident year reported claim count on
   large losses

13

10

8

10

5

14

20

18

35

26

41

 
47

   Non-Catastrophe reported claim count on
      large losses total

45

46

23

42

35

37

38

72

78

112

116

 
159

Commercial Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year reported claim count greater
than $5,000,000

1

2

—

1

1

2

—

2

2

3

3

 
4

Current accident year reported claim count
$1,000,000 - $5,000,000

24

30

11

20

21

18

14

43

34

68

56

 
80

Prior accident year reported claim count on
large losses

11

9

7

10

4

12

17

17

30

23

35

 
42

   Non-Catastrophe reported claim count on
large losses total

36

41

18

31

26

32

31

62

66

94

94

 
126

Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year reported claim count greater
than $5,000,000

—

—

—

—

—

—

—

—

—

—

—

 
—

Current accident year reported claim count
$1,000,000 - $5,000,000

6

3

3

10

7

3

3

7

6

13

14

 
25

Prior accident year reported claim count on
large losses

2

1

1

—

1

—

3

1

3

3

5

 
4

   Non-Catastrophe reported claim count on
large losses total

8

4

4

10

8

3

6

8

9

16

19

 
29

Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year reported claim count greater
than $5,000,000

—

—

—

—

—

—

—

—

—

—

—

 
—

Current accident year reported claim count
$1,000,000 - $5,000,000

1

1

1

1

1

—

1

2

1

2

2

 
3

Prior accident year reported claim count on
large losses

—

—

—

—

—

2

—

—

2

—

1

 
1

   Non-Catastrophe reported claim count on
large losses total

1

1

1

1

1

2

1

2

3

2

3

 
4

*The sum of quarterly amounts may not equal the full year as each is computed independently.


CINF Third-Quarter 2014 Supplemental Financial Data
11


 Consolidated Cincinnati Insurance Companies
Agency Direct Written Premiums by Agency State by Line of Business for the Nine Months Ended September 30, 2014
 
Commercial Lines
 
 Personal Lines
 
E & S
 
Consolidated
Comm'l
Change
%
Personal
Change
%
E & S
Change
%
Consol
Change
%
Risk
State
Comm
Casualty
Comm
Property
Comm
Auto
Workers'
Comp
Spec
Packages
Mgmt Liab & Surety
Mach &
Equipment
 
Personal
Auto
Home Owner
Other
Personal
 
All
Lines
 
2014
2013
 
 
 
Total
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 OH
$
111.1

$
93.8

$
57.5

$
—

$
6.9

$
18.7

$
5.5

 
$
99.4

$
89.3

$
27.6

 
$
9.8

 
$
519.6

$
523.4

(2.9
)
2.4

9.6

(0.5
)
 IL
48.6

40.4

23.0

42.4

5.3

5.7

2.6

 
25.0

23.8

6.7

 
8.2

 
231.7

228.2

0.1

2.3

38.1

1.6

 IN
41.1

37.8

22.4

24.1

3.0

5.0

2.5

 
26.3

29.1

6.6

 
8.1

 
206.0

204.1

0.1

1.7

(3.7
)
0.5

 PA
45.6

33.4

29.9

38.7

4.0

5.1

2.2

 
9.9

7.7

3.0

 
4.9

 
184.4

178.1

2.5

8.4

22.9

3.6

 GA
28.1

27.6

20.1

10.4

4.2

5.4

1.4

 
29.9

31.3

8.2

 
6.8

 
173.4

162.3

8.0

5.9

0.5

6.8

 NC
32.9

33.8

17.3

14.9

6.2

6.3

2.0

 
23.0

17.8

5.6

 
4.9

 
164.7

149.5

7.6

15.1

29.7

10.2

 MI
34.0

26.2

16.8

16.1

3.9

5.6

2.1

 
29.4

21.8

3.8

 
4.9

 
164.6

149.6

6.9

16.8

5.5

10.0

 TN
26.9

26.9

16.1

8.9

5.1

4.3

1.7

 
13.6

16.1

4.3

 
3.2

 
127.1

118.2

5.1

12.1

41.8

7.6

 KY
19.9

24.6

14.3

2.8

2.8

2.3

1.3

 
21.2

20.1

4.8

 
3.6

 
117.7

113.7

2.6

5.5

(3.1
)
3.5

 AL
19.2

23.5

9.1

1.0

5.0

3.2

1.3

 
15.5

25.5

5.3

 
5.5

 
114.1

103.4

12.3

5.5

33.9

10.3

 VA
26.0

21.7

16.7

14.6

2.1

5.5

1.2

 
8.6

7.7

2.5

 
4.1

 
110.7

106.5

2.6

6.6

25.3

4.0

 WI
23.4

18.7

11.4

24.5

1.9

2.7

1.7

 
6.9

7.3

2.8

 
2.7

 
104.0

105.7

(2.4
)
(0.2
)
19.9

(1.5
)
 MN
22.3

17.0

8.5

7.6

1.6

2.3

1.1

 
13.4

13.5

4.1

 
3.3

 
94.7

89.3

2.2

13.2

23.7

6.3

 TX
33.8

22.0

21.1

1.3

0.5

1.7

1.6

 
—

—

—

 
11.6

 
93.6

83.0

9.8

(11.2
)
39.3

12.7

 MO
21.4

22.5

12.0

10.4

3.4

2.0

1.6

 
4.8

6.9

1.4

 
4.8

 
91.2

87.9

2.5

5.8

19.7

3.8

 IA
14.3

15.1

6.4

15.0

1.4

3.4

1.2

 
3.8

4.5

1.4

 
1.7

 
68.2

71.4

(6.0
)
2.2

14.5

(4.5
)
 MD
15.9

9.0

11.8

9.0

1.2

2.1

0.6

 
4.6

3.8

1.1

 
1.8

 
60.9

55.5

5.8

32.0

25.9

9.7

 NY
23.4

11.5

8.7

2.3

0.4

2.2

0.9

 
2.7

1.2

0.3

 
2.0

 
55.6

54.3

(2.7
)
103.5

34.9

2.2

 FL
17.9

13.2

6.1

0.9

0.3

1.6

0.4

 
4.9

4.9

1.1

 
3.9

 
55.2

55.3

10.1

(33.0
)
55.5

(0.5
)
 AR
8.1

13.5

5.7

1.9

2.9

1.4

0.9

 
6.4

7.3

1.7

 
2.3

 
52.1

47.4

4.2

20.0

33.8

9.5

 AZ
12.2

7.6

9.8

5.1

0.6

1.0

0.2

 
3.4

2.5

0.9

 
1.7

 
45.0

38.9

12.6

27.2

48.5

15.7

 SC
9.4

8.5

6.3

2.8

1.6

1.5

0.4

 
6.0

4.0

1.1

 
1.7

 
43.3

40.1

1.4

29.5

29.2

8.3

 KS
8.2

10.2

4.7

5.3

1.2

1.5

0.6

 
4.0

5.7

1.1

 
0.8

 
43.3

43.8

(1.6
)
1.5

(15.4
)
(1.2
)
 UT
13.3

6.4

8.6

0.5

0.6

1.9

0.4

 
6.0

2.9

0.7

 
1.6

 
42.9

38.6

11.5

7.7

11.0

10.6

 CO
11.8

7.3

8.0

0.4

0.1

0.9

0.5

 
—

0.2

—

 
3.6

 
32.8

26.0

20.7

11.3

98.5

26.0

 MT
11.5

7.0

6.3

0.1

0.5

0.5

0.5

 
2.1

2.1

0.5

 
0.6

 
31.7

29.4

7.1

11.2

20.5

7.9

 NE
7.0

7.3

3.6

7.1

0.7

1.1

0.5

 
0.6

0.9

0.2

 
1.5

 
30.5

28.2

6.0

2.7

47.5

7.2

 ID
9.1

5.8

5.6

0.2

0.5

0.8

0.4

 
2.4

1.6

0.5

 
1.0

 
27.9

24.9

11.0

17.8

16.2

12.2

 WV
7.1

6.8

5.3

1.9

0.8

0.5

0.4

 
—

0.4

0.1

 
2.2

 
25.5

24.7

2.0

(2.4
)
17.9

3.2

 OR
6.3

4.0

4.4

0.1

—

1.0

0.4

 
1.1

0.5

0.2

 
2.9

 
20.9

12.6

63.2

142.5

43.4

64.5

 VT
3.2

3.5

2.3

5.0

0.6

1.1

0.2

 
1.1

1.2

0.3

 
0.7

 
19.2

19.8

(4.6
)
4.0

6.9

(3.2
)
 ND
6.5

4.5

3.4

—

0.7

0.7

0.3

 
0.6

0.7

0.2

 
0.2

 
17.8

17.8

(0.2
)
11.5

(9.7
)
0.5

 WA
5.5

3.1

3.4

—

—

1.1

0.3

 
—

—

—

 
1.2

 
14.6

12.6

17.3

3.6

3.0

16.0

 NH
3.0

2.4

1.3

2.5

0.4

0.4

0.2

 
1.4

1.3

0.4

 
0.5

 
13.8

13.6

5.2

(2.2
)
(23.8
)
2.0

 NM
4.2

2.4

2.7

0.7

0.1

1.0

0.1

 
—

—

—

 
0.7

 
11.9

9.5

25.6

nm

40.3

26.4

 SD
2.6

2.8

1.6

2.6

0.4

0.5

0.2

 
—

—

—

 
0.4

 
11.1

9.9

13.0

(83.3
)
4.3

12.4

 DE
3.1

2.1

2.1

2.1

0.3

0.3

0.2

 
—

—

—

 
0.2

 
10.4

9.4

10.9

11.6

46.3

11.6

 CT
2.8

2.4

1.5

0.9

0.1

0.2

0.2

 
0.2

0.2

0.1

 
0.3

 
8.9

5.3

60.4

nm

73.3

69.1

 WY
1.6

1.6

0.8

—

—

0.2

0.1

 
—

—

—

 
0.4

 
4.7

3.8

27.0

1.1

20.3

26.2

 All Other
4.1

1.9

2.8

4.7

0.4

1.2

0.3

 
0.1

(0.1
)
(0.1
)
 
1.1

 
16.4

14.9

10.7

25.1

(8.4
)
9.8

 Total
$
746.4

$
629.8

$
419.4

$
288.8

$
71.7

$
103.9

$
40.2

 
$
378.3

$
363.7

$
98.5

 
$
121.4

 
$
3,262.1

$
3,110.6

3.6

6.4

21.4

4.9

 Other Direct
—

2.0

3.5

5.1

—

—

—

 
7.4

0.2

—

 
—

 
18.2

13.8

43.0

18.6

nm

31.9

 Total Direct
$
746.4

$
631.8

$
422.9

$
293.9

$
71.7

$
103.9

$
40.2

 
$385.7
$
363.9

$
98.5

 
$
121.4

 
$
3,280.3

$
3,124.4

3.7

6.5

21.4

5.0

*Dollar amounts shown are rounded to the nearest hundred thousand; certain amounts may not add due to rounding. Percentage changes are calculated based on whole dollar amounts.
*nm - Not meaningful

CINF Third-Quarter 2014 Supplemental Financial Data
12


Quarterly Property Casualty Data - Commercial Lines
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
3/31/13
6/30/14
6/30/13
9/30/14
9/30/13
12/31/14
12/31/13
Commercial casualty:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
228

$
249

$
258

$
206

$
232

$
222

$
237

$
507

$
459

$
735

$
691


$
897

Earned premiums

237

234

224

220

221

211

204

458

415

695

636


856

Current accident year before catastrophe losses

60.2
 %
61.7
 %
56.3
 %
54.2
 %
53.5
 %
55.7
 %
60.8
 %
59.1
 %
58.2
 %
59.4
 %
56.6
 %

56.0
 %
Current accident year catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

Prior accident years before catastrophe losses

(3.6
)
(10.5
)
3.6

1.9

(8.4
)
(15.1
)
(11.5
)
(3.6
)
(13.3
)
(3.6
)
(11.6
)

(8.2
)
Prior accident years catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

   Total loss and loss expense ratio

56.6
 %
51.2
 %
59.9
 %
56.1
 %
45.1
 %
40.6
 %
49.3
 %
55.5
 %
44.9
 %
55.8
 %
45.0
 %

47.8
 %
Commercial property:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
194

$
197

$
193

$
157

$
186

$
164

$
166

$
390

$
330

$
584

$
516


$
673

Earned premiums

186

180

171

163

161

152

147

351

299

537

460


623

Current accident year before catastrophe losses

54.3
 %
50.8
 %
53.4
 %
51.3
 %
49.6
 %
52.9
 %
48.9
 %
52.1
 %
50.9
 %
52.9
 %
50.5
 %

50.7
 %
Current accident year catastrophe losses

5.2

25.8

27.7

9.0

19.1

28.4

2.8

26.7

15.8

19.3

17.0


14.9

Prior accident years before catastrophe losses

(3.1
)
(9.8
)
(0.6
)
(2.5
)
1.4

(6.0
)
2.0

(5.3
)
(2.0
)
(4.6
)
(0.9
)

(1.3
)
Prior accident years catastrophe losses

(1.3
)
(2.3
)
(0.9
)
(1.9
)
(2.0
)
(3.2
)
(1.9
)
(1.6
)
(2.6
)
(1.5
)
(2.4
)

(2.3
)
   Total loss and loss expense ratio

55.1
 %
64.5
 %
79.6
 %
55.9
 %
68.1
 %
72.1
 %
51.8
 %
71.9
 %
62.1
 %
66.1
 %
64.2
 %

62.0
 %
Commercial auto:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
128

$
144

$
145

$
117

$
128

$
127

$
135

$
289

$
262

$
417

$
390


$
507

Earned premiums

133

132

126

124

124

117

114

258

231

391

355


479

Current accident year before catastrophe losses

69.1
 %
72.1
 %
68.0
 %
70.6
 %
64.3
 %
76.3
 %
59.6
 %
70.0
 %
68.1
 %
69.8
 %
66.7
 %

67.8
 %
Current accident year catastrophe losses

(0.6
)
4.1

—

(0.1
)
0.9

1.5

0.4

2.1

1.0

1.2

0.9


0.7

Prior accident years before catastrophe losses

9.3

9.0

(0.2
)
3.1

(0.4
)
(3.2
)
2.1

4.5

(0.7
)
6.1

(0.5
)

0.4

Prior accident years catastrophe losses

—

—

(0.2
)
—

(0.2
)
(0.3
)
(0.2
)
(0.1
)
(0.2
)
(0.1
)
(0.2
)

(0.2
)
   Total loss and loss expense ratio

77.8
 %
85.2
 %
67.6
 %
73.6
 %
64.6
 %
74.3
 %
61.9
 %
76.5
 %
68.2
 %
77.0
 %
66.9
 %

68.7
 %
Workers' compensation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
86

$
92

$
106

$
86

$
90

$
85

$
113

$
198

$
198

$
284

$
288


$
374

Earned premiums

93

95

92

95

95

87

88

187

175

280

270


365

Current accident year before catastrophe losses

75.0
 %
83.2
 %
76.8
 %
76.9
 %
78.6
 %
84.8
 %
71.8
 %
80.0
 %
78.3
 %
78.4
 %
78.4
 %

78.0
 %
Current accident year catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

Prior accident years before catastrophe losses

(16.1
)
(21.2
)
(10.3
)
(0.5
)
9.3

(17.8
)
(8.0
)
(15.8
)
(12.9
)
(15.9
)
(5.1
)

(3.9
)
Prior accident years catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

   Total loss and loss expense ratio

58.9
 %
62.0
 %
66.5
 %
76.4
 %
87.9
 %
67.0
 %
63.8
 %
64.2
 %
65.4
 %
62.5
 %
73.3
 %

74.1
 %
Specialty package:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
19

$
21

$
27

$
30

$
36

$
36

$
40

$
48

$
76

$
67

$
112


$
142

Earned premiums

27

30

36

36

38

37

39

66

76

93

114


150

Current accident year before catastrophe losses

63.7
 %
76.0
 %
63.9
 %
45.0
 %
56.2
 %
80.0
 %
73.5
 %
69.5
 %
76.7
 %
67.8
 %
69.9
 %

63.9
 %
Current accident year catastrophe losses

5.3

42.2

39.9

2.8

22.9

16.1

6.4

40.9

11.2

30.7

15.1


12.1

Prior accident years before catastrophe losses

(3.3
)
(13.0
)
(6.0
)
5.2

9.0

(3.3
)
(2.5
)
(9.2
)
(2.8
)
(7.5
)
1.1


2.1

Prior accident years catastrophe losses

(2.1
)
1.9

(3.0
)
(2.4
)
(0.1
)
(0.6
)
(3.4
)
(0.7
)
(2.0
)
(1.1
)
(1.4
)

(1.6
)
   Total loss and loss expense ratio

63.6
 %
107.1
 %
94.8
 %
50.6
 %
88.0
 %
92.2
 %
74.0
 %
100.5
 %
83.1
 %
89.9
 %
84.7
 %

76.5
 %
Management liability and surety:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
36

$
32

$
30

$
28

$
34

$
33

$
26

$
62

$
59

$
98

$
93


$
121

Earned premiums

32

31

31

30

30

30

29

62

59

94

89


119

Current accident year before catastrophe losses

50.9
 %
58.0
 %
37.4
 %
54.4
 %
57.1
 %
60.1
 %
44.5
 %
47.7
 %
52.4
 %
48.7
 %
54.0
 %

54.1
 %
Current accident year catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

Prior accident years before catastrophe losses

(12.4
)
5.8

19.8

(20.8
)
(16.3
)
4.8

60.8

12.8

32.4

4.3

15.9


6.6

Prior accident years catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

   Total loss and loss expense ratio

38.5
 %
63.8
 %
57.2
 %
33.6
 %
40.8
 %
64.9
 %
105.3
 %
60.5
 %
84.8
 %
53.0
 %
69.9
 %

60.7
 %
Machinery and equipment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
13

$
13

$
12

$
12

$
13

$
11

$
11

$
25

$
22

$
38

$
35


$
47

Earned premiums

12

12

12

12

11

11

10

24

21

36

32


44

Current accident year before catastrophe losses

18.5
 %
18.2
 %
20.9
 %
29.6
 %
26.7
 %
45.8
 %
15.0
 %
19.6
 %
30.5
 %
19.2
 %
29.2
 %

29.3
 %
Current accident year catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

Prior accident years before catastrophe losses

7.1

(7.0
)
(11.0
)
1.1

(1.1
)
(4.9
)
8.0

(9.0
)
1.5

(3.5
)
0.6


0.7

Prior accident years catastrophe losses

—


—

—

—

—

—

—

—

—

—


—

   Total loss and loss expense ratio

25.6
 %
11.2
 %
9.9
 %
30.7
 %
25.6
 %
40.9
 %
23.0
 %
10.6
 %
32.0
 %
15.7
 %
29.8
 %

30.0
 %
*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not equal the full year as each is computed independently.

CINF Third-Quarter 2014 Supplemental Financial Data
13


Quarterly Property Casualty Data - Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
3/31/13
6/30/14
6/30/13
9/30/14
9/30/13
12/31/14
12/31/13
Personal auto:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
135

$
133

$
107

$
107

$
128

$
125

$
100

$
240

$
225

$
375

$
353


$
460

Earned premiums

121

117

116

115

112

109

107

233

216

354

328


443

Current accident year before catastrophe losses

73.9
 %
80.5
 %
79.5
 %
73.2
 %
71.7
 %
85.4
 %
66.9
 %
80.1
 %
76.3
 %
77.9
 %
74.7
 %

74.3
 %
Current accident year catastrophe losses

1.1

4.9

0.5

0.4

1.3

1.4

1.4

2.7

1.4

2.2

1.4


1.1

Prior accident years before catastrophe losses

2.0

(1.7
)
(3.4
)
2.7

(0.4
)
(10.2
)
7.9

(2.6
)
(1.2
)
(1.0
)
(0.9
)

—

Prior accident years catastrophe losses

—

(0.2
)
(0.4
)
—

(0.4
)
(0.4
)
(0.3
)
(0.3
)
(0.4
)
(0.2
)
(0.4
)

(0.3
)
   Total loss and loss expense ratio

77.0
 %
83.5
 %
76.2
 %
76.3
 %
72.2
 %
76.2
 %
75.9
 %
79.9
 %
76.1
 %
78.9
 %
74.8
 %

75.1
 %
Homeowner:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
123

$
128

$
98

$
105

$
118

$
116

$
89

$
226

$
205

$
349

$
323


$
428

Earned premiums

110

111

109

105

103

99

96

220

195

330

298


403

Current accident year before catastrophe losses

51.1
 %
59.5
 %
61.3
 %
52.5
 %
55.2
 %
50.5
 %
40.6
 %
60.4
 %
45.6
 %
57.4
 %
48.9
 %

49.9
 %
Current accident year catastrophe losses

4.8

41.5

28.3

16.1

18.7

30.1

9.4

35.0

19.9

25.0

19.5


18.6

Prior accident years before catastrophe losses

(0.7
)
3.6

(6.5
)
0.2

(3.2
)
(7.4
)
(0.7
)
(1.4
)
(4.1
)
(1.2
)
(3.8
)

(2.8
)
Prior accident years catastrophe losses

(1.2
)
(0.9
)
(5.4
)
0.6

(4.2
)
(2.0
)
(2.4
)
(3.2
)
(2.2
)
(2.6
)
(2.9
)

(2.0
)
   Total loss and loss expense ratio

54.0
 %
103.7
 %
77.7
 %
69.4
 %
66.5
 %
71.2
 %
46.9
 %
90.8
 %
59.2
 %
78.6
 %
61.7
 %

63.7
 %
Other personal:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
36

$
33

$
26

$
27

$
32

$
32

$
26

$
59

$
58

$
95

$
90


$
117

Earned premiums

32

30

29

29

29

29

28

59

57

91

86


115

Current accident year before catastrophe losses

59.3
 %
42.3
 %
46.5
 %
57.2
 %
56.3
 %
52.5
 %
56.7
 %
44.3
 %
54.5
 %
49.6
 %
55.2
 %

55.7
 %
Current accident year catastrophe losses

0.4

7.9

7.8

3.1

5.5

4.3

1.5

7.8

2.9

5.2

3.8


3.6

Prior accident years before catastrophe losses

17.3

(5.4
)
(1.9
)
(2.1
)
(39.8
)
(17.8
)
(1.5
)
(3.6
)
(9.5
)
3.8

(19.9
)

(15.4
)
Prior accident years catastrophe losses

(0.4
)
(0.5
)
0.2

0.2

(1.6
)
(0.9
)
(1.2
)
(0.1
)
(1.1
)
(0.2
)
(1.3
)

(0.9
)
   Total loss and loss expense ratio

76.6
 %
44.3
 %
52.6
 %
58.4
 %
20.4
 %
38.1
 %
55.5
 %
48.4
 %
46.8
 %
58.4
 %
37.8
 %

43.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly Property Casualty Data - Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
3/31/13
6/30/14
6/30/13
9/30/14
9/30/13
12/31/14
12/31/13
Excess & Surplus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
39

$
40

$
35

$
34

$
34

$
33

$
27

$
75

$
60

$
114

$
94


$
128

Earned premiums

42

34

33

31

30

28

27

67

55

109

85


116

Current accident year before catastrophe losses

57.8
 %
75.4
 %
80.6
 %
62.6
 %
67.2
 %
65.7
 %
73.6
 %
77.9
 %
69.6
 %
70.2
 %
68.7
 %

67.1
 %
Current accident year catastrophe losses

(0.7
)
2.3

3.0

(1.9
)
3.4

0.9

0.1

2.6

0.6

1.4

1.6


0.7

Prior accident years before catastrophe losses

(15.4
)
(21.3
)
(27.1
)
(19.9
)
(13.7
)
(0.7
)
(8.8
)
(24.1
)
(4.7
)
(20.8
)
(7.9
)

(11.2
)
Prior accident years catastrophe losses

0.1

0.6

0.1

0.2

(0.9
)
1.0

0.3

0.4

0.6

0.2

0.1


0.1

   Total loss and loss expense ratio

41.8
 %
57.0
 %
56.6
 %
41.0
 %
56.0
 %
66.9
 %
65.2
 %
56.8
 %
66.1
 %
51.0
 %
62.5
 %

56.7
 %
*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not equal the full year as each is computed independently


CINF Third-Quarter 2014 Supplemental Financial Data
14


Cincinnati Insurance Companies Consolidated
Loss and Loss Expense Analysis
(In millions)
 
 
 
 
 
 
 
Change in
 
Change in
 
Change in
 
Total
 
 
 
 
 
Loss
 
 
 
Paid
 
Paid loss
 
Total
 
case
 
IBNR
 
loss expense
 
change in
 
Case
 
IBNR
 
expense
 
Total
 
losses
 
expense
 
paid
 
reserves
 
reserves
 
reserves
 
reserves
 
incurred
 
incurred
 
incurred
 
incurred
Gross loss and loss expense incurred for the nine months ended September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
255

 
$
109

 
$
364

 
$
25

 
$
4

 
$
8

 
$
37

 
$
280

 
$
4

 
$
117

 
$
401

  Commercial property
 
321

 
27

 
348

 
52

 
(45
)
 
—

 
7

 
373

 
(45
)
 
27

 
355

  Commercial auto
 
219

 
37

 
256

 
23

 
18

 
6

 
47

 
242

 
18

 
43

 
303

  Workers' compensation
 
150

 
29

 
179

 
(11
)
 
24

 
(4
)
 
9

 
139

 
24

 
25

 
188

  Specialty packages
 
74

 
13

 
87

 
10

 
(11
)
 
(3
)
 
(4
)
 
84

 
(11
)
 
10

 
83

  Management liability and surety
 
50

 
12

 
62

 
(29
)
 
11

 
3

 
(15
)
 
21

 
11

 
15

 
47

  Machinery and equipment
 
7

 
1

 
8

 
2

 
(5
)
 
—

 
(3
)
 
9

 
(5
)
 
1

 
5

    Total commercial lines
 
1,076

 
228

 
1,304

 
72

 
(4
)
 
10

 
78

 
1,148

 
(4
)
 
238

 
1,382

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
221

 
37

 
258

 
14

 
6

 
3

 
23

 
235

 
6

 
40

 
281

  Homeowners
 
232

 
21

 
253

 
10

 
(4
)
 
—

 
6

 
242

 
(4
)
 
21

 
259

  Other personal
 
39

 
3

 
42

 
6

 
5

 
—

 
11

 
45

 
5

 
3

 
53

    Total personal lines
 
492

 
61

 
553

 
30

 
7

 
3

 
40

 
522

 
7

 
64

 
593

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty & property
 
14

 
9

 
23

 
8

 
19

 
6

 
33

 
22

 
19

 
15

 
56

    Total excess & surplus lines
 
14

 
9

 
23

 
8

 
19

 
6

 
33

 
22

 
19

 
15

 
56

      Total property casualty
 
$
1,582

 
$
298

 
$
1,880

 
$
110

 
$
22

 
$
19

 
$
151

 
$
1,692

 
$
22

 
$
317

 
$
2,031

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ceded loss and loss expense incurred for the nine months ended September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
17

 
$
1

 
$
18

 
$
(6
)
 
$
3

 
$
(2
)
 
$
(5
)
 
$
11

 
$
3

 
$
(1
)
 
$
13

  Commercial property
 
1

 
—

 
1

 
—

 
(1
)
 
—

 
(1
)
 
1

 
(1
)
 
—

 
—

  Commercial auto
 
2

 
—

 
2

 
—

 
—

 
—

 
—

 
2

 
—

 
—

 
2

  Workers' compensation
 
12

 
1

 
13

 
(1
)
 
1

 
—

 
—

 
11

 
1

 
1

 
13

  Specialty packages
 
1

 
—

 
1

 
(1
)
 
—

 
—

 
(1
)
 
—

 
—

 
—

 
—

  Management liability and surety
 
3

 
—

 
3

 
(7
)
 
—

 
—

 
(7
)
 
(4
)
 
—

 
—

 
(4
)
  Machinery and equipment
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

    Total commercial lines
 
36

 
2

 
38

 
(15
)
 
3

 
(2
)
 
(14
)
 
21

 
3

 
—

 
24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
1

 
—

 
1

 
—

 
—

 
—

 
—

 
1

 
—

 
—

 
1

  Homeowners
 
2

 
—

 
2

 
(1
)
 
(1
)
 
—

 
(2
)
 
1

 
(1
)
 
—

 
—

  Other personal
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

    Total personal lines
 
3

 
—

 
3

 
(1
)
 
(1
)
 
—

 
(2
)
 
2

 
(1
)
 
—

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty & property
 
1

 
—

 
1

 
—

 
—

 
—

 
—

 
1

 
—

 
—

 
1

    Total excess & surplus lines
 
1

 
—

 
1

 
—

 
—

 
—

 
—

 
1

 
—

 
—

 
1

      Total property casualty
 
$
40

 
$
2

 
$
42

 
$
(16
)
 
$
2

 
$
(2
)
 
$
(16
)
 
$
24

 
$
2

 
$
—

 
$
26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss and loss expense incurred for the nine months ended September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
238

 
$
108

 
$
346

 
$
31

 
$
1

 
$
10

 
$
42

 
$
269

 
$
1

 
$
118

 
$
388

  Commercial property
 
320

 
27

 
347

 
52

 
(44
)
 
—

 
8

 
372

 
(44
)
 
27

 
355

  Commercial auto
 
217

 
37

 
254

 
23

 
18

 
6

 
47

 
240

 
18

 
43

 
301

  Workers' compensation
 
138

 
28

 
166

 
(10
)
 
23

 
(4
)
 
9

 
128

 
23

 
24

 
175

  Specialty packages
 
73

 
13

 
86

 
11

 
(11
)
 
(3
)
 
(3
)
 
84

 
(11
)
 
10

 
83

  Management liability and surety
 
47

 
12

 
59

 
(22
)
 
11

 
3

 
(8
)
 
25

 
11

 
15

 
51

  Machinery and equipment
 
7

 
1

 
8

 
2

 
(5
)
 
—

 
(3
)
 
9

 
(5
)
 
1

 
5

    Total commercial lines
 
1,040

 
226

 
1,266

 
87

 
(7
)
 
12

 
92

 
1,127

 
(7
)
 
238

 
1,358

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
220

 
37

 
257

 
14

 
6

 
3

 
23

 
234

 
6

 
40

 
280

  Homeowners
 
230

 
21

 
251

 
11

 
(3
)
 
—

 
8

 
241

 
(3
)
 
21

 
259

  Other personal
 
39

 
3

 
42

 
6

 
5

 
—

 
11

 
45

 
5

 
3

 
53

    Total personal lines
 
489

 
61

 
550

 
31

 
8

 
3

 
42

 
520

 
8

 
64

 
592

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty & property
 
13

 
9

 
22

 
8

 
19

 
6

 
33

 
21

 
19

 
15

 
55

    Total excess & surplus lines
 
13

 
9

 
22

 
8

 
19

 
6

 
33

 
21

 
19

 
15

 
55

      Total property casualty
 
$
1,542

 
$
296

 
$
1,838

 
$
126

 
$
20

 
$
21

 
$
167

 
$
1,668

 
$
20

 
$
317

 
$
2,005

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

CINF Third-Quarter 2014 Supplemental Financial Data
15


Cincinnati Insurance Companies Consolidated
Loss and Loss Expense Analysis
(In millions)
 
 
 
 
 
 
 
Change in
 
Change in
 
Change in
 
Total
 
 
 
 
 
Loss
 
 
 
Paid
 
Paid loss
 
Total
 
case
 
IBNR
 
loss expense
 
change in
 
Case
 
IBNR
 
expense
 
Total
 
losses
 
expense
 
paid
 
reserves
 
reserves
 
reserves
 
reserves
 
incurred
 
incurred
 
incurred
 
incurred
Gross loss and loss expense incurred for the three months ended September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
97

 
$
37

 
$
134

 
$
(7
)
 
$
7

 
$
9

 
$
9

 
$
90

 
$
7

 
$
46

 
$
143

  Commercial property
 
114

 
8

 
122

 
(1
)
 
(18
)
 
—

 
(19
)
 
113

 
(18
)
 
8

 
103

  Commercial auto
 
78

 
12

 
90

 
10

 
2

 
3

 
15

 
88

 
2

 
15

 
105

  Workers' compensation
 
45

 
9

 
54

 
1

 
1

 
1

 
3

 
46

 
1

 
10

 
57

  Specialty packages
 
26

 
4

 
30

 
(9
)
 
(4
)
 
(1
)
 
(14
)
 
17

 
(4
)
 
3

 
16

  Management liability and surety
 
12

 
4

 
16

 
(8
)
 
3

 
—

 
(5
)
 
4

 
3

 
4

 
11

  Machinery and equipment
 
3

 
1

 
4

 
—

 
(1
)
 
—

 
(1
)
 
3

 
(1
)
 
1

 
3

    Total commercial lines
 
375

 
75

 
450

 
(14
)
 
(10
)
 
12

 
(12
)
 
361

 
(10
)
 
87

 
438

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
74

 
12

 
86

 
8

 
(1
)
 
1

 
8

 
82

 
(1
)
 
13

 
94

  Homeowners
 
81

 
7

 
88

 
(17
)
 
(10
)
 
(2
)
 
(29
)
 
64

 
(10
)
 
5

 
59

  Other personal
 
16

 
1

 
17

 
4

 
4

 
—

 
8

 
20

 
4

 
1

 
25

    Total personal lines
 
171

 
20

 
191

 
(5
)
 
(7
)
 
(1
)
 
(13
)
 
166

 
(7
)
 
19

 
178

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty & property
 
6

 
3

 
9

 
—

 
6

 
3

 
9

 
6

 
6

 
6

 
18

    Total excess & surplus lines
 
6

 
3

 
9

 
—

 
6

 
3

 
9

 
6

 
6

 
6

 
18

      Total property casualty
 
$
552

 
$
98

 
$
650

 
$
(19
)
 
$
(11
)
 
$
14

 
$
(16
)
 
$
533

 
$
(11
)
 
$
112

 
$
634

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ceded loss and loss expense incurred for the three months ended September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
2

 
$
1

 
$
3

 
$
6

 
$
—

 
$
—

 
$
6

 
$
8

 
$
—

 
$
1

 
$
9

  Commercial property
 
—

 
—

 
—

 
1

 
—

 
—

 
1

 
1

 
—

 
—

 
1

  Commercial auto
 
1

 
—

 
1

 
—

 
—

 
—

 
—

 
1

 
—

 
—

 
1

  Workers' compensation
 
3

 
1

 
4

 
(2
)
 
—

 
—

 
(2
)
 
1

 
—

 
1

 
2

  Specialty packages
 
—

 
—

 
—

 
(1
)
 
—

 
—

 
(1
)
 
(1
)
 
—

 
—

 
(1
)
  Management liability and surety
 
1

 
—

 
1

 
(3
)
 
—

 
—

 
(3
)
 
(2
)
 
—

 
—

 
(2
)
  Machinery and equipment
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

    Total commercial lines
 
7

 
2

 
9

 
1

 
—

 
—

 
1

 
8

 
—

 
2

 
10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

  Homeowners
 
1

 
—

 
1

 
—

 
—

 
—

 
—

 
1

 
—

 
—

 
1

  Other personal
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

    Total personal lines
 
1

 
—

 
1

 
—

 
—

 
—

 
—

 
1

 
—

 
—

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty & property
 
1

 
—

 
1

 
—

 
—

 
—

 
—

 
1

 
—

 
—

 
1

    Total excess & surplus lines
 
1

 
—

 
1

 
—

 
—

 
—

 
—

 
1

 
—

 
—

 
1

      Total property casualty
 
$
9

 
$
2

 
$
11

 
$
1

 
$
—

 
$
—

 
$
1

 
$
10

 
$
—

 
$
2

 
$
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss and loss expense incurred for the three months ended September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
95

 
$
36

 
$
131

 
$
(13
)
 
$
7

 
$
9

 
$
3

 
$
82

 
$
7

 
$
45

 
$
134

  Commercial property
 
114

 
8

 
122

 
(2
)
 
(18
)
 
—

 
(20
)
 
112

 
(18
)
 
8

 
102

  Commercial auto
 
77

 
12

 
89

 
10

 
2

 
3

 
15

 
87

 
2

 
15

 
104

  Workers' compensation
 
42

 
8

 
50

 
3

 
1

 
1

 
5

 
45

 
1

 
9

 
55

  Specialty packages
 
26

 
4

 
30

 
(8
)
 
(4
)
 
(1
)
 
(13
)
 
18

 
(4
)
 
3

 
17

  Management liability and surety
 
11

 
4

 
15

 
(5
)
 
3

 
—

 
(2
)
 
6

 
3

 
4

 
13

  Machinery and equipment
 
3

 
1

 
4

 
—

 
(1
)
 
—

 
(1
)
 
3

 
(1
)
 
1

 
3

    Total commercial lines
 
368

 
73

 
441

 
(15
)
 
(10
)
 
12

 
(13
)
 
353

 
(10
)
 
85

 
428

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
74

 
12

 
86

 
8

 
(1
)
 
1

 
8

 
82

 
(1
)
 
13

 
94

  Homeowners
 
80

 
7

 
87

 
(17
)
 
(10
)
 
(2
)
 
(29
)
 
63

 
(10
)
 
5

 
58

  Other personal
 
16

 
1

 
17

 
4

 
4

 
—

 
8

 
20

 
4

 
1

 
25

    Total personal lines
 
170

 
20

 
190

 
(5
)
 
(7
)
 
(1
)
 
(13
)
 
165

 
(7
)
 
19

 
177

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty & property
 
5

 
3

 
8

 
—

 
6

 
3

 
9

 
5

 
6

 
6

 
17

    Total excess & surplus lines
 
5

 
3

 
8

 
—

 
6

 
3

 
9

 
5

 
6

 
6

 
17

      Total property casualty
 
$
543

 
$
96

 
$
639

 
$
(20
)
 
$
(11
)
 
$
14

 
$
(17
)
 
$
523

 
$
(11
)
 
$
110

 
$
622

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

CINF Third-Quarter 2014 Supplemental Financial Data
16


Consolidated Cincinnati Insurance Companies
Quarterly Property Casualty Data - Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
3/31/13
6/30/14
6/30/13
9/30/14
9/30/13
12/31/14
12/31/13
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
 
$
958

$
974

$
956

$
854

$
915

$
879

$
845

$
1,930

$
1,724

$
2,888

$
2,639

 
$
3,493

   Agency new business written premiums
 
125

133

123

128

141

139

135

256

274

381

415

 
543

   Other written premiums
 
(46
)
(25
)
(42
)
(74
)
(25
)
(34
)
(10
)
(67
)
(44
)
(113
)
(69
)
 
(143
)
   Reported written premiums – statutory*
 
$
1,037

$
1,082

$
1,037

$
908

$
1,031

$
984

$
970

$
2,119

$
1,954

$
3,156

$
2,985

 
$
3,893

   Unearned premium change
 
(12
)
(76
)
(58
)
52

(77
)
(74
)
(81
)
(134
)
(155
)
(146
)
(232
)
 
(180
)
   Earned premiums
 
$
1,025

$
1,006

$
979

$
960

$
954

$
910

$
889

$
1,985

$
1,799

$
3,010

$
2,753

 
$
3,713

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
 
5
 %
11
 %
13
 %
11
 %
13
%
10
 %
11
%
12
 %
11
%
9
 %
11
%
 
11
%
   Agency new business written premiums
 
(11
)
(4
)
(9
)
(3
)
8

6

25

(7
)
15

(8
)
12

 
8

   Other written premiums
 
(84
)
26

(320
)
(12
)
34

(31
)
63

(52
)
17

(64
)
24

 
9

   Reported written premiums – statutory*
 
1

10

7

8

15

9

15

8

12

6

13

 
12

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid
 
$
543

$
517

$
484

$
477

$
470

$
431

$
424

$
1,001

$
855

$
1,543

$
1,325

 
$
1,802

   Loss expenses paid
 
96

98

100

98

92

90

89

198

179

295

271

 
369

   Loss and loss expenses paid
 
$
639

$
615

$
584

$
575

$
562

$
521

$
513

$
1,199

$
1,034

$
1,838

$
1,596

 
$
2,171

Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio
 
50.0
 %
60.7
 %
57.9
 %
51.6
 %
51.7
%
56.3
 %
48.9
%
59.4
 %
52.7
%
56.2
 %
52.3
%
 
52.1
%
   DCC expense ratio
 
5.1

3.9

5.2

4.7

4.4

1.1

3.9

4.5

2.4

4.7

3.1

 
3.5

   AO expense ratio
 
5.6

5.6

6.0

6.3

6.1

6.6

6.2

5.8

6.4

5.7

6.3

 
6.3

   Net underwriting expense ratio
 
30.6

29.4

29.0

32.8

30.1

30.6

29.9

29.2

30.3

29.7

30.3

 
30.8

   Statutory combined ratio
 
91.3
 %
99.6
 %
98.1
 %
95.4
 %
92.3
%
94.6
 %
88.9
%
98.9
 %
91.8
%
96.3
 %
92.0
%
 
92.7
%
   Contribution from catastrophe losses
 
1.2

11.4

8.9

3.2

5.7

8.3

1.2

10.2

4.8

7.1

5.1

 
4.6

   Statutory combined ratio excl. catastrophe losses
 
90.1
 %
88.2
 %
89.2
 %
92.2
 %
86.6
%
86.3
 %
87.7
%
88.7
 %
87.0
%
89.2
 %
86.9
%
 
88.1
%
   Commission expense ratio
 
18.9
 %
17.9
 %
17.7
 %
19.5
 %
18.5
%
18.5
 %
17.9
%
17.8
 %
18.2
%
18.1
 %
18.3
%
 
18.6
%
   Other expense ratio
 
11.7

11.5

11.3

13.3

11.6

12.1

12.0

11.4

12.1

11.6

12.0

 
12.2

   Statutory expense ratio
 
30.6
 %
29.4
 %
29.0
 %
32.8
 %
30.1
%
30.6
 %
29.9
%
29.2
 %
30.3
%
29.7
 %
30.3
%
 
30.8
%
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio
 
91.0
 %
100.9
 %
100.3
 %
93.9
 %
93.7
%
96.4
 %
91.2
%
100.6
 %
93.9
%
97.3
 %
93.8
%
 
93.8
%
   Contribution from catastrophe losses
 
1.2

11.4

8.9

3.2

5.7

8.3

1.2

10.2

4.8

7.1

5.1

 
4.6

   GAAP combined ratio excl. catastrophe losses
 
89.8
 %
89.5
 %
91.4
 %
90.7
 %
88.0
%
88.1
 %
90.0
%
90.4
 %
89.1
%
90.2
 %
88.7
%
 
89.2
%
*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
 equal the full year as each is computed independently.
*nm - Not meaningful
*Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.


CINF Third-Quarter 2014 Supplemental Financial Data
17


Consolidated Cincinnati Insurance Companies
Quarterly Property Casualty Data - Commercial Lines
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
3/31/13
6/30/14
6/30/13
9/30/14
9/30/13
12/31/14
12/31/13
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
 
$
651

$
669

$
713

$
606

$
632

$
602

$
631

$
1,382

$
1,233

$
2,033

$
1,865

 
$
2,471

   Agency new business written premiums
 
89

95

90

92

102

100

97

185

197

274

299

 
391

   Other written premiums
 
(36
)
(16
)
(32
)
(63
)
(15
)
(24
)
—

(48
)
(24
)
(84
)
(39
)
 
(102
)
   Reported written premiums – statutory*
 
$
704

$
748

$
771

$
635

$
719

$
678

$
728

$
1,519

$
1,406

$
2,223

$
2,125

 
$
2,760

   Unearned premium change
 
16

(34
)
(79
)
45

(39
)
(33
)
(97
)
(113
)
(130
)
(97
)
(169
)
 
(124
)
   Earned premiums
 
$
720

$
714

$
692

$
680

$
680

$
645

$
631

$
1,406

$
1,276

$
2,126

$
1,956

 
$
2,636

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
 
3
 %
11
 %
13
 %
10
 %
13
%
9
 %
11
%
12
 %
10
%
9
 %
11
%
 
11
%
   Agency new business written premiums
 
(13
)
(4
)
(7
)
(4
)
13

10

29

(6
)
19

(8
)
17

 
11

   Other written premiums
 
(140
)
33

nm

(11
)
46

(41
)
100

(100
)
35

(115
)
40

 
16

   Reported written premiums – statutory*
 
(2
)
10

6

8

16

8

16

8

12

5

14

 
12

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid
 
$
368

$
347

$
327

$
327

$
306

$
286

$
297

$
674

$
585

$
1,041

$
891

 
$
1,218

   Loss expenses paid
 
74

75

76

75

70

68

68

151

135

226

205

 
280

   Loss and loss expenses paid
 
$
442

$
422

$
403

$
402

$
376

$
354

$
365

$
825

$
720

$
1,267

$
1,096

 
$
1,498

Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio
 
47.5
 %
54.7
 %
56.1
 %
48.8
 %
51.1
%
54.9
 %
47.3
%
55.4
 %
51.2
%
52.8
 %
51.2
%
 
50.6
%
   DCC expense ratio
 
6.2

4.6

6.4

5.3

5.1

0.6

4.3

5.5

2.5

5.7

3.4

 
3.9

   AO expense ratio
 
5.7

5.2

5.4

6.3

5.7

6.4

6.2

5.3

6.2

5.4

6.0

 
6.1

   Net underwriting expense ratio
 
32.2

30.5

28.5

34.0

30.8

31.5

29.0

29.5

30.2

30.3

30.4

 
31.2

   Statutory combined ratio
 
91.6
 %
95.0
 %
96.4
 %
94.4
 %
92.7
%
93.4
 %
86.8
%
95.7
 %
90.1
%
94.2
 %
91.0
%
 
91.8
%
   Contribution from catastrophe losses
 
1.0

8.6

8.5

1.7

5.4

7.1

0.4

8.5

3.8

6.0

4.4

 
3.7

   Statutory combined ratio excl. catastrophe losses
 
90.6
 %
86.4
 %
87.9
 %
92.7
 %
87.3
%
86.3
 %
86.4
%
87.2
 %
86.3
%
88.2
 %
86.6
%
 
88.1
%
   Commission expense ratio
 
19.0
 %
17.7
 %
16.4
 %
19.1
 %
18.0
%
17.9
 %
16.5
%
17.0
 %
17.2
%
17.7
 %
17.4
%
 
17.8
%
   Other expense ratio
 
13.2

12.8

12.1

14.9

12.8

13.6

12.5

12.5

13.0

12.6

13.0

 
13.5

   Statutory expense ratio
 
32.2
 %
30.5
 %
28.5
 %
34.0
 %
30.8
%
31.5
 %
29.0
%
29.5
 %
30.2
%
30.3
 %
30.4
%
 
31.3
%
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio
 
90.7
 %
96.3
 %
99.9
 %
92.7
 %
93.7
%
94.9
 %
90.8
%
98.1
 %
92.9
%
95.6
 %
93.2
%
 
93.0
%
   Contribution from catastrophe losses
 
1.0

8.6

8.5

1.7

5.4

7.1

0.4

8.5

3.8

6.0

4.4

 
3.7

   GAAP combined ratio excl. catastrophe losses
 
89.7
 %
87.7
 %
91.4
 %
91.0
 %
88.3
%
87.8
 %
90.4
%
89.6
 %
89.1
%
89.6
 %
88.8
%
 
89.3
%
*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
 equal the full year as each is computed independently.
*nm - Not meaningful
*Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.


CINF Third-Quarter 2014 Supplemental Financial Data
18


Consolidated Cincinnati Insurance Companies
Quarterly Property Casualty Data - Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
3/31/13
6/30/14
6/30/13
9/30/14
9/30/13
12/31/14
12/31/13
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
 
$
278

$
276

$
218

$
224

$
258

$
251

$
195

$
494

$
446

$
772

$
704

 
$
928

   Agency new business written premiums
 
23

24

21

24

28

30

28

45

58

68

86

 
110

   Other written premiums
 
(7
)
(6
)
(8
)
(9
)
(8
)
(8
)
(8
)
(14
)
(16
)
(21
)
(24
)
 
(33
)
   Reported written premiums – statutory*
 
$
294

$
294

$
231

$
239

$
278

$
273

$
215

$
525

$
488

$
819

$
766

 
$
1,005

   Unearned premium change
 
(31
)
(36
)
23

10

(34
)
(36
)
16

(13
)
(20
)
(44
)
(54
)
 
(44
)
   Earned premiums
 
$
263

$
258

$
254

$
249

$
244

$
237

$
231

$
512

$
468

$
775

$
712

 
$
961

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
 
8
 %
10
 %
12
 %
10
 %
12
 %
11
 %
11
 %
11
 %
11
 %
10
 %
11
 %
 
11
 %
   Agency new business written premiums
 
(18
)
(20
)
(25
)
(11
)
(10
)
3

17

(22
)
9

(21
)
2

 
(1
)
   Other written premiums
 
13

25

0

(13
)
11

(33
)
(33
)
13

(33
)
13

(14
)
 
(14
)
   Reported written premiums – statutory*
 
6

8

7

8

10

9

11

8

10

7

10

 
9

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid
 
$
170

$
167

$
152

$
141

$
158

$
141

$
122

$
319

$
261

$
489

$
419

 
$
560

   Loss expenses paid
 
19

20

21

20

19

19

19

41

39

60

58

 
78

   Loss and loss expenses paid
 
$
189

$
187

$
173

$
161

$
177

$
160

$
141

$
360

$
300

$
549

$
477

 
$
638

Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio
 
60.5
 %
79.4
 %
64.8
 %
62.6
 %
54.1
 %
60.6
 %
53.6
 %
72.2
 %
57.2
 %
68.2
 %
56.0
 %
 
57.8
 %
   DCC expense ratio
 
1.4

1.6

1.6

1.9

2.1

1.5

1.4

1.6

1.5

1.5

1.7

 
1.7

   AO expense ratio
 
5.5

6.7

7.7

6.9

7.5

7.4

6.3

7.2

6.8

6.6

7.1

 
7.0

   Net underwriting expense ratio
 
26.3

26.6

30.5

30.1

28.4

28.5

32.8

28.3

30.4

27.6

29.7

 
29.8

   Statutory combined ratio
 
93.7
 %
114.3
 %
104.6
 %
101.5
 %
92.1
 %
98.0
 %
94.1
 %
109.3
 %
95.9
 %
103.9
 %
94.5
 %
 
96.3
 %
   Contribution from catastrophe losses
 
2.0

20.4

10.8

7.7

7.0

12.6

3.5

15.7

8.1

11.0

7.7

 
7.7

   Statutory combined ratio excl. catastrophe losses
 
91.7
 %
93.9
 %
93.8
 %
93.8
 %
85.1
 %
85.4
 %
90.6
 %
93.6
 %
87.8
 %
92.9
 %
86.8
 %
 
88.6
 %
   Commission expense ratio
 
17.0
 %
17.4
 %
20.5
 %
19.5
 %
19.0
 %
19.0
 %
21.7
 %
18.8
 %
20.2
 %
18.2
 %
19.7
 %
 
19.7
 %
   Other expense ratio
 
9.3

9.2

10.0

10.6

9.4

9.5

11.1

9.5

10.2

9.4

10.0

 
10.0

   Statutory expense ratio
 
26.3
 %
26.6
 %
30.5
 %
30.1
 %
28.4
 %
28.5
 %
32.8
 %
28.3
 %
30.4
 %
27.6
 %
29.7
 %
 
29.7
 %
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio
 
95.0
 %
115.8
 %
103.0
 %
100.3
 %
94.5
 %
100.4
 %
91.6
 %
109.4
 %
96.1
 %
104.5
 %
95.5
 %
 
96.8
 %
   Contribution from catastrophe losses
 
2.0

20.4

10.8

7.7

7.0

12.6

3.5

15.7

8.1

11.0

7.7

 
7.7

   GAAP combined ratio excl. catastrophe losses
 
93.0
 %
95.4
 %
92.2
 %
92.6
 %
87.5
 %
87.8
 %
88.1
 %
93.7
 %
88.0
 %
93.5
 %
87.8
 %
 
89.1
 %
*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
 equal the full year as each is computed independently.
*nm - Not meaningful
*Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.


CINF Third-Quarter 2014 Supplemental Financial Data
19


Consolidated Cincinnati Insurance Companies
Quarterly Property Casualty Data - Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/14
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
6/30/13
3/31/13
6/30/14
6/30/13
9/30/14
9/30/13
12/31/14
12/31/13
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
 
$
29

$
29

$
25

$
24

$
25

$
26

$
19

$
54

$
45

$
83

$
70

 
$
94

   Agency new business written premiums
 
13

14

12

12

11

9

10

26

19

39

30

 
42

   Other written premiums
 
(3
)
(3
)
(2
)
(2
)
(2
)
(2
)
(2
)
(5
)
(4
)
(8
)
(6
)
 
(8
)
   Reported written premiums – statutory*
 
$
39

$
40

$
35

$
34

$
34

$
33

$
27

$
75

$
60

$
114

$
94

 
$
128

   Unearned premium change
 
3

(6
)
(2
)
(3
)
(4
)
(5
)
—

(8
)
(5
)
(5
)
(9
)
 
(12
)
   Earned premiums
 
$
42

$
34

$
33

$
31

$
30

$
28

$
27

$
67

$
55

$
109

$
85

 
$
116

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
 
16
 %
12
 %
32
%
26
 %
32
 %
37
 %
19
 %
20
 %
29
 %
19
 %
30
 %
 
29
 %
   Agency new business written premiums
 
18

56

20

33

22

(18
)
11

37

(5
)
30

3

 
11

   Other written premiums
 
(50
)
(50
)
0

(100
)
(100
)
33

(100
)
(25
)
0

(33
)
(20
)
 
(33
)
   Reported written premiums – statutory*
 
15

21

30

26

26

22

13

25

18

21

21

 
22

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid
 
$
5

$
3

$
5

$
9

$
6

$
4

$
5

$
8

$
9

$
13

$
15

 
$
24

   Loss expenses paid
 
3

3

3

3

3

3

2

6

5

9

8

 
11

   Loss and loss expenses paid
 
$
8

$
6

$
8

$
12

$
9

$
7

$
7

$
14

$
14

$
22

$
23

 
$
35

Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio
 
27.9
 %
46.6
 %
40.6
%
24.7
 %
43.5
 %
52.1
 %
47.2
 %
43.7
 %
49.7
 %
37.6
 %
47.4
 %
 
41.3
 %
   DCC expense ratio
 
9.5

6.5

8.4

12.1

7.0

9.3

11.9

7.4

10.6

8.2

9.4

 
10.1

   AO expense ratio
 
4.4

3.9

7.6

4.2

5.5

5.5

6.1

5.7

5.8

5.2

5.7

 
5.3

   Net underwriting expense ratio
 
34.0

29.1

30.4

29.9

30.9

30.9

33.3

29.7

32.0

31.2

31.6

 
31.1

   Statutory combined ratio
 
75.8
 %
86.1
 %
87.0
%
70.9
 %
86.9
 %
97.8
 %
98.5
 %
86.5
 %
98.1
 %
82.2
 %
94.1
 %
 
87.8
 %
   Contribution from catastrophe losses
 
(0.6
)
2.9

3.1

(1.7
)
2.5

1.9

0.4

3.0

1.2

1.6

1.7

 
0.8

   Statutory combined ratio excl. catastrophe losses
 
76.4
 %
83.2
 %
83.9
%
72.6
 %
84.4
 %
95.9
 %
98.1
 %
83.5
 %
96.9
 %
80.6
 %
92.4
 %
 
87.0
 %
   Commission expense ratio
 
29.1
 %
25.8
 %
26.5
%
25.9
 %
26.3
 %
26.3
 %
26.9
 %
26.1
 %
26.6
 %
27.2
 %
26.5
 %
 
26.3
 %
   Other expense ratio
 
4.9

3.3

3.9

4.0

4.6

4.6

6.4

3.6

5.4

4.0

5.1

 
4.8

   Statutory expense ratio
 
34.0
 %
29.1
 %
30.4
%
29.9
 %
30.9
 %
30.9
 %
33.3
 %
29.7
 %
32.0
 %
31.2
 %
31.6
 %
 
31.1
 %
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio
 
70.2
 %
85.0
 %
86.9
%
70.4
 %
86.7
 %
98.7
 %
98.0
 %
85.9
 %
98.4
 %
79.9
 %
94.2
 %
 
87.8
 %
   Contribution from catastrophe losses
 
(0.6
)
2.9

3.1

(1.7
)
2.5

1.9

0.4

3.0

1.2

1.6

1.7

 
0.8

   GAAP combined ratio excl. catastrophe losses
 
70.8
 %
82.1
 %
83.8
%
72.1
 %
84.2
 %
96.8
 %
97.6
 %
82.9
 %
97.2
 %
78.3
 %
92.5
 %
 
87.0
 %
*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
 equal the full year as each is computed independently.
*nm - Not meaningful
*Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.


CINF Third-Quarter 2014 Supplemental Financial Data
20


The Cincinnati Life Insurance Company
Statutory Statements of Income
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
(Dollars in millions)
2014
2013
Change
% Change
2014
2013
Change
% Change
Net premiums written
$
59

$
56

$
3

5

$
182

$
176

$
6

3

Net investment income
37

36

1

3

111

107

4

4

Amortization of interest maintenance reserve
1

1

—

0

3

1

2

200

Commissions and expense allowances on reinsurance ceded
1

1

—

0

4

4

—

0

Income from fees associated with Separate Accounts
2

1

1

100

4

3

1

33

Total revenues
$
100

$
95

$
5

5

$
304

$
291

$
13

4

 
 
 
 
 
 
 
 
 
Death benefits and matured endowments
$
25

$
19

$
6

32

$
73

$
55

$
18

33

Annuity benefits
17

12

5

42

47

37

10

27

Disability benefits and benefits under accident and health contracts
—

1

(1
)
(100
)
1

1

—

0

Surrender benefits and group conversions
6

6

—

0

17

18

(1
)
(6
)
Interest and adjustments on deposit-type contract funds
3

3

—

0

8

8

—

0

Increase in aggregate reserves for life and accident and health contracts
40

55

(15
)
(27
)
128

138

(10
)
(7
)
Payments on supplementary contracts with life contingencies
—

—

—

nm

—

—

—

nm

Total benefit expenses
$
91

$
96

$
(5
)
(5
)
$
274

$
257

$
17

7

 
 
 
 
 
 
 
 
 
Commissions
$
10

$
9

$
1

11

$
28

$
29

$
(1
)
(3
)
General insurance expenses and taxes
10

10

—

0

30

32

(2
)
(6
)
Increase in loading on deferred and uncollected premiums
(1
)
—

(1
)
nm

(4
)
(5
)
1

20

Net transfers from Separate Accounts
(2
)
—

(2
)
nm

(6
)
—

(6
)
nm

Other deductions
—

—

—

nm

—

—

—

nm

Total operating expenses
$
17

$
19

$
(2
)
(11
)
$
48

$
56

$
(8
)
(14
)
 
 
 
 
 
 
 
 
 
Federal and foreign income tax benefit
(3
)
(5
)
2

40

(6
)
(4
)
(2
)
(50
)
 
 
 
 
 
 
 
 
 
Net loss from operations before realized capital gains
$
(5
)
$
(15
)
$
10

67

$
(12
)
$
(18
)
$
6

33

 
 
 
 
 
 
 
 
 
Net realized gains net of capital gains tax
—

—

—

nm

—

1

(1
)
(100
)
 
 
 
 
 
 
 
 
 
Net loss (statutory)
$
(5
)
$
(15
)
$
10

67

$
(12
)
$
(17
)
$
5

29

*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding.
*nm - Not meaningful
*Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the
  appropriate regulatory bodies.


CINF Third-Quarter 2014 Supplemental Financial Data
21