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 25, 2018
(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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§203.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

¨ Emerging growth company

¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.




Item 2.02 Results of Operations and Financial Condition.

On October 25, 2018, Cincinnati Financial Corporation issued the attached news release titled “Cincinnati Financial Reports Third-Quarter 2018 Results,” furnished as Exhibit 99.1 hereto and incorporated herein by reference. On October 25, 2018, 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 releases 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 25, 2018, “Cincinnati Financial Reports Third-Quarter 2018 Results”

Exhibit 99.2 – Supplemental Financial Data for the period ending September 30, 2018 distributed October 25, 2018.


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 25, 2018
/S/ Michael J. Sewell
 
Michael J. Sewell, CPA
 
Chief Financial Officer, Senior Vice President and Treasurer
 
(Principal Accounting Officer)




Exhibit
cfclogoa02a05.jpg
 
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 2018 Results

Cincinnati, October 25, 2018 – Cincinnati Financial Corporation (Nasdaq: CINF) today reported:
•
Third-quarter 2018 net income of $553 million, or $3.38 per share, compared with $102 million, or 61 cents per share, in the third quarter of 2017, after recognizing a $356 million increase in the fair value of equity securities still held that prior to 2018 would have been reported in other comprehensive income instead of net income.
•
$40 million or 41 percent increase in non-GAAP operating income* to $137 million, or 84 cents per share, compared with $97 million, or 58 cents per share, in the third quarter of last year.
•
$451 million increase in third-quarter 2018 net income, primarily reflecting the after-tax net effect of a $355 million increase in net investment gains, a $56 million increase in other non-recurring items, a $26 million increase in after-tax property casualty underwriting income and a $12 million increase in after-tax investment income. Included in the $355 million increase in net investment gains was an increase of $4 million in net gains of securities sold, in addition to the $356 million noted above.
•
$51.22 book value per share at September 30, 2018, a record high, up $0.93 or 1.8 percent since year-end.
•
5.0 percent value creation ratio for the first nine months of 2018, compared with 10.3 percent for the 2017 period.
Financial Highlights
(Dollars in millions, except per share data)
Three months ended September 30,
Nine months ended September 30,
 
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Revenue Data
 
 
 
 
 
 
 
 
 
 
 
 
   Earned premiums
 
$
1,298

 
$
1,247

 
4
 
$
3,852

 
$
3,696

 
4
   Investment income, net of expenses
 
154

 
153

 
1
 
458

 
453

 
1
   Total revenues
 
1,915

 
1,412

 
36
 
4,697

 
4,321

 
9
Income Statement Data
 
 
 
 
 
 
 
 
 
 
 
 
   Net income
 
$
553

 
$
102

 
442
 
$
739

 
$
403

 
83
   Investment gains and losses, after-tax
 
360

 
5

 
nm
 
293

 
101

 
190
   Other non-recurring items
 
56

 
—

 
nm
 
56

 
—

 
nm
   Non-GAAP operating income*
 
$
137

 
$
97

 
41
 
$
390

 
$
302

 
29
Per Share Data (diluted)
 
 
 
 
 
 
 
 
 
 
 
 
   Net income
 
$
3.38

 
$
0.61

 
454
 
$
4.49

 
$
2.42

 
86
   Investment gains and losses, after-tax
 
2.20

 
0.03

 
nm
 
1.78

 
0.61

 
192
   Other non-recurring items
 
$
0.34

 
$
—

 
nm
 
$
0.34

 
$
—

 
nm
   Non-GAAP operating income*
 
$
0.84

 
$
0.58

 
45
 
$
2.37

 
$
1.81

 
31
 
 
 
 
 
 
 
 
 
 
 
 
 
   Book value
 
 
 
 
 
 
 
$
51.22

 
$
45.86

 
12
   Cash dividend declared
 
$
0.53

 
$
0.50

 
6
 
$
1.59

 
$
1.50

 
6
   Diluted weighted average shares outstanding
 
164.0

 
165.9

 
(1)
 
164.7

 
166.1

 
(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
*
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 3Q18 Release 1

Selected Third-Quarter Highlights
•
96.8 percent third-quarter 2018 property casualty combined ratio, down from 99.3 percent for the third quarter of 2017.
•
3 percent growth in third-quarter net written premiums, reflecting price increases and premium growth initiatives.
•
$154 million third-quarter 2018 property casualty new business written premiums, down 2 percent. Agencies appointed since the beginning of 2017 contributed $16 million or 10 percent of total new business written premiums.
•
$15 million of life insurance subsidiary net income, up $7 million or 88 percent from the third quarter of 2017, and 8 percent growth in third-quarter 2018 term life insurance earned premiums.
•
$56 million third-quarter 2018 benefit from certain non-recurring items includes the impact of various tax accounting method changes.
Investment and Balance Sheet Highlights
•
1 percent or $1 million increase in third-quarter 2018 pretax investment income, including a 5 percent increase for stock portfolio dividends and a 1 percent decrease for bond interest income.
•
Three-month increase of 3 percent in fair value of total investments at September 30, 2018, including a 7 percent increase for the stock portfolio and an increase of less than 1 percent for the bond portfolio.
•
$2.817 billion parent company cash and marketable securities at September 30, 2018, up 12 percent from year-end 2017.

Property Casualty Operations Maintaining Profitability
Steven J. Johnston, president and chief executive officer, commented: “Over the past few months our field claims teams and headquarters claims associates have been busy. I’m proud of their efforts as they brought compassion and expertise to our agents and policyholders, quickly resolving claims and helping affected communities to begin to move forward.
“This quarter is a nice example of the impact our many growth, profitability and diversification initiatives are having on our insurance business. While catastrophe losses grew by six-tenths of a percentage point in the third quarter of 2018 compared with last year’s third quarter, our overall combined ratio declined 2.5 points to 96.8 percent.
“That improvement reflects our continued efforts in pricing segmentation across our organization and our purposeful growth in lines of business less prone to catastrophe losses such as: management liability, surety, the casualty portion of excess and surplus lines and life insurance.
“On a nine-month basis we achieved strong non-GAAP operating income results, increasing that measure 29 percent to $390 million. Our insurance operations continued to lead the way. With three-quarters of the year behind us, our 97.3 percent combined ratio is comfortably within our long-term target of 95 to 100 percent.
“We again built on our record of 29 consecutive years of overall favorable reserve development. While maintaining our consistent approach to setting reserves, we were able to recognize a 3.5 percentage-point third-quarter benefit to our combined ratio, compared with 1.6 points for the 2017 period. Commercial casualty – a line we’ve been watching closely – also experienced another quarter of favorable prior accident year reserve development.”
Growth Reflecting Underwriting Discipline
“In this competitive market, we are balancing new business opportunities with underwriting discipline. Total property casualty net written premiums grew 4 percent through the first nine months of 2018, reflecting average renewal price increases for each of our property casualty insurance segments and most of our major lines of business.
“Our overall growth strategy plays to the strengths of each area where we do business. We consider factors such as market conditions, weather patterns and historic loss ratios for particular lines of business to create an appropriate plan for targeted growth. That work creates a generally stable underwriting appetite to support our agents and enhance our mutual success.”
Book Value Reaching Record High
“Our third-quarter pretax investment income grew 1 percent as 5 percent growth in dividends from our equity holdings helped to offset a 1 percent decline in interest income from our bond portfolio. Benefits from the increasing value of our investment portfolio, our strong underwriting performance and other non-recurring items helped to boost book value to another record high, increasing 1.8 percent since the end of 2017 to $51.22.
“The increase in our book value brings our value creation ratio back into positive territory, ending the first nine months at 5.0 percent.”

CINF 3Q18 Release 2

Insurance Operations Highlights
Consolidated Property Casualty Insurance Results
(Dollars in millions)
Three months ended September 30,
Nine months ended September 30,
 
 
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Earned premiums
 
$
1,237

 
$
1,191

 
4

 
$
3,667

 
$
3,523

 
4

Fee revenues
 
2

 
2

 
0

 
8

 
8

 
0

   Total revenues
 
1,239

 
1,193

 
4

 
3,675

 
3,531

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
813

 
815

 
0

 
2,425

 
2,397

 
1

Underwriting expenses
 
384

 
367

 
5

 
1,143

 
1,094

 
4

   Underwriting profit
 
$
42

 
$
11

 
282

 
$
107

 
$
40

 
168

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
65.7
 %
 
68.4
 %
 
(2.7
)
 
66.1
 %
 
68.0
 %
 
(1.9
)
     Underwriting expenses
 
31.1

 
30.9

 
0.2

 
31.2

 
31.1

 
0.1

           Combined ratio
 
96.8
 %
 
99.3
 %
 
(2.5
)
 
97.3
 %
 
99.1
 %
 
(1.8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
1,088

 
$
1,064

 
2

 
$
3,321

 
$
3,211

 
3

Agency new business written premiums
 
154

 
157

 
(2
)
 
494

 
475

 
4

Cincinnati Re net written premiums
 
36

 
24

 
50

 
130

 
104

 
25

Other written premiums
 
(32
)
 
(37
)
 
14

 
(92
)
 
(80
)
 
(15
)
   Net written premiums
 
$
1,246

 
$
1,208

 
3

 
$
3,853

 
$
3,710

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
59.1
 %
 
60.4
 %
 
(1.3
)
 
62.0
 %
 
60.8
 %
 
1.2

     Current accident year catastrophe losses
 
10.1

 
9.6

 
0.5

 
7.4

 
9.9

 
(2.5
)
     Prior accident years before catastrophe losses
 
(3.1
)
 
(1.1
)
 
(2.0
)
 
(3.0
)
 
(2.1
)
 
(0.9
)
     Prior accident years catastrophe losses
 
(0.4
)
 
(0.5
)
 
0.1

 
(0.3
)
 
(0.6
)
 
0.3

           Loss and loss expense ratio
 
65.7
 %
 
68.4
 %
 
(2.7
)
 
66.1
 %
 
68.0
 %
 
(1.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before catastrophe
  losses
 
90.2
 %
 
91.3
 %
 
(1.1
)
 
93.2
 %
 
91.9
 %
 
1.3

 
 
 
 
 
 
 
 
 
 
 
 
 

•
$38 million or 3 percent growth of third-quarter 2018 property casualty net written premiums, and nine-month growth of 4 percent, largely due to premium growth initiatives and price increases.
•
$3 million or 2 percent decrease in third-quarter 2018 new business premiums written by agencies and 4 percent nine-month growth. The nine-month growth included a $33 million increase in standard market property casualty production from agencies appointed since the beginning of 2017.
•
120 new agency appointments in the first nine months of 2018, including 54 that market only our personal lines products.
•
2.5 percentage-point decrease in the third-quarter 2018 combined ratio and a 1.8 percentage-point decrease for the nine-month period, including a third-quarter increase of 0.6 points and a nine-month decrease of 2.2 points for losses from natural catastrophes. The nine-month combined ratio included an increase of 0.9 points for losses from noncatastrophe weather-related losses.
•
3.5 percentage-point third-quarter 2018 benefit from favorable prior accident year reserve development of $44 million, compared with 1.6 points or $20 million for third-quarter 2017.
•
3.3 percentage-point nine-month 2018 benefit from favorable prior accident year reserve development, compared with 2.7 points for the 2017 period.
•
1.2 percentage-point increase, to 62.0 percent, for the nine-month 2018 ratio of current accident year losses and loss expenses before catastrophes, including no change in the ratio for current accident year losses of $1 million or more per claim, and with higher noncatastrophe weather-related losses representing approximately three-fourths of the increase.
•
0.1 percentage-point increase in the nine-month 2018 underwriting expense ratio, compared with the same period of 2017.

CINF 3Q18 Release 3


Commercial Lines Insurance Results
(Dollars in millions)
Three months ended September 30,
Nine months ended September 30,
 
 
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Earned premiums
 
$
805

 
$
792

 
2

 
$
2,407

 
$
2,369

 
2

Fee revenues
 
1

 
1

 
0

 
3

 
3

 
0

   Total revenues
 
806

 
793

 
2

 
2,410

 
2,372

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
515

 
501

 
3

 
1,544

 
1,555

 
(1
)
Underwriting expenses
 
257

 
253

 
2

 
770

 
756

 
2

   Underwriting profit
 
$
34

 
$
39

 
(13
)
 
$
96

 
$
61

 
57

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
63.9
 %
 
63.3
 %
 
0.6

 
64.1
 %
 
65.7
 %
 
(1.6
)
     Underwriting expenses
 
32.0

 
31.9

 
0.1

 
32.0

 
31.9

 
0.1

           Combined ratio
 
95.9
 %
 
95.2
 %
 
0.7

 
96.1
 %
 
97.6
 %
 
(1.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
702

 
$
707

 
(1
)
 
$
2,231

 
$
2,208

 
1

Agency new business written premiums
 
94

 
99

 
(5
)
 
316

 
301

 
5

Other written premiums
 
(22
)
 
(28
)
 
21

 
(63
)
 
(53
)
 
(19
)
   Net written premiums
 
$
774

 
$
778

 
(1
)
 
$
2,484

 
$
2,456

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
58.2
 %
 
61.3
 %
 
(3.1
)
 
61.9
 %
 
60.7
 %
 
1.2

     Current accident year catastrophe losses
 
10.3

 
4.3

 
6.0

 
7.0

 
7.2

 
(0.2
)
     Prior accident years before catastrophe losses
 
(3.8
)
 
(1.8
)
 
(2.0
)
 
(4.1
)
 
(1.6
)
 
(2.5
)
     Prior accident years catastrophe losses
 
(0.8
)
 
(0.5
)
 
(0.3
)
 
(0.7
)
 
(0.6
)
 
(0.1
)
           Loss and loss expense ratio
 
63.9
 %
 
63.3
 %
 
0.6

 
64.1
 %
 
65.7
 %
 
(1.6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before catastrophe
  losses
 
90.2
 %
 
93.2
 %
 
(3.0
)
 
93.9
 %
 
92.6
 %
 
1.3

 
 
 
 
 
 
 
 
 
 
 
 
 

•
$4 million or 1 percent decrease in third-quarter 2018 commercial lines net written premiums, in part reflecting targeted underwriting actions. One percent increase in nine-month net written premiums.
•
$5 million or 1 percent decrease in third-quarter renewal written premiums, with commercial lines average renewal pricing increases in the low-single-digit percent range, and including commercial auto increases in the high-single-digit range.
•
$5 million or 5 percent decrease in third-quarter 2018 new business written by agencies, largely reflecting targeted underwriting actions. For the nine-month period, commercial lines new business written premiums increased 5 percent.
•
0.7 percentage-point third-quarter 2018 combined ratio increase and nine-month improvement of 1.5 points, including a third-quarter increase of 5.7 points and a nine-month decrease of 0.3 points for losses from natural catastrophes. The nine-month decrease in the catastrophe loss ratio was partially offset by an increase of 1.0 points for losses from noncatastrophe weather-related losses.
•
4.6 percentage-point third-quarter 2018 benefit from favorable prior accident year reserve development of $37 million, compared with 2.3 points or $18 million for third-quarter 2017.
•
4.8 percentage-point nine-month 2018 benefit from favorable prior accident year reserve development, compared with 2.2 points for the 2017 period.

CINF 3Q18 Release 4


Personal Lines Insurance Results
(Dollars in millions)
Three months ended September 30,
Nine months ended September 30,
 
 
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Earned premiums
 
$
338

 
$
314

 
8

 
$
994

 
$
921

 
8

Fee revenues
 
1

 
1

 
0

 
4

 
4

 
0

   Total revenues
 
339

 
315

 
8

 
998

 
925

 
8

 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
249

 
233

 
7

 
756

 
706

 
7

Underwriting expenses
 
99

 
91

 
9

 
292

 
267

 
9

   Underwriting loss
 
$
(9
)
 
$
(9
)
 
0

 
$
(50
)
 
$
(48
)
 
(4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
73.7
 %
 
74.0
 %
 
(0.3
)
 
76.0
%
 
76.6
 %
 
(0.6
)
     Underwriting expenses
 
29.3

 
29.1

 
0.2

 
29.4

 
29.0

 
0.4

           Combined ratio
 
103.0
 %
 
103.1
 %
 
(0.1
)
 
105.4
%
 
105.6
 %
 
(0.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
342

 
$
318

 
8

 
$
948

 
$
881

 
8

Agency new business written premiums
 
42

 
43

 
(2
)
 
127

 
122

 
4

Other written premiums
 
(7
)
 
(6
)
 
(17
)
 
(20
)
 
(18
)
 
(11
)
   Net written premiums
 
$
377

 
$
355

 
6

 
$
1,055

 
$
985

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
64.0
 %
 
62.2
 %
 
1.8

 
65.0
%
 
63.6
 %
 
1.4

     Current accident year catastrophe losses
 
9.7

 
11.7

 
(2.0
)
 
9.5

 
14.5

 
(5.0
)
     Prior accident years before catastrophe losses
 
(0.5
)
 
0.7

 
(1.2
)
 
1.2

 
(1.0
)
 
2.2

     Prior accident years catastrophe losses
 
0.5

 
(0.6
)
 
1.1

 
0.3

 
(0.5
)
 
0.8

           Loss and loss expense ratio
 
73.7
 %
 
74.0
 %
 
(0.3
)
 
76.0
%
 
76.6
 %
 
(0.6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before catastrophe
  losses
 
93.3
 %
 
91.3
 %
 
2.0

 
94.4
%
 
92.6
 %
 
1.8

 
 
 
 
 
 
 
 
 
 
 
 
 

•
$22 million or 6 percent increase in third-quarter 2018 personal lines net written premiums, driven by higher renewal written premiums that benefited from rate increases averaging in the high-single-digit percent range, including personal auto increases near the high end of the high-single-digit range. Seven percent increase in nine-month net written premiums.
•
Less than $1 million decrease in third-quarter 2018 new business written by agencies, reflecting underwriting discipline, and 4 percent growth for the first nine months, primarily from expanding our share of business from agencies’ high net worth clients.
•
0.1 percentage-point third-quarter 2018 combined ratio decrease and a nine-month decrease of 0.2 points, including decreases of 0.9 and 4.2 points for losses from natural catastrophes. The nine-month decrease in the catastrophe loss ratio was partially offset by an increase of 0.7 points for noncatastrophe weather-related losses.
•
Less than $1 million of third-quarter 2018 favorable prior accident year reserve development, largely from our personal auto line of business, compared with less than $1 million of unfavorable development for the third quarter of 2017.
•
1.5 percentage-point nine-month 2018 unfavorable prior accident year reserve development, compared with 1.5 points of favorable development for the 2017 period.

CINF 3Q18 Release 5


Excess and Surplus Lines Insurance Results
(Dollars in millions)
Three months ended September 30,
Nine months ended September 30,
 
 
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Earned premiums
 
$
60

 
$
53

 
13

 
$
173

 
$
153

 
13

Fee revenues
 
—

 
—

 
0

 
1

 
1

 
0

   Total revenues
 
60

 
53

 
13

 
174

 
154

 
13

 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
25

 
24

 
4

 
75

 
58

 
29

Underwriting expenses
 
18

 
16

 
13

 
51

 
46

 
11

   Underwriting profit
 
$
17

 
$
13

 
31

 
$
48

 
$
50

 
(4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
42.6
 %
 
45.8
 %
 
(3.2
)
 
43.5
 %
 
38.1
 %
 
5.4

     Underwriting expenses
 
29.4

 
29.0

 
0.4

 
29.3

 
29.9

 
(0.6
)
           Combined ratio
 
72.0
 %
 
74.8
 %
 
(2.8
)
 
72.8
 %
 
68.0
 %
 
4.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
44

 
$
39

 
13

 
$
142

 
$
122

 
16

Agency new business written premiums
 
18

 
15

 
20

 
51

 
52

 
(2
)
Other written premiums
 
(3
)
 
(3
)
 
0

 
(9
)
 
(9
)
 
0

   Net written premiums
 
$
59

 
$
51

 
16

 
$
184

 
$
165

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
53.3
 %
 
49.1
 %
 
4.2

 
54.9
 %
 
52.8
 %
 
2.1

     Current accident year catastrophe losses
 
0.9

 
1.7

 
(0.8
)
 
1.2

 
1.3

 
(0.1
)
     Prior accident years before catastrophe losses
 
(11.3
)
 
(4.7
)
 
(6.6
)
 
(12.6
)
 
(15.9
)
 
3.3

     Prior accident years catastrophe losses
 
(0.3
)
 
(0.3
)
 
0.0

 
0.0

 
(0.1
)
 
0.1

           Loss and loss expense ratio
 
42.6
 %
 
45.8
 %
 
(3.2
)
 
43.5
 %
 
38.1
 %
 
5.4

 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before catastrophe
  losses
 
82.7
 %
 
78.1
 %
 
4.6

 
84.2
 %
 
82.7
 %
 
1.5

 
 
 
 
 
 
 
 
 
 
 
 
 

•
$8 million or 16 percent increase in third-quarter 2018 excess and surplus lines net written premiums, primarily due to higher renewal written premiums that benefited from rate increases averaging in the low-single-digit percent range. Twelve percent increase in nine-month net written premiums.
•
$3 million increase in third-quarter new business written by agencies and $1 million decrease for the first nine months of 2018, reflecting a highly competitive market particularly for larger policies.
•
2.8 percentage-point third-quarter 2018 combined ratio improvement and a nine-month increase of 4.8 points, reflecting changes in amounts of favorable prior accident year reserve development.
•
11.6 percentage-point third-quarter 2018 benefit from favorable prior accident year reserve development of $8 million, compared with 5.0 points or $3 million for third-quarter 2017.
•
12.6 percentage-point nine-month 2018 benefit from favorable prior accident year reserve development, compared with 16.0 points for the 2017 period.


CINF 3Q18 Release 6


Life Insurance Subsidiary Results
(Dollars in millions)
Three months ended September 30,
Nine months ended September 30,
 
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Term life insurance
 
$
42

 
$
39

 
8

 
$
127

 
$
118

 
8

Universal life insurance
 
9

 
7

 
29

 
27

 
28

 
(4
)
Other life insurance, annuity, and disability income
  products
 
10

 
10

 
0

 
31

 
27

 
15

    Earned premiums
 
61

 
56

 
9

 
185

 
173

 
7

Investment income, net of expenses
 
39

 
39

 
0

 
115

 
117

 
(2
)
Investment gains and losses, net
 
—

 
1

 
(100
)
 
—

 
4

 
(100
)
Fee revenues
 
1

 
1

 
0

 
3

 
4

 
(25
)
Total revenues
 
101

 
97

 
4

 
303

 
298

 
2

Contract holders’ benefits incurred
 
66

 
59

 
12

 
191

 
184

 
4

Underwriting expenses incurred
 
17

 
26

 
(35
)
 
56

 
63

 
(11
)
    Total benefits and expenses
 
83

 
85

 
(2
)
 
247

 
247

 
0

Net income before income tax
 
18

 
12

 
50

 
56

 
51

 
10

Income tax
 
3

 
4

 
(25
)
 
11

 
18

 
(39
)
Net income of the life insurance subsidiary
 
$
15

 
$
8

 
88

 
$
45

 
$
33

 
36

 
 
 
 
 
 
 
 
 
 
 
 
 

•
$5 million or 9 percent increase in third-quarter 2018 earned premiums. Growth was largely due to increases of 8 percent growth for both the third quarter and first nine months of 2018, for term life insurance, our largest life insurance product line.
•
$12 million or 36 percent improvement in nine-month 2018 life insurance subsidiary net income, largely due to decreased income taxes as a result of tax reform.
•
$46 million or 4 percent nine-month 2018 decrease to $1.058 billion in GAAP shareholders’ equity for the life insurance subsidiary, primarily from a decrease in unrealized investment gains.


CINF 3Q18 Release 7


Investment and Balance Sheet Highlights
Investments Results
(Dollars in millions)
 
Three months ended September 30,
Nine months ended September 30,
 
2018
 
2017
 
% Change
 
2018
 
2017
 
% Change
Investment income, net of expenses
 
$
154

 
$
153

 
1

 
$
458

 
$
453

 
1

Investment interest credited to contract holders’
 
(24
)
 
(24
)
 
0

 
(72
)
 
(70
)
 
(3
)
Investment gains and losses, net
 
458

 
7

 
nm

 
372

 
156

 
138

      Investments profit
 
$
588

 
$
136

 
332

 
$
758

 
$
539

 
41

 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
   Interest
 
$
111

 
$
112

 
(1
)
 
$
333

 
$
334

 
0

   Dividends
 
45

 
43

 
5

 
131

 
124

 
6

   Other
 
1

 
1

 
0

 
3

 
3

 
0

   Less investment expenses
 
3

 
3

 
0

 
9

 
8

 
13

      Investment income, pretax
 
154

 
153

 
1

 
458

 
453

 
1

      Less income taxes
 
24

 
35

 
(31
)
 
70

 
106

 
(34
)
      Total investment income, after-tax
 
$
130

 
$
118

 
10

 
$
388

 
$
347

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
Investment returns:
 
 
 
 
 
 
 
 
 
 
 
 
Average invested assets plus cash and cash
  equivalents
 
$
17,712

 
$
16,769

 
 
 
$
17,683

 
$
16,462

 
 
      Average yield pretax
 
3.48
%
 
3.65
%
 


 
3.45
%
 
3.67
%
 


      Average yield after-tax
 
2.94

 
2.81

 


 
2.93

 
2.81

 


      Effective tax rate
 
15.4

 
23.4

 
 
 
15.3

 
23.5

 
 
Fixed-maturity returns:
 
 
 
 
 
 
 
 
 
 
 
 
Average amortized cost
 
$
10,603

 
$
10,121

 
 
 
$
10,484

 
$
9,967

 
 
Average yield pretax
 
4.19
%
 
4.43
%
 


 
4.24
%
 
4.47
%
 


Average yield after-tax
 
3.50

 
3.25

 


 
3.54

 
3.27

 


Effective tax rate
 
16.5

 
26.6

 
 
 
16.4

 
26.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

•
$1 million or 1 percent rise in third-quarter 2018 pretax investment income, including a 5 percent increase in equity portfolio dividends and a 1 percent decrease in interest income.
•
$381 million third-quarter 2018 pretax total investment gains, summarized on the table below. Changes in unrealized gains or losses reported in other comprehensive income, in addition to investment gains and losses reported in net income, are useful for evaluating total investment performance over time and are major components of changes in book value and the value creation ratio.
(Dollars in millions)
 
Three months ended September 30,
 
Nine months ended September 30,
 
2018
 
2017
 
2018
 
2017
Investment gains and losses on equity securities sold, net
 
$
8

 
$
1

 
$
17

 
$
146

Unrealized gains and losses on equity securities still held,
  net
 
450

 
—

 
351

 
—

Investment gains and losses on fixed-maturity securities
  sold, net
 
1

 
3

 
7

 
16

Other
 
(1
)
 
3

 
(3
)
 
(6
)
Subtotal - investment gains and losses reported in net
  income
 
458

 
7

 
372

 
156

Change in unrealized investment gains and losses - equity
  securities
 
—

 
9

 
—

 
119

Change in unrealized investment gains and losses - fixed
  maturities
 
(77
)
 
180

 
(378
)
 
422

Total
 
$
381

 
$
196

 
$
(6
)
 
$
697

 
 
 
 
 
 
 
 
 

CINF 3Q18 Release 8



Balance Sheet Highlights
(Dollars in millions, except share data)
At September 30,
At December 31,
 
2018
 
2017
   Total investments
 
$
17,433

 
$
17,051

   Total assets
 
22,480

 
21,843

   Short-term debt
 
30

 
24

   Long-term debt
 
787

 
787

   Shareholders’ equity
 
8,334

 
8,243

   Book value per share
 
51.22

 
50.29

   Debt-to-total-capital ratio
 
8.9
%
 
9.0
%
 
 
 
 
 

•
$18.049 billion in consolidated cash and total investments at September 30, 2018, up 2 percent from $17.708 billion at year-end 2017.
•
$10.660 billion bond portfolio at September 30, 2018, with an average rating of A2/A. Fair value increased $24 million during the third quarter of 2018, including $98 million in net purchases of fixed-maturity securities.
•
$6.663 billion equity portfolio was 38.2 percent of total investments, including $3.369 billion in appreciated value before taxes at September 30, 2018. Third-quarter 2018 increase in fair value of $463 million or 7 percent.
•
$5.299 billion of statutory surplus for the property casualty insurance group at September 30, 2018, up $205 million from $5.094 billion at year-end 2017, after declaring $300 million in dividends to the parent company. For the 12 months ended September 30, 2018, the ratio of net written premiums to surplus was 0.9-to-1, compared with 1.0-to-1 at year-end 2017.
•
$2.54 three-month 2018 increase in book value per share, including additions of $1.19 from net income before investment gains, $1.86 from investment portfolio net investment gains or changes in unrealized gains for fixed-maturity securities and $0.02 for other items, partially offset by a deduction of $0.53 from dividends declared to shareholders.
•
Value creation ratio of 5.0 percent for the first nine months of 2018, including 5.4 percent from net income before investment gains, which includes underwriting and investment income, 0.0 percent from investment portfolio net investment losses and changes in unrealized gains for fixed-maturity securities, in addition to negative 0.4 percent from other items.
•
Announcement on October 12, 2018, of a definitive agreement to acquire MSP Underwriting Limited, a global specialty underwriter and Munich Re subsidiary, in an all-cash transaction for £102 million. MSP operates through Beaufort Underwriting Agency Limited, the underwriter for Lloyd’s Syndicate 318 and its 2017 annual gross written premiums of approximately £153 million.

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 3Q18 Release 9

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 2017 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 30.
Factors that could cause or contribute to such differences include, but are not limited to:
•
The fact that the consummation of the transaction to acquire MSP Underwriting Ltd. and it its subsidiaries is subject to closing conditions, one or more of which may not be satisfied, or that the transaction is not consummated for any other reason
•
Our inability to integrate MSP and its subsidiaries into our on-going operations, or disruptions to our on-going operations due to such integration
•
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, assumptions or reliance on third-party data used for critical accounting estimates
•
Declines in overall stock market values negatively affecting the company’s equity portfolio and book value
•
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
•
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 fair 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
•
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; disrupt our relationships with agents, policyholders and others; cause reputational damage, mitigation expenses and data loss and expose us to liability under federal and state laws
•
Disruption of the insurance market caused by technology innovations such as driverless cars that could decrease consumer demand for insurance products
•
Delays, inadequate data developed internally or from third parties, 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 ceded reinsurance on acceptable terms, amount of reinsurance coverage 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
•
Inability of our subsidiaries 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

CINF 3Q18 Release 10

•
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
◦
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 3Q18 Release 11

Cincinnati Financial Corporation
Condensed Consolidated Balance Sheets and Statements of Income (unaudited)
(Dollars in millions)
 
 
 
 
September 30,
 
December 31,
 
 
 
 
 
2018
 
2017
Assets
 
 
 
 
 
 
 
   Investments
 
 
 
 
$
17,433

 
$
17,051

   Cash and cash equivalents
 
 
 
 
616

 
657

   Premiums receivable
 
 
 
 
1,709

 
1,589

   Reinsurance recoverable
 
 
 
 
424

 
432

Deferred policy acquisition costs
 
 
 
 
743

 
670

   Other assets
 
 
 
 
1,555

 
1,444

Total assets
 
 
 
 
$
22,480

 
$
21,843

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
   Insurance reserves
 
 
 
 
$
8,348

 
$
8,002

   Unearned premiums
 
 
 
 
2,591

 
2,404

   Deferred income tax
 
 
 
 
797

 
745

   Long-term debt and capital lease obligations
 
 
 
 
830

 
827

   Other liabilities
 
 
 
 
1,580

 
1,622

Total liabilities
 
 
 
 
14,146

 
13,600

 
 
 
 
 
 
 
 
Shareholders’ Equity
 
 
 
 
 
 
 
   Common stock and paid-in capital
 
 
 
 
1,670

 
1,662

   Retained earnings
 
 
 
 
8,164

 
5,180

   Accumulated other comprehensive income (loss)
 
 
 
 
(4
)
 
2,788

   Treasury stock
 
 
 
 
(1,496
)
 
(1,387
)
Total shareholders' equity
 
 
 
 
8,334

 
8,243

Total liabilities and shareholders' equity
 
 
 
 
$
22,480

 
$
21,843

 
 
 
 
 
 
 
 
(Dollars in millions, except per share data)
Three months ended September 30,
 
Nine months ended September 30,
 
2018
 
2017
 
2018
 
2017
Revenues
 
 
 
 
 
 
 
   Earned premiums
$
1,298

 
$
1,247

 
$
3,852

 
$
3,696

   Investment income, net of expenses
154

 
153

 
458

 
453

   Investment gains and losses, net
458

 
7

 
372

 
156

   Other revenues
5

 
5

 
15

 
16

      Total revenues
1,915

 
1,412

 
4,697

 
4,321

 
 
 
 
 
 
 
 
Benefits and Expenses
 
 
 
 
 
 
 
   Insurance losses and contract holders' benefits
879

 
874

 
2,616

 
2,581

   Underwriting, acquisition and insurance expenses
401

 
393

 
1,199

 
1,157

   Interest expense
14

 
13

 
40

 
39

   Other operating expenses
3

 
3

 
10

 
11

      Total benefits and expenses
1,297

 
1,283

 
3,865

 
3,788

 
 
 
 
 
 
 
 
Income Before Income Taxes
618

 
129

 
832

 
533

 
 
 
 
 
 
 
 
Provision for Income Taxes
65

 
27

 
93

 
130

 
 
 
 
 
 
 
 
Net Income
$
553

 
$
102

 
$
739

 
$
403

 
 
 
 
 
 
 
 
Per Common Share:
 
 
 
 
 
 
 
   Net income—basic
$
3.40

 
$
0.62

 
$
4.53

 
$
2.45

   Net income—diluted
3.38

 
0.61

 
4.49

 
2.42

 
 
 
 
 
 
 
 

CINF 3Q18 Release 12

Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures
(See attached tables for reconciliations; additional 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 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 results 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; supplement reporting segment disclosures with disclosures for a subsidiary company or for a combination of subsidiaries or reporting segments; or relate to accounting refinements that affect comparability between periods, creating a need to analyze data on the same basis.
•
Non-GAAP operating income: Non-GAAP operating income is calculated by excluding investment gains and losses (defined as investment gains and losses after applicable federal and state income taxes) and other significant non-recurring items from net income. Management evaluates non-GAAP operating income to measure the success of pricing, rate and underwriting strategies. While investment gains (or losses) are integral to the company’s insurance operations over the long term, the determination to realize investment gains or losses on fixed-maturity securities sold 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 are recognized from certain changes in market values of securities without actual realization. Management believes that the level of 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 non-GAAP 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 non-GAAP operating income so that all investors have what management believes to be a useful supplement to GAAP information.
•
Consolidated property casualty insurance results: To supplement reporting segment disclosures related to our property casualty insurance operations, we also evaluate results for those operations on a basis that includes results for our property casualty insurance and brokerage services subsidiaries. That is the total of our commercial lines, personal lines and our excess and surplus lines segment plus our reinsurance assumed operations.
•
Life insurance subsidiary results: To supplement life insurance reporting segment disclosures related to our life insurance operation, we also evaluate results for that operation on a basis that includes life insurance subsidiary investment income, or investment income plus investment gains and losses, that are also included in our investments reporting segment. We recognize that assets under management, capital appreciation and investment income are integral to evaluating the success of the life insurance segment because of the long duration of life products.


CINF 3Q18 Release 13

Cincinnati Financial Corporation
 Net Income Reconciliation
 
(Dollars in millions, except per share data)
Three months ended September 30,
Nine months ended September 30,
 
 
2018
 
2017
 
2018
 
2017
Net income
 
$
553

 
$
102

 
$
739

 
$
403

Less:
 
 
 
 
 
 
 
 
   Investment gains and losses, net
 
458

 
7

 
372

 
156

   Income tax on investment gains and losses
 
(98
)
 
(2
)
 
(79
)
 
(55
)
   Investment gains and losses, after-tax
 
360

 
5

 
293

 
101

   Other non-recurring items
 
$
56

 
$
—

 
$
56

 
$
—

Non-GAAP operating income
 
$
137

 
$
97

 
$
390

 
$
302

 
 
 
 
 
 
 
 
 
Diluted per share data:
 
 
 
 
 
 
 
 
Net income
 
$
3.38

 
$
0.61

 
$
4.49

 
$
2.42

Less:
 
 
 
 
 
 
 
 
   Investment gains and losses, net
 
2.79

 
0.04

 
2.26

 
0.94

   Income tax on investment gains and losses
 
(0.59
)
 
(0.01
)
 
(0.48
)
 
(0.33
)
   Investment gains and losses, after-tax
 
2.20

 
0.03

 
1.78

 
0.61

   Other non-recurring items
 
$
0.34

 
$
—

 
$
0.34

 
$
—

   Non-GAAP operating income
 
$
0.84

 
$
0.58

 
$
2.37

 
$
1.81

 
 
 
 
 
 
 
 
 

Life Insurance Reconciliation
 
(Dollars in millions)
Three months ended September 30,
Nine months ended September 30,
 
 
2018
 
2017
 
2018
 
2017
Net income of the life insurance subsidiary
 
$
15

 
$
8

 
$
45

 
$
33

Investment gains and losses, net
 
—

 
1

 
—

 
4

Income tax on investment gains and losses
 
—

 
1

 
—

 
2

Non-GAAP operating income
 
15

 
8

 
45

 
31

 
 
 
 
 
 
 
 
 
Investment income, net of expenses
 
(39
)
 
(39
)
 
(115
)
 
(117
)
Investment income credited to contract holders’
 
24

 
24

 
72

 
70

Income tax excluding tax on investment gains and losses, net
 
3

 
3

 
11

 
16

Life insurance segment profit
 
$
3

 
$
(4
)
 
$
13

 
$
—

 
 
 
 
 
 
 
 
 

CINF 3Q18 Release 14

Cincinnati Financial Corporation
Other Measures
•
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 measure is useful, 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 and differ from GAAP. 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.

Value Creation Ratio Calculations
(Dollars are per share)
Three months ended September 30,
Nine months ended September 30,
 
2018
 
2017
 
2018
 
2017
Value creation ratio:
 
 
 
 
 
 
 
 
   End of period book value*
 
$
51.22

 
$
45.86

 
$
51.22

 
$
45.86

   Less beginning of period book value
 
48.68

 
44.97

 
50.29

 
42.95

   Change in book value
 
2.54

 
0.89

 
0.93

 
2.91

   Dividend declared to shareholders
 
0.53

 
0.50

 
1.59

 
1.50

   Total value creation
 
$
3.07

 
$
1.39

 
$
2.52

 
$
4.41

 
 
 
 
 
 
 
 
 
Value creation ratio from change in book value**
 
5.2
%
 
2.0
%
 
1.8
%
 
6.8
%
Value creation ratio from dividends declared to
   shareholders***
1.1

 
1.1

 
3.2

 
3.5

Value creation ratio
 
6.3
%
 
3.1
%
 
5.0
%
 
10.3
%
 
 
 
 
 
 
 
 
 
    * Book value per share is calculated by dividing end of period total shareholders' equity by end of period shares outstanding
 
 
  ** Change in book value divided by the beginning of period book value
 
 
*** Dividend declared to shareholders divided by beginning of period book value
 
 


CINF 3Q18 Release 15

Cincinnati Financial Corporation
Property Casualty Insurance Reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended September 30, 2018
 
Consolidated
Commercial
Personal
E&S
 
Cincinnati Re
Premiums:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Written premiums
 
$
1,246

 
 
$
774

 
 
$
377

 
 
$
59

 
 
$
36

   Unearned premiums change
 
(9
)
 
 
31

 
 
(39
)
 
 
1

 
 
(2
)
   Earned premiums
 
$
1,237

 
 
$
805

 
 
$
338

 
 
$
60

 
 
$
34

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statutory ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Combined ratio
 
96.7
 %
 
 
96.7
 %
 
 
100.6
 %
 
 
73.1
 %
 
 
106.8
 %
   Contribution from catastrophe losses
 
9.7

 
 
9.5

 
 
10.2

 
 
0.6

 
 
24.5

   Combined ratio excluding catastrophe losses
 
87.0
 %
 
 
87.2
 %
 
 
90.4
 %
 
 
72.5
 %
 
 
82.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commission expense ratio
 
19.3
 %
 
 
19.3
 %
 
 
17.0
 %
 
 
27.2
 %
 
 
30.7
 %
   Other underwriting expense ratio
 
11.7

 
 
13.5

 
 
9.9

 
 
3.3

 
 
6.8

   Total expense ratio
 
31.0
 %
 
 
32.8
 %
 
 
26.9
 %
 
 
30.5
 %
 
 
37.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Combined ratio
 
96.8
 %
 
 
95.9
 %
 
 
103.0
 %
 
 
72.0
 %
 
 
101.0
 %
   Contribution from catastrophe losses
 
9.7

 
 
9.5

 
 
10.2

 
 
0.6

 
 
24.5

   Prior accident years before catastrophe losses
 
(3.1
)
 
 
(3.8
)
 
 
(0.5
)
 
 
(11.3
)
 
 
2.3

Current accident year combined ratio before
   catastrophe losses
 
90.2
 %
 
 
90.2
 %
 
 
93.3
 %
 
 
82.7
 %
 
 
74.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Nine months ended September 30, 2018
 
Consolidated
Commercial
Personal
E&S
 
Cincinnati Re
Premiums:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Written premiums
 
$
3,853

 
 
$
2,484

 
 
$
1,055

 
 
$
184

 
 
$
130

   Unearned premiums change
 
(186
)
 
 
(77
)
 
 
(61
)
 
 
(11
)
 
 
(37
)
   Earned premiums
 
$
3,667

 
 
$
2,407

 
 
$
994

 
 
$
173

 
 
$
93

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statutory ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Combined ratio
 
96.3
 %
 
 
95.2
 %
 
 
104.0
 %
 
 
72.5
 %
 
 
85.9
 %
   Contribution from catastrophe losses
 
7.1

 
 
6.3

 
 
9.8

 
 
1.2

 
 
9.0

   Combined ratio excluding catastrophe losses
 
89.2
 %
 
 
88.9
 %
 
 
94.2
 %
 
 
71.3
 %
 
 
76.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commission expense ratio
 
18.5
 %
 
 
17.9
 %
 
 
17.5
 %
 
 
25.7
 %
 
 
26.4
 %
   Other underwriting expense ratio
 
11.7

 
 
13.2

 
 
10.5

 
 
3.3

 
 
6.1

   Total expense ratio
 
30.2
 %
 
 
31.1
 %
 
 
28.0
 %
 
 
29.0
 %
 
 
32.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Combined ratio
 
97.3
 %
 
 
96.1
 %
 
 
105.4
 %
 
 
72.8
 %
 
 
86.2
 %
   Contribution from catastrophe losses
 
7.1

 
 
6.3

 
 
9.8

 
 
1.2

 
 
9.0

   Prior accident years before catastrophe losses
 
(3.0
)
 
 
(4.1
)
 
 
1.2

 
 
(12.6
)
 
 
(3.9
)
Current accident year combined ratio before
   catastrophe losses
 
93.2
 %
 
 
93.9
 %
 
 
94.4
 %
 
 
84.2
 %
 
 
81.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 3Q18 Release 16
Exhibit


Cincinnati Financial Corporation
Supplemental Financial Data
for the period ending September 30, 2018

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

Investor Contact:
Media Contact:
Shareholder Contact:
Dennis E. McDaniel
Betsy E. Ertel
Brandon McIntosh
513-870-2768
513-603-5323
513-870-2696

 
A.M. Best
Fitch
Moody's
S&P
Cincinnati Financial Corporation
 
 
 
 
Corporate Debt
a-
A-
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 24, 2018, 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 2018 Supplemental Financial Data
1


 
Cincinnati Financial Corporation
 
Supplemental Financial Data
 
for the period ending September 30, 2018
 
 
 
 
 
Page
 
Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures
3
 
 
 
Consolidated
 
 
CFC and Subsidiaries Consolidation – Nine Months Ended September 30, 2018
4
 
CFC and Subsidiaries Consolidation – Three Months Ended September 30, 2018
5
 
 
 
 
 
 
Consolidated Property Casualty Insurance Operations
 
 
Statutory Statements of Income
6
 
Consolidated Cincinnati Insurance Companies – Losses Incurred Detail
7
 
Consolidated Cincinnati Insurance Companies – Loss Ratio Detail
8
 
Consolidated Cincinnati Insurance Companies – Loss Claim Count Detail
9
 
Direct Written Premiums by Risk State by Line of Business
10
 
Quarterly Property Casualty Data – Commercial Lines
11
 
Quarterly Property Casualty Data – Personal Lines and Excess & Surplus Lines
12
 
Loss and Loss Expense Analysis – Nine Months Ended September 30, 2018
13
 
Loss and Loss Expense Analysis – Three Months Ended September 30, 2018
14
 
 
 
Reconciliation Data
 
 
Quarterly Property Casualty Data – Consolidated
15
 
Quarterly Property Casualty Data – Commercial Lines
16
 
Quarterly Property Casualty Data – Personal Lines
17
 
Quarterly Property Casualty Data – Excess & Surplus Lines
18
 
 
 
Life Insurance Operations
 
 
Statutory Statements of Income
19
 
 
 
Noninsurance Operations and Cincinnati Re
 
 
Quarterly Data – Other
20



CINF Third-Quarter 2018 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 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 results 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; supplement reporting segment disclosures with disclosures for a subsidiary company or for a combination of subsidiaries or reporting segments; or relate to accounting refinements that affect comparability between periods, creating a need to analyze data on the same basis.
•
Non-GAAP operating income: Non-GAAP operating income is calculated by excluding investment gains and losses (defined as investment gains and losses after applicable federal and state income taxes) and other significant non-recurring items from net income. Management evaluates non-GAAP operating income to measure the success of pricing, rate and underwriting strategies. While investment gains (or losses) are integral to the company’s insurance operations over the long term, the determination to realize investment gains or losses on fixed-maturity securities sold 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 are recognized from certain changes in market values of securities without actual realization. Management believes that the level of 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 non-GAAP 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 non-GAAP operating income so that all investors have what management believes to be a useful supplement to GAAP information.
•
Consolidated property casualty insurance results: To supplement reporting segment disclosures related to our property casualty insurance operations, we also evaluate results for those operations on a basis that includes results for our property casualty insurance and brokerage services subsidiaries. That is the total of our commercial lines, personal lines and our excess and surplus lines segment plus our reinsurance assumed operations.
•
Life insurance subsidiary results: To supplement life insurance reporting segment disclosures related to our life insurance operation, we also evaluate results for that operation on a basis that includes life insurance subsidiary investment income, or investment income plus investment gains and losses, that are also included in our investments reporting segment. We recognize that assets under management, capital appreciation and investment income are integral to evaluating the success of the life insurance segment because of the long duration of life products.

Other Measures
•
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 measure is useful, 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 and differ from GAAP. 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 2018 Supplemental Financial Data
3


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
(Dollars in millions)
CFC
CONSOL P&C
CLIC
CFC-I
ELIM
Total
Revenues
 
 
 
 
 
 
  Premiums earned:
 
 
 
 
 
 
    Property casualty
$
—

$
3,787

$
—

$
—

$
—

$
3,787

    Life
—

—

237

—

—

237

    Premiums ceded
—

(120
)
(52
)
—

—

(172
)
      Total earned premium
—

3,667

185

—

—

3,852

  Investment income, net of expenses
46

297

115

—

—

458

  Investment gains and losses, net
232

140

—

—

—

372

  Fee revenues
—

8

3

—

—

11

  Other revenues
11

1

—

4

(12
)
4

Total revenues
$
289

$
4,113

$
303

$
4

$
(12
)
$
4,697

 
 
 
 
 
 
 
Benefits & expenses
 
 
 
 
 
 
  Losses & contract holders' benefits
$
—

$
2,449

$
228

$
—

$
—

$
2,677

  Reinsurance recoveries
—

(24
)
(37
)
—

—

(61
)
  Underwriting, acquisition and insurance expenses
—

1,143

56

—

—

1,199

  Interest expense
39

—

—

1

—

40

  Other operating expenses
21

—

—

1

(12
)
10

Total expenses
$
60

$
3,568

$
247

$
2

$
(12
)
$
3,865

 
 
 
 
 
 
 
Income before income taxes
$
229

$
545

$
56

$
2

$
—

$
832

 
 
 
 
 
 
 
Provision (benefit) for income taxes
 
 
 
 
 
 
  Current operating income (loss)
$
(46
)
$
(69
)
$
—

$
—

$
—

$
(115
)
  Capital gains/losses
48

30

—

—

—

78

  Deferred
40

79

11

—

—

130

Total provision for income taxes
$
42

$
40

$
11

$
—

$
—

$
93

 
 
 
 
 
 
 
Net income - current year
$
187

$
505

$
45

$
2

$
—

$
739

 
 
 
 
 
 
 
Net income - prior year
$
39

$
329

$
33

$
1

$
1

$
403

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


CINF Third-Quarter 2018 Supplemental Financial Data
4


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Three Months Ended September 30, 2018
 
 
 
 
 
 
 
(Dollars in millions)
CFC
CONSOL P&C
CLIC
CFC-I
ELIM
Total
Revenues
 
 
 
 
 
 
  Premiums earned:
 
 
 
 
 
 
    Property casualty
$
—

$
1,276

$
—

$
—

$
—

$
1,276

    Life
—

—

79

—

—

79

    Premiums ceded
—

(39
)
(18
)
—

—

(57
)
      Total earned premium
—

1,237

61

—

—

1,298

  Investment income, net of expenses
16

99

39

—

—

154

  Investment gains and losses, net
213

245

—

—

—

458

  Fee revenues
—

2

1

—

—

3

  Other revenues
3

1

—

2

(4
)
2

Total revenues
$
232

$
1,584

$
101

$
2

$
(4
)
$
1,915

 
 
 
 
 
 
 
Benefits & expenses
 
 
 
 
 
 
  Losses & contract holders' benefits
$
—

$
818

$
82

$
—

$
—

$
900

  Reinsurance recoveries
—

(5
)
(16
)
—

—

(21
)
  Underwriting, acquisition and insurance expenses
—

384

17

—

—

401

  Interest expense
13

—

—

1

—

14

  Other operating expenses
7

—

—

—

(4
)
3

Total expenses
$
20

$
1,197

$
83

$
1

$
(4
)
$
1,297

 
 
 
 
 
 
 
Income before income taxes
$
212

$
387

$
18

$
1

$
—

$
618

 
 
 
 
 
 
 
Provision (benefit) for income taxes
 
 
 
 
 
 
  Current operating income (loss)
$
(43
)
$
(150
)
$
(1
)
$
—

$
—

$
(194
)
  Capital gains/losses
44

52

—

—

—

96

  Deferred
40

119

4

—

—

163

Total provision for income taxes
$
41

$
21

$
3

$
—

$
—

$
65

 
 
 
 
 
 
 
Net income - current year
$
171

$
366

$
15

$
1

$
—

$
553

 
 
 
 
 
 
 
Net income - prior year
$
5

$
89

$
8

$
—

$
—

$
102

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


CINF Third-Quarter 2018 Supplemental Financial Data
5


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)
2018
2017
Change
% Change
2018
2017
Change
% Change
Underwriting income
 
 
 
 
 
 
 
 
Net premiums written
$
1,246

$
1,208

$
38

3

$
3,853

$
3,710

$
143

4

Unearned premium change
9

17

(8
)
(47
)
186

187

(1
)
(1
)
Earned premiums
$
1,237

$
1,191

$
46

4

$
3,667

$
3,523

$
144

4

 
 
 
 
 
 
 
 
 
Losses incurred
$
677

$
679

$
(2
)
—

$
2,014

$
1,994

$
20

1

Defense and cost containment expenses incurred
70

62

8

13

228

198

30

15

Adjusting and other expenses incurred
66

74

(8
)
(11
)
183

205

(22
)
(11
)
Other underwriting expenses incurred
384

368

16

4

1,153

1,112

41

4

Workers compensation dividend incurred
3

3

—

—

9

10

(1
)
(10
)
     Total underwriting deductions
$
1,200

$
1,186

$
14

1

$
3,587

$
3,519

$
68

2

 
 
 
 
 
 
 
 
 
Net underwriting profit
$
37

$
5

$
32

nm

$
80

$
4

$
76

nm

 
 
 
 
 
 
 
 
 
Investment income
 
 
 
 
 
 
 
 
Gross investment income earned
$
100

$
101

$
(1
)
(1
)
$
301

$
299

$
2

1

Net investment income earned
98

100

(2
)
(2
)
296

295

1

—

Net realized capital gains and losses, net
44

—

44

nm

81

79

2

3

     Net investment gains (net of tax)
$
142

$
100

$
42

42

$
377

$
374

$
3

1

 
 
 
 
 
 
 
 
 
     Other income
$
3

$
2

$
1

50

$
7

$
7

$
—

—

 
 
 
 
 
 
 
 
 
Net income before federal income taxes
$
182

$
107

$
75

70

$
464

$
385

$
79

21

Federal and foreign income taxes incurred
(109
)
28

(137
)
nm

(62
)
71

(133
)
nm

     Net income (statutory)
$
291

$
79

$
212

nm

$
526

$
314

$
212

68

 
 
 
 
 
 
 
 
 
Policyholders' surplus - statutory
$
5,299

$
4,846

$
453

9

$
5,299

$
4,846

$
453

9

 
 
 
 
 
 
 
 
 
Fixed maturities at amortized cost - statutory
$
7,184

$
6,811

$
373

5

$
7,184

$
6,811

$
373

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 2018 Supplemental Financial Data
6


Consolidated Cincinnati Insurance Companies
Losses Incurred Detail
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5 million

$
8

$
6

$
15

$
11

$
6

$
—

$
28

$
21

$
28

$
29

$
34


$
45

Current accident year losses $1 million - $5 million

70

62

32

60

75

48

29

94

77

164

152


212

Large loss prior accident year reserve development

10

4

34

9

4

21

17

38

38

48

42


51

   Total large losses incurred

$
88

$
72

$
81

$
80

$
85

$
69

$
74

$
153

$
143

$
241

$
228


$
308

Losses incurred but not reported

(10
)
87

10

60

(9
)
(1
)
4

97

3

87

(6
)

54

Other losses excluding catastrophe losses

482

433

520

450

499

487

467

953

954

1,435

1,453


1,903

Catastrophe losses

117

83

51

8

104

112

103

134

215

251

319


327

   Total losses incurred

$
677

$
675

$
662

$
598

$
679

$
667

$
648

$
1,337

$
1,315

$
2,014

$
1,994


$
2,592

Commercial Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5 million

$
8

$
6

$
15

$
5

$
6

$
—

$
28

$
21

$
28

$
29

$
34


$
39

Current accident year losses $1 million - $5 million

62

51

22

51

56

33

26

73

59

135

115


166

Large loss prior accident year reserve development

11

1

29

10

1

19

17

30

36

41

37


47

   Total large losses incurred

$
81

$
58

$
66

$
66

$
63

$
52

$
71

$
124

$
123

$
205

$
186


$
252

Losses incurred but not reported

(23
)
53

16

44

1

21

(5
)
69

16

46

17


61

Other losses excluding catastrophe losses

284

247

325

273

313

292

306

572

598

856

911


1,184

Catastrophe losses

75

51

22

1

27

64

58

73

122

148

149


150

   Total losses incurred

$
417

$
409

$
429

$
384

$
404

$
429

$
430

$
838

$
859

$
1,255

$
1,263


$
1,647

Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5 million

$
—

$
—

$
—

$
6

$
—

$
—

$
—

$
—

$
—

$
—

$
—


$
6

Current accident year losses $1 million - $5 million

7

11

10

6

19

15

3

21

18

28

37


43

Large loss prior accident year reserve development

(1
)
3

5

(1
)
3

1

—

8

1

7

4


3

   Total large losses incurred

$
6

$
14

$
15

$
11

$
22

$
16

$
3

$
29

$
19

$
35

$
41


$
52

Losses incurred but not reported

11

31

(1
)
10

(17
)
(12
)
10

30

(2
)
41

(19
)

(9
)
Other losses excluding catastrophe losses

172

157

167

157

164

164

144

324

308

496

472


629

Catastrophe losses

33

33

29

5

34

47

46

62

93

95

127


132

   Total losses incurred

$
222

$
235

$
210

$
183

$
203

$
215

$
203

$
445

$
418

$
667

$
621


$
804

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

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—


$
—

Current accident year losses $1 million - $5 million

1

—

—

3

—

—

—

—

—

1

—


3

Large loss prior accident year reserve development

—

—

—

—

—

1

—

—

1

—

1


1

   Total large losses incurred

$
1

$
—

$
—

$
3

$
—

$
1

$
—

$
—

$
1

$
1

$
1


$
4

Losses incurred but not reported

2

3

(5
)
6

7

(10
)
(1
)
(2
)
(11
)
—

(4
)

2

Other losses excluding catastrophe losses

11

17

14

9

8

19

8

31

27

42

35


44

Catastrophe losses

1

—

1

—

1

1

—

1

1

2

2


2

   Total losses incurred

$
15

$
20

$
10

$
18

$
16

$
11

$
7

$
30

$
18

$
45

$
34


$
52

*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.
Consolidated property casualty data includes results from our Cincinnati Re operations.
 
 
 
 
 

CINF Third-Quarter 2018 Supplemental Financial Data
7


Consolidated Cincinnati Insurance Companies
Loss Ratio Detail
 
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5 million

0.7
 %
0.4
 %
1.3
 %
0.9
 %
0.5
 %
—
 %
2.4
 %
0.8
 %
1.2
 %
0.8
 %
1.0
 %
 
1.0
 %
Current accident year losses $1 million - $5 million

5.7

5.1

2.7

5.0

6.4

4.1

2.5

3.9

3.3

4.5

4.3

 
4.5

Large loss prior accident year reserve development

0.7

0.3

2.8

0.7

0.3

1.8

1.5

1.6

1.6

1.3

1.2

 
1.0

   Total large loss ratio

7.1
 %
5.8
 %
6.8
 %
6.6
 %
7.2
 %
5.9
 %
6.4
 %
6.3
 %
6.1
 %
6.6
 %
6.5
 %
 
6.5
 %
Losses incurred but not reported

(0.8
)
7.1

0.8

5.0

(0.7
)
(0.1
)
0.4

4.0

0.1

2.4

(0.2
)
 
1.1

Other losses excluding catastrophe losses

39.0

35.1

43.4

37.6

41.7

41.3

40.5

39.2

40.9

39.0

41.2

 
40.3

Catastrophe losses

9.5

6.8

4.2

0.7

8.8

9.4

9.0

5.5

9.3

6.9

9.1

 
7.0

   Total loss ratio

54.8
 %
54.8
 %
55.2
 %
49.9
 %
57.0
 %
56.5
 %
56.3
 %
55.0
 %
56.4
 %
54.9
 %
56.6
 %
 
54.9
 %
Commercial Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5 million

1.1
 %
0.7
 %
1.9
 %
0.6
 %
0.8
 %
—
 %
3.6
 %
1.3
 %
1.8
 %
1.2
 %
1.5
 %
 
1.2
 %
Current accident year losses $1 million - $5 million

7.7

6.2

2.9

6.4

7.2

4.2

3.3

4.6

3.7

5.6

4.8

 
5.3

Large loss prior accident year reserve development

1.3

0.2

3.6

1.2

0.1

2.3

2.2

1.8

2.3

1.7

1.6

 
1.5

   Total large loss ratio

10.1
 %
7.1
 %
8.4
 %
8.2
 %
8.1
 %
6.5
 %
9.1
 %
7.7
 %
7.8
 %
8.5
 %
7.9
 %
 
8.0
 %
Losses incurred but not reported

(2.9
)
6.5

2.1

5.5

—

2.7

(0.6
)
4.3

1.0

1.9

0.7

 
1.9

Other losses excluding catastrophe losses

35.3

30.4

41.1

34.4

39.6

36.5

39.2

35.7

37.9

35.6

38.4

 
37.4

Catastrophe losses

9.3

6.3

2.8

0.1

3.4

8.1

7.4

4.6

7.7

6.2

6.3

 
4.7

   Total loss ratio

51.8
 %
50.3
 %
54.4
 %
48.2
 %
51.1
 %
53.8
 %
55.1
 %
52.3
 %
54.4
 %
52.2
 %
53.3
 %
 
52.0
 %
Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5 million

—
 %
—
 %
—
 %
1.9
 %
—
 %
—
 %
—
 %
—
 %
—
 %
—
 %
—
 %
 
0.5
 %
Current accident year losses $1 million - $5 million

2.0

3.5

2.9

1.8

6.0

4.8

1.0

3.2

2.9

2.8

4.0

 
3.4

Large loss prior accident year reserve development

(0.3
)
0.8

1.7

(0.3
)
1.0

0.6

(0.2
)
1.2

0.2

0.7

0.4

 
0.3

   Total large loss ratio

1.7
 %
4.3
 %
4.6
 %
3.4
 %
7.0
 %
5.4
 %
0.8
 %
4.4
 %
3.1
 %
3.5
 %
4.4
 %
 
4.2
 %
Losses incurred but not reported

3.4

9.4

(0.4
)
3.2

(5.3
)
(4.0
)
3.3

4.6

(0.4
)
4.2

(2.1
)
 
(0.7
)
Other losses excluding catastrophe losses

50.5

47.3

51.6

49.0

52.1

53.7

47.9

49.4

50.9

49.7

51.3

 
50.7

Catastrophe losses

10.0

10.0

8.8

1.6

10.8

15.2

15.5

9.4

15.3

9.6

13.8

 
10.6

   Total loss ratio

65.6
 %
71.0
 %
64.6
 %
57.2
 %
64.6
 %
70.3
 %
67.5
 %
67.8
 %
68.9
 %
67.0
 %
67.4
 %
 
64.8
 %
Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5 million

—
 %
—
 %
—
 %
—
 %
—
 %
—
 %
—
 %
—
 %
—
 %
—
 %
—
 %
 
—
 %
Current accident year losses $1 million - $5 million

1.9

—

—

5.6

—

—

—

—

—

0.7

—

 
1.5

Large loss prior accident year reserve development

0.4

(0.2
)
(0.4
)
(0.1
)
(0.3
)
2.3

(0.3
)
(0.3
)
1.1

(0.1
)
0.6

 
0.4

   Total large loss ratio

2.3
 %
(0.2
)%
(0.4
)%
5.5
 %
(0.3
)%
2.3
 %
(0.3
)%
(0.3
)%
1.1
 %
0.6
 %
0.6
 %
 
1.9
 %
Losses incurred but not reported

4.3

4.5

(9.0
)
9.8

13.8

(20.2
)
(1.6
)
(2.1
)
(11.3
)
0.1

(2.4
)
 
0.8

Other losses excluding catastrophe losses

18.7

28.6

26.4

17.3

15.3

37.0

17.0

27.4

27.4

24.4

23.1

 
21.6

Catastrophe losses

0.5

1.0

1.8

0.2

1.3

1.2

0.8

1.4

1.0

1.1

1.1

 
0.8

   Total loss ratio

25.8
 %
33.9
 %
18.8
 %
32.8
 %
30.1
 %
20.3
 %
15.9
 %
26.4
 %
18.2
 %
26.2
 %
22.4
 %
 
25.1
 %
*Certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts.
Consolidated property casualty data includes results from our Cincinnati Re operations.
 
 
 
 
 
 
 
 


CINF Third-Quarter 2018 Supplemental Financial Data
8


Consolidated Cincinnati Insurance Companies
Loss Claim Count Detail
 
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year reported losses greater
   than $5 million

1

1

3

2

1

—

5

4

5

5

6

 
8

Current accident year reported losses
   $1 million - $5 million

37

36

22

32

43

31

22

59

55

95

100

 
134

Prior accident year reported losses on
   large losses

8

9

24

10

12

15

14

35

30

44

42

 
63

   Non-Catastrophe reported losses on
      large losses total

46

46

49

44

56

46

41

98

90

144

148

 
205

Commercial Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year reported losses greater
   than $5 million

1

1

2

1

1

—

5

3

5

4

6

 
7

Current accident year reported losses
   $1 million - $5 million

33

30

15

27

34

20

20

46

42

77

77

 
106

Prior accident year reported losses on
   large losses

7

6

22

10

10

12

13

30

26

38

35

 
56

   Non-Catastrophe reported losses on
      large losses total

41

37

39

38

45

32

38

79

73

119

118

 
169

Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year reported losses greater
   than $5 million

—

—

1

1

—

—

—

1

—

1

—

 
1

Current accident year reported losses
   $1 million - $5 million

3

6

7

5

9

11

2

13

13

17

23

 
26

Prior accident year reported losses on
   large losses

1

3

2

—

2

2

—

5

2

6

5

 
5

   Non-Catastrophe reported losses on
      large losses total

4

9

10

6

11

13

2

19

15

24

28

 
32

Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year reported losses greater
   than $5 million

—

—

—

—

—

—

—

—

—

—

—

 
—

Current accident year reported losses
   $1 million - $5 million

1

—

—

—

—

—

—

—

—

1

—

 
2

Prior accident year reported losses on
   large losses

—

—

—

—

—

1

1

—

2

—

2

 
2

   Non-Catastrophe reported losses on
      large losses total

1

—

—

—

—

1

1

—

2

1

2

 
4

*The sum of quarterly amounts may not equal the full year as each is computed independently.
Consolidated property casualty data includes results from our Cincinnati Re operations.
 
 
 
 
 
 
 
 


CINF Third-Quarter 2018 Supplemental Financial Data
9


 Consolidated Cincinnati Insurance Companies
Direct Written Premiums by Risk State by Line of Business for the Nine Months Ended September 30, 2018
(Dollars in millions)
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
Other Comm
 
Personal
Auto
Home Owner
Other
Personal
 
All
Lines
 
2018
2017
 
 
 
Total
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OH
$
117.0

$
111.5

$
71.3

$
—

$
31.2

 
$
102.8

$
86.9

$
27.3

 
$
11.9

 
$
559.9

$
552.7

1.1

1.6

(0.2
)
1.3

IL
48.6

43.0

25.0

32.5

10.1

 
23.0

22.5

6.6

 
12.1

 
223.4

229.0

(4.6
)
3.2

3.6

(2.5
)
GA
32.2

36.6

24.0

11.3

10.8

 
43.3

39.9

9.9

 
12.9

 
220.9

216.2

(2.0
)
7.2

6.7

2.2

IN
42.0

43.0

25.7

18.3

11.3

 
24.4

25.7

5.8

 
9.4

 
205.6

208.8

(1.2
)
(3.1
)
5.2

(1.4
)
PA
51.9

39.5

32.6

34.6

9.2

 
11.8

9.6

3.8

 
8.6

 
201.6

190.8

5.1

9.0

6.9

5.6

NC
39.6

47.6

20.2

13.0

10.5

 
29.1

26.1

7.2

 
8.7

 
202.0

195.2

2.9

3.1

16.0

3.5

MI
34.0

31.1

19.4

11.2

8.4

 
37.2

23.8

4.5

 
5.2

 
174.8

189.2

(2.7
)
(14.8
)
(0.5
)
(7.6
)
TN
32.0

34.6

19.3

7.3

9.7

 
15.4

19.1

4.8

 
5.4

 
147.6

146.7

(0.5
)
1.3

18.7

0.6

KY
21.2

28.8

17.8

2.7

5.5

 
23.4

22.3

5.1

 
4.8

 
131.6

130.5

1.3

(0.7
)
5.9

0.7

AL
20.9

26.1

12.3

0.8

5.3

 
21.5

28.2

5.6

 
7.3

 
128.0

123.7

1.2

5.6

6.8

3.4

VA
26.5

25.9

19.6

13.4

9.5

 
11.2

9.6

3.4

 
4.0

 
123.1

116.5

5.2

7.8

2.7

5.6

TX
36.8

19.8

24.2

1.8

5.3

 
3.8

5.7

2.1

 
16.4

 
115.9

109.1

(3.6
)
385.9

6.2

6.3

MO
25.9

29.5

15.0

10.3

4.3

 
9.6

11.7

2.5

 
7.5

 
116.3

108.7

3.0

22.2

11.3

7.0

NY
30.8

15.3

11.5

3.7

3.6

 
12.8

19.2

7.0

 
4.5

 
108.4

89.7

4.4

54.9

76.0

20.6

WI
22.3

20.6

11.3

19.5

5.0

 
7.6

7.6

3.1

 
4.3

 
101.3

102.2

(2.6
)
2.6

24.7

(0.8
)
MN
21.6

19.6

8.7

6.6

4.3

 
15.6

16.5

4.7

 
6.5

 
104.1

102.9

—

1.8

8.0

1.1

MD
16.5

11.3

13.1

7.2

3.5

 
12.7

9.4

2.6

 
2.5

 
78.8

74.7

(0.9
)
19.8

19.8

5.4

FL
25.9

11.4

13.3

1.3

4.1

 
4.3

2.9

0.9

 
11.2

 
75.3

65.1

11.6

28.5

30.2

15.7

AR
9.2

17.4

9.8

1.4

3.1

 
8.5

9.2

2.4

 
3.3

 
64.3

65.6

(3.0
)
(1.4
)
9.4

(2.0
)
AZ
16.4

9.1

11.7

4.6

2.2

 
6.1

5.2

2.2

 
2.9

 
60.4

57.9

1.7

10.7

15.8

4.2

IA
13.3

15.9

6.6

10.3

4.6

 
4.0

4.4

1.2

 
1.6

 
61.9

63.2

(2.9
)
0.7

2.5

(2.2
)
SC
10.9

11.0

7.2

2.6

2.8

 
10.7

8.4

1.7

 
3.3

 
58.6

56.4

1.0

10.3

(1.9
)
3.9

UT
15.2

7.7

10.7

1.0

2.3

 
7.1

4.2

1.1

 
4.2

 
53.5

51.9

(0.1
)
4.1

39.4

3.2

CO
14.7

7.6

11.5

0.9

2.0

 
0.8

1.9

0.4

 
7.8

 
47.6

46.2

(4.9
)
108.2

26.5

2.9

KS
9.2

12.5

6.1

3.7

2.4

 
3.6

5.5

1.0

 
2.0

 
46.0

45.9

(1.8
)
1.2

29.8

(0.1
)
OR
14.0

8.1

10.5

0.1

2.1

 
4.7

2.1

0.6

 
3.9

 
46.1

41.6

15.1

8.7

(10.8
)
11.3

MT
15.5

10.1

9.2

0.1

1.7

 
2.3

2.3

0.5

 
1.3

 
43.0

40.9

5.6

0.3

5.5

4.9

CT
5.2

4.0

2.4

2.0

0.7

 
9.7

8.8

3.0

 
1.5

 
37.3

27.9

19.1

45.7

26.8

33.5

ID
11.5

7.8

7.5

1.2

1.6

 
3.0

2.2

0.6

 
1.8

 
37.2

33.2

12.0

3.7

24.9

11.2

NE
8.1

9.2

5.1

5.1

1.8

 
0.7

0.9

0.2

 
2.0

 
33.1

33.4

(1.0
)
2.1

14.4

—

CA
0.7

0.2

0.6

1.3

0.2

 
5.7

15.3

4.0

 
0.8

 
28.8

15.4

2.8

110.5

58.1

87.8

WV
8.0

7.5

6.2

0.7

1.2

 
—

0.3

0.1

 
2.4

 
26.4

24.7

7.4

(5.5
)
4.0

6.9

WA
8.9

5.1

6.6

—

1.6

 
0.4

0.5

0.3

 
2.0

 
25.4

20.9

17.0

nm

6.4

21.1

NM
8.0

5.1

6.2

0.6

1.6

 
—

—

—

 
1.6

 
23.1

19.8

15.5

353.5

27.2

16.3

VT
3.8

4.6

2.7

4.1

1.5

 
1.3

1.5

0.4

 
1.3

 
21.2

21.0

(0.6
)
3.0

18.9

0.9

NH
3.1

2.6

1.7

1.9

0.7

 
1.4

1.5

0.4

 
0.8

 
14.1

14.5

(3.5
)
2.1

(6.8
)
(2.5
)
DE
4.4

3.2

2.9

2.2

0.6

 
—

—

—

 
0.5

 
13.8

11.7

19.3

nm

7.6

18.9

ND
4.1

3.4

2.1

—

0.8

 
0.6

0.7

0.2

 
0.6

 
12.5

14.7

(16.6
)
3.2

8.6

(13.6
)
SD
2.6

2.8

1.6

1.8

0.7

 
—

—

—

 
0.6

 
10.1

10.4

(2.3
)
2.6

2.8

(2.0
)
NJ
0.9

0.8

0.7

1.3

0.3

 
1.6

2.2

1.0

 
0.8

 
9.6

5.7

37.0

98.3

247.4

72.1

WY
2.3

1.9

1.7

—

0.4

 
—

—

—

 
0.7

 
7.0

5.9

16.6

73.4

19.8

17.0

 All Other
3.0

2.1

2.3

2.6

1.8

 
0.4

1.2

0.3

 
2.1

 
15.8

12.8

13.1

nm

11.5

26.0

 Total
$
838.7

$
754.9

$
517.9

$
245.0

$
190.3

 
$
482.1

$
465.0

$
128.5

 
$
193.0

 
$
3,815.4

$
3,693.3

1.2

7.2

11.3

3.3

 Other Direct
—

1.7

2.7

3.9

—

 
6.5

0.1

0.6

 
—

 
15.5

18.3

(15.0
)
37.7

—

(15.3
)
 Total Direct
$
838.7

$
756.6

$
520.6

$
248.9

$
190.3

 
$
488.6

$
465.1

$
129.1

 
$
193.0

 
$
3,830.9

$
3,711.6

1.1

7.1

11.3

3.2

*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 2018 Supplemental Financial Data
10


Quarterly Property Casualty Data - Commercial Lines
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Commercial casualty:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
251

$
291

$
287

$
248

$
257

$
280

$
297

$
578

$
577

$
829

$
834


$
1,082

Year over year change %- written premium

(2
)%
4
 %
(3
)%
4
 %
(1
)%
1
 %
4
 %
—
 %
2
 %
(1
)%
1
 %

2
 %
Earned premiums

$
268

$
272

$
265

$
268

$
268

$
271

$
265

$
537

$
536

$
805

$
804


$
1,072

Current accident year before catastrophe losses

64.5
 %
66.8
 %
67.9
 %
67.5
 %
63.1
 %
60.1
 %
60.7
 %
67.3
 %
60.4
 %
66.4
 %
61.3
 %

62.9
 %
Current accident year catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

Prior accident years before catastrophe losses

(8.0
)
(5.2
)
1.7

0.9

0.1

(2.5
)
5.6

(1.8
)
1.5

(3.9
)
1.0


1.0

Prior accident years catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

   Total loss and loss expense ratio

56.5
 %
61.6
 %
69.6
 %
68.4
 %
63.2
 %
57.6
 %
66.3
 %
65.5
 %
61.9
 %
62.5
 %
62.3
 %

63.9
 %
Commercial property:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
232

$
240

$
237

$
217

$
230

$
233

$
239

$
477

$
472

$
709

$
702


$
919

Year over year change %- written premium

1
 %
3
 %
(1
)%
4
 %
3
 %
4
 %
6
 %
1
 %
5
 %
1
 %
4
 %

4
 %
Earned premiums

$
229

$
231

$
228

$
229

$
225

$
226

$
223

$
459

$
449

$
688

$
674


$
903

Current accident year before catastrophe losses

40.7
 %
45.8
 %
58.6
 %
48.2
 %
48.6
 %
49.7
 %
50.2
 %
52.2
 %
50.0
 %
48.3
 %
49.4
 %

49.1
 %
Current accident year catastrophe losses

36.1

22.1

12.8

4.5

14.5

29.1

29.3

17.4

29.2

23.7

24.3


19.3

Prior accident years before catastrophe losses

(1.0
)
(1.9
)
(6.4
)
(1.4
)
(1.1
)
(1.2
)
(0.7
)
(4.1
)
(1.0
)
(3.1
)
(1.0
)

(1.1
)
Prior accident years catastrophe losses

(2.9
)
(1.2
)
(2.6
)
(3.7
)
(1.9
)
(0.8
)
(3.8
)
(1.9
)
(2.3
)
(2.2
)
(2.1
)

(2.5
)
   Total loss and loss expense ratio

72.9
 %
64.8
 %
62.4
 %
47.6
 %
60.1
 %
76.8
 %
75.0
 %
63.6
 %
75.9
 %
66.7
 %
70.6
 %

64.8
 %
Commercial auto:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
160

$
182

$
177

$
153

$
157

$
167

$
174

$
359

$
341

$
519

$
498


$
651

Year over year change %- written premium

2
 %
9
 %
2
 %
5
 %
4
 %
7
 %
10
 %
5
 %
9
 %
4
 %
7
 %

7
 %
Earned premiums

$
168

$
166

$
161

$
162

$
159

$
158

$
155

$
327

$
313

$
495

$
472


$
634

Current accident year before catastrophe losses

73.5
 %
75.8
 %
80.6
 %
74.5
 %
80.2
 %
76.4
 %
80.7
 %
78.2
 %
78.6
 %
76.6
 %
79.1
 %

78.0
 %
Current accident year catastrophe losses

0.1

2.1

0.2

(0.1
)
0.7

1.7

1.2

1.1

1.4

0.8

1.2


0.9

Prior accident years before catastrophe losses

1.8

3.3

(0.8
)
3.2

5.1

6.0

6.7

1.3

6.3

1.5

5.9


5.2

Prior accident years catastrophe losses

—

(0.1
)
(0.2
)
—

—

—

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

(0.1
)
   Total loss and loss expense ratio

75.4
 %
81.1
 %
79.8
 %
77.6
 %
86.0
 %
84.1
 %
88.4
 %
80.5
 %
86.2
 %
78.8
 %
86.1
 %

84.0
 %
Workers' compensation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
66

$
83

$
95

$
73

$
75

$
79

$
99

$
178

$
178

$
244

$
253


$
326

Year over year change %- written premium

(12
)%
5
 %
(4
)%
(6
)%
(10
)%
(8
)%
(6
)%
—
 %
(7
)%
(4
)%
(8
)%

(7
)%
Earned premiums

$
80

$
85

$
80

$
81

$
84

$
86

$
84

$
165

$
170

$
245

$
254


$
335

Current accident year before catastrophe losses

74.6
 %
73.0
 %
73.1
 %
76.2
 %
71.6
 %
68.9
 %
69.8
 %
73.1
 %
69.3
 %
73.6
 %
70.1
 %

71.6
 %
Current accident year catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

Prior accident years before catastrophe losses

(10.8
)
(20.7
)
(16.1
)
(11.1
)
(16.6
)
(14.3
)
(21.6
)
(18.5
)
(17.9
)
(16.0
)
(17.5
)

(15.9
)
Prior accident years catastrophe losses

—

—

—

—

—

—

—

—

—

—

—


—

   Total loss and loss expense ratio

63.8
 %
52.3
 %
57.0
 %
65.1
 %
55.0
 %
54.6
 %
48.2
 %
54.6
 %
51.4
 %
57.6
 %
52.6
 %

55.7
 %
Other commercial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
65

$
60

$
58

$
55

$
59

$
54

$
56

$
118

$
110

$
183

$
169


$
224

Year over year change %- written premium

10
 %
11
 %
4
 %
10
 %
(2
)%
—
 %
4
 %
7
 %
2
 %
8
 %
1
 %

3
 %
Earned premiums

$
60

$
58

$
56

$
56

$
56

$
55

$
54

$
114

$
109

$
174

$
165


$
221

Current accident year before catastrophe losses

33.2
 %
38.2
 %
37.8
 %
35.2
 %
35.1
 %
35.3
 %
40.2
 %
38.0
 %
37.7
 %
36.3
 %
36.9
 %

36.4
 %
Current accident year catastrophe losses

0.3

1.7

0.3

0.5

(0.2
)
1.8

1.9

1.0

1.8

0.8

1.2


1.0

Prior accident years before catastrophe losses

(2.7
)
(14.8
)
(6.8
)
(9.9
)
(10.2
)
(20.0
)
(14.8
)
(10.9
)
(17.4
)
(8.1
)
(15.0
)

(13.7
)
Prior accident years catastrophe losses

(0.1
)
0.3

(0.3
)
1.6

0.3

0.1

(0.5
)
—

(0.2
)
—

(0.1
)

0.4

   Total loss and loss expense ratio

30.7
 %
25.4
 %
31.0
 %
27.4
 %
25.0
 %
17.2
 %
26.8
 %
28.1
 %
21.9
 %
29.0
 %
23.0
 %

24.1
 %
*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.

CINF Third-Quarter 2018 Supplemental Financial Data
11


Quarterly Property Casualty Data - Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Personal auto:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
169

$
172

$
140

$
141

$
165

$
165

$
132

$
312

$
297

$
481

$
462


$
603

Year over year change %- written premium

2
 %
4
 %
6
 %
7
 %
7
 %
7
 %
7
 %
5
 %
7
 %
4
 %
7
 %

7
 %
Earned premiums

$
155

$
153

$
151

$
149

$
148

$
144

$
141

$
304

$
285

$
459

$
433


$
582

Current accident year before catastrophe losses

77.9
 %
78.7
 %
81.2
 %
76.2
 %
79.8
 %
78.1
 %
82.4
 %
80.0
 %
80.2
 %
79.2
 %
80.1
 %

79.1
 %
Current accident year catastrophe losses

1.1

1.3

0.8

(0.4
)
1.6

2.4

2.4

1.0

2.4

1.1

2.1


1.5

Prior accident years before catastrophe losses

(2.1
)
(1.5
)
(4.3
)
1.4

1.1

(0.3
)
(1.1
)
(2.9
)
(0.7
)
(2.6
)
(0.1
)

0.3

Prior accident years catastrophe losses

—

(0.1
)
(0.1
)
—

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

(0.1
)
   Total loss and loss expense ratio

76.9
 %
78.4
 %
77.6
 %
77.2
 %
82.4
 %
80.1
 %
83.5
 %
78.0
 %
81.8
 %
77.6
 %
82.0
 %

80.8
 %
Homeowner:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
162

$
164

$
121

$
132

$
150

$
150

$
110

$
285

$
260

$
447

$
410


$
542

Year over year change %- written premium

8
 %
9
 %
10
 %
11
 %
9
 %
7
 %
7
 %
10
 %
7
 %
9
 %
8
 %

8
 %
Earned premiums

$
142

$
139

$
136

$
134

$
131

$
128

$
125

$
275

$
253

$
417

$
384


$
518

Current accident year before catastrophe losses

49.8
 %
57.7
 %
55.8
 %
55.0
 %
46.7
 %
48.4
 %
48.4
 %
56.7
 %
48.5
 %
54.4
 %
47.8
 %

49.6
 %
Current accident year catastrophe losses

19.2

20.6

19.6

4.8

24.5

34.1

33.1

20.1

33.6

19.8

30.5


23.9

Prior accident years before catastrophe losses

3.6

8.1

2.4

(1.4
)
(0.2
)
(1.9
)
(2.6
)
5.3

(2.3
)
4.7

(1.5
)

(1.5
)
Prior accident years catastrophe losses

1.0

1.6

0.1

0.3

(1.4
)
(0.5
)
(0.5
)
0.9

(0.5
)
0.9

(0.8
)

(0.5
)
   Total loss and loss expense ratio

73.6
 %
88.0
 %
77.9
 %
58.7
 %
69.6
 %
80.1
 %
78.4
 %
83.0
 %
79.3
 %
79.8
 %
76.0
 %

71.5
 %
Other personal:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
46

$
45

$
36

$
36

$
40

$
42

$
31

$
81

$
73

$
127

$
113


$
149

Year over year change %- written premium

15
 %
7
 %
16
 %
13
 %
8
 %
12
 %
3
 %
11
 %
11
 %
12
 %
10
 %

10
 %
Earned premiums

$
41

$
39

$
38

$
37

$
35

$
35

$
34

$
77

$
69

$
118

$
104


$
141

Current accident year before catastrophe losses

60.6
 %
50.1
 %
28.9
 %
54.0
 %
46.7
 %
68.3
 %
45.6
 %
39.6
 %
57.1
 %
46.9
 %
53.5
 %

53.7
 %
Current accident year catastrophe losses

9.7

3.0

4.0

0.5

6.2

4.5

9.3

3.6

6.9

5.7

6.7


5.0

Prior accident years before catastrophe losses

(8.7
)
13.9

7.2

(4.5
)
2.4

(0.1
)
(11.2
)
10.6

(5.6
)
3.9

(2.9
)

(3.3
)
Prior accident years catastrophe losses

0.1

0.2

(0.5
)
0.1

—

(0.9
)
(0.7
)
(0.2
)
(0.8
)
(0.1
)
(0.5
)

(0.4
)
   Total loss and loss expense ratio

61.7
 %
67.2
 %
39.6
 %
50.1
 %
55.3
 %
71.8
 %
43.0
 %
53.6
 %
57.6
 %
56.4
 %
56.8
 %

55.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly Property Casualty Data - Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Excess & Surplus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums

$
59

$
64

$
61

$
54

$
51

$
61

$
53

$
125

$
114

$
184

$
165


$
219

Year over year change %- written premium

16
 %
5
 %
15
 %
20
 %
6
 %
20
 %
18
 %
10
 %
19
 %
12
 %
15
 %

16
 %
Earned premiums

$
60

$
57

$
56

$
56

$
53

$
52

$
48

$
113

$
100

$
173

$
153


$
209

Current accident year before catastrophe losses

53.3
 %
56.9
 %
54.6
 %
57.6
 %
49.1
 %
54.2
 %
55.5
 %
55.8
 %
54.8
 %
54.9
 %
52.8
 %

54.0
 %
Current accident year catastrophe losses

0.9

1.0

1.8

0.3

1.7

0.9

1.2

1.4

1.1

1.2

1.3


1.1

Prior accident years before catastrophe losses

(11.3
)
(9.6
)
(17.2
)
(7.1
)
(4.7
)
(17.0
)
(27.4
)
(13.3
)
(22.0
)
(12.6
)
(15.9
)

(13.6
)
Prior accident years catastrophe losses

(0.3
)
0.2

0.1

(0.1
)
(0.3
)
0.4

(0.4
)
0.1

—

—

(0.1
)

(0.1
)
   Total loss and loss expense ratio

42.6
 %
48.5
 %
39.3
 %
50.7
 %
45.8
 %
38.5
 %
28.9
 %
44.0
 %
33.9
 %
43.5
 %
38.1
 %

41.4
 %
*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 2018 Supplemental Financial Data
12


Consolidated Cincinnati Insurance Companies
Loss and Loss Expense Analysis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars 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, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
260

 
$
132

 
$
392

 
$
54

 
$
36

 
$
24

 
$
114

 
$
314

 
$
36

 
$
156

 
$
506

  Commercial property
 
390

 
37

 
427

 
31

 
4

 
(6
)
 
29

 
421

 
4

 
31

 
456

  Commercial auto
 
287

 
54

 
341

 
11

 
28

 
11

 
50

 
298

 
28

 
65

 
391

  Workers' compensation
 
125

 
25

 
150

 
(6
)
 
11

 
(5
)
 
—

 
119

 
11

 
20

 
150

  Other commercial
 
44

 
10

 
54

 
(7
)
 
(4
)
 
7

 
(4
)
 
37

 
(4
)
 
17

 
50

    Total commercial lines
 
1,106

 
258

 
1,364

 
83

 
75

 
31

 
189

 
1,189

 
75

 
289

 
1,553

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
287

 
54

 
341

 
(1
)
 
18

 
—

 
17

 
286

 
18

 
54

 
358

  Homeowners
 
263

 
26

 
289

 
29

 
18

 
6

 
53

 
292

 
18

 
32

 
342

  Other personal
 
48

 
4

 
52

 
1

 
14

 
—

 
15

 
49

 
14

 
4

 
67

    Total personal lines
 
598

 
84

 
682

 
29

 
50

 
6

 
85

 
627

 
50

 
90

 
767

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
35

 
20

 
55

 
12

 
—

 
10

 
22

 
47

 
—

 
30

 
77

  Cincinnati Re
 
34

 
4

 
38

 
10

 
4

 
—

 
14

 
44

 
4

 
4

 
52

      Total property casualty
 
$
1,773

 
$
366

 
$
2,139

 
$
134

 
$
129

 
$
47

 
$
310

 
$
1,907

 
$
129

 
$
413

 
$
2,449

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ceded loss and loss expense incurred for the nine months ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
1

 
$
1

 
$
2

 
$
2

 
$
(2
)
 
$
—

 
$
—

 
$
3

 
$
(2
)
 
$
1

 
$
2

  Commercial property
 
1

 
—

 
1

 
(4
)
 
—

 
—

 
(4
)
 
(3
)
 
—

 
—

 
(3
)
  Commercial auto
 
—

 
—

 
—

 
1

 
—

 
—

 
1

 
1

 
—

 
—

 
1

  Workers' compensation
 
11

 
—

 
11

 
(1
)
 
(1
)
 
—

 
(2
)
 
10

 
(1
)
 
—

 
9

  Other commercial
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

    Total commercial lines
 
13

 
1

 
14

 
(2
)
 
(3
)
 
—

 
(5
)
 
11

 
(3
)
 
1

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
1

 
—

 
1

 
1

 
—

 
—

 
1

 
2

 
—

 
—

 
2

  Homeowners
 
2

 
—

 
2

 
7

 
—

 
—

 
7

 
9

 
—

 
—

 
9

  Other personal
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

    Total personal lines
 
3

 
—

 
3

 
8

 
—

 
—

 
8

 
11

 
—

 
—

 
11

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
2

 
—

 
2

 
—

 
—

 
—

 
—

 
2

 
—

 
—

 
2

  Cincinnati Re
 
4

 
2

 
6

 
(1
)
 
(2
)
 
(1
)
 
(4
)
 
3

 
(2
)
 
1

 
2

      Total property casualty
 
$
22

 
$
3

 
$
25

 
$
5

 
$
(5
)
 
$
(1
)
 
$
(1
)
 
$
27

 
$
(5
)
 
$
2

 
$
24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss and loss expense incurred for the nine months ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
259

 
$
131

 
$
390

 
$
52

 
$
38

 
$
24

 
$
114

 
$
311

 
$
38

 
$
155

 
$
504

  Commercial property
 
389

 
37

 
426

 
35

 
4

 
(6
)
 
33

 
424

 
4

 
31

 
459

  Commercial auto
 
287

 
54

 
341

 
10

 
28

 
11

 
49

 
297

 
28

 
65

 
390

  Workers' compensation
 
114

 
25

 
139

 
(5
)
 
12

 
(5
)
 
2

 
109

 
12

 
20

 
141

  Other commercial
 
44

 
10

 
54

 
(7
)
 
(4
)
 
7

 
(4
)
 
37

 
(4
)
 
17

 
50

    Total commercial lines
 
1,093

 
257

 
1,350

 
85

 
78

 
31

 
194

 
1,178

 
78

 
288

 
1,544

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
286

 
54

 
340

 
(2
)
 
18

 
—

 
16

 
284

 
18

 
54

 
356

  Homeowners
 
261

 
26

 
287

 
22

 
18

 
6

 
46

 
283

 
18

 
32

 
333

  Other personal
 
48

 
4

 
52

 
1

 
14

 
—

 
15

 
49

 
14

 
4

 
67

    Total personal lines
 
595

 
84

 
679

 
21

 
50

 
6

 
77

 
616

 
50

 
90

 
756

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
33

 
20

 
53

 
12

 
—

 
10

 
22

 
45

 
—

 
30

 
75

  Cincinnati Re
 
30

 
2

 
32

 
11

 
6

 
1

 
18

 
41

 
6

 
3

 
50

      Total property casualty
 
$
1,751

 
$
363

 
$
2,114

 
$
129

 
$
134

 
$
48

 
$
311

 
$
1,880

 
$
134

 
$
411

 
$
2,425

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

CINF Third-Quarter 2018 Supplemental Financial Data
13


Consolidated Cincinnati Insurance Companies
Loss and Loss Expense Analysis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars 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, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
97

 
$
45

 
$
142

 
$
16

 
$
(7
)
 
$
3

 
$
12

 
$
113

 
$
(7
)
 
$
48

 
$
154

  Commercial property
 
134

 
11

 
145

 
27

 
(8
)
 
2

 
21

 
161

 
(8
)
 
13

 
166

  Commercial auto
 
92

 
18

 
110

 
5

 
10

 
3

 
18

 
97

 
10

 
21

 
128

  Workers' compensation
 
37

 
8

 
45

 
(2
)
 
11

 
(1
)
 
8

 
35

 
11

 
7

 
53

  Other commercial
 
15

 
3

 
18

 
(2
)
 
(4
)
 
6

 
—

 
13

 
(4
)
 
9

 
18

    Total commercial lines
 
375

 
85

 
460

 
44

 
2

 
13

 
59

 
419

 
2

 
98

 
519

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
95

 
17

 
112

 
(1
)
 
9

 
—

 
8

 
94

 
9

 
17

 
120

  Homeowners
 
89

 
9

 
98

 
8

 
(2
)
 
—

 
6

 
97

 
(2
)
 
9

 
104

  Other personal
 
15

 
2

 
17

 
1

 
9

 
(1
)
 
9

 
16

 
9

 
1

 
26

    Total personal lines
 
199

 
28

 
227

 
8

 
16

 
(1
)
 
23

 
207

 
16

 
27

 
250

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
10

 
7

 
17

 
3

 
2

 
3

 
8

 
13

 
2

 
10

 
25

  Cincinnati Re
 
7

 
1

 
8

 
—

 
16

 
—

 
16

 
7

 
16

 
1

 
24

      Total property casualty
 
$
591

 
$
121

 
$
712

 
$
55

 
$
36

 
$
15

 
$
106

 
$
646

 
$
36

 
$
136

 
$
818

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ceded loss and loss expense incurred for the three months ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
2

 
$
1

 
$
3

 
$
(1
)
 
$
—

 
$
—

 
$
(1
)
 
$
1

 
$
—

 
$
1

 
$
2

  Commercial property
 
—

 
—

 
—

 
(1
)
 
—

 
—

 
(1
)
 
(1
)
 
—

 
—

 
(1
)
  Commercial auto
 
—

 
—

 
—

 
1

 
—

 
—

 
1

 
1

 
—

 
—

 
1

  Workers' compensation
 
2

 
—

 
2

 
—

 
—

 
—

 
—

 
2

 
—

 
—

 
2

  Other commercial
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

    Total commercial lines
 
4

 
1

 
5

 
(1
)
 
—

 
—

 
(1
)
 
3

 
—

 
1

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
—

 
—

 
—

 
1

 
—

 
—

 
1

 
1

 
—

 
—

 
1

  Homeowners
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

  Other personal
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

    Total personal lines
 
—

 
—

 
—

 
1

 
—

 
—

 
1

 
1

 
—

 
—

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

  Cincinnati Re
 
1

 
1

 
2

 
(1
)
 
—

 
(1
)
 
(2
)
 
—

 
—

 
—

 
—

      Total property casualty
 
$
5

 
$
2

 
$
7

 
$
(1
)
 
$
—

 
$
(1
)
 
$
(2
)
 
$
4

 
$
—

 
$
1

 
$
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss and loss expense incurred for the three months ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
95

 
$
44

 
$
139

 
$
17

 
$
(7
)
 
$
3

 
$
13

 
$
112

 
$
(7
)
 
$
47

 
$
152

  Commercial property
 
134

 
11

 
145

 
28

 
(8
)
 
2

 
22

 
162

 
(8
)
 
13

 
167

  Commercial auto
 
92

 
18

 
110

 
4

 
10

 
3

 
17

 
96

 
10

 
21

 
127

  Workers' compensation
 
35

 
8

 
43

 
(2
)
 
11

 
(1
)
 
8

 
33

 
11

 
7

 
51

  Other commercial
 
15

 
3

 
18

 
(2
)
 
(4
)
 
6

 
—

 
13

 
(4
)
 
9

 
18

    Total commercial lines
 
371

 
84

 
455

 
45

 
2

 
13

 
60

 
416

 
2

 
97

 
515

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
95

 
17

 
112

 
(2
)
 
9

 
—

 
7

 
93

 
9

 
17

 
119

  Homeowners
 
89

 
9

 
98

 
8

 
(2
)
 
—

 
6

 
97

 
(2
)
 
9

 
104

  Other personal
 
15

 
2

 
17

 
1

 
9

 
(1
)
 
9

 
16

 
9

 
1

 
26

    Total personal lines
 
199

 
28

 
227

 
7

 
16

 
(1
)
 
22

 
206

 
16

 
27

 
249

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
10

 
7

 
17

 
3

 
2

 
3

 
8

 
13

 
2

 
10

 
25

  Cincinnati Re
 
6

 
—

 
6

 
1

 
16

 
1

 
18

 
7

 
16

 
1

 
24

      Total property casualty
 
$
586

 
$
119

 
$
705

 
$
56

 
$
36

 
$
16

 
$
108

 
$
642

 
$
36

 
$
135

 
$
813

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

CINF Third-Quarter 2018 Supplemental Financial Data
14


Consolidated Cincinnati Insurance Companies
Quarterly Property Casualty Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums

$
1,088

$
1,150

$
1,083

$
987

$
1,064

$
1,090

$
1,057

$
2,233

$
2,147

$
3,321

$
3,211


$
4,198

   Agency new business written premiums

154

181

159

151

157

165

153

340

318

494

475


626

   Cincinnati Re net written premiums

36

48

46

21

24

40

40

94

80

130

104


125

   Other written premiums

(32
)
(30
)
(30
)
(29
)
(37
)
(24
)
(19
)
(60
)
(43
)
(92
)
(80
)

(109
)
   Net written premiums – statutory*

$
1,246

$
1,349

$
1,258

$
1,130

$
1,208

$
1,271

$
1,231

$
2,607

$
2,502

$
3,853

$
3,710


$
4,840

   Unearned premium change

(9
)
(119
)
(58
)
69

(17
)
(90
)
(80
)
(177
)
(170
)
(186
)
(187
)

(118
)
   Earned premiums

$
1,237

$
1,230

$
1,200

$
1,199

$
1,191

$
1,181

$
1,151

$
2,430

$
2,332

$
3,667

$
3,523


$
4,722

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums

2
 %
6
 %
2
 %
4
%
3
 %
3
 %
3
%
4
 %
3
%
3
 %
3
 %

3
%
   Agency new business written premiums

(2
)
10

4

13

5

15

22

7

19

4

14


14

   Cincinnati Re net written premiums

50

20

15

40

14

150

111

18

129

25

86


76

   Other written premiums

(14
)
(25
)
(58
)
19

(19
)
(9
)
24

(40
)
9

(15
)
(3
)

4

   Net written premiums – statutory*

3

6

2

6

3

6

7

4

7

4

6


6

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid

$
585

$
586

$
579

$
614

$
607

$
587

$
567

$
1,165

$
1,154

$
1,750

$
1,761


$
2,375

   Loss expenses paid

120

109

135

115

118

108

127

244

235

364

353


468

   Loss and loss expenses paid

$
705

$
695

$
714

$
729

$
725

$
695

$
694

$
1,409

$
1,389

$
2,114

$
2,114


$
2,843

Incurred losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss and loss expense incurred

$
813

$
821

$
791

$
741

$
815

$
794

$
788

$
1,612

$
1,582

$
2,425

$
2,397


$
3,138

   Loss and loss expenses paid as a % of incurred

86.7
 %
84.7
 %
90.3
 %
98.4
%
89.0
 %
87.5
 %
88.1
%
87.4
 %
87.8
%
87.2
 %
88.2
 %

90.6
%
Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio

54.8
 %
54.9
 %
55.2
 %
49.9
%
57.0
 %
56.5
 %
56.3
%
55.0
 %
56.4
%
54.9
 %
56.6
 %

54.9
%
   Loss adjustment expense ratio

10.9

11.8

10.8

11.9

11.4

10.8

12.1

11.3

11.4

11.2

11.4


11.5

   Net underwriting expense ratio

31.0

29.1

30.4

32.5

30.7

29.9

30.2

29.8

30.1

30.2

30.3


30.8

   Statutory combined ratio

96.7
 %
95.8
 %
96.4
 %
94.3
%
99.1
 %
97.2
 %
98.6
%
96.1
 %
97.9
%
96.3
 %
98.3
 %

97.2
%
   Contribution from catastrophe losses

9.7

7.1

4.4

0.9

9.1

9.8

9.2

5.8

9.5

7.1

9.3


7.2

   Statutory combined ratio excl. catastrophe losses

87.0
 %
88.7
 %
92.0
 %
93.4
%
90.0
 %
87.4
 %
89.4
%
90.3
 %
88.4
%
89.2
 %
89.0
 %

90.0
%
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio

96.8
 %
97.2
 %
97.9
 %
92.9
%
99.3
 %
98.3
 %
99.7
%
97.5
 %
99.0
%
97.3
 %
99.1
 %

97.5
%
   Contribution from catastrophe losses

9.7

7.1

4.4

0.9

9.1

9.8

9.2

5.8

9.5

7.1

9.3


7.2

   GAAP combined ratio excl. catastrophe losses

87.1
 %
90.1
 %
93.5
 %
92.0
%
90.2
 %
88.5
 %
90.5
%
91.7
 %
89.5
%
90.2
 %
89.8
 %

90.3
%
*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 2018 Supplemental Financial Data
15


Cincinnati Insurance Companies
Quarterly Property Casualty Data - Commercial Lines
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums

$
702

$
758

$
771

$
672

$
707

$
729

$
772

$
1,529

$
1,501

$
2,231

$
2,208


$
2,880

   Agency new business written premiums

94

118

104

96

99

99

103

222

202

316

301


397

   Other written premiums

(22
)
(20
)
(21
)
(22
)
(28
)
(15
)
(10
)
(41
)
(25
)
(63
)
(53
)

(75
)
   Net written premiums – statutory*

$
774

$
856

$
854

$
746

$
778

$
813

$
865

$
1,710

$
1,678

$
2,484

$
2,456


$
3,202

   Unearned premium change

31

(44
)
(64
)
50

14

(17
)
(84
)
(108
)
(101
)
(77
)
(87
)

(37
)
   Earned premiums

$
805

$
812

$
790

$
796

$
792

$
796

$
781

$
1,602

$
1,577

$
2,407

$
2,369


$
3,165

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums

(1
)%
4
 %
—
 %
2
%
1
 %
2
 %
2
%
2
 %
2
%
1
 %
2
%

2
%
   Agency new business written premiums

(5
)
19

1

5

(2
)
6

18

10

12

5

7


7

   Other written premiums

21

(33
)
(110
)
21

(27
)
(7
)
44

(64
)
22

(19
)
2


9

   Net written premiums – statutory*

(1
)
5

(1
)
3

—

2

5

2

3

1

2


3

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid

$
370

$
350

$
371

$
401

$
376

$
370

$
381

$
722

$
751

$
1,092

$
1,127


$
1,528

   Loss expenses paid

84

77

96

84

84

79

91

173

170

257

254


338

   Loss and loss expenses paid

$
454

$
427

$
467

$
485

$
460

$
449

$
472

$
895

$
921

$
1,349

$
1,381


$
1,866

Incurred losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss and loss expense incurred

$
515

$
510

$
519

$
487

$
501

$
519

$
535

$
1,029

$
1,054

$
1,544

$
1,555


$
2,042

   Loss and loss expenses paid as a % of incurred

88.2
 %
83.7
 %
90.0
 %
99.6
%
91.8
 %
86.5
 %
88.2
%
87.0
 %
87.4
%
87.4
 %
88.8
%

91.4
%
Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio

51.8
 %
50.3
 %
54.4
 %
48.2
%
51.1
 %
53.8
 %
55.0
%
52.3
 %
54.5
%
52.1
 %
53.4
%

52.0
%
   Loss adjustment expense ratio

12.1

12.6

11.2

12.9

12.2

11.4

13.5

11.9

12.4

12.0

12.3


12.5

   Net underwriting expense ratio

32.8

30.0

30.5

33.6

32.5

31.2

29.7

30.3

30.4

31.1

31.0


31.7

   Statutory combined ratio

96.7
 %
92.9
 %
96.1
 %
94.7
%
95.8
 %
96.4
 %
98.2
%
94.5
 %
97.3
%
95.2
 %
96.7
%

96.2
%
   Contribution from catastrophe losses

9.5

6.5

2.9

0.3

3.8

8.5

7.6

4.7

8.1

6.3

6.6


5.0

   Statutory combined ratio excl. catastrophe losses

87.2
 %
86.4
 %
93.2
 %
94.4
%
92.0
 %
87.9
 %
90.6
%
89.8
 %
89.2
%
88.9
 %
90.1
%

91.2
%
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio

95.9
 %
94.2
 %
98.3
 %
92.9
%
95.2
 %
97.1
 %
100.4
%
96.2
 %
98.8
%
96.1
 %
97.6
%

96.4
%
   Contribution from catastrophe losses

9.5

6.5

2.9

0.3

3.8

8.5

7.6

4.7

8.1

6.3

6.6


5.0

   GAAP combined ratio excl. catastrophe losses

86.4
 %
87.7
 %
95.4
 %
92.6
%
91.4
 %
88.6
 %
92.8
%
91.5
 %
90.7
%
89.8
 %
91.0
%

91.4
%
*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 2018 Supplemental Financial Data
16


Cincinnati Insurance Companies
Quarterly Property Casualty Data - Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums

$
342

$
342

$
264

$
275

$
318

$
318

$
245

$
606

$
563

$
948

$
881


$
1,156

   Agency new business written premiums

42

46

39

39

43

45

34

85

79

127

122


161

   Other written premiums

(7
)
(7
)
(6
)
(5
)
(6
)
(6
)
(6
)
(13
)
(12
)
(20
)
(18
)

(23
)
   Net written premiums – statutory*

$
377

$
381

$
297

$
309

$
355

$
357

$
273

$
678

$
630

$
1,055

$
985


$
1,294

   Unearned premium change

(39
)
(50
)
28

11

(41
)
(50
)
27

(22
)
(23
)
(61
)
(64
)

(53
)
   Earned premiums

$
338

$
331

$
325

$
320

$
314

$
307

$
300

$
656

$
607

$
994

$
921


$
1,241

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums

8
 %
8
 %
8
%
7
%
5
%
5
%
4
 %
8
 %
5
 %
8
 %
5
 %

5
%
   Agency new business written premiums

(2
)
2

15

26

34

32

36

8

34

4

34


32

   Other written premiums

(17
)
(17
)
—

17

—

—

(20
)
(8
)
(9
)
(11
)
(6
)

—

   Net written premiums – statutory*

6

7

9

9

8

8

7

8

8

7

8


8

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid

$
199

$
210

$
187

$
197

$
218

$
205

$
174

$
396

$
379

$
595

$
597


$
794

   Loss expenses paid

28

25

32

24

27

24

30

56

54

84

81


104

   Loss and loss expenses paid

$
227

$
235

$
219

$
221

$
245

$
229

$
204

$
452

$
433

$
679

$
678


$
898

Incurred losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss and loss expense incurred

$
249

$
269

$
238

$
212

$
233

$
242

$
231

$
507

$
473

$
756

$
706


$
918

   Loss and loss expenses paid as a % of incurred

91.2
 %
87.4
 %
92.0
%
104.2
%
105.2
%
94.6
%
88.3
 %
89.2
 %
91.5
 %
89.8
 %
96.0
 %

97.8
%
Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio

65.6
 %
71.0
 %
64.5
%
57.2
%
64.5
%
70.3
%
67.5
 %
67.7
 %
68.9
 %
67.0
 %
67.4
 %

64.8
%
   Loss adjustment expense ratio

8.1

10.1

8.8

9.1

9.5

8.8

9.3

9.5

9.1

9.0

9.2


9.2

   Net underwriting expense ratio

26.9

26.6

31.3

30.0

26.9

26.7

31.2

28.7

28.6

28.0

28.0


28.4

   Statutory combined ratio

100.6
 %
107.7
 %
104.6
%
96.3
%
100.9
%
105.8
%
108.0
 %
105.9
 %
106.6
 %
104.0
 %
104.6
 %

102.4
%
   Contribution from catastrophe losses

10.2

10.2

8.9

1.9

11.1

15.4

15.6

9.6

15.5

9.8

14.0


10.9

   Statutory combined ratio excl. catastrophe losses

90.4
 %
97.5
 %
95.7
%
94.4
%
89.8
%
90.4
%
92.4
 %
96.3
 %
91.1
 %
94.2
 %
90.6
 %

91.5
%
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio

103.0
 %
110.1
 %
103.2
%
95.5
%
103.1
%
108.4
%
105.5
 %
106.7
 %
107.0
 %
105.4
 %
105.6
 %

103.0
%
   Contribution from catastrophe losses

10.2

10.2

8.9

1.9

11.1

15.4

15.6

9.6

15.5

9.8

14.0


10.9

   GAAP combined ratio excl. catastrophe losses

92.8
 %
99.9
 %
94.3
%
93.6
%
92.0
%
93.0
%
89.9
 %
97.1
 %
91.5
 %
95.6
 %
91.6
 %

92.1
%
*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 2018 Supplemental Financial Data
17


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
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums

$
44

$
50

$
48

$
40

$
39

$
43

$
40

$
98

$
83

$
142

$
122


$
162

   Agency new business written premiums

18

17

16

16

15

21

16

33

37

51

52


68

   Other written premiums

(3
)
(3
)
(3
)
(2
)
(3
)
(3
)
(3
)
(6
)
(6
)
(9
)
(9
)

(11
)
   Net written premiums – statutory*

$
59

$
64

$
61

$
54

$
51

$
61

$
53

$
125

$
114

$
184

$
165


$
219

   Unearned premium change

1

(7
)
(5
)
2

2

(9
)
(5
)
(12
)
(14
)
(11
)
(12
)

(10
)
   Earned premiums

$
60

$
57

$
56

$
56

$
53

$
52

$
48

$
113

$
100

$
173

$
153


$
209

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums

13
%
16
 %
20
%
14
%
11
 %
16
 %
18
 %
18
 %
17
 %
16
 %
15
 %

15
 %
   Agency new business written premiums

20

(19
)
—

33

(6
)
31

23

(11
)
28

(2
)
16


19

   Other written premiums

—

—

—

—

—

(50
)
(50
)
0

(50
)
—

(29
)

(22
)
   Net written premiums – statutory*

16

5

15

20

6

20

18

10

19

12

15


16

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid

$
10

$
14

$
9

$
9

$
8

$
11

$
10

$
23

$
21

$
33

$
29


$
38

   Loss expenses paid

7

6

7

6

6

5

6

13

11

20

17


23

   Loss and loss expenses paid

$
17

$
20

$
16

$
15

$
14

$
16

$
16

$
36

$
32

$
53

$
46


$
61

Incurred losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss and loss expense incurred

$
25

$
29

$
21

$
28

$
24

$
20

$
14

$
50

$
34

$
75

$
58


$
86

   Loss and loss expenses paid as a % of incurred

68.0
%
69.0
 %
76.2
%
53.6
%
58.3
 %
80.0
 %
114.3
 %
72.0
 %
94.1
 %
70.7
 %
79.3
 %

70.9
 %
Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio

25.8
%
33.9
 %
18.8
%
32.8
%
30.1
 %
20.3
 %
15.8
 %
26.5
 %
18.2
 %
26.2
 %
22.4
 %

25.1
 %
   Loss adjustment expense ratio

16.8

14.6

20.5

17.9

15.7

18.2

13.1

17.5

15.7

17.3

15.7


16.3

   Net underwriting expense ratio

30.5

28.7

28.0

29.2

31.6

28.6

32.8

28.3

30.6

29.0

30.9


30.5

   Statutory combined ratio

73.1
%
77.2
 %
67.3
%
79.9
%
77.4
 %
67.1
 %
61.7
 %
72.3
 %
64.5
 %
72.5
 %
69.0
 %

71.9
 %
   Contribution from catastrophe losses

0.6

1.2

1.9

0.2

1.4

1.3

0.8

1.5

1.1

1.2

1.2


1.0

   Statutory combined ratio excl. catastrophe losses

72.5
%
76.0
 %
65.4
%
79.7
%
76.0
 %
65.8
 %
60.9
 %
70.8
 %
63.4
 %
71.3
 %
67.8
 %

70.9
 %
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio

72.0
%
77.6
 %
68.8
%
79.8
%
74.8
 %
66.2
 %
62.3
 %
73.3
 %
64.3
 %
72.8
 %
68.0
 %

71.1
 %
   Contribution from catastrophe losses

0.6

1.2

1.9

0.2

1.4

1.3

0.8

1.5

1.1

1.2

1.2


1.0

   GAAP combined ratio excl. catastrophe losses

71.4
%
76.4
 %
66.9
%
79.6
%
73.4
 %
64.9
 %
61.5
 %
71.8
 %
63.2
 %
71.6
 %
66.8
 %

70.1
 %
*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 2018 Supplemental Financial Data
18


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)
2018
2017
Change
% Change
2018
2017
Change
% Change
Net premiums written
$
72

$
67

$
5

7

$
217

$
201

$
16

8

Net investment income
39

40

(1
)
(3
)
118

122

(4
)
(3
)
Amortization of interest maintenance reserve
1

2

(1
)
(50
)
2

4

(2
)
(50
)
Commissions and expense allowances on reinsurance ceded
—

1

(1
)
(100
)
3

4

(1
)
(25
)
Income from fees associated with separate accounts
1

1

—

—

3

4

(1
)
(25
)
Total revenues
$
113

$
111

$
2

2

$
343

$
335

$
8

2

 
 
 
 
 
 
 
 
 
Death benefits and matured endowments
$
27

$
25

$
2

8

$
76

$
75

$
1

1

Annuity benefits
24

20

4

20

73

59

14

24

Disability benefits and benefits under accident and health contracts
—

1

(1
)
(100
)
1

2

(1
)
(50
)
Surrender benefits and group conversions
9

4

5

125

21

15

6

40

Interest and adjustments on deposit-type contract funds
2

2

—

—

7

6

1

17

Increase in aggregate reserves for life and accident and health contracts
20

28

(8
)
(29
)
78

103

(25
)
(24
)
Total benefit expenses
$
82

$
80

$
2

3

$
256

$
260

$
(4
)
(2
)
 
 
 
 
 
 
 
 
 
Commissions
$
14

$
11

$
3

27

$
38

$
33

$
5

15

General insurance expenses and taxes
13

12

1

8

37

35

2

6

Increase in loading on deferred and uncollected premiums
(1
)
1

(2
)
nm

1

(1
)
2

nm

Net transfers from separate accounts
—

—

—

nm

—

(2
)
2

100

Total underwriting expenses
$
26

$
24

$
2

8

$
76

$
65

$
11

17

 
 
 
 
 
 
 
 
 
Federal and foreign income tax benefit
(2
)
(1
)
(1
)
100

(1
)
(2
)
1

50

 
 
 
 
 
 
 
 
 
Net gain from operations before realized capital gains
$
7

$
8

$
(1
)
(13
)
$
12

$
12

$
—

—

 
 
 
 
 
 
 
 
 
Realized gains and losses net of capital gains tax, net
—

(1
)
1

100

—

(4
)
4

100

 
 
 
 
 
 
 
 
 
Net income (statutory)
$
7

$
7

$
—

—

$
12

$
8

$
4

50

 
 
 
 
 
 
 
 
 
Policyholders' surplus - statutory
$
205

$
210

(5
)
(2
)
$
205

$
210

$
(5
)
(2
)
 
 
 
 
 
 
 
 
 
Fixed maturities at amortized cost - statutory
3,359

3,219

140

4

3,359

3,219

140

4

*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 2018 Supplemental Financial Data
19


Noninsurance Operations and Cincinnati Re
Quarterly Data - Other
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/18
9/30/18
6/30/18
3/31/18
12/31/17
9/30/17
6/30/17
3/31/17
6/30/18
6/30/17
9/30/18
9/30/17
12/31/18
12/31/17
Noninsurance Operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans and leases

$
2

$
1

$
1

$
1

$
1

$
1

$
1

$
2

$
2

$
4

$
3


$
4

Other revenue

—

—

—

—

1

—

—

—

—

—

1


1

Interest expense

14

13

13

14

13

13

13

26

26

40

39


53

Operating expense

3

3

4

2

3

4

4

7

8

10

11


13

Cincinnati Re:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net written premiums

$
36

$
48

$
46

$
21

$
24

$
40

$
40

$
94

$
80

$
130

$
104


$
125

Earned premiums

34

30

29

27

32

26

22

59

48

93

80


107

Loss and loss expenses from:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year before catastrophe losses

15

15

15

12

13

13

12

30

25

45

38


50

Current accident year catastrophe losses

8

—

—

2

43

—

—

—

—

8

43


45

Prior accident years before catastrophe losses

1

(2
)
(2
)
—

1

—

(3
)
(4
)
(3
)
(3
)
(2
)

(2
)
Prior accident years catastrophe losses

—

—

—

—

—

—

(1
)
—

(1
)
—

(1
)

(1
)
Loss and loss expenses

$
24

$
13

$
13

$
14

$
57

$
13

$
8

$
26

$
21

$
50

$
78


$
92

Underwriting expenses

10

9

11

10

7

9

9

20

18

30

25


35

Underwriting profit (loss)

$
—

$
8

$
5

$
3

$
(32
)
$
4

$
5

$
13

$
9

$
13

$
(23
)

$
(20
)
Ratios as a percent of earned premiums:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year before catastrophe losses

42.5
%
50.0
 %
53.4
 %
44.5
%
41.1
%
48.8
 %
54.1
 %
51.6
 %
51.2
 %
48.3
 %
47.3
 %

46.5
 %
Current accident year catastrophe losses

23.7

—

—

6.1

137.2

—

—

—

—

8.8

53.8


41.5

Prior accident years before catastrophe losses

2.3

(5.8
)
(9.3
)
1.4

1.6

(1.2
)
(12.4
)
(7.5
)
(6.2
)
(3.9
)
(3.2
)

(2.0
)
Prior accident years catastrophe losses

0.8

(0.1
)
(0.3
)
—

—

0.3

(4.5
)
(0.2
)
(1.9
)
0.2

(1.2
)

(0.8
)
Loss and loss expenses

69.3
%
44.1
 %
43.8
 %
52.0
%
179.9
%
47.9
 %
37.2
 %
43.9
 %
43.1
 %
53.4
 %
96.7
 %

85.2
 %
Underwriting expenses

31.7

29.1

38.0

35.0

27.5

32.0

40.8

33.5

36.0

32.8

32.7


33.3

GAAP combined ratio

101.0
%
73.2
 %
81.8
 %
87.0
%
207.4
%
79.9
 %
78.0
 %
77.4
 %
79.1
 %
86.2
 %
129.4
 %

118.5
 %
Totals for other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues

$
36

$
31

$
30

$
28

$
34

$
27

$
23

$
61

$
50

$
97

$
84


$
112

Total expenses

51

38

41

40

80

39

34

79

73

130

153


193

Other loss

$
(15
)
$
(7
)
$
(11
)
$
(12
)
$
(46
)
$
(12
)
$
(11
)
$
(18
)
$
(23
)
$
(33
)
$
(69
)

$
(81
)
*Dollar amounts shown are in conformity with GAAP and 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 2018 Supplemental Financial Data
20