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: February 3, 2016
(Date of earliest event reported)
 
 
CINCINNATI FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
 
Ohio
0-4604
31‑0746871
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
 
 
 
6200 S. Gilmore Road, Fairfield, Ohio
45014‑5141
(Address of principal executive offices)
(Zip Code)
 
 
Registrant’s telephone number, including area code: (513) 870-2000
 
N/A
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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


Item 2.02 Results of Operations and Financial Condition.

On February 3, 2016, Cincinnati Financial Corporation issued the attached news release titled “Cincinnati Financial Reports Fourth-Quarter and Full-Year 2015 Results,” furnished as Exhibit 99.1 hereto and incorporated herein by reference. On February 3, 2016, the company also distributed the attached information titled “Supplemental Financial Data,” furnished as Exhibit 99.2 hereto and incorporated herein by reference. This report should not be deemed an admission as to the materiality of any information contained in the news release or supplemental financial data.






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




Item 9.01 Financial Statements and Exhibits.

(c)     Exhibits

Exhibit 99.1 – News release dated February 3, 2016, “Cincinnati Financial Reports Fourth-Quarter and Full-Year 2015 Results”

Exhibit 99.2 – Supplemental Financial Data for the Period Ending December 31, 2015 distributed February 3, 2016.



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: February 3, 2016
/S/Michael J. Sewell
 
Michael J. Sewell, CPA
 
Chief Financial Officer, Senior Vice President and Treasurer
 
 




Exhibit
 
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 Fourth-Quarter and Full-Year 2015 Results

Cincinnati, February 3, 2016 – Cincinnati Financial Corporation (Nasdaq: CINF) today reported:
•
Fourth-quarter 2015 net income of $156 million, or 94 cents per share, compared with $167 million, or $1.02 per share, in the fourth quarter of 2014.
•
Full-year 2015 net income of $634 million, or $3.83 per share, up 21 percent from $525 million, or $3.18, in 2014. Operating income of $589 million, or $3.56 per share, up 34 percent from $440 million, or $2.66 per share.
•
$11 million decrease in fourth-quarter 2015 net income reflected the after-tax net effect of two primary items: $45 million reduction in net realized investment gains that offset $28 million of improvement in the contribution from property casualty underwriting. The underwriting improvement effect was partially offset by a $14 million unfavorable impact from natural catastrophe losses.
•
$39.20 book value per share at December 31, 2015, down 94 cents or 2 percent since December 31, 2014.
•
3.4 percent value creation ratio for full-year 2015, compared with 12.6 percent for 2014.

Financial Highlights
(Dollars in millions except per share data)
Three months ended December 31,
Twelve months ended December 31,
 
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Revenue Data
 
 
 
 
 
 
 
 
 
 
 
 
   Earned premiums
 
$
1,148

 
$
1,086

 
6
 
$
4,480

 
$
4,243

 
6
   Investment income, net of expenses
 
150

 
140

 
7
 
572

 
549

 
4
   Total revenues
 
1,263

 
1,262

 
0
 
5,142

 
4,945

 
4
Income Statement Data
 
 
 
 
 
 
 
 
 
 
 
 
   Net income
 
$
156

 
$
167

 
(7)
 
$
634

 
$
525

 
21
   Realized investment gains and losses, net
 
(26
)
 
19

 
nm
 
45

 
85

 
(47)
   Operating income*
 
$
182

 
$
148

 
23
 
$
589

 
$
440

 
34
Per Share Data (diluted)
 
 
 
 
 
 
 
 
 
 
 
 
   Net income
 
$
0.94

 
$
1.02

 
(8)
 
$
3.83

 
$
3.18

 
20
   Realized investment gains and losses, net
 
(0.16
)
 
0.13

 
nm
 
0.27

 
0.52

 
(48)
   Operating income*
 
$
1.10

 
$
0.89

 
24
 
$
3.56

 
$
2.66

 
34
 
 
 
 
 
 
 
 
 
 
 
 
 
   Book value
 
 
 
 
 
 
 
$
39.20

 
$
40.14

 
(2)
   Cash dividend declared
 
$
0.92

 
$
0.44

 
109
 
$
2.30

 
$
1.76

 
31
   Diluted weighted average shares outstanding
 
165.7

 
165.3

 
0
 
165.6

 
165.1

 
0

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


CINF 4Q15 Release 1

Insurance Operations Fourth-Quarter Highlights
•
87.0 percent fourth-quarter 2015 property casualty combined ratio, improved from 90.4 percent for fourth-quarter 2014. Full-year 2015 property casualty combined ratio at 91.1%, with net written premiums up 5 percent.
•
7 percent increase in fourth-quarter net written premiums, including higher pricing and growth initiatives.
•
$140 million fourth-quarter 2015 property casualty new business written premiums. Agencies appointed since the beginning of 2014 contributed $12 million or 9 percent of total fourth-quarter new business written premiums.
•
6 cents per share contribution from life insurance operating income, matching a year ago.
Investment and Balance Sheet Highlights
•
7 percent or $10 million rise in fourth-quarter 2015 pretax investment income, including 14 percent growth for stock portfolio dividends and 4 percent growth for bond interest income.
•
Less than 1 percent full-year increase in fair value of invested assets at December 31, 2015, including a 3 percent decrease for the stock portfolio and a 2 percent increase for the bond portfolio.
•
$1.747 billion parent company cash and marketable securities at year-end 2015, down 2 percent from a year ago.

Achieving Planned Results
Steven J. Johnston, president and chief executive officer, commented: “Operating income for the fourth quarter rose 23 percent over last year’s result, bringing our full-year operating income to $589 million.

“Property casualty insurance underwriting was the key to our performance. Underwriting profits before taxes increased 43 percent for the quarter and 108 percent for the year. These strong overall results reflect the positive execution of our strategies to balance growth and profitability.

“The combined ratio of 87.0 percent for the fourth quarter improved 3.4 points over last year’s healthy result. Our 2015 full-year results surpassed those of the last seven years with a combined ratio of 91.1 percent, benefiting from sound underwriting judgment, lower catastrophe losses and steady favorable prior accident year reserve development. At the same time, our recent premium growth represents a solid achievement, including net written premium growth of 5 percent for the year.

“Our long-term investment approach continued to boost operating results. Pretax investment income rose to $150 million for the quarter and $572 million for the year, up 7 percent and 4 percent, respectively.”

Focusing on Profitable Growth
“We believe our full-year property casualty net written premium growth is again ahead of the industry average. Thanks to the success achieved by our associates and independent agency partners, we nearly reached our goal of $5 billion in direct written premiums by year-end 2015.

“Our growth initiatives are on track. New business for personal insurance rose 21 percent for the year, including an increase of $4 million from agencies’ high net worth clients. Cincinnati ReSM, our reinsurance assumed operation which we began to expand in 2015, profitably increased full-year property casualty net written premiums by 1 percent.

“We continue to refine pricing precision on all accounts. Our ability to price on a policy-by-policy basis will support our efforts to maintain appropriate pricing as we navigate a challenging market environment in 2016. The right price, bolstered by our hallmarks of strong agency relationships and overwhelming claims service, will help our agents attract and retain high-quality business.”

Returning Capital to Shareholders
“Our property casualty statutory surplus, a healthy $4.4 billion at December 31, provides ample capacity to move forward with our growth plans. A strong balance sheet gives us the flexibility to invest in our business while still paying shareholder dividends as a consistent, long-term strategy. The board of directors’ recent actions to pay a special cash dividend at the end of 2015 and to increase our indicated annual dividend for the 56th consecutive year demonstrates their confidence in our future.”


CINF 4Q15 Release 2

Insurance Operations Highlights
Consolidated Property Casualty Insurance Results
(Dollars in millions)
Three months ended December 31,
 
Twelve months ended December 31,
 
 
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Earned premiums
 
$
1,095

 
$
1,035

 
6
 
$
4,271

 
$
4,045

 
6
Fee revenues
 
2

 
1

 
100
 
8

 
6

 
33
   Total revenues
 
1,097

 
1,036

 
6
 
4,279

 
4,051

 
6
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
616

 
622

 
(1)
 
2,572

 
2,627

 
(2)
Underwriting expenses
 
338

 
314

 
8
 
1,321

 
1,238

 
7
   Underwriting profit
 
$
143

 
$
100

 
43
 
$
386

 
$
186

 
108
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
56.3
 %
 
60.1
 %
 
(3.8)
 
60.2
 %
 
65.0
 %
 
(4.8)
     Underwriting expenses
 
30.7

 
30.3

 
0.4
 
30.9

 
30.6

 
0.3
           Combined ratio
 
87.0
 %
 
90.4
 %
 
(3.4)
 
91.1
 %
 
95.6
 %
 
(4.5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
925

 
$
906

 
2
 
$
3,925

 
$
3,794

 
3
Agency new business written premiums
 
140

 
122

 
15
 
532

 
503

 
6
Cincinnati Re net written premiums
 
33

 
—

 
nm
 
33

 
—

 
nm
Other written premiums
 
(43
)
 
(41
)
 
(5)
 
(129
)
 
(154
)
 
16
   Net written premiums
 
$
1,055

 
$
987

 
7
 
$
4,361

 
$
4,143

 
5
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
58.9
 %
 
58.3
 %
 
0.6
 
60.4
 %
 
61.7
 %
 
(1.3)
     Current accident year catastrophe losses
 
1.5

 
(0.2
)
 
1.7
 
4.1

 
5.7

 
(1.6)
     Prior accident years before catastrophe losses
 
(3.8
)
 
2.7

 
(6.5)
 
(3.9
)
 
(1.8
)
 
(2.1)
     Prior accident years catastrophe losses
 
(0.3
)
 
(0.7
)
 
0.4
 
(0.4
)
 
(0.6
)
 
0.2
           Loss and loss expense ratio
 
56.3
 %
 
60.1
 %
 
(3.8)
 
60.2
 %
 
65.0
 %
 
(4.8)
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before
 
 
 
 
 
 
 
 
 
 
 
 
  catastrophe losses
 
89.6
 %
 
88.6
 %
 
1.0
 
91.3
 %
 
92.3
 %
 
(1.0)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
•
7 percent and 5 percent growth in fourth-quarter and full-year 2015 property casualty net written premiums, including 3 percent and 1 percent from Cincinnati Re. The increase in premiums also reflects other growth initiatives, modest average price increases and a higher level of insured exposures.
•
15 percent and 6 percent increase in fourth-quarter and full-year 2015 new business premiums written by agencies, compared with a year ago, including 1 percent for each period from agencies’ high net worth clients. Full-year 2015 new business premiums, up $29 million in total, included a $27 million increase in standard market property casualty production from agencies appointed since the beginning of 2014 and a $5 million increase for excess and surplus lines.
•
1,526 agency relationships in 1,956 reporting locations marketing standard market property casualty insurance products at December 31, 2015, compared with 1,466 agency relationships in 1,884 reporting locations at year-end 2014. The 114 new agency appointments made during 2015 were slightly more than planned.
•
3.4 percentage-point fourth-quarter 2015 combined ratio improvement, driven by 6.5 points more benefit from prior accident year reserve development before catastrophes that offset an increase of 2.1 points for higher losses from natural catastrophes.
•
4.5 percentage-point improvement in full-year 2015 combined ratio, compared with 2014, including 1.4 points from lower natural catastrophe losses and 0.9 points from lower noncatastrophe weather-related losses.
•
4.1 and 4.3 percentage-point fourth-quarter and full-year 2015 benefit from favorable prior accident year reserve development of $44 million and $184 million, compared with 2.0 points or $22 million of unfavorable fourth-quarter 2014 development and 2.4 points or $98 million of favorable development for full-year 2014. The unfavorable development reported for the fourth-quarter of 2014 was primarily due to higher estimates of IBNR losses and loss expenses for our commercial casualty line of business.

CINF 4Q15 Release 3

•
1.3 percentage-point improvement, to 60.4 percent, for the full-year 2015 ratio of current accident year losses and loss expenses before catastrophes, largely due to lower noncatastrophe weather-related losses and a 0.5 point decrease in the ratio for current accident year losses of $1 million or more per claim.
•
0.3 percentage-point increase in the full-year 2015 underwriting expense ratio, as strategic investments for profitable growth offset higher earned premiums and expense management efforts.

CINF 4Q15 Release 4

           
Commercial Lines Insurance Results
(Dollars in millions)
Three months ended December 31,
 
Twelve months ended December 31,
 
 
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Earned premiums
 
$
761

 
$
730

 
4
 
$
2,996

 
$
2,856

 
5
Fee revenues
 
1

 
1

 
0
 
4

 
4

 
0
   Total revenues
 
762

 
731

 
4
 
3,000

 
2,860

 
5
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
419

 
454

 
(8)
 
1,708

 
1,812

 
(6)
Underwriting expenses
 
242

 
228

 
6
 
947

 
902

 
5
   Underwriting profit
 
$
101

 
$
49

 
106
 
$
345

 
$
146

 
136
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
55.1
 %
 
62.3
 %
 
(7.2)
 
57.0
 %
 
63.5
 %
 
(6.5)
     Underwriting expenses
 
31.7

 
31.3

 
0.4
 
31.6

 
31.6

 
0.0
           Combined ratio
 
86.8
 %
 
93.6
 %
 
(6.8)
 
88.6
 %
 
95.1
 %
 
(6.5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
649

 
$
645

 
1
 
$
2,756

 
$
2,678

 
3
Agency new business written premiums
 
97

 
86

 
13
 
365

 
360

 
1
Other written premiums
 
(34
)
 
(32
)
 
(6)
 
(96
)
 
(116
)
 
17
   Net written premiums
 
$
712

 
$
699

 
2
 
$
3,025

 
$
2,922

 
4
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
58.2
 %
 
58.9
 %
 
(0.7)
 
58.6
 %
 
60.7
 %
 
(2.1)
     Current accident year catastrophe losses
 
1.4

 
(0.1
)
 
1.5
 
3.5

 
4.8

 
(1.3)
     Prior accident years before catastrophe losses
 
(4.1
)
 
4.4

 
(8.5)
 
(4.7
)
 
(1.5
)
 
(3.2)
     Prior accident years catastrophe losses
 
(0.4
)
 
(0.9
)
 
0.5
 
(0.4
)
 
(0.5
)
 
0.1
           Loss and loss expense ratio
 
55.1
 %
 
62.3
 %
 
(7.2)
 
57.0
 %
 
63.5
 %
 
(6.5)
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before
 
 
 
 
 
 
 
 
 
 
 
 
  catastrophe losses
 
89.9
 %
 
90.2
 %
 
(0.3)
 
90.2
 %
 
92.3
 %
 
(2.1)
 
 
 
 
 
 
 
 
 
 
 
 
 

•
2 percent and 4 percent growth in fourth-quarter and full-year 2015 commercial lines net written premiums, reflecting growth initiatives, a higher level of insured exposures and price increases. Fourth-quarter and full-year 2015 commercial lines average renewal price increases at a percentage in the low-single-digit range.
•
$5 million or 1 percent rise in full-year 2015 new business written by agencies, driven by production from agencies appointed since the beginning of 2014 that offset effects of a softening commercial insurance market.
•
6.8 percentage-point improvement in fourth-quarter 2015 combined ratio, driven by 8.5 points more benefit from prior accident year reserve development before catastrophes that offset an increase of 2.0 points for higher losses from natural catastrophes.
•
6.5 percentage-point improvement in the full-year 2015 combined ratio, including 1.2 points from lower natural catastrophe losses and 2.1 points from lower incurred losses and loss expenses for our largest commercial line of business, commercial casualty.
•
4.5 and 5.1 percentage-point fourth-quarter and full-year 2015 benefit from favorable prior accident year reserve development of $34 million and $154 million, compared with 3.5 points or $26 million of unfavorable fourth-quarter 2014 development and 2.0 points or $57 million of favorable development for full-year 2014.
•
2.1 percentage-point improvement, to 58.6 percent, for the full-year 2015 ratio of current accident year losses and loss expenses before catastrophes, largely due to a 1.5 point decrease in the ratio for current accident year losses of $1 million or more per claim.

CINF 4Q15 Release 5


Personal Lines Insurance Results
(Dollars in millions)
Three months ended December 31,
 
Twelve months ended December 31,
 
 
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Earned premiums
 
$
280

 
$
266

 
5
 
$
1,097

 
$
1,041

 
5
Fee revenues
 
1

 
0

 
0
 
3

 
2

 
50
   Total revenues
 
281

 
266

 
6
 
1,100

 
1,043

 
5
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
184

 
148

 
24
 
789

 
740

 
7
Underwriting expenses
 
79

 
75

 
5
 
323

 
293

 
10
   Underwriting (loss) profit
 
$
18

 
$
43

 
(58)
 
$
(12
)
 
$
10

 
nm
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
65.7
 %
 
55.8
 %
 
9.9
 
71.9
 %
 
71.1
 %
 
0.8
     Underwriting expenses
 
28.3

 
27.9

 
0.4
 
29.4

 
28.1

 
1.3
           Combined ratio
 
94.0
 %
 
83.7
 %
 
10.3
 
101.3
 %
 
99.2
 %
 
2.1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
245

 
$
233

 
5
 
$
1,041

 
$
1,005

 
4
Agency new business written premiums
 
27

 
24

 
13
 
111

 
92

 
21
Other written premiums
 
(6
)
 
(8
)
 
25
 
(24
)
 
(29
)
 
17
   Net written premiums
 
$
266

 
$
249

 
7
 
$
1,128

 
$
1,068

 
6
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
62.4
 %
 
56.1
 %
 
6.3
 
64.9
 %
 
63.4
 %
 
1.5
     Current accident year catastrophe losses
 
2.0

 
(0.9
)
 
2.9
 
6.5

 
8.8

 
(2.3)
     Prior accident years before catastrophe losses
 
1.5

 
1.1

 
0.4
 
0.8

 
(0.1
)
 
0.9
     Prior accident years catastrophe losses
 
(0.2
)
 
(0.5
)
 
0.3
 
(0.3
)
 
(1.0
)
 
0.7
           Loss and loss expense ratio
 
65.7
 %
 
55.8
 %
 
9.9
 
71.9
 %
 
71.1
 %
 
0.8
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before
 
 
 
 
 
 
 
 
 
 
 
 
  catastrophe losses
 
90.7
 %
 
84.0
 %
 
6.7
 
94.3
 %
 
91.5
 %
 
2.8
 
 
 
 
 
 
 
 
 
 
 
 
 

•
7 percent and 6 percent growth in fourth-quarter and full-year 2015 personal lines net written premiums, including growth in new business and higher renewal written premiums that benefited from rate increases.
•
3 percent increase in full-year 2015 earned premiums in aggregate from our five highest volume states where we offer personal lines policies and that represent approximately half of our personal lines premiums, while rising 8 percent for all other states in aggregate as we progress toward geographic diversification.
•
13 percent and 21 percent increase in fourth-quarter and full-year 2015 new business written premium, including increases of approximately $1 million and $4 million, respectively, from agencies’ high net worth clients.
•
10.3 percentage-point rise in fourth-quarter 2015 combined ratio, including 3.2 points from higher natural catastrophe losses and 6.3 points from higher current accident year losses and loss expenses before catastrophes, largely from our personal auto line of business.
•
2.1 percentage-point rise in the full-year 2015 combined ratio, including increases in the underwriting expense ratio and in the ratio for losses of $1 million or more per claim that offset decreases in ratios of 1.6 points from lower natural catastrophe losses and 1.7 points from lower noncatastrophe weather-related losses.
•
1.3 and 0.5 percentage-point fourth-quarter and full-year 2015 unfavorable prior accident year reserve development of $4 million and $5 million, compared with 0.6 points or $1 million of unfavorable fourth-quarter 2014 development and 1.1 points or $12 million of favorable development for full-year 2014.
•
1.5 percentage-point increase, to 64.9 percent, for the full-year 2015 ratio of current accident year losses and loss expenses before catastrophes, including a 2.2 point increase in the ratio for current accident year losses of $1 million or more per claim that offset lower noncatastrophe weather-related losses.
•
1.3 percentage-point increase in the full-year 2015 underwriting expense ratio, largely due to strategic investments such as staff additions to support expansion in high net worth markets.


CINF 4Q15 Release 6


Excess and Surplus Lines Insurance Results
(Dollars in millions)
Three months ended December 31,
 
Twelve months ended December 31,
 
 
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Earned premiums
 
$
44

 
$
39

 
13
 
$
168

 
$
148

 
14
Fee revenues
 
—

 
—

 
—
 
1

 
—

 
nm
   Total revenues
 
44

 
39

 
13
 
169

 
148

 
14
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss and loss expenses
 
8

 
20

 
(60)
 
70

 
75

 
(7)
Underwriting expenses
 
14

 
11

 
27
 
48

 
43

 
12
   Underwriting profit
 
$
22

 
$
8

 
175
 
$
51

 
$
30

 
70
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Loss and loss expenses
 
18.9
 %
 
49.0
 %
 
(30.1)
 
41.9
 %
 
50.5
 %
 
(8.6)
     Underwriting expenses
 
29.2

 
28.8

 
0.4
 
28.1

 
28.9

 
(0.8)
           Combined ratio
 
48.1
 %
 
77.8
 %
 
(29.7)
 
70.0
 %
 
79.4
 %
 
(9.4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 
 
 
 
% Change
Agency renewal written premiums
 
$
31

 
$
28

 
11
 
$
128

 
$
111

 
15
Agency new business written premiums
 
16

 
12

 
33
 
56

 
51

 
10
Other written premiums
 
(3
)
 
(1
)
 
(200)
 
(9
)
 
(9
)
 
0
   Net written premiums
 
$
44

 
$
39

 
13
 
$
175

 
$
153

 
14
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios as a percent of earned premiums:
 
 
 
 
 
Pt. Change
 
 
 
 
 
Pt. Change
     Current accident year before catastrophe losses
 
51.3
 %
 
62.1
 %
 
(10.8)
 
62.1
 %
 
68.1
 %
 
(6.0)
     Current accident year catastrophe losses
 
0.2

 
2.9

 
(2.7)
 
0.5

 
1.8

 
(1.3)
     Prior accident years before catastrophe losses
 
(32.5
)
 
(16.1
)
 
(16.4)
 
(20.6
)
 
(19.6
)
 
(1.0)
     Prior accident years catastrophe losses
 
(0.1
)
 
0.1

 
(0.2)
 
(0.1
)
 
0.2

 
(0.3)
           Loss and loss expense ratio
 
18.9
 %
 
49.0
 %
 
(30.1)
 
41.9
 %
 
50.5
 %
 
(8.6)
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year combined ratio before
 
 
 
 
 
 
 
 
 
 
 
 
  catastrophe losses
 
80.5
 %
 
90.9
 %
 
(10.4)
 
90.2
 %
 
97.0
 %
 
(6.8)
 
 
 
 
 
 
 
 
 
 
 
 
 

•
13 percent and 14 percent growth in fourth-quarter and full-year 2015 excess and surplus lines net written premiums, including average renewal price increases at a percentage near the high end of a low-single-digit range – down slightly from a mid-single-digit range in the third quarter of 2015.
•
10 percent increase in full-year 2015 new business written premiums, slowing from 21 percent in full-year 2014 as a result of careful underwriting in a highly competitive market.
•
29.7 percentage-point improvement in fourth-quarter 2015 combined ratio, largely due to 16.4 points more benefit from prior accident year reserve development before catastrophes.
•
9.4 percentage-point combined ratio improvement for full-year 2015, primarily due to improved experience in the ratio for current accident year losses and loss expenses before catastrophe losses.

CINF 4Q15 Release 7


Life Insurance Results
(Dollars in millions)
Three months ended December 31,
 
Twelve months ended December 31,
 
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Term life insurance
 
$
33

 
$
32

 
3
 
$
136

 
$
131

 
4
Universal life insurance
 
11

 
10

 
10
 
39

 
35

 
11
Other life insurance, annuity, and disability income
  products
 
9

 
9

 
0
 
34

 
32

 
6
Earned premiums
 
53

 
51

 
4
 
209

 
198

 
6
Investment income, net of expenses
 
38

 
36

 
6
 
150

 
144

 
4
Other income
 
1

 
2

 
(50)
 
5

 
6

 
(17)
Total revenues, excluding realized investment gains
  and losses
 
92

 
89

 
3
 
364

 
348

 
5
Contract holders’ benefits incurred
 
61

 
53

 
15
 
236

 
229

 
3
Underwriting expenses incurred
 
16

 
21

 
(24)
 
66

 
63

 
5
Total benefits and expenses
 
77

 
74

 
4
 
302

 
292

 
3
Net income before income tax and realized
  investment gains, net
 
15

 
15

 
0
 
62

 
56

 
11
Income tax
 
5

 
5

 
0
 
22

 
20

 
10
Net income before realized investment gains, net
 
$
10

 
$
10

 
0
 
$
40

 
$
36

 
11
 
 
 
 
 
 
 
 
 
 
 
 
 

•
$11 million or 6 percent increase in full-year 2015 earned premiums, including a 4 percent increase for term life insurance, our largest life insurance product line.
•
$4 million increase in full-year 2015 profit, primarily due to more favorable mortality experience.
•
$32 million or 4 percent full-year 2015 decrease to $872 million in GAAP shareholders’ equity for The Cincinnati Life Insurance Company, largely reflecting a decrease in fair value of the fixed-maturity portfolio due to the effects of rising interest rates and widening credit spreads.



CINF 4Q15 Release 8


Investment and Balance Sheet Highlights
Investment Results
(Dollars in millions)
 
Three months ended December 31,
 
Twelve months ended December 31,
 
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
Investment income, net of expenses
 
$
150

 
$
140

 
7
 
$
572

 
$
549

 
4
Investment interest credited to contract holders’
 
(22
)
 
(21
)
 
(5)
 
(86
)
 
(83
)
 
(4)
Realized investment gains and losses, net
 
(40
)
 
32

 
(225)
 
70

 
133

 
(47)
Investment profit
 
$
88

 
$
151

 
(42)
 
$
556

 
$
599

 
(7)
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
   Interest
 
$
109

 
$
105

 
4
 
$
428

 
$
417

 
3
   Dividends
 
42

 
37

 
14
 
150

 
138

 
9
   Other
 
1

 
—

 
nm
 
3

 
2

 
50
   Less investment expenses
 
2

 
2

 
0
 
9

 
8

 
13
      Investment income, pretax
 
150

 
140

 
7
 
572

 
549

 
4
      Less income taxes
 
35

 
33

 
6
 
135

 
130

 
4
Total investment income, after-tax
 
$
115

 
$
107

 
7
 
$
437

 
$
419

 
4
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment returns:
 
 
 
 
 
 
 
 
 
 
 
 
      Effective tax rate
 
23.5
%
 
23.6
%
 
 
 
23.6
%
 
23.7
%
 
 
    Average invested assets plus cash and cash
      equivalents
 
$
14,525

 
$
14,229

 
 
 
$
14,515

 
$
13,951

 
 
      Average yield pretax
 
4.13
%
 
3.94
%
 
 
 
3.94
%
 
3.94
%
 
 
      Average yield after-tax
 
3.17

 
3.01

 
 
 
3.01

 
3.00

 
 
Fixed-maturity returns:
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
27.2
%
 
27.0
%
 
 
 
27.1
%
 
27.0
%
 
 
Average amortized cost
 
$
9,360

 
$
8,898

 
 
 
$
9,098

 
$
8,755

 
 
Average yield pretax
 
4.66
%
 
4.72
%
 
 
 
4.70
%
 
4.76
%
 
 
Average yield after-tax
 
3.39

 
3.45

 
 
 
3.43

 
3.48

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

•
$10 million or 7 percent rise in fourth-quarter 2015 pretax investment income, including 14 percent growth in equity portfolio dividends and 4 percent growth in interest income.
•
$40 million and $52 million fourth-quarter and full-year 2015 impact from other-than-temporary impairments to net realized investment gains and losses, compared with $23 million and $24 million for fourth-quarter and full-year 2014.
•
$102 million or 5 percent fourth-quarter 2015 net increase in pretax net unrealized investment portfolio gains, including a $212 million increase for the equity portfolio. The fourth-quarter effect of net realized gains from investment portfolio security sales or called bonds was immaterial.
•
$625 million or 23 percent full-year 2015 net decrease in pretax net unrealized investment portfolio gains, including a $362 million decrease for the equity portfolio. The total decrease included the effect of $121 million of pretax net realized gains from investment portfolio security sales or called bonds during full-year 2015, including $103 million from the equity portfolio.

CINF 4Q15 Release 9

Balance Sheet Highlights
(Dollars in millions except share data)
 
At December 31,
 
At December 31,
 
2015
 
2014
Balance sheet data:
 
 
 
 
   Total investments
 
$
14,423

 
$
14,386

   Total assets
 
18,888

 
18,748

   Short-term debt
 
35

 
49

   Long-term debt
 
786

 
786

   Shareholders’ equity
 
6,427

 
6,573

   Book value per share
 
39.20

 
40.14

   Debt-to-total-capital ratio
 
11.3
%
 
11.3
%

•
$14.967 billion in consolidated cash and invested assets at December 31, 2015, down $10 million from $14.977 billion at year-end 2014.
•
$9.650 billion bond portfolio at December 31, 2015, with an average rating of A2/A. Fair value decreased $106 million or 1 percent during the fourth quarter of 2015.
•
$4.706 billion equity portfolio was 32.6 percent of total investments, including $1.768 billion in pretax net unrealized gains at December 31, 2015. Fourth-quarter 2015 increase in fair value of $180 million or 4 percent.
•
$4.413 billion of statutory surplus for the property casualty insurance group at December 31, 2015, down $59 million from $4.472 billion at year-end 2014, after declaring $447 million in dividends to the parent company. The ratio of net written premiums to property casualty statutory surplus for the 12 months ended December 31, 2015, was 1.0-to-1, up from 0.9-to-1 at year-end 2014.
•
Value creation ratio of 3.4 percent for full-year 2015 included contributions of 8.9 percentage points from net income before net realized investment gains, partially offset by unfavorable effects of investment portfolio realized gains and changes in unrealized gains of 2.6 points from our bond portfolio and 2.9 points from our stock portfolio.

For additional information or to register for our conference call webcast, please visit cinfin.com/investors.

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



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 2014 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 33.
Factors that could cause or contribute to such differences include, but are not limited to:
•
Unusually high levels of catastrophe losses due to risk concentrations, changes in weather patterns, environmental events, terrorism incidents or other causes
•
Increased frequency and/or severity of claims or development of claims that are unforeseen at the time of policy issuance
•
Inadequate estimates, 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
•
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

CINF 4Q15 Release 10

•
Prolonged low interest rate environment or other factors that limit the company’s ability to generate growth in investment income or interest rate fluctuations that result in declining values of fixed-maturity investments, including declines in accounts in which we hold bank-owned life insurance contract assets
•
Recession or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies
•
Difficulties with technology or data security breaches, including cyberattacks, that could negatively affect our ability to conduct business and our relationships with agents, policyholders and others
•
Disruption of the insurance market caused by technology innovations such as driverless cars that could decrease consumer demand for insurance products
•
Delays, 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
•
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 4Q15 Release 11


Cincinnati Financial Corporation
Condensed Consolidated Balance Sheets (unaudited)
(Dollars in millions except per share data)
 
December 31,
 
December 31,
 
 
2015
 
2014
Assets
 
 

 
 

  Investments
 
 

 
 

    Fixed maturities, at fair value (amortized cost: 2015—$9,324; 2014—$8,871)
 
$
9,650

 
$
9,460

    Equity securities, at fair value (cost: 2015—$2,938; 2014—$2,728)
 
4,706

 
4,858

    Other invested assets
 
67

 
68

      Total investments
 
14,423

 
14,386

  Cash and cash equivalents
 
544

 
591

  Investment income receivable
 
129

 
123

  Finance receivable
 
62

 
75

  Premiums receivable
 
1,431

 
1,405

  Reinsurance recoverable
 
542

 
545

  Prepaid reinsurance premiums
 
54

 
29

  Deferred policy acquisition costs
 
616

 
578

  Land, building and equipment, net, for company use (accumulated depreciation:
     2015—$459; 2014—$446)
 
185

 
194

  Other assets
 
154

 
70

  Separate accounts
 
748

 
752

    Total assets
 
$
18,888

 
$
18,748

Liabilities
 
 

 
 

  Insurance reserves
 
 

 
 

    Loss and loss expense reserves
 
$
4,718

 
$
4,485

    Life policy and investment contract reserves
 
2,583

 
2,497

  Unearned premiums
 
2,201

 
2,082

  Other liabilities
 
717

 
648

  Deferred income tax
 
638

 
840

  Note payable
 
35

 
49

  Long-term debt and capital lease obligations
 
821

 
822

  Separate accounts
 
748

 
752

    Total liabilities
 
12,461

 
12,175

 
 
 
 
 
Shareholders' Equity
 
 

 
 

  Common stock, par value—$2 per share; (authorized: 2015 and 2014—500 million shares;
    issued and outstanding: 2015 and 2014—198.3 million shares)
 
397

 
397

Paid-in capital
 
1,232

 
1,214

Retained earnings
 
4,762

 
4,505

Accumulated other comprehensive income
 
1,344

 
1,744

Treasury stock at cost (2015—34.4 million share and 2014—34.6 million shares)
 
(1,308
)
 
(1,287
)
Total shareholders' equity
 
6,427

 
6,573

Total liabilities and shareholders' equity
 
$
18,888

 
$
18,748

 
 
 
 
 


CINF 4Q15 Release 12

Cincinnati Financial Corporation
Condensed Consolidated Statements of Income (unaudited)
 
 
 
 
 
 
 
 
(Dollars in millions except per share data)
Three months ended December 31,
 
Twelve months ended December 31,
 
2015
 
2014
 
2015
 
2014
Revenues
 
 
 
 
 
 
 
   Earned premiums
$
1,148

 
$
1,086

 
$
4,480

 
$
4,243

   Investment income, net of expenses
150

 
140

 
572

 
549

   Realized investment gains and losses, net
(40
)
 
32

 
70

 
133

   Fee revenues
3

 
3

 
13

 
12

   Other revenues
2

 
1

 
7

 
8

      Total revenues
1,263

 
1,262

 
5,142

 
4,945

 
 
 
 
 
 
 
 
Benefits and Expenses
 
 
 
 
 
 
 
   Insurance losses and contract holders’ benefits
677

 
675

 
2,808

 
2,856

   Underwriting, acquisition and insurance expenses
354

 
334

 
1,387

 
1,301

   Interest expense
13

 
13

 
53

 
53

   Other operating expenses
3

 
4

 
13

 
14

      Total benefits and expenses
1,047

 
1,026

 
4,261

 
4,224

 
 
 
 
 
 
 
 
Income Before Income Taxes
216

 
236

 
881

 
721

 
 
 
 
 
 
 
 
Provision for Income Taxes
 
 
 
 
 
 
 
   Current
51

 
53

 
231

 
159

   Deferred
9

 
16

 
16

 
37

      Total provision for income taxes
60

 
69

 
247

 
196

 
 
 
 
 
 
 
 
Net Income
$
156

 
$
167

 
$
634

 
$
525

 
 
 
 
 
 
 
 
Per Common Share
 
 
 
 
 
 
 
   Net income—basic
$
0.95

 
$
1.03

 
$
3.87

 
$
3.21

   Net income—diluted
0.94

 
1.02

 
3.83

 
3.18



Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures
(See attached tables for reconciliations; prior-period reconciliations available at cinfin.com/investors.)
Cincinnati Financial Corporation prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Statutory data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners’ (NAIC) Accounting Practices and Procedures Manual, and therefore is not reconciled to GAAP data.
Management uses certain non-GAAP and non-statutory financial measures to evaluate its primary business areas – property casualty insurance, life insurance and investments. Management uses these measures when analyzing both GAAP and non-GAAP measures to improve its understanding of trends in the underlying business and to help avoid incorrect or misleading assumptions and conclusions about the success or failure of company strategies. Management adjustments to GAAP measures generally: apply to non-recurring events that are unrelated to business performance and distort short-term results; involve values that fluctuate based on events outside of management’s control; or relate to accounting refinements that affect comparability between periods, creating a need to analyze data on the same basis.
•
Operating income: Operating income is calculated by excluding net realized investment gains and losses (defined as realized investment gains and losses after applicable federal and state income taxes) from net income. Management evaluates operating income to measure the success of pricing, rate and underwriting strategies. While realized investment gains (or losses) are integral to the company’s insurance operations over the long term, the determination to realize investment gains or losses in any period may be subject to management’s discretion and is independent of the insurance underwriting process. Also, under applicable GAAP accounting requirements, gains and losses can be recognized from certain changes in market values of securities without actual realization. Management believes that the level of realized investment gains or losses for any particular period, while it may be material, may not fully indicate the performance of ongoing underlying business operations in that period.

CINF 4Q15 Release 13

For these reasons, many investors and shareholders consider operating income to be one of the more meaningful measures for evaluating insurance company performance. Equity analysts who report on the insurance industry and the company generally focus on this metric in their analyses. The company presents operating income so that all investors have what management believes to be a useful supplement to GAAP information.
•
Value creation ratio: This is a measure of shareholder value creation that management believes captures the contribution of the company’s insurance operations, the success of its investment strategy and the importance placed on paying cash dividends to shareholders. The value creation ratio measure is made up of two primary components: (1) rate of growth in book value per share plus (2) the ratio of dividends declared per share to beginning book value per share. Management believes this non-GAAP measure is a useful supplement to GAAP information, providing a meaningful measure of long-term progress in creating shareholder value. It is intended to be all-inclusive regarding changes in book value per share, and uses originally reported book value per share in cases where book value per share has been adjusted, such as adoption of Accounting Standards Updates with a cumulative effect of a change in accounting.
•
Statutory accounting rules: For public reporting, insurance companies prepare financial statements in accordance with GAAP. However, insurers also must calculate certain data according to statutory accounting rules as defined in the NAIC’s Accounting Practices and Procedures Manual, which may be, and has been, modified by various state insurance departments. Statutory data is publicly available, and various organizations use it to calculate aggregate industry data, study industry trends and compare insurance companies.
•
Written premium: Under statutory accounting rules, property casualty written premium is the amount recorded for policies issued and recognized on an annualized basis at the effective date of the policy. Management analyzes trends in written premium to assess business efforts. Earned premium, used in both statutory and GAAP accounting, is calculated ratably over the policy term. The difference between written and earned premium is unearned premium.

CINF 4Q15 Release 14


Cincinnati Financial Corporation
Balance Sheet Reconciliation
(Dollars are per share)
 
Three months ended December 31,
 
Twelve months ended December 31,
 
2015
 
2014
 
2015
 
2014
Value creation ratio:
 
 
 
 
 
 
 
 
   End of period book value
 
$
39.20

 
$
40.14

 
$
39.20

 
$
40.14

   Less beginning of period book value
 
38.77

 
39.01

 
40.14

 
37.21

   Change in book value
 
0.43

 
1.13

 
(0.94
)
 
2.93

   Dividend declared to shareholders
 
0.92

 
0.44

 
2.30

 
1.76

   Total value creation
 
$
1.35

 
$
1.57

 
$
1.36

 
$
4.69

 
 
 
 
 
 
 
 
 
Value creation ratio from change in book value*
 
1.1
%
 
2.9
%
 
(2.3
)%
 
7.9
%
Value creation ratio from dividends declared to
   shareholders**
2.4

 
1.1

 
5.7

 
4.7

Value creation ratio
 
3.5
%
 
4.0
%
 
3.4
 %
 
12.6
%
 
 
 
 
 
 
 
 
 
* Change in book value divided by the beginning of period book value
 
 
** Dividend declared to shareholders divided by beginning of period book value
 
 

 Net Income Reconciliation
 
(Dollars in millions except per share data)
 
Three months ended December 31,
 
Twelve months ended December 31,
 
 
2015
 
2014
 
2015
 
2014
   Net income
 
$
156

 
$
167

 
$
634

 
$
525

   Realized investment gains and losses, net
 
(26
)
 
19

 
45

 
85

   Operating income
 
182

 
148

 
589

 
440

   Less catastrophe losses
 
(9
)
 
6

 
(105
)
 
(133
)
   Operating income before catastrophe losses
 
$
191

 
$
142

 
$
694

 
$
573

 
 
 
 
 
 
 
 
 
Diluted per share data:
 
 
 
 
 
 
 
 
   Net income
 
$
0.94

 
$
1.02

 
$
3.83

 
$
3.18

   Realized investment gains and losses, net
 
(0.16
)
 
0.13

 
0.27

 
0.52

   Operating income
 
1.10

 
0.89

 
3.56

 
2.66

   Less catastrophe losses
 
(0.05
)
 
0.04

 
(0.63
)
 
(0.81
)
   Operating income before catastrophe losses
 
$
1.15

 
$
0.85

 
$
4.19

 
$
3.47

 
 
 
 
 
 
 
 
 




CINF 4Q15 Release 15

Cincinnati Financial Corporation
Property Casualty Operations Reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended December 31, 2015
 
Consolidated*
Commercial
Personal
E&S
Premiums:
 
 
 
 
 
 
 
 
 
 
 
 
   Written premiums
 
$
1,055

 
 
$
712

 
 
$
266

 
 
$
44

 
   Unearned premiums change
 
40

 
 
49

 
 
14

 
 
0

 
   Earned premiums
 
$
1,095

 
 
$
761

 
 
$
280

 
 
$
44

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statutory ratios:
 
 
 
 
 
 
 
 
 
 
 
 
   Combined ratio
 
88.6
 %
 
 
88.6
 %
 
 
95.1
%
 
 
50.7
 %
 
   Contribution from catastrophe losses
 
1.2

 
 
1.0

 
 
1.8

 
 
0.1

 
   Combined ratio excluding catastrophe losses
 
87.4
 %
 
 
87.6
 %
 
 
93.3
%
 
 
50.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commission expense ratio
 
19.7
 %
 
 
19.5
 %
 
 
17.9
%
 
 
28.8
 %
 
   Other underwriting expense ratio
 
12.6

 
 
14.0

 
 
11.5

 
 
3.0

 
   Total expense ratio
 
32.3
 %
 
 
33.5
 %
 
 
29.4
%
 
 
31.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP ratios:
 
 
 
 
 
 
 
 
 
 
 
 
   Combined ratio
 
87.0
 %
 
 
86.8
 %
 
 
94.0
%
 
 
48.1
 %
 
   Contribution from catastrophe losses
 
1.2

 
 
1.0

 
 
1.8

 
 
0.1

 
   Prior accident years before catastrophe losses
 
(3.8
)
 
 
(4.1
)
 
 
1.5

 
 
(32.5
)
 
   Current accident year combined ratio before catastrophe losses
 
89.6
 %
 
 
89.9
 %
 
 
90.7
%
 
 
80.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Twelve months ended December 31, 2015
 
Consolidated*
Commercial
Personal
E&S
Premiums:
 
 
 
 
 
 
 
 
 
 
 
 
   Written premiums
 
$
4,361

 
 
$
3,025

 
 
$
1,128

 
 
$
175

 
   Unearned premiums change
 
(90
)
 
 
(29
)
 
 
(31
)
 
 
(7
)
 
   Earned premiums
 
$
4,271

 
 
$
2,996

 
 
$
1,097

 
 
$
168

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statutory ratios:
 
 
 
 
 
 
 
 
 
 
 
 
   Combined ratio
 
90.6
 %
 
 
88.3
 %
 
 
100.0
%
 
 
71.9
 %
 
   Contribution from catastrophe losses
 
3.7

 
 
3.1

 
 
6.2

 
 
0.4

 
   Combined ratio excluding catastrophe losses
 
86.9
 %
 
 
85.2
 %
 
 
93.8
%
 
 
71.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commission expense ratio
 
18.5
 %
 
 
18.3
 %
 
 
17.7
%
 
 
27.2
 %
 
   Other underwriting expense ratio
 
11.9

 
 
13.0

 
 
10.4

 
 
2.8

 
   Total expense ratio
 
30.4
 %
 
 
31.3
 %
 
 
28.1
%
 
 
30.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP ratios:
 
 
 
 
 
 
 
 
 
 
 
 
   Combined ratio
 
91.1
 %
 
 
88.6
 %
 
 
101.3
%
 
 
70.0
 %
 
   Contribution from catastrophe losses
 
3.7

 
 
3.1

 
 
6.2

 
 
0.4

 
   Prior accident years before catastrophe losses
 
(3.9
)
 
 
(4.7
)
 
 
0.8

 
 
(20.6
)
 
   Current accident year combined ratio before catastrophe losses
 
91.3
 %
 
 
90.2
 %
 
 
94.3
%
 
 
90.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on dollar amounts in thousands.
*Consolidated property casualty data includes results from our Cincinnati Re operations.
 
 
 
 
 
 
 


CINF 4Q15 Release 16
Exhibit


Cincinnati Financial Corporation
Supplemental Financial Data
for the Period Ending December 31, 2015

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

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

 
A.M. Best
Fitch
Moody's
Standard &
 Poor's
Cincinnati Financial Corporation
 
 
 
 
Corporate Debt
a-
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 February 2, 2016, 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 Fourth-Quarter 2015 Supplemental Financial Data
1


 
Cincinnati Financial Corporation
 
Supplemental Financial Data
 
Fourth Quarter 2015
 
 
 
 
 
Page
 
Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures
3
 
 
 
Consolidated
 
 
Quick Reference
4
 
CFC and Subsidiaries Consolidation – Twelve Months Ended December 31, 2015
5
 
CFC and Subsidiaries Consolidation – Three Months Ended December 31, 2015
6
 
5-Year Net Income Reconciliation
7
 
CFC Insurance Subsidiaries – Selected Balance Sheet Data
8
 
 
 
Consolidated Property Casualty Insurance Operations
 
 
Statutory Statements of Income
9
 
Consolidated Cincinnati Insurance Companies – Losses Incurred Detail
10
 
Consolidated Cincinnati Insurance Companies – Loss Ratio Detail
11
 
Consolidated Cincinnati Insurance Companies – Loss Claim Count Detail
12
 
Direct Written Premiums by Line of Business and State
13
 
Quarterly Property Casualty Data – Commercial Lines
14
 
Quarterly Property Casualty Data – Personal Lines and Excess & Surplus Lines
15
 
Loss and Loss Expense Analysis – Twelve Months Ended December 31, 2015
16
 
Loss and Loss Expense Analysis – Three Months Ended December 31, 2015
17
 
 
 
Reconciliation Data
 
 
Quarterly Property Casualty Data – Consolidated
18
 
Quarterly Property Casualty Data – Commercial Lines
19
 
Quarterly Property Casualty Data – Personal Lines
20
 
Quarterly Property Casualty Data – Excess & Surplus Lines
21
 
 
 
Life Insurance Operations
 
 
Statutory Statements of Income
22


CINF Fourth-Quarter 2015 Supplemental Financial Data
2


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

•
Statutory accounting rules: For public reporting, insurance companies prepare financial statements in accordance with GAAP. However, insurers also must calculate certain data according to statutory accounting rules as defined in the NAIC's Accounting Practices and Procedures Manual, which may be, and has been, modified by various state insurance departments. Statutory data is publicly available, and various organizations use it to calculate aggregate industry data, study industry trends and compare insurance companies.

•
Written premium: Under statutory accounting rules, property casualty written premium is the amount recorded for policies issued and recognized on an annualized basis at the effective date of the policy. Management analyzes trends in written premium to assess business efforts. Earned premium, used in both statutory and GAAP accounting, is calculated ratably over the policy term. The difference between written and earned premium is unearned premium.



CINF Fourth-Quarter 2015 Supplemental Financial Data
3


Cincinnati Financial Corporation
Quick Reference
 
—
Fourth Quarter 2015
(all data shown is for the three months ended or at December 31, 2015)
 
 
 
 
 
 
 
 
 
 
12/31/2015
 
Year over year
change %
 
 
12/31/2015
 
Year over year change %
Revenues:
 
 
 
 
Benefits and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial lines net written premiums
$
712

 
2

 
Commercial lines loss and loss expenses
$
419

 
(8
)
Personal lines net written premiums
266

 
7

 
Personal lines loss and loss expenses
184

 
24

Excess & surplus lines net written premiums
44

 
13

 
Excess & surplus lines loss and loss expenses
8

 
(60
)
Cincinnati Re net written premiums
33

 
nm

 
Cincinnati Re loss and loss expenses
5

 
nm

   Property casualty net written premiums
$
1,055

 
7

 
Life and health contract holders' benefits incurred
61

 
15

Life and accident and health net written premiums
$
57

 
3

 
Underwriting, acquisition and insurance expenses
354

 
6

Annuity net written premiums
9

 
7

 
Interest expenses
13

 
0

   Life, annuity and accident and health net written premiums
$
66

 
4

 
Other operating expenses
3

 
(25
)
Commercial lines net earned premiums
$
761

 
4

 
Total benefits & expenses
$
1,047

 
2

Personal lines net earned premiums
280

 
5

 
Income before income taxes
216

 
(8
)
Excess & surplus lines net earned premiums
44

 
13

 
Total income tax
60

 
(13
)
Cincinnati Re net earned premiums
10

 
nm

 
 
 
 
 
Property casualty net earned premiums
$
1,095

 
6

 
Balance Sheet:
 
 
 
Life and accident and health net earned premiums
53

 
4

 
 
 
 
 
Investment income
150

 
7

 
Fixed maturity investments
$
9,650

 
 
Realized investment gains and losses, net
(40
)
 
nm

 
Equity securities
4,706

 
 
Fee revenue
3

 
0

 
Other investments
67

 
 
Other revenue
2

 
100

 
  Total invested assets
$
14,423

 
 
Total revenues
1,263

 
0

 
 
 
 
 
 
 
 
 
 
Loss and loss expense reserves
$
4,718

 
 
 
 
 
 
 
Life policy and investment contract reserves
2,583

 
 
 
 
 
 
 
Long-term debt and capital lease obligations
821

 
 
Income:
 
 
 
 
Shareholders' equity
6,427

 
 
 
 
 
 
 
 
 
 
 
Operating income
$
182

 
23

 
Key ratios:
 
 
 
Realized investment gains and losses, net
(26
)
 
nm

 
 
 
 
 
Net income
156

 
(7
)
 
Commercial lines GAAP combined ratio
86.8
%
 
 
 
 
 
 
 
Personal lines GAAP combined ratio
94.0

 
 
 
 
 
 
 
Excess & surplus lines GAAP combined ratio
48.1

 
 
 
 
 
 
 
Property casualty GAAP combined ratio
87.0

 
 
Per share (diluted):
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial lines STAT combined ratio
88.6
%
 
 
Operating income
$
1.10

 
24

 
Personal lines STAT combined ratio
95.1

 
 
Realized investment gains and losses, net
(0.16
)
 
nm

 
Excess & surplus lines STAT combined ratio
50.7

 
 
Net income
0.94

 
(8
)
 
Property casualty STAT combined ratio
88.6

 
 
Book value
39.20

 
(2
)
 
 
 
 
 
Weighted average shares outstanding
165.7

 
0

 
Value creation ratio
3.5
%
 
 

CINF Fourth-Quarter 2015 Supplemental Financial Data
4


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Twelve Months Ended December 31, 2015
 
 
 
 
 
 
 
(Dollars in millions)
CFC
CONSOL P&C
CLIC
CFC-I
ELIM
Total
Revenues
 
 
 
 
 
 
  Premiums earned:
 
 
 
 
 
 
    Property casualty
$
—

$
4,425

$
—

$
—

$
—

$
4,425

    Life
—

—

271

—

—

271

    Premiums ceded
—

(154
)
(62
)
—

—

(216
)
      Total earned premium
—

4,271

209

—

—

4,480

  Investment income, net of expenses
53

369

150

—

—

572

  Realized investment gains (losses), net
(19
)
84

1

1

3

70

  Fee revenues
—

8

5

—

—

13

  Other revenues
15

2

—

5

(15
)
7

Total revenues
$
49

$
4,734

$
365

$
6

$
(12
)
$
5,142

 
 
 
 
 
 
 
Benefits & expenses
 
 
 
 
 
 
  Losses & contract holders' benefits
$
—

$
2,609

$
292

$
—

$
(1
)
$
2,900

  Reinsurance recoveries
—

(37
)
(56
)
—

1

(92
)
  Underwriting, acquisition and insurance expenses
—

1,321

66

—

—

1,387

  Interest expense
52

—

—

1

—

53

  Other operating expenses
28

—

—

1

(16
)
13

Total expenses
$
80

$
3,893

$
302

$
2

$
(16
)
$
4,261

 
 
 
 
 
 
 
Income (loss) before income taxes
$
(31
)
$
841

$
63

$
4

$
4

$
881

 
 
 
 
 
 
 
Provision (benefit) for income taxes
 
 
 
 
 
 
  Current operating income
$
(6
)
$
216

$
(4
)
$
1

$
(1
)
$
206

  Capital gains/losses
(6
)
30

—

—

1

25

  Deferred
(10
)
—

25

—

1

16

Total provision (benefit) for income taxes
$
(22
)
$
246

$
21

$
1

$
1

$
247

 
 
 
 
 
 
 
Operating income
$
4

$
541

$
41

$
2

$
1

$
589

 
 
 
 
 
 
 
Net income (loss) - current year
$
(9
)
$
595

$
42

$
3

$
3

$
634

 
 
 
 
 
 
 
Net income - prior year
$
21

$
461

$
40

$
2

$
1

$
525

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


CINF Fourth-Quarter 2015 Supplemental Financial Data
5


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Three Months Ended December 31, 2015
 
 
 
 
 
 
 
(Dollars in millions)
CFC
CONSOL P&C
CLIC
CFC-I
ELIM
Total
Revenues
 
 
 
 
 
 
  Premiums earned:
 
 
 
 
 
 
    Property casualty
$
—

$
1,138

$
—

$
—

$
—

$
1,138

    Life
—

—

71

—

—

71

    Premiums ceded
—

(43
)
(18
)
—

—

(61
)
      Total earned premium
—

1,095

53

—

—

1,148

  Investment income, net of expenses
16

96

38

—

—

150

  Realized investment gains (losses), net
(28
)
(12
)
—

1

(1
)
(40
)
  Fee revenues
—

2

1

—

—

3

  Other revenues
4

1

—

1

(4
)
2

Total revenues
$
(8
)
$
1,182

$
92

$
2

$
(5
)
$
1,263

 
 
 
 
 
 
 
Benefits & expenses
 
 
 
 
 
 
  Losses & contract holders' benefits
$
—

$
623

$
78

$
—

$
—

$
701

  Reinsurance recoveries
—

(7
)
(17
)
—

—

(24
)
  Underwriting, acquisition and insurance expenses
—

338

16

—

—

354

  Interest expense
13

—

—

—

—

13

  Other operating expenses
7

—

—

—

(4
)
3

Total expenses
$
20

$
954

$
77

$
—

$
(4
)
$
1,047

 
 
 
 
 
 
 
Income (loss) before income taxes
$
(28
)
$
228

$
15

$
2

$
(1
)
$
216

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

$
62

$
(1
)
$
—

$
1

$
65

  Capital gains/losses
(9
)
(4
)
(1
)
—

—

(14
)
  Deferred
(6
)
10

6

—

(1
)
9

Total provision (benefit) for income taxes
$
(12
)
$
68

$
4

$
—

$
—

$
60

 
 
 
 
 
 
 
Operating income
$
3

$
168

$
10

$
1

$
—

$
182

 
 
 
 
 
 
 
Net income (loss) - current year
$
(16
)
$
160

$
11

$
2

$
(1
)
$
156

 
 
 
 
 
 
 
Net income - prior year
$
6

$
150

$
10

$
—

$
1

$
167

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


CINF Fourth-Quarter 2015 Supplemental Financial Data
6


Cincinnati Financial Corporation
5-Year Net Income Reconciliation
(Dollars in millions except per share data)
Years ended December 31,
 
2015
2014
2013
2012
2011
   Net income
$
634

$
525

$
517

$
421

$
164

   Realized investment gains and losses, net
45

85

54

28

45

   Operating income
589

440

463

393

119

   Less catastrophe losses
(105
)
(133
)
(112
)
(217
)
(261
)
   Operating income before catastrophe losses
$
694

$
573

$
575

$
610

$
380

 
 
 
 
 
 
Diluted per share data
 
 
 
 
 
   Net income
$
3.83

$
3.18

$
3.12

$
2.57

$
1.01

   Realized investment gains and losses, net
0.27

0.52

0.32

0.17

0.28

   Operating income
3.56

2.66

2.80

2.4

0.73

   Less catastrophe losses
(0.63
)
(0.81
)
(0.67
)
(1.33
)
(1.6
)
   Operating income before catastrophe losses
$
4.19

$
3.47

$
3.47

$
3.73

$
2.33

 
 
 
 
 
 
Value creation ratio
 
 
 
 
 
   Book value per share growth
(2.3
)%
7.9
%
11.1
%
7.4
%
0.8
%
   Shareholder dividend declared as a percentage of beginning book value
5.7

4.7

5

5.2

5.2

   Value creation ratio
3.4
 %
12.6
%
16.1
%
12.6
%
6
%
 
 
 
 
 
 
Investment income
 
 
 
 
 
   Investment income, net of expenses
$
572

$
549

$
529

$
531

$
525

*Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts.


CINF Fourth-Quarter 2015 Supplemental Financial Data
7


Cincinnati Financial Corporation Insurance Subsidiaries
Selected Balance Sheet Data
 
 
 
 
 
 
 
 
 
(Dollars in millions)
 
 
12/31/2015
9/30/2015
6/30/2015
3/31/2015
12/31/2014
9/30/2014
6/30/2014
3/31/2014
Cincinnati Insurance Consolidated
 
 
 
 
 
 
 
 
   Fixed maturities (fair value)
$
6,435

$
6,472

$
6,435

$
6,325

$
6,260

$
6,344

$
6,215

$
6,111

   Equities (fair value)
3,101

2,961

3,108

3,108

3,195

3,121

3,094

3,022

   Fixed maturities - pretax net unrealized gain
234

283

280

387

366

379

414

361

   Equities - pretax net unrealized gain
1,203

1,063

1,297

1,397

1,478

1,387

1,434

1,349

   Loss and loss expense reserves - STAT
4,382

4,366

4,357

4,302

4,158

4,112

4,129

4,037

   Shareholders' equity - GAAP
5,444

5,397

5,485

5,593

5,594

5,480

5,481

5,384

   Policyholders' Surplus - STAT
4,413

4,324

4,419

4,436

4,472

4,364

4,332

4,308

 
 
 
 
 
 
 
 
 
The Cincinnati Life Insurance Company
 
 
 
 
 
 
 
 
   Fixed maturities (fair value)
$
3,154

$
3,221

$
3,176

$
3,199

$
3,126

$
3,102

$
3,091

$
2,989

   Equities (fair value)
9

9

8

9

9

8

8

14

   Fixed maturities - pretax net unrealized gain
76

133

151

220

197

195

225

186

   Equities - pretax net unrealized gain
4

4

3

4

3

3

3

6

   Shareholders' equity - GAAP
872

897

896

927

904

893

901

867

   Policyholders' Surplus - STAT
208

215

217

219

223

228

224

232



CINF Fourth-Quarter 2015 Supplemental Financial Data
8


Consolidated Cincinnati Insurance Companies
Statutory Statements of Income
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended December 31,
For the Twelve Months Ended December 31,
(Dollars in millions)
2015
2014
Change
% Change
2015
2014
Change
% Change
Underwriting income
 
 
 
 
 
 
 
 
Net premiums written
$
1,055

$
987

$
68

7

$
4,361

$
4,143

$
218

5

Unearned premiums increase (decrease)
(40
)
(48
)
8

(17
)
90

98

(8
)
(8
)
Earned premiums
$
1,095

$
1,035

$
60

6

$
4,271

$
4,045

$
226

6

 
 
 
 
 
 
 
 
 
Losses incurred
$
496

$
508

$
(12
)
(2
)
$
2,125

$
2,199

$
(74
)
(3
)
Allocated loss expenses incurred
62

58

4

7

214

200

14

7

Unallocated loss expenses incurred
58

56

2

4

233

228

5

2

Other underwriting expenses incurred
336

308

28

9

1,311

1,232

79

6

Workers compensation dividend incurred
4

4

—

—

15

16

(1
)
(6
)
Total underwriting deductions
$
956

$
934

$
22

2

$
3,898

$
3,875

$
23

1

 
 
 
 
 
 
 
 
 
Net underwriting profit
$
139

$
101

$
38

38

$
373

$
170

$
203

119

 
 
 
 
 
 
 
 
 
Investment income
 
 
 
 
 
 
 
 
Gross investment income earned
$
97

$
93

$
4

4

$
379

$
369

$
10

3

Net investment income earned
96

92

4

4

373

364

9

2

Realized capital gains and losses, net
(13
)
11

(24
)
(218
)
49

68

(19
)
(28
)
Net investment gains (net of tax)
$
83

$
103

$
(20
)
(19
)
$
422

$
432

$
(10
)
(2
)
 
 
 
 
 
 
 
 
 
Other income
$
2

$
1

$
1

100

$
7

$
6

$
1

17

 
 
 
 
 
 
 
 
 
Net income before federal income taxes
$
224

$
205

$
19

9

$
802

$
608

$
194

32

Federal and foreign income taxes incurred
54

36

18

50

204

125

79

63

Net income (statutory)
$
170

$
169

$
1

1

$
598

$
483

$
115

24

*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 Fourth-Quarter 2015 Supplemental Financial Data
9


`
Consolidated Cincinnati Insurance Companies
Losses Incurred Detail
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/15
9/30/15
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
3/31/14
6/30/15
6/30/14
9/30/15
9/30/14
12/31/15
12/31/14
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000
$
4

$
8

$
5

$
12

$
12

$
7

$
11

$
—

$
17

$
12

$
25

$
19

$
29

$
30

Current accident year losses $1,000,000-$5,000,000
57

43

24

37

46

51

52

23

61

74

104

125

161

172

Large loss prior accident year reserve development
(3
)
19

(4
)
15

(14
)
(6
)
17

10

11

27

30

21

27

7

   Total large losses incurred
$
58

$
70

$
25

$
64

$
44

$
52

$
80

$
33

$
89

$
113

$
159

$
165

$
217

$
209

Losses incurred but not reported
20

(31
)
38

43

112

17

(17
)
21

81

5

50

22

70

133

Other losses excluding catastrophe losses
406

441

417

418

365

432

436

427

835

863

1,276

1,295

1,682

1,660

Catastrophe losses
12

24

78

42

(13
)
11

112

86

120

197

144

208

156

197

   Total losses incurred
$
496

$
504

$
558

$
567

$
508

$
512

$
611

$
567

$
1,125

$
1,178

$
1,629

$
1,690

$
2,125

$
2,199

Commercial Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000
$
4

$
8

$
5

$
12

$
12

$
7

$
11

$
—

$
17

$
12

$
25

$
19

$
29

$
30

Current accident year losses $1,000,000-$5,000,000
48

26

14

24

39

45

47

18

38

64

64

109

112

149

Large loss prior accident year reserve development
(3
)
17

(4
)
15

(11
)
(7
)
15

10

11

25

28

18

25

7

   Total large losses incurred
$
49

$
51

$
15

$
51

$
40

$
45

$
73

$
28

$
66

$
101

$
117

$
146

$
166

$
186

Losses incurred but not reported
20

(17
)
17

31

95

8

(35
)
22

48

(12
)
31

(4
)
51

90

Other losses excluding catastrophe losses
253

277

274

272

240

282

292

282

546

574

823

856

1,076

1,096

Catastrophe losses
7

9

43

29

(10
)
7

59

58

72

116

81

123

88

114

   Total losses incurred
$
329

$
320

$
349

$
383

$
365

$
342

$
389

$
390

$
732

$
779

$
1,052

$
1,121

$
1,381

$
1,486

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

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

Current accident year losses $1,000,000-$5,000,000
8

15

10

12

6

6

4

4

22

8

37

14

45

20

Large loss prior accident year reserve development
—

—

—

—

(3
)
2

2

—

—

2

—

4

—

1

   Total large losses incurred
$
8

$
15

$
10

$
12

$
3

$
8

$
6

$
4

$
22

$
10

$
37

$
18

$
45

$
21

Losses incurred but not reported
9

(12
)
14

7

12

3

9

(5
)
21

4

9

7

18

19

Other losses excluding catastrophe losses
141

155

136

134

119

144

138

138

270

276

425

420

566

539

Catastrophe losses
4

15

34

13

(4
)
4

52

27

47

79

62

83

66

79

   Total losses incurred
$
162

$
173

$
194

$
166

$
130

$
159

$
205

$
164

$
360

$
369

$
533

$
528

$
695

$
658

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

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

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

2

—

1

1

—

1

1

1

2

3

2

4

3

Large loss prior accident year reserve development
1

2

—

—

—

(1
)
—

—

—

—

2

(1
)
3

(1
)
   Total large losses incurred
$
2

$
4

$
—

$
1

$
1

$
(1
)
$
1

$
1

$
1

$
2

$
5

$
1

$
7

$
2

Losses incurred but not reported
(8
)
(2
)
7

5

5

6

9

4

12

13

10

19

2

24

Other losses excluding catastrophe losses
7

9

7

12

6

6

6

7

19

13

28

19

35

25

Catastrophe losses
—

—

1

—

1

—

1

1

1

2

1

2

1

4

   Total losses incurred
$
1

$
11

$
15

$
18

$
13

$
11

$
17

$
13

$
33

$
30

$
44

$
41

$
45

$
55

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

CINF Fourth-Quarter 2015 Supplemental Financial Data
10


Consolidated Cincinnati Insurance Companies
Loss Ratio Detail
 
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/15
9/30/15
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
3/31/14
6/30/15
6/30/14
9/30/15
9/30/14
12/31/15
12/31/14
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000
0.5
 %
0.7
 %
0.5
 %
1.0
%
1.0
 %
0.7
 %
1.1
 %
—
 %
0.8
%
0.6
 %
0.8
%
0.6
 %
0.7
%
0.7
 %
Current accident year losses $1,000,000-$5,000,000
5.2

4.1

2.1

3.6

4.7

4.8

5.0

2.3

2.9

3.8

3.3

4.2

3.8

4.3

Large loss prior accident year reserve development
(0.2
)
1.7

(0.3
)
1.4

(1.4
)
(0.5
)
1.7

1.1

0.5

1.4

0.9

0.7

0.6

0.2

   Total large loss ratio
5.5
 %
6.5
 %
2.3
 %
6.0
%
4.3
 %
5.0
 %
7.8
 %
3.4
 %
4.2
%
5.8
 %
5.0
%
5.5
 %
5.1
%
5.2
 %
Losses incurred but not reported
1.9

(2.9
)
3.6

4.2

10.7

1.7

(1.6
)
2.2

3.9

0.2

1.6

0.8

1.6

3.3

Other losses excluding catastrophe losses
36.9

40.9

39.6

40.1

35.2

42.3

43.4

43.6

39.8

43.5

40.2

43.0

39.5

41.0

Catastrophe losses
1.0

2.3

7.3

4.1

(1.1
)
1.0

11.1

8.7

5.7

9.9

4.5

6.9

3.6

4.9

   Total loss ratio
45.3
 %
46.8
 %
52.8
 %
54.4
%
49.1
 %
50.0
 %
60.7
 %
57.9
 %
53.6
%
59.4
 %
51.3
%
56.2
 %
49.8
%
54.4
 %
Commercial Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000
0.7
 %
1.0
 %
0.7
 %
1.6
%
1.5
 %
1.0
 %
1.6
 %
—
 %
1.2
%
0.8
 %
1.1
%
0.9
 %
1.0
%
1.0
 %
Current accident year losses $1,000,000-$5,000,000
6.2

3.7

1.7

3.3

5.6

5.9

6.5

2.6

2.6

4.6

2.9

5.1

3.7

5.2

Large loss prior accident year reserve development
(0.4
)
2.3

(0.5
)
2.0

(1.5
)
(0.9
)
2.1

1.4

0.7

1.8

1.3

0.9

0.8

0.3

   Total large loss ratio
6.5
 %
7.0
 %
1.9
 %
6.9
%
5.6
 %
6.0
 %
10.2
 %
4.0
 %
4.5
%
7.2
 %
5.3
%
6.9
 %
5.5
%
6.5
 %
Losses incurred but not reported
2.8

(2.4
)
2.2

4.3

12.8

1.1

(4.8
)
3.2

3.2

(0.9
)
1.3

(0.2
)
1.7

3.1

Other losses excluding catastrophe losses
33.1

36.3

37.0

37.1

32.6

39.6

41.0

40.6

37.0

40.8

36.8

40.2

35.9

38.4

Catastrophe losses
0.9

1.3

5.8

4.0

(1.1
)
0.8

8.3

8.3

4.9

8.3

3.7

5.8

3.0

4.0

   Total loss ratio
43.3
 %
42.2
 %
46.9
 %
52.3
%
49.9
 %
47.5
 %
54.7
 %
56.1
 %
49.6
%
55.4
 %
47.1
%
52.7
 %
46.1
%
52.0
 %
Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000
—
 %
—
 %
—
 %
—
%
—
 %
—
 %
—
 %
—
 %
—
%
—
 %
—
%
—
 %
—
%
—
 %
Current accident year losses $1,000,000-$5,000,000
3.1

5.2

3.5

4.5

2.2

2.5

1.7

1.4

4.1

1.5

4.5

1.8

4.1

1.9

Large loss prior accident year reserve development
—

(0.2
)
0.1

—

(1.1
)
0.8

0.6

0.3

—

0.5

—

0.7

—

0.1

   Total large loss ratio
3.1
 %
5.0
 %
3.6
 %
4.5
%
1.1
 %
3.3
 %
2.3
 %
1.7
 %
4.1
%
2.0
 %
4.5
%
2.5
 %
4.1
%
2.0
 %
Losses incurred but not reported
3.1

(4.2
)
5.1

2.7

4.5

1.3

3.5

(2.0
)
3.9

0.8

1.1

0.9

1.6

1.8

Other losses excluding catastrophe losses
49.9

56.3

50.0

49.9

44.8

54.1

53.6

54.5

49.8

54.0

52.0

54.1

51.6

51.9

Catastrophe losses
1.6

5.4

12.5

4.9

(1.5
)
1.7

20.0

10.6

8.7

15.4

7.6

10.7

6.0

7.6

   Total loss ratio
57.7
 %
62.5
 %
71.2
 %
62.0
%
48.9
 %
60.4
 %
79.4
 %
64.8
 %
66.5
%
72.2
 %
65.2
%
68.2
 %
63.3
%
63.3
 %
Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year losses greater than $5,000,000
—
 %
—
 %
—
 %
—
%
—
 %
—
 %
—
 %
—
 %
—
%
—
 %
—
%
—
 %
—
%
—
 %
Current accident year losses $1,000,000-$5,000,000
2.3

4.8

—

2.5

3.3

—

3.1

3.2

1.2

3.1

2.5

1.9

2.4

2.3

Large loss prior accident year reserve development
1.5

5.0

—

—

(1.8
)
(1.3
)
—

(0.3
)
—

(0.1
)
1.7

(0.5
)
1.7

(0.9
)
   Total large loss ratio
3.8
 %
9.8
 %
—
 %
2.5
%
1.5
 %
(1.3
)%
3.1
 %
2.9
 %
1.2
%
3.0
 %
4.2
%
1.4
 %
4.1
%
1.4
 %
Losses incurred but not reported
(19.5
)
(4.4
)
18.3

11.8

12.4

14.6

25.7

13.1

15.1

19.6

8.4

17.7

1.0

16.4

Other losses excluding catastrophe losses
16.8

21.2

17.5

29.9

17.7

15.3

15.1

21.6

23.5

18.3

22.7

17.1

21.2

17.2

Catastrophe losses
—

0.3

0.4

0.8

2.9

(0.7
)
2.7

3.0

0.6

2.8

0.5

1.4

0.4

1.8

   Total loss ratio
1.1
 %
26.9
 %
36.2
 %
45.0
%
34.5
 %
27.9
 %
46.6
 %
40.6
 %
40.4
%
43.7
 %
35.8
%
37.6
 %
26.7
%
36.8
 %
*Certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts.


CINF Fourth-Quarter 2015 Supplemental Financial Data
11


Consolidated Cincinnati Insurance Companies
Loss Claim Count Detail
 
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/15
9/30/15
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
3/31/14
6/30/15
6/30/14
9/30/15
9/30/14
12/31/15
12/31/14
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year reported losses greater
   than $5,000,000
1

1

1

2

2

1

2

—

3

2

4

3

5

5

Current accident year reported losses
   $1,000,000 - $5,000,000
37

28

14

27

31

31

34

15

42

52

74

83

112

120

Prior accident year reported losses on
   large losses
8

6

9

15

4

13

10

8

27

18

35

26

46

32

   Non-Catastrophe reported losses on
      large losses total
46

35

24

44

37

45

46

23

72

72

113

112

163

157

Commercial Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current accident year reported losses greater
than $5,000,000
1

1

1

2

2

1

2

—

3

2

4

3

5

5

Current accident year reported losses
$1,000,000 - $5,000,000
29

17

9

18

27

24

30

11

26

43

46

68

77

99

Prior accident year reported losses on
large losses
6

5

9

14

3

11

9

7

26

17

32

23

41

28

   Non-Catastrophe reported losses on
large losses total
36

23

19

34

32

36

41

18

55

62

82

94

123

132

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

—

—

—

—

—

—

—

—

—

—

—

—

—

Current accident year reported losses
$1,000,000 - $5,000,000
7

9

5

8

3

6

3

3

15

7

25

13

31

18

Prior accident year reported losses on
large losses
1

—

—

1

—

2

1

1

1

1

1

3

2

3

   Non-Catastrophe reported losses on
large losses total
8

9

5

9

3

8

4

4

16

8

26

16

33

21

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

—

—

—

—

—

—

—

—

—

—

—

—

—

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

2

—

1

1

1

1

1

1

2

3

2

4

3

Prior accident year reported losses on
large losses
1

1

—

—

1

—

—

—

—

—

2

—

3

1

   Non-Catastrophe reported losses on
large losses total
2

3

—

1

2

1

1

1

1

2

5

2

7

4

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


CINF Fourth-Quarter 2015 Supplemental Financial Data
12


 Consolidated Cincinnati Insurance Companies
Direct Written Premiums by Risk State by Line of Business for the Twelve Months Ended December 31, 2015
 
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
 
2015
2014
 
 
 
Total
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 OH
$
153.5

$
130.0

$
78.9

$
—

$
35.3

 
$
130.1

$
112.0

$
35.9

 
$
14.0

 
$
689.7

$
684.8

1.7

(0.6
)
7.1

0.9

 IL
66.6

57.1

30.8

53.9

14.1

 
31.9

30.9

8.6

 
12.4

 
306.3

308.9

(1.8
)
(0.3
)
15.1

(0.8
)
 IN
55.6

52.4

32.0

30.4

13.0

 
34.4

37.2

8.6

 
11.8

 
275.4

268.1

3.5

(0.5
)
4.1

2.3

 PA
62.0

46.5

38.8

47.0

12.1

 
13.5

10.9

4.0

 
8.0

 
242.8

238.6

0.8

4.0

22.9

1.8

 GA
39.3

40.1

27.6

13.2

13.3

 
41.7

43.1

10.7

 
10.6

 
239.6

229.6

3.4

5.0

10.8

4.3

 MI
47.1

38.7

23.7

20.3

12.2

 
47.4

33.4

5.6

 
8.2

 
236.6

221.2

0.7

17.5

24.0

7.0

 NC
46.1

50.0

23.6

18.6

14.0

 
34.5

28.7

7.9

 
7.2

 
230.6

216.6

2.8

14.6

12.9

6.5

 TN
37.0

38.3

22.4

10.5

11.2

 
19.5

22.1

5.9

 
4.9

 
171.8

164.3

2.8

8.4

13.7

4.5

 KY
28.8

34.1

19.8

3.4

7.2

 
28.1

27.1

6.4

 
5.4

 
160.3

156.1

2.4

2.3

14.0

2.7

 AL
26.9

34.2

13.0

1.2

9.0

 
21.1

34.5

7.0

 
7.6

 
154.5

152.9

(0.4
)
3.3

(1.6
)
1.0

 VA
34.1

30.0

21.5

18.4

10.8

 
12.2

10.8

3.5

 
5.3

 
146.6

145.3

(0.2
)
6.3

(1.0
)
0.9

 MN
29.9

24.1

11.2

11.9

5.6

 
18.5

19.5

5.3

 
4.7

 
130.7

120.9

7.8

7.7

17.1

8.1

 TX
47.6

29.4

29.4

1.3

5.0

 
—

—

—

 
17.3

 
130.0

123.8

3.2

(14.6
)
17.8

5.0

 WI
29.7

25.1

14.1

28.0

6.9

 
9.0

9.5

3.8

 
3.5

 
129.6

131.2

(1.9
)
2.0

(4.2
)
(1.3
)
 MO
29.5

32.5

15.9

14.0

6.7

 
7.1

9.8

2.0

 
7.4

 
124.9

119.6

3.7

7.6

6.5

4.5

 MD
21.1

12.6

16.3

12.6

4.1

 
8.3

6.5

1.8

 
2.4

 
85.7

78.5

5.2

28.7

6.2

9.1

 IA
18.2

19.5

8.8

18.1

5.6

 
4.9

5.7

1.7

 
2.2

 
84.7

89.2

(5.9
)
(0.6
)
0.9

(5.0
)
 NY
31.8

18.1

12.0

2.8

4.1

 
4.7

3.0

0.9

 
3.5

 
80.9

74.7

4.3

57.7

7.0

8.3

 AR
11.0

20.2

7.1

2.6

5.1

 
9.6

10.7

2.6

 
2.8

 
71.7

67.9

2.4

13.5

(0.9
)
5.5

 FL
25.2

16.2

9.3

1.5

3.0

 
4.4

1.4

0.7

 
6.9

 
68.6

71.5

2.3

(47.8
)
33.1

(4.0
)
 SC
14.8

13.0

10.0

3.3

4.1

 
9.7

6.8

1.7

 
3.0

 
66.4

60.2

5.1

23.4

25.8

10.4

 AZ
17.3

10.0

12.4

5.5

2.7

 
5.9

4.2

1.6

 
2.7

 
62.3

59.2

0.4

25.3

23.6

5.2

 UT
19.8

9.5

11.0

0.4

3.4

 
8.5

4.6

1.0

 
3.1

 
61.3

55.9

7.9

9.6

39.0

9.6

 KS
10.4

13.9

5.8

6.5

3.3

 
4.9

7.3

1.4

 
1.5

 
55.0

53.3

4.1

(1.2
)
20.4

3.1

 CO
16.8

9.8

11.9

0.8

2.2

 
0.1

0.4

—

 
5.7

 
47.7

42.3

10.3

23.6

33.2

12.7

 MT
17.2

10.4

8.7

0.1

2.2

 
2.9

3.0

0.7

 
1.1

 
46.3

41.0

13.8

5.7

30.6

12.9

 NE
10.0

10.8

5.3

9.9

2.4

 
0.7

1.1

0.3

 
1.9

 
42.4

39.5

8.2

1.2

0.2

7.4

 ID
13.2

8.7

7.4

0.3

2.1

 
3.5

2.4

0.7

 
1.6

 
39.9

36.4

9.0

11.5

11.7

9.5

 OR
11.9

7.0

7.4

0.1

2.0

 
2.8

1.3

0.4

 
4.4

 
37.3

27.1

35.1

79.3

23.8

37.8

 WV
10.2

9.1

6.8

1.4

1.5

 
—

0.4

0.1

 
3.1

 
32.6

33.0

(1.6
)
(9.5
)
5.4

(1.1
)
 VT
5.2

5.9

2.7

5.4

2.4

 
1.4

1.6

0.4

 
1.1

 
26.1

26.3

(2.4
)
5.1

16.9

(0.8
)
 ND
8.0

6.3

4.1

—

1.3

 
0.8

0.9

0.3

 
0.4

 
22.1

22.7

(2.7
)
(1.0
)
(10.9
)
(2.7
)
 WA
7.8

4.7

5.3

—

1.7

 
—

—

—

 
1.8

 
21.3

19.7

7.8

(65.0
)
12.9

8.2

 NM
8.0

4.3

4.4

1.0

1.9

 
—

—

—

 
0.9

 
20.5

16.6

25.0

(10.2
)
5.1

23.9

 NH
4.1

3.5

2.0

2.8

1.0

 
1.8

1.8

0.5

 
0.6

 
18.1

18.6

(2.3
)
(0.5
)
(14.4
)
(2.4
)
 CT
4.6

4.2

2.7

1.4

0.9

 
1.6

1.4

0.5

 
0.8

 
18.1

12.7

21.4

289.7

77.8

42.7

 DE
5.0

3.3

3.3

3.0

1.0

 
—

—

—

 
0.7

 
16.3

14.1

16.0

(81.5
)
17.7

16.0

 SD
3.3

3.5

1.7

2.6

1.1

 
—

—

—

 
0.6

 
12.8

14.0

(9.2
)
0.4

11.9

(8.4
)
 WY
2.4

2.6

1.2

—

0.8

 
—

—

—

 
0.7

 
7.7

6.7

14.3

7.0

17.2

14.6

 All Other
4.5

2.5

4.9

6.4

1.6

 
—

0.1

—

 
1.5

 
21.5

21.0

1.8

7.3

28.8

3.0

 Total
$
1,035.5

$
892.1

$
575.2

$
360.6

$
237.9

 
$
525.5

$
494.1

$
132.5

 
$
183.3

 
$
4,436.7

$
4,284.0

2.5

5.0

12.9

3.6

 Other Direct
—

2.3

4.0

7.8

—

 
10.2

0.2

—

 
—

 
24.5

25.1

(6.6
)
4.3

nm

(2.3
)
 Total Direct
$
1,035.5

$
894.4

$
579.2

$
368.4

$
237.9

 
$
535.7

$
494.3

$
132.5

 
$
183.3

 
$
4,461.2

$
4,309.1

2.5

5.0

12.9

3.5

*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 Fourth-Quarter 2015 Supplemental Financial Data
13


Quarterly Property Casualty Data - Commercial Lines
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/15
9/30/15
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
3/31/14
6/30/15
6/30/14
9/30/15
9/30/14
12/31/15
12/31/14
Commercial casualty:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums
$
238

$
247

$
274

$
266

$
234

$
228

$
249

$
258

$
540

$
507

$
787

$
735

$
1,025

$
969

Earned premiums
257

257

252

244

243

237

234

224

496

458

753

695

1,010

938

Current accident year before catastrophe losses
61.5
 %
53.6
 %
59.6
 %
59.2
 %
59.2
 %
60.2
 %
61.7
 %
56.3
 %
59.4
 %
59.1
 %
57.4
 %
59.4
 %
58.5
 %
59.4
 %
Current accident year catastrophe losses
—

—

—

—

—

—

—

—

—

—

—

—

—

—

Prior accident years before catastrophe losses
(10.6
)
(6.2
)
(9.1
)
1.1

12.1

(3.6
)
(10.5
)
3.6

(4.1
)
(3.6
)
(4.8
)
(3.6
)
(6.3
)
0.5

Prior accident years catastrophe losses
—

—

—

—

—

—

—

—

—

—

—

—


—

   Total loss and loss expense ratio
50.9
 %
47.4
 %
50.5
 %
60.3
 %
71.3
 %
56.6
 %
51.2
 %
59.9
 %
55.3
 %
55.5
 %
52.6
 %
55.8
 %
52.2
 %
59.9
 %
Commercial property:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums
$
203

$
218

$
218

$
206

$
192

$
194

$
197

$
193

$
424

$
390

$
642

$
584

$
845

$
776

Earned premiums
211

205

201

196

191

186

180

171

399

351

604

537

815

728

Current accident year before catastrophe losses
44.1
 %
47.0
 %
42.1
 %
53.6
 %
45.7
 %
54.3
 %
50.8
 %
53.4
 %
47.8
 %
52.1
 %
47.5
 %
52.9
 %
46.6
 %
51.0
 %
Current accident year catastrophe losses
5.0

5.2

19.6

16.7

0.5

5.2

25.8

27.7

18.2

26.7

13.8

19.3

11.5

14.3

Prior accident years before catastrophe losses
3.0

(0.2
)
(2.0
)
(1.9
)
1.8

(3.1
)
(9.8
)
(0.6
)
(2.0
)
(5.3
)
(1.4
)
(4.6
)
(0.3
)
(2.9
)
Prior accident years catastrophe losses
(1.3
)
0.3

0.1

(3.8
)
(2.7
)
(1.3
)
(2.3
)
(0.9
)
(1.8
)
(1.6
)
(1.1
)
(1.5
)
(1.1
)
(1.8
)
   Total loss and loss expense ratio
50.8
 %
52.3
 %
59.8
 %
64.6
 %
45.3
 %
55.1
 %
64.5
 %
79.6
 %
62.2
 %
71.9
 %
58.8
 %
66.1
 %
56.7
 %
60.6
 %
Commercial auto:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums
$
140

$
137

$
149

$
149

$
131

$
128

$
144

$
145

$
298

$
289

$
435

$
417

$
575

$
548

Earned premiums
145

141

139

136

137

133

132

126

275

258

416

391

561

528

Current accident year before catastrophe losses
71.2
 %
71.4
 %
75.8
 %
72.3
 %
65.6
 %
69.1
 %
72.1
 %
68.0
 %
74.1
 %
70.0
 %
73.1
 %
69.8
 %
72.6
 %
68.7
 %
Current accident year catastrophe losses
0.1

—

1.3

—

(0.1
)
(0.6
)
4.1

—

0.7

2.1

0.5

1.2

0.4

0.9

Prior accident years before catastrophe losses
3.0

3.2

8.3

8.6

11.2

9.3

9.0

(0.2
)
8.4

4.5

6.6

6.1

5.7

7.4

Prior accident years catastrophe losses
—

(0.1
)
(0.2
)
(0.1
)
—

—

—

(0.2
)
(0.2
)
(0.1
)
(0.1
)
(0.1
)
(0.1
)
(0.1
)
   Total loss and loss expense ratio
74.3
 %
74.5
 %
85.2
 %
80.8
 %
76.7
 %
77.8
 %
85.2
 %
67.6
 %
83.0
 %
76.5
 %
80.1
 %
77.0
 %
78.6
 %
76.9
 %
Workers' compensation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums
$
81

$
83

$
89

$
104

$
81

$
86

$
92

$
106

$
193

$
198

$
276

$
284

$
357

$
365

Earned premiums
91

93

90

93

90

93

95

92

183

187

276

280

367

370

Current accident year before catastrophe losses
73.2
 %
71.1
 %
77.6
 %
71.5
 %
75.9
 %
75.0
 %
83.2
 %
76.8
 %
74.5
 %
80.0
 %
73.4
 %
78.4
 %
73.3
 %
77.8
 %
Current accident year catastrophe losses
—

—

—

—

—

—

—

—

—

—

—

—

—

—

Prior accident years before catastrophe losses
(14.0
)
(26.4
)
(44.8
)
(16.1
)
(7.5
)
(16.1
)
(21.2
)
(10.3
)
(30.3
)
(15.8
)
(29.0
)
(15.9
)
(25.3
)
(13.9
)
Prior accident years catastrophe losses
—

—

—

—

—

—

—

—

—

—

—

—

—

—

   Total loss and loss expense ratio
59.2
 %
44.7
 %
32.8
 %
55.4
 %
68.4
 %
58.9
 %
62.0
 %
66.5
 %
44.2
 %
64.2
 %
44.4
 %
62.5
 %
48.0
 %
63.9
 %
Other commercial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums
$
50

$
60

$
55

$
58

$
61

$
68

$
66

$
69

$
113

$
135

$
173

$
203

$
223

$
264

Earned premiums
57

61

61

64

69

71

73

79

125

152

186

223

243

292

Current accident year before catastrophe losses
37.3
 %
45.9
 %
42.7
 %
54.4
 %
58.5
 %
50.2
 %
59.6
 %
46.7
 %
48.6
 %
52.9
 %
47.7
 %
52.0
 %
45.3
 %
53.4
 %
Current accident year catastrophe losses
0.4

1.2

3.4

9.7

(2.7
)
2.0

17.8

17.9

6.6

17.9

4.9

12.8

3.8

9.2

Prior accident years before catastrophe losses
(2.9
)
(9.8
)
(13.6
)
(0.2
)
(13.8
)
(5.6
)
(4.2
)
3.5

(6.7
)
(0.2
)
(7.7
)
(1.9
)
(6.6
)
(4.8
)
Prior accident years catastrophe losses
(0.7
)
(2.1
)
1.2

(2.6
)
(1.2
)
(0.8
)
0.8

(1.3
)
(0.7
)
(0.3
)
(1.2
)
(0.5
)
(1.1
)
(0.7
)
   Total loss and loss expense ratio
34.1
 %
35.2
 %
33.7
 %
61.3
 %
40.8
 %
45.8
 %
74.0
 %
66.8
 %
47.8
 %
70.3
 %
43.7
 %
62.4
 %
41.4
 %
57.1
 %
*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 Fourth-Quarter 2015 Supplemental Financial Data
14


Quarterly Property Casualty Data - Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/15
9/30/15
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
3/31/14
6/30/15
6/30/14
9/30/15
9/30/14
12/31/15
12/31/14
Personal auto:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums
$
124

$
144

$
142

$
114

$
114

$
135

$
133

$
107

$
256

$
240

$
400

$
375

$
524

$
489

Earned premiums
130

128

125

123

122

121

117

116

248

233

376

354

506

476

Current accident year before catastrophe losses
76.6
 %
74.5
 %
79.7
 %
81.6
 %
70.2
 %
73.9
 %
80.5
 %
79.5
 %
80.8
 %
80.1
 %
78.6
 %
77.9
 %
78.1
 %
76.0
 %
Current accident year catastrophe losses
0.7

0.6

2.3

0.2

(1.2
)
1.1

4.9

0.5

1.2

2.7

1.0

2.2

0.9

1.3

Prior accident years before catastrophe losses
2.3

1.2

5.8

3.0

2.8

2.0

(1.7
)
(3.4
)
4.4

(2.6
)
3.3

(1.0
)
3.0

—

Prior accident years catastrophe losses
(0.1
)
(0.1
)
(0.1
)
(0.2
)
—

—

(0.2
)
(0.4
)
(0.3
)
(0.3
)
(0.2
)
(0.2
)
(0.1
)
(0.2
)
   Total loss and loss expense ratio
79.5
 %
76.2
 %
87.7
 %
84.6
 %
71.8
 %
77.0
 %
83.5
 %
76.2
 %
86.1
 %
79.9
 %
82.7
 %
78.9
 %
81.9
 %
77.1
 %
Homeowner:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums
$
112

$
132

$
132

$
98

$
107

$
123

$
128

$
98

$
230

$
226

$
362

$
349

$
474

$
456

Earned premiums
118

117

114

114

113

110

111

109

228

220

345

330

463

443

Current accident year before catastrophe losses
50.2
 %
52.8
 %
52.9
 %
55.5
 %
44.3
 %
51.1
 %
59.5
 %
61.3
 %
54.1
 %
60.4
 %
53.7
 %
57.4
 %
52.8
 %
54.0
 %
Current accident year catastrophe losses
3.9

12.6

25.6

12.3

(0.9
)
4.8

41.5

28.3

19.0

35.0

16.8

25.0

13.5

18.3

Prior accident years before catastrophe losses
—

(1.0
)
(2.4
)
(5.1
)
(0.2
)
(0.7
)
3.6

(6.5
)
(3.7
)
(1.4
)
(2.8
)
(1.2
)
(2.1
)
(0.9
)
Prior accident years catastrophe losses
(0.5
)
(0.1
)
(0.3
)
(1.2
)
(1.2
)
(1.2
)
(0.9
)
(5.4
)
(0.7
)
(3.2
)
(0.5
)
(2.6
)
(0.5
)
(2.2
)
   Total loss and loss expense ratio
53.6
 %
64.3
 %
75.8
 %
61.5
 %
42.0
 %
54.0
 %
103.7
 %
77.7
 %
68.7
 %
90.8
 %
67.2
 %
78.6
 %
63.7
 %
69.2
 %
Other personal:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums
$
30

$
36

$
35

$
29

$
28

$
36

$
33

$
26

$
64

$
59

$
100

$
95

$
130

$
123

Earned premiums
32

32

33

31

31

32

30

29

64

59

96

91

128

122

Current accident year before catastrophe losses
49.9
 %
70.1
 %
58.2
 %
49.6
 %
44.3
 %
59.3
 %
42.3
 %
46.5
 %
53.9
 %
44.3
 %
59.4
 %
49.6
 %
57.0
 %
48.3
 %
Current accident year catastrophe losses
0.3

1.2

8.4

2.8

0.5

0.4

7.9

7.8

5.6

7.8

4.1

5.2

3.2

4.0

Prior accident years before catastrophe losses
4.1

7.6

(4.9
)
1.1

(1.3
)
17.3

(5.4
)
(1.9
)
(1.9
)
(3.6
)
1.3

3.8

2.0

2.5

Prior accident years catastrophe losses
(0.1
)
(0.1
)
—

(0.8
)
(0.1
)
(0.4
)
(0.5
)
0.2

(0.4
)
(0.1
)
(0.3
)
(0.2
)
(0.3
)
(0.2
)
   Total loss and loss expense ratio
54.2
 %
78.8
 %
61.7
 %
52.7
 %
43.4
 %
76.6
 %
44.3
 %
52.6
 %
57.2
 %
48.4
 %
64.5
 %
58.4
 %
61.9
 %
54.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly Property Casualty Data - Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/15
9/30/15
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
3/31/14
6/30/15
6/30/14
9/30/15
9/30/14
12/31/15
12/31/14
Excess & Surplus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Written premiums
$
44

$
43

$
46

$
42

$
39

$
39

$
40

$
35

$
88

$
75

$
131

$
114

$
175

$
153

Earned premiums
44

42

42

40

39

42

34

33

82

67

124

109

168

148

Current accident year before catastrophe losses
51.3
 %
56.9
 %
69.3
 %
72.1
 %
62.1
 %
57.8
 %
75.4
 %
80.6
 %
70.7
 %
77.9
 %
65.9
 %
70.2
 %
62.1
 %
68.1
 %
Current accident year catastrophe losses
0.2

0.3

0.6

1.2

2.9

(0.7
)
2.3

3.0

0.9

2.6

0.7

1.4

0.5

1.8

Prior accident years before catastrophe losses
(32.5
)
(15.4
)
(20.2
)
(13.6
)
(16.1
)
(15.4
)
(21.3
)
(27.1
)
(17.0
)
(24.1
)
(16.4
)
(20.8
)
(20.6
)
(19.6
)
Prior accident years catastrophe losses
(0.1
)
0.1

(0.1
)
(0.3
)
0.1

0.1

0.6

0.1

(0.2
)
0.4

(0.1
)
0.2

(0.1
)
0.2

   Total loss and loss expense ratio
18.9
 %
41.9
 %
49.6
 %
59.4
 %
49.0
 %
41.8
 %
57.0
 %
56.6
 %
54.4
 %
56.8
 %
50.1
 %
51.0
 %
41.9
 %
50.5
 %
*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 Fourth-Quarter 2015 Supplemental Financial Data
15


Cincinnati Insurance Companies Consolidated
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 twelve months ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
264

 
$
142

 
$
406

 
$
102

 
$
(8
)
 
$
22

 
$
116

 
$
366

 
$
(8
)
 
$
164

 
$
522

  Commercial property
 
416

 
36

 
452

 
(11
)
 
32

 
3

 
24

 
405

 
32

 
39

 
476

  Commercial auto
 
338

 
54

 
392

 
32

 
8

 
12

 
52

 
370

 
8

 
66

 
444

  Workers' compensation
 
181

 
37

 
218

 
(22
)
 
(1
)
 
(2
)
 
(25
)
 
159

 
(1
)
 
35

 
193

  Other commercial
 
117

 
21

 
138

 
(49
)
 
6

 
4

 
(39
)
 
68

 
6

 
25

 
99

    Total commercial lines
 
1,316

 
290

 
1,606

 
52

 
37

 
39

 
128

 
1,368

 
37

 
329

 
1,734

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
329

 
57

 
386

 
16

 
13

 
7

 
36

 
345

 
13

 
64

 
422

  Homeowners
 
260

 
26

 
286

 
6

 
1

 
1

 
8

 
266

 
1

 
27

 
294

  Other personal
 
60

 
4

 
64

 
7

 
8

 
—

 
15

 
67

 
8

 
4

 
79

    Total personal lines
 
649

 
87

 
736

 
29

 
22

 
8

 
59

 
678

 
22

 
95

 
795

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
28

 
16

 
44

 
14

 
1

 
10

 
25

 
42

 
1

 
26

 
69

  Cincinnati Re
 
—

 
—

 
—

 
—

 
10

 
—

 
10

 
—

 
10

 
—

 
10

      Total property casualty
 
$
1,993

 
$
393

 
$
2,386

 
$
95

 
$
70

 
$
57

 
$
222

 
$
2,088

 
$
70

 
$
450

 
$
2,608

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ceded loss and loss expense incurred for the twelve months ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
—

 
$
—

 
$
—

 
$
(2
)
 
$
(4
)
 
$
—

 
$
(6
)
 
$
(2
)
 
$
(4
)
 
$
—

 
$
(6
)
  Commercial property
 
9

 
1

 
10

 
3

 
—

 
—

 
3

 
12

 
—

 
1

 
13

  Commercial auto
 
—

 
—

 
—

 
3

 
—

 
1

 
4

 
3

 
—

 
1

 
4

  Workers' compensation
 
13

 
1

 
14

 
5

 
(3
)
 
1

 
3

 
18

 
(3
)
 
2

 
17

  Other commercial
 
7

 
—

 
7

 
(9
)
 
—

 
—

 
(9
)
 
(2
)
 
—

 
—

 
(2
)
    Total commercial lines
 
29

 
2

 
31

 
—

 
(7
)
 
2

 
(5
)
 
29

 
(7
)
 
4

 
26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
2

 
—

 
2

 
1

 
4

 
—

 
5

 
3

 
4

 
—

 
7

  Homeowners
 
3

 
—

 
3

 
(2
)
 
(1
)
 
—

 
(3
)
 
1

 
(1
)
 
—

 
—

  Other personal
 
—

 
—

 
—

 
—

 
(1
)
 
—

 
(1
)
 
—

 
(1
)
 
—

 
(1
)
    Total personal lines
 
5

 
—

 
5

 
(1
)
 
2

 
—

 
1

 
4

 
2

 
—

 
6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
1

 
—

 
1

 
(1
)
 
(2
)
 
1

 
(2
)
 
—

 
(2
)
 
1

 
(1
)
  Cincinnati Re
 
—

 
—

 
—

 
—

 
5

 
—

 
5

 
—

 
5

 
—

 
5

      Total property casualty
 
$
35

 
$
2

 
$
37

 
$
(2
)
 
$
(2
)
 
$
3

 
$
(1
)
 
$
33

 
$
(2
)
 
$
5

 
$
36

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss and loss expense incurred for the twelve months ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
264

 
$
142

 
$
406

 
$
104

 
$
(4
)
 
$
22

 
$
122

 
$
368

 
$
(4
)
 
$
164

 
$
528

  Commercial property
 
407

 
35

 
442

 
(14
)
 
32

 
3

 
21

 
393

 
32

 
38

 
463

  Commercial auto
 
338

 
54

 
392

 
29

 
8

 
11

 
48

 
367

 
8

 
65

 
440

  Workers' compensation
 
168

 
36

 
204

 
(27
)
 
2

 
(3
)
 
(28
)
 
141

 
2

 
33

 
176

  Other commercial
 
110

 
21

 
131

 
(40
)
 
6

 
4

 
(30
)
 
70

 
6

 
25

 
101

    Total commercial lines
 
1,287

 
288

 
1,575

 
52

 
44

 
37

 
133

 
1,339

 
44

 
325

 
1,708

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
327

 
57

 
384

 
15

 
9

 
7

 
31

 
342

 
9

 
64

 
415

  Homeowners
 
257

 
26

 
283

 
8

 
2

 
1

 
11

 
265

 
2

 
27

 
294

  Other personal
 
60

 
4

 
64

 
7

 
9

 
—

 
16

 
67

 
9

 
4

 
80

    Total personal lines
 
644

 
87

 
731

 
30

 
20

 
8

 
58

 
674

 
20

 
95

 
789

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
27

 
16

 
43

 
15

 
3

 
9

 
27

 
42

 
3

 
25

 
70

  Cincinnati Re
 
—

 
—

 
—

 
—

 
5

 
—

 
5

 
—

 
5

 
—

 
5

      Total property casualty
 
$
1,958

 
$
391

 
$
2,349

 
$
97

 
$
72

 
$
54

 
$
223

 
$
2,055

 
$
72

 
$
445

 
$
2,572

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

CINF Fourth-Quarter 2015 Supplemental Financial Data
16


Cincinnati Insurance Companies Consolidated
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 December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
82

 
$
39

 
$
121

 
$
20

 
$
(24
)
 
$
9

 
$
5

 
$
102

 
$
(24
)
 
$
48

 
$
126

  Commercial property
 
99

 
9

 
108

 
(33
)
 
30

 
3

 
—

 
66

 
30

 
12

 
108

  Commercial auto
 
97

 
14

 
111

 
5

 
(6
)
 
(2
)
 
(3
)
 
102

 
(6
)
 
12

 
108

  Workers' compensation
 
46

 
10

 
56

 
(6
)
 
9

 
1

 
4

 
40

 
9

 
11

 
60

  Other commercial
 
21

 
5

 
26

 
(14
)
 
4

 
3

 
(7
)
 
7

 
4

 
8

 
19

    Total commercial lines
 
345

 
77

 
422

 
(28
)
 
13

 
14

 
(1
)
 
317

 
13

 
91

 
421

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
91

 
15

 
106

 
8

 
(7
)
 
(2
)
 
(1
)
 
99

 
(7
)
 
13

 
105

  Homeowners
 
56

 
7

 
63

 
(12
)
 
11

 
1

 
—

 
44

 
11

 
8

 
63

  Other personal
 
14

 
1

 
15

 
(1
)
 
2

 
1

 
2

 
13

 
2

 
2

 
17

    Total personal lines
 
161

 
23

 
184

 
(5
)
 
6

 
—

 
1

 
156

 
6

 
23

 
185

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
7

 
4

 
11

 
2

 
(9
)
 
4

 
(3
)
 
9

 
(9
)
 
8

 
8

  Cincinnati Re
 
—

 
—

 
—

 
—

 
10

 
—

 
10

 
—

 
10

 
—

 
10

      Total property casualty
 
$
506

 
$
100

 
$
606

 
$
(33
)
 
$
29

 
$
14

 
$
10

 
$
473

 
$
29

 
$
114

 
$
616

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ceded loss and loss expense incurred for the three months ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
1

 
$
(1
)
 
$
—

 
$
—

 
$
(5
)
 
$
—

 
$
(5
)
 
$
1

 
$
(5
)
 
$
(1
)
 
$
(5
)
  Commercial property
 
8

 
1

 
9

 
(11
)
 
1

 
—

 
(10
)
 
(3
)
 
1

 
1

 
(1
)
  Commercial auto
 
—

 
—

 
—

 
—

 
—

 
1

 
1

 
—

 
—

 
1

 
1

  Workers' compensation
 
5

 
1

 
6

 
3

 
(2
)
 
1

 
2

 
8

 
(2
)
 
2

 
8

  Other commercial
 
—

 
—

 
—

 
(1
)
 
—

 
—

 
(1
)
 
(1
)
 
—

 
—

 
(1
)
    Total commercial lines
 
14

 
1

 
15

 
(9
)
 
(6
)
 
2

 
(13
)
 
5

 
(6
)
 
3

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
—

 
—

 
—

 
2

 
—

 
—

 
2

 
2

 
—

 
—

 
2

  Homeowners
 
1

 
—

 
1

 
—

 
(1
)
 
—

 
(1
)
 
1

 
(1
)
 
—

 
—

  Other personal
 
—

 
—

 
—

 
—

 
(1
)
 
—

 
(1
)
 
—

 
(1
)
 
—

 
(1
)
    Total personal lines
 
1

 
—

 
1

 
2

 
(2
)
 
—

 
—

 
3

 
(2
)
 
—

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
—

 
—

 
—

 
—

 
(1
)
 
1

 
—

 
—

 
(1
)
 
1

 
—

  Cincinnati Re
 
—

 
—

 
—

 
—

 
5

 
—

 
5

 
—

 
5

 
—

 
5

      Total property casualty
 
$
15

 
$
1

 
$
16

 
$
(7
)
 
$
(4
)
 
$
3

 
$
(8
)
 
$
8

 
$
(4
)
 
$
4

 
$
8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss and loss expense incurred for the three months ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial casualty
 
$
81

 
$
40

 
$
121

 
$
20

 
$
(19
)
 
$
9

 
$
10

 
$
101

 
$
(19
)
 
$
49

 
$
131

  Commercial property
 
91

 
8

 
99

 
(22
)
 
29

 
3

 
10

 
69

 
29

 
11

 
109

  Commercial auto
 
97

 
14

 
111

 
5

 
(6
)
 
(3
)
 
(4
)
 
102

 
(6
)
 
11

 
107

  Workers' compensation
 
41

 
9

 
50

 
(9
)
 
11

 
—

 
2

 
32

 
11

 
9

 
52

  Other commercial
 
21

 
5

 
26

 
(13
)
 
4

 
3

 
(6
)
 
8

 
4

 
8

 
20

    Total commercial lines
 
331

 
76

 
407

 
(19
)
 
19

 
12

 
12

 
312

 
19

 
88

 
419

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Personal auto
 
91

 
15

 
106

 
6

 
(7
)
 
(2
)
 
(3
)
 
97

 
(7
)
 
13

 
103

  Homeowners
 
55

 
7

 
62

 
(12
)
 
12

 
1

 
1

 
43

 
12

 
8

 
63

  Other personal
 
14

 
1

 
15

 
(1
)
 
3

 
1

 
3

 
13

 
3

 
2

 
18

    Total personal lines
 
160

 
23

 
183

 
(7
)
 
8

 
—

 
1

 
153

 
8

 
23

 
184

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Excess & surplus lines
 
7

 
4

 
11

 
2

 
(8
)
 
3

 
(3
)
 
9

 
(8
)
 
7

 
8

  Cincinnati Re
 
—

 
—

 
—

 
—

 
5

 
—

 
5

 
—

 
5

 
—

 
5

      Total property casualty
 
$
498

 
$
103

 
$
601

 
$
(24
)
 
$
24

 
$
15

 
$
15

 
$
474

 
$
24

 
$
118

 
$
616

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

CINF Fourth-Quarter 2015 Supplemental Financial Data
17


Consolidated Cincinnati Insurance Companies
Quarterly Property Casualty Data - Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/15
9/30/15
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
3/31/14
6/30/15
6/30/14
9/30/15
9/30/14
12/31/15
12/31/14
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
$
925

$
999

$
1,018

$
983

$
906

$
958

$
974

$
956

$
2,001

$
1,930

$
3,000

$
2,888

$
3,925

$
3,794

   Agency new business written premiums
140

138

138

116

122

125

133

123

254

256

392

381

532

503

   Other written premiums
(10
)
(39
)
(14
)
(33
)
(41
)
(46
)
(25
)
(42
)
(47
)
(67
)
(86
)
(113
)
(96
)
(154
)
   Net written premiums – statutory*
$
1,055

$
1,098

$
1,142

$
1,066

$
987

$
1,037

$
1,082

$
1,037

$
2,208

$
2,119

$
3,306

$
3,156

$
4,361

$
4,143

   Unearned premium change
40

(22
)
(83
)
(25
)
48

(12
)
(76
)
(58
)
(108
)
(134
)
(130
)
(146
)
(90
)
(98
)
   Earned premiums
$
1,095

$
1,076

$
1,059

$
1,041

$
1,035

$
1,025

$
1,006

$
979

$
2,100

$
1,985

$
3,176

$
3,010

$
4,271

$
4,045

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
2
%
4
%
5
%
3
 %
6
 %
5
 %
11
 %
13
 %
4
 %
12
 %
4
%
9
 %
3
%
9
 %
   Agency new business written premiums
15

10

4

(6
)
(5
)
(11
)
(4
)
(9
)
(1
)
(7
)
3

(8
)
6

(7
)
   Other written premiums
76

15

44

21

45

(84
)
26

(320
)
30

(52
)
24

(64
)
38

(8
)
   Net written premiums – statutory*
7

6

6

3

9

1

10

7

4

8

5

6

5

6

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid
$
498

$
511

$
501

$
448

$
478

$
543

$
517

$
484

$
949

$
1,001

$
1,460

$
1,543

$
1,958

$
2,021

   Loss expenses paid
103

93

97

98

98

96

98

100

195

198

288

295

391

392

   Loss and loss expenses paid
$
601

$
604

$
598

$
546

$
576

$
639

$
615

$
584

$
1,144

$
1,199

$
1,748

$
1,838

$
2,349

$
2,413

Incurred losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss and loss expense incurred
$
616

$
613

$
654

$
689

$
622

$
622

$
707

$
676

$
1,343

$
1,383

$
1,956

$
2,005

$
2,572

$
2,627

   Loss and loss expenses paid as a % of incurred
97.6
%
98.5
%
91.4
%
79.2
 %
92.6
 %
102.7
 %
87.0
 %
86.4
 %
85.2
 %
86.7
 %
89.4
%
91.7
 %
91.3
%
91.9
 %
Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio
45.3
%
46.8
%
52.7
%
54.4
 %
49.0
 %
50.0
 %
60.7
 %
57.9
 %
53.6
 %
59.4
 %
51.3
%
56.2
 %
49.8
%
54.4
 %
   Loss adjustment expense ratio
11.0

10.1

9.1

11.7

11.1

10.7

9.5

11.2

10.3

10.3

10.2

10.4

10.4

10.6

   Net underwriting expense ratio
32.3

30.6

28.9

30.0

31.7

30.6

29.4

29.0

29.4

29.2

29.8

29.7

30.4

30.1

   Statutory combined ratio
88.6
%
87.5
%
90.7
%
96.1
 %
91.8
 %
91.3
 %
99.6
 %
98.1
 %
93.3
 %
98.9
 %
91.3
%
96.3
 %
90.6
%
95.1
 %
   Contribution from catastrophe losses
1.2

2.5

7.5

4.1

(0.9
)
1.2

11.4

8.9

5.8

10.2

4.7

7.1

3.7

5.1

   Statutory combined ratio excl. catastrophe losses
87.4
%
85.0
%
83.2
%
92.0
 %
92.7
 %
90.1
 %
88.2
 %
89.2
 %
87.5
 %
88.7
 %
86.6
%
89.2
 %
86.9
%
90.0
 %
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio
87.0
%
87.8
%
92.4
%
97.5
 %
90.4
 %
91.0
 %
100.9
 %
100.3
 %
94.9
 %
100.6
 %
92.5
%
97.3
 %
91.1
%
95.6
 %
   Contribution from catastrophe losses
1.2

2.5

7.5

4.1

(0.9
)
1.2

11.4

8.9

5.8

10.2

4.7

7.1

3.7

5.1

   GAAP combined ratio excl. catastrophe losses
85.8
%
85.3
%
84.9
%
93.4
 %
91.3
 %
89.8
 %
89.5
 %
91.4
 %
89.1
 %
90.4
 %
87.8
%
90.2
 %
87.4
%
90.5
 %
*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 Fourth-Quarter 2015 Supplemental Financial Data
18


Consolidated Cincinnati Insurance Companies
Quarterly Property Casualty Data - Commercial Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/15
9/30/15
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
3/31/14
6/30/15
6/30/14
9/30/15
9/30/14
12/31/15
12/31/14
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
$
649

$
678

$
699

$
730

$
645

$
651

$
669

$
713

$
1,429

$
1,382

$
2,107

$
2,033

$
2,756

$
2,678

   Agency new business written premiums
97

96

93

79

86

89

95

90

172

185

268

274

365

360

   Other written premiums
(34
)
(31
)
(5
)
(26
)
(32
)
(36
)
(16
)
(32
)
(31
)
(48
)
(62
)
(84
)
(96
)
(116
)
   Net written premiums – statutory*
$
712

$
743

$
787

$
783

$
699

$
704

$
748

$
771

$
1,570

$
1,519

$
2,313

$
2,223

$
3,025

$
2,922

   Unearned premium change
49

14

(42
)
(50
)
31

16

(34
)
(79
)
(92
)
(113
)
(78
)
(97
)
(29
)
(66
)
   Earned premiums
$
761

$
757

$
745

$
733

$
730

$
720

$
714

$
692

$
1,478

$
1,406

$
2,235

$
2,126

$
2,996

$
2,856

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
1
 %
4
%
4
 %
2
 %
6
 %
3
 %
11
 %
13
 %
3
 %
12
 %
4
 %
9
 %
3
%
8
 %
   Agency new business written premiums
13

8

(2
)
(12
)
(7
)
(13
)
(4
)
(7
)
(7
)
(6
)
(2
)
(8
)
1

(8
)
   Other written premiums
(6
)
14

69

19

49

(140
)
33

nm

35

(100
)
26

(115
)
17

(14
)
   Net written premiums – statutory*
2

6

5

2

10

(2
)
10

6

3

8

4

5

4

6

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid
$
331

$
324

$
329

$
303

$
325

$
368

$
347

$
327

$
632

$
674

$
956

$
1,041

$
1,287

$
1,366

   Loss expenses paid
76

68

71

73

75

74

75

76

144

151

212

226

288

300

   Loss and loss expenses paid
$
407

$
392

$
400

$
376

$
400

$
442

$
422

$
403

$
776

$
825

$
1,168

$
1,267

$
1,575

$
1,666

Incurred losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss and loss expense incurred
$
419

$
398

$
417

$
474

$
454

$
428

$
461

$
469

$
891

$
930

$
1,289

$
1,358

$
1,708

$
1,812

   Loss and loss expenses paid as a % of incurred
97.1
 %
98.5
%
95.9
 %
79.3
 %
88.1
 %
103.3
 %
91.5
 %
85.9
 %
87.1
 %
88.7
 %
90.6
 %
93.3
 %
92.2
%
91.9
 %
Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio
43.3
 %
42.2
%
46.9
 %
52.2
 %
49.9
 %
47.5
 %
54.7
 %
56.1
 %
49.6
 %
55.4
 %
47.1
 %
52.8
 %
46.1
%
52.0
 %
   Loss adjustment expense ratio
11.8

10.2

9.1

12.5

12.4

11.9

9.8

11.8

10.7

10.8

10.5

11.1

10.9

11.5

   Net underwriting expense ratio
33.5

32.2

29.9

29.9

32.5

32.2

30.5

28.5

29.9

29.5

30.6

30.3

31.3

30.8

   Statutory combined ratio
88.6
 %
84.6
%
85.9
 %
94.6
 %
94.8
 %
91.6
 %
95.0
 %
96.4
 %
90.2
 %
95.7
 %
88.2
 %
94.2
 %
88.3
%
94.3
 %
   Contribution from catastrophe losses
1.0

1.4

5.9

4.0

(1.0
)
1.0

8.6

8.5

5.0

8.5

3.8

6.0

3.1

4.3

   Statutory combined ratio excl. catastrophe losses
87.6
 %
83.2
%
80.0
 %
90.6
 %
95.8
 %
90.6
 %
86.4
 %
87.9
 %
85.2
 %
87.2
 %
84.4
 %
88.2
 %
85.2
%
90.0
 %
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio
86.8
 %
84.0
%
87.2
 %
96.6
 %
93.6
 %
90.7
 %
96.3
 %
99.9
 %
91.9
 %
98.1
 %
89.2
 %
95.6
 %
88.6
%
95.1
 %
   Contribution from catastrophe losses
1.0

1.4

5.9

4.0

(1.0
)
1.0

8.6

8.5

5.0

8.5

3.8

6.0

3.1

4.3

   GAAP combined ratio excl. catastrophe losses
85.8
 %
82.6
%
81.3
 %
92.6
 %
94.6
 %
89.7
 %
87.7
 %
91.4
 %
86.9
 %
89.6
 %
85.4
 %
89.6
 %
85.5
%
90.8
 %
*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 Fourth-Quarter 2015 Supplemental Financial Data
19


Consolidated Cincinnati Insurance Companies
Quarterly Property Casualty Data - Personal Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/15
9/30/15
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
3/31/14
6/30/15
6/30/14
9/30/15
9/30/14
12/31/15
12/31/14
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
$
245

$
288

$
285

$
223

$
233

$
278

$
276

$
218

$
508

$
494

$
796

$
772

$
1,041

$
1,005

   Agency new business written premiums
27

30

30

24

24

23

24

21

54

45

84

68

111

92

   Other written premiums
(6
)
(6
)
(6
)
(6
)
(8
)
(7
)
(6
)
(8
)
(12
)
(14
)
(18
)
(21
)
(24
)
(29
)
   Net written premiums – statutory*
$
266

$
312

$
309

$
241

$
249

$
294

$
294

$
231

$
550

$
525

$
862

$
819

$
1,128

$
1,068

   Unearned premium change
14

(35
)
(37
)
27

17

(31
)
(36
)
23

(10
)
(13
)
(45
)
(44
)
(31
)
(27
)
   Earned premiums
$
280

$
277

$
272

$
268

$
266

$
263

$
258

$
254

$
540

$
512

$
817

$
775

$
1,097

$
1,041

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
5
%
4
%
3
%
2
%
4
 %
8
 %
10
 %
12
 %
3
%
11
 %
3
%
10
 %
4
%
8
 %
   Agency new business written premiums
13

30

25

14

—

(18
)
(20
)
(25
)
20

(22
)
24

(21
)
21

(16
)
   Other written premiums
25

14

—

25

11

13

25

—

14

13

14

13

17

12

   Net written premiums – statutory*
7

6

5

4

4

6

8

7

5

8

5

7

6

6

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid
$
160

$
180

$
165

$
139

$
147

$
170

$
167

$
152

$
304

$
319

$
484

$
489

$
644

$
636

   Loss expenses paid
23

20

22

22

21

19

20

21

44

41

64

60

87

81

   Loss and loss expenses paid
$
183

$
200

$
187

$
161

$
168

$
189

$
187

$
173

$
348

$
360

$
548

$
549

$
731

$
717

Incurred losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss and loss expense incurred
$
184

$
198

$
216

$
191

$
148

$
177

$
227

$
188

$
407

$
415

$
605

$
592

$
789

$
740

   Loss and loss expenses paid as a % of incurred
99.5
%
101.0
%
86.6
%
84.3
%
113.5
 %
106.8
 %
82.4
 %
92.0
 %
85.5
%
86.7
 %
90.6
%
92.7
 %
92.6
%
96.9
 %
Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio
57.7
%
62.5
%
71.1
%
61.9
%
48.9
 %
60.5
 %
79.4
 %
64.8
 %
66.6
%
72.2
 %
65.2
%
68.2
 %
63.3
%
63.3
 %
   Loss adjustment expense ratio
8.0

9.0

8.5

9.1

6.9

6.9

8.3

9.3

8.8

8.8

8.8

8.1

8.6

7.8

   Net underwriting expense ratio
29.4

27.0

26.2

30.4

29.3

26.3

26.6

30.5

28.0

28.3

27.7

27.6

28.1

28.0

   Statutory combined ratio
95.1
%
98.5
%
105.8
%
101.4
%
85.1
 %
93.7
 %
114.3
 %
104.6
 %
103.4
%
109.3
 %
101.7
%
103.9
 %
100.0
%
99.1
 %
   Contribution from catastrophe losses
1.8

5.6

12.6

4.9

(1.4
)
2.0

20.4

10.8

8.8

15.7

7.7

11.0

6.2

7.8

   Statutory combined ratio excl. catastrophe losses
93.3
%
92.9
%
93.2
%
96.5
%
86.5
 %
91.7
 %
93.9
 %
93.8
 %
94.6
%
93.6
 %
94.0
%
92.9
 %
93.8
%
91.3
 %
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio
94.0
%
100.9
%
109.2
%
101.4
%
83.7
 %
95.0
 %
115.8
 %
103.0
 %
105.3
%
109.4
 %
103.8
%
104.5
 %
101.3
%
99.2
 %
   Contribution from catastrophe losses
1.8

5.6

12.6

4.9

(1.4
)
2.0

20.4

10.8

8.8

15.7

7.7

11.0

6.2

7.8

   GAAP combined ratio excl. catastrophe losses
92.2
%
95.3
%
96.6
%
96.5
%
85.1
 %
93.0
 %
95.4
 %
92.2
 %
96.5
%
93.7
 %
96.1
%
93.5
 %
95.1
%
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 Fourth-Quarter 2015 Supplemental Financial Data
20


Consolidated Cincinnati Insurance Companies
Quarterly Property Casualty Data - Excess & Surplus Lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Three months ended
Six months ended
Nine months ended
Twelve months ended
 
12/31/15
9/30/15
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
3/31/14
6/30/15
6/30/14
9/30/15
9/30/14
12/31/15
12/31/14
Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
$
31

$
33

$
34

$
30

$
28

$
29

$
29

$
25

$
64

$
54

$
97

$
83

$
128

$
111

   Agency new business written premiums
16

12

15

13

12

13

14

12

28

26

40

39

56

51

   Other written premiums
(3
)
(2
)
(3
)
(1
)
(1
)
(3
)
(3
)
(2
)
(4
)
(5
)
(6
)
(8
)
(9
)
(9
)
   Net written premiums – statutory*
$
44

$
43

$
46

$
42

$
39

$
39

$
40

$
35

$
88

$
75

$
131

$
114

$
175

$
153

   Unearned premium change
—

(1
)
(4
)
(2
)
—

3

(6
)
(2
)
(6
)
(8
)
(7
)
(5
)
(7
)
(5
)
   Earned premiums
$
44

$
42

$
42

$
40

$
39

$
42

$
34

$
33

$
82

$
67

$
124

$
109

$
168

$
148

Year over year change %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Agency renewal written premiums
11
 %
14
 %
17
%
20
%
17
%
16
 %
12
 %
32
%
19
%
20
 %
17
%
19
 %
15
%
18
 %
   Agency new business written premiums
33

(8
)
7

8

—

18

56

20

8

37

3

30

10

21

   Other written premiums
(200
)
33

—

50

50

(50
)
(50
)
—

20

(25
)
25

(33
)
—

(13
)
   Net written premiums – statutory*
13

10

15

20

15

15

21

30

17

25

15

21

14

20

Paid losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Losses paid
$
6

$
8

$
8

$
5

$
6

$
5

$
3

$
5

$
13

$
8

$
21

$
13

$
27

$
19

   Loss expenses paid
5

4

3

4

2

3

3

3

7

6

11

9

16

11

   Loss and loss expenses paid
$
11

$
12

$
11

$
9

$
8

$
8

$
6

$
8

$
20

$
14

$
32

$
22

$
43

$
30

Incurred losses and loss expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss and loss expense incurred
$
8

$
17

$
21

$
24

$
20

$
17

$
19

$
19

$
45

$
38

$
62

$
55

$
70

$
75

   Loss and loss expenses paid as a % of incurred
137.5
 %
70.6
 %
52.4
%
37.5
%
40.0
%
47.1
 %
31.6
 %
42.1
%
44.4
%
36.8
 %
51.6
%
40.0
 %
61.4
%
40.0
 %
Statutory combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Loss ratio
1.1
 %
26.9
 %
36.1
%
44.9
%
34.4
%
27.9
 %
46.6
 %
40.6
%
40.4
%
43.7
 %
35.8
%
37.6
 %
26.7
%
36.8
 %
   Loss adjustment expense ratio
17.8

15.0

13.5

14.5

14.6

13.9

10.4

0.1

14.0

13.1

14.3

13.4

15.2

13.7

   Net underwriting expense ratio
31.8

29.4

29.1

29.9

31.4

34.0

29.1

30.4

29.5

29.7

29.5

31.2

30.0

31.3

   Statutory combined ratio
50.7
 %
71.3
 %
78.7
%
89.3
%
80.4
%
75.8
 %
86.1
 %
71.1
%
83.9
%
86.5
 %
79.6
%
82.2
 %
71.9
%
81.8
 %
   Contribution from catastrophe losses
0.1

0.4

0.5

0.9

3.0

(0.6
)
2.9

3.1

0.7

3.0

0.6

1.6

0.4

2.0

   Statutory combined ratio excl. catastrophe losses
50.6
 %
70.9
 %
78.2
%
88.4
%
77.4
%
76.4
 %
83.2
 %
68.0
%
83.2
%
83.5
 %
79.0
%
80.6
 %
71.5
%
79.8
 %
GAAP combined ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   GAAP combined ratio
48.1
 %
69.9
 %
76.0
%
88.3
%
77.8
%
70.2
 %
85.0
 %
86.9
%
82.1
%
85.9
 %
77.9
%
79.9
 %
70.0
%
79.4
 %
   Contribution from catastrophe losses
0.1

0.4

0.5

0.9

3.0

(0.6
)
2.9

3.1

0.7

3.0

0.6

1.6

0.4

2.0

   GAAP combined ratio excl. catastrophe losses
48.0
 %
69.5
 %
75.5
%
87.4
%
74.8
%
70.8
 %
82.1
 %
83.8
%
81.4
%
82.9
 %
77.3
%
78.3
 %
69.6
%
77.4
 %
*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 Fourth-Quarter 2015 Supplemental Financial Data
21


The Cincinnati Life Insurance Company
Statutory Statements of Income
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended December 31,
For the Twelve Months Ended December 31,
(Dollars in millions)
2015
2014
Change
% Change
2015
2014
Change
% Change
Net premiums written
$
65

$
62

$
3

5

$
250

$
244

$
6

2

Net investment income
39

37

2

5

154

148

6

4

Amortization of interest maintenance reserve
1

2

(1
)
(50
)
4

5

(1
)
(20
)
Commissions and expense allowances on reinsurance ceded
2

2

—

0

6

6

—

0

Income from fees associated with Separate Accounts
2

2

—

0

6

6

—

0

Total revenues
$
109

$
105

$
4

4

$
420

$
409

$
11

3

 
 
 
 
 
 
 
 
 
Death benefits and matured endowments
$
32

$
25

$
7

28

$
101

$
98

$
3

3

Annuity benefits
20

15

5

33

64

62

2

3

Disability benefits and benefits under accident and health contracts
—

1

(1
)
(100
)
2

2

—

0

Surrender benefits and group conversions
4

5

(1
)
(20
)
17

22

(5
)
(23
)
Interest and adjustments on deposit-type contract funds
2

2

—

0

10

10

—

0

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

41

(1
)
(2
)
164

169

(5
)
(3
)
Total benefit expenses
$
98

$
89

$
9

10

$
358

$
363

$
(5
)
(1
)
 
 
 
 
 
 
 
 
 
Commissions
$
10

$
9

$
1

11

$
38

$
37

$
1

3

General insurance expenses and taxes
11

10

1

10

42

40

2

5

Increase in loading on deferred and uncollected premiums
1

(1
)
2

200

—

(5
)
5

(100
)
Net transfers from Separate Accounts
(7
)
—

(7
)
nm

(7
)
(6
)
(1
)
17

Total underwriting expenses
$
15

$
18

$
(3
)
(17
)
$
73

$
66

$
7

11

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

(6
)
(7
)
1

(14
)
 
 
 
 
 
 
 
 
 
Net loss from operations before realized capital gains
$
(2
)
$
(1
)
$
(1
)
100

$
(5
)
$
(13
)
$
8

(62
)
 
 
 
 
 
 
 
 
 
Realized gains and losses net of capital gains tax, net
(3
)
(6
)
3

(50
)
(6
)
(6
)
—

0

 
 
 
 
 
 
 
 
 
Net loss (statutory)
$
(5
)
$
(7
)
$
2

(29
)
$
(11
)
$
(19
)
$
8

(42
)
*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 Fourth-Quarter 2015 Supplemental Financial Data
22