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| Cincinnati Financial Net Income Up 30.0% and Operating Income* Gains 13.5% for Third-quarter 2005 |
CINCINNATI, Nov. 2 /PRNewswire-FirstCall/ -- Cincinnati Financial Corporation (Nasdaq: CINF) today reported for the third quarter and first nine months of 2005:
Financial Highlights*
(Dollars in millions except share data)
Three months ended Nine months ended
September 30, September 30,
2005 2004 Change % 2005 2004** Change %
Revenue Highlights
Earned
premiums $790 $758 4.2 $2,361 $2,243 5.3
Investment
income 134 124 7.7 390 365 6.9
Total
revenues 944 879 7.4 2,801 2,672 4.8
Income Statement
Data
Net income $117 $90 30.0 $419 $392 7.1
Net realized
investment
gains and
losses 10 (5) 318.6 24 36 (33.7)
Operating
income* $107 $95 13.5 $395 $356 11.2
Per Share Data
(diluted) ***
Net income $0.66 $0.50 32.0 $2.37 $2.19 8.2
Net realized
investment
gains and
losses 0.05 (0.03) 266.7 0.14 0.20 (30.0)
Operating
income* $0.61 $0.53 15.1 $2.23 $1.99 12.1
Cash
dividend
declared $0.305 $0.26 16.4 $0.90 $0.77 16.9
Book
value $- $- $34.43 $34.49 (0.2)
Average shares
outstand-
ing 176,806,267 178,402,767 (0.9) 177,212,677 178,546,137 (0.7)
Corporate Highlights
Insurance Operations Highlights
* The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 12 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles or Statutory Accounting Principles. ** Nine-month 2004 income included a benefit of $21 million, or 11 cents per share, after tax, and GAAP combined ratio included a benefit of 1.5 percentage points from the release of reserves for uninsured/underinsured motorist (UM/UIM) losses. *** Per share amounts for all periods have been adjusted for the 5 percent stock dividend paid April 26, 2005. Marketplace Position "The past two years have been remarkable for both the frequency and severity of severe weather events," commented Chairman and Chief Executive Officer John J. Schiff, Jr., CPCU. "Despite the magnitude of this year's hurricanes, our catastrophe losses through the first nine months of 2005 were below last year's level. In addition, we experienced continued strong performance from our commercial lines insurance operations, improved personal lines insurance profitability and higher investment income. As a result, third-quarter and nine-month results were ahead of last year's level, with both commercial lines and personal lines contributing an underwriting profit for the nine-month period. "Catastrophic events are our chance to demonstrate The Cincinnati Insurance Companies' commitment to the financial strength and claims service excellence that sets us apart. We now have closed about 85 percent of the 2,500 claims reported in the wake of Hurricanes Dennis, Katrina and Rita and are responding to Hurricane Wilma claims. Our thanks go out to our independent agent representatives and company associates for delivering prompt and fair claims service, as well as making personal efforts to help hurricane survivors. "Across our commercial lines market areas, we have seen continued signs of the soft market, with fewer increases and more declines in renewal pricing, aside from any changes in an account's exposures. Typically, account quality, class of business, size of account, location and the specific local market competition all continue to play a part in pricing levels. Commercial policyholders continue to respond favorably to our agents' presentation of the Cincinnati value proposition - customized coverage packages, personal claims service and high financial strength ratings -- all wrapped up in a convenient three-year commercial policy." Schiff commented, "In the personal lines area, we are making territory-by- territory refinements to our rates and premium credits. These changes better position our agents to sell the value of our homeowner-auto package, superior claims service and financial strength. We believe the rate changes could help return policy retention to its usual high level near 90 percent and personal lines new business activity to a healthy pace." Schiff added, "We've recently reached several milestones as a company -- more than 1,000 agency relationships being served in 100 field marketing territories by approximately 4,000 associates. We continue to seek ways of providing an ever-higher level of service so we can earn business from the independent agencies that represent the company. In total, we appointed 30 new agencies during the first nine months of 2005, putting us on track to achieve our target of 50 new agency appointments in both this year and next." Looking Ahead Schiff noted, "We remain positive about the outlook for full-year 2005. We continue to look for property casualty written premium growth in the low single digits based on market intelligence from insurance agents and field marketing representatives, production results for agencies and policy retention trends. "In early October, we became more positive in our view of the full-year 2005 combined ratio target after assessing the impact of Hurricanes Dennis, Katrina and Rita. Later in October, Hurricane Wilma affected The Cincinnati Insurance Companies' policyholders in Florida. Taking that event into consideration, we remain comfortable with the revised target of a full-year 2005 combined ratio at or below 92 percent. As is our usual practice, that target assumes full-year catastrophe losses will contribute approximately 3.5 percentage points to the ratio. Our revised consolidated target also reflects our assumption that favorable loss reserve development will return to historical levels. We continue to anticipate that the 2005 commercial lines combined ratio will be at or below 90 percent and the 2005 personal lines combined ratio will be approximately 100 percent, assuming a normal level of personal lines catastrophe losses. "Through the first nine months of 2005, catastrophe losses contributed 3.6 percentage points to the overall property casualty combined ratio of 91.0 percent. Hurricane Wilma losses are preliminarily estimated at $23 million to $25 million. This early estimate will be updated and included in results for the fourth quarter ending December 31, 2005. "Investment income continues to benefit from the allocation of new investment dollars to fixed-income securities. We now believe growth for the full year will be in the range of 6.5 percent to 7.0 percent," Schiff added. Schiff noted, "Since the second quarter of last year, almost all of our available cash flow has been used to purchase fixed-income investments to reduce the ratio of common stock to statutory surplus to a level more in line with our historic sub-100 ratio. During the same period, we took actions to reduce the parent company's ratio of investment assets to total assets. We now plan to maintain that ratio below 40 percent, as we have concluded that the SEC staff is not actively considering the company's application for exemptive relief under the Investment Company Act of 1940. Moving forward, we will take into consideration insurance department regulations and rating agency comments as well as the trend in these ratios to determine what portion of new cash flow could be invested in equity securities at the parent and operating company levels. "Equity investing has played an important role in achieving our portfolio objectives, contributing to net unrealized investment gains of $4.988 billion at September 30, 2005. We remain committed to our long-term equity focus, which we believe is key to the company's long-term growth and stability."
Property Casualty Insurance Operations
(Dollars in millions) Three months ended Nine months ended
September 30, September 30,
2005 2004 Change % 2005 2004 Change %
Written premiums $761 $750 1.6 $2,349 $2,274 3.3
Earned premiums $765 $733 4.4 $2,283 $2,166 5.4
Loss and loss
expenses excluding
catastrophes 435 416 4.7 1,312 1,222 7.4
Catastrophe loss and
loss expense 66 86 (23.4) 83 133 (37.6)
Commission expenses 151 149 1.5 451 445 1.2
Underwriting expenses 84 64 30.8 225 191 17.7
Policyholder
dividends 3 2 56.5 7 8 (1.5)
Underwriting profit $26 $16 60.8 $205 $167 22.9
Combined ratio:
Loss and loss
expenses excluding
catastrophes 56.9% 56.7% 57.5% 56.5%
Catastrophe loss and
loss expenses 8.6 11.8 3.6 6.1
Loss and loss
expenses 65.5% 68.5% 61.1% 62.6%
Commission expenses 19.8 20.3 19.7 20.5
Underwriting
expenses 11.0 8.8 9.9 8.8
Policyholder
dividends 0.3 0.2 0.3 0.4
Combined ratio 96.6% 97.8% 91.0% 92.3%
Reported
2005 Claims Loss Estimate
Third-quarter States (as of (pretax, net
Event Dates Primarily Affected October 28) of reinsurance)
Hurricane July 9-11 Alabama, Florida,
Dennis Georgia, Mississippi 494 $8 million
Hurricane Aug. 25-30 Alabama, Florida, 1,986 $34 million
Katrina - Georgia, Louisiana,
direct Mississippi, Tennessee
Hurricane
Katrina -
assumed $18 million
Hurricane
Katrina -
total $52 million
Hurricane Sept. 20-24 Alabama, Louisiana, 17 $3 million
Rita Mississippi, Tennessee,
Texas
* The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 12 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles (non-GAAP).
Commercial Lines
(Dollars in millions) Three months ended Nine months ended
September 30, September 30,
2005 2004 Change % 2005 2004 Change %
Written premiums $546 $532 2.6 $1,741 $1,654 5.3
Earned premiums $564 $537 4.9 $1,678 $1,576 6.5
Loss and loss expenses
excluding catastrophes 307 285 7.6 942 826 14.0
Catastrophe loss and
loss expenses 53 48 10.5 62 65 (4.0)
Commission expenses 110 108 1.7 325 324 0.2
Underwriting expenses 64 48 34.0 160 135 18.1
Policyholder dividends 3 2 56.5 7 8 (1.5)
Underwriting profit $27 $46 (41.3) $182 $218 (16.4)
Combined ratio:
Loss and loss expenses
excluding catastrophes 54.4% 53.1% 56.1% 52.4%
Catastrophe loss and
loss expenses 9.5 9.0 3.7 4.1
Loss and loss expenses 63.9% 62.1% 59.8% 56.5%
Commission expenses 19.5 20.1 19.4 20.6
Underwriting expenses 11.4 8.9 9.5 8.6
Policyholder dividends 0.4 0.3 0.5 0.5
Combined ratio 95.2% 91.4% 89.2% 86.2%
* The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 12 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles (non-GAAP).
Personal Lines
(Dollars in Three months ended Nine months ended
millions) September 30, September 30,
2005 2004 Change % 2005 2004 Change %
Written premiums $215 $218 (0.9) $608 $620 (1.9)
Earned premiums $201 $196 2.8 $605 $590 2.5
Loss and loss
expenses
excluding
catastrophes 128 131 (1.8) 370 396 (6.5)
Catastrophe loss and
loss expenses 13 38 (66.8) 21 68 (69.3)
Commission expenses 41 41 0.9 126 121 3.9
Underwriting expenses 20 16 21.6 65 56 16.7
Underwriting
profit (loss) $(1) $(30) 96.4 $23 $(51) 145.9
Combined ratio:
Loss and loss
expenses
excluding
catastrophes 63.9% 66.9% 61.1% 67.1%
Catastrophe loss and
loss expenses 6.3 19.3 3.5 11.6
Loss and loss
expenses 70.2% 86.2% 64.6% 78.7%
Commission expenses 20.5 20.9 20.8 20.5
Underwriting expenses 9.8 8.3 10.7 9.4
Combined ratio 100.5% 115.4% 96.1% 108.6%
* The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 12 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles (non-GAAP).
Life Insurance Operations
(In millions) Three months ended Nine months ended
September 30, September 30,
2005 2004 Change % 2005 2004 Change %
Written premiums $56 $45 23.8 $163 $132 23.3
Earned premiums $25 $25 0.2 $78 $77 1.8
Investment income,
net of expenses 25 23 6.0 73 68 8.4
Other income 1 1 16.7 3 2 10.7
Total revenues,
excluding realized
investment gains
and losses 51 49 3.3 154 147 5.0
Policyholder benefits 27 23 16.8 77 71 8.0
Expenses 12 14 (17.2) 37 40 (6.9)
Total benefits and
expenses 39 37 4.2 114 111 2.7
Net income before
income tax and
realized investment
gains and losses 12 12 0.5 40 36 12.2
Income tax 4 4 (1.2) 13 12 12.3
Net income before
realized investment
gains and losses $8 $8 1.4 $27 $24 12.2
* The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 12 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles (non-GAAP).
Investment Operations
(In millions) Three months ended Nine months ended
September 30, September 30,
2005 2004 Change % 2005 2004 Change %
Investment income:
Interest $70 $64 8.7 $208 $188 10.9
Dividends 64 58 8.8 180 176 2.7
Other 2 3 (31.6) 6 5 18.5
Investment expenses (2) (1) (24.5) (4) (4) (29.1)
Total net
investment
income $134 $124 7.7 $390 $365 6.9
Investment interest
credited to contract
holders $(13) $(11) 13.8 $(38) $(34) 13.5
Net realized
investment gains
and losses:
Other-than-temporary
impairment charges $(1) $(5) 82.5 $(1) $(8) 83.4
Realized investment
gains and losses 12 8 50.7 41 70 (41.5)
Change in valuation
of embedded
derivatives 5 (10) 145.7 (2) (7) 69.1
Net realized
investment gains $16 $(7) 339.2 $38 $55 (31.7)
Investment operations
income $137 $106 28.9 $390 $386 0.8
Balance Sheet
(Dollars in millions) September 30, December 31, September 30,
2005 2004 2004
Balance Sheet Data
Total assets $15,984 $16,107 $15,806
Invested assets 12,591 12,677 12,242
Shareholders' equity 6,015 6,249 6,084
Ratio Data
Return on equity, annualized 9.1% 9.4% 8.5%
Return on equity, annualized,
based on comprehensive income (0.8)% 4.6% 0.7%
Cincinnati Financial Corporation offers property and casualty insurance, its main business, through The Cincinnati Insurance Company, The Cincinnati Indemnity Company and The Cincinnati Casualty Company. The Cincinnati Life Insurance Company markets life and disability income insurance and annuities. CFC Investment Company offers commercial leasing and financing services. CinFin Capital Management Company provides asset management services to institutions, corporations and individuals. For additional information about the company, please visit http://www.cinfin.com. This is a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. Certain forward-looking statements contained herein involve potential risks and uncertainties. The company's future results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to:
Further, the company's insurance businesses are subject to the effects of changing social, 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 recent measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain. Readers are cautioned that the company undertakes no obligation to review or update the forward-looking statements included herein.
Cincinnati Financial Corporation
Consolidated Balance Sheets
(Dollars in millions except per September 30, December 31,
share data) 2005 2004
Assets (unaudited)
Investments
Fixed maturities, at fair value (amortized
cost: 2005-$5,377; 2004-$4,854) $ 5,517 $ 5,141
Equity securities, at fair value
(cost: 2005-$2,043; 2004-$1,945) 7,031 7,498
Other invested assets 43 38
Cash 98 306
Investment income receivable 114 107
Finance receivable 100 95
Premiums receivable 1,163 1,119
Reinsurance receivable 711 680
Prepaid reinsurance premiums 14 15
Deferred policy acquisition costs 431 400
Property and equipment, net, for company use
(accumulated depreciation: 2005-$226; 2004-$206) 167 156
Other assets 108 75
Separate accounts 487 477
Total assets $ 15,984 $ 16,107
Liabilities
Insurance reserves
Loss and loss expense reserves $ 3,706 $ 3,549
Life policy reserves 1,337 1,194
Unearned premiums 1,606 1,539
Other liabilities 438 474
Deferred income tax 1,604 1,834
6.125% senior notes due 2034 371 371
6.90% senior debentures due 2028 28 420
6.92% senior debentures due 2028 392 0
Separate accounts 487 477
Total liabilities 9,969 9,858
Shareholders' equity
Common stock, par value-$2 per share;
authorized: 2005-500 million shares,
2004-200 million shares; issued: 2005-194
million shares, 2004-185 million shares 389 370
Paid-in capital 965 618
Retained earnings 1,958 2,057
Accumulated other comprehensive
income-unrealized gains on investments
and derivatives 3,329 3,787
Treasury stock at cost (2005-19 million
shares, 2004-18 million shares) (626) (583)
Total shareholders' equity 6,015 6,249
Total liabilities and
shareholders' equity $ 15,984 $ 16,107
Cincinnati Financial Corporation
Consolidated Statements of Income
(In millions except per
share data) Three months ended Nine months ended
Sept. 30, Sept. 30,
2005 2004 2005 2004
(unaudited) (unaudited)
Revenues
Earned premiums
Property casualty $ 765 $ 733 $ 2,283 $ 2,166
Life 25 25 78 77
Investment income, net
of expenses 134 124 390 365
Realized investment
gains and losses 16 (7) 38 55
Other income 4 4 12 9
Total revenues 944 879 2,801 2,672
Benefits and expenses
Insurance losses and
policyholder benefits 528 525 1,470 1,424
Commissions 160 157 476 468
Other operating expenses 74 63 213 192
Taxes, licenses and fees 17 16 52 55
Increase in deferred
policy acquisition costs (5) (6) (23) (29)
Interest expense 13 11 39 27
Other expenses 6 0 12 6
Total benefits and
expenses 793 766 2,239 2,143
Income before income taxes 151 113 562 529
Provision (benefit) for
income taxes
Current 19 78 126 120
Deferred 15 (55) 17 17
Total provision
for income taxes 34 23 143 137
Net income $ 117 $ 90 $ 419 $ 392
Per common share
Net income-basic $ 0.67 $ 0.51 $ 2.39 $ 2.22
Net income-diluted $ 0.66 $ 0.50 $ 2.37 $ 2.19
Since 1996, Cincinnati Financial has disclosed the estimated impact of stock options on net income and earnings per share in a Note to the Financial Statements. For the first three quarters of 2005 and 2004, diluted net income would have been reduced by approximately 2 cents per share, if option expense, calculated using the binomial option-pricing model, were included as an expense. Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures (See attached tables for 2005 and 2004 data, prior-period reconciliations available at www.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 - when analyzing both GAAP and certain non-GAAP measures may improve understanding of trends in the underlying business, helping 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.
Cincinnati Financial Corporation
Quarterly Net Income Reconciliation
(In millions except per share data)
Three months ended
12/31/05 09/30/05 06/30/05 03/31/05
Net income $117 $158 $144
One-time item 0 0 0
Net income before one-time
item 117 158 144
Net realized investment
gains and losses 10 8 6
Operating income before
one-time item 107 150 138
Less catastrophe losses (43) (9) (2)
Operating income before
catastrophe losses and
one-time item $150 $159 $140
Diluted per share data
Net income $0.66 $0.89 $0.81
One-time item 0.00 0.00 0.00
Net income before one-time
item 0.66 0.89 0.81
Net realized investment
gains and losses 0.05 0.05 0.03
Operating income before
one-time item 0.61 0.84 0.78
Less catastrophe losses (0.24) (0.05) (0.01)
Operating income before
catastrophe losses and
one-time item $0.85 $0.89 $0.79
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.
Cincinnati Financial Corporation
Quarterly Net Income Reconciliation
(In millions except per share data)
Three months ended
12/31/04 09/30/04 06/30/04 03/31/04
Net income $192 $90 $155 $146
One-time item 0 0 0 0
Net income before one-time
item 192 90 155 146
Net realized investment gains
and losses 24 (5) 36 4
Operating income before one-time
item 168 95 119 142
Less catastrophe losses (10) (56) (30) 0
Operating income before
catastrophe losses and
one-time item $178 $151 $149 $142
Diluted per share data
Net income $1.09 $0.50 $0.87 $0.82
One-time item 0.00 0.00 0.00 0.00
Net income before one-time item 1.09 0.50 0.87 0.82
Net realized investment gains
and losses 0.14 (0.03) 0.20 0.03
Operating income before one-time
item 0.95 0.53 0.67 0.79
Less catastrophe losses (0.06) (0.31) (0.17) 0.00
Operating income before
catastrophe losses and
one-time item $1.10 $0.84 $0.84 $0.79
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.
Cincinnati Financial Corporation
Quarterly Net Income Reconciliation
(In millions except per share data)
Six Nine Twelve
months ended months ended months ended
06/30/05 06/30/04 09/30/05 09/30/04 12/31/05 12/31/04
Net income $302 $301 $419 $392 $584
One-time item 0 0 0 0 0
Net income before
one-time item 302 301 419 392 584
Net realized
investment gains
and losses 14 40 24 36 60
Operating income
before one-time
item 288 261 395 356 524
Less catastrophe
losses (11) (30) (54) (86) (96)
Operating income
before catastrophe
losses and
one-time item $299 $291 $449 $442 $620
Diluted per share
data
Net income $1.70 $1.77 $2.37 $2.19 $3.28
One-time item 0.00 0.00 0.00 0.00 0.00
Net income before
one-time item 1.70 1.77 2.37 2.19 3.28
Net realized
investment gains
and losses 0.08 0.24 0.14 0.20 0.35
Operating income
before one-time
item 1.62 1.53 2.23 1.99 2.93
Less catastrophe
losses (0.06) (0.18) (0.30) (0.48) (0.54)
Operating income
before catastrophe
losses and
one-time item $1.68 $1.71 $2.53 $2.47 $3.47
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.
Cincinnati Insurance Group
Quarterly Property Casualty Data - Consolidated
(Dollars in millions)
Three months ended
12/31/05 9/30/05 6/30/05 3/31/05
Premiums
Adjusted written premiums
(statutory) $764 $781 $787
Written premium adjustment -
statutory only (3) 10 10
Reported written premiums
(statutory)* $761 $791 $797
Unearned premiums change 4 (26) (44)
Earned premiums $765 $765 $753
Statutory combined ratio
Reported statutory combined
ratio* 96.6 % 86.6 % 87.4 %
Written premium adjustment -
statutory only nm nm nm
One-time item 0.0 0.0 0.0
Adjusted statutory combined
ratio 96.6 % 86.6 % 87.4 %
Less catastrophe losses 8.6 2.0 0.3
Adjusted statutory combined
ratio excluding
catastrophe losses 88.0 % 84.6 % 87.1 %
Reported commission expense
ratio* 20.3 % 19.3 % 16.8 %
Written premium adjustment -
statutory only nm nm nm
One-time item 0.0 0.0 0.0
Adjusted commission expense
ratio 20.3 % 19.3 % 16.8 %
Reported other expense ratio* 10.8 % 10.3 % 9.8 %
Written premium adjustment -
statutory only nm nm nm
One-time item 0.0 0.0 0.0
Adjusted other expense ratio 10.8 % 10.3 % 9.8 %
Reported statutory expense
ratio* 31.1 % 29.6 % 26.6 %
Written premium adjustment -
statutory only nm nm nm
One-time item 0.0 0.0 0.0
Adjusted statutory expense
ratio 31.1 % 29.6 % 26.6 %
GAAP combined ratio
GAAP combined ratio 96.6 % 87.5 % 88.9 %
One-time item 0.0 0.0 0.0
GAAP combined ratio before one-
time item 96.6 % 87.5 % 88.9 %
Cincinnati Insurance Group
Quarterly Property Casualty Data - Consolidated
(Dollars in millions)
Three months ended
12/31/04 09/30/04 06/30/04 03/31/04
Premiums
Adjusted written premiums
(statutory) $748 $750 $761 $767
Written premium adjustment -
statutory only (25) 0 (27) 23
Reported written premiums
(statutory)* $723 $750 $734 $790
Unearned premiums change 31 (17) (17) (74)
Earned premiums $754 $733 $717 $716
Statutory combined ratio
Reported statutory combined
ratio* 83.6 % 97.9 % 91.2 % 85.1 %
Written premium adjustment -
statutory only nm nm nm nm
One-time item 0.0 0.0 0.0 0.0
Adjusted statutory combined
ratio 83.6 % 97.9 % 91.2 % 85.1 %
Less catastrophe losses 2.0 11.7 6.5 0.1
Adjusted statutory combined
ratio excluding
catastrophe losses 81.6 % 86.2 % 84.7 % 85.0 %
Reported commission expense
ratio* 19.7 % 19.9 % 18.9 % 18.3 %
Written premium adjustment -
statutory only nm nm nm nm
One-time item 0.0 0.0 0.0 0.0
Adjusted commission expense
ratio 19.7 % 19.9 % 18.9 % 18.3 %
Reported other expense ratio* 11.0 % 9.5 % 10.8 % 9.3 %
Written premium adjustment -
statutory only nm nm nm nm
One-time item 0.0 0.0 0.0 0.0
Adjusted other expense ratio 11.0 % 9.5 % 10.8 % 9.3 %
Reported statutory expense
ratio* 30.7 % 29.4 % 29.7 % 27.6 %
Written premium adjustment -
statutory only nm nm nm nm
One-time item 0.0 0.0 0.0 0.0
Adjusted statutory expense ratio 30.7 % 29.4 % 29.7 % 27.6 %
GAAP combined ratio
GAAP combined ratio 82.6 % 97.8 % 91.9 % 87.1 %
One-time item 0.0 0.0 0.0 0.0
GAAP combined ratio before one-
time item 82.6 % 97.8 % 91.9 % 87.1 %
Cincinnati Insurance Group
Quarterly Property Casualty Data - Consolidated
(Dollars in millions)
Twelve
Six months ended Nine months ended months ended
6/30/05 6/30/04 9/30/05 9/30/04 12/31/05 12/31/04
Premiums
Adjusted written
premiums
(statutory) $1,568 $1,528 $2,332 $2,278 $3,026
Written premium
adjustment -
statutory only 20 (4) 17 (4) (29)
Reported written
premiums
(statutory)* $1,588 $1,524 $2,349 $2,274 $2,997
Unearned premiums
change (70) (92) (66) (108) (78)
Earned premiums $1,518 $1,432 $2,283 $2,166 $2,919
Statutory combined
ratio
Reported
statutory
combined ratio* 86.9 % 88.1 % 90.1 % 91.4 % 89.4 %
Written premium
adjustment -
statutory only nm nm nm nm nm
One-time item 0.0 0.0 0.0 0.0 0.0
Adjusted
statutory
combined ratio 86.9 % 88.1 % 90.1 % 91.4 % 89.4 %
Less catastrophe
losses 1.1 3.3 3.6 6.1 5.1
Adjusted
statutory
combined ratio
excluding
catastrophe
losses 85.8 % 84.8 % 86.5 % 85.3 % 84.3 %
Reported
commission
expense ratio* 18.0 % 18.6 % 18.8 % 19.0 % 19.2 %
Written premium
adjustment -
statutory only nm nm nm nm nm
One-time item 0.0 0.0 0.0 0.0 0.0
Adjusted
commission
expense ratio 18.0 % 18.6 % 18.8 % 19.0 % 19.2 %
Reported other
expense ratio* 10.0 % 10.0 % 10.2 % 9.8 % 10.1 %
Written premium
adjustment -
statutory only nm nm nm nm nm
One-time item 0.0 0.0 0.0 0.0 0.0
Adjusted other
expense ratio 10.0 % 10.0 % 10.2 % 9.8 % 10.1 %
Reported
statutory
expense ratio* 28.0 % 28.6 % 29.0 % 28.9 % 29.3 %
Written premium
adjustment -
statutory only nm nm nm nm nm
One-time item 0.0 0.0 0.0 0.0 0.0
Adjusted
statutory
expense ratio 28.0 % 28.6 % 29.0 % 28.9 % 29.3 %
GAAP combined ratio
GAAP combined
ratio 88.2 % 89.5 % 91.0 % 92.3 % 89.8 %
One-time item 0.0 0.0 0.0 0.0 0.0
GAAP combined
ratio before
one-time item 88.2 % 89.5 % 91.0 % 92.3 % 89.8 %
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.
Cincinnati Insurance Group
Quarterly Property Casualty Data - Commercial Lines
(Dollars in millions)
Three months ended
12/31/05 9/30/05 6/30/05 3/31/05
Premiums
Adjusted written premiums
(statutory) $547 $557 $617
Written premium adjustment --
statutory only (1) 9 12
Reported written premiums
(statutory)* $546 $566 $629
Unearned premiums change 18 (3) (78)
Earned premiums $564 $563 $551
Statutory combined ratio
Reported statutory combined
ratio* 95.5 % 83.9 % 85.5 %
Written premium adjustment --
statutory only nm nm nm
One-time item 0.0 0.0 0.0
Adjusted statutory combined
ratio 95.5 % 83.9 % 85.5 %
Less catastrophe losses 9.5 0.4 1.1
Adjusted statutory combined
ratio
excluding
catastrophe losses 86.0 % 83.5 % 84.4 %
GAAP combined ratio
GAAP combined ratio 95.2 % 84.8 % 87.5 %
One-time item 0.0 0.0 0.0
GAAP combined ratio before one-
time item 95.2 % 84.8 % 87.5 %
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.
Cincinnati Insurance Group
Quarterly Property Casualty Data - Commercial Lines
(Dollars in millions)
Three months ended
12/31/04 09/30/04 06/30/04 03/31/04
Premiums
Adjusted written premiums
(statutory) $555 $530 $537 $587
Written premium adjustment --
statutory only (23) 2 (25) 23
Reported written premiums
(statutory)* $532 $532 $512 $610
Unearned premiums change 19 5 8 (91)
Earned premiums $551 $537 $520 $519
Statutory combined ratio
Reported statutory combined
ratio* 79.1 % 92.0 % 84.1 % 80.3 %
Written premium adjustment --
statutory only nm nm nm nm
One-time item 0.0 0.0 0.0 0.0
Adjusted statutory combined
ratio 79.1 % 92.0 % 84.1 % 80.3 %
Less catastrophe losses 1.3 9.0 3.0 0.2
Adjusted statutory combined
ratio excluding
catastrophe losses 77.8 % 83.0 % 81.1 % 80.1 %
GAAP combined ratio
GAAP combined ratio 78.2 % 91.4 % 84.4 % 82.6 %
One-time item 0.0 0.0 0.0 0.0
GAAP combined ratio before one-
time item 78.2 % 91.4 % 84.4 % 82.6 %
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.
Cincinnati Insurance Group
Quarterly Property Casualty Data - Commercial Lines
(Dollars in millions)
Twelve
Six months ended Nine months ended months ended
6/30/05 6/30/04 9/30/05 9/30/04 12/31/05 12/31/04
Premiums
Adjusted written
premiums
(statutory) $1,174 $1,124 $1,721 $1,656 $2,209
Written premium
adjustment --
statutory only 21 (2) 20 (2) (23)
Reported written
premiums
(statutory)* $1,195 $1,122 $1,741 $1,654 $2,186
Unearned
premiums
change (81) (84) (63) (79) (60)
Earned
premiums $1,114 $1,038 $1,678 $1,575 $2,126
Statutory combined
ratio
Reported
statutory
combined ratio* 84.6 % 82.0 % 88.1 % 85.4 % 83.7 %
Written premium
adjustment --
statutory only nm nm nm nm nm
One-time item 0.0 0.0 0.0 0.0 0.0
Adjusted
statutory
combined ratio 84.6 % 82.0 % 88.1 % 85.4 % 83.7 %
Less catastrophe
losses 0.8 1.6 3.6 4.1 0.0
Adjusted
statutory
combined ratio
excluding
catastrophe
losses 83.8 % 80.4 % 84.5 % 81.3 % 80.3 %
GAAP combined ratio
GAAP combined
ratio 86.1 % 83.5 % 89.2 % 86.2 % 84.1 %
One-time item 0.0 0.0 0.0 0.0 0.0
GAAP combined
ratio before
one-time item 86.1 % 83.5 % 89.2 % 86.2 % 84.1 %
Dollar amounts shown are rounded to millions; certain amounts may not
add due to rounding. Ratios are calculated based on whole dollar
amounts. The sum of quarterly amounts may not
equal the full year as each is computed independently.
nm - Not meaningful
* Statutory data prepared in accordance with statutory accounting
rules as defined by the National Association of Insurance Commissioners
and filed with the appropriate regulatory bodies.
Cincinnati Insurance Group
Quarterly Property Casualty Data - Personal Lines
(Dollars in millions)
Three months ended
12/31/05 09/30/05 06/30/05 03/31/05
Premiums
Adjusted written premiums
(statutory) $217 $223 $170
Written premium adjustment --
statutory only (2) 1 (2)
Reported written premiums
(statutory)* $215 $224 $168
Unearned premiums change (14) (22) 34
Earned premiums $201 $202 $202
Statutory combined ratio
Reported statutory combined
ratio* 99.9 % 93.6 % 94.0 %
Written premium adjustment --
statutory only nm nm nm
One-time item 0.0 0.0 0.0
Adjusted statutory combined
ratio 99.9 % 93.6 % 94.0 %
Less catastrophe losses 6.3 6.2 2.0
Adjusted statutory combined
ratio excluding
catastrophe losses 93.6 % 87.4 % 96.0 %
GAAP combined ratio
GAAP combined ratio 100.5 % 95.3 % 92.7 %
One-time item 0.0 0.0 0.0
GAAP combined ratio before
one-time item 100.5 % 95.3 % 92.7 %
Dollar amounts shown are rounded to millions; certain amounts may not
add due to rounding. Ratios are calculated based on whole dollar
amounts. The sum of quarterly amounts may not equal the full year as
each is computed independently.
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.
Cincinnati Insurance Group
Quarterly Property Casualty Data - Personal Lines
(Dollars in millions)
Three months ended
12/31/04 09/30/04 06/30/04 03/31/04
Premiums
Adjusted written premiums
(statutory) $194 $218 $224 $180
Written premium adjustment --
statutory only (3) (1) (2) 0
Reported written premiums
(statutory)* $191 $217 $222 $180
Unearned premiums change 12 (21) (25) 17
Earned premiums $203 $196 $197 $197
Statutory combined ratio
Reported statutory combined
ratio* 96.0 % 114.4 % 110.1 % 98.7 %
Written premium adjustment --
statutory only nm nm nm nm
One-time item 0.0 0.0 0.0 0.0
Adjusted statutory combined
ratio 96.0 % 114.4 % 110.1 % 98.7 %
Less catastrophe losses 4.2 19.3 15.7 0.0
Adjusted statutory combined
ratio excluding
catastrophe losses 91.8 % 95.1 % 94.4 % 98.9 %
GAAP combined ratio
GAAP combined ratio 94.5 % 115.4 % 111.6 % 98.8 %
One-time item 0.0 0.0 0.0 0.0
GAAP combined ratio before one-
time item 94.5 % 115.4 % 111.6 % 98.8 %
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.
Cincinnati Insurance Group
Quarterly Property Casualty Data - Personal Lines
(Dollars in millions)
Twelve
Six months ended Nine months ended months ended
6/30/05 6/30/04 9/30/05 9/30/04 12/31/05 12/31/04
Premiums
Adjusted
written
premiums
(statutory) $393 $404 $611 $623 $817
Written premium
adjustment --
statutory only (1) (2) (3) (3) (6)
Reported written
premiums
(statutory)* $392 $402 $608 $620 $811
Unearned
premiums change 8 (8) (3) (30) (18)
Earned premiums $404 $394 $605 $590 $793
Statutory combined
ratio
Reported statutory
combined ratio* 93.7 % 104.3 % 95.7 % 107.6 % 104.6 %
Written premium
adjustment --
statutory only nm nm nm nm nm
One-time item 0.0 0.0 0.0 0.0 0.0
Adjusted
statutory
combined ratio 93.7 % 104.3 % 95.7 % 107.6 % 104.6 %
Less catastrophe
losses 2.1 7.8 3.5 11.6 0.1
Adjusted statutory
combined ratio
excluding
catastrophe
losses 91.6 % 96.5 % 92.2 % 96.0 % 94.9 %
GAAP combined ratio
GAAP combined
ratio 94.0 % 105.2 % 96.1 % 108.6 % 105.0 %
One-time item 0.0 0.0 0.0 0.0 0.0
GAAP combined
ratio before
one-time item 94.0 % 105.2 % 96.1 % 108.6 % 105.0 %
Dollar amounts shown are rounded to millions; certain amounts may not
add due to rounding. Ratios are calculated based on whole dollar
amounts. The sum of quarterly amounts may not equal the full year as
each is computed independently.
nm - Not meaningful
* Statutory data prepared in accordance with statutory accounting
rules as defined by the National Association of Insurance Commissioners
and filed with the appropriate regulatory bodies.
SOURCE Cincinnati Financial Corporation |
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