Cincinnati Financial Corporation · NASDAQ:CINF
Cincinnati Financial — Merger or Acquisition (October 2018)
10 slides from Cincinnati Financial's merger presentation, Oct 12, 2018
Slide 1: Cincinnati Financial Corporation Acquisition of MSP
“CINCINNATI FINANCIAL CORPORATION ACQUISITION OF MSP (MSP UNDERWRITING LIMITED) OCTOBER 12, 2018 imme
Slide 2: Forward-looking statements disclaimer
NASDAQ: CINF This presentation contains forward-looking statements that involve risks and uncertainties. Please refer to our various filings with the U.S. Securities and Exchange Commission for factors that could cause results to materially differ from those discussed. The forward-looking informatio
Slide 3: Transaction Summary
TRANSACTION SUMMARY * Acquisition of MSP will expand Cincinnati Financial’s market reach beyond the U.S., deploying more capital, further diversifying earnings * Underwriting for MSP will continue to be managed by the seasoned team operating Lloyd’s Syndicate 318* * Purchase price: £102 million, bas
Slide 4: Transaction Highlights
TRANSACTION HIGHLIGHTS * Supports agency-centered strategy by expanding solutions for specialized accounts and enhancing reinsurance assumed operations * Expected to be accretive to earnings in 2019, assuming a combined ratio of 98% or better for MSP business * MSP 2017 net written premiums of $162
Slide 5: Earnings Accretion Likely in 2019
EARNINGS ACCRETION LIKELY IN 2019 MSP combined ratio of 98% or better expected to result in accretion We expect the combined ratio for the next five years to average 90% to 95% Range of expected earnings accretion by varying CINF actual 2017 results* + $0.01 per share assuming 97.5% combined ratio +
Slide 6: Transaction Continues to Diversify Revenue and Earnings
TRANSACTION CONTINUES TO DIVERSIFY REVENUE AND EARNINGS Cincinnati Financial Combined 2017 Earned Actual 2017 Earned Premiums Premiums Including MSP Commercial Commercial Lines 64% ir 9 Bas once E8S tines MSP 3% Lines 629% 4% Life Life Insurance. Insurance 5% 5% Cincinnati Re 2% Personal Personal Li
Slide 7: MSP Business Mix in 2017
MSP BUSINESS MIX IN 2017 By Class of Business By Geography Central & Other 6% Property Pacific Asia Us & Canad % 4% nada (D&F) 62% ped Europe 5% Aviation FS 7% Caribbean 5% Property (Binder) 31%. Central & South America 7%
Slide 8: Experienced Underwriting Team with Profitable History
EXPERIENCED UNDERWRITING TEAM WITH PROFITABLE HISTORY Loss exposure for MSP is mostly short-tailed, helping to minimize risk of adverse reserve development Potential for profitable growth through well-developed plans for more diverse premiums, with property at approximately 60% of MSP total Business
Slide 9: Other Financial Highlights
OTHER FINANCIAL HIGHLIGHTS * $146 million MSP fixed-maturity securities investments at 6-30-18, generating approximately $2 million in annual investment income * $479 million MSP total assets at 6-30-18, including $112 million cash * $300 million (approximate) balance of MSP loss and loss expense re
Slide 10: Expanding Cincinnati's Opportunities
EXPANDING CINCINNATI'S OPPORTUNITIES « New geographies or lines of business, supporting agents * Complements expansion of large commercial, E&S, HNW and reinsurance * Transaction involves relatively low risk + We are experienced in successfully building new areas of our insurance operation + MSP res
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