Slide 1: Cincinnati Financial Corporation
Cincinnati Financial Corporation June 2012 Am CINCINNAT! Nasdaq: CINF contains f ‘d-looki that Ive risks and uncertainties. Please refer to our various ngs with the U.S. Securities and Exchange Commission for tors that could cause results to materially differ from those issed. d-looki in this been p
Slide 2: Cincinnati Financial at a Glance
Cincinnati Financial at a Glance p 25 U.S. PIC insurer Best Rating: A+ Superior engi or stably end confidence deci ’ng and claims excellen ers oF #2 in approximately 75% of agencies appointed more Forbes and GMll recognize Cincinnati Financial, operating through The Cincinnati Insurance Companies, f
Slide 3: Increase Value for Shareholders (Value Creation Ratio)
e creation ratio (VCR) for 2011 was 6.0%; 2009-11 average as 12.3% 6% VCR for 1Q12, 1.7 points higher than 1Q11 Realized plus unrealized capital gain component was 1.2 points higher Operating eamings plus other component was 0.5 points higher ree performance driver >remium growth above industry aver
Slide 4: Combined Ratio Reflects Improving Underwriting Profitability Trends
mbined Ratio Reflects Improving WAderwriting Profitability Trends | Allcombined ratios in the graph below exclude the effects of catastrophe losses [Year 2010” Year 2011 | yrose2 ‘Av2010 AYO avi2mos at 12 mos exc. cat losses = frategies for Long-Term Success incial strength for consistent support to
Slide 5: Improve Profitability
Improve Profitability dictive modeling tools in use to improve pricing precision orkers’ compensation line of business since the second half of 2009 Homeowner enhanced version in 2010, personal auto since late 2010 Commercial auto, commercial property and general liability since 2011 Ongoing enhance
Slide 6: Premium Growth Potential
Premium Growth Potential ies within 10 years after appointment share eamed in 2011 for all agencies appointed 2010 share eamed in 2010 for all agencies appointed during 2004-07 12 million of $402 million total 2011 standard market new business ten premiums was from agencies appointed since early 201
Slide 7: Appendix
Appendix Income, Dividend & Cash Flow Trends Underwriting & Premium Growth Trends Business Mix & Premium Growth Potential Reserve Adequacy & Development Trends Investment Portfolio Management & Performance Reinsurance, Ratings & Valuation Comparison to Peers AS CINCINNATI Peenccorouna ome and Shareh
Slide 8: Cash Dividend Payout Ratio
Cash Dividend Payout Ratio Strong Capital and Cash Flow Support Recent-year Payout Level + 1Q12 Te + 2011 rd-high 159% (netincome basis) 211% (operating income besis) = 56% for years 2011 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 «Dividend as a Percentage of Net Cash Flow from Operations 103
Slide 9: Operating Cash Flow
Operating Cash Flow Recorc-high Catastrophe Losses Lowered Year 2011 Cash Flow 2009 2010 2011 1911 1012 Cincinnati Typically Outperforms the Industry Statutory combined ratio Industry data excludes mortgage and financial guaranty 5 To.yoar = 5.4%
Slide 10: Greater Pricing Precision
Greater Pricing Precision /s Improving Profit Margins in 2011 by Workers’ Compensation Better Middle. Worse “Premium Growth versus Industry bee As the Market Firms Our Growth Rate Is Outpacing the Industry Property casualty net written premium growth
Slide 11: Market for 75% of Agency's Typical Risks
irket for 75% of Agency's Typical Risks 2011 Net Earned Premiums Consolidated — commercial Lines $3.194 Billion Lines 69% Property Casualty $3.029 Billion Surety and Personal Auto 2% Other Personal 3% Commercial _- Machinery and Cooualy24% —— ERupment 1% Potential within » Cincinnati Appointed Agenc
Slide 12: Property Casualty Reserves
Property Casualty Reserves arable Development for 23 Consecutive Years Vertical bar represents reasonably likely range In millions High end $4,056 carried at 60" percentile $3.97 Development (Favorable) ($248) ($323) (8188) ($308) (8285) 2007 2008 2009 2010 zon eAccident Year Combined Ratios Effect
Slide 13: Investment Income
Investment Income 1% Growth for 2011 First 3 Months 2012 Matched 1011 jpretaxy TUL 2007 2008 2010 2011 eld: (eons at amorizn cos, socks tava) 3.6% 3.5% 3.5% lld to book for bonds maturing in 2012=5.2%, 2013=4.7%, 2014=5.3% Investment Portfolio Invest for Income and Appreciation $12.1 billion fair va
Slide 14: Diversified Equity Portfolio
Diversified Equity Portfolio* Balances Income Stability & Capital Appreciation Potential z Med rice Reta iin 2011 Versus 2.196 for the S&P 500. fran toto ty holding at 3-31-12: Pepsico at 4.4% of publicly-traded common stock pi Bll rvestront porto March 31, 2012 December 31, 2010 S&P 500 S&P 500 cre
Slide 15: Solid Reinsurance Program
Solid Reinsurance Program inces Costs with Shareholders’ Equity Protection Coverage and Retention Summary Fora single event + Retain 100% of ist $75 milion in losses ca + Retain 51.7% for losses at $75-100 milion ‘in + Retain 5.0% to 11.3% at $100-600 milion + Max exposure for SS00M event = $115 mil
Slide 16: Valuation Comparison to Peers
‘aluation Comparison to Peers Ratio of closing price on 06-04-12 to latest reported tangible book value VLOOLIAES LE