Cincinnati Financial Corporation · NASDAQ:CINF
Cincinnati Financial — Investor Presentation (March 2015)
17 slides from Cincinnati Financial's investor presentation, Mar 10, 2015
Slide 1: Cincinnati Financial Corporation Investor Handout
AAS CINCINNATI FINANCIAL CORPORATION Investor Handout March 2015 Nasdaq: CINF entation contains forward looking statements that lease refer to our various lings withthe U.S Secures and Exchange Commission ir factors that could cause results to materially differ from those discusse: The forward-| ook
Slide 2: Strategy Overview
Strategy Overview + Competitive advantages: + Relationships leading to agents’ best accounts + Financial strength for stability and confidence + Local decision making and claims excellence * Other distinguishing factors: + 54 years of shareholder dividend increases + Common stocks for over 30% of in
Slide 3: Cincinnati Financial at a Glance
Cincinnati Financial at a Glance + Top 25 U.S. PIC insurer + AM. Best rating: A+ Superior + $4.2 billion 2014 premiums: 25% personal 5% life ‘3% excess & surplus + Competitive advantages: — Relationships leading to agents’ best accounts ~ Financial strength for stability and confidence — Local decis
Slide 4: Long-Term Value Creation
Long-Term Value Creation + Targeting annual rate of growth in book value plus the percentage of dividends to beginning book value to average 10% to 13% from 2013 through 2017 = Value creation ratio (VCR) for 2010 through 2014 averaged 11.7% ~ 12.656 VCR for 2014 was down 3.5 points from 2013 * Opera
Slide 5: Combined Ratio Reflects Improved Profitability Trends
Combined Ratio Reflects Improved itability Trends Combined ratio before catastrophe losses. wos a] Weather | ; losses other than = catastrophes (non-cat al weather) cats on am catastrophe and weather losses Year20r1Year2012.—Year2013. | ‘Year 2014 Financial strength for consistent support to agencie
Slide 6: Improve Profitability / Drive Premium Growth
Improve Profitability * Enhancing underwriting expertise and knowledge + Technology is improving efficiencies ~ Streamining processing for agencies and the company ptinize personalized service is Ongoing efforts for greater efficiency and effectiveness} = Sin Thtease | in futstime equivalent staff a
Slide 7: Premium Growth Potential
Premium Growth Potential ‘we eam approximately 10% market share in new + Historical agencies within 10 yé 2013, 5% for appointments during 2009-12, 9% for appointments ‘during 2004-08 Our agenei i business other carriers, representing potential for us pr + We help our agencies grow their businesses
Slide 8: Appendix
APPENDIX ao 2012 2013 “Operating Income mmiNet Income -w-Dividends declared Porshe baae
Slide 9: 60% average for years 2006 through 2014
60% average for years 2006 through 2014 li ili 2007" 2008 2000" 20102011" 2012 2013 2014 Dividend as a Percentage of Net Cash Flow From Operations : : = = : : : : =H & "2008" 2008
Slide 10: Strong Operating Cash Flow
Strong Operating Cash Flow to $324M 2014 Net. chases in Investment Portfolio 2011 2012 Outperforming the Industry ‘Statutory combined ratio Industry data excludes mertgage and financial uaranty [vit 08% 107% om om ox om 114: Spar = 7.4%, 1900 = 6.0%
Slide 11: Greater Pricing Precision
Greater Pricing Precision Is Improving Profit Margins = Growth Rate Outpaced Industry as Market Firmed Premium Growth Vs. Industry Property casualty net written premium growth se tatecinanty ecutig motgage anna gurty (AM Best)
Slide 12: Market for 75% of Agency's Typical Risks
Market for 75% of Agency’s Typical Risks 2014 Net Eamed Premiums es. Property C com ary ores a Sob pe Prone a Coney Premium Growth Potential Steadily Increase Our Share Within Appointed Agencies ‘currently appointed agencies is approximately 11% Market sare per agency reporting location by year appo
Slide 13: Property Casualty Reserves
Property Casualty Reseives Favorable Development fo Vertical bar represents reasonably ikely range 96 Soe sen bed $3813 ‘$309 205) 36) oun oe)
Slide 14: Investment Income
Investment Income 4% Growth in 2014: Dividends up 13%, Interest up 1% ( 2010 zon 2012 213 2014 Prete ond el 8.48% 631% 5.15% 490% 476% 20% Pretax book yield as of 12-31-14 for bonds maturing in 20154 37%, 20164 494, 20174805 2016, 7.7% 2017, 19.0% n 2018-19 Investment Portfolio Invest for Income and
Slide 15: Diversified Equity Portfolio
Diversified Equity Portfolio* Balances Income Stability & Capital Appreciation Potential December 31,2014 Pont 4 ope est helsra wap soo | estates ete conmen Secor SFE | weighing | $5.2 estman pro 773% | 108% |+ dividend income aaa 103 Tea ]* 50 0f50 companies n core a 9 [ ar ol |[enecy : 30], |[ con
Slide 16: Solid Reinsurance Program
Solid Reinsurance Program Balances Costs With Shareholders’ Equity Protection Maloc Treaties ‘Coverage and Retention Summary at 01-01-15, Property catastrophe saa) Fora single event * Retain 100% attra estas tod fot Property per isk 8 $25 ition Fora a single loss rope tain 10056 mon {Retain OW of os
Slide 17: Valuation Comparison to Peers
Valuation Comparison to Peers PLOPLILSE PLE
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