Cincinnati Financial Corporation · NASDAQ:CINF
Cincinnati Financial — Investor Presentation (March 2017)
16 slides from Cincinnati Financial's investor presentation, Mar 3, 2017
Slide 1: Cincinnati Financial Corporation Investor Handout
aij CINCINNATI FINANCIAL CORPORATION INVESTOR HANDOUT March 2017 NASDAQ: CINF npeak fouder inperson uncertainties. Please refer to our various filings with the U.S. Securities and from those discussed, disclosed, |, 2017, be effective only as of that date. Its inclusion
Slide 2: Strategy and competitive advantages
ACTION: STRATEGY Tae (es, Competitive advantages: + Relationships leading to agents’ best accounts + Financial strength for stability and confidence * Local decision making and claims excellence Other distinguishing factors: + 56 years of shareholder dividend increases Common stocks are approximatel
Slide 3: Long-Term Value Creation
LONG-TERM VALUE CREATION ACTIONS Speck nperson * 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 11.8% = 14.5% + Operating earings compon * Roalzed plus umcozd cpt gain component was 12 pits higher *
Slide 4: Financial at a Glance
FINANCIAL ATAGLANCE “TON! + Top 25 U.S. P&C insurer + A.M. Best rating: A+ Superior + $4.7 billion 2016 premiums: cial 25% Personal 4% Excess & Surplus 1% Cincinnati Res™ + Agency-centered business model is time-tested + 56 consecutive years of shareholder tint increases ~ Only eight U.S. public com
Slide 5: Outperforming the Industry
OUTP ERT ORMING THE INDUSTRY TIO 5 POINTS BETTER bee f i Statutory combined ratio Industry data excludes mortgage and financial guaranty 2016 ar = 6.1%, 10-year = 6.2% FOR LONG-TERM SUCCESS ACTIONS & + Fi for rtf + No corporate exposure exceeded 0.7% of total bond portfolio at 12-31-16, 'n0 municipa
Slide 6: Manage Profitability, Drive Premium Growth
MANAGE PROFITABILITY “ZIONS * Ongoing underwriting expertise enhancement precision and segmentation on an individual poicy basis + Improving efficiencies and ease of use with technology Steaming processing apenis andthe company = Helps optimize personalized ser + Investing for the future DRIVE PREMI
Slide 7: Select Group of Agencies
SELECT GROUP OF AGENCIES IN 41 STATES TONS ‘iar. 4,614 agency relationships with 2,090 locations (et of Decne 2, 2018) 1ur Commercial Top Five = 39% oe Ilinois, Pennsylvania, 1a, North Carolina ‘Qur Personal Top Five = 54% Ohio, Georgia, Michigan, Indiana, North Carolina P&C Market Share: and hgher
Slide 8: Appendix: Fourth-Quarter 2016 Highlights
APPENDIX Income, Dividend & Cash Flow Trends Pricing Precision, Premium Growth Trends & Busi Investment Portfolio Management & Perfor Reinsurance Ceded P am Fra rh Ratings \Valuation Comparison to Peer FOURTH-QUARTER 2016 HIGHLIGHTS M<1/985,¢ Pisses etn + EPS of $0.60 per share vs. $0.94 in 4Q15 — O
Slide 9: Income and Dividend Trends
INCOME AND DER ACTION! $4.00 $3.50, 's3.00 's2.50 's2.00 $1.50 $1.00 $0.50 's0.00 STRONG OPERATING CASH FLOW IN INVESTMENT PORTFOLIO iiiaiacalt week inn (an mtions) st 2012 2013 2014 2015 2016 Copyright ©2017 Cincinat Fi aa ~ . :
Slide 10: Cash Dividend Payout Ratio
CASH DIVIDEND PAYOUT RATIO Me En 120% | 66% average for years 2007 through 2016 100% — ~ o a 2003 2008 | 2006 | 2008 2009 2010 2011* 2012 2013 2014 2015 2016 DIVIDEND AS A PERCENTAGE OF NET CASH FLOW FROM OPERATIONS npaek a 40% 20% 20% 10% | 0% 2008 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 11: Property Casualty Reserves
Copyright ©2017 Cincinat Fi PROPERTY CASUALTY RESERVES. ACTION: YEARS’ ae Vertical bar represents reasonably likely range (tnmitions) ($396), wien, (528) si) si6) GREATER PRICING ERECISION IMPROVING PROFIT MARGI ae ONS £ Fier. } oo : H i Pr wl ' : f i ‘ os — Poy tertan
Slide 12: Premium Growth vs. Industry
PREMIUM GROWTH VS. INDUSTRY 8.1% CAGR y ACTION: 2 fouder inperson Property casualty net written premium growth MARKET FOR 75% OF AGENCY'S TYPICAL RI: 2016 NET EARNED PREMIUMS AURA oegk ‘onsolidated eas Lines Serio itton — omNS teatecor re ivALve} cat Property Casualty Reis ces ncnetiRe $4,482 Billon
Slide 13: Investment Income
INVESTMENT INCOME 4% GROWTH FOR FULL-YEAR 2016: DIVIDENDS UP 7%, eri INTEREST UP 3% (pretax) “rcuder (in ations) le $600 $575 $525 $500 $475 $450 $425 $400 2013 2018 Pretax bond yield: 5.15% 4.90% (Gon atanorotes) INVESTMENT PORTFOLIO INVEST FOR INCOME AND APPRECIATION aeons 6 ‘ses, ‘$15.4 billion f
Slide 14: Diversified Equity Portfolio
DIVERSIFIED EQUITY PORTFOLIO* BALANCES INCOME STABILITY & ACTIONS f g toate, ine December 31, 2016 Portfolio Highliants at 12.31.16 «Blog cae eet sas cre | SBP Pe ighting: the priate Sa | TEST pti nancial 156 [148 | + Tiinrease in 2016 9 1S | 88 gon ncome i 26 [136] - toa [to] | Sebion rato 10.3 ‘30
Slide 15: Solid Reinsurance Ceded Program
SOLID REINSURANCE CEDED PROGRAM BALANCES COSTS WITH ‘SHAREHOLDERS’ EQUITY PROTECTION ATOMS 3s Treatles nan Sateen Property catastrophe (529 sion) For a single event: reat tan 100% “Catatrtze xasvope ted cove tijerssmonrcrimne’ _* MaX-exposr S600 event = $25 millon toe enc nL of shart ety por RAR mod
Slide 16: Valuation Comparison to Peers
VALUATION COMPARISON TO PEERS eet) LLEPL IEA SEF
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