Cincinnati Financial Corporation · NASDAQ:CINF
Cincinnati Financial — INVESTOhio Equity Conference (September 2011)
9 slides from Cincinnati Financial's conference presentation, Sep 21, 2011
Slide 1: Cincinnati Financial Corporation – INVESTOhio Equity Conference
Cincinnati Financial Corporation Steven J. Johnston, FCAS, MAAA, CFA President and Chief Executive Officer INVESTOhio Equity Conference This presentation contains forward-looking statements that involve risks and uncertainties. Please refer to our various filings with the U.S. Securities and Exchang
Slide 2: Cincinnati Financial Profile
Cincinnati Financial Profile 25th largest U.S. property casualty writer based on 2010 written premium Rated A+ by A.M. Best Increased shareholder dividend for 50 consecutive years A record matched by only 9 other publicly traded companies $3.1 billion annual premiums through select agencies in 39 st
Slide 3: Increase Value for Shareholders Measured by Value Creation Ratio
Increase Value for Shareholders Measured by Value Creation Ratio (VCR) -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 2006 2007 2008 2009 2010 VCR - Investment Income & Other VCR - P&C Underwriting VCR - Bond Portfolio Gains VCR - Equity Portfolio Gains Total CINF Shareholder Return (TSR) Target
Slide 4: Cash Dividend Payout Ratio and Investment Portfolio
Cash Dividend Payout Ratio 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend Payout Ratio – Net Income Dividend Payout Ratio – Operating Income Strong capital and cash flow support current dividend payout level Investment Portfolio
Slide 5: Property Casualty Reserves
Property Casualty Reserves Favorable development for 22 consecutive years $3,356 $3,397 $3,498 $3,661 $3,811 2006 2007 2008 2009 2010 Reserve range at 12-31-10 Low end $3,571 High end $3,952 Carried at 63rd percentile (64th percentile at 12-31-09) Values shown are carried loss and loss expense reser
Slide 6: Profitability Improvement Initiatives
Profitability Improvement Initiatives Predictive modeling for improved pricing precision – In use for: Workers’ compensation, homeowner, personal auto – Production status in 3Q11: Commercial auto, property, general liability Technology is improving efficiency, ease of use – Agencies benefit and are
Slide 7: Premium Growth Initiatives
Premium Growth Initiatives New agency appointments – 2011 target: 120 appointments; 2010 actual: 93 appointments – Benefits realized over time as relationships mature and our share increases Targeted marketing – Enhancing our small business strategy, including greater ease of use – Target Markets pr
Slide 8: Select Group of Agencies in States; Current Valuation Is Attractive
Select Group of Agencies in 39 States P&C Market Share: 1% and higher Less than 1% Entered in 2008 and 2009 New states in 2010 Inactive states Headquarters (no branches) 1,281 agency relationships with 1,593 locations Commercial Top Five = 45% Ohio, Illinois, Pennsylvania, Indiana, North Carolina Pe
Slide 9: Why Invest in Cincinnati Financial
Why Invest in Cincinnati Financial Potential for stock price appreciation based on current valuation and long-term potential growth of earnings and book value Clear strategy for profitable growth, proven record of execution History of increasing dividend, attractive current yield Solid capital posit
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