Cincinnati Financial Corporation · NASDAQ:CINF
Cincinnati Financial — Investor Presentation (November 2017)
16 slides from Cincinnati Financial's investor presentation, Nov 3, 2017
Slide 1: Cincinnati Financial Corporation
Am CINCINNATI NASDAQ: CINF porsiad uncertainties. Please refer to our various filings with the U.S. Securities and from those discussed, disclosed, be effective only as of that date.
Slide 2: Strategy Overview
Copyight ©2017 Cincinnati STRATEGY OVERVIEW, eee i Competitive advantages: + Relationships leading to agents’ best accounts + Financial strength for stability and confidence * Local decision making and claims excellence Other distinguishing factors: + 57 years of shareholder dividend in Common stock
Slide 3: Long-Term Value Creation
LONG-TERM VALUE CREATION enone * Targeting annual rate of growth in book value plus the percentage of dividends to beginning book value to bp averase: 10% to 13% from 2013 through 2017 11.8% — 10.3% VCR for the first nine months of 2017 + Three performance drivers: — Premium growth above industry av
Slide 4: Cincinnati Financial at a Glance
CINCINNATI FINANCIAL AT A GLANCE vorourn ol + 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 + 57 consecutive years of shareholder ein increases — Yield is at
Slide 5: Outperforming the Industry
OUTPERFORMING THE INDUSTRY ETTER Statutory combined ratio Industry data excludes mortgage and financial guaranty 2016 f= 6.1%, 10yoar = 6.2% STRATEGIES FOR LONG-TERM SUCCESS Pperee) + Financial strength for consistent support to agencies - portfolio, : 4 0.7 ‘no municipal exposure excoeded 0.3% rise
Slide 6: Manage Insurance Profitability / Drive Premium Growth
MANAGE INSURANCE PROFITABILITY: power perso * Ongoing underwriting expertise enhancement precision and segmentation on an individual policy basis + Improving efficiencies and ease of use with technology Steaming processing fr agencies anh company = Helps optimize personalized ser * Investing for the
Slide 7: Select Group of Agencies
SELECT GROUP OF AGENCIES IN 42 STATES vorourn ol 4,704 agency relationships with 2237 locations a, North Carolina ‘Qur Personal Top Five = 54% Ohio, Georgia, Michigan, Indiana, North Carolina P&C Market Share: io: 4.6 1% and her Indiana: 2.7% tase ah Kentucky: 2.4% ina Montana: 2.4% © Hoocavats (no
Slide 8: Appendix: Third-Quarter 2017 Highlights
vorourn ol APPENDIX Income, Dividend & Cash Flow Trends vo Reisane Coded Progam & Fecal 1 Svengh Ratings Valuation Comparison to P THIRD-QUARTER 2017 HIGHLIGHTS _srewsn personal} . ae of $0. 61 per share vs. $1.08 in 3Q16 $46 million, including $34 mill tm higher catastrophe losses Investment income
Slide 9: Income and Shareholder Dividends
INCOME AND SHAREHOLDER DIVIDENDS. $4.00 dons dacared STRONG OPERATING CASH FLOW CONTRIBUTED TO YTD 9-30-17 NET PURCHASES IN INVESTMENT PORTFOLIO personal perso (anmations) $1,100 eer $1,000 irae \neatstophe ‘$900 $800 $700 ‘$600 $600 ‘$400 $300 $200 $100 so 2013 2014 2015 2016 | 9moe16 — 9mos 17 Cop
Slide 10: Cash Dividend Payout Ratio
CASH DIVIDEND PAYOUT RATIO "ASH FLOW SUPPORT PAYOUT. LEVELS peor is aus 66% average payout for 2007 through 2016 100% =— 80% sos 0% o% a7 2008 2009 2010 2011" 2012-2013 2014 20152016 DIVIDEND AS A PERCENTAGE OF NET CASH FLOW FROM OPERATIONS. "stout! personal} 40% 30% 20% 10% 0% 2016 210 201120122019
Slide 11: Property Casualty Reserves
PROPERTY CASUALTY RESERVES YEs “angio Vertical bar represents reasonably likely range (tn miltions) ’ GREATER PRICING PRECISION IMPROVING PROFIT MARGINS personal} ' } i & § a | H wnt ; i a Poy tentan Copyight ©2017 Cincinnati Financial
Slide 12: Premium Growth vs. Industry
PREMIUM GROWTH VS. INDUSTRY 8.1% CAGR APPROXIMATELY DOUBLED INDUSTRY Property casualty net written premium growth he POWER of s=xcinconat 2016 NET EARNED PREMIUMS Consolidated esses $4,740 Billion Persona ines 25% commer ccasualy 2050 MARKET FOR 75% OF AGENCY'S TYPICAL RISKS perso Property Casualty
Slide 13: Investment Income
INVESTMENT INCOME 2% GROWTH YTD 9-30-17: DIVIDENDS UP 6%, INTEREST UP 1% (pretax) W ENAOHC (in maions) $600 $575 $550 $525 $500 S475 $450 $425 400 2012 2013 2014 2015 2016 Protax bond yield: 5.15% 490% 476% 470% 4.60% (Gord atanentotess) Pretax book yield for bonds acquired in 2016: 3.75% 2 8 § 16%
Slide 14: Balanced Income Stability & Capital Appreciation Potential
BALANCES INCOME STABILITY & CAPITAL APPRECIATION POTENTIAL ‘September 30, 2017 DIVERSIFIED EQUITY PORTFOLIO* the POWER of sap s00 | + Appieinesirgest noting Seer CFC | Weightings | + 3.7% of publicly traded common Preto Fa aaa] * 15 etal ivosinnt parte 148 | + owi oy is] dividend income eaticare 7 [
Slide 15: Solid Reinsurance Ceded Program
SOLID REINSURANCE CEDED PROGRAM BALANCES COSTS WITH exewiny EQUITY PROTECTION IS Major Treaties (hao nay 12017) Property catastrophe (s39 maton) For a single event: etain 100% “Teeaty * Collateralized eatastophe bond coverage to Fe S20 miton er ertke + Max exposure for $600M e\ 125 milion e =S tom o
Slide 16: Financial Strength
FINANCIAL STRENGTH RATINGS COMPARISON AM. Bost Fitch Moody's VALUATION COMPARISON TO PEERS ‘pasonal 3 PL OL LIPS Eg Copyight © 2017 Cincnna Financial Corporation. Al igh eserves, Dono eproduce oF nec $n
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