Cincinnati Financial Corporation · NASDAQ:CINF
Cincinnati Financial — Investor Day (March 2025)
30 slides from Cincinnati Financial's investor day presentation, Mar 10, 2025
Slide 1: Cincinnati Financial Investor Day
Cincinnati Financial Investor Day March 10, 2025 A Bridge to Better Since 1950 © 2025 Cincinnati Financial Corporation. All rights reserved. Do not reproduce or post online, in whole or in part, without written permission.
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to risks and uncertainties, including those detailed in our various filings with the U.S. Securities and Ex
Slide 3: A Bridge to Better Since 1950
A Bridge to Better Since 1950 STEVE SPRAY President and CEO
Slide 4: Welcome & CEO Overview, Panel Discussions, Q&A
Welcome & CEO Overview Panel Discussions Financial Review, Investment Approach, Risk Management Commercial Lines, Excess & Surplus Lines Personal Lines, Life Insurance Operations Panel Participants Q&A Session Business Unit Breakout Q&A A Bridge to Better Since 1950
Slide 5: A Bridge to Better Since 1950
“ Agents Overwhelming Claims Service Empowered Field Associates eadquarters Support Financial Strength Ethical Behavior
Slide 6: Successful Strategy Proven Over Time
Successful Strategy Proven Over Time 64 Consecutive years of dividend increases P&C Premium Growth Combined Ratio Value Creation Ratio 8.0% 96.2% 13.0% 15-year CAGR, 3 percentage points 15-year average, 4 percentage points 15-year annual average better than industry better than industry Improved div
Slide 7: Growing Expertise and Products
Growing Expertise and Products Cincinnati Specialty Cincinnati Commercial Lines Cincinnati Specialty Underwriters Private Client Key Accounts Underwriters – PLD 2011 2015 2019 2022 2007 2014 2016 2020 Predictive Cincinnati Re Cincinnati Small Business and Analytics Global Leveraging Lloyd’s & Risk U
Slide 8: Agency Appointments Support Long-Term Growth
Agency Appointments Support Long-Term Growth Ohio – first and largest state → 2% share of P&C industry premiums, representing the average if all 50 states were equal size → 13% share of Cincinnati premiums, produced by agents representing Countrywide Agency Appointments 8% of our total agencies 84 1
Slide 9: Experienced and Motivated Management Team
Experienced and Motivated Management Team Roger Brown Teresa Cracas Dawn Chapel Angie Delaney Don Doyle, Jr. Sean Givler Phil Sandercox Chief Operating Officer Chief Risk Officer SVP Excess & SVP Sales & SVP Executive EVP Commercial and SVP Reinsurance Cincinnati Life Surplus Lines Marketing Advisor
Slide 10: Finance, Investments and Risk Management
Finance, Investments and Risk Management Steve Soloria Mike Sewell Chief Investment Officer Chief Financial Officer Teresa Cracas Chief Risk Officer A Bridge to Better Since 1950 10
Slide 11: Operating Results: Key to Improving Value Creation
Operating Results: Key to Improving Value Creation 0.5% VCR increase with 1% improvement in combined ratio 0.5% VCR increase with 8% growth in investment income AVERAGE ANNUAL VCR: 11.7% 14.2% 13.0% 40% 14% 12% 30% 10% Bond 20% Portfolio Gains 8% 2.5% Equity Portfolio Gains 6% 0.5% 2.9% P&C10% Under
Slide 12: Capital Management
Capital Management Invest in our Paying and increasing Invest relatively more insurance business shareholder dividends in equity securities Repurchase shares M&A opportunities A Bridge to Better Since 1950 12
Slide 13: Equity Portfolio Enhances Investment Income and Book Value Growth
Equity Portfolio Enhances Investment Income and Book Value Growth 5.4% equity portfolio gains contribution to 15-year average annual book value growth Negative 0.2% contribution from bond portfolio change in unrealized gains plus realized gains 15-year CAGR: 7.2% dividend income; 4.1% interest inc
Slide 14: Risk Management and Analytics Enhances Results
Risk Management and Analytics Enhances Results Assessment of risk capital is an important part of Enterprise Risk Management Testing is designed to ensure adequate capital relative to our risk tolerance Testing also includes modeling to assess risk from catastrophes in business unit plans Op
Slide 15: Risk Management Review Cycle
Risk Management Stochastic Review Cycle Capital Model Allocation of Risk and pricing actuaries work closely Understanding the Risks capital to segment, line, with business units to optimize pricing, territory growth and other business plan elements CONTINUOUS CYCLE OF COLLABORATION Credentialed staf
Slide 16: Reserve Adequacy Considerations
Reserve Adequacy Considerations Each accident year for commercial casualty has developed favorably except 2019 IBNR at 12 months has increased significantly in recent years Modest net unfavorable reserve development in aggregate during recent calendar years $26 million in 2024, $15 million in
Slide 17: Commercial Lines and Excess & Surplus Lines Insurance
Commercial Lines and Excess & Surplus Lines Insurance Don Doyle, Jr. SVP Executive Advisor Sean Givler EVP Commercial, Sales & Marketing and Life insurance Angie Delaney SVP Sales & Marketing A Bridge to Better Since 1950 17
Slide 18: Commercial Lines Profitable Growth Reflects Continuous Improvement
Commercial Lines Profitable Average CR 93.8% Growth Reflects Continuous NWP CAGR 4.8% Improvement 98.3% 99.2% 5,500 96.4% 95.4% 96.2% 100.0% 94.2% 92.9% 93.2% 95.0% 4,500 88.6% 83.8% 90.0% 85.0% 3,500 ($ in millions) 80.0% 2,500 $4,690 75.0% $4,159 $4,336 $3,410 $3,534 $3,811 70.0% 1,500 $3,025 $3,1
Slide 19: Built for Agency Success
Built for Agency Success Field model positions us for strong agency Sales & relationships at a local level Marketing → Claims → Commercial Lines → Customer Care Center → Cincinnati Life → Excess & Surplus Lines → Loss Control → Management Liability & Surety → Machinery & Equipment Agents → Personal
Slide 20: Segmentation Improves Price Adequacy
Segmentation Improves Price Adequacy Models with predictive analytics identify policies needing relatively higher pricing Lower retention of least adequately priced business reflects pricing action Commercial Lines Modeled Package Policy Count Retention 90% 86% We retain almost 90% of the most a
Slide 21: E&S Provides Stronger Profit Margin and Growth Opportunities
E&S Provides Stronger Profit Margin and Growth Opportunities Average CR 81.8% NWP CAGR 15.6% Combined ratio and premium growth outperform E&S market 12 consecutive years at or below 94% combined ratio (top quartile) 800 94.0% 100.0% 700 90.0% 89.5% 90.4% 90.6% 95.0% ($ in millions) 90.0% 600 81.
Slide 22: Our E&S Advantages
Our E&S Advantages Only E&S carrier No ceding of Relatively low Underwriters with all business underwriting risk profile averaging produced by authority to Excellent spread of risk 20+ years independent brokers, across classes of business experience agencies wholesalers and geography or MGAs Majorit
Slide 23: E&S Advantages for Agencies
E&S Advantages for Agencies Higher Compensation Additional Differentiators No wholesale broker involved that Direct access to underwriters through in-house brokerage requires sharing commission Direct bill options Potential enhancement of profit sharing Most policies issued within a day of binding c
Slide 24: Personal Lines Insurance and Life Insurance Operations
Personal Lines Insurance and Life Insurance Operations Will Van Den Heuvel Roger Brown EVP Specialty and Chief Operating Officer Personal Insurance SVP – Cincinnati Life A Bridge to Better Since 1950 24
Slide 25: Personal Lines Profitability Despite Elevated Catastrophe Losses
Personal Lines Profitability Despite Average CR 99.6% Elevated Catastrophe Losses NWP CAGR 10.9% Catastrophe loss ratio average for 2023-24 exceeded 10-year average by 4 percentage points 3,000 101.3% 101.4% 103.0% 101.9% 99.8% 100.4% 110.0% 97.1% 99.2% 97.5% 2,500 94.0% 100.0% 95.1% 2,000 90.0% 83.
Slide 26: Diversification by Geography and Product Improved Profitability
Diversification by Geography and Product Improved Profitability Diversified and balanced portfolio helps mitigate volatile catastrophe effects • One of the few companies to offer solutions for middle market and high net worth customers • High net worth property risk volatility effect reduced by diff
Slide 27: Agencies Benefit from Broad Personal Lines Appetite
Agencies Benefit from Broad Personal Lines Appetite Our unique agency- Strong value proposition Cincinnati’s mix of centric strategy provides for clients personal lines premiums significant advantages • Fewer agents; deeper relationships • Broad and comprehensive • 57% private client; 43% middle mea
Slide 28: Life Insurance Segment Diversifies Risk and Benefits Agencies
Life Insurance Segment Diversifies Risk and Benefits Agencies Operating Income CAGR 10.4% Average contribution to operating income over past 10 years: 8% for Cincinnati Life (ranging from 5% to 10%) 32% for property casualty (ranging from 16% to 54%) 110 9% 10% 10% 11% 100 8% 9% 9% 10% 90 9% 6%
Slide 29: Life Insurance Tailored to Agency Needs
Life Insurance Tailored to Agency Needs 82% of our property casualty agency relationships offer Cincinnati Life products Life insurance and annuity products are attractive to agencies - Term life insurance focus tends to be easier for agents to explain - Meets wide range of client needs and soph
Slide 30: Q&A Session
Q&A Session Contact dennis_mcdaniel@cinfin.com with additional questions or for more information A Bridge to Better Since 1950 30