Cincinnati Financial Corporation · NASDAQ:CINF
Cincinnati Financial — Investor Presentation (May 2018)
17 slides from Cincinnati Financial's investor presentation, May 3, 2018
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, i effective only as of that date.
Slide 2: Strategy Overview
CCopyight ©2018 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 st
Slide 3: Long-Term Value Creation
LONG-TERM VALUE CREATION vorourn ol + Targeting annual rate of growth in book value plus the percentage of dividends to beginning book value to average 10% to 13% over the next five-year period — Value creation ratio (VCR) for 2013 through 2017 averaged 13.9% + Three performance drivers: = Premium g
Slide 4: Cincinnati Financial at a Glance
CINCINNATI FINANCIAL AT A GLANCE _ rower er perso + Top 25 U.S. P&C insurer + A.M. Best rating: A+ Superior + $5 billion 2017 premiums: mercial 25% Personal 4% Excess & Surplus 5% Life 2% Cincinnati Re®™ + Agency-centered business model is time-tested . o consecutive vers of shareholder sy nile iner
Slide 5: Outperforming the Industry
OUTPERFORMING THE INDUSTRY the POWER of Statutory combined ratio Industry data excludes mortgage and financial guaranty 2017 f= 5.7%, 1Oyoar = 6.8% STRATEGIES FOR LONG-TERM SUCCESS Pperee) + Financial strength for consistent support to agencies - portfolio, : 4 0.8 ‘no municipal exposure excoeded 0.
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 4.724 agency relationships with 2288 locations P&C Market Share: BH 1% and higher Less than 1% Inactive stats © Headquarters (no branches) Ohio, Sent nan cg ABH ean op (Qur Commercial Top Five = 38% Indiana, ‘Qur Personal Top Five = 52% Ohio, Georgia, coon North
Slide 8: First-Quarter 2018 Highlights
vorourn ol APPENDIX Income, Dividend & Cash Flow Trends Coded Program & Agency Statistics ‘Strength Ratings & Valuation Comparison to Peers FIRST-QUARTER 2018 HIGHLIGHTS Sen korall + Net loss $0.19 per share vs. 1Q17 $1.21 net income — $1.53 decrease from investment losses vs. 1017 gains — Majority
Slide 9: Income and Shareholder Dividends
INCOME AND SHAREHOLDER DIVIDENDS sso 2017 stecone -_ ecsns 3250 borat tonorisony meuetee aan S460: ‘US. tax reform $3.50 = $2.50 $1.50 $0.50 soso. 2421828 20K7 Smos 17 Smeets STRONG OPERATING CASH FLOW CONTRIBUTED TO $518M OF FULL-YEAR 2017 NET PURCHASES: in 2017 toes ¢ovmtns Soa ravas $1,100 $1,000
Slide 10: Cash Dividend Payout Ratio
CASH DIVIDEND PAYOUT RATIO "ASH FLOW SUPPORT PAYOUT. LEVELS peor is aus {67% avorage payout for 2008 through 2017 80% 60% 40% 20% 0% 2009 2010 2011" 2012 2013 2014 201520162017" +21 pyar ut cre, 211% cprg ner ae) a shown on a nah lag ees 1 ir belie te to ae eh an haere sat arson en SUS DIVIDEND AS A
Slide 11: Property Casualty Reserves
PROPERTY CASUALTY RESERVES YEARS personal} Vertical bar represents reasonably likely range ge at 12-91-17 Low end $4,709 (omitions) High end $5,155 CCatied at 72% prcantio $3,942 (forme) ($147) (308) (s188) (5188) 9) 2013 2018 2015 2016 GREATER PRICING PRECISION IMPROVING PROFIT MARGINS ‘personal ”
Slide 12: Commercial Casualty Ratios
COMMERCIAL CASUALTY RATIOS LOSS & ALAE FOR AC 12 MONTHS " ron EN" | iy EI 520% 520% s20% 520% Une = Rate Component Pa, 1ONR) 33 PSRTRTRRTGRTTT TE tot Lose AE us one COMMERCIAL CASUALTY RATIOS THROUGH 1 sey RESET EE z 5 (r= Eos tina Los ALAE Ratt Ear Preis i | i i : ; i 20
Slide 13: Premium Growth vs. Industry
PREMIUM GROWTH VS. INDUSTRY 6.8% CAGR APPROXIMATELY DOUBLED INDUSTRY". bowen! Property casualty net written premium growth s=xcinconat MARKET FOR 75% OF AGENCY'S TYPICAL RISKS 2017 NET EARNED PREMIUMS RASH Consolidated $4,954 Billion Property Casualty $4.722 Billion cess Supls. Cro Re 2% Contest Pro
Slide 14: Investment Income
INVESTMENT INCOME ix GHOWTH I 770 331-16 OMDENDS UR@S, INTEREST DOWN 19% (ene SRA OH (in ations) $625 $600 $575 $550 $525 $500 $475 $450 $425 2013 2014 2015 2016 2017 hecho le 480% 476% 470% 4.60% 442% (wort Pretax book yield for bonds acquired in 2017: 3.61% 2019=6.09%, 2020=4.75% 9% in 2019, 6.9%
Slide 15: Diversified Equity Portfolio
DIVERSIFIED EQUITY PORTFOLIO* BALANCES INCOME STABILITY & CAPITAL APPRECIATION POTENTIAL We ENA OW 31, 2018 Portfolio Highlights at 03-31-18 SS8P 500 | + JPNoruon Chase sige Poling Secor CFC | Weightings | * 42% of publicly traded com Stock porto 206% | 201% | * 1Sieor otal investment portoio 0 144
Slide 16: Reinsurance Ceded Program
SOD REINSURANCE CEDED PROGRAM \LANCES COSTS WI SHAREHOLDERS" EQUITY PROTECTION & Retention Sum (cates 207 cao ror ey 82010) Property catastrophe ($43 maton) For a single event: + Retain 100% ‘$60 milion for severe convective storms Set business pls Gna Re (exe Cer various combinatons combined fo tie
Slide 17: Financial Strength
FINANCIAL STRENGTH RATINGS COMPARISON ye AM. Bost Fitch Moody's VALUATION COMPARISON TO PEERS rover ol 26 U “Pha & < a ee ee Copyight © 2018 Cincinnat Financial Coporation Al igh reserves. Do not eproduee oF aia
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