Cincinnati Financial Corporation · NASDAQ:CINF
Cincinnati Financial — Investor Presentation (May 2012)
15 slides from Cincinnati Financial's investor presentation, May 9, 2012
Slide 1: Cincinnati Financial Corporation
Cincinnati Financial Corporation May 2012 ‘Bicnwws NASDAQ: CINF = This contains fc rd-lookil that involve risks and uncertainties. Please refer to our various filings with the U.S. Securities and Exchange Commission for factors that could cause results to materially differ from those ssounsed. d-loo
Slide 2: Cincinnati Financial at a Glance
Cincinnati Financial at a Glance Profile = Top 25 U.S. PIC insurer = A.M. Best Rating: A+ Superior * $3.2 billion 2011 premiums: — 69% commercial es eae = 5% lite = Bib excess & surplus = Competitive 1Q12 Highlights EPS of 53 cents vs. 38 cents = Operating eamings of 48 cents per re were up 45% from
Slide 3: Increase Value for Shareholders
Increase Value for Shareholders Measured by Value Creation Ratio (VCR) Target for the period 2010-2014: Annual VCR averaging 12% to 15% 2011 [=VER- Investment income & Other scr. pac Undenwating [SIVCR - Bond Portfolio Gains quity Portfolio Gains +# Total Shareholder Return (TSR) Combined Ratio Refl
Slide 4: Strategies for Long-Term Success
Strategies for Long-Term Success = Financial strength for consistent support to agencies — Diversified fixed-maturity portfolio, laddered maturity structure + No corporate exposure exceeded 0.6% of total bond portfolio at 3-: unicipal exposure exceeded 0.2% — 22% of investment portfolio in common st
Slide 5: Drive Premium Growth
Drive Premium Growth = New agency appointments yield growth over time — Target for 2012: appoint approximately 130 agencies ~ 133 appointed in 2011, $2.0B aggregate premiums from all carriers = Geographic and product line expansion recent history — Entered Connecticut and Oregon in 2010, Colorado an
Slide 6: Select Group of Agencies in States
Select Group of Agencies in 39 States 1,246 agency relationships with 1,696 locations (sof Moreh 33,2012) Commercial Top Five = 43% Ohio, ilinois, Pennsylvania, Indiana, North Carolina Personal Top Five = 62% ‘Ohio, Georgia, Indiana, Market Share: Mlinois, Kentucky Market Share Top Three © Headavart
Slide 7: Income and Shareholder Dividends
Income and Shareholder Dividends $0.15 YTD Improvement Despite $0.19 of Higher Catastrophe Losses nang) $1.01 of higl phe k drove $0.94 (eoeraing bass) Cash Dividend Payout Ratio Strong Capital and Cash Flow Support Recent-year Payout Level + 1012 * 2011 payout rato reflected record-high eatatrophe
Slide 8: Dividend as a Percentage of Net Cash Flow from Operations
Dividend as a Percentage of Net Cash Flow from Operations 103% in 2011 primarily due to record-high catastrophe losses 2000 2001 2002 2003 2004 2005 2008 2007 2008 2009 2010 Operating Cash Flow Record-high Catastrophe Losses Lowered Year 2011 Cash Flow (ln mitions)
Slide 9: Cincinnati Typically Outperforms the Industry
Cincinnati Typically Outperforms the Industry Statutory combined ratio Industry data excludes mortgage and financial guaranty Ciena nel at. bes AEs ry (AM Bost) nel cat Loses . 10-year = 5.4% Greater Pricing Precision Ts Improving Profit Margins in 2011 by ‘Workers’ Compensation Homeowner Beller mMi
Slide 10: Premium Growth versus Industry
Premium Growth versus Industry As the Market Firms Our Growth Rate Is Outpacing the Industry 6.0% Property casualty net written premium growth 2007 2008 2009 2010 2011 Cincinnati ~S- Estimated Industry excluding mortgage and financial guaranty (AM. Bes!) Market for 75% of Agency’s Typical Risks 2011
Slide 11: Potential within Cincinnati Appointed Agencies
Potential within Cincinnati Appointed A i Steadily Increase Our Share of Agency Business ‘Market share per reporting agency location by year appointed Cincinnati share of estimated $28 billion total premiums 13a produced by appointed agencies is approximately 11% 2010 2009 2004-2007 " 1999-2003” Pre
Slide 12: Property Casualty Reserves
Property Casualty Reserves t for 23 Ce ive Years Values shown are carried loss and loss expense reserves net of reinsurance Vertical bar represents reasonably likely range Development (Favorable) ($244) ($323) $188) ($204) ($285) 2007 2008 2009 2010 2011 Accident Year Combined Ratios Effectoof Reser
Slide 13: Investment Income
Investment Income 1% Growth for 2011, First 3 Months 2012 Matched 1011 neta 2007 2008 2009 2010 2011 After-tax yield:(Gonds st smorizod cot socks vate) 3.6% 3.5% 3.5% Pre-tax yield to book for bonds maturing in 2012°5.2%, 2013=4.7%, 2014=5.3% Investment Portfolio Invest for Income and Appreciation $
Slide 14: Diversified Equity Portfolio
Diversified Equity Portfolio* 6.1% Ci d in 2011 Versus 2.1% for the S&P 500 Index Largest eq 19 at 3-31-12: stock portfolio, 1.1% December 31,2011 | December 31,2010 Sector cre ‘S&P 500 cre | S8P500 Weightings Weightings Information technology 16.9% 19.0% 13.0% 18.7% Energy 14.0 123 129 12.0 ‘Consum
Slide 15: Financial Strength Ratings Comparison
Financial Strength Ratings Comparison AM. Best Fitch Moodys Eg ‘Sours: Rating ageney webs a of Moy 32012, Ron ar nde ontnone rovew and sujet to Range ‘nd er atrmoton Valuation Comparison to Peers Ratio of closing price on 05-04-12 to latest reported tangible book value PPLEPIOLL SEP
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