Cincinnati Financial Corporation · NASDAQ:CINF
Cincinnati Financial — Investor Presentation (May 2017)
16 slides from Cincinnati Financial's investor presentation, May 3, 2017
Slide 1: meer
NASDAQ: CINF meer uncertainties. Please refer to our various filings with the U.S. Securities and from those discussed, disclosed, i effective only as of that date. Its inclusion
Slide 2: Strategy Overview
Copyright © 2017 Ci STRATEGY OVERVIEW, Competitive advantages: Financial strength for stability and confidence Local decision making and claims excellence Other distinguishing factors: + 56 years of shareholder dividend increas Common stocks are approxima! 28 years of favorable reserve development R
Slide 3: Long-Term Value Creation
LONG-TERM VALUE CREATION psy) * 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% + Three performance drivers: = Premium growth above industry average = 100% — Investment contribution + Invest
Slide 4: Cincinnati Financial at a Glance
CINCINNATI FINANCIAL ATA GLANCE rv tit 0) + 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 + 56 consecutive veers of of shareholder seal increases ~ Only se
Slide 5: Outperforming the Industry
OUTPERFORMING THE INDUSTRY 3 she POWER sy TER personal, Statutory combined ratio Industry data excludes mortgage and financial guaranty 2016 ar = 6.1%, 10-year = 6.2% STRATEGIES FOR LONG-TERM SUCCESS men + Financial strength for consistent support to agencies z portato, : 4 0.8 ‘no municipal exposur
Slide 6: Manage Insurance Profitability
MANAGE INSURANCE PROFITABILITY "75801 0 * Ongoing underwriting expertise enhancement precision and segmentation on an individual poicy basis + Improving efficiencies and ease of use with technology Steaming processing apenis andthe company = Helps optimize personalized ser + Investing for the future
Slide 7: Select Group of Agencies
SELECT GROUP OF AGENCIES IN 41 STATES Pia) 4.643 agency elatonships with 2,138 locations Our Commercial Top Five = 39% Ohio, ine, Penneyvens 1a, North Carolina ‘Qur Personal Top Five = 54% Ohio, Georgia, Michigan, Indiana, North Carolina | P&C Market Share: io: 4.6 ond hgher Indiana: 2.8% Lasettan K
Slide 8: Appendix: First-Quarter 2017 Highlights
APPENDIX Income, Dividend & Cash Flow Trends nt & Pe Reinsurance Coded Progam & Pentel rSvengh Ratings Valuation Comparison to P FIRST-QUARTER 2017 HIGHLIGHTS S544 + EPS of $1.21 per share, up 7% vs. $1.13 in 1016 — Operating earnings decreased $50 million, — by a $47 million increase in after-tax c
Slide 9: Income and Shareholder Dividends
INCOME AND SHAREHOLDER DIVIDENDS. Pah ‘3mos 16 3mos 17 STRONG OPERATING CASH FLOW CONTRIBUTED TO $239M OF 1017 NET PURCHASES IN INVESTMENT PORTFOLIO gst ersonal, (in mitions) 8 $1,000 $900 $800 $700 $600 $500 Decrease reflects $400 increase in catastrophe $300 losses $200 $100 Hl so 2013 2018 2015 2
Slide 10: Cash Dividend Payout Ratio
CASH DIVIDEND PAYOUT RATIO "ASH FLOW SUPPORT PAYOUT LEVELS") 05 5 of, a 66% average payout for 2007 through 2016 100% =— 80% sos 0% o% 2 8 2009 2010 2011" 2012 2013 201420152016 DIVIDEND AS A PERCENTAGE OF NET CASH FLOW FROM OPERATIONS. "2" personal 40% 30% 20% 10% 0% 2010 201120122013 2018-2015 201
Slide 11: Property Casualty Reserves
Copyright © 2017 Cincinnati PROPERTY CASUALTY RESERVES YEs “ARS pesional Vertical bar represents reasonably likely range $4,449 Anmitions) High end $4,804 ($396), wien, (528) si) si6) ‘4 wos t a ont 4 i : E é co —— . Poteet
Slide 12: Premium Growth vs. Industry
PREMIUM GROWTH VS. INDUSTRY 8.1% CAGR APPROXIMATELY DOUBLED INDUSTRY" /S\ 1) Property casualty net written premium growth mmcincinnat 2016 NET EARNED PREMIUMS Consolidated fas tins $4,710 Billion Property Casualty cess Croat Re $4,482 Billion omer Suis 4% Persona ne Homeoner sonal nes 25% 1% Persona
Slide 13: Investment Income and Portfolio
ee ey INCOME, 3% GROWTH ¥7O 21-17: DMDENDS UPS%, ‘he POWER INTEREST U UP 2% (Pre nal, (in mations) $600 $575 $550 $525 $500 $475 $450 $425 2012 2013 2018 2015 2016 6% 4.70% 0% Pretax book yield for bonds acquired in 2016: 3.75% 18°5.67%, 2019°6.22% 16% in 2018, 7.6% in 2019, 15.9% in 2020-21 Pretax
Slide 14: Balances Income Stability & Capital Appreciation Potential
BALANCES INCOME STABILITY & CAPITAL APPRECIATION POTENTIAL DIVERSIFIED EQUITY PORTFOLIO* March 31,2017 » Rene bonny sexor Cr | ee ee a amen ighting: fie ext Sa | TTT pti inane tae [14a] + 8% increase in 117 idustrials 147 10.1 dividend income tare io [ 139] Tae [tas] | $28lon eta) Moora ees a ExxonM
Slide 15: Balances Costs with Solid Reinsurance Ceded Program
BALANCES COSTS WITH SOLID REINSURANCE CEDED PROGRAM lor Treaties ‘EQUITY PROTECTION “personal Property catastrophe ($39 maton) (ha nay 12017) For a single event: “Treaty * Collateralized catastrophe bond coverage ($24 mio) Casualty per occurrence (S12 milion) Casualty excess treaties to Fe S20 min e
Slide 16: Valuation Comparison to Peers
VALUA’ PAR’ PEE! et ¢ 1ON COM ARISON TO RS «POWER! pata ve & ne oe oe oe “
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