10-KPeriod: FY2009

CINCINNATI FINANCIAL CORP Annual Report, Year Ended Dec 31, 2009

Filed February 26, 2010For Securities:CINF

Summary

Cincinnati Financial Corporation (CINF) is a diversified insurance company that primarily operates through its lead subsidiary, The Cincinnati Insurance Company. The company focuses on property casualty insurance, marketed through a select network of independent insurance agents across 37 states. In 2009, CINF navigated a challenging economic environment, reporting a slight increase in net income to $432 million, or $2.65 per diluted share, compared to $429 million in 2008. The company's strategic focus remains on effective capital management, improving insurance profitability, and driving premium growth. Despite a decline in property casualty earned premiums, the company maintained a strong capital position and continued to invest in technology and agent relationships to support long-term value creation. The company also continued its long-standing practice of increasing shareholder dividends.

Financial Highlights

35 data points
Beta

Revenue

$3.90B

Net Income

$432.00M

11.1% Net Margin

EPS (Diluted)

$2.65

Total Assets

$14.44B

Cash & Equivalents

$557.00M

Free Cash Flow

$483.00M

Financial Statements
Beta
Revenue$3.90B
Interest Expense$55.00M
Net Income$432.00M
EPS (Basic)$2.66
EPS (Diluted)$2.65
Shares Outstanding (Basic)162.60M
Shares Outstanding (Diluted)162.87M

Key Highlights

  • 1Net income for 2009 was $432 million, a slight increase from $429 million in 2008.
  • 2Diluted earnings per share were $2.65 in 2009, up from $2.62 in 2008.
  • 3Property casualty earned premiums decreased by 3.3% to $2,911 million in 2009.
  • 4The company's combined ratio for property casualty operations was 104.5% in 2009, indicating an underwriting loss.
  • 5The company continued its strategy of managing capital effectively, improving insurance profitability, and driving premium growth.
  • 6Financial strength ratings remained strong, although Fitch Ratings lowered some ratings in August 2009 due to underwriting performance.
  • 7The company has a record of increasing cash dividends for 49 consecutive years through 2009.

Frequently Asked Questions

Cincinnati Financial Corporation's primary business is property casualty insurance, marketed through a select group of independent insurance agents in 37 states. It also offers life insurance and financial services.

In 2009, Cincinnati Financial Corporation reported net income of $432 million, a slight increase from $429 million in 2008. Diluted earnings per share were $2.65, up from $2.62 in the prior year. However, property casualty earned premiums declined, and the combined ratio indicated an underwriting loss.

The company's core strategies are to manage capital effectively, improve insurance profitability, and drive premium growth. This includes focusing on underwriting expertise, expense management, technology development, geographic expansion, and strengthening relationships with its independent agency network.

Cincinnati Financial Corporation manages a diversified investment portfolio, emphasizing a high-quality fixed-maturity portfolio and a diversified equity portfolio. The company aims to achieve a total return on its equity portfolio that exceeds the S&P 500 index over a five-year period.

The company utilizes catastrophe modeling and reinsurance to mitigate the impact of catastrophe losses, which can significantly affect earnings volatility. Despite these measures, catastrophe losses in 2009 contributed 5.7 percentage points to the property casualty combined ratio.