Cincinnati Financial Corporation

Chairman and President's Letter

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Six-year Summary Financial Information
                                                 
Cincinnati Financial Corporation and Subsidiaries
(Dollars in millions except per share data)
   Years ended December 31,
    2007     2006     2005     2004     2003     2002  
 
Financial Highlights
Net income
   $ 855     $ 930     $ 602     $ 584     $ 374     $ 238  
One-time items*
     -       -       -       -       15       -  
Net income before one-time items*
   $ 855     $ 930     $ 602     $ 584     $ 359     $ 238  
Net realized investment gains and losses, after tax
     245       434       40       60       (27)       (62)  
Net income before net realized investment gains and losses, before one-time items*
   $ 610     $ 496     $ 562     $ 524     $ 386     $ 300  
Comprehensive income
     (368)       1,057       99       287       815       (232)  
Per Share Data (diluted)
Net income
   $ 4.97     $ 5.30     $ 3.40     $ 3.28     $ 2.10     $ 1.32  
One-time items*
     -       -       -       -       0.09       -  
Net income before one-time items*
   $ 4.97     $ 5.30     $ 3.40     $ 3.28     $ 2.01     $ 1.32  
Net realized investment gains and losses, after tax
     1.43       2.48       0.23       0.34       (0.15)       (0.35)  
Net income before net realized investment gains and losses, before one-time items*
   $ 3.54     $ 2.82     $ 3.17     $ 2.94     $ 2.16     $ 1.67  
Cash dividends declared
     1.42       1.34       1.21       1.04       0.90       0.81  
Book value
     35.70       39.38       34.88       35.60       35.10       31.43  
Ratio Data
Investment yield-to-cost (pretax)
     6.9%       6.8%       7.0%       7.2%       7.5%       7.9%  
Debt-to-capital
     12.7       11.0       11.5       11.2       8.9       9.7  
Return on equity (ROE) before one-time items*
     13.4       14.4       9.8       9.4       6.0       4.1  
ROE based on comprehensive income before one-time items*
     (5.8)       16.4       1.6       4.6       13.5       (4.0)  
Property Casualty Insurance Operations (Statutory)
Written premiums
   $ 3,117     $ 3,178     $ 3,076     $ 2,997     $ 2,815     $ 2,613  
Written premiums (adjusted)*
     3,149       3,172       3,097       3,026       2,789       2,496  
Earned premiums
     3,125       3,164       3,058       2,919       2,653       2,391  
Loss ratio
     46.6%       51.9%       49.2%       49.8%       56.1%       61.5%  
Loss expense ratio
     12.0       11.6       10.0       10.3       11.6       11.4  
Underwriting expense ratio
     31.7       30.4       29.8       29.3       26.5       25.5  
Combined ratio (reported)
     90.3%       93.9%       89.0%       89.4%       94.2%       98.4%  
Combined ratio (adjusted)*
     90.3%       93.9%       89.0%       89.4%       95.0%       99.6%  
Policyholders' surplus
   $ 4,307     $ 4,723     $ 4,194     $ 4,191     $ 2,783     $ 2,340  
Commercial Lines Property Casualty Insurance Operations (Statutory)
Written premiums
   $ 2,413     $ 2,442     $ 2,290     $ 2,186     $ 2,031     $ 1,905  
Written premiums (adjusted)*
     2,444       2,435       2,306       2,209       2,009       1,795  
Earned premiums
     2,411       2,402       2,254       2,126       1,908       1,721  
Loss ratio
     44.8%       48.4%       46.6%       43.4%       51.2%       57.8%  
Loss expense ratio
     13.1       12.7       11.0       10.9       12.7       12.5  
Underwriting expense ratio
     31.3       29.7       29.5       29.4       27.0       25.0  
Combined ratio (reported)
     89.2%       90.8%       87.1%       83.7%       90.9%       95.3%  
Combined ratio (adjusted)*
     89.2%       90.8%       87.1%       83.7%       91.6%       96.8%  
Personal Lines Property Casualty Insurance Operations (Statutory)
Written premiums
   $ 704     $ 736     $ 786     $ 811     $ 784     $ 708  
Written premiums (adjusted)*
     705       737       791       817       780       701  
Earned premiums
     714       762       804       793       745       670  
Loss ratio
     53.2%       62.9%       56.7%       66.7%       68.8%       71.0%  
Loss expense ratio
     8.1       8.3       7.2       8.9       8.9       8.7  
Underwriting expense ratio
     32.8       32.4       30.4       29.0       25.2       26.8  
Combined ratio (reported)
     94.1%       103.6%       94.3%       104.6%       102.9%       106.5%  
Combined ratio (adjusted)*
     94.1%       103.6%       94.3%       104.6%       103.9%       106.8%  
Life Insurance Operations (Statutory)
Written premiums
   $ 167     $ 161     $ 205     $ 193     $ 143     $ 220  
Net income before realized investment gains and losses
     7       (1)       10       26       27       20  
Net income
     39       28       21       28       20       17  
Gross life insurance face amount in force
     61,875       56,971       51,493       44,921       38,492       32,486  
Admitted assets excluding separate account business
     2,283       2,026       1,882       1,713       1,572       1,477  
Risk-based capital
Total adjusted capital
     506       556       511       491       443       420  
Authorized control level risk-based capital
     66       67       52       47       50       47  
 
* The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on www.cinfin.com defines and reconciles measures presented in this report that are not based on Generally Accepted Accounting Principles or Statutory Accounting Principles.


This report contains forward-looking statements that involve potential risks and uncertainties. For factors that could cause results to differ materially from those discussed, please see the most recent edition of our safe harbor statement under the Private Securities Litigation Reform Act of 1995. To view or print the edition in effect as of this report's initial publication date, please view this document as a printable PDF.