Creating the Experience: How Cincinnati Stands Out
Cincinnati Financial Corporation recently reached a new milestone when we began writing excess and surplus lines insurance through two new companies, The Cincinnati Specialty Underwriters Insurance Company and CSU Producer Resources Inc. Donald J. Doyle, Jr., CPCU, AIM, senior vice president leading our new E&S operations, notes, "We tell our independent agents that CSU's mission is 'bringing the Cincinnati experience to your E&S clients.' Their response is immediate and positive. Our agents welcome Cincinnati's relationship-based approach, appropriately applied to aspects of this new venture."

What is this Cincinnati experience? How does it build the strong relationships that open the door to new opportunities, taking us forward to find new solutions and create more value? Here, some company associates and leaders share their perspectives on how we make the Cincinnati experience special for agents and policyholders:

Teresa
"Our research and planning activities affirm our shared belief that partnering with independent agencies is the best way to sell insurance. Our company's founding principle is to be a primary contributor to the success of each agency, regardless of size, location, ownership or length of time appointed. Our strategic plan keeps that principle at the center of our agents' experience - past, present and future. We listen and act, adapt and improve, in response to these customers. We've grown and will continue to grow by meeting their needs for local field representatives to serve their clients; by helping train their new staff members; by deploying Web-based services to support their agency efficiency; and by improving our own internal efficiency and service standards."
- Teresa C. Cracas, Counsel and Vice President, Planning & Risk Management

"Our company and each subsidiary emphasize strong capitalization, low debt leverage, adequate reserves and appropriate reinsurance programs. That's how we build strength, stability and flexibility over the long term. Agents and policyholders experience our strength when they seek an insurer with outstanding ratings from A.M. Best, Fitch, Moody's and Standard & Poor's. They experience our stability when we are able to avoid pricing extremes and keep coverage available when the market is disrupted for classes or lines of business. And they experience flexibility when we are able to meet their changing needs by making forwardlooking investments in new products, technology or infrastructure."
- David T. Groff, FCAS, MAAA, CPCU, Vice President, Staff Underwriting

William
"Agencies that receive Cincinnati appointments are the select few - top-notch professional organizations with a strong community presence, sales culture and solid financials. To become and stay their carrier of choice, we structure our field staff to complement the strengths of our agents as knowledgeable, responsive and trusted advisors. Field team members are local, working out of their homes in the agencies' communities. They bring our company into our agents' offices with local decision-making authority. Agents can quickly enlist their field marketing representative to help present an insurance program to their prospect. They can reach their field claims representative to guide emergency repairs, or call on their loss control or premium audit representatives to provide client services. The team delivers on the promises agents make to their clients, and we grow together."
- William M. Clevidence, CIC, Secretary, Sales & Marketing

"Agents want the Cincinnati claims experience for their valued clients, including the businesses and people who are centers of influence in their communities. Our claims service is different. It starts with the way we assign our multi-line claims representatives - to specific agencies, rather than to types of claims. When a policyholder or claimant reports a loss, the agent knows and trusts the local claims representative who will respond. Our representatives make personal contact in most cases within 24 hours, inspect damage, review the policy to find coverage for the claim and provide service with a human touch. They have the authority and technology to write most checks on the spot. The result is claims service that sells insurance."
- Charles P. Stoneburner II, CPCU, AIM, Senior Vice President, Field Claims

Cincinnati's Highest Volume Lines National Market Share and Rank Based on 2006 Direct Written Premiums(Percent)

Cincinnati is a regional carrier, serving local markets and focusing on working with our agents account by account. In selected product lines, this approach has made us a leading competitor. Nationally, Cincinnati stands among the top 20 carriers for commercial property, commercial auto and commercial casualty insurance. We achieve those ranks with a market share below 3 percent in each of those product lines, showing the growth potential that remains as we continue to meet agent needs.
"As Cincinnati introduces or improves our automation, we preserve and support the agency's client relationships, choice and control. Technology tools free our agents and associates to do what they do best - sales and service. Our major systems present options that respect agency differences, so agents can experience efficiency gains while managing their client relationships and interactions the way they prefer. Our priorities mirror those of the agencies: we streamline processing and share data between their systems and ours. We mutually benefit from improved data quality, which supports a deeper understanding of the book of business and ensures the right rates, terms and conditions for our products."
- Robyn C. Muhlberg, Vice President, Information Technology

Stephen
"Policyholders and agents benefit from an underwriting approach that encourages loyalty. They renew more than 90 percent of our expiring policies eligible for renewal. They experience our willingness to write many commercial coverages over a multi-year policy term with pricing that stays the same for the same exposure. In addition to price stability, availability of these multi-year terms and policy term extensions save everyone from annual paperwork and expenses. We're also willing to cover our agents' best-of-class accounts with few exceptions, using versatile products to protect a wide variety of businesses, even as they grow and change. Our underwriters and agents have the skill to tailor comprehensive business insurance packages. When a loss happens, policyholders are glad their package comes from one agent and one carrier, so it's clear who will respond."
- Stephen A. Ventre, CPCU, Vice President, Commercial Lines

"Our commitment to personal lines grows from a conviction that insurance is first and foremost a people business. We believe our agents' home and auto insurance clients deserve a Cincinnati experience with comparable value to the experience of business insurance clients. In fact, a policyholder's experience with our home or auto policy and service often leads to the decision to become our business policyholder, and vice versa. The same Cincinnati claims representative responds to business and personal claims. The same attention applies to service and product quality, tailored insurance packages and processing systems and efficiencies. We also recognize that different trends and events affect the personal and commercial lines marketplaces to different degrees. Marketing both business and personal insurance can help stabilize the overall book of business."
- John C. DuBois, Assistant Vice President, Personal Lines

Cincinnati Market Share Within Reporting Agency Location Based on 2006 Direct Written Premiums

As agents learn about Cincinnati, they develop an appreciation for our approach and reward us with a steadily increasing share of their business. We rank No. 1 or No. 2, based on premium volume, in 75 percent of the reporting agency locations that we have served for more than five years. Cincinnati has tremendous potential in the 283 reporting agency locations that have marketed our products for less than five years, even as we continue to grow with the 1,044 more established reporting locations.
"Cincinnati's property casualty agencies have easy access to Cincinnati Life products. Our agents can count on Cincinnati Life to help protect their clients' families, their businesses and their futures. We are a resource for agents whose valuable business clients may need insurance to fund business perpetuation or key employee replacement or who want to offer voluntary benefits to employees. Our term, whole life, universal life and disability income policies and annuities flexibly meet individual and business policyholders' needs. With the professional advice of our agents, policyholders can select optional features like the accelerated benefit rider. It provides early benefits to terminally ill policyholders, helping preserve their dignity and choices in the last months of life."
- Ann S. Binzer, FLHC, CLU, ChFC, FALU, FLMI, Secretary, The Cincinnati Life Insurance Company

Cincinnati Market Share by State Based on 2006 Direct Written Premiums(Percent)

Our 34 active states provide us with substantial potential. In 26 of the 50 states, our market share is less than 1 percent. To tap this potential, we have accelerated efforts to appoint new agency relationships. In 2006 and 2007, we added 92 agency relationships including our first nine agencies in New Mexico and Washington. We anticipate 65 new agency appointments in 2008 within all active states






















Martin
"Cincinnati has never had to sell an investment security to pay a claim. Policyholders, agents, associates and shareholders expect and receive consistent, predictable performance. We manage insurance operations to achieve a profit, paying all claims and expenses from cash flow. After we buy bonds to cover our insurance liabilities, we invest in equities. The equities we select and hold offer a current stream of dividends, plus the potential for asset appreciation farther along the horizon. Although financial stocks are a good fit, like any other sector, they periodically fall out of favor. We believe careful selection and monitoring of well-managed companies, rather than market timing, leads to higher ultimate returns. This strategy helps us pay steadily increasing dividends to our shareholders. At the insurance company level, it protects policyholders by contributing to strong surplus positions."
- Martin F. Hollenbeck, CFA, CPCU, Vice President, Investments

We make deliberate choices about the quality experience we provide for agents and policyholders. Those experiences create strong relationships that differentiate your company, giving us a superior ability to prosper in any environment. Relationships are the centerpiece of our strategies as we move into 2008 and beyond, finding new solutions and creating long-term value for our shareholders, agents and associates.

Shareholders can experience Cincinnati and support your company's goals by giving us the opportunity to serve your insurance needs. Local independent insurance agencies offer our business policies in 34 states, our personal auto policies in 22 states, homeowner policies in 25 states and life insurance in 49 states. To check availability in your area, please select Find An Agent on www.cinfin.com or call us at 1-800-769-0548.


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.