Cincinnati Financial Corporation

2008 Third-quarter Letter to Shareholders

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Inside Cincinnati

Since our last Letter to Shareholders, these associates merited promotions:

Andy Agerton, AIC – Senior Claims Representative Lori Bagoly – Underwriting Superintendent Rich Balestra, CFA – Portfolio Manager Erin Barlow, API – Underwriting Specialist Cary Barrow, AFSB – Senior Underwriting Specialist Vanessa Barry – Senior Claims Specialist Scott Beckman – Underwriting Specialist Kevin Beykirch – Regional Director Marle Billman – Associate Superintendent, Casualty Claims Chris Boydston, AIC – Senior Claims Representative Bradley Boyett – Underwriting Superintendent Sheri Bugher, AIC – Associate Superintendent, Casualty Claims Sandy Burden, CISA – Group Manager, I.T. Portfolio Management/Architecture Kristie Bushman – Underwriting Superintendent Bill Chandler, AIM – Assistant Territory Manager Dawn Chapel, CPCU, APA, ARe, AU – Chief Underwriting Specialist Sarah Chiasson – Underwriting Superintendent Jennifer Conklin, AIM, AIS – Underwriting Specialist David Conlon, AIC – Senior Claims Representative Thomas Dameron – Chief Underwriting Specialist Gregory DePew, CFA – Portfolio Manager Chris Draper, CPCU, AU – Underwriting Superintendent James Ducar – Senior Claims Examiner Rocky Edwards – Senior Claims Specialist David Ellis, AIC – Claims Specialist Angie Engelke – Chief Underwriting Specialist Kyle Fader, AIC – Senior Claims Representative Carol Fuller – Senior Claims Examiner Todd Gagnon, API – Underwriting Specialist Matt Gardner, AIC, AIM – Senior Claims Representative Thomas Goodwin, AAI, AIM, AIS, ASLI, AU – Underwriting Specialist Ryan Gustafson, AIC – Claims Specialist Jenny Harvey – Systems Analyst Christopher Heldman – Senior Analyst Rusty Hymer – Chief Underwriting Specialist Nicole Ippolito, AIC – Claims Specialist John James, AIC, SCLA – Field Claims Superintendent Phil Jankowski, CPCU – Senior Claims Representative Scott Jeschke, AIC – Claims Specialist Craig Johnson – Superintendent, Casualty Claims Nolan Joseph – Claims Specialist Adam Kadish – Programmer Kathy Kerr, AIC – Senior Claims Representative Keith Klatt, AIC – Claims Specialist Gregory Knifley, CPCU – Underwriting Specialist Joy Knifley – Underwriting Specialist Mary Kretchmer, AIC – Field Claims Superintendent Michael Kuhl, AIS – Senior Analyst Art Leatham – Senior Machinery & Equipment Specialist Laura Lewis, CPCU, AIM, AIS, API, ARe – Underwriting Specialist Lynn Lilly – Manager, Payroll

Donnie Lowery – Associate Superintendent, Surveillance Robert Lozo, AIC – Senior Claims Specialist John Luebke, CPCU, AIC, AIM, SCLA – Field Claims Manager Ernie Macke, PMP – Senior Project Manager Dan Mays, CPCU, AIC, AIM, ARM, CIC, CRM – Senior Loss Control Consultant Bill McCullough – Chief Underwriting Specialist Michael McGuire, CPCU – Senior Underwriting Specialist Dana McKenzie, AIC – Senior Claims Representative Steve Mikesell – Senior Underwriter Paul Miller, CPCU, AIM, APA, API, AU – Underwriting Superintendent Tracy Miller, CPCU, CPIW, AIC – Senior Claims Specialist Julie Montgomery – Senior Claims Representative David Morel – P&C Senior Actuarial Analyst Suzi Morgan – Manager, Machinery & Equipment Support Laura Nickol – Underwriting Director, Field Shawn Niehaus, CPCU, AIM, ARe – Underwriting Specialist Doug Nordhausen – System Engineer Jeffrey O'Leary, AIC – Claims Specialist Nick Orgill – Claims Specialist Roxanna Otto, AIS – Underwriting Superintendent Heather Paul, CPCU – Underwriting Superintendent Nathan Perry II, API – Underwriting Specialist Joseph Pierro, AU – Underwriting Specialist Wayne Pinney – Machinery & Equipment Field Manager Sandy Pohlman, CPCU, ARC – Regulatory Specialist Toni Postell – Supervisor, Workers' Compensation Claims Bob Rook, AU – Chief Underwriting Specialist Duane Russell – Claims Specialist Christina Scherpenberg – Senior Accountant Andrew Schnell – Manager, Corporate Accounting Jeff Shive, CPCU, AIM, AIC – Field Claims Manager Laura Siebert, API – Underwriting Superintendent Jill Slater – Programmer Analyst Mike Slusser – Senior Claims Representative Sue Smith – Senior Systems Analyst Paul Snyder, AIS – Underwriting Specialist Jeff Spangler, CPCU, CSP – Loss Control Field Director Melissa Stegmaier, AIC, AIS, SCLA – Senior Claims Representative Katie Stickel – Claims Specialist Cathy Story, CPCU, APA – Senior Auditor Tim Tiernan – Senior Business Analyst Donna Vanover – Diamond Systems Specialist Ernie Wang – Programmer Shannon Ward – Diamond Systems Specialist Jennifer Whitmer, AIS – Senior Personnel Specialist Suzanne Wilkerson – Specialist, I.T. Administration Steve Wilsbacher, AIC – Senior Claims Specialist Michael Wood, CPCU, CPA, CIA, AIAF – Manager, Accounting & Agency Services Dawn Woodrick, CPCU – Underwriting Superintendent Kip Zepf – Senior Programmer

Professional Development
Agents of Cincinnati Insurance have a new tool to develop educational plans for their staff. Modeled after popular GPS navigation devices, the Agency Development Roadmap helps agencies plan a route to success for each member of their agency team. The roadmap includes checklists to customize training in areas such as personal effectiveness skills, desktop computing efficiency, general insurance or specific knowledge of commercial and personal lines products.

On December 1, 2008, our Education & Training department is changing its name to Learning & Development. Our new name better reflects our philosophy - continuing education works best when the learner values and initiates it. Whether our associates or agents want to conquer a new subject or add deeper layers of understanding to a professional topic they are familiar with, the Learning & Development department is committed to delivering the tools they need.

We encourage and reward associates who continue their professional insurance education, earning credentials by meeting high academic, ethical and length-of-experience standards. Congratulations to the following associates who completed a series of courses to earn a designation; Jeff Poe, Chartered Property Casualty Underwriter (CPCU); Sandy Burden, Certified Information Systems Auditor (CISA); Luana Dillingham, Fellow, Life Management Institute (FLMI); Steve Dunn, Michelle Gregov, Kevin Gullette and Michael Leininger, Certified Insurance Counselor (CIC); Deborah Naegele, Certified Life Underwriter (CLU); and Nieata Bailey, Mona Helton and Sherry Meyer, Certified Professional Insurance Women (CPIW).

The ABC Award recognizes exemplary productivity, service and quality in exceptional associates. The ABC Award committee recently granted the quarterly Above and Beyond the Call (ABC) award to Shawn Niehaus, CPCU, AIM, ARe, Underwriting Specialist, and Darin Riley, Policy Service Specialist. Congratulations to these quarterly winners! At the Queen City Club on October 29, Robert Meyer, Systems Engineer, was named ABC of The Year. This honor is awarded annually to just one of the quarterly winners. Bob's ingenuity was key to identifying and resolving a problem with a recent software upgrade. He worked extended hours to make the necessary repairs while maintaining system availability. Bob is a consistent performer whose dedication to his job, teammates and customers earn the respect of those around him.

Financial Services
The company's three financial services subsidiaries continue to support our insurance relationships and broaden our offerings. As of September 30, 2008, CFC Investment Company, which offers equipment and vehicle leases and loans, reported 2,253 accounts representing $74 million in net receivables. CinFin Capital Management Company, which offers asset management services, reported $858 million under management in 52 accounts. During the first nine months of 2008, The Cincinnati Specialty Underwriters Insurance Company and our wholly owned brokerage, CSU Producer Resources Inc., have begun marketing excess and surplus lines insurance in 23 states, remaining on track to have these products available in 33 active states before year-end. Cincinnati Specialty Underwriters has added the property line of business in five states and will continue to introduce new lines of business throughout the remainder of the year, including miscellaneous professional and excess casualty. Availability of CSU's new offerings has enhanced your company's ability to write new standard market property casualty business, as we work with agents to round out accounts that require both admitted and nonadmitted market solutions.

Public Responsibility
The effectiveness of state-based insurance regulation is again the subject of debate after the federal assistance recently extended to parts of the financial services sector, including some organizations with insurance operations. Advocates for federal regulation of insurance suggest that federal oversight of the insurance industry could have avoided the need for this assistance. Representatives of the National Association of Insurance Commissioners recently testified in Congress that state insurance regulators had no jurisdiction over any of the financial services companies that recently reached the brink of failure. Further, they stated that none of the pending optional federal charter proposals would give that jurisdiction to proposed federal insurance regulators. NAIC representatives also testified that the state-regulated insurance industry continues to face more stringent investment restrictions and capital-to-surplus requirements than the federally-regulated financial services sector.

Policyholder risks and coverage needs vary because of diverse geographic, climatic and economic conditions. We continue to believe that state regulators are in the best position to respond with regulations and insurance products that consider that diversity.

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.

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