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Executive Perspective
November 7, 2008

To Our Shareholders, Friends and Associates:

We are more convinced than ever that our long-term approach to business will help us come out of this difficult period a better and more focused company.

In this document, you'll read about our initiatives to extend your company's advantages and preparations to seize new opportunities. You'll also read about our commitment to create two kinds of capital strength that give us flexibility under pressure. Our intention is to protect and preserve both kinds, adding to this capital over time. First, we have strong financial capital and flexibility. Secondly, we have invested in relationships and accumulated tremendous people capital – loyal agents who help us underwrite profitably; loyal policyholders who value broad insurance coverages and superior service; and loyal associates willing to step up their efforts. Both types of capital give us welcome advantages in these uncertain times:

Exceptional liquidity. We have strong cash flow from operations, thanks to our agents' consistent willingness to let us earn their profitable business. Our insurance subsidiaries have capital that exceeds required levels, and we hold significant additional assets at the parent company level. These assets are there if we need them, giving us flexibility through difficult periods to maintain our record of increasing dividends for 48 consecutive years and to continue growing our insurance business. Our operations do not depend on bank loans to meet payroll, pay claims or cover other normal business expenses.

A rebalanced investment portfolio. Over the past year, you have heard about significant sales, not just of Fifth Third Bancorp, but also sales of other stocks. As we continue to apply our new investment guidelines, we are diversifying away from concentrated positions in single stocks or industries. Our recent sales are part of this strategic portfolio restructuring and give us the flexibility to reinvest proceeds where we see potential for both current income and long-term return.

Disciplined and focused company associates. Our resolve is to stay calm and to deepen our commitment to outperform on service to our agents and their clients. Aligning ourselves ever more closely with local agents can only build our resilience, mitigating whatever additional setbacks may occur in the wider markets, in our industry and for our company. Our energy level and activity have never been higher.

At a time when our policyholders needed us, our associates' outstanding response to storm claims created satisfied customers – customers who will continue to buy our policies for years to come and share the value of a Cincinnati policy with their friends and neighbors. And at a time when many businesses are contracting, we believe we can and must stay energized, expand our marketing territories, add new agency relationships and introduce new products and technology.

An unrelenting focus on what we can control – disciplined investing and underwriting as well as excellent service to our agents – will go a long way to offset what we can't control, as individuals or as individual companies. We will dedicate ourselves to maintaining that focus and moving steadily toward growth and long-term prosperity. Thank you for your investment and your faith in our daily efforts to return value to you by marketing the value of Cincinnati service and solid insurance protection.

Respectfully,


/S/ James E. Benoski

James E. Benoski
Vice Chairman of the Board
/S/ John J. Schiff, Jr.

John J. Schiff, Jr., CPCU
Chairman of the Board
/S/ Kenneth W. Stecher

Kenneth W. Stecher
President and
Chief Executive Officer


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.