• Board expresses confidence in capital position and business plan, highlighting exceptional liquidity reflected in cash balance slightly above $1 billion

Cincinnati, February 2, 2009 - Cincinnati Financial Corporation (Nasdaq: CINF) today announced that the board of directors voted at its regular meeting on January 30, 2009, to pay a first-quarter cash dividend of 39 cents per share, unchanged from the prior four quarters. The dividend is payable April 15, 2009, to shareholders of record on March 20, 2009. At this level, the indicated annual dividend is $1.56 per share. The company had 162,411,529 shares outstanding at December 31, 2008.

Chairman John J. Schiff, Jr., CPCU, commented, "A long-term perspective governs all of our major decisions - with the goal of benefiting our policyholders, agents, shareholders and associates over time. The ongoing instability of the financial markets highlights the value of operating in an open and consistent way, building a cushion of financial strength over a period of years. In responding to current economic pressures, we are confident in the steps we have taken to protect our capital.

"In view of current economic and market conditions, the board chose to continue for later discussion the potential for an increase in the 2009 dividend payout level," Schiff said, "The board is cognizant that Cincinnati Financial stands among the top tier of U.S. dividend-paying companies, with a long, uninterrupted history of annual dividend increases that we believe only 11 other companies can claim. While there is merit to sustaining that record, the first priority of the board and management is to assure continued financial strength as the company enters 2009 so that we can reward shareholders over the long term."

President and Chief Executive Officer Kenneth W. Stecher, added, "Our consistent cash flows and prudent cash balances continue to create exceptional liquidity. At January 31, we had slightly more than $1 billion in cash and cash equivalents on hand. That gives us the flexibility to help build value for shareholders by investing where we see potential for both current income and long-term return. Our low debt leverage also enhances flexibility. Our $795 million of long-term debt isn't due until 2028 and 2032 and we have only $49 million in short-term borrowings on a $75 million line of credit. In addition, we have a second, untapped line of credit with availability of $150 million.

"At year-end 2008, we estimate book value was approximately $25.75. Our year-end consolidated cash and invested assets totaled $9.9 billion, including $2.7 billion of common stock holdings, compared with $10.5 billion, including $3.9 billion of common stock holdings, at September 30, 2008, and $12.5 billion, including $6.0 billion of common stock holdings, at year-end 2007.

"Further, our insurance appetite remains strong. All of our insurance subsidiaries continue to be highly rated, operating with a level of capital far exceeding regulatory requirements. We ended 2008 with a healthy property casualty premium-to-surplus ratio of 0.9 to 1, allowing us the flexibility to reduce risk by expanding our operations into new geographies and product areas. Plus, we hold more than $1 billion of our assets at the parent company level, increasing our flexibility through all periods to continue to invest in and expand our insurance operations while maintaining our cash dividend."

Stecher said, "Preserving this high level of capital and liquidity remains a key objective. In mid-summer, we began applying new investment guidelines that increased portfolio diversification, reducing single issue and sector concentrations. Our year-end 2008 portfolio, fully detailed today in our regular online portfolio listing, shows how we have positioned the portfolio for reduced volatility going forward. As a result, despite economic and market disruptions that led to unprecedented market value declines, our equity portfolio suffered less than the broader indices during the fourth quarter and full year of 2008. It continues to hold up well in the challenging environment we have experienced since the beginning of 2009."

"At year-end, our financial sector holdings were 12.4 percent of our $2.7 billion publicly traded common stock portfolio, below the Standard & Poor's 500 weighting, and significantly lower than our 56.2 percent financial sector weighting at year-end 2007. Among other changes, we reduced our Fifth Third Bancorp holding to approximately 12 million shares at year-end 2008. Following Fifth Third's further reduction of its dividend payout in December 2008, we sold the remainder of our holding in January for an additional capital gain."

Stecher noted, "In addition to equities, our portfolio includes highly rated taxable and tax-exempt fixed maturity and short-term investments valued at $5.8 billion at year-end 2008, virtually unchanged from year-end 2007. This bond portfolio's value continues to exceed our insurance liabilities. It contains less than 1 percent, or approximately $43 million book value, of collateralized mortgage obligations we obtained in the termination of a securities lending program. We own no other mortgage-related securities nor any other derivative products."

Stecher concluded, "As the disruptions of the financial market have pressured short-term results for our company and others, we have continued to look to the long term. On Thursday, we will provide a thorough look at our financial results for 2008. We also will share our perspective on Cincinnati's long-term potential to create value for shareholders by continuing to act on strategic initiatives that further our mission: to grow profitability and enhance the ability of local independent agents to deliver quality financial protection to the people and businesses they serve."