Serving Agents with Improved Technology. We are streamlining our processes and systems to bring new efficiencies to our agency customers. Since October 2009, our new policy administration system for commercial package and auto coverages has deployed to agents in 14 states, with plans to add 16 more states in 2010. It features real-time quoting and policy issuance, a new direct billing option and interface capabilities to transfer selected policy data from agency management systems.

Early in 2010, we deployed the next version of our personal lines policy administration system to agencies in all 29 states where we market personal lines. This next generation, Web-based system prefills selected data, automatically orders third-party reports and offers quoting with some real-time rating and comparative vendors.

Interface technology makes it easy for agents to work on our policies within their agency systems, without logging on to our system or rekeying data. Cincinnati received the 2009 Agency Interface Award from Applied Systems® Client Network for achievements in this area.

Our excess and surplus lines company continued expanding its processing system to handle new products and states in 2009. Agents appreciate the system's delivery of electronic copies of policies within minutes of underwriting approval and policy issue. Cincinnati Specialty Underwriters was recognized as a Celent Model Insurer in the area of service for successfully leveraging a previous implementation to quickly enter a new market in 2009.

Serving Shareholders. Now you can manage your Cincinnati Financial shares online by setting up your My Shareholder Account. Securely complete address changes, view your recent transactions or shareholder account statements and manage your participation in the Shareholder Investment Plan on your schedule. Once enrolled in that plan, you can buy shares directly from the company by making onetime purchases, monthly withdrawals from your bank account or reinvesting your quarterly dividends. Get started by going to Shareholder Information at www.cinfin.com/investors.

Shareholders who reinvest dividends compound your returns over time. Our 49-year record of consecutive dividend increases is matched by only a handful of companies. Your company qualified again in 2009 as an S&P 500 Dividend Aristocrat and a Mergent's Dividend Achiever.

Now shareholders of record can choose to hold shares in book entry instead of keeping track of paper certificates. This service protects you from the effort and cost to replace any misplaced certificates. To convert your certificated shares to book entry or request other services, please e-mail Shareholder_inquiries@cinfin.com or call our new toll-free shareholder line, 866-638-6443.

Reducing paper use supports our efforts to be green. Rankings published in Newsweek (September 2009) gave your company's operations a green score of 97.4 percent in the environmental impact category, the 16th most favorable score among 500 large companies evaluated.

Serving Policyholders. We made more payment options available in 2009 to the growing number of policyholders directly billed by Cincinnati rather than by their agencies. They can pay for home, auto and other personal property and casualty policies online or by telephone, using credit cards or bank account transfers. They can choose annual, semi-annual or quarterly pay plans or monthly electronic funds transfers. Soon, we will expand our online services to offer all personal lines policyholders view and print capability for policy declarations pages and auto identification cards.

Pay plans for directly billed commercial package policyholders also expanded this year, now including monthly direct invoicing or electronic funds transfer for all payment plans. We have heightened our responsiveness to our commercial workers' compensation policyholders and claimants, adding 24/7 toll-free direct claim reporting with prompt agent notifications, more workers' compensation claims specialists and field claims managers, and more loss control specialists and services. We believe employers, injured employees and the company all benefit from timely, personal attention to safety and claims.

In an independent survey of 8,693 independent agents who evaluated 200 insurers, Cincinnati was the top performer for handling claims fairly (Deep Customer Connections, October 2009).

Serving Agents with a Full Range of Products. By meeting our agents needs, we win an average of 16.7 percent of premiums in agency reporting locations that have represented us for 10 or more years. To increase that share and help diversify their revenue sources, we are expanding our product offerings.

We have developed personal lines automation for more states and refined our rates, attracting agencies that previously marketed only our commercial products. An additional 133 agencies gained the ability in 2009 to cross-serve commercial clients who already know about Cincinnati's superior claims service.

In just two years of writing excess and surplus lines we have expanded product availability to include excess casualty in addition to general liability, property and dozens of classes of professional errors and omissions insurance.

Recent additions to our commercial product portfolio include Educational Institution Legal Liability and Internet Security, both available as endorsements to our Blue Chip Policy for directors and officers. New commercial package endorsements include Internet Liability Coverage and Utility Services with Overhead Transmission and Distribution Line Coverage - Direct Damage and Time Element, which is incorporated into two new coverage bundles, the CinciPlus^® Commercial Property Power XCM^® and XC+^®. In 2010, our new Target Markets area is forming to identify specific commercial classes of business for which we will develop expertise, tailored coverage and marketing support.

Cincinnati is the 24^th largest of approximately 2,000 U.S. property casualty insurers based on 2008 direct premiums. According to A.M. Best data, our market share is 0.9 percent of industry premiums, indicating plenty of room to grow. Other direct written premium rankings and market shares: Commercial multiple peril - 12^th place and 3 percent; commercial auto - 16^th place and 1.5 percent; workers compensation - 23^rd place and 0.9 percent; homeowners multiple peril - 25^th place and 0.5 percent.