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Ohio
|
31-0746871
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
6200 S. Gilmore Road, Fairfield, Ohio
|
45014-5141
|
|
(Address of principal executive offices)
|
(Zip code)
|
Part I – Financial Information
|
3
|
Item 1. Financial Statements (unaudited)
|
3
|
Condensed Consolidated Balance Sheets
|
3
|
Condensed Consolidated Statements of Income
|
4
|
Condensed Consolidated Statements of Shareholders’ Equity
|
5
|
Condensed Consolidated Statements of Cash Flows
|
6
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
17
|
Safe Harbor Statement
|
17
|
Introduction
|
19
|
Results of Operations
|
24
|
Liquidity and Capital Resources
|
38
|
Other Matters
|
40
|
Item 3. Quantitative and Qualitative Disclosures about Market Risk
|
42
|
Fixed-Maturity Investments
|
42
|
Equity Investments
|
45
|
Unrealized Investment Gains and Losses
|
45
|
Item 4. Controls and Procedures
|
48
|
Part II – Other Information
|
48
|
Item 1.
Legal Proceedings
|
48
|
Item 1A. Risk Factors
|
48
|
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
|
48
|
Item 3.
Defaults upon Senior Securities
|
48
|
Item 4.
(Removed and Reserved)
|
48
|
Item 5.
Other Information
|
49
|
Item 6.
Exhibits
|
49
|
Item 1.
|
Financial Statements (unaudited)
|
(In millions except per share data)
|
March 31,
|
December 31,
|
||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Investments
|
||||||||
Fixed maturities, at fair value (amortized cost: 2011—$8,033; 2010—$7,888)
|
$ | 8,536 | $ | 8,383 | ||||
Equity securities, at fair value (cost: 2011—$2,223; 2010—$2,286)
|
3,100 | 3,041 | ||||||
Other invested assets
|
68 | 84 | ||||||
Total investments
|
11,704 | 11,508 | ||||||
Cash and cash equivalents
|
379 | 385 | ||||||
Investment income receivable
|
117 | 119 | ||||||
Finance receivable
|
76 | 73 | ||||||
Premiums receivable
|
1,062 | 1,015 | ||||||
Reinsurance receivable
|
573 | 572 | ||||||
Prepaid reinsurance premiums
|
16 | 18 | ||||||
Deferred policy acquisition costs
|
503 | 488 | ||||||
Land, building and equipment, net, for company use (accumulated depreciation: 2011—$368; 2010—$352)
|
243 | 229 | ||||||
Other assets
|
66 | 67 | ||||||
Separate accounts
|
630 | 621 | ||||||
Total assets
|
$ | 15,369 | $ | 15,095 | ||||
LIABILITIES
|
||||||||
Insurance reserves
|
||||||||
Loss and loss expense reserves
|
$ | 4,239 | $ | 4,200 | ||||
Life policy reserves
|
2,106 | 2,034 | ||||||
Unearned premiums
|
1,586 | 1,553 | ||||||
Other liabilities
|
555 | 556 | ||||||
Deferred income tax
|
296 | 260 | ||||||
Note payable
|
49 | 49 | ||||||
Long-term debt
|
790 | 790 | ||||||
Separate accounts
|
630 | 621 | ||||||
Total liabilities
|
10,251 | 10,063 | ||||||
Commitments and contingent liabilities (Note 10)
|
— | — | ||||||
SHAREHOLDERS' EQUITY
|
||||||||
Common stock, par value—$2 per share; (authorized: 2011 and 2010—500 million shares; issued: 2011 and 2010—196 million shares)
|
393 | 393 | ||||||
Paid-in capital
|
1,090 | 1,091 | ||||||
Retained earnings
|
3,977 | 3,980 | ||||||
Accumulated other comprehensive income
|
855 | 769 | ||||||
Treasury stock at cost (2011—33 million shares and 2010—34 million shares)
|
(1,197 | ) | (1,201 | ) | ||||
Total shareholders' equity
|
5,118 | 5,032 | ||||||
Total liabilities and shareholders' equity
|
$ | 15,369 | $ | 15,095 |
(In millions except per share data)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
REVENUES
|
||||||||
Earned premiums
|
$ | 782 | $ | 746 | ||||
Investment income, net of expenses
|
131 | 130 | ||||||
Fee revenues
|
1 | 1 | ||||||
Other revenues
|
3 | 2 | ||||||
Realized investment gains (losses), net:
|
||||||||
Other-than-temporary impairments on fixed maturity securities
|
- | (1 | ) | |||||
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income
|
- | - | ||||||
Other realized investment gains, net
|
12 | 9 | ||||||
Total realized investment gains, net
|
12 | 8 | ||||||
Total revenues
|
929 | 887 | ||||||
BENEFITS AND EXPENSES
|
||||||||
Insurance losses and policyholder benefits
|
575 | 516 | ||||||
Underwriting, acquisition and insurance expenses
|
261 | 268 | ||||||
Other operating expenses
|
4 | 4 | ||||||
Interest expense
|
13 | 14 | ||||||
Total benefits and expenses
|
853 | 802 | ||||||
INCOME BEFORE INCOME TAXES
|
76 | 85 | ||||||
PROVISION (BENEFIT) FOR INCOME TAXES
|
||||||||
Current
|
24 | 15 | ||||||
Deferred
|
(10 | ) | 2 | |||||
Total provision for income taxes
|
14 | 17 | ||||||
NET INCOME
|
$ | 62 | $ | 68 | ||||
PER COMMON SHARE
|
||||||||
Net income—basic
|
$ | 0.38 | $ | 0.42 | ||||
Net income—diluted
|
0.38 | 0.42 |
(In millions)
|
Accumulated
|
Total
|
||||||||||||||||||||||||||
Common Stock
|
Other
|
Share-
|
||||||||||||||||||||||||||
Outstanding
|
Paid-In
|
Retained
|
Comprehensive
|
Treasury
|
holders'
|
|||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income
|
Stock
|
Equity
|
||||||||||||||||||||||
Balance December 31, 2009
|
162 | $ | 393 | $ | 1,081 | $ | 3,862 | $ | 624 | $ | (1,200 | ) | $ | 4,760 | ||||||||||||||
Net income
|
- | - | - | 68 | - | - | 68 | |||||||||||||||||||||
Other comprehensive income, net
|
- | - | - | - | 98 | - | 98 | |||||||||||||||||||||
Total comprehensive income
|
166 | |||||||||||||||||||||||||||
Dividends declared
|
- | - | - | (65 | ) | - | - | (65 | ) | |||||||||||||||||||
Stock options exercised
|
1 | - | (2 | ) | - | - | 3 | 1 | ||||||||||||||||||||
Stock-based compensation
|
- | - | 3 | - | - | - | 3 | |||||||||||||||||||||
Other
|
- | - | (1 | ) | - | - | 1 | - | ||||||||||||||||||||
Balance March 31, 2010
|
163 | $ | 393 | $ | 1,081 | $ | 3,865 | $ | 722 | $ | (1,196 | ) | $ | 4,865 | ||||||||||||||
Balance December 31, 2010
|
163 | $ | 393 | $ | 1,091 | $ | 3,980 | $ | 769 | $ | (1,201 | ) | $ | 5,032 | ||||||||||||||
Net income
|
- | - | - | 62 | - | - | 62 | |||||||||||||||||||||
Other comprehensive income, net
|
- | - | - | - | 86 | - | 86 | |||||||||||||||||||||
Total comprehensive income
|
148 | |||||||||||||||||||||||||||
Dividends declared
|
- | - | - | (65 | ) | - | - | (65 | ) | |||||||||||||||||||
Stock options exercised
|
- | - | (2 | ) | - | - | 3 | 1 | ||||||||||||||||||||
Stock-based compensation
|
- | - | 3 | - | - | - | 3 | |||||||||||||||||||||
Other
|
- | - | (2 | ) | - | - | 1 | (1 | ) | |||||||||||||||||||
Balance March 31, 2011
|
163 | $ | 393 | $ | 1,090 | $ | 3,977 | $ | 855 | $ | (1,197 | ) | $ | 5,118 |
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 62 | $ | 68 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation, amortization and other non-cash items
|
11 | 10 | ||||||
Realized gains on investments
|
(12 | ) | (8 | ) | ||||
Stock-based compensation
|
3 | 3 | ||||||
Interest credited to contract holders
|
14 | 13 | ||||||
Deferred income tax (benefit) expense
|
(10 | ) | 2 | |||||
Changes in:
|
||||||||
Investment income receivable
|
2 | 2 | ||||||
Premiums and reinsurance receivable
|
(46 | ) | 69 | |||||
Deferred policy acquisition costs
|
(15 | ) | (10 | ) | ||||
Other assets
|
(5 | ) | (4 | ) | ||||
Loss and loss expense reserves
|
39 | (23 | ) | |||||
Life policy reserves
|
28 | 28 | ||||||
Unearned premiums
|
33 | 40 | ||||||
Other liabilities
|
(70 | ) | (29 | ) | ||||
Current income tax receivable/payable
|
23 | (51 | ) | |||||
Net cash provided by operating activities
|
57 | 110 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Sale of fixed maturities
|
28 | 74 | ||||||
Call or maturity of fixed maturities
|
149 | 176 | ||||||
Sale of equity securities
|
133 | 31 | ||||||
Collection of finance receivables
|
6 | 7 | ||||||
Purchase of fixed maturities
|
(269 | ) | (431 | ) | ||||
Purchase of equity securities
|
(66 | ) | (88 | ) | ||||
Change in short-term investments, net
|
- | 6 | ||||||
Investment in buildings and equipment, net
|
(2 | ) | (8 | ) | ||||
Investment in finance receivables
|
(9 | ) | (7 | ) | ||||
Change in other invested assets, net
|
- | 1 | ||||||
Net cash used in investing activities
|
(30 | ) | (239 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Payment of cash dividends to shareholders
|
(64 | ) | (63 | ) | ||||
Contract holders' funds deposited
|
53 | 58 | ||||||
Contract holders' funds withdrawn
|
(22 | ) | (17 | ) | ||||
Excess tax benefits on share-based compensation
|
3 | (2 | ) | |||||
Other
|
(3 | ) | (2 | ) | ||||
Net cash used in financing activities
|
(33 | ) | (26 | ) | ||||
Net change in cash and cash equivalents
|
(6 | ) | (155 | ) | ||||
Cash and cash equivalents at beginning of year
|
385 | 557 | ||||||
Cash and cash equivalents at end of period
|
$ | 379 | $ | 402 | ||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid
|
$ | - | $ | - | ||||
Income taxes paid
|
1 | 67 | ||||||
Non-cash activities:
|
||||||||
Conversion of securities
|
$ | - | $ | - | ||||
Equipment acquired under capital lease obligations
|
19 | - |
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Change in unrealized investment gains and losses and other summary:
|
||||||||
Fixed maturities
|
$ | 8 | $ | 85 | ||||
Equity securities
|
122 | 64 | ||||||
Adjustment to deferred acquisition costs and life policy reserves
|
- | (3 | ) | |||||
Pension obligations
|
1 | 1 | ||||||
Other
|
1 | 3 | ||||||
Income taxes on above
|
(46 | ) | (52 | ) | ||||
Total
|
$ | 86 | $ | 98 |
(In millions)
|
||||||||||||||||||||
Cost or
amortized
|
Gross unrealized
|
Fair
|
OTTI in
|
|||||||||||||||||
At March 31, 2011
|
cost
|
gains
|
losses
|
value | AOCI | |||||||||||||||
Fixed maturities:
|
||||||||||||||||||||
States, municipalities and political subdivisions
|
$ | 3,058 | $ | 112 | $ | 10 | $ | 3,160 | $ | - | ||||||||||
Convertibles and bonds with warrants attached
|
73 | - | - | 73 | - | |||||||||||||||
United States government
|
4 | 1 | - | 5 | - | |||||||||||||||
Government-sponsored enterprises
|
226 | - | 2 | 224 | - | |||||||||||||||
Foreign government
|
3 | - | - | 3 | - | |||||||||||||||
Corporate securities
|
4,669 | 408 | 6 | 5,071 | - | |||||||||||||||
Subtotal
|
8,033 | 521 | 18 | 8,536 | $ | - | ||||||||||||||
Equity securities:
|
||||||||||||||||||||
Common equities
|
2,149 | 858 | 11 | 2,996 | ||||||||||||||||
Preferred equities
|
74 | 30 | - | 104 | ||||||||||||||||
Subtotal
|
2,223 | 888 | 11 | 3,100 |
NA
|
|||||||||||||||
Total
|
$ | 10,256 | $ | 1,409 | $ | 29 | $ | 11,636 | ||||||||||||
At December 31, 2010
|
||||||||||||||||||||
Fixed maturities:
|
||||||||||||||||||||
States, municipalities and political subdivisions
|
$ | 3,043 | $ | 110 | $ | 10 | $ | 3,143 | $ | - | ||||||||||
Convertibles and bonds with warrants attached
|
69 | - | - | 69 | - | |||||||||||||||
United States government
|
4 | 1 | - | 5 | - | |||||||||||||||
Government-sponsored enterprises
|
201 | - | 1 | 200 | - | |||||||||||||||
Foreign government
|
3 | - | - | 3 | - | |||||||||||||||
Corporate securities
|
4,568 | 404 | 9 | 4,963 | - | |||||||||||||||
Subtotal
|
7,888 | 515 | 20 | 8,383 | $ | - | ||||||||||||||
Equity securities:
|
||||||||||||||||||||
Common equities
|
2,211 | 757 | 28 | 2,940 | ||||||||||||||||
Preferred equities
|
75 | 27 | 1 | 101 | ||||||||||||||||
Subtotal
|
2,286 | 784 | 29 | 3,041 |
NA
|
|||||||||||||||
Total
|
$ | 10,174 | $ | 1,299 | $ | 49 | $ | 11,424 |
(In millions)
|
Less than 12 months
|
12 months or more
|
Total
|
|||||||||||||||||||||
At March 31, 2011
|
Fair
value
|
Unrealized
losses
|
Fair
value
|
Unrealized
losses
|
Fair
value
|
Unrealized
losses
|
||||||||||||||||||
Fixed maturities:
|
||||||||||||||||||||||||
States, municipalities and political subdivisions
|
$ | 312 | $ | 9 | $ | 9 | $ | 1 | $ | 321 | $ | 10 | ||||||||||||
Government-sponsored enterprises
|
149 | 2 | - | - | 149 | 2 | ||||||||||||||||||
Corporate securities
|
339 | 4 | 31 | 2 | 370 | 6 | ||||||||||||||||||
Subtotal
|
800 | 15 | 40 | 3 | 840 | 18 | ||||||||||||||||||
Equity securities:
|
||||||||||||||||||||||||
Common equities
|
206 | 11 | - | - | 206 | 11 | ||||||||||||||||||
Preferred equities
|
5 | - | 23 | - | 28 | - | ||||||||||||||||||
Subtotal
|
211 | 11 | 23 | - | 234 | 11 | ||||||||||||||||||
Total
|
$ | 1,011 | $ | 26 | $ | 63 | $ | 3 | $ | 1,074 | $ | 29 | ||||||||||||
At December 31, 2010
|
||||||||||||||||||||||||
Fixed maturities:
|
||||||||||||||||||||||||
States, municipalities and political subdivisions
|
$ | 325 | $ | 9 | $ | 9 | $ | 1 | $ | 334 | $ | 10 | ||||||||||||
Government-sponsored enterprises
|
133 | 1 | - | - | 133 | 1 | ||||||||||||||||||
Corporate securities
|
354 | 6 | 39 | 3 | 393 | 9 | ||||||||||||||||||
Subtotal
|
812 | 16 | 48 | 4 | 860 | 20 | ||||||||||||||||||
Equity securities:
|
||||||||||||||||||||||||
Common equities
|
337 | 28 | - | - | 337 | 28 | ||||||||||||||||||
Preferred equities
|
5 | - | 23 | 1 | 28 | 1 | ||||||||||||||||||
Subtotal
|
342 | 28 | 23 | 1 | 365 | 29 | ||||||||||||||||||
Total
|
$ | 1,154 | $ | 44 | $ | 71 | $ | 5 | $ | 1,225 | $ | 49 |
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Fixed maturities
|
$ | - | $ | 1 | ||||
Equity securities
|
30 | - | ||||||
Total
|
$ | 30 | $ | 1 |
·
|
Level 1 – Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in active markets. This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities.
|
·
|
Level 2 – Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets and liabilities that are actively traded. This also includes pricing models for which the inputs are corroborated by market data.
|
·
|
Level 3 – Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Level 3 inputs include the following:
|
o
|
Quotes from brokers or other external sources that are not considered binding;
|
o
|
Quotes from brokers or other external sources where it cannot be determined that market participants would in fact transact for the asset or liability at the quoted price; or
|
o
|
Quotes from brokers or other external sources where the inputs are not deemed observable.
|
(In millions)
|
Asset fair value measurements at March 31, 2011 using:
|
|||||||||||||||
Quoted prices in
active markets for
identical assets
(Level 1)
|
Significant other
observable inputs
(Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
Total
|
|||||||||||||
Fixed maturities, available for sale:
|
||||||||||||||||
States, municipalities and political subdivisions
|
$ | - | $ | 3,156 | $ | 4 | $ | 3,160 | ||||||||
Convertibles and bonds with warrants attached
|
- | 73 | - | 73 | ||||||||||||
United States government
|
5 | - | - | 5 | ||||||||||||
Government-sponsored enterprises
|
- | 224 | - | 224 | ||||||||||||
Foreign government
|
- | 3 | - | 3 | ||||||||||||
Corporate securities
|
- | 5,060 | 11 | 5,071 | ||||||||||||
Subtotal
|
5 | 8,516 | 15 | 8,536 | ||||||||||||
Common equities, available for sale
|
2,996 | - | - | 2,996 | ||||||||||||
Preferred equities, available for sale
|
- | 98 | 6 | 104 | ||||||||||||
Taxable fixed maturities separate accounts
|
- | 604 | - | 604 | ||||||||||||
Top Hat Savings Plan
|
9 | - | - | 9 | ||||||||||||
Total
|
$ | 3,010 | $ | 9,218 | $ | 21 | $ | 12,249 | ||||||||
(In millions)
|
Asset fair value measurements at December 31, 2010 using:
|
|||||||||||||||
Quoted prices in
active markets for
identical assets
(Level 1)
|
Significant other
observable inputs
(Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
Total
|
|||||||||||||
Fixed maturities, available for sale:
|
||||||||||||||||
Corporate securities
|
$ | - | $ | 4,943 | $ | 20 | $ | 4,963 | ||||||||
Convertibles and bonds with warrants attached
|
- | 69 | - | 69 | ||||||||||||
Foreign government
|
- | 3 | - | 3 | ||||||||||||
United States government
|
5 | - | - | 5 | ||||||||||||
Government-sponsored enterprises
|
- | 200 | - | 200 | ||||||||||||
States, municipalities and political subdivisions
|
- | 3,139 | 4 | 3,143 | ||||||||||||
Subtotal
|
5 | 8,354 | 24 | 8,383 | ||||||||||||
Common equities, available for sale
|
2,940 | - | - | 2,940 | ||||||||||||
Preferred equities, available for sale
|
- | 96 | 5 | 101 | ||||||||||||
Taxable fixed maturities separate accounts
|
- | 606 | 2 | 608 | ||||||||||||
Top Hat Savings Plan
|
9 | - | - | 9 | ||||||||||||
Total
|
$ | 2,954 | $ | 9,056 | $ | 31 | $ | 12,041 |
(In millions)
|
Asset fair value measurements using significant unobservable inputs (Level 3)
|
|||||||||||||||||||||||
Corporate
fixed
maturities
|
Taxable fixed
maturities-
separate accounts
|
States,
municipalities
and political
subdivisions
fixed maturities
|
Common
equities
|
Preferred
equities
|
Total
|
|||||||||||||||||||
Beginning balance, December 31, 2010
|
$ | 20 | $ | 2 | $ | 4 | $ | - | $ | 5 | $ | 31 | ||||||||||||
Total gains or losses (realized/unrealized):
|
||||||||||||||||||||||||
Included in earnings (or changes in net assets)
|
- | - | - | - | - | - | ||||||||||||||||||
Included in other comprehensive income
|
- | - | - | - | - | - | ||||||||||||||||||
Purchases, sales, issuances, and settlements
|
- | - | - | - | - | - | ||||||||||||||||||
Transfers into Level 3
|
- | - | 1 | 1 | ||||||||||||||||||||
Transfers out of Level 3
|
(9 | ) | (2 | ) | - | - | - | (11 | ) | |||||||||||||||
Ending balance, March 31, 2011
|
$ | 11 | $ | - | $ | 4 | $ | - | $ | 6 | $ | 21 | ||||||||||||
(In millions)
|
Asset fair value measurements using significant unobservable inputs (Level 3)
|
|||||||||||||||||||||||
Taxable
fixed
maturities
|
Taxable fixed
maturities-
separate accounts
|
Tax-exempt
fixed maturities
|
Common
equities
|
Preferred
equities
|
Total
|
|||||||||||||||||||
Beginning balance, December 31, 2009
|
$ | 27 | $ | - | $ | 4 | $ | - | $ | 5 | $ | 36 | ||||||||||||
Total gains or losses (realized/unrealized):
|
||||||||||||||||||||||||
Included in earnings (or changes in net assets)
|
- | - | - | - | - | - | ||||||||||||||||||
Included in other comprehensive income
|
- | - | - | - | 1 | 1 | ||||||||||||||||||
Purchases, sales, issuances, and settlements
|
5 | - | - | - | - | 5 | ||||||||||||||||||
Transfers in and/or out of Level 3
|
(4 | ) | - | - | - | - | (4 | ) | ||||||||||||||||
Ending balance, March 31, 2010
|
$ | 28 | $ | - | $ | 4 | $ | - | $ | 6 | $ | 38 |
(In millions)
|
Book value
|
Principal amount
|
||||||||||||||||||||
March 31,
|
December
31,
|
March 31,
|
December
31,
|
|||||||||||||||||||
Interest
rate
|
Year of
issue
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||
6.900 | % | 1998 |
Senior debentures, due 2028
|
$ | 28 | $ | 28 | $ | 28 | $ | 28 | |||||||||||
6.920 | % | 2005 |
Senior debentures, due 2028
|
391 | 391 | 391 | 391 | |||||||||||||||
6.125 | % | 2004 |
Senior notes, due 2034
|
371 | 371 | 374 | 374 | |||||||||||||||
Total
|
$ | 790 | $ | 790 | $ | 793 | $ | 793 |
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Deferred policy acquisition costs asset, beginning of period
|
$ | 488 | $ | 481 | ||||
Capitalized deferred policy acquisition costs
|
178 | 171 | ||||||
Amortized deferred policy acquisition costs
|
(163 | ) | (161 | ) | ||||
Amortized shadow deferred policy acquisition costs
|
- | (6 | ) | |||||
Deferred policy acquisition costs asset, end of period
|
$ | 503 | $ | 485 |
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Gross loss and loss expense reserves, beginning of period
|
$ | 4,137 | $ | 4,096 | ||||
Less reinsurance receivable
|
326 | 435 | ||||||
Net loss and loss expense reserves, beginning of period
|
3,811 | 3,661 | ||||||
Net incurred loss and loss expenses related to:
|
||||||||
Current accident year
|
588 | 514 | ||||||
Prior accident years
|
(58 | ) | (39 | ) | ||||
Total incurred
|
530 | 475 | ||||||
Net paid loss and loss expenses related to:
|
||||||||
Current accident year
|
129 | 113 | ||||||
Prior accident years
|
359 | 301 | ||||||
Total paid
|
488 | 414 | ||||||
Net loss and loss expense reserves, end of period
|
3,853 | 3,722 | ||||||
Plus reinsurance receivable
|
326 | 343 | ||||||
Gross loss and loss expense reserves, end of period
|
$ | 4,179 | $ | 4,065 |
(In millions)
|
March 31,
|
December 31,
|
||||||
2011
|
2010
|
|||||||
Ordinary/traditional life
|
$ | 640 | $ | 628 | ||||
Universal life
|
467 | 459 | ||||||
Deferred annuities
|
783 | 730 | ||||||
Investment contracts
|
199 | 200 | ||||||
Other
|
17 | 17 | ||||||
Total gross reserves
|
$ | 2,106 | $ | 2,034 |
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Direct earned premiums
|
$ | 780 | $ | 744 | ||||
Assumed earned premiums
|
5 | 3 | ||||||
Ceded earned premiums
|
(40 | ) | (40 | ) | ||||
Net earned premiums
|
$ | 745 | $ | 707 |
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Direct incurred loss and loss expenses
|
$ | 527 | $ | 449 | ||||
Assumed incurred loss and loss expenses
|
15 | 2 | ||||||
Ceded incurred loss and loss expenses
|
(12 | ) | 23 | |||||
Net incurred loss and loss expenses
|
$ | 530 | $ | 474 |
(In millions)
|
Three months ended March 31,
|
|||||||
|
2011
|
2010
|
||||||
Direct earned premiums
|
$ | 50 | $ | 50 | ||||
Assumed earned premiums
|
- | - | ||||||
Ceded earned premiums
|
(13 | ) | (11 | ) | ||||
Net earned premiums
|
$ | 37 | $ | 39 |
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Direct contract holders' benefits incurred
|
$ | 53 | $ | 57 | ||||
Assumed contract holders' benefits incurred
|
- | - | ||||||
Ceded contract holders' benefits incurred
|
(8 | ) | (15 | ) | ||||
Net incurred loss and loss expenses
|
$ | 45 | $ | 42 |
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Service cost
|
$ | 3 | $ | 2 | ||||
Interest cost
|
3 | 3 | ||||||
Expected return on plan assets
|
(4 | ) | (3 | ) | ||||
Amortization of actuarial loss and prior service cost
|
1 | 1 | ||||||
Net periodic benefit cost
|
$ | 3 | $ | 3 |
(Shares in thousands)
|
Shares
|
Weighted-
average
exercise price
|
||||||
Outstanding at January 1, 2011
|
9,690 | $ | 36.59 | |||||
Granted
|
876 | 34.04 | ||||||
Exercised
|
(14 | ) | 26.82 | |||||
Forfeited or expired
|
(939 | ) | 33.05 | |||||
Outstanding at March 31, 2011
|
9,613 | 36.72 |
(Shares in thousands)
|
Service-based
nonvested shares
|
Weighted-average
grant-date fair
value
|
Performance-based
nonvested shares
|
Weighted-average
grant-date
fair
value
|
||||||||||||
Nonvested at January 1, 2011
|
716 | $ | 26.00 | 149 | $ | 26.08 | ||||||||||
Granted
|
298 | 29.59 | 41 | 31.77 | ||||||||||||
Vested
|
(215 | ) | 34.48 | - | 0.00 | |||||||||||
Forfeited or canceled
|
(4 | ) | 24.57 | (43 | ) | 32.56 | ||||||||||
Nonvested at March 31, 2011
|
795 | 25.06 | 147 | 25.78 |
Three months ended March 31,
|
||||||||
2011
|
2010
|
|||||||
Tax at statutory rate
|
35.0 | % | 35.0 | % | ||||
Increase (decrease) resulting from:
|
||||||||
Tax-exempt income from municipal bonds
|
(11.4 | ) | (10.8 | ) | ||||
Dividend received exclusion
|
(6.7 | ) | (5.2 | ) | ||||
Other
|
1.5 | 1.0 | ||||||
Effective rate
|
18.4 | % | 20.0 | % |
·
|
Commercial lines property casualty insurance
|
·
|
Personal lines property casualty insurance
|
·
|
Excess and Surplus lines property and casualty insurance
|
·
|
Life insurance
|
·
|
Investments
|
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Revenues:
|
||||||||
Commercial lines insurance
|
||||||||
Commercial casualty
|
$ | 172 | $ | 164 | ||||
Commercial property
|
126 | 121 | ||||||
Commercial auto
|
96 | 95 | ||||||
Workers' compensation
|
76 | 74 | ||||||
Specialty packages
|
37 | 37 | ||||||
Surety and executive risk
|
25 | 24 | ||||||
Machinery and equipment
|
8 | 8 | ||||||
Commercial lines insurance premiums
|
540 | 523 | ||||||
Fee revenue
|
1 | 1 | ||||||
Total commercial lines insurance
|
541 | 524 | ||||||
Personal lines insurance
|
||||||||
Personal auto
|
89 | 81 | ||||||
Homeowner
|
76 | 70 | ||||||
Other personal lines
|
25 | 23 | ||||||
Personal lines insurance premiums
|
190 | 174 | ||||||
Fee revenue
|
- | - | ||||||
Total personal lines insurance
|
190 | 174 | ||||||
Excess and surplus lines insurance
|
15 | 11 | ||||||
Life insurance
|
38 | 39 | ||||||
Investment operations
|
143 | 138 | ||||||
Other
|
2 | 1 | ||||||
Total revenues
|
$ | 929 | $ | 887 | ||||
Income (loss) before income taxes:
|
||||||||
Insurance underwriting results:
|
||||||||
Commercial lines insurance
|
$ | (21 | ) | $ | (10 | ) | ||
Personal lines insurance
|
(3 | ) | (5 | ) | ||||
Excess and surplus lines insurance
|
(5 | ) | (3 | ) | ||||
Life insurance
|
(3 | ) | - | |||||
Investment operations
|
123 | 119 | ||||||
Other
|
(15 | ) | (16 | ) | ||||
Total
|
$ | 76 | $ | 85 | ||||
Identifiable assets:
|
March 31,
|
December 31,
|
||||||
2011 | 2010 | |||||||
Property casualty insurance
|
$ | 2,045 | $ | 2,008 | ||||
Life insurance
|
1,191 | 1,214 | ||||||
Investment operations
|
11,769 | 11,543 | ||||||
Other
|
364 | 330 | ||||||
Total
|
$ | 15,369 | $ | 15,095 |
·
|
Unusually high levels of catastrophe losses due to risk
concentrations, changes in weather patterns, environmental events, terrorism incidents or other causes
|
·
|
Increased frequency and/or severity of claims
|
·
|
Inadequate estimates or assumptions used for critical accounting estimates
|
·
|
Recession or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies
|
·
|
Delays in adoption and implementation of underwriting and pricing methods that could increase our pricing accuracy, underwriting profit and competitiveness
|
·
|
Inability to defer policy acquisition costs for any business segment if pricing and loss trends would lead management to conclude that segment could not achieve sustainable profitability
|
·
|
Declines in overall stock market values negatively affecting the company’s equity portfolio and book value
|
·
|
Events, such as the credit crisis, followed by prolonged periods of economic instability or recession, that lead
to:
|
|
o
|
Significant or prolonged decline in the value of a particular security or group of securities and impairment of the asset(s)
|
|
o
|
Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities
|
|
o
|
Significant rise in losses from surety and director and officer policies written for financial institutions
|
·
|
Prolonged low interest rate environment or other factors that limit the company’s ability to generate growth in investment income or interest rate fluctuations that result in declining values of fixed-maturity investments, including declines in accounts in which we hold bank-owned life insurance contract assets
|
·
|
Increased competition that could result in a significant reduction in the company’s premium volume
|
·
|
Changing consumer insurance-buying habits and consolidation of independent insurance agencies that could alter our competitive advantages
|
·
|
Inability to obtain adequate reinsurance on acceptable terms, amount of reinsurance purchased, financial strength of reinsurers and the potential for non-payment or delay in payment by reinsurers
|
·
|
Events or conditions that could weaken or harm the company’s relationships with its independent agencies and hamper opportunities to add new agencies, resulting in limitations on the company’s opportunities for growth, such as:
|
|
o
|
Downgrades of the company’s financial strength ratings
|
|
o
|
Concerns that doing business with the company is too difficult
|
|
o
|
Perceptions that the company’s level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace
|
|
o
|
Delays or inadequacies in the development, implementation, performance and benefits of technology projects and enhancements
|
·
|
Actions of insurance departments, state attorneys general or other regulatory agencies, including a change to a federal system of regulation from a state-based system, that:
|
|
o
|
Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business
|
|
o
|
Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations
|
|
o
|
Add assessments for guaranty funds, other insurance related assessments or mandatory reinsurance arrangements; or that impair our ability to recover such assessments through future surcharges or other rate changes
|
|
o
|
Increase our provision for federal income taxes due to changes in tax law
|
|
o
|
Increase our other expenses
|
|
o
|
Limit our ability to set fair, adequate and reasonable
rates
|
|
o
|
Place us at a disadvantage in the marketplace
|
|
o
|
Restrict our ability to execute our business model, including the way we compensate agents
|
·
|
Adverse outcomes from litigation or administrative proceedings
|
·
|
Events or actions, including unauthorized intentional circumvention of controls, that reduce the company’s future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002
|
·
|
Unforeseen departure of certain executive officers or other key employees due to retirement, health or other
causes that could interrupt progress toward important strategic goals or diminish the effectiveness of certain longstanding relationships with insurance agents and others
|
·
|
Events, such as an epidemic, natural catastrophe or terrorism, that could hamper our ability to assemble our workforce at our headquarters location
|
·
|
Difficulties with technology or data security breaches that could negatively affect our ability to conduct business
and our relationships with agents, policyholders and others
|
(Dollars in millions except share data)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Income statement data
|
||||||||||||
Earned premiums
|
$ | 782 | $ | 746 | 5 | |||||||
Investment income, net of expenses (pretax)
|
131 | 130 | 1 | |||||||||
Realized investment gains and losses (pretax)
|
12 | 8 | 50 | |||||||||
Total revenues
|
929 | 887 | 5 | |||||||||
Net income
|
62 | 68 | (9 | ) | ||||||||
Per share data
|
||||||||||||
Net income - diluted
|
0.38 | 0.42 | (10 | ) | ||||||||
Cash dividends declared
|
0.40 | 0.395 | 1 | |||||||||
Weighted average shares outstanding
|
163,669,998 | 163,310,451 | 0 |
(Dollars in millions except share data)
|
At March 31,
|
At December 31,
|
||||||
2011
|
2010
|
|||||||
Balance sheet data
|
||||||||
Invested assets
|
$ | 11,704 | $ | 11,508 | ||||
Total assets
|
15,369 | 15,095 | ||||||
Short-term debt
|
49 | 49 | ||||||
Long-term debt
|
790 | 790 | ||||||
Shareholders' equity
|
5,118 | 5,032 | ||||||
Book value per share
|
31.40 | 30.91 | ||||||
Debt-to-total-capital ratio
|
14.1 | % | 14.3 | % | ||||
Three months ended March 31,
|
||||||||
2011 | 2010 | |||||||
Performance measure
|
||||||||
Value creation ratio
|
2.9 | % | 3.4 | % |
·
|
Premium growth – We believe over any five-year period our agency relationships and initiatives can lead to a property casualty written premium growth rate that exceeds the industry average. The compound annual growth rate of our net written premiums was negative 0.7
percent over the five-year period 2006
through 2010, slightly worse than the negative 0.5 percent estimated growth rate for the property casualty insurance industry. Our premium mix, relative to the industry, is more heavily weighted in commercial lines and premium growth for the commercial lines segment of the industry has lagged growth for the personal lines segment in recent years.
|
·
|
Combined ratio – We believe our underwriting philosophy and initiatives can generate a GAAP combined ratio over any five-year period that is consistently below 100 percent. Our GAAP combined ratio averaged 98.3
percent over the five-year period 2006 through 2010. It was below 100
percent in 2006 and 2007, but was above 100 percent for 2008 through 2010, when we averaged 102.3
percent, including an average catastrophe loss ratio that was 2.1 percentage points higher than our average for the 10-year period prior to 2008. Our statutory combined ratio averaged 98.2
percent over the five-year period 2006 through 2010
compared with an estimated 99.5
percent for the property casualty industry.
|
·
|
Investment contribution – We believe our investment philosophy and initiatives can drive investment income growth and lead to a total return on our equity investment portfolio over a five-year period that exceeds the five-year return of the Standard & Poor’s 500 Index. The compound annual return for our equity portfolio over the five-year period 2006 through 2010 was negative 3.0
percent compared with positive 2.3
percent for the Index. Our equity portfolio underperformed the market for the five-year period primarily because of the 2008 decline in the market value of our previously large equity holdings in the financial services sector.
|
·
|
Improve insurance profitability – Implementation of this group of initiatives is intended to improve pricing capabilities for our property casualty business, increasing our ability to manage our business while also enhancing our efficiency. Improved pricing capabilities through the use of technology and analytics can lead to better profit margins. Improved planning for growth and profitability can enhance our ability to achieve objectives at all levels in the organization. Improved internal processes with additional performance metrics can help us be more efficient and effective. These initiatives support the ability of the agencies that represent us to grow profitably by allowing them to serve clients faster and to more efficiently manage agency expenses.
|
·
|
Drive premium growth – Implementation of this group of initiatives is intended to further penetrate each market we serve through our independent agency network. Strategies aimed at specific market opportunities, along with service enhancements, can help our agents grow and increase our share of their business. Diversified growth also may reduce variability of losses from weather-related catastrophes.
|
·
|
Improve pricing precision using predictive analytics – We continue efforts to expand our pricing and underwriting capabilities by using predictive analytics and expect cumulative benefits of these efforts to improve loss ratios over time. Development of additional business data to support accurate underwriting, pricing and other business decisions also continues. A project that will continue in phases over the next several years will deploy a full data management program, including a data warehouse for our property casualty and life insurance operations, providing enhanced granularity of pricing data. 2011 progress to date and future plans for key initiatives are summarized below.
|
|
o
|
Commercial lines – In the second half of 2009, we began to use predictive modeling tools that align individual insurance policy pricing to risk attributes for our workers’ compensation line of business. By late 2010, we had completed development of predictive models for our commercial auto line of business and also for general liability and commercial property coverages in commercial package accounts. A pilot version for production use of tools for these three business lines began early in the second quarter of 2011, and we plan a full-production release before the end of 2011. Underwriters using these tools have enhanced abilities to target profitability and to discuss pricing impacts with agency personnel. Development of similar tools for our specialty packages line of business is planned for the second half of 2011.
|
|
o
|
Personal lines – Prior to 2010, we began to use predictive modeling tools for our homeowner line of business, and in late 2010 we began using similar analytics for personal auto. We believe we are successfully attracting more of our agents’ preferred business, based on trends indicating the average quality of our book of business as measured by the insurance score profile. Personal lines new business written premiums continue to increase at a strong pace, growing 22 percent during the first three months of 2011. We are continuing to develop model attributes and expand our pricing points to add more precision. This includes an update to the modeling of our homeowner book for pricing changes targeted for implementation beginning the fourth quarter of 2011.
|
·
|
Improve agency-level planning for profitability and growth – Additional use of analytics tools helps us to better understand our business in greater detail and to communicate additional quantitative and qualitative information to agents and associates. To predict profitability, we are developing models at an agency level and in aggregate. Enhanced reporting of related metrics should facilitate coordination and consistent decision-making. During 2011, we expect to enhance our agency planning processes to develop multi-year profitability and growth plans.
|
·
|
Improve internal processes and further deploy performance metrics – Improving processes supports our strategic goals and can reduce internal costs. Use of additional measurements to track progress and accountability for results will improve our overall effectiveness. Our commercial lines operation is developing additional performance metrics for underwriting associates that we plan to pilot in 2011. Completion of development for additional coverages in our commercial lines policy administration system is expected to facilitate important internal process improvement initiatives for 2011. Progress during the first quarter of 2011 included implementing professional and employment practices liability insurance in one of our larger states with development for additional states and coverages in progress. Another important initiative aims to develop business rules and parameters for personal lines accounts that will allow processing of risks that meet qualifying underwriting criteria without intervention by an underwriter. The objective is to streamline processing for our agents and associates, permitting more time for risks that need additional service or attention. The initiative includes developing technology to integrate automated steps into the current process plus changes in workflow, including auditing for compliance with eligibility requirements. Progress during the first quarter of 2011 included piloting a new rules engine for a select sample of new business. Changes resulting from the pilot are targeted for implementation during the second quarter of 2011.
|
·
|
Gain a larger share of agency business – We continue to execute on prior year growth initiatives and add new initiatives to improve our penetration in each market we serve through our independent agencies. Our
focus remains on the key components of agent satisfaction based on factors agents tell us are most important.
|
|
o
|
Innovate our small business strategy – Additional focus on attributes that agencies weigh heavily in carrier selection for their clients is a key component of this initiative. Those attributes include technology ease of use and integration with agency management systems, flexible billing, product breadth and pricing, and service and marketing support for new business. The initiative includes refining workflows for the entire policy process, including more streamlined underwriting and claims processes, and providing additional policyholder services. We also are developing and coordinating small business targeted marketing, including cross-selling opportunities for our agencies, through our Target Markets department. This area focuses on new commercial product development, including identification and promotional support for promising classes of business. This strategy also is expected to grow our existing book of small business and to improve profitability due to lower expenses through more automation of data gathering and use of predictive analytics.
|
|
o
|
New agency appointments – We continue to appoint new agencies to develop additional points of distribution, focusing on areas where our market share is less than 1 percent while also considering economic and catastrophe risk factors. In 2011, we are targeting approximately 120 appointments of independent agencies, with a significant portion in the five states we entered since late 2008. During the first three months of 2011, we appointed 40 new agencies that write an aggregate of approximately $650 million in property casualty premiums annually with various companies for an average of approximately $16
million per agency. As of March 31, 2011, a total of 1,263
agency relationships market our standard market insurance products from 1,569
reporting locations.
|
·
|
Improve consumer relationships we undertake on behalf of our agencies – Improved interactions with consumers who are clients and prospects of our agents can drive more business to agents and help them grow. Through this initiative, we expect to identify the various ways we interact with consumers on behalf of our agencies and ensure that we do so in a manner that reinforces the value of the independent agent while establishing the value and service of a Cincinnati policy. By understanding and monitoring trends that drive consumer purchasing decisions, we can create positive interactions. We expect online policyholder services to continue evolving and will continue to work with agencies to meet the needs of their clients. During the first quarter of 2011, we completed research that included agent and consumer surveys. Analysis of survey data yielded significant insights on consumer preferences and perceptions that we will use to make informed decisions and set priorities as we work to create positive consumer experiences that support the agent’s consumer relationships.
|
Insurer Financial Strength Ratings
|
||||||||||||||||||||
Rating
Agency
|
Standard Market Property
Casualty Insurance
Subsidiary
|
Life Insurance
Subsidiary
|
Excess and Surplus
Insurance
Subsidiary
|
Date of Most Recent
Affirmation or Action
|
||||||||||||||||
Rating
Tier
|
Rating
Tier
|
Rating
Tier
|
||||||||||||||||||
A. M. Best Co.
|
A+
|
Superior
|
2 of 16
|
A
|
Excellent
|
3 of 16
|
A
|
Excellent
|
3 of 16
|
Stable outlook (12/13/10)
|
||||||||||
Fitch Ratings
|
A+
|
Strong
|
5 of 21
|
A+
|
Strong
|
5 of 21
|
-
|
-
|
-
|
Stable outlook (9/2/10)
|
||||||||||
Moody's Investors
Service
|
A1
|
Good
|
5 of 21
|
-
|
-
|
-
|
-
|
-
|
-
|
Stable outlook (9/25/08)
|
||||||||||
Standard & Poor's
Ratings Services
|
A
|
Strong
|
6 of 21
|
A
|
Strong
|
6 of 21
|
-
|
-
|
-
|
Stable outlook (7/19/10)
|
·
|
All of our insurance subsidiaries continue to be highly rated. No ratings agency actions to our insurer financial strength ratings have occurred in 2011.
|
·
|
Commercial lines property casualty insurance
|
·
|
Personal lines property casualty insurance
|
·
|
Excess and surplus lines property casualty insurance
|
·
|
Life insurance
|
·
|
Investments
|
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Earned premiums
|
$ | 745 | $ | 708 | 5 | |||||||
Fee revenues
|
1 | 1 | 0 | |||||||||
Total revenues
|
746 | 709 | 5 | |||||||||
Loss and loss expenses from:
|
||||||||||||
Current accident year before catastrophe losses
|
546 | 492 | 11 | |||||||||
Current accident year catastrophe losses
|
42 | 22 | 91 | |||||||||
Prior accident years before catastrophe losses
|
(57 | ) | (32 | ) | (78 | ) | ||||||
Prior accident years catastrophe losses
|
(1 | ) | (7 | ) | 86 | |||||||
Total loss and loss expenses
|
530 | 475 | 12 | |||||||||
Underwriting expenses
|
245 | 252 | (3 | ) | ||||||||
Underwriting loss
|
$ | (29 | ) | $ | (18 | ) | (61 | ) | ||||
Ratios as a percent of earned premiums:
|
Pt. Change
|
|||||||||||
Current accident year before catastrophe losses
|
73.3 | % | 69.5 | % | 3.8 | |||||||
Current accident year catastrophe losses
|
5.7 | 3.1 | 2.6 | |||||||||
Prior accident years before catastrophe losses
|
(7.7 | ) | (4.6 | ) | (3.1 | ) | ||||||
Prior accident years catastrophe losses
|
(0.2 | ) | (1.0 | ) | 0.8 | |||||||
Total loss and loss expenses
|
71.1 | 67.0 | 4.1 | |||||||||
Underwriting expenses
|
32.8 | 35.6 | (2.8 | ) | ||||||||
Combined ratio
|
103.9 | % | 102.6 | % | 1.3 | |||||||
Combined ratio:
|
103.9 | % | 102.6 | % | 1.3 | |||||||
Contribution from catastrophe losses and prior years reserve development
|
(2.2 | ) | (2.5 | ) | 0.3 | |||||||
Combined ratio before catastrophe losses and prior years reserve development
|
106.1 | % | 105.1 | % | 1.0 |
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Agency renewal written premiums
|
$ | 708 | $ | 682 | 4 | |||||||
Agency new business written premiums
|
102 | 92 | 11 | |||||||||
Other written premiums
|
(31 | ) | (18 | ) | (72 | ) | ||||||
Net written premiums
|
779 | 756 | 3 | |||||||||
Unearned premium change
|
(34 | ) | (48 | ) | 29 | |||||||
Earned premiums
|
$ | 745 | $ | 708 | 5 |
(In millions, net of reinsurance)
|
Three months ended March 31,
|
|||||||||||||||||||
Excess
|
||||||||||||||||||||
Commercial
|
Personal
|
and surplus
|
||||||||||||||||||
Dates
|
Cause of loss
|
Region
|
lines
|
lines
|
lines
|
Total
|
||||||||||||||
2011
|
||||||||||||||||||||
Jan. 31 - Feb 3
|
Flood, freezing, ice, snow, wind
|
South, Midwest
|
$ | 5 | $ | 5 | $ | - | $ | 10 | ||||||||||
Feb. 27 – 28
|
Flood, hail, tornado, wind
|
Midwest
|
5 | 8 | - | 13 | ||||||||||||||
Mar. 11
|
Earthquake
|
Japan
|
8 | - | - | 8 | ||||||||||||||
All other 2011 catastrophes
|
5 | 6 | - | 11 | ||||||||||||||||
Development on 2010 and prior catastrophes
|
4 | (5 | ) | - | (1 | ) | ||||||||||||||
Calendar year incurred total
|
$ | 27 | $ | 14 | $ | - | $ | 41 | ||||||||||||
2010
|
||||||||||||||||||||
Jan. 7
|
Freezing, wind
|
South, Midwest
|
$ | 4 | $ | 2 | $ | - | $ | 6 | ||||||||||
Feb. 4
|
Ice, snow, wind
|
East, Midwest
|
4 | 1 | - | 5 | ||||||||||||||
Feb. 9
|
Ice, snow, wind
|
East, Midwest
|
6 | 2 | - | 8 | ||||||||||||||
All other 2010 catastrophes
|
2 | 1 | - | 3 | ||||||||||||||||
Development on 2009 and prior catastrophes
|
(6 | ) | (1 | ) | - | (7 | ) | |||||||||||||
Calendar year incurred total
|
$ | 10 | $ | 5 | $ | - | $ | 15 |
Three months ended March 31,
|
||||||||||||
2011
|
2010
|
Change %
|
||||||||||
Earned premiums
|
$ | 540 | $ | 523 | 3 | |||||||
Fee revenues
|
1 | 1 | 0 | |||||||||
Total revenues
|
541 | 524 | 3 | |||||||||
Loss and loss expenses from:
|
||||||||||||
Current accident year before catastrophe losses
|
402 | 371 | 8 | |||||||||
Current accident year catastrophe losses
|
23 | 16 | 44 | |||||||||
Prior accident years before catastrophe losses
|
(55 | ) | (28 | ) | (96 | ) | ||||||
Prior accident years catastrophe losses
|
4 | (6 | ) |
nm
|
||||||||
Total loss and loss expenses
|
374 | 353 | 6 | |||||||||
Underwriting expenses
|
188 | 181 | 4 | |||||||||
Underwriting loss
|
$ | (21 | ) | $ | (10 | ) | (110 | ) | ||||
Ratios as a percent of earned premiums:
|
Pt. Change
|
|||||||||||
Current accident year before catastrophe losses
|
74.5 | % | 71.1 | % | 3.4 | |||||||
Current accident year catastrophe losses
|
4.3 | 3.0 | 1.3 | |||||||||
Prior accident years before catastrophe losses
|
(10.2 | ) | (5.5 | ) | (4.7 | ) | ||||||
Prior accident years catastrophe losses
|
0.6 | (1.2 | ) | 1.8 | ||||||||
Total loss and loss expenses
|
69.2 | 67.4 | 1.8 | |||||||||
Underwriting expenses
|
34.8 | 34.7 | 0.1 | |||||||||
Combined ratio
|
104.0 | % | 102.1 | % | 1.9 | |||||||
Combined ratio:
|
104.0 | % | 102.1 | % | 1.9 | |||||||
Contribution from catastrophe losses and prior years reserve development
|
(5.3 | ) | (3.7 | ) | (1.6 | ) | ||||||
Combined ratio before catastrophe losses and prior years reserve development
|
109.3 | % | 105.8 | % | 3.5 |
·
|
Premiums – Commercial lines earned premiums grew 3 percent during the first quarter of 2011 while net written premiums were essentially flat. Premiums for our commercial casualty and workers’ compensation business include the result of policy audits that adjust initial premium amounts based on differences between estimated and actual sales or payroll related to a specific policy. Audits contributed $18 million of the $17 million net increase in earned premiums for the first quarter of 2011 compared with the same period a year ago. The premiums table below analyzes other components of earned premiums.
|
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Agency renewal written premiums
|
$ | 542 | $ | 533 | 2 | |||||||
Agency new business written premiums
|
71 | 66 | 8 | |||||||||
Other written premiums
|
(25 | ) | (11 | ) | (127 | ) | ||||||
Net written premiums
|
588 | 588 | 0 | |||||||||
Unearned premium change
|
(48 | ) | (65 | ) | 26 | |||||||
Earned premiums
|
$ | 540 | $ | 523 | 3 |
·
|
Combined ratio – The commercial lines combined ratio for the first quarter of 2011 increased compared with the 2010 first quarter, driven by catastrophe losses that were 3.1 points higher. The ratio for current accident year loss and loss expenses before catastrophe losses of 74.5 percent for the first three months of 2011 was even with the 74.5 percent accident year 2010
ratio measured as of December 31, 2010.
|
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
New losses greater than $4,000,000
|
$ | 11 | $ | 6 | 83 | |||||||
New losses $1,000,000-$4,000,000
|
40 | 32 | 25 | |||||||||
New losses $250,000-$1,000,000
|
37 | 40 | (8 | ) | ||||||||
Case reserve development above $250,000
|
31 | 32 | (3 | ) | ||||||||
Total large losses incurred
|
119 | 110 | 8 | |||||||||
Other losses excluding catastrophe losses
|
155 | 161 | (4 | ) | ||||||||
Catastrophe losses
|
26 | 10 | 160 | |||||||||
Total losses incurred
|
$ | 300 | $ | 281 | 7 |
Ratios as a percent of earned premiums:
|
Pt. Change
|
|||||||||||
New losses greater than $4,000,000
|
1.9 | % | 1.1 | % | 0.8 | |||||||
New losses $1,000,000-$4,000,000
|
7.5 | 6.1 | 1.4 | |||||||||
New losses $250,000-$1,000,000
|
6.9 | 7.7 | (0.8 | ) | ||||||||
Case reserve development above $250,000
|
5.7 | 6.2 | (0.5 | ) | ||||||||
Total large loss ratio
|
22.0 | 21.1 | 0.9 | |||||||||
Other losses excluding catastrophe losses
|
28.6 | 30.8 | (2.2 | ) | ||||||||
Catastrophe losses
|
4.9 | 1.8 | 3.1 | |||||||||
Total loss ratio
|
55.5 | % | 53.7 | % | 1.8 |
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Commercial casualty:
|
||||||||||||
Written premiums
|
$ | 189 | $ | 191 | (1 | ) | ||||||
Earned premiums
|
172 | 164 | 5 | |||||||||
Loss and loss expenses incurred
|
80 | 96 | (17 | ) | ||||||||
Loss and loss expense ratio
|
46.5 | % | 58.3 | % | ||||||||
Contribution from catastrophe losses
|
0.0 | 0.0 | ||||||||||
Contribution from prior period reserve development
|
(32.3 | ) | (12.7 | ) | ||||||||
Loss and loss expenses before catastrophe losses and prior period reserve development
|
78.8 | 71.0 | ||||||||||
Commercial property:
|
||||||||||||
Written premiums
|
$ | 132 | $ | 129 | 2 | |||||||
Earned premiums
|
126 | 121 | 4 | |||||||||
Loss and loss expenses incurred
|
115 | 86 | 34 | |||||||||
Loss and loss expense ratio
|
91.4 | % | 71.0 | % | ||||||||
Contribution from catastrophe losses
|
18.6 | 8.3 | ||||||||||
Contribution from prior period reserve development
|
11.4 | (1.8 | ) | |||||||||
Loss and loss expenses before catastrophe losses and prior period reserve development
|
61.4 | 64.5 | ||||||||||
Commercial auto:
|
||||||||||||
Written premiums
|
$ | 107 | $ | 103 | 4 | |||||||
Earned premiums
|
96 | 95 | 1 | |||||||||
Loss and loss expenses incurred
|
50 | 58 | (14 | ) | ||||||||
Loss and loss expense ratio
|
52.2 | % | 61.0 | % | ||||||||
Contribution from catastrophe losses
|
(0.1 | ) | (1.0 | ) | ||||||||
Contribution from prior period reserve development
|
(24.6 | ) | (7.1 | ) | ||||||||
Loss and loss expenses before catastrophe losses and prior period reserve development
|
76.9 | 69.1 | ||||||||||
Workers' compensation:
|
||||||||||||
Written premiums
|
$ | 90 | $ | 95 | (5 | ) | ||||||
Earned premiums
|
76 | 74 | 3 | |||||||||
Loss and loss expenses incurred
|
70 | 67 | 4 | |||||||||
Loss and loss expense ratio
|
91.5 | % | 91.4 | % | ||||||||
Contribution from catastrophe losses
|
0.0 | 0.0 | ||||||||||
Contribution from prior period reserve development
|
(4.1 | ) | (11.9 | ) | ||||||||
Loss and loss expenses before catastrophe losses and prior period reserve development
|
95.6 | 103.3 | ||||||||||
Specialty packages:
|
||||||||||||
Written premiums
|
$ | 37 | $ | 39 | (5 | ) | ||||||
Earned premiums
|
37 | 37 | 0 | |||||||||
Loss and loss expenses incurred
|
32 | 33 | (3 | ) | ||||||||
Loss and loss expense ratio
|
85.5 | % | 89.0 | % | ||||||||
Contribution from catastrophe losses
|
7.7 | 1.1 | ||||||||||
Contribution from prior period reserve development
|
13.6 | 10.0 | ||||||||||
Loss and loss expenses before catastrophe losses and prior period reserve development
|
64.2 | 77.9 | ||||||||||
Surety and executive risk:
|
||||||||||||
Written premiums
|
$ | 24 | $ | 23 | 4 | |||||||
Earned premiums
|
25 | 24 | 4 | |||||||||
Loss and loss expenses incurred
|
24 | 13 | 85 | |||||||||
Loss and loss expense ratio
|
96.1 | % | 51.1 | % | ||||||||
Contribution from catastrophe losses
|
0.0 | 0.0 | ||||||||||
Contribution from prior period reserve development
|
41.4 | 4.0 | ||||||||||
Loss and loss expenses before catastrophe losses and prior period reserve development
|
54.7 | 47.1 | ||||||||||
Machinery and equipment:
|
||||||||||||
Written premiums
|
$ | 9 | $ | 8 | 13 | |||||||
Earned premiums
|
8 | 8 | 0 | |||||||||
Loss and loss expenses incurred
|
3 | - |
nm
|
|||||||||
Loss and loss expense ratio
|
36.9 | % | 6.1 | % | ||||||||
Contribution from catastrophe losses
|
0.2 | (1.0 | ) | |||||||||
Contribution from prior period reserve development
|
8.5 | (17.2 | ) | |||||||||
Loss and loss expenses before catastrophe losses and prior period reserve development
|
28.2 | 24.3 |
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Earned premiums
|
$ | 190 | $ | 174 | 9 | |||||||
Fee revenues
|
- | - |
nm
|
|||||||||
Total revenues
|
190 | 174 | 9 | |||||||||
Loss and loss expenses from:
|
||||||||||||
Current accident year before catastrophe losses
|
129 | 111 | 16 | |||||||||
Current accident year catastrophe losses
|
19 | 6 | 217 | |||||||||
Prior accident years before catastrophe losses
|
(2 | ) | (4 | ) | 50 | |||||||
Prior accident years catastrophe losses
|
(5 | ) | (1 | ) | (400 | ) | ||||||
Total loss and loss expenses
|
141 | 112 | 26 | |||||||||
Underwriting expenses
|
52 | 67 | (22 | ) | ||||||||
Underwriting loss
|
$ | (3 | ) | $ | (5 | ) | 40 | |||||
Ratios as a percent of earned premiums:
|
Pt. Change
|
|||||||||||
Current accident year before catastrophe losses
|
67.9 | % | 63.7 | % | 4.2 | |||||||
Current accident year catastrophe losses
|
10.0 | 3.3 | 6.7 | |||||||||
Prior accident years before catastrophe losses
|
(1.2 | ) | (2.3 | ) | 1.1 | |||||||
Prior accident years catastrophe losses
|
(2.6 | ) | (0.3 | ) | (2.3 | ) | ||||||
Total loss and loss expenses
|
74.1 | 64.4 | 9.7 | |||||||||
Underwriting expenses
|
27.3 | 38.1 | (10.8 | ) | ||||||||
Combined ratio
|
101.4 | % | 102.5 | % | (1.1 | ) | ||||||
Combined ratio:
|
101.4 | % | 102.5 | % | (1.1 | ) | ||||||
Contribution from catastrophe losses and prior years reserve development
|
6.2 | 0.7 | 5.5 | |||||||||
Combined ratio before catastrophe losses and prior years reserve development
|
95.2 | % | 101.8 | % | (6.6 | ) |
·
|
Premiums – Personal lines earned premiums and net written premiums for the three months ended March 31, 2011, continued recent quarters’ pattern of growth due to higher renewal and new business premiums that reflected improved pricing.
|
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Agency renewal written premiums
|
$ | 156 | $ | 143 | 9 | |||||||
Agency new business written premiums
|
22 | 18 | 22 | |||||||||
Other written premiums
|
(5 | ) | (6 | ) | 17 | |||||||
Net written premiums
|
173 | 155 | 12 | |||||||||
Unearned premium change
|
17 | 19 | (11 | ) | ||||||||
Earned premiums
|
$ | 190 | $ | 174 | 9 |
·
|
Combined ratio – The personal lines combined ratio improved 1.1 percentage points for the first quarter of 2011 compared with the same period of 2010, as lower underwriting expenses more than offset higher weather-related catastrophe losses and an increase in other large losses. The 67.9 percent ratio for current accident year loss and loss expenses before catastrophe losses for the first three months of 2011 improved 2.5
percentage points compared with the 70.4
percent accident year 2010 ratio measured as of December 31, 2010. Pricing changes were the primary driver of the improvement and were somewhat offset by higher large losses. New losses greater than $250,000, shown in the table below, had a ratio effect of 11.9
percentage points for the first three months ended March 31, 2011, compared with 9.2
percentage points for full-year 2010, accounting for 2.7
percentage points of the change.
|
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
New losses greater than $4,000,000
|
$ | 0 | $ | 0 |
nm
|
|||||||
New losses $1,000,000-$4,000,000
|
9 | 3 | 200 | |||||||||
New losses $250,000-$1,000,000
|
14 | 10 | 40 | |||||||||
Case reserve development above $250,000
|
3 | 3 | 0 | |||||||||
Total large losses incurred
|
26 | 16 | 63 | |||||||||
Other losses excluding catastrophe losses
|
84 | 76 | 11 | |||||||||
Catastrophe losses
|
14 | 5 | 180 | |||||||||
Total losses incurred
|
$ | 124 | $ | 97 | 28 | |||||||
Ratios as a percent of earned premiums:
|
Pt. Change
|
|||||||||||
New losses greater than $4,000,000
|
0.0 | % | 0.0 | % | 0.0 | |||||||
New losses $1,000,000-$4,000,000
|
4.8 | 1.5 | 3.3 | |||||||||
New losses $250,000-$1,000,000
|
7.1 | 5.5 | 1.6 | |||||||||
Case reserve development above $250,000
|
1.7 | 1.9 | (0.2 | ) | ||||||||
Total large losses incurred
|
13.6 | 8.9 | 4.7 | |||||||||
Other losses excluding catastrophe losses
|
43.9 | 43.4 | 0.5 | |||||||||
Catastrophe losses
|
7.4 | 3.0 | 4.4 | |||||||||
Total loss ratio
|
64.9 | % | 55.3 | % | 9.6 |
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Personal auto:
|
||||||||||||
Written premiums
|
$ | 82 | $ | 73 | 12 | |||||||
Earned premiums
|
89 | 81 | 10 | |||||||||
Loss and loss expenses incurred
|
57 | 47 | 21 | |||||||||
Loss and loss expense ratio
|
63.8 | % | 58.2 | % | ||||||||
Contribution from catastrophe losses
|
0.9 | (0.1 | ) | |||||||||
Contribution from prior period reserve development
|
(5.7 | ) | (4.7 | ) | ||||||||
Loss and loss expenses before catastrophe losses and prior period reserve development
|
68.6 | 63.0 | ||||||||||
Homeowner:
|
||||||||||||
Written premiums
|
$ | 68 | $ | 60 | 13 | |||||||
Earned premiums
|
76 | 70 | 9 | |||||||||
Loss and loss expenses incurred
|
69 | 53 | 30 | |||||||||
Loss and loss expense ratio
|
90.3 | % | 76.0 | % | ||||||||
Contribution from catastrophe losses
|
16.3 | 6.9 | ||||||||||
Contribution from prior period reserve development
|
(3.2 | ) | 1.6 | |||||||||
Loss and loss expenses before catastrophe losses and prior period reserve development
|
77.2 | 67.5 | ||||||||||
Other personal:
|
||||||||||||
Written premiums
|
$ | 23 | $ | 22 | 5 | |||||||
Earned premiums
|
25 | 23 | 9 | |||||||||
Loss and loss expenses incurred
|
15 | 12 | 25 | |||||||||
Loss and loss expense ratio
|
61.2 | % | 51.5 | % | ||||||||
Contribution from catastrophe losses
|
3.0 | 2.8 | ||||||||||
Contribution from prior period reserve development
|
1.5 | (7.8 | ) | |||||||||
Loss and loss expenses before catastrophe losses and prior period reserve development
|
56.7 | 56.5 |
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Earned premiums
|
$ | 15 | $ | 11 | 36 | |||||||
Loss and loss expenses from:
|
||||||||||||
Current accident year before catastrophe losses
|
15 | 10 | 50 | |||||||||
Current accident year catastrophe losses
|
- | - |
nm
|
|||||||||
Prior accident years before catastrophe losses
|
- | - |
nm
|
|||||||||
Prior accident years catastrophe losses
|
- | - |
nm
|
|||||||||
Total loss and loss expenses
|
15 | 10 | 50 | |||||||||
Underwriting expenses
|
5 | 4 | 25 | |||||||||
Underwriting loss
|
$ | (5 | ) | $ | (3 | ) | (67 | ) | ||||
Ratios as a percent of earned premiums:
|
Pt. Change
|
|||||||||||
Current accident year before catastrophe losses
|
98.8 | % | 88.0 | % | 10.8 | |||||||
Current accident year catastrophe losses
|
1.7 | 0.0 | 1.7 | |||||||||
Prior accident years before catastrophe losses
|
1.1 | 3.6 | (2.5 | ) | ||||||||
Prior accident years catastrophe losses
|
1.1 | (0.2 | ) | 1.3 | ||||||||
Total loss and loss expenses
|
102.7 | 91.4 | 11.3 | |||||||||
Underwriting expenses
|
30.3 | 35.7 | (5.4 | ) | ||||||||
Combined ratio
|
133.0 | % | 127.1 | % | 5.9 | |||||||
Combined ratio:
|
133.0 | % | 127.1 | % | 5.9 | |||||||
Contribution from catastrophe losses and prior years reserve development
|
3.9 | 3.4 | 0.5 | |||||||||
Combined ratio before catastrophe losses and prior years reserve development
|
129.1 | % | 123.7 | % | 5.4 |
·
|
Premiums – Excess and surplus lines earned premiums and net written premiums increased for the three months ended March 31, 2011, reflecting growth in both renewal and new business written premiums.
|
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Renewal written premiums
|
$ | 10 | $ | 6 | 67 | |||||||
New business written premiums
|
9 | 8 | 13 | |||||||||
Other written premiums
|
(1 | ) | (1 | ) | 0 | |||||||
Net written premiums
|
18 | 13 | 38 | |||||||||
Unearned premium change
|
(3 | ) | (2 | ) | (50 | ) | ||||||
Earned premiums
|
$ | 15 | $ | 11 | 36 |
·
|
Combined ratio – The excess and surplus lines combined ratio increased 5.9 percentage points for the first quarter of 2011 compared with the same period of 2010, driven by a higher ratio for new large losses. The 98.8 percent ratio for current accident year loss and loss expenses before catastrophe losses for the first three months of 2011 increased 15.0
percentage points compared with the 83.8
percent accident year 2010 ratio measured as of December 31, 2010. Large losses and reserves for estimated losses incurred but not reported (IBNR) were the primary cause of the higher loss ratio. New losses greater than $250,000, had a ratio effect of 25.8
percentage points for the first three months ended March 31, 2011, compared with 23.5
percentage points for full-year 2010, accounting for 2.3
percentage points of the ratio increase while the ratio for the change in IBNR reserves accounted for 16.5 percentage points.
|
(In millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Earned premiums
|
$ | 37 | $ | 39 | (5 | ) | ||||||
Separate account investment management fees
|
1 | - |
nm
|
|||||||||
Total revenues
|
38 | 39 | (3 | ) | ||||||||
Contract holders' benefits incurred
|
45 | 42 | 7 | |||||||||
Investment interest credited to contract holders
|
(20 | ) | (19 | ) | (5 | ) | ||||||
Operating expenses incurred
|
16 | 16 | 0 | |||||||||
Total benefits and expenses
|
41 | 39 | 5 | |||||||||
Life insurance segment profit (loss)
|
$ | (3 | ) | $ | - |
nm
|
·
|
Revenues – Revenues were lower for the three months ended March 31, 2011, primarily due to lower earned premiums from universal life insurance products.
|
(Dollars in millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Term life insurance
|
$ | 25 | $ | 23 | 9 | |||||||
Universal life insurance
|
5 | 9 | (44 | ) | ||||||||
Other life insurance, annuity, and disability income products
|
7 | 7 | 0 | |||||||||
Net earned premiums
|
$ | 37 | $ | 39 | (5 | ) |
·
|
Profitability – Our life insurance segment typically reports a small profit or loss on a GAAP basis because most of its investment income is included in our investment segment results. We include only investment income credited to contract holders (interest assumed in life insurance policy reserve calculations) in our life insurance segment results. Loss of $3
million for our life insurance segment in the first three months of 2011 compared unfavorably with profit of less than $1
million for the first three months of 2010, primarily due to less favorable mortality experience.
|
(In millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Total investment income, net of expenses, pre-tax
|
$ | 131 | $ | 130 | 1 | |||||||
Investment interest credited to contract holders
|
(20 | ) | (19 | ) | (5 | ) | ||||||
Realized investment gains and losses summary:
|
||||||||||||
Realized investment gains and losses
|
38 | 3 |
nm
|
|||||||||
Change in fair value of securities with embedded derivatives
|
4 | 6 | (33 | ) | ||||||||
Other-than-temporary impairment charges
|
(30 | ) | (1 | ) |
nm
|
|||||||
Total realized investment gains and losses
|
12 | 8 | 50 | |||||||||
Investment operations profit
|
$ | 123 | $ | 119 | 3 |
(In millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Investment income:
|
||||||||||||
Interest
|
$ | 106 | $ | 107 | (1 | ) | ||||||
Dividends
|
26 | 24 | 8 | |||||||||
Other
|
1 | 1 | 0 | |||||||||
Investment expenses
|
(2 | ) | (2 | ) | 0 | |||||||
Total investment income, net of expenses, pre-tax
|
131 | 130 | 1 | |||||||||
Income taxes
|
(32 | ) | (32 | ) | 0 | |||||||
Total investment income, net of expenses, after-tax
|
$ | 99 | $ | 98 | 1 | |||||||
Effective tax rate
|
24.5 | % | 24.5 | % | ||||||||
Average invested assets plus cash and cash equivalents
|
$ | 11,489 | $ | 10,919 | ||||||||
Average yield pre-tax
|
4.6 | % | 4.8 | % | ||||||||
Average yield after-tax
|
3.4 | % | 3.6 | % |
·
|
$35
million in gains from the sale of various common stock holdings.
|
·
|
$3
million in net gains from fixed-maturity security sales and calls.
|
·
|
$4
million in gains from changes in fair value of securities with embedded derivatives.
|
·
|
$30 million in OTTI charges to write down holdings of equities and fixed maturities.
|
(In millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Fixed maturities
|
||||||||
Other
|
$ | - | $ | 1 | ||||
Total fixed maturities
|
- | 1 | ||||||
Common equities
|
||||||||
Financial
|
30 | - | ||||||
Total common equities
|
30 | - | ||||||
Total
|
$ | 30 | $ | 1 |
(In millions)
|
Three months ended March 31,
|
|||||||||||
2011
|
2010
|
Change %
|
||||||||||
Interest and fees on loans and leases
|
$ | 2 | $ | 1 | 100 | |||||||
Other revenues
|
- | - |
nm
|
|||||||||
Total revenues
|
2 | 1 | 100 | |||||||||
Interest expense
|
13 | 13 | 0 | |||||||||
Operating expenses
|
4 | 4 | 0 | |||||||||
Total expenses
|
17 | 17 | 0 | |||||||||
Other loss
|
$ | (15 | ) | $ | (16 | ) | 6 |
(Dollars in millions)
|
Three months ended March 31,
|
|||||||
2011
|
2010
|
|||||||
Premiums collected
|
$ | 773 | $ | 718 | ||||
Loss and loss expenses paid
|
(486 | ) | (414 | ) | ||||
Commissions and other underwriting expenses paid
|
(295 | ) | (290 | ) | ||||
Insurance subsidiary cash flow from underwriting
|
(8 | ) | 14 | |||||
Investment income received
|
92 | 89 | ||||||
Insurance operating cash flow
|
$ | 84 | $ | 103 |
·
|
Commissions – Commissions paid were $195 million in the first three months of 2011. Commission payments generally track with written premiums, except for annual profit-sharing commissions typically paid during the first quarter of the year.
|
·
|
Other underwriting expenses – Many of our underwriting expenses are not contractual obligations, but reflect the ongoing expenses of our business. Non-commission underwriting expenses paid were $100 million in the first three months of 2011.
|
·
|
In addition to contractual obligations for hardware and software, we anticipate capitalizing approximately $7
million in spending for key technology initiatives in 2011. Capitalized development costs related to key technology initiatives were $1 million in the first three months of 2011. These activities are conducted at our discretion, and we have no material contractual obligations for activities planned as part of these projects.
|
(In millions)
|
Loss reserves
|
Loss
|
Total
|
|||||||||||||||||
Case
|
IBNR
|
expense
|
gross
|
Percent
|
||||||||||||||||
reserves
|
reserves
|
reserves
|
reserves
|
of total
|
||||||||||||||||
At March 31, 2011
|
||||||||||||||||||||
Commercial casualty
|
$ | 938 | $ | 339 | $ | 532 | $ | 1,809 | 48.3 | % | ||||||||||
Commercial property
|
143 | 28 | 35 | 206 | 5.5 | |||||||||||||||
Commercial auto
|
240 | 37 | 58 | 335 | 8.9 | |||||||||||||||
Workers' compensation
|
484 | 465 | 147 | 1,096 | 29.3 | |||||||||||||||
Specialty packages
|
82 | 3 | 11 | 96 | 2.6 | |||||||||||||||
Surety and executive risk
|
127 | 7 | 62 | 196 | 5.2 | |||||||||||||||
Machinery and equipment
|
2 | 3 | 1 | 6 | 0.2 | |||||||||||||||
Total
|
$ | 2,016 | $ | 882 | $ | 846 | $ | 3,744 | 100.0 | % | ||||||||||
At December 31, 2010
|
||||||||||||||||||||
Commercial casualty
|
$ | 966 | $ | 321 | $ | 533 | $ | 1,820 | 48.8 | % | ||||||||||
Commercial property
|
130 | 13 | 32 | 175 | 4.7 | |||||||||||||||
Commercial auto
|
258 | 41 | 60 | 359 | 9.6 | |||||||||||||||
Workers' compensation
|
476 | 465 | 147 | 1,088 | 29.2 | |||||||||||||||
Specialty packages
|
80 | 2 | 10 | 92 | 2.5 | |||||||||||||||
Surety and executive risk
|
130 | 2 | 57 | 189 | 5.1 | |||||||||||||||
Machinery and equipment
|
1 | 3 | 1 | 5 | 0.1 | |||||||||||||||
Total
|
$ | 2,041 | $ | 847 | $ | 840 | $ | 3,728 | 100.0 | % |
(In millions)
|
Loss reserves
|
Loss
|
Total
|
|||||||||||||||||
Case
|
IBNR
|
expense
|
gross
|
Percent
|
||||||||||||||||
reserves
|
reserves
|
reserves
|
reserves
|
of total
|
||||||||||||||||
At March 31, 2011
|
||||||||||||||||||||
Personal auto
|
$ | 123 | $ | (2 | ) | $ | 28 | $ | 149 | 40.5 | % | |||||||||
Homeowner
|
81 | 27 | 18 | 126 | 34.1 | |||||||||||||||
Other personal
|
38 | 46 | 10 | 94 | 25.4 | |||||||||||||||
Total
|
$ | 242 | $ | 71 | $ | 56 | $ | 369 | 100.0 | % | ||||||||||
At December 31, 2010
|
||||||||||||||||||||
Personal auto
|
$ | 126 | $ | (1 | ) | $ | 28 | $ | 153 | 43.4 | % | |||||||||
Homeowner
|
73 | 21 | 17 | 111 | 31.4 | |||||||||||||||
Other personal
|
37 | 43 | 9 | 89 | 25.2 | |||||||||||||||
Total
|
$ | 236 | $ | 63 | $ | 54 | $ | 353 | 100.0 | % |
(In millions)
|
Loss reserves
|
Loss
|
Total
|
|||||||||||||
Case
|
IBNR
|
expense
|
gross
|
|||||||||||||
reserves
|
reserves
|
reserves
|
reserves
|
|||||||||||||
At March 31, 2011
|
||||||||||||||||
Excess and surplus lines
|
$ | 31 | $ | 15 | $ | 20 | $ | 66 | ||||||||
At December 31, 2010
|
||||||||||||||||
Excess and surplus lines
|
$ | 29 | $ | 10 | $ | 17 | $ | 56 |
(In millions)
|
At March 31, 2011
|
At December 31, 2010
|
||||||||||||||||||||||||||||||
Amortized cost
|
% of total
|
Fair value
|
% of total
|
Amortized cost
|
% of total
|
Fair value
|
% of total
|
|||||||||||||||||||||||||
Taxable fixed maturities
|
$ | 5,274 | 51.4 | % | $ | 5,676 | 48.8 | % | $ | 5,139 | 50.5 | % | $ | 5,533 | 48.4 | % | ||||||||||||||||
Tax-exempt fixed maturities
|
2,759 | 26.9 | 2,860 | 24.6 | 2,749 | 27.0 | 2,850 | 25.0 | ||||||||||||||||||||||||
Common equities
|
2,149 | 21.0 | 2,996 | 25.7 | 2,211 | 21.7 | 2,940 | 25.7 | ||||||||||||||||||||||||
Preferred equities
|
74 | 0.7 | 104 | 0.9 | 75 | 0.8 | 101 | 0.9 | ||||||||||||||||||||||||
Total
|
$ | 10,256 | 100.0 | % | $ | 11,636 | 100.0 | % | $ | 10,174 | 100.0 | % | $ | 11,424 | 100.0 | % |
(In millions)
|
At March 31, 2011
|
At December 31, 2010
|
||||||||||||||
Fair
value
|
Percent
to total
|
Fair
value
|
Percent
to total
|
|||||||||||||
Moody's Ratings and Standard & Poor's Ratings combined
|
||||||||||||||||
Aaa, Aa, A, AAA, AA, A
|
$ | 5,351 | 62.7 | % | $ | 5,216 | 62.2 | % | ||||||||
Baa, BBB
|
2,675 | 31.3 | 2,656 | 31.7 | ||||||||||||
Ba, BB
|
242 | 2.8 | 241 | 2.9 | ||||||||||||
B, B
|
34 | 0.4 | 42 | 0.5 | ||||||||||||
Caa, CCC
|
18 | 0.2 | 19 | 0.2 | ||||||||||||
Daa, Da, D
|
1 | 0.0 | 1 | 0.0 | ||||||||||||
Non-rated
|
215 | 2.6 | 208 | 2.5 | ||||||||||||
Total
|
$ | 8,536 | 100.0 | % | $ | 8,383 | 100.0 | % |
At March 31,
|
At December 31,
|
|||||||
2011
|
2010
|
|||||||
Weighted average yield-to-book value
|
5.4 | % | 5.5 | % | ||||
Weighted average maturity
|
6.0
|
yrs |
6.2
|
yrs | ||||
Effective duration
|
4.9
|
yrs |
5.0
|
yrs |
(In millions)
|
At March 31,
|
At December 31,
|
||||||
2011
|
2010
|
|||||||
States, municipalities and political subdivisions
|
$ | 300 | $ | 293 | ||||
Convertibles and bonds with warrants attached
|
73 | 69 | ||||||
United States government
|
5 | 5 | ||||||
Government sponsored enterprises
|
225 | 200 | ||||||
Foreign government
|
3 | 3 | ||||||
Investment-grade corporate securities
|
4,812 | 4,695 | ||||||
Below investment-grade corporate securities
|
258 | 268 | ||||||
Total
|
$ | 5,676 | $ | 5,533 |
(In millions)
At March 31, 2011
|
State issued general
obligation bonds
|
Local issued
general
obligation
bonds
|
Special
revenue
bonds
|
Total
|
Percent of
total
|
|||||||||||||
Texas
|
$ | - | $ | 417 | $ | 107 | $ | 524 | 18.3 | % | ||||||||
Indiana
|
- | 21 | 324 | 345 | 12.1 | |||||||||||||
Michigan
|
- | 247 | 12 | 259 | 9.1 | |||||||||||||
Illinois
|
- | 218 | 22 | 240 | 8.4 | |||||||||||||
Ohio
|
- | 132 | 106 | 238 | 8.3 | |||||||||||||
Washington
|
3 | 170 | 37 | 210 | 7.3 | |||||||||||||
Wisconsin
|
2 | 115 | 19 | 136 | 4.8 | |||||||||||||
Florida
|
- | 19 | 67 | 86 | 3.0 | |||||||||||||
Pennsylvania
|
- | 69 | 10 | 79 | 2.8 | |||||||||||||
Arizona
|
- | 46 | 26 | 72 | 2.5 | |||||||||||||
Colorado
|
- | 38 | 15 | 53 | 1.9 | |||||||||||||
New Jersey
|
- | 28 | 17 | 45 | 1.6 | |||||||||||||
Kansas
|
- | 24 | 19 | 43 | 1.5 | |||||||||||||
New York
|
3 | 15 | 22 | 40 | 1.4 | |||||||||||||
Missouri
|
- | 16 | 21 | 37 | 1.3 | |||||||||||||
All other states
|
- | 244 | 209 | 453 | 15.7 | |||||||||||||
Total
|
$ | 8 | $ | 1,819 | $ | 1,033 | $ | 2,860 | 100.0 | % | ||||||||
At December 31, 2010
|
||||||||||||||||||
Texas
|
$ | - | $ | 425 | $ | 107 | $ | 532 | 18.7 | % | ||||||||
Indiana
|
- | 21 | 328 | 349 | 12.2 | |||||||||||||
Michigan
|
- | 245 | 12 | 257 | 9.0 | |||||||||||||
Illinois
|
- | 219 | 23 | 242 | 8.5 | |||||||||||||
Ohio
|
- | 131 | 107 | 238 | 8.4 | |||||||||||||
Washington
|
- | 166 | 32 | 198 | 6.9 | |||||||||||||
Wisconsin
|
- | 116 | 19 | 135 | 4.7 | |||||||||||||
Florida
|
- | 19 | 67 | 86 | 3.0 | |||||||||||||
Pennsylvania
|
- | 67 | 9 | 76 | 2.7 | |||||||||||||
Arizona
|
- | 46 | 30 | 76 | 2.7 | |||||||||||||
Colorado
|
- | 37 | 15 | 52 | 1.8 | |||||||||||||
New Jersey
|
- | 28 | 17 | 45 | 1.6 | |||||||||||||
Kansas
|
- | 24 | 20 | 44 | 1.5 | |||||||||||||
New York
|
3 | 15 | 21 | 39 | 1.4 | |||||||||||||
Utah
|
- | 20 | 17 | 37 | 1.3 | |||||||||||||
All other states
|
- | 233 | 211 | 444 | 15.6 | |||||||||||||
Total
|
$ | 3 | $ | 1,812 | $ | 1,035 | $ | 2,850 | 100.0 | % |
(In millions)
|
Interest Rate Shift in Basis Points (bps)
|
|||||||||||||||||||
-200 bps
|
-100 bps
|
0 bps
|
100 bps
|
200 bps
|
||||||||||||||||
At March 31, 2011
|
$ | 9,406 | $ | 8,965 | $ | 8,536 | $ | 8,115 | $ | 7,718 | ||||||||||
At December 31, 2010
|
$ | 9,260 | $ | 8,814 | $ | 8,383 | $ | 7,964 | $ | 7,568 |
Percent of Publicly Traded Common Stock Portfolio
|
||||||||||||||||
At March 31, 2011
|
At December 31, 2010
|
|||||||||||||||
Cincinnati
Financial
|
S&P 500 Industry
Weightings
|
Cincinnati
Financial
|
S&P 500 Industry
Weightings
|
|||||||||||||
Sector:
|
||||||||||||||||
Healthcare
|
14.1 | % | 11.0 | % | 14.1 | % | 10.9 | % | ||||||||
Information technology
|
14.0 | 18.1 | 13.0 | 18.7 | ||||||||||||
Energy
|
13.4 | 13.3 | 12.9 | 12.0 | ||||||||||||
Consumer staples
|
12.7 | 10.2 | 15.4 | 10.6 | ||||||||||||
Industrials
|
12.3 | 11.3 | 11.7 | 11.0 | ||||||||||||
Financial
|
11.5 | 15.8 | 11.7 | 16.1 | ||||||||||||
Consumer discretionary
|
8.5 | 10.4 | 8.3 | 10.6 | ||||||||||||
Materials
|
5.5 | 3.7 | 5.2 | 3.7 | ||||||||||||
Utilities
|
4.4 | 3.2 | 4.2 | 3.3 | ||||||||||||
Telecomm services
|
3.6 | 3.0 | 3.5 | 3.1 | ||||||||||||
Total
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
·
|
302 of these holdings were trading between 90 percent and 100 percent of book value at March 31, 2011. Nine of these are equity securities that may be subject to OTTI should they not recover by the recovery dates we determined. The remaining 293 securities primarily consists of fixed-maturity securities whose current valuation is largely the result of interest rate factors. The fair value of these 302 securities was $1.066
million, and they accounted for $27
million in unrealized losses.
|
·
|
Three of these holdings were trading between 70 percent and 90 percent of book value at March 31, 2011. None of these securities are equity securities. Three are fixed-maturity securities that we believe will continue to pay interest and ultimately principal upon maturity. The issuers of these securities have strong cash flow to service their debt and meet their contractual obligation to make principal payments. The fair value of these three securities was $8
million, and they accounted for $2
million in unrealized losses.
|
·
|
No securities were trading below 70 percent of book value at March 31, 2011.
|
(In millions)
|
Less than 12 months
|
12 months or more
|
Total
|
|||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
At March 31, 2011
|
value
|
losses
|
value
|
losses
|
value
|
losses
|
||||||||||||||||||
Fixed maturities:
|
||||||||||||||||||||||||
States, municipalities and political subdivisions
|
$ | 312 | $ | 9 | $ | 9 | $ | 1 | $ | 321 | $ | 10 | ||||||||||||
Government-sponsored enterprises
|
149 | 2 | - | - | 149 | 2 | ||||||||||||||||||
Corporate securities
|
339 | 4 | 31 | 2 | 370 | 6 | ||||||||||||||||||
Subtotal
|
800 | 15 | 40 | 3 | 840 | 18 | ||||||||||||||||||
Equity securities:
|
||||||||||||||||||||||||
Common equities
|
206 | 11 | - | - | 206 | 11 | ||||||||||||||||||
Preferred equities
|
5 | - | 23 | - | 28 | - | ||||||||||||||||||
Subtotal
|
211 | 11 | 23 | - | 234 | 11 | ||||||||||||||||||
Total
|
$ | 1,011 | $ | 26 | $ | 63 | $ | 3 | $ | 1,074 | $ | 29 | ||||||||||||
At December 31, 2010
|
||||||||||||||||||||||||
Fixed maturities:
|
||||||||||||||||||||||||
States, municipalities and political subdivisions
|
$ | 325 | $ | 9 | $ | 9 | $ | 1 | $ | 334 | $ | 10 | ||||||||||||
Government-sponsored enterprises
|
133 | 1 | - | - | 133 | 1 | ||||||||||||||||||
Corporate securities
|
354 | 6 | 39 | 3 | 393 | 9 | ||||||||||||||||||
Subtotal
|
812 | 16 | 48 | 4 | 860 | 20 | ||||||||||||||||||
Equity securities:
|
||||||||||||||||||||||||
Common equities
|
337 | 28 | - | - | 337 | 28 | ||||||||||||||||||
Preferred equities
|
5 | - | 23 | 1 | 28 | 1 | ||||||||||||||||||
Subtotal
|
342 | 28 | 23 | 1 | 365 | 29 | ||||||||||||||||||
Total
|
$ | 1,154 | $ | 44 | $ | 71 | $ | 5 | $ | 1,225 | $ | 49 |
(In millions)
|
Number
of issues
|
Book
value
|
Fair
value
|
Gross
unrealized
gain/loss
|
Gross
investment
income
|
|||||||||||||||
At March 31, 2011
|
||||||||||||||||||||
Taxable fixed maturities:
|
||||||||||||||||||||
Fair value below 70% of book value
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Fair value at 70% to less than 100% of book value
|
189 | 654 | 643 | (11 | ) | 6 | ||||||||||||||
Fair value at 100% and above book value
|
1,154 | 4,620 | 5,033 | 413 | 70 | |||||||||||||||
Securities sold in current year
|
- | - | - | - | 1 | |||||||||||||||
Total
|
1,343 | 5,274 | 5,676 | 402 | 77 | |||||||||||||||
Tax-exempt fixed maturities:
|
||||||||||||||||||||
Fair value below 70% of book value
|
- | - | - | - | - | |||||||||||||||
Fair value at 70% to less than 100% of book value
|
107 | 204 | 197 | (7 | ) | 2 | ||||||||||||||
Fair value at 100% and above book value
|
1,154 | 2,555 | 2,663 | 108 | 27 | |||||||||||||||
Securities sold in current year
|
- | - | - | - | - | |||||||||||||||
Total
|
1,261 | 2,759 | 2,860 | 101 | 29 | |||||||||||||||
Common equities:
|
||||||||||||||||||||
Fair value below 70% of book value
|
- | - | - | - | - | |||||||||||||||
Fair value at 70% to less than 100% of book value
|
5 | 217 | 206 | (11 | ) | 1 | ||||||||||||||
Fair value at 100% and above book value
|
64 | 1,932 | 2,790 | 858 | 22 | |||||||||||||||
Securities sold in current year
|
- | - | - | - | 1 | |||||||||||||||
Total
|
69 | 2,149 | 2,996 | 847 | 24 | |||||||||||||||
Preferred equities:
|
||||||||||||||||||||
Fair value below 70% of book value
|
- | - | - | - | - | |||||||||||||||
Fair value at 70% to less than 100% of book value
|
4 | 28 | 28 | - | 1 | |||||||||||||||
Fair value at 100% and above book value
|
21 | 46 | 76 | 30 | 1 | |||||||||||||||
Securities sold in current year
|
- | - | - | - | - | |||||||||||||||
Total
|
25 | 74 | 104 | 30 | 2 | |||||||||||||||
Portfolio summary:
|
||||||||||||||||||||
Fair value below 70% of book value
|
- | - | - | - | - | |||||||||||||||
Fair value at 70% to less than 100% of book value
|
305 | 1,103 | 1,074 | (29 | ) | 10 | ||||||||||||||
Fair value at 100% and above book value
|
2,393 | 9,153 | 10,562 | 1,409 | 120 | |||||||||||||||
Securities sold in current year
|
- | - | - | - | 2 | |||||||||||||||
Total
|
2,698 | $ | 10,256 | $ | 11,636 | $ | 1,380 | $ | 132 | |||||||||||
At December 31, 2010
|
||||||||||||||||||||
Portfolio summary:
|
||||||||||||||||||||
Fair value below 70% of book value
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Fair value at 70% to less than 100% of book value
|
316 | 1,274 | 1,225 | (49 | ) | 38 | ||||||||||||||
Fair value at 100% and above book value
|
2,355 | 8,900 | 10,199 | 1,299 | 457 | |||||||||||||||
Securities sold in current year
|
- | - | - | - | 27 | |||||||||||||||
Total
|
2,671 | $ | 10,174 | $ | 11,424 | $ | 1,250 | $ | 522 |
Item 4.
|
Controls and Procedures
|
·
|
that information required to be disclosed in the company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and
|
·
|
that such information is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures.
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Period
|
Total number
of shares
purchased
|
Average
price paid
per share
|
Total number of shares
purchased as part of
publicly announced
plans or programs
|
Maximum number of
shares that may yet
be
purchased under
the
plans or programs
|
||||||||||||
January 1-31, 2011
|
0 | $ | 0.00 | 0 | 8,666,349 | |||||||||||
February 1-28, 2011
|
0 | 0.00 | 0 | 8,666,349 | ||||||||||||
March 1-31, 2011
|
0 | 0.00 | 0 | 8,666,349 | ||||||||||||
Totals
|
0 | 0.00 | 0 |
Item 3.
|
Defaults upon Senior Securities
|
Item 4.
|
(Removed and Reserved)
|
Item 5.
|
Other Information
|
Exhibit
No.
|
Exhibit
Description
|
|
3.1
|
Amended and Restated Articles of Incorporation of Cincinnati Financial Corporation (incorporated by reference to the company’s 2010 Annual Report on Form 10-K dated February 25, 2011, Exhibit 3.1)
|
|
3.2
|
Regulations of Cincinnati Financial Corporation, as amended through May 1, 2010 (incorporated by reference to the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, Exhibit 3.2)
|
|
11
|
Statement re: Computation of per share earnings for the three months ended March 31, 2011, contained in
Exhibit 11
of this report
|
|
31A
|
Certification pursuant to Section 302 of the Sarbanes Oxley Act of 2002 – Chief Executive Officer
|
|
31B
|
Certification pursuant to Section 302 of the Sarbanes Oxley Act of 2002 – Chief Financial Officer
|
|
32
|
|
Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002
|
/S/ Eric N. Mathews
|
|
Eric N. Mathews, CPCU, AIAF
|
|
Vice President, Assistant Secretary and Assistant Treasurer
|
|
(Principal Accounting Officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|---|---|---|
GEODE CAPITAL MANAGEMENT, LLC | 3,930,022 | 563,323,104 | |
FORT WASHINGTON INVESTMENT ADVISORS INC /OH/ | 1,502,095 | 221,889,473 | |
BAHL & GAYNOR INC | 1,120,083 | 160,955,968 | |
Boston Trust Walden Corp | 804,777 | 118,881,664 | |
Parametric Portfolio Associates LLC | 641,532 | 87,223 | |
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC | 627,458 | 90,165,713 | |
AEGON ASSET MANAGEMENT UK Plc | 378,384 | 55,802 | |
BNP PARIBAS FINANCIAL MARKETS | 330,558 | 47,501,185 | |
CALIFORNIA STATE TEACHERS RETIREMENT SYSTEM | 220,376 | 31,668,031 | |
AMUNDI | 190,231 | 26,957,634 | |
KORNITZER CAPITAL MANAGEMENT INC /KS | 172,027 | 25,411,828 | |
NEW YORK STATE TEACHERS RETIREMENT SYSTEM | 144,273 | 21,312 | |
PUBLIC EMPLOYEES RETIREMENT ASSOCIATION OF COLORADO | 133,952 | 19,249 | |
KLP KAPITALFORVALTNING AS | 84,524 | 12,548,390 | |
9258 Wealth Management, LLC | 82,498 | 11,229,628 | |
NEW YORK STATE COMMON RETIREMENT FUND | 76,673 | 11,326 | |
YOUSIF CAPITAL MANAGEMENT, LLC | 74,118 | 10,948,782 | |
FORSTA AP-FONDEN | 72,200 | 10,375,140 | |
NISA INVESTMENT ADVISORS, LLC | 42,866 | 6,369,459 | |
MetLife Investment Management, LLC | 41,313 | 5,936,678 | |
DnB Asset Management AS | 29,084 | 4,179,371 | |
Lighthouse Financial Advisors, Inc. | 25,796 | 2,659 | |
Police & Firemen's Retirement System of New Jersey | 22,469 | 3,319,121 | |
AGF MANAGEMENT LTD | 20,375 | 2,927,888 | |
Ethic Inc. | 18,486 | 2,656,372 | |
STRS OHIO | 16,795 | 2,286,135 | |
AGF Investments LLC | 16,611 | 1,488 | |
Twin Tree Management, LP | 15,600 | 2,241,720 | |
COMMERZBANK AKTIENGESELLSCHAFT /FI | 13,739 | 2,030 | |
OREGON PUBLIC EMPLOYEES RETIREMENT FUND | 13,422 | 1,982,698 | |
STOCK YARDS BANK & TRUST CO | 12,157 | 1,795,832 | |
TEACHERS RETIREMENT SYSTEM OF THE STATE OF KENTUCKY | 12,071 | 1,783 | |
Aurora Investment Counsel | 10,431 | 1,540,867 | |
TRUST CO OF TOLEDO NA /OH/ | 10,138 | 1,497,585 | |
Sterling Capital Management LLC | 9,940 | 1,428,378 | |
Jump Financial, LLC | 9,914 | 1,424,642 | |
HARTFORD INVESTMENT MANAGEMENT CO | 9,717 | 1,435,395 | |
SlateStone Wealth, LLC | 8,680 | 1,282 | |
BESSEMER GROUP INC | 8,585 | 1,268 | |
PRIVATE TRUST CO NA | 8,460 | 1,249,711 | |
Pacer Advisors, Inc. | 7,946 | 1,173,783 | |
NEW MEXICO EDUCATIONAL RETIREMENT BOARD | 7,287 | 1,076 | |
Mount Lucas Management LP | 6,664 | 984,406 | |
American Research & Management Co. | 6,143 | 550 | |
Plato Investment Management Ltd | 5,022 | 724,284 | |
Azimuth Capital Management LLC | 4,623 | 629 | |
BBVA USA | 4,263 | 487 | |
Degroof Petercam Asset Management | 4,163 | 516,920 | |
Azimuth Capital Investment Management LLC | 3,973 | 570,920 | |
McGowan Group Asset Management, Inc. | 3,787 | 544,192 | |
HARBOR CAPITAL ADVISORS, INC. | 3,475 | 513 | |
BROWN BROTHERS HARRIMAN & CO | 3,339 | 479,814 | |
Mediolanum International Funds Ltd | 3,175 | 462,121 | |
QUANTITATIVE VALUE TECHNOLOGIES, LLC | 2,961 | 345 | |
Argent Trust Co | 2,928 | 432,526 | |
Canada Post Corp Registered Pension Plan | 2,808 | 403,510 | |
Bollard Group LLC | 2,775 | 399 | |
V-Square Quantitative Management LLC | 2,748 | 394,888 | |
GREENLEAF TRUST | 2,706 | 399,730 | |
MUFG SECURITIES AMERICAS INC. | 2,308 | 331,660 | |
Community Financial Services Group, LLC | 2,232 | 329,712 | |
FORBES J M & CO LLP | 2,156 | 318,484 | |
Horan Securities, Inc. | 2,139 | 307,359 | |
Sippican Capital Advisors | 1,985 | 293,224 | |
WHITTIER TRUST CO | 1,904 | 281,258 | |
BRADLEY FOSTER & SARGENT INC/CT | 1,666 | 239,404 | |
THOMPSON INVESTMENT MANAGEMENT, INC. | 1,663 | 245,658 | |
HighPoint Advisor Group LLC | 1,546 | 216,197 | |
CIGNA INVESTMENTS INC /NEW | 1,544 | 221 | |
DAVIDSON TRUST CO | 1,504 | 222,171 | |
DUMONT & BLAKE INVESTMENT ADVISORS LLC | 1,487 | 219,660 | |
TRUST CO OF VERMONT | 1,484 | 219,216 | |
KLCM Advisors, Inc. | 1,467 | 210,781 | |
USA FINANCIAL FORMULAS | 1,418 | 209,467 | |
DEARBORN PARTNERS LLC | 1,403 | 207,251 | |
Fifth Third Wealth Advisors LLC | 1,403 | 207,251 | |
CIBC Private Wealth Group LLC | 1,207 | 171,044 | |
Desjardins Global Asset Management Inc. | 1,008 | 104,283 | |
Vigilant Capital Management, LLC | 1,000 | 97 | |
Livforsakringsbolaget Skandia, Omsesidigt | 763 | 113,221 | |
Covestor Ltd | 671 | 97 | |
Arlington Trust Co LLC | 660 | 97,495 | |
Zions Bancorporation, N.A. | 610 | 87,657 | |
NuWave Investment Management, LLC | 596 | 53 | |
MassMutual Private Wealth & Trust, FSB | 552 | 81,541 | |
SENTRY INVESTMENT MANAGEMENT LLC | 452 | 57 | |
Hanson & Doremus Investment Management | 390 | 58 | |
Canton Hathaway, LLC | 325 | 48 | |
Whipplewood Advisors, LLC | 260 | 8,863 | |
OLD POINT TRUST & FINANCIAL SERVICES N A | 250 | 35,925 | |
BOYD WATTERSON ASSET MANAGEMENT LLC/OH | 212 | 31,317 | |
SBI Securities Co., Ltd. | 196 | 28,953 | |
BOKF, NA | 161 | 21,828 | |
Private Capital Group, LLC | 136 | 16 | |
Cyrus J. Lawrence, LLC | 100 | 14 | |
FARMERS & MERCHANTS INVESTMENTS INC | 99 | 14,624 | |
Hilltop National Bank | 88 | 12,646 | |
GW&K Investment Management, LLC | 68 | 10 | |
Harvest Fund Management Co., Ltd | 33 | 5 | |
ATLAS CAPITAL ADVISORS INC. | 6 | 862 |
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|---|---|---|
Steven J. Johnston Executive Chairman of the Board and former Chief Executive Officer Cincinnati Financial Corporation | |||
Stephen M. Spray President and Chief Executive Officer Cincinnati Financial Corporation | |||
President (Retired), Webb Insurance Agency Inc. | |||
Steven J. Johnston Executive Chairman of the Board and former Chief Executive Officer Cincinnati Financial Corporation | |||
Chief Executive Officer, Skidmore Sales & Distributing Company Inc. | |||
Cheng-sheng Peter Wu | |||
Name and Principal Position | Year |
Salary
($) |
Bonus
($) |
Stock Awards
($) |
Option
Awards ($) |
Nonequity Incentive Plan Compen-
sation ($) |
Change in Pension Value and
Nonqualified Deferred Compen-sation Earnings ($) |
All Other Compen-sation
($) |
Total Compen-sation
($) |
||||||||||||||||||||||||||
Stephen M. Spray
President and Chief Executive Officer Cincinnati Financial Corporation |
2024 | 1,061,264 | — | 1,667,532 | 1,573,366 | 4,195,608 | 234,019 | 52,411 | 8,784,200 | ||||||||||||||||||||||||||
2023 | 893,786 | — | 1,372,772 | 855,096 | 1,140,111 | 398,237 | 48,645 | 4,708,647 | |||||||||||||||||||||||||||
2022 | 784,082 | — | 1,033,715 | 743,498 | 991,401 | — | 50,343 | 3,603,039 | |||||||||||||||||||||||||||
Michael J. Sewell
Chief Financial Officer, Executive Vice President and Treasurer Cincinnati Financial Corporation |
2024 | 1,038,235 | — | 1,130,849 | 979,160 | 2,611,038 | — | 233,804 | 5,993,086 | ||||||||||||||||||||||||||
2023 | 995,500 | — | 1,511,422 | 941,511 | 1,255,307 | — | 222,681 | 4,926,421 | |||||||||||||||||||||||||||
2022 | 943,156 | — | 1,234,675 | 888,144 | 1,184,251 | — | 230,382 | 4,480,608 | |||||||||||||||||||||||||||
Steven J. Johnston
Executive Chairman of the Board and former Chief Executive Officer Cincinnati Financial Corporation |
2024 | 753,716 | — | 1,994,070 | 1,881,613 | 5,017,594 | — | 237,727 | 9,884,720 | ||||||||||||||||||||||||||
2023 | 1,195,649 | — | 2,730,976 | 1,809,258 | 2,412,305 | — | 233,323 | 8,381,511 | |||||||||||||||||||||||||||
2022 | 1,132,781 | — | 2,208,212 | 1,706,714 | 2,275,759 | — | 273,044 | 7,596,511 | |||||||||||||||||||||||||||
John S. Kellington
Chief Information Officer and Executive Vice President The Cincinnati Insurance Company |
2024 | 723,961 | — | 789,051 | 682,769 | 1,820,674 | — | 123,218 | 4,139,673 | ||||||||||||||||||||||||||
2023 | 694,161 | — | 1,054,377 | 656,505 | 875,324 | — | 117,272 | 3,397,639 | |||||||||||||||||||||||||||
2022 | 657,662 | — | 861,273 | 619,305 | 825,777 | — | 124,229 | 3,088,246 | |||||||||||||||||||||||||||
Teresa C. Cracas
Chief Risk Officer and Executive Vice President The Cincinnati Insurance Company |
2024 | 659,192 | — | 718,563 | 621,696 | 1,657,789 | — | 140,997 | 3,798,237 | ||||||||||||||||||||||||||
2023 | 632,059 | — | 960,083 | 597,761 | 797,014 | — | 125,175 | 3,112,092 | |||||||||||||||||||||||||||
2022 | 598,825 | — | 784,218 | 563,900 | 751,900 | — | 135,274 | 2,834,117 | |||||||||||||||||||||||||||
Steven A. Soloria
Chief Investment Officer and Executive Vice President Cincinnati Financial Corporation |
2024 | 561,231 | — | 624,340 | 540,022 | 1,440,000 | 146,700 | 49,491 | 3,361,784 |
No Customers Found
Suppliers
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|---|---|---|
Schiff Charles Odell | - | 745,734 | 145,735 |
JOHNSTON STEVEN J | - | 187,928 | 0 |
Sewell Michael J | - | 98,583 | 1,178 |
KELLINGTON JOHN S | - | 95,205 | 0 |
Sewell Michael J | - | 92,615 | 1,178 |
Brown Roger A | - | 57,217 | 14,416 |
Brown Roger A | - | 53,842 | 13,959 |
Love Lisa Anne | - | 49,479 | 2,264 |
Spray Stephen M | - | 48,049 | 0 |
Love Lisa Anne | - | 47,809 | 2,264 |
Cracas Teresa C | - | 42,082 | 1,883 |
Hoffer Theresa A | - | 40,679 | 0 |
Doyle Donald J Jr | - | 35,669 | 0 |
Doyle Donald J Jr | - | 35,063 | 0 |
Givler Sean Michael | - | 28,703 | 0 |
Van Den Heuvel Will H | - | 27,951 | 2,987 |
SCHAMBOW MARC JON | - | 21,548 | 0 |
Givler Sean Michael | - | 21,289 | 0 |
SCHAMBOW MARC JON | - | 19,894 | 0 |
Hogan Thomas Christopher | - | 16,060 | 1,057 |
Soloria Steven Anthony | - | 13,827 | 175 |
Delaney Angela Ossello | - | 9,645 | 1,124 |
Delaney Angela Ossello | - | 8,829 | 922 |
Benacci Nancy Cunningham | - | 6,653 | 937 |
Aaron Thomas J | - | 2,196 | 6,240 |
Debbink Dirk J | - | 0 | 54,500 |