10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

þ        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 

For the quarterly period ended March 31, 2016.

¨       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 

For the transition period from _____________________ to _____________________.

Commission file number 0-4604

CINCINNATI FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

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)

Registrant’s telephone number, including area code: (513) 870-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

þYes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

þYes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company" in Rule 12b-2 of the Exchange Act.

þ Large accelerated filer ¨ Accelerated filer ¨ Nonaccelerated filer ¨ Smaller reporting company 

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

¨Yes þ No

As of April 22, 2016, there were 164,479,622 shares of common stock outstanding.

CINCINNATI FINANCIAL CORPORATION

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2016

TABLE OF CONTENTS

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 Comprehensive Income	5
Condensed Consolidated Statements of Shareholders’ Equity	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Safe Harbor Statement	25
Corporate Financial Highlights	27
Financial Results	35
Liquidity and Capital Resources	51
Other Matters	55
Item 3. Quantitative and Qualitative Disclosures about Market Risk	55
Item 4. Controls and Procedures	63
Part II – Other Information	63
Item 1. Legal Proceedings	63
Item 1A. Risk Factors	63
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 6. Exhibits	65

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Part I – Financial Information

Item 1.    Financial Statements (unaudited)

Cincinnati Financial Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in millions except per share data)	March 31,			December 31,
	2016			2015
Assets
Investments
Fixed maturities, at fair value (amortized cost: 2016—$9,442; 2015—$9,324)	$	9,884		$	9,650
Equity securities, at fair value (cost: 2016—$2,999; 2015—$2,938)	4,941			4,706
Other invested assets	64			67
Total investments	14,889			14,423
Cash and cash equivalents	613			544
Investment income receivable	121			129
Finance receivable	60			62
Premiums receivable	1,468			1,431
Reinsurance recoverable	532			542
Prepaid reinsurance premiums	50			54
Deferred policy acquisition costs	618			616
Land, building and equipment, net, for company use (accumulated depreciation: 2016—$465; 2015—$459)	188			185
Other assets	135			154
Separate accounts	773			748
Total assets	$	19,447		$	18,888
Liabilities
Insurance reserves
Loss and loss expense reserves	$	4,804		$	4,718
Life policy and investment contract reserves	2,601			2,583
Unearned premiums	2,248			2,201
Other liabilities	675			717
Deferred income tax	751			638
Note payable	35			35
Long-term debt and capital lease obligations	825			821
Separate accounts	773			748
Total liabilities	12,712			12,461
Commitments and contingent liabilities (Note 12)	—			—
Shareholders' Equity
Common stock, par value—$2 per share; (authorized: 2016 and 2015—500 million shares; issued: 2016 and 2015—198.3 million shares)	397			397
Paid-in capital	1,230			1,232
Retained earnings	4,871			4,762
Accumulated other comprehensive income	1,531			1,344
Treasury stock at cost (2016— 33.9 million shares and 2015—34.4 million shares)	(1,294		)	(1,308		)
Total shareholders' equity	6,735			6,427
Total liabilities and shareholders' equity	$	19,447		$	18,888

 Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

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Cincinnati Financial Corporation and Subsidiaries

Condensed Consolidated Statements of Income

(Dollars in millions except per share data)	Three months ended March 31,
	2016		2015
Revenues
Earned premiums	$	1,154	$	1,094
Investment income, net of expenses	145		139
Realized investment gains, net	61		47
Fee revenues	3		3
Other revenues	1		2
Total revenues	1,364		1,285
Benefits and Expenses
Insurance losses and contract holders' benefits	724		749
Underwriting, acquisition and insurance expenses	360		345
Interest expense	13		13
Other operating expenses	2		4
Total benefits and expenses	1,099		1,111
Income Before Income Taxes	265		174
Provision for Income Taxes
Current	65		46
Deferred	12		—
Total provision for income taxes	77		46
Net Income	$	188	$	128
Per Common Share
Net income—basic	$	1.14	$	0.78
Net income—diluted	1.13		0.77

Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

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Cincinnati Financial Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Dollars in millions)	Three months ended March 31,
	2016			2015
Net Income	$	188		$	128
Other Comprehensive (Loss) Income
Change in unrealized gains on investments, net of tax of $100 and $(15), respectively	190			(28		)
Amortization of pension actuarial loss and prior service cost, net of tax of $1 and $0, respectively	—			1
Change in life deferred acquisition costs, life policy reserves and other, net of tax of $(1) and $0, respectively	(3		)	(1		)
Other comprehensive income (loss), net of tax	187			(28		)
Comprehensive Income	$	375		$	100

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Cincinnati Financial Corporation and Subsidiaries

Condensed Consolidated Statements of Shareholders' Equity

(Dollars in millions)	Three months ended March 31,
	2016			2015
Common Stock
Beginning of year	$	397		$	397
Share-based awards	—			—
End of period	397			397
Paid-In Capital
Beginning of year	1,232			1,214
Share-based awards	(10		)	(11		)
Share-based compensation	7			6
Other	1			1
End of period	1,230			1,210
Retained Earnings
Beginning of year	4,762			4,505
Net income	188			128
Dividends declared	(79		)	(76		)
End of period	4,871			4,557
Accumulated Other Comprehensive Income
Beginning of year	1,344			1,744
Other comprehensive income, net	187			(28		)
End of period	1,531			1,716
Treasury Stock
Beginning of year	(1,308		)	(1,287		)
Share-based awards	18			19
Shares acquired - share repurchase authorization	—			—
Shares acquired - share-based compensation plans	(5		)	(5		)
Other	1			1
End of period	(1,294		)	(1,272		)
Total Shareholders' Equity	$	6,735		$	6,608
(In millions)
Common Stock - Shares Outstanding
Beginning of year	163.9			163.7
Share-based awards	0.5			0.6
Shares acquired - share repurchase authorization	—			—
Shares acquired - share-based compensation plans	—			—
Other	—			—
End of period	164.4			164.3

Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

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Cincinnati Financial Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in millions)	Three months ended March 31,
	2016			2015
Cash Flows From Operating Activities
Net income	$	188		$	128
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12			14
Realized investment gains, net	(61		)	(47		)
Stock-based compensation	7			7
Interest credited to contract holders'	13			12
Deferred income tax expense	12			—
Changes in:
Investment income receivable	8			—
Premiums and reinsurance receivable	(23		)	(22		)
Deferred policy acquisition costs	(9		)	2
Other assets	(12		)	4
Loss and loss expense reserves	86			138
Life policy reserves	22			20
Unearned premiums	47			27
Other liabilities	(98		)	(100		)
Current income tax receivable/payable	65			32
Net cash provided by operating activities	257			215
Cash Flows From Investing Activities
Sale of fixed maturities	14			13
Call or maturity of fixed maturities	368			267
Sale of equity securities	132			67
Purchase of fixed maturities	(496		)	(348		)
Purchase of equity securities	(129		)	(67		)
Purchase of short-term investments	—			(25		)
Investment in finance receivables	(6		)	(3		)
Collection of finance receivables	8			8
Investment in buildings and equipment, net	(3		)	(1		)
Change in other invested assets, net	4			1
Net cash used in investing activities	(108		)	(88		)
Cash Flows From Financing Activities
Payment of cash dividends to shareholders	(74		)	(71		)
Proceeds from stock options exercised	9			7
Contract holders' funds deposited	26			20
Contract holders' funds withdrawn	(39		)	(33		)
Excess tax benefits on stock-based compensation	2			3
Other	(4		)	(4		)
Net cash used in financing activities	(80		)	(78		)
Net change in cash and cash equivalents	69			49
Cash and cash equivalents at beginning of year	544			591
Cash and cash equivalents at end of period	$	613		$	640
Supplemental Disclosures of Cash Flow Information:
Income taxes (refunded) paid	(1		)	11
Noncash Activities
Conversion of securities	$	3		$	—
Equipment acquired under capital lease obligations	9			3
Cashless exercise of stock options	5			5

 Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 — Accounting Policies

The condensed consolidated financial statements include the accounts of Cincinnati Financial Corporation and its consolidated subsidiaries, each of which is wholly owned. These statements are presented in conformity with accounting principles generally accepted in the United States of America (GAAP). All intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Our actual results could differ from those estimates. Our December 31, 2015, condensed consolidated balance sheet amounts are derived from the audited financial statements but do not include all disclosures required by GAAP.

Our March 31, 2016, condensed consolidated financial statements are unaudited. Certain financial information that is included in annual financial statements prepared in accordance with GAAP is not required for interim reporting and has been condensed or omitted. We believe that we have made all adjustments, consisting only of normal recurring accruals, that are necessary for fair presentation. These condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our 2015 Annual Report on Form 10-K. The results of operations for interim periods do not necessarily indicate results to be expected for the full year.

Adopted Accounting Updates

ASU 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that performance targets that affect vesting and that could be achieved after the requisite service period be treated as performance conditions. The effective date of ASU 2014-12 was for interim and annual reporting periods beginning after December 15, 2015. The company adopted this ASU and it did not have a material impact on our company’s financial position, cash flows or results of operations.

ASU 2015-02, Consolidation-Amendments to the Consolidation Analysis

In February 2015, the FASB issued ASU 2015-02, Consolidation-Amendments to the Consolidation Analysis. ASU 2015-02 makes amendments to the current consolidation guidance, focusing mainly on the investment management industry; however, entities across all industries may be impacted. The effective date of ASU 2015-02 was for interim and annual reporting periods beginning after December 15, 2015. The company adopted this ASU and it did not have a material impact on our company’s financial position, cash flows or results of operations.

Pending Accounting Updates

ASU 2014-09 Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Insurance contracts do not fall within the scope of this ASU. The effective date of ASU 2014-09 is for annual reporting periods beginning after December 15, 2017. The ASU has not yet been adopted and will not have a material impact on our company’s financial position, cash flows or results of operations.

ASU 2015-09, Financial Services-Insurance: Disclosures about Short-Duration Contracts

In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures About Short-Duration Contracts. ASU 2015-09 requires entities to provide additional disclosures about the liability for loss and loss expense reserves to increase the transparency of significant estimates. ASU 2015-09 also requires entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for loss and loss expense reserves, including reasons for the change and the effects on the financial statements. ASU 2015-09 also requires entities to disclose a rollforward of the liability of loss and loss expense reserves for

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annual and interim reporting periods. The effective date of ASU 2015-09 is for annual reporting periods beginning after December 15, 2015, and interim reporting periods within annual period beginning after December 15, 2016. The ASU has not yet been adopted and will not have a material impact on our company’s financial position, cash flows or results of operations, but the ASU will require additional disclosures to our annual and interim reporting periods.

ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The effective date of ASU 2016-01 is for interim and annual reporting periods beginning after December 15, 2017. The ASU has not yet been adopted. Management is currently evaluating the impact on our company’s consolidated financial position, cash flows and results of operations.

ASU 2016-02, Leases (Topic 842)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The main provision of ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The effective date of ASU 2016-02 is for interim and annual reporting periods beginning after December 15, 2018. The ASU has not yet been adopted. Management is currently evaluating the impact on our company’s consolidated financial position, cash flows and results of operations.

ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting

In March 2016, the FASB issued ASU 2016-07, Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. ASU 2016-07 eliminates the requirement to retroactively adjust an investment, results of operations, and retained earnings once an investment qualifies for use of the equity method. It requires the equity method investor to add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting without retroactive adjustment. The effective date of ASU 2016-07 is for interim and annual reporting periods beginning after December 15, 2016. The ASU has not yet been adopted; however, it is not expected to have a material impact on our company's consolidated financial position, cash flows or results of operations.

ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies and improves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The effective date of ASU 2016-09 is for interim and annual reporting periods beginning after December 15, 2016. The ASU has not yet been adopted; however, it is not expected to have a material impact on our company's consolidated financial position, cash flows or results of operations.

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NOTE 2 – Investments

The following table provides cost or amortized cost, gross unrealized gains, gross unrealized losses and fair value for our investment portfolio:

(Dollars in millions)	Cost or amortized cost
			Gross unrealized				Fair value
At March 31, 2016			gains		losses
Fixed maturity securities:
Corporate	$	5,395	$	295	$	66	$	5,624
States, municipalities and political subdivisions	3,499		204		—		3,703
Commercial mortgage-backed	289		11		2		298
Government-sponsored enterprises	240		—		—		240
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
United States government	4		—		—		4
Subtotal	9,442		510		68		9,884
Equity securities:
Common equities	2,810		1,954		44		4,720
Nonredeemable preferred equities	189		33		1		221
Subtotal	2,999		1,987		45		4,941
Total	$	12,441	$	2,497	$	113	$	14,825
At December 31, 2015
Fixed maturity securities:
Corporate	$	5,294	$	255	$	96	$	5,453
States, municipalities and political subdivisions	3,440		172		1		3,611
Commercial mortgage-backed	287		4		2		289
Government-sponsored enterprises	284		—		6		278
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
United States government	4		—		—		4
Subtotal	9,324		431		105		9,650
Equity securities:
Common equities	2,749		1,787		51		4,485
Nonredeemable preferred equities	189		32		—		221
Subtotal	2,938		1,819		51		4,706
Total	$	12,262	$	2,250	$	156	$	14,356

The net unrealized investment gains in our fixed-maturity portfolio are primarily the result of the continued low interest rate environment that increased the fair value of our fixed-maturity portfolio. Our commercial mortgage-backed securities had an average rating of Aa1/AA at March 31, 2016, and December 31, 2015. The seven largest unrealized investment gains in our common stock portfolio are from Honeywell International Incorporated (NYSE:HON), Exxon Mobil Corporation (NYSE:XOM), The Procter & Gamble Company (NYSE:PG), BlackRock Inc. (NYSE:BLK), Johnson and Johnson (NYSE:JNJ), Hasbro Incorporated (Nasdaq:HAS), and Microsoft Corporation (Nasdaq:MSFT), which had a combined gross unrealized gain of $597 million. At March 31, 2016, Apple was our largest single common stock holding with a fair value of $153 million, whichwas3.2 percent of our publicly traded common stock portfolio and 1.0 percent of the total investment portfolio.

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The table below provides fair values and gross unrealized losses by investment category and by the duration of the securities’ continuous unrealized loss positions:

(Dollars in millions)	Less than 12 months				12 months or more				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
At March 31, 2016
Fixed maturity securities:
Corporate	$	801	$	43	$	153	$	23	$	954	$	66
States, municipalities and political subdivisions	28		—		4		—		32		—
Commercial mortgage-backed	49		1		2		1		51		2
Government-sponsored enterprises	29		—		19		—		48		—
Subtotal	907		44		178		24		1,085		68
Equity securities:
Common equities	345		44		—		—		345		44
Nonredeemable preferred equities	42		1		—		—		42		1
Subtotal	387		45		—		—		387		45
Total	$	1,294	$	89	$	178	$	24	$	1,472	$	113
At December 31, 2015
Fixed maturity securities:
Corporate	$	1,099	$	63	$	133	$	33	$	1,232	$	96
States, municipalities and political subdivisions	47		1		22		—		69		1
Commercial mortgage-backed	103		2		2		—		105		2
Government-sponsored enterprises	100		2		127		4		227		6
Subtotal	1,349		68		284		37		1,633		105
Equity securities:
Common equities	270		51		—		—		270		51
Nonredeemable preferred equities	35		—		—		—		35		—
Subtotal	305		51		—		—		305		51
Total	$	1,654	$	119	$	284	$	37	$	1,938	$	156

Contractual maturity dates for fixed-maturity investments were:

(Dollars in millions)	Amortized cost		Fair value		% of fair value
At March 31, 2016
Maturity dates:
Due in one year or less	$	481	$	488	4.9	%
Due after one year through five years	3,017		3,202		32.4
Due after five years through ten years	3,676		3,797		38.4
Due after ten years	2,268		2,397		24.3
Total	$	9,442	$	9,884	100.0	%

Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties.

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The following table provides investment income, realized investment gains and losses, the change in unrealized investment gains and losses, and other items:

(Dollars in millions)	Three months ended March 31,
	2016			2015
Investment income:
Interest	$	109		$	105
Dividends	37			36
Other	1			—
Total	147			141
Less investment expenses	2			2
Total	$	145		$	139
Realized investment gains and losses summary:
Fixed maturities:
Gross realized gains	$	3		$	3
Gross realized losses	(1		)	—
Other-than-temporary impairments	(2		)	—
Equity securities:
Gross realized gains	62			44
Gross realized losses	(1		)	(1		)
Other-than-temporary impairments	—			—
Other	—			1
Total	$	61		$	47
Change in unrealized investment gains and losses:
Fixed maturities	$	116		$	46
Equity securities	174			(89		)
Less income taxes	(100		)	15
Total	$	190		$	(28	)

During the three months ended March 31, 2016, there were no equity securities and two fixed-maturity securities other-than-temporarily impaired. There were no credit losses on fixed-maturity securities for which a portion of other-than-temporary impairment (OTTI) has been recognized in other comprehensive income for the three months ended March 31, 2016 and 2015. At March 31, 2016, 44 fixed-maturity investments with a total unrealized loss of $24 million had been in an unrealized loss position for 12 months or more. Of that total, two fixed-maturity investments had fair values below 70 percent of amortized cost. There were no equity investments in an unrealized loss position for 12 months or more as of March 31, 2016.

During 2015, we other-than-temporarily impaired 20 securities. At December 31, 2015, 69 fixed-maturity investments with a total unrealized loss of $37 million had been in an unrealized loss position for 12 months or more. Of that total, five fixed-maturity investments had fair values below 70 percent of amortized cost. There were no equity security investments in an unrealized loss position for 12 months or more as of December 31, 2015.

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NOTE 3 – Fair Value Measurements

In accordance with accounting guidance for fair value measurements and disclosures, we categorized our financial instruments, based on the priority of the observable and market-based data for the valuation technique used, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3). When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest observable input that has a significant impact on fair value measurement is used. Our valuation techniques have not changed from those used at December 31, 2015, and ultimately management determines fair value. See our 2015 Annual Report on Form 10-K, Item 8, Note 3, Fair Value Measurements, Page 133, for information on characteristics and valuation techniques used in determining fair value.

Fair Value Disclosures for Assets

The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at March 31, 2016, and December 31, 2015. We do not have any material liabilities carried at fair value. There were no transfers between Level 1 and Level 2.

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Fixed maturities, available for sale:
Corporate	$	—	$	5,573	$	51	$	5,624
States, municipalities and political subdivisions	—		3,703		—		3,703
Commercial mortgage-backed	—		298		—		298
Government-sponsored enterprises	—		240		—		240
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		5		—		5
United States government	4		—		—		4
Subtotal	4		9,829		51		9,884
Common equities, available for sale	4,720		—		—		4,720
Nonredeemable preferred equities, available for sale	—		219		2		221
Separate accounts taxable fixed maturities	—		755		1		756
Top Hat savings plan mutual funds and common   equity (included in Other assets)	22		—		—		22
Total	$	4,746	$	10,803	$	54	$	15,603
At December 31, 2015
Fixed maturities, available for sale:
Corporate	$	—	$	5,402	$	51	$	5,453
States, municipalities and political subdivisions	—		3,611		—		3,611
Commercial mortgage-backed	—		289		—		289
Government-sponsored enterprises	—		278		—		278
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		5		—		5
United States government	4		—		—		4
Subtotal	4		9,595		51		9,650
Common equities, available for sale	4,485		—		—		4,485
Nonredeemable preferred equities, available for sale	—		218		3		221
Separate accounts taxable fixed maturities	—		736		1		737
Top Hat savings plan mutual funds and common   equity (included in Other assets)	21		—		—		21
Total	$	4,510	$	10,549	$	55	$	15,114

Cincinnati Financial Corporation First-Quarter 2016 10-Q

Page 13

Each financial instrument that was deemed to have significant unobservable inputs when determining valuation is identified in the following tables by security type with a summary of changes in fair value as of March 31, 2016. Total Level 3 assets continue to be less than 1 percent of financial assets measured at fair value in the condensed consolidated balance sheets. Assets presented in the table below were valued based primarily on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to us.

The following table provides the change in Level 3 assets for the three months ended March 31:

(Dollars in millions)	Asset fair value measurements using significant unobservable inputs (Level 3)
		Corporate fixed maturities			Separate accounts taxable fixed maturities		States, municipalities and political subdivisions fixed maturities		Nonredeemable preferred equities			Total
Beginning balance, January 1, 2016		$	51		$	1	$	—	$	3		$	55
Total gains or losses (realized/unrealized):
Included in net income		—			—		—		—			—
Included in other comprehensive income		—			—		—		(1		)	(1		)
Purchases		5			—		—		—			5
Sales		—			—		—		—			—
Transfers into Level 3		—			—		—		—			—
Transfers out of Level 3		(5		)	—		—		—			(5		)
Ending balance, March 31, 2016		$	51		$	1	$	—	$	2		$	54
Beginning balance, January 1, 2015		$	18		$	—	$	—	$	2		$	20
Total gains or losses (realized/unrealized):
Included in net income		—			—		—		—			—
Included in other comprehensive income		—			—		—		—			—
Purchases		—			—		—		—			—
Sales		—			—		—		—			—
Transfers into Level 3		—			—		1		—			1
Transfers out of Level 3		—			—		—		—			—
Ending balance, March 31, 2015		$	18		$	—	$	1	$	2		$	21

Additional disclosures for the Level 3 category are not material.

Fair Value Disclosures for Assets and Liabilities Not Carried at Fair Value

The disclosures below are presented to provide timely information about the effects of current market conditions on financial instruments that are not reported at fair value in our condensed consolidated financial statements.

This table summarizes the book value and principal amounts of our long-term debt:

(Dollars in millions)				Book value				Principal amount
				March 31,		December 31,		March 31,		December 31,
Interest rate		Year of issue		2016		2015		2016		2015
6.900	%	1998	Senior debentures, due 2028	$	26	$	26	$	28	$	28
6.920	%	2005	Senior debentures, due 2028	391		391		391		391
6.125	%	2004	Senior notes, due 2034	369		369		374		374
			Total	$	786	$	786	$	793	$	793

Cincinnati Financial Corporation First-Quarter 2016 10-Q

Page 14

The following table shows fair values of our note payable and long-term debt:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Note payable	$	—	$	35	$	—	$	35
6.900% senior debentures, due 2028	—		33		—		33
6.920% senior debentures, due 2028	—		492		—		492
6.125% senior notes, due 2034	—		437		—		437
Total	$	—	$	997	$	—	$	997
At December 31, 2015
Note payable	$	—	$	35	$	—	$	35
6.900% senior debentures, due 2028	—		31		—		31
6.920% senior debentures, due 2028	—		480		—		480
6.125% senior notes, due 2034	—		425		—		425
Total	$	—	$	971	$	—	$	971

The following table shows the fair value of our life policy loans included in other invested assets:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Life policy loans	$	—	$	—	$	42	$	42
At December 31, 2015
Life policy loans	$	—	$	—	$	40	$	40

Outstanding principal and interest for these life policy loans totaled $30 million and $31 million at March 31, 2016, and December 31, 2015, respectively.

The following table shows fair values of our deferred annuities and structured settlements included in life policy and investment contract reserves:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Deferred annuities	$	—	$	—	$	917	$	917
Structured settlements	—		212		—		212
Total	$	—	$	212	$	917	$	1,129
At December 31, 2015
Deferred annuities	$	—	$	—	$	886	$	886
Structured settlements	—		208		—		208
Total	$	—	$	208	$	886	$	1,094

Recorded reserves for the deferred annuities were $860 million at March 31, 2016 and December 31, 2015. Recorded reserves for the structured settlements were $175 million and $174 million at March 31, 2016, and December 31, 2015, respectively.

Cincinnati Financial Corporation First-Quarter 2016 10-Q

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NOTE 4 – Property Casualty Loss and Loss Expenses

This table summarizes activity for our consolidated property casualty loss and loss expense reserves:

(Dollars in millions)	Three months ended March 31,
	2016			2015
Gross loss and loss expense reserves, beginning of period	$	4,660		$	4,438
Less reinsurance recoverable	281			282
Net loss and loss expense reserves, beginning of period	4,379			4,156
Net incurred loss and loss expenses related to:
Current accident year	723			711
Prior accident years	(62		)	(22		)
Total incurred	661			689
Net paid loss and loss expenses related to:
Current accident year	146			147
Prior accident years	416			399
Total paid	562			546
Net loss and loss expense reserves, end of period	4,478			4,299
Plus reinsurance recoverable	272			278
Gross loss and loss expense reserves, end of period	$	4,750		$	4,577

We use actuarial methods, models and judgment to estimate, as of a financial statement date, the property casualty loss and loss expense reserves required to pay for and settle all outstanding insured claims, including incurred but not reported (IBNR) claims, as of that date. The actuarial estimate is subject to review and adjustment by an inter-departmental committee that includes actuarial management that is familiar with relevant company and industry business, claims and underwriting trends, as well as general economic and legal trends that could affect future loss and loss expense payments. The amount we will actually have to pay for claims can be highly uncertain. This uncertainty, together with the size of our reserves, makes the loss and loss expense reserves our most significant estimate. The reserve for loss and loss expenses in the condensed consolidated balance sheets also included $54 million at March 31, 2016, and $46 million at March 31, 2015, for certain life and health loss and loss expense reserves.

For the three months endedMarch 31, 2016, we experienced $62 million of favorable development on prior accident years, including $29 million of favorable development in commercial lines, $18 million of favorable development in personal lines, $14 million of favorable development in excess and surplus lines, and $1 million of favorable development in our reinsurance assumed operations. This included $7 million from favorable development of catastrophe losses for the three months endedMarch 31, 2016. We recognized favorable reserve development during the three months endedMarch 31, 2016, of $13 million for the workers' compensation line,

$8 million for the commercial property line, $13 million for the other commercial lines and $8 million for the homeowner line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. Our commercial auto line developed unfavorably by $8 million for the three months ended March 31, 2016, due to higher loss cost effects in recent accident years, resulting in an increase of our reserve estimate for claims that have not yet been settled.

For the three months endedMarch 31, 2015, we experienced $22 million of favorable development on prior accident years, including $14 million of favorable development in commercial lines, $3 million of favorable development in personal lines and $5 million of favorable development in excess and surplus lines. This included $11 million from favorable development of catastrophe losses for the three months endedMarch 31, 2015. We recognized favorable development during the three months ended March 31, 2015, of $15 million for the workers' compensation line, $11 million for the commercial property line and $7 million for the homeowner line due to reduced uncertainty of prior accident year loss and loss adjustment expenses for these lines. Our commercial auto line developed unfavorably by $11 million for the three months ended March 31, 2015, due to higher loss cost effects in recent accident years, resulting in an increase of our reserve estimate for claims that have not yet been settled.

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NOTE 5 – Life Policy and Investment Contract Reserves

We establish the reserves for traditional life insurance policies based on expected expenses, mortality, morbidity, withdrawal rates, timing of claim presentation and investment yields, including a provision for uncertainty. Once these assumptions are established, they generally are maintained throughout the lives of the contracts. We use both our own experience and industry experience, adjusted for historical trends, in arriving at our assumptions for expected mortality, morbidity and withdrawal rates as well as for expected expenses. We base our assumptions for expected investment income on our own experience adjusted for current economic conditions.

We establish reserves for the company’s universal life, deferred annuity and structured settlement policies equal to the cumulative account balances, which include premium deposits plus credited interest less charges and withdrawals. Some of our universal life policies contain no-lapse guarantee provisions. For these policies, we establish a reserve in addition to the account balance, based on expected no-lapse guarantee benefits and expected policy assessments.

This table summarizes our life policy and investment contract reserves:

(Dollars in millions)	March 31, 2016		December 31, 2015
Ordinary/traditional life	$	956	$	943
Deferred annuities	860		860
Universal life	561		558
Structured settlements	175		174
Other	49		48
Total life policy and investment contract reserves	$	2,601	$	2,583

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Page 17

NOTE 6 – Deferred Policy Acquisition Costs

Expenses directly related to successfully acquired insurance policies – primarily commissions, premium taxes and underwriting costs – are deferred and amortized over the terms of the policies. We update our acquisition cost assumptions periodically to reflect actual experience, and we evaluate the costs for recoverability. The table below shows the deferred policy acquisition costs and asset reconciliation.

(Dollars in millions)	Three months ended March 31,
	2016			2015
Property casualty:
Deferred policy acquisition costs asset, beginning of period	$	388		$	379
Capitalized deferred policy acquisition costs	210			196
Amortized deferred policy acquisition costs	(201		)	(198		)
Deferred policy acquisition costs asset, end of period	$	397		$	377
Life:
Deferred policy acquisition costs asset, beginning of period	$	228		$	199
Capitalized deferred policy acquisition costs	12			11
Amortized deferred policy acquisition costs	(11		)	(11		)
Amortized shadow deferred policy acquisition costs	(8		)	(5		)
Deferred policy acquisition costs asset, end of period	$	221		$	194
Consolidated:
Deferred policy acquisition costs asset, beginning of period	$	616		$	578
Capitalized deferred policy acquisition costs	222			207
Amortized deferred policy acquisition costs	(212		)	(209		)
Amortized shadow deferred policy acquisition costs	(8		)	(5		)
Deferred policy acquisition costs asset, end of period	$	618		$	571

No premium deficiencies were recorded in the condensed consolidated statements of income, as the sum of the anticipated loss and loss adjustment expenses, policyholder dividends and unamortized deferred acquisition expenses did not exceed the related unearned premiums and anticipated investment income.

Cincinnati Financial Corporation First-Quarter 2016 10-Q

Page 18

NOTE 7 – Accumulated Other Comprehensive Income

Accumulated other comprehensive income (AOCI) includes changes in unrealized gains and losses on investments, changes in pension obligations and changes in life deferred acquisition costs, life policy reserves and other as follows:

(Dollars in millions)	Three months ended March 31,
	2016									2015
	Before tax			Income tax			Net			Before tax			Income tax			Net
Investments:
AOCI, beginning of period	$	2,094		$	722		$	1,372		$	2,719		$	942		$	1,777
OCI excluding realized gains recognized in net income	351			121			230			3			1			2
Realized gains recognized in net income	(61		)	(21		)	(40		)	(46		)	(16		)	(30		)
OCI	290			100			190			(43		)	(15		)	(28		)
AOCI, end of period	$	2,384		$	822		$	1,562		$	2,676		$	927		$	1,749
Pension obligations:
AOCI, beginning of period	$	(42	)	$	(14	)	$	(28	)	$	(36	)	$	(12	)	$	(24	)
OCI excluding amortization recognized in net income	—			—			—			—			—			—
Amortization recognized in net income	1			1			—			1			—			1
OCI	1			1			—			1			—			1
AOCI, end of period	$	(41	)	$	(13	)	$	(28	)	$	(35	)	$	(12	)	$	(23	)
Life deferred acquisition costs, life policy reserves and other:
AOCI, beginning of period	$	1		$	1		$	—		$	(12	)	$	(3	)	$	(9	)
OCI excluding realized gains recognized in net income	(4		)	(1		)	(3		)	(1		)	(1		)	—
Realized gains recognized in net income	—			—			—			(1		)	—			(1		)
OCI	(4		)	(1		)	(3		)	(2		)	(1		)	(1		)
AOCI, end of period	$	(3	)	$	—		$	(3	)	$	(14	)	$	(4	)	$	(10	)
Summary of AOCI:
AOCI, beginning of period	$	2,053		$	709		$	1,344		$	2,671		$	927		$	1,744
Investments OCI	290			100			190			(43		)	(15		)	(28		)
Pension obligations OCI	1			1			—			1			—			1
Life deferred acquisition costs, life policy reserves and other OCI	(4		)	(1		)	(3		)	(2		)	(1		)	(1		)
Total OCI	287			100			187			(44		)	(16		)	(28		)
AOCI, end of period	$	2,340		$	809		$	1,531		$	2,627		$	911		$	1,716

Investments realized gains and life deferred acquisition costs, life policy reserves and other realized gains are recorded in the realized investment gains, net, line item in the condensed consolidated statements of income. Amortization on pension obligations is recorded in the insurance losses and contract holders' benefits and underwriting, acquisition and insurance expenses in the condensed consolidated statements of income.

Cincinnati Financial Corporation First-Quarter 2016 10-Q

Page 19

NOTE 8 – Reinsurance

Primary components of our property casualty operations assumed reinsurance include involuntary and voluntary assumed as well as contracts from our reinsurance assumed operations, known as Cincinnati Re^SM. Primary components of our ceded reinsurance include a property per risk treaty, property excess treaty, casualty per occurrence treaty, casualty excess treaty, property catastrophe treaty and catastrophe bonds and retrocessions on our reinsurance assumed operations. Management's decisions about the appropriate level of risk retention are affected by various factors, including changes in our underwriting practices, capacity to retain risks and reinsurance market conditions.

Our condensed consolidated statements of income include earned consolidated property casualty insurance premiums on assumed and ceded business: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Direct earned premiums	$	1,119		$	1,076
Assumed earned premiums	15			2
Ceded earned premiums	(38		)	(37		)
Earned premiums	$	1,096		$	1,041

Our condensed consolidated statements of income include incurred consolidated property casualty insurance loss and loss expenses on assumed and ceded business:

(Dollars in millions)	Three months ended March 31,
	2016		2015
Direct incurred loss and loss expenses	$	648	$	691
Assumed incurred loss and loss expenses	10		(1		)
Ceded incurred loss and loss expenses	3		(1		)
Incurred loss and loss expenses	$	661	$	689

Our ceded incurred results generally vary with our catastrophe experience.

Our life insurance company purchases reinsurance for protection of a portion of the risk that is written. Primary components of our life reinsurance program include individual mortality coverage and aggregate catastrophe and accidental death coverage in excess of certain deductibles.

Our condensed consolidated statements of income include earned life insurance premiums on ceded business: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Direct earned premiums	$	71		$	65
Ceded earned premiums	(13		)	(12		)
Earned premiums	$	58		$	53

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Page 20

Our condensed consolidated statements of income include life insurance contract holders' benefits incurred on ceded business: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Direct contract holders' benefits incurred	$	76		$	72
Ceded contract holders' benefits incurred	(13		)	(12		)
Contract holders' benefits incurred	$	63		$	60

The ceded benefits incurred can vary depending on the type of life insurance policy held and the year the policy was sold.

NOTE 9 – Income Taxes

As of March 31, 2016, and December 31, 2015, we had no liability for unrecognized tax benefits.

The differences between the 35 percent statutory federal income tax rate and our effective income tax rate were as follows:

(Dollars in millions)	Three months ended March 31,
	2016					2015
Tax at statutory rate:	$	93		35.0	%	$	61		35.0	%
Increase (decrease) resulting from:
Tax-exempt income from municipal bonds	(9		)	(3.4	)	(8		)	(4.6	)
Dividend received exclusion	(8		)	(3.0	)	(8		)	(4.6	)
Other	1			0.5		1			0.6
Provision for income taxes	$	77		29.1	%	$	46		26.4	%

The provision for federal income taxes is based upon filing a consolidated income tax return for the company and its subsidiaries. As of March 31, 2016, we had no operating or capital loss carry forwards.

NOTE 10 – Net Income Per Common Share

Basic earnings per share are computed based on the weighted average number of common shares outstanding. Diluted earnings per share are computed based on the weighted average number of common and dilutive potential common shares outstanding using the treasury stock method. The table shows calculations for basic and diluted earnings per share:

(In millions except per share data)	Three months ended March 31,
	2016		2015
Numerator:
Net income—basic and diluted	$	188	$	128
Denominator:
Basic weighted-average common shares outstanding	164.2		164.0
Effect of share-based awards:
Stock options	1.0		1.0
Nonvested shares	0.8		0.6
Diluted weighted-average shares	166.0		165.6
Earnings per share:
Basic	$	1.14	$	0.78
Diluted	1.13		0.77
Number of anti-dilutive share-based awards:	0.4		0.7

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Page 21

The sources of dilution of our common shares are certain equity-based awards. See our 2015 Annual Report on Form 10-K, Item 8, Note 17, Share-Based Associate Compensation Plans, Page 152, for information about equity-based awards. The above table shows the number of anti-dilutive share-based awards for the three months endedMarch 31, 2016 and 2015. We did not include these share-based awards in the computation of net income per common share (diluted) because their exercise would have anti-dilutive effects.

NOTE 11 – Employee Retirement Benefits

The following summarizes the components of net periodic benefit cost for our qualified and supplemental pension plans:

(Dollars in millions)	Three months ended March 31,
	2016			2015
Service cost	$	3		$	3
Interest cost	3			3
Expected return on plan assets	(5		)	(4		)
Amortization of actuarial loss and prior service cost	1			1
Net periodic benefit cost	$	2		$	3

See our 2015 Annual Report on Form 10-K, Item 8, Note 13, Employee Retirement Benefits, Page 146, for information on our retirement benefits. We made matching contributions totaling $4 million to our 401(k) and Top Hat savings plans during both the first quarters of 2016 and 2015.

We contributed $5 million to our qualified pension plan during the first quarter of 2016. We do not anticipate further contributions to our qualified pension plan during the remainder of 2016.

NOTE 12 – Commitments and Contingent Liabilities

In the ordinary course of conducting business, the company and its subsidiaries are named as defendants in various legal proceedings. Most of these proceedings are claims litigation involving the company's insurance subsidiaries in which the company is either defending or providing indemnity for third-party claims brought against insureds or litigating first-party coverage claims. The company accounts for such activity throughthe establishment of unpaid loss and loss expense reserves. We believe that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, is immaterial to our consolidated financial condition, results of operations and cash flows.

The company and its subsidiaries also are occasionally involved in other legal and regulatory proceedings, some of which assert claims for substantial amounts. These actions include, among others, putative class actions seeking certification of a state or national class. Such proceedings have alleged, for example, breach of an alleged duty to search national databases to ascertain unreported deaths of insureds underlife insurance policies. The company's insurance subsidiaries also are occasionally parties to individual actions in which extra-contractual damages, punitive damages or penalties are sought, such asclaims alleging bad faith handling of insuranceclaims or writing unauthorized coverage or claims alleging discrimination by former or current associates.

On a quarterly basis, we review these outstanding matters. Under current accounting guidance, we establish accruals when it is probable that a loss has been incurred and we can reasonably estimate its potential exposure. The company accounts for such probable and estimable losses, if any, through the establishment of legal expense reserves. Based on our quarterly review, we believe that our accruals for probable and estimable losses are reasonable and that the amounts accrued do not have a material effect on our consolidated financial condition or results of operations. However, if any one or more of these matters results in a judgment against us or settlement for an amount that is significantly greater than the amount accrued, the resulting liability could have a material effect on the company's consolidated results of operations or cash flows. Based on our most recent review, our estimate for any other matters for which the risk of loss is not probable, but more than remote, is less than $1 million.

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Page 22

NOTE 13 – Segment Information

We operate primarily in two industries, property casualty insurance and life insurance. We regularly review our reporting segments to make decisions about allocating resources and assessing performance. Our reporting segments are:

• Commercial lines insurance

• Personal lines insurance

• Excess and surplus lines insurance

• Life insurance

• Investments

We report as Other the noninvestment operations of the parent company and its noninsurer subsidiary, CFC Investment Company and Cincinnati Re, our reinsurance assumed operations. See our 2015 Annual Report on Form 10-K, Item 8, Note 18, Segment Information, Page 155, for a description of revenue, income or loss before income taxes and identifiable assets for each of the five segments.

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Page 23

Segment information is summarized in the following table: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Revenues:
Commercial lines insurance
Commercial casualty	$	257		$	244
Commercial property	214			196
Commercial auto	144			136
Workers' compensation	89			93
Other commercial	56			64
Commercial lines insurance premiums	760			733
Fee revenues	1			1
Total commercial lines insurance	761			734
Personal lines insurance
Personal auto	131			123
Homeowner	119			114
Other personal	33			31
Personal lines insurance premiums	283			268
Fee revenues	1			1
Total personal lines insurance	284			269
Excess and surplus lines insurance	43			40
Life insurance premiums	58			53
Separate account investment management fees	1			1
Total life insurance	59			54
Investments
Investment income, net of expenses	145			139
Realized investment gains, net	61			47
Total investment revenue	206			186
Other	11			2
Total revenues	$	1,364		$	1,285
Income (loss) before income taxes:
Insurance underwriting results
Commercial lines insurance	$	50		$	26
Personal lines insurance	28			(3		)
Excess and surplus lines insurance	17			4
Life insurance	(1		)	(3		)
Investments	184			165
Other	(13		)	(15		)
Total income before income taxes	$	265		$	174

Identifiable assets:	March 31, 2016		December 31, 2015
Property casualty insurance	$	2,699	$	2,717
Life insurance	1,372		1,325
Investments	14,978		14,485
Other	398		361
Total	$	19,447	$	18,888

Cincinnati Financial Corporation First-Quarter 2016 10-Q

Page 24

Item 2.    Management’s Discussion and Analysis of Financial Condition and

Results of Operations

The following discussion highlights significant factors influencing the condensed consolidated results of operations and financial position of Cincinnati Financial Corporation. It should be read in conjunction with the consolidated financial statements and related notes included in our 2015 Annual Report on Form 10-K. Unless otherwise noted, the industry data is prepared by A.M. Best Co., a leading insurance industry statistical, analytical and financial strength rating organization. Information from A.M. Best is presented on a statutory basis. When we provide our results on a comparable statutory basis, we label it as such; all other company data is presented in accordance with accounting principles generally accepted in the United States of America (GAAP).

We present per share data on a diluted basis unless otherwise noted, adjusting those amounts for all stock splits and dividends. Dollar amounts are rounded to millions; calculations of percent changes are based on dollar amounts rounded to the nearest million. Certain percentage changes are identified as not meaningful (nm).

SAFE HARBOR STATEMENT

This is our “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995. Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by the forward-looking statements in this report. Some of those risks and uncertainties are discussed in our 2015 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 26.

Factors that could cause or contribute to such differences include, but are not limited to:

• 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 or development of claims that are unforeseen at the time of policy issuance

• Inadequate estimates, assumptions or reliance on third-party data used for critical accounting estimates

• Declines in overall stock market values negatively affecting the company’s equity portfolio and book value

• Domestic and global events resulting in capital market or credit market uncertainty, followed by prolonged periods of economic instability or recession, that lead to:

◦ Significant or prolonged decline in the fair value of a particular security or group of securities and impairment of the asset(s)

◦ Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities

◦ Significant rise in losses from surety and director and officer policies written for financial institutions or other insured entities

• 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

• Recession or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies

• Difficulties with technology or data security breaches, including cyberattacks, that could negatively affect our ability to conduct business and our relationships with agents, policyholders and others

• Disruption of the insurance market caused by technology innovations such as driverless cars that could decrease consumer demand for insurance products

• Delays, inadequate data developed internally or from third parties, or performance inadequacies from ongoing development and implementation of underwriting and pricing methods, including telematics and other usage-based insurance methods, or technology projects and enhancements expected to increase our pricing accuracy, underwriting profit and competitiveness

• 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

Cincinnati Financial Corporation First-Quarter 2016 10-Q

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• Inability to obtain adequate ceded reinsurance on acceptable terms, amount of reinsurance coverage purchased, financial strength of reinsurers and the potential for nonpayment or delay in payment by reinsurers

• 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

• Inability of our subsidiaries to pay dividends consistent with current or past levels

• 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:

◦ Downgrades of the company’s financial strength ratings

◦ Concerns that doing business with the company is too difficult

◦ Perceptions that the company’s level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace

◦ Inability or unwillingness to nimbly develop and introduce coverage product updates and innovations that our competitors offer and consumers expect to find in the marketplace

• 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:

◦ Impose new obligations on us that increase our expenses or change the assumptions underlying our critical accounting estimates

◦ Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations

◦ Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business

◦ 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

◦ Increase our provision for federal income taxes due to changes in tax law

◦ Increase our other expenses

◦ Limit our ability to set fair, adequate and reasonable rates

◦ Place us at a disadvantage in the marketplace

◦ 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

Further, the company’s insurance businesses are subject to the effects of changing social, global, economic and regulatory environments. Public and regulatory initiatives have included efforts to adversely influence and restrict premium rates, restrict the ability to cancel policies, impose underwriting standards and expand overall regulation. The company also is subject to public and regulatory initiatives that can affect the market value for its common stock, such as measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain.

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CORPORATE FINANCIAL HIGHLIGHTS

Net Income and Comprehensive Income Data

(Dollars in millions except per share data)	Three months ended March 31,
	2016		2015		% Change
Net income and comprehensive income data:
Earned premiums	$	1,154	$	1,094	5
Investment income, net of expenses (pretax)	145		139		4
Realized investment gains, net (pretax)	61		47		30
Total revenues	1,364		1,285		6
Net income	188		128		47
Comprehensive income	375		100		275
Net income per share—diluted	1.13		0.77		47
Cash dividends declared per share	0.48		0.46		4
Diluted weighted average shares outstanding	166.0		165.6		0

Total revenues rose for the first quarter of 2016, compared with the first quarter 2015, primarily due to higher earned premiums. Premium and investment revenue trends are discussed further in the respective sections of Financial Results.

Realized investment gains and losses are recognized on the sales of investments or as otherwise required by GAAP. We have substantial discretion in the timing of investment sales, and that timing generally is independent of the insurance underwriting process. GAAP also requires us to recognize in net income the gains or losses from certain changes in fair values of securities even though we continue to hold the securities.

Net income for the first quarter of 2016, compared with first-quarter 2015, increased $60 million. The increase reflected improvement in property casualty underwriting income of $45 million after taxes and a $9 million increase in after-tax net realized investment gains. Lower catastrophe losses, mostly weather related, were $6 million less after taxes and favorably affected both net income and property casualty underwriting income. After-tax investment income in our investment segment results for the first quarter of 2016 rose $4 million compared with the same quarter of 2015. Life insurance segment results on a pretax basis improved by $2 million.

Performance by segment is discussed below in Financial Results. As discussed in our 2015 Annual Report on Form 10-K, Item 7, Factors Influencing Our Future Performance, Page 45, there are several reasons that our performance during 2016 may be below our long-term targets. In that annual report, as part of Financial Results, we also discussed the full-year 2016 outlook for each reporting segment.

The board of directors is committed to rewarding shareholders directly through cash dividends and through share repurchase authorizations. Through 2015, the company had increased the indicated annual cash dividend rate for 55 consecutive years, a record we believe was matched by only eight other publicly traded companies. In January 2016, the board of directors increased the regular quarterly dividend to 48 cents per share, setting the stage for our 56^th consecutive year of increasing cash dividends. During the first three months of 2016, cash dividends declared by the company increased approximately 4 percent compared with the same period of 2015. Our board regularly evaluates relevant factors in decisions related to dividends and share repurchases. The 2016 dividend increase reflected our strong earnings performance and signaled management’s and the board’s positive outlook and confidence in our outstanding capital, liquidity and financial flexibility.

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Balance Sheet Data and Performance Measures

(In millions except share data)	At March 31,			At December 31,
	2016			2015
Balance sheet data:
Total investments	$	14,889		$	14,423
Total assets	19,447			18,888
Short-term debt	35			35
Long-term debt	786			786
Shareholders' equity	6,735			6,427
Book value per share	40.96			39.20
Debt-to-total-capital ratio	10.9		%	11.3		%

Total assets at March 31, 2016, increased 3 percent compared with year-end 2015, and included 3 percent growth in investments largely driven by higher fair values for many securities in our portfolio. Shareholders’ equity increased 5 percent, and book value per share increased 4 percent during the first three months of 2016. Our debt-to-total-capital ratio (capital is the sum of debt plus shareholders’ equity) was lower than at year-end 2015.

Our value creation ratio is a non-GAAP measure defined below and is our primary performance metric. That ratio was 5.7 percent for the first three months of 2016, and was better than the same period in 2015 primarily due to higher net gains from our investment portfolio. The $1.76 increase in book value per share during the first three months of 2016 contributed 4.5 percentage points to the value creation ratio, while dividends declared at $0.48 per share contributed 1.2 points. Value creation ratio trends in total and by major components, along with a reconciliation of the non-GAAP measure to comparable GAAP measures, are shown in the tables below.

	Three months ended March 31,
	2016		2015
Value creation ratio major components:
Net income before net realized gains	2.3	%	1.4	%
Change in fixed-maturity securities, realized and unrealized gains	1.2		0.5
Change in equity securities, realized and unrealized gains	2.4		(0.4	)
Other	(0.2	)	(0.2	)
Value creation ratio	5.7	%	1.3	%

(Dollars are per share)	Three months ended March 31,
	2016			2015
Book value change per share:
End of period book value	$	40.96		$	40.22
Less beginning of period book value	39.20			40.14
Change in book value	$	1.76		$	0.08
Change in book value:
Net income before realized gains	$	0.90		$	0.59
Change in fixed-maturity securities, realized and unrealized gains	0.46			0.19
Change in equity securities, realized and unrealized gains	0.93			(0.18		)
Dividend declared to shareholders	(0.48		)	(0.46		)
Other	(0.05		)	(0.06		)
Change in book value	$	1.76		$	0.08

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(Dollars are per share)	Three months ended March 31,
	2016			2015
Value creation ratio:
End of period book value	$	40.96		$	40.22
Less beginning of period book value	39.20			40.14
Change in book value	1.76			0.08
Dividend declared to shareholders	0.48			0.46
Total value creation	$	2.24		$	0.54
Value creation ratio from change in book value*	4.5		%	0.2		%
Value creation ratio from dividends declared to shareholders**	1.2			1.1
Value creation ratio	5.7		%	1.3		%
*Change in book value divided by the beginning of period book value
**Dividend declared to shareholders divided by beginning of period book value

DRIVERS OF LONG-TERM VALUE CREATION

Operating through The Cincinnati Insurance Company, Cincinnati Financial Corporation is one of the 25 largest property casualty insurers in the nation, based on 2015 net written premiums for approximately 2,000 U.S. stock and mutual insurer groups. We market our insurance products through a select group of independent insurance agencies as discussed in our 2015 Annual Report on Form 10-K, Item 1, Our Business and Our Strategy, Page 5. At March 31, 2016, we actively marketed through agencies located in 40 states. We maintain a long-term perspective that guides us in addressing immediate challenges or opportunities while focusing on the major decisions that best position our company for success through all market cycles.

To measure our long-term progress in creating shareholder value, our value creation ratio is our primary financial performance target. As discussed in our 2015 Annual Report on Form 10-K, Item 7, Executive Summary, Page 40, management believes this non-GAAP measure is a meaningful indicator of our long-term progress in creating shareholder value, is a useful supplement to GAAP information and has three primary performance drivers:

• Premium growth – We believe our agency relationships and initiatives can lead to a property casualty written premium growth rate over any five-year period that exceeds the industry average. For the first three months of 2016, our consolidated property casualty net written premium year-over-year growth was 8 percent, comparing favorably with A.M. Best's February 2016 projection of approximately 2 percent full-year growth for the industry. For the five-year period 2011 through 2015, our growth rate was approximately double that of the industry. The industry's growth rate excludes its mortgage and financial guaranty lines of business.

• Combined ratio – We believe our underwriting philosophy and initiatives can generate a GAAP combined ratio over any five-year period that is consistently within the range of 95 percent to 100 percent. For the first three months of 2016, our GAAP combined ratio was 91.4 percent and our statutory combined ratio was 90.2 percent, both including 3.7 percentage points of current accident year catastrophe losses offset by 5.6 percentage points of favorable loss reserve development on prior accident years. As of February 2016, A.M. Best projected the industry's full-year 2016 statutory combined ratio at approximately 99 percent, including approximately 5 percentage points of catastrophe losses and a favorable effect of approximately 2 percentage points of loss reserve development on prior accident years. The industry's ratio again excludes its mortgage and financial guaranty lines of business.

• 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. For the first three months of 2016, pretax investment income was $145 million, up 4 percent compared with the same period in 2015. We believe our investment portfolio mix provides an appropriate balance of income stability and growth with capital appreciation potential.

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Highlights of Our Strategy and Supporting Initiatives

Management has worked to identify a strategy that can lead to long-term success, with concurrence by the board of directors. Our strategy is intended to position us to compete successfully in the markets we have targeted while appropriately managing risk. Further description of our long-term, proven strategy can be found in our 2015 Annual Report on Form 10-K, Item 1, Our Business and Our Strategy, Page 5. We believe successful implementation of initiatives that support our strategy will help us better serve our agent customers and reduce volatility in our financial results while we also grow earnings and book value over the long term, successfully navigating challenging economic, market or industry pricing cycles.

• Manage insurance profitability – Implementation of these initiatives is intended to enhance underwriting expertise and knowledge, thereby increasing our ability to manage our business while also gaining efficiency. Better profit margins can arise from additional information and more focused action on underperforming product lines, plus pricing capabilities we are expanding through the use of technology and analytics. In addition to enhancing company efficiency, improving internal processes also supports the ability of the independent agencies that represent us to grow profitably by allowing them to serve clients faster and to more efficiently manage agency expenses.

We continue to enhance our property casualty underwriting expertise and to effectively and efficiently underwrite individual policies and process transactions. Ongoing initiatives supporting this work include expanding our pricing and segmentation capabilities through experience and use of predictive analytics and additional data. Our segmentation efforts emphasize identification and retention of insurance policies we believe have relatively stronger pricing, while seeking more aggressive renewal terms and conditions on policies we believe have relatively weaker pricing. An area of concentration in 2016 is improving underwriting and rate adequacy for our commercial auto and personal auto lines of business. Both our commercial auto and personal auto policies that renewed during the first three months of 2016 experienced an estimated average price percentage increase in the mid-single-digit range.

• Drive premium growth – Implementation of these initiatives is intended to further penetrate each market we serve through our independent agencies. 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.

We continue to appoint new agencies to develop additional points of distribution. In 2016, we are planning approximately 100 appointments of independent agencies that offer most or all of our property casualty insurance products. During the first three months of 2016, we appointed 26 new agencies that meet that criteria. They write, in aggregate, nearly $2 billion in property casualty premiums annually with various insurance carriers. We also appointed another 34 agencies to market only personal lines insurance products for us. As of March 31, 2016, a total of 1,551 agency relationships market our property casualty insurance products from 1,993 reporting locations.

We plan to appoint additional agencies that focus on high net worth personal lines clients. In 2016, we are targeting approximately $25 million in high net worth new business written premiums, including premiums from our Executive Capstone™ suite of insurance products and services. During the first three months of 2016, our agencies produced for us approximately $5 million in high net worth new business written premiums. In the first quarter of 2016, we appointed agencies in the state of New Jersey and began to offer personal lines insurance products for the unique needs of high net worth personal lines clients. That state represents our 40^th state for marketing property casualty insurance, including 32 states where we market personal lines policies.

Financial Strength

An important part of our long-term strategy is financial strength, which is described in our 2015 Annual Report on Form 10-K, Item 1, Our Business and Our Strategy, Financial Strength, Page 7. One aspect of our financial strength is prudent use of reinsurance ceded to help manage financial performance variability due to catastrophe loss experience. A description of how we use reinsurance ceded is included in our 2015 Annual Report on Form 10-K, Item 7, Liquidity and Capital Resources, 2016 Reinsurance Ceded Programs, Page 101. Another aspect of our financial strength is our investment portfolio, which remains well-diversified as discussed in this quarterly report in Item 3, Quantitative and Qualitative Disclosures About Market Risk. Our strong parent-company liquidity and financial strength increase our flexibility to maintain a cash dividend through all periods and to continue to invest in and expand our insurance operations.

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At March 31, 2016, we held $1.940 billion of our cash and invested assets at the parent-company level, of which $1.693 billion, or 87.3 percent, was invested in common stocks, and $153 million, or 7.9 percent, was cash or cash equivalents. Our debt-to-total-capital ratio of 10.9 percent remains well below our target limit. Another important indicator of financial strength is our ratio of property casualty net written premiums to statutory surplus, which was 1.0-to-1 for the 12 months ended March 31, 2016, matching year-end 2015.

Financial strength ratings assigned to us by independent rating firms also are important. In addition to rating our parent company’s senior debt, four firms award insurer financial strength ratings to one or more of our insurance subsidiary companies based on their quantitative and qualitative analyses. These ratings primarily assess an insurer’s ability to meet financial obligations to policyholders and do not necessarily address all of the matters that may be important to investors. Ratings are under continuous review and subject to changes or withdrawal at any time by the rating agency. Each rating should be evaluated independently of any other rating; please see each rating agency's website for its most recent report on our ratings.

As of April 25, 2016, our insurer financial strength ratings were:

Rating agency	Standard market property casualty insurance subsidiaries			Life insurance  subsidiary			Excess and surplus lines insurance subsidiary			Date of most recent affirmation or action
			Rating tier			Rating tier			Rating tier
A.M. Best Co. ambest.com	A+	Superior	2 of 16	A	Excellent	3 of 16	A+	Superior	2 of 16	Stable outlook (03/10/16)
Fitch Ratings fitchratings.com	A+	Strong	5 of 21	A+	Strong	5 of 21	-	-	-	Stable outlook (11/13/15)
Moody's Investors  Service moodys.com	A1	Good	5 of 21	-	-	-	-	-	-	Stable outlook (04/30/13)
Standard & Poor's  Ratings Services spratings.com	A+	Strong	5 of 21	A+	Strong	5 of 21	-	-	-	Stable outlook (06/30/15)

On March 10, 2016, A.M. Best affirmed, with a stable outlook, its rating for The Cincinnati Life Insurance Company, including a financial strength rating of A (Excellent) and an issuer credit rating of "a+." According to A.M. Best, the ratings reflect Cincinnati Life's positive premium growth trends, good quality investment portfolio, adequate capitalization and strategic role within Cincinnati Financial Corporation.

No other rating agency actions to our insurer financial strength ratings occurred during the first quarter of 2016. All of our insurance subsidiaries continue to be highly rated.

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CONSOLIDATED PROPERTY CASUALTY INSURANCE HIGHLIGHTS

Consolidated property casualty insurance results include premiums and expenses for our standard market insurance segments (commercial lines and personal lines), our excess and surplus lines segment and our reinsurance assumed operations.

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Earned premiums	$	1,096		$	1,041		5
Fee revenues	2			2			0
Total revenues	1,098			1,043			5
Loss and loss expenses from:
Current accident year before catastrophe losses	682			657			4
Current accident year catastrophe losses	41			54			(24	)
Prior accident years before catastrophe losses	(55		)	(11		)	(400	)
Prior accident years catastrophe losses	(7		)	(11		)	36
Loss and loss expenses	661			689			(4	)
Underwriting expenses	341			327			4
Underwriting profit	$	96		$	27		256
Ratios as a percent of earned premiums:							Pt. Change
Current accident year before catastrophe losses	62.2		%	63.1		%	(0.9	)
Current accident year catastrophe losses	3.7			5.2			(1.5	)
Prior accident years before catastrophe losses	(5.0		)	(1.1		)	(3.9	)
Prior accident years catastrophe losses	(0.6		)	(1.1		)	0.5
Loss and loss expenses	60.3			66.1			(5.8	)
Underwriting expenses	31.1			31.4			(0.3	)
Combined ratio	91.4		%	97.5		%	(6.1	)
Combined ratio	91.4		%	97.5		%	(6.1	)
Contribution from catastrophe losses and prior years reserve development	(1.9		)	3.0			(4.9	)
Combined ratio before catastrophe losses and prior years reserve development	93.3		%	94.5		%	(1.2	)

Our consolidated property casualty insurance operations generated an underwriting profit of $96 million for the first quarter of 2016. The improvement of $69 million, compared with first-quarter 2015, reflected improved underwriting in addition to a decrease of $9 million in losses from weather-related natural catastrophes. We believe future property casualty underwriting results will continue to benefit from price increases and our ongoing initiatives to improve pricing precision and loss experience related to claims and loss control practices.

For all property casualty lines of business in aggregate, net loss and loss expense reserves at March 31, 2016, were $99 million higher than at year-end 2015, including $95 million for the incurred but not reported (IBNR) portion of the increase. The $99 million reserve increase raised year-end 2015 net loss and loss expense reserves by 2 percent.

We measure and analyze property casualty underwriting results primarily by the combined ratio and its component ratios. The GAAP-basis combined ratio is the percentage of incurred losses plus all expenses per each earned premium dollar – the lower the ratio, the better the performance. An underwriting profit results when the combined ratio is below 100 percent. A combined ratio above 100 percent indicates that an insurance company’s losses and expenses exceeded premiums.

Our consolidated property casualty combined ratio for the first three months of 2016 improved 6.1 percentage points, compared with the same period of 2015. The ratio for catastrophe losses and loss expenses was 1.0 percentage points lower for the first quarter of 2016.

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The combined ratio can be affected significantly by natural catastrophe losses and other large losses as discussed in detail below. The combined ratio can also be affected by updated estimates of loss and loss expense reserves established for claims that occurred in prior periods, referred to as prior accident years. Net favorable development on prior accident year reserves, including reserves for catastrophe losses, benefited the combined ratio by 5.6 percentage points in the first three months of 2016, compared with 2.2 percentage points in the same period of 2015. Net favorable development is discussed in further detail in Financial Results by property casualty insurance segment.

The ratio for current accident year loss and loss expenses before catastrophe losses improved in the first three months of 2016. The 62.2 percent ratio for the first three months of 2016 decreased 0.9 percentage points compared with the 63.1 percent accident year 2015 ratio measured as of March 31, 2015, largely reflecting a lower ratio for large losses of $1 million or more per claim, discussed below.

The underwriting expense ratio decreased 0.3 percentage points for the first quarter of 2016. Higher agency profit-sharing commissions and strategic investments that include enhancement of underwriting expertise were offset by the favorable effects of higher earned premiums and ongoing expense management efforts.

Consolidated Property Casualty Insurance Premiums

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Agency renewal written premiums	$	1,028		$	983		5
Agency new business written premiums	125			116			8
Cincinnati Re net written premiums	19			—			nm
Other written premiums	(25		)	(33		)	24
Net written premiums	1,147			1,066			8
Unearned premium change	(51		)	(25		)	(104	)
Earned premiums	$	1,096		$	1,041		5

The trends in net written premiums and earned premiums summarized in the table above largely reflect the effects of price increases. Price increase trends that heavily influence renewal written premium increases or decreases and other premium growth drivers for 2016 are discussed in more detail by segment below in Financial Results.

Consolidated property casualty net written premiums for the first quarter of 2016 grew $81 million compared with the first quarter of 2015. Each of our property casualty segments continued to grow during the first three months of 2016. Our premium growth initiatives from prior years have provided an ongoing favorable effect on growth during the current year, particularly as newer agency relationships mature over time.

Consolidated property casualty agency new business written premiums rose $9 million for the first three months of 2016, compared with the same period of 2015. New business written premiums in 2016 were higher than the year-ago periods for both our commercial lines and our personal lines insurance segments while they were essentially flat for our excess and surplus insurance segment. New agency appointments during 2015 and 2016 produced an $8 million increase in standard lines new business for the first three months of 2016 compared with the same period of 2015. As we appoint new agencies that choose to move accounts to us, we report these accounts as new business. While this business is new to us, in many cases it is not new to the agent. We believe these seasoned accounts tend to be priced more accurately than business that may be less familiar to our agent upon obtaining it from a competing agent.

Net written premiums increased $19 million for the first quarter of 2016, compared with the first quarter of 2015, from expansion of our reinsurance assumed operations, known as Cincinnati Re^SM. Cincinnati Re assumes risks through reinsurance treaties and in some cases cedes part of the risk and related premiums to one or more unaffiliated reinsurance companies through transactions known as retrocessions. For the first three months of 2016, earned premiums for Cincinnati Re totaled $10 million, compared with none earned in the same period a year ago.

Other written premiums include premiums ceded to reinsurers as part of our ceded reinsurance program. A decrease in ceded premiums for the first three months of 2016, compared with the same period of 2015, contributed $2 million to 2016 net written premium growth.

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Catastrophe losses and loss expenses typically have a material effect on property casualty results and can vary significantly from period to period. Losses from natural catastrophes contributed 3.1 percentage points to the combined ratio in the first three months of 2016, compared with 4.1 percentage points in the same period of 2015. Some of those losses were applicable to annual loss deductible provisions of our collateralized reinsurance funded through catastrophe bonds. For our collateralized reinsurance arrangement effective January 18, 2014, there were no 2016 occurrences through March 31, 2016, where aggregate losses reached the applicable loss deductible provision for the specific geographic locations included in the severe convective storm portion of that coverage. If aggregate losses, after the $5 million per occurrence deductible, exceed $160 million during an annual coverage period, we can recover the excess through funds that collateralize the catastrophe bonds. The following table shows consolidated property casualty insurance catastrophe losses and loss expenses incurred, net of reinsurance, as well as the effect of loss development on prior period catastrophe events. We individually list declared catastrophe events for which our incurred losses reached or exceeded $10 million.

Consolidated Property Casualty Insurance Catastrophe Losses and Loss Expenses Incurred

(Dollars in millions, net of reinsurance)			Three months ended March 31,
			Comm.			Pers.			E&S
Dates	Event	Region	lines			lines			lines		Total
2016
All 2016 catastrophes			$	30		$	11		$	—	$	41
Development on 2015 and prior catastrophes			(5		)	(2		)	—		(7		)
Calendar year incurred total			$	25		$	9		$	—	$	34
2015
Feb. 16-27	Freezing, ice and snow, wind	Midwest, Northeast, South	$	32		$	10		$	—	$	42
All other 2015 catastrophes			7			5			—		12
Development on 2014 and prior catastrophes			(9		)	(2		)	—		(11		)
Calendar year incurred total			$	30		$	13		$	—	$	43

The following table includes data for losses incurred of $1 million or more per claim, net of reinsurance.

Consolidated Property Casualty Insurance Losses Incurred by Size

(Dollars in millions, net of reinsurance)	Three months ended March 31,
	2016			2015			% Change
Current accident year losses greater than $5,000,000	$	—		$	12		(100	)
Current accident year losses $1,000,000-$5,000,000	42			37			14
Large loss prior accident year reserve development	—			15			(100	)
Total large losses incurred	42			64			(34	)
Losses incurred but not reported	73			43			70
Other losses excluding catastrophe losses	402			418			(4	)
Catastrophe losses	33			42			(21	)
Total losses incurred	$	550		$	567		(3	)
Ratios as a percent of earned premiums:							Pt. Change
Current accident year losses greater than $5,000,000	—		%	1.0		%	(1.0	)
Current accident year losses $1,000,000-$5,000,000	3.8			3.6			0.2
Large loss prior accident year reserve development	—			1.4			(1.4	)
Total large loss ratio	3.8			6.0			(2.2	)
Losses incurred but not reported	6.6			4.2			2.4
Other losses excluding catastrophe losses	36.8			40.1			(3.3	)
Catastrophe losses	3.0			4.1			(1.1	)
Total loss ratio	50.2		%	54.4		%	(4.2	)

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We believe the inherent variability of aggregate loss experience for our portfolio of larger policies is greater than that of our portfolio of smaller policies, and we continue to monitor the variability in addition to general inflationary trends in loss costs. Our analysis continues to indicate no unexpected concentration of large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. The first-quarter 2016 property casualty total large losses incurred of $42 million, net of reinsurance, were lower than the $54 million quarterly average during 2015 and also were lower than the $64 million for the first quarter of 2015. The ratio for these large losses was 2.2 percentage points lower compared with last year’s first quarter. We believe results for the three-month period largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $1 million. Losses by size are discussed in further detail in results of operations by property casualty insurance segment.

FINANCIAL RESULTS

Consolidated results reflect the operating results of each of our five segments along with the parent company and other activities reported as “Other.” The five segments are:

• Commercial lines property casualty insurance

• Personal lines property casualty insurance

• Excess and surplus lines property casualty insurance

• Life insurance

• Investments

COMMERCIAL LINES INSURANCE RESULTS

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Earned premiums	$	760		$	733		4
Fee revenues	1			1			0
Total revenues	761			734			4
Loss and loss expenses from:
Current accident year before catastrophe losses	468			449			4
Current accident year catastrophe losses	30			39			(23	)
Prior accident years before catastrophe losses	(24		)	(5		)	(380	)
Prior accident years catastrophe losses	(5		)	(9		)	44
Loss and loss expenses	469			474			(1	)
Underwriting expenses	242			234			3
Underwriting profit	$	50		$	26		92
Ratios as a percent of earned premiums:							Pt. Change
Current accident year before catastrophe losses	61.5		%	61.3		%	0.2
Current accident year catastrophe losses	4.0			5.3			(1.3	)
Prior accident years before catastrophe losses	(3.2		)	(0.6		)	(2.6	)
Prior accident years catastrophe losses	(0.6		)	(1.3		)	0.7
Loss and loss expenses	61.7			64.7			(3.0	)
Underwriting expenses	31.9			31.9			0.0
Combined ratio	93.6		%	96.6		%	(3.0	)
Combined ratio	93.6		%	96.6		%	(3.0	)
Contribution from catastrophe losses and prior years reserve development	0.2			3.4			(3.2	)
Combined ratio before catastrophe losses and prior years reserve development	93.4		%	93.2		%	0.2

Cincinnati Financial Corporation First-Quarter 2016 10-Q

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Overview

Performance highlights for the commercial lines segment include:

• Premiums – Earned premiums and net written premiums for the commercial lines segment grew during the first three months of 2016, largely due to renewal premium growth that continued to reflect price increases and a higher level of insured exposures. Higher new business written premiums for the first quarter of 2016 also contributed to growth. The table below analyzes the primary components of premiums. We continue using predictive analytics tools to improve pricing precision and segmentation while also leveraging our local relationships with agents through the efforts of our teams that work closely with them. We seek to maintain appropriate pricing discipline for both new and renewal business as our agents and underwriters assess account quality to make careful decisions on a case-by-case basis whether to write or renew a policy.

Agency renewal written premiums rose 4 percent for the three months ended March 31, 2016, reflecting price increases and improving economic conditions. During the first quarter of 2016, our overall standard commercial lines policies continued to average estimated renewal price increases at percentages in the low-single-digit range, similar to the fourth quarter of 2015. We continue to segment commercial lines policies, emphasizing identification and retention of policies we believe have relatively stronger pricing. Conversely, we have been seeking stricter renewal terms and conditions on policies we believe have relatively weaker pricing, in turn retaining fewer of those policies. As a result, the average change in commercial lines renewal pricing was somewhat lower than in 2015. We measure average changes in commercial lines renewal pricing as the percentage rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for the respective policies.

Our average overall commercial lines renewal pricing change includes the impact of flat pricing of certain coverages within package policies written for a three-year term that were in force but did not expire during the period being measured. Therefore, the change in average commercial lines renewal pricing we report reflects a blend of three-year policies that did not expire and other policies that did expire during the measurement period. For commercial lines policies that did expire and were then renewed during the first quarter of 2016, we estimate that our average percentage price increase for both commercial auto and commercial property were in the mid-single-digit range. The estimated average percentage price change for our commercial casualty line of business was an increase in the low-single-digit range, and for workers’ compensation it was a decrease in the low-single-digit range.

Renewal premiums for our commercial casualty and workers’ compensation lines include the results of policy audits that adjust initial premium amounts based on differences between estimated and actual sales or payroll related to a specific policy. Audits completed during the first three months of 2016 contributed $21 million to net written premiums. Audits contributed $3 million of the $44 million net increase in net written premiums for the first three months of 2016, compared with the same period a year ago. The $27 million increase in earned premiums during the first three months of 2016, compared with 2015, included an increase from audit premiums of $2 million.

New business written premiums for commercial lines increased $8 million during the first quarter of 2016, compared with the same period last year. During the first quarter of 2016, new business written premiums grew for each major line of business in our commercial lines segment. Trend analysis for year-over-year comparisons of individual quarters are more difficult to assess for commercial lines new business written premiums, due to inherent variability. That variability is often driven by larger policies with annual premiums greater than $100,000.

Other written premiums include premiums ceded to reinsurers as part of our ceded reinsurance program. A decrease in ceded premiums contributed $2 million to net written premium growth for the first quarter of 2016, compared with the same period of 2015.

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Commercial Lines Insurance Premiums

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Agency renewal written premiums	$	758		$	730		4
Agency new business written premiums	87			79			10
Other written premiums	(18		)	(26		)	31
Net written premiums	827			783			6
Unearned premium change	(67		)	(50		)	(34	)
Earned premiums	$	760		$	733		4

• Combined ratio – The commercial lines combined ratio improved for the three months ended March 31, 2016, compared with the same period of 2015, largely due to more favorable reserve development on prior accident years before catastrophe losses. The three-month 2016 period also benefited from weather-related natural catastrophe losses and loss expenses that were 0.6 percentage points lower.

Catastrophe losses and loss expenses accounted for 3.4 percentage points of the combined ratio for the first three months of 2016, compared with 4.0 percentage points for the same period a year ago. The 10-year annual average for that catastrophe measure through 2015 for the commercial lines segment was 4.4 percentage points, and the five-year annual average was 5.6 percentage points.

The net effect of reserve development on prior accident years during the first three months of 2016 was favorable for commercial lines overall by $29 million compared with $14 million for the same period in 2015. For the three months ended March 31, 2016, our workers’ compensation line of business was the largest contributor to the total commercial lines net favorable reserve development on prior accident years, followed by our other commercial lines of business, which was largely attributable to director and officer liability insurance. Those contributions were partially offset by unfavorable development for our commercial auto line of business. The net favorable reserve development recognized during the first three months of 2016 for commercial lines was distributed mainly between accident years 2015 and 2014, and was primarily due to lower-than-anticipated loss emergence on known claims. Reserve estimates are inherently uncertain as described in our 2015 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 46.

The first-quarter 2016 commercial lines underwriting expense ratio matched the first quarter of 2015. Higher agency profit-sharing commissions were offset by the favorable effects of higher earned premiums and ongoing expense management efforts.

Underwriting results and related measures for the combined ratio are summarized in the first table of Commercial Lines Insurance Results. The tables and discussion below provide additional details for certain primary drivers of underwriting results.

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Commercial Lines Insurance Losses Incurred by Size

(Dollars in millions, net of reinsurance)	Three months ended March 31,
	2016			2015			% Change
Current accident year losses greater than $5,000,000	$	—		$	12		nm
Current accident year losses $1,000,000-$5,000,000	36			24			50
Large loss prior accident year reserve development	(1		)	15			nm
Total large losses incurred	35			51			(31	)
Losses incurred but not reported	64			31			106
Other losses excluding catastrophe losses	255			272			(6	)
Catastrophe losses	25			29			(14	)
Total losses incurred	$	379		$	383		(1	)
Ratios as a percent of earned premiums:							Pt. Change
Current accident year losses greater than $5,000,000	—		%	1.6		%	(1.6	)
Current accident year losses $1,000,000-5,000,000	4.8			3.3			1.5
Large loss prior accident year reserve development	(0.2		)	2.0			(2.2	)
Total large loss ratio	4.6			6.9			(2.3	)
Losses incurred but not reported	8.4			4.3			4.1
Other losses excluding catastrophe losses	33.6			37.1			(3.5	)
Catastrophe losses	3.3			4.0			(0.7	)
Total loss ratio	49.9		%	52.3		%	(2.4	)

We continue to monitor new losses and case reserve increases greater than $1 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. The first-quarter 2016 commercial lines total large losses incurred of $35 million, net of reinsurance, were lower than both the quarterly average of $42 million during 2015 and the $51 million total large losses incurred for the first quarter of 2015. The ratio for these large losses was 2.3 percentage points lower compared with last year’s first-quarter ratio. We believe results for the three-month period largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $1 million.

Commercial Lines of Business Analysis

Approximately 95 percent of our commercial lines premiums relate to accounts with coverages from more than one of our business lines. As a result, we believe that our commercial lines business is best measured and evaluated on a segment basis. However, we provide line-of-business data to summarize premium and loss trends separately for each line. The ratios shown in the table below are components of loss and loss expenses as a percentage of earned premiums.  

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(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Commercial casualty:
Written premiums	$	285		$	266		7
Earned premiums	257			244			5
Current accident year before catastrophe losses	60.2		%	59.2		%
Current accident year catastrophe losses	—			—
Prior accident years before catastrophe losses	(1.2		)	1.1
Prior accident years catastrophe losses	—			—
Total loss and loss expenses ratio	59.0		%	60.3		%
Commercial property:
Written premiums	$	225		$	206		9
Earned premiums	214			196			9
Current accident year before catastrophe losses	51.4		%	53.6		%
Current accident year catastrophe losses	13.6			16.7
Prior accident years before catastrophe losses	(1.7		)	(1.9		)
Prior accident years catastrophe losses	(2.2		)	(3.8		)
Total loss and loss expenses ratio	61.1		%	64.6		%
Commercial auto:
Written premiums	$	158		$	149		6
Earned premiums	144			136			6
Current accident year before catastrophe losses	77.5		%	72.3		%
Current accident year catastrophe losses	0.6			—
Prior accident years before catastrophe losses	5.7			8.6
Prior accident years catastrophe losses	(0.1		)	(0.1		)
Total loss and loss expenses ratio	83.7		%	80.8		%
Workers' compensation:
Written premiums	$	105		$	104		1
Earned premiums	89			93			(4	)
Current accident year before catastrophe losses	73.3		%	71.5		%
Current accident year catastrophe losses	—			—
Prior accident years before catastrophe losses	(14.5		)	(16.1		)
Prior accident years catastrophe losses	—			—
Total loss and loss expenses ratio	58.8		%	55.4		%
Other commercial lines:
Written premiums	$	54		$	58		(7	)
Earned premiums	56			64			(13	)
Current accident year before catastrophe losses	46.3		%	54.4		%
Current accident year catastrophe losses	0.6			9.7
Prior accident years before catastrophe losses	(22.9		)	(0.2		)
Prior accident years catastrophe losses	0.2			(2.6		)
Total loss and loss expenses ratio	24.2		%	61.3		%

As discussed above, the loss and loss expenses ratio component of the combined ratio is an important measure of underwriting profit and performance. Catastrophe losses are volatile and can distort short-term profitability trends, particularly for certain lines of business. Development of loss and loss expense reserves on prior accident years can also distort trends in measures of profitability for recently written business. To illustrate these effects, we separate their impact on the ratios shown in the table above. For the three months ended March 31, 2016, the commercial line of business with the most significant profitability challenge was commercial auto. For the first three months of 2016, our commercial auto policies experienced average renewal price percentage increases in the mid-single-digit range, which we believe will help improve profitability in future quarters. We further discuss current initiatives for commercial auto in the Highlights of Our Strategy and Supporting Initiatives section of this quarterly report and in our 2015 Annual Report on Form 10-K, Item 7, Commercial Lines of Business Analysis, Page 67.

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PERSONAL LINES INSURANCE RESULTS

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Earned premiums	$	283		$	268		6
Fee revenues	1			1			0
Total revenues	284			269			6
Loss and loss expenses from:
Current accident year before catastrophe losses	180			179			1
Current accident year catastrophe losses	11			15			(27	)
Prior accident years before catastrophe losses	(16		)	(1		)	nm
Prior accident years catastrophe losses	(2		)	(2		)	0
Loss and loss expenses	173			191			(9	)
Underwriting expenses	83			81			2
Underwriting profit (loss)	$	28		$	(3	)	nm
Ratios as a percent of earned premiums:							Pt. Change
Current accident year before catastrophe losses	63.5		%	66.8		%	(3.3	)
Current accident year catastrophe losses	3.8			5.6			(1.8	)
Prior accident years before catastrophe losses	(5.6		)	(0.7		)	(4.9	)
Prior accident years catastrophe losses	(0.8		)	(0.7		)	(0.1	)
Loss and loss expenses	60.9			71.0			(10.1	)
Underwriting expenses	29.2			30.4			(1.2	)
Combined ratio	90.1		%	101.4		%	(11.3	)
Combined ratio	90.1		%	101.4		%	(11.3	)
Contribution from catastrophe losses and prior years reserve development	(2.6		)	4.2			(6.8	)
Combined ratio before catastrophe losses and prior years reserve development	92.7		%	97.2		%	(4.5	)

Overview

Performance highlights for the personal lines segment include:

• Premiums – Personal lines earned premiums and net written premiums for the first quarter of 2016 continued to grow, primarily due to rising renewal written premiums. Price increases and a steady, high level of policy retention contributed to premium growth. The table below analyzes the primary components of premiums.

Agency renewal written premiums increased 6 percent for the first three months of 2016, largely reflecting rate increases. We estimate that premium rates for our personal auto line of business increased at average percentages in the mid-single-digit range during the first three months of 2016, higher than in the fourth quarter of 2015. For our homeowner line of business, we estimate that rate increases for the first three months of 2016 also averaged a percentage in the mid-single-digit range. For both our personal auto and homeowner lines of business, some individual policies experienced lower or higher rate changes based on enhanced pricing precision enabled by predictive models.

Personal lines new business written premiums increased approximately $1 million or 4 percent for the first three months of 2016, compared with the same period of 2015. Most of that growth came from high net worth clients of our agencies. First-quarter 2016 personal lines new business written premiums from high net worth policies totaled approximately $5 million.

Other written premiums include premiums ceded to reinsurers as part of our ceded reinsurance program. A decrease in ceded premiums contributed less than $1 million to net written premium growth for the first three months of 2016, compared with the same period of 2015.

We continue to implement strategies discussed in our 2015 Annual Report on Form 10-K, Item 1, Strategic Initiatives, Page 12, to enhance our responsiveness to marketplace changes and to help achieve our long-term objectives for personal lines growth and profitability. These strategies include initiatives to more profitably underwrite personal auto policies.

Cincinnati Financial Corporation First-Quarter 2016 10-Q

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Personal Lines Insurance Premiums

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Agency renewal written premiums	$	236		$	223		6
Agency new business written premiums	25			24			4
Other written premiums	(5		)	(6		)	17
Net written premiums	256			241			6
Unearned premium change	27			27			0
Earned premiums	$	283		$	268		6

• Combined ratio – Our personal lines combined ratio improved by 11.3 percentage points for the three months ended March 31, 2016, compared with the same period of 2015, including 1.9 points from lower weather-related natural catastrophe losses and loss expenses. The first-quarter 2016 combined ratio included a higher amount of favorable reserve development on prior accident years, compared with the same quarter of 2015, improving the combined ratio before catastrophe effects by 4.9 percentage points.

In addition to the average rate increases discussed above, we continue to refine our pricing to better match premiums to the risk of loss on individual policies. The results of improved pricing precision and broad-based rate increases are expected to help position the combined ratio at a profitable level over the long term. In addition, greater geographic diversification is expected to reduce the volatility of homeowner loss ratios attributable to weather-related catastrophe losses over time.

Catastrophe losses and loss expenses accounted for 3.0 percentage points of the combined ratio for the three months ended March 31, 2016, compared with 4.9 percentage points for the same period last year. The 10-year annual average catastrophe loss ratio through 2015 for the personal lines segment was 10.9 percentage points, and the five-year annual average was 11.4 percentage points.

Personal lines net reserve development on prior accident years was a favorable $18 million for the first three months of 2016, split almost evenly between our personal auto and homeowner lines of business. The total was $15 million more favorable than the same period of 2015 and included a refinement to reserves for loss expenses. The refinement transferred approximately $10 million of reserves, primarily for our personal auto line of business, to various lines of business in our commercial lines segment. For losses only, our first-quarter 2016 personal auto prior accident year net reserve development was unfavorable by $1 million. In the first three months of 2016, our personal lines net favorable reserve development was attributable primarily to accident year 2015. Reserve estimates are inherently uncertain as described in our 2015 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 46.

The underwriting expense ratio decreased 1.2 percentage points for the first quarter of 2016, compared with the same period of 2015. The decrease reflects an unusually high ratio in first-quarter 2015 from changes in estimates related to allocations of deferred acquisition costs by segment.

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Personal Lines Insurance Losses Incurred by Size

(Dollars in millions, net of reinsurance)	Three months ended March 31,
	2016			2015			% Change
Current accident year losses greater than $5,000,000	$	—		$	—		nm
Current accident year losses $1,000,000-$5,000,000	6			12			(50	)
Large loss prior accident year reserve development	1			—			nm
Total large losses incurred	7			12			(42	)
Losses incurred but not reported	11			7			57
Other losses excluding catastrophe losses	133			134			(1	)
Catastrophe losses	8			13			(38	)
Total losses incurred	$	159		$	166		(4	)
Ratios as a percent of earned premiums:							Pt. Change
Current accident year losses greater than $5,000,000	—		%	—		%	0.0
Current accident year losses $1,000,000-$5,000,000	1.9			4.5			(2.6	)
Large loss prior accident year reserve development	0.5			—			0.5
Total large loss ratio	2.4			4.5			(2.1	)
Losses incurred but not reported	3.8			2.7			1.1
Other losses excluding catastrophe losses	47.1			49.9			(2.8	)
Catastrophe losses	2.9			4.9			(2.0	)
Total loss ratio	56.2		%	62.0		%	(5.8	)

We continue to monitor new losses and case reserve increases greater than $1 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. In the first quarter of 2016, the personal lines total large loss ratio, net of reinsurance, was 2.1 percentage points lower than last year’s first quarter. We believe results for the three-month period largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $1 million.

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Personal Lines of Business Analysis

We prefer to write personal lines coverages on an account basis, including auto and homeowner coverages as well as coverages from the other personal business line. As a result, we believe that our personal lines business is best measured and evaluated on a segment basis. However, we provide line of business data to summarize premium and loss trends separately for each line. The ratios shown in the table below are components of loss and loss expenses as a percentage of earned premiums.

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Personal auto:
Written premiums	$	123		$	114		8
Earned premiums	131			123			7
Current accident year before catastrophe losses	79.1		%	81.6		%
Current accident year catastrophe losses	1.0			0.2
Prior accident years before catastrophe losses	(6.3		)	3.0
Prior accident years catastrophe losses	(0.3		)	(0.2		)
Total loss and loss expenses ratio	73.5		%	84.6		%
Homeowner:
Written premiums	$	103		$	98		5
Earned premiums	119			114			4
Current accident year before catastrophe losses	51.5		%	55.5		%
Current accident year catastrophe losses	6.4			12.3
Prior accident years before catastrophe losses	(5.2		)	(5.1		)
Prior accident years catastrophe losses	(1.6		)	(1.2		)
Total loss and loss expenses ratio	51.1		%	61.5		%
Other personal:
Written premiums	$	30		$	29		3
Earned premiums	33			31			6
Current accident year before catastrophe losses	44.2		%	49.6		%
Current accident year catastrophe losses	5.8			2.8
Prior accident years before catastrophe losses	(4.6		)	1.1
Prior accident years catastrophe losses	0.3			(0.8		)
Total loss and loss expenses ratio	45.7		%	52.7		%

As discussed above, the loss and loss expenses ratio component of the combined ratio is an important measure of underwriting profit and performance. Catastrophe losses are volatile and can distort short-term profitability trends, particularly for certain lines of business. Development of loss and loss expense reserves on prior accident years can also distort trends in measures of profitability for recently written business. To illustrate these effects, we separate their impact on the ratios shown in the table above. For the three months ended March 31, 2016, the line of business in our personal lines insurance segment with the most significant profitability challenge was personal auto. During the first three months of 2016, premium rate increases that allow for more pricing precision on our personal auto policies continued to be implemented at average percentages in the mid-single-digit range. We continue to work toward greater pricing precision in addition to broad-based rate increases to help improve profitability over the long term. 

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EXCESS AND SURPLUS LINES INSURANCE RESULTS

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Earned premiums	$	43		$	40		8
Loss and loss expenses from:
Current accident year before catastrophe losses	27			29			(7	)
Current accident year catastrophe losses	—			—			nm
Prior accident years before catastrophe losses	(14		)	(5		)	(180	)
Prior accident years catastrophe losses	—			—			nm
Loss and loss expenses	13			24			(46	)
Underwriting expenses	13			12			8
Underwriting profit	$	17		$	4		325
Ratios as a percent of earned premiums:							Pt. Change
Current accident year before catastrophe losses	63.1		%	72.1		%	(9.0	)
Current accident year catastrophe losses	0.4			1.2			(0.8	)
Prior accident years before catastrophe losses	(31.6		)	(13.6		)	(18.0	)
Prior accident years catastrophe losses	(0.2		)	(0.3		)	0.1
Loss and loss expenses	31.7			59.4			(27.7	)
Underwriting expenses	29.4			28.9			0.5
Combined ratio	61.1		%	88.3		%	(27.2	)
Combined ratio	61.1		%	88.3		%	(27.2	)
Contribution from catastrophe losses and prior years reserve development	(31.4		)	(12.7		)	(18.7	)
Combined ratio before catastrophe losses and prior years reserve development	92.5		%	101.0		%	(8.5	)

Overview

Performance highlights for the excess and surplus lines segment include:

• Premiums – Excess and surplus lines net written premiums continued to grow during the first three months of 2016. Growth in renewal written premiums was the main contributor to the increase.

Renewal written premiums rose 13 percent for the three months ended March 31, 2016, compared with the same period of 2015, reflecting the opportunity to renew many accounts for the first time, as well as higher renewal pricing. March 2016 marked the 67^th consecutive month of positive average price changes for the excess and surplus lines segment of our property casualty business. For the first three months of 2016, excess and surplus lines policy renewals experienced estimated average percentage price increases near the high end of the low-single-digit range. We measure average changes in excess and surplus lines renewal pricing as the percentage rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for respective policies.

New business written premiums produced by agencies rose by an immaterial amount for the first three months of 2016, compared with the same period of 2015, reflecting careful underwriting in a highly competitive market. Some of what we report as new business came from accounts that were not new to our agents. We believe our agents’ seasoned accounts tend to be priced more accurately than business that may be less familiar to them.

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Excess and Surplus Lines Insurance Premiums

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Agency renewal written premiums	$	34		$	30		13
Agency new business written premiums	13			13			0
Other written premiums	(2		)	(1		)	(100	)
Net written premiums	45			42			7
Unearned premium change	(2		)	(2		)	0
Earned premiums	$	43		$	40		8

• Combined ratio – The excess and surplus lines combined ratio improved for the first quarter of 2016 by 27.2 percentage points compared with the same period of 2015, reflecting lower ratios for current accident year losses and loss expenses before catastrophe losses and more favorable reserve development on prior accident years before catastrophe losses.

Catastrophe losses and loss expenses accounted for 0.2 percentage points of the combined ratio for the three months ended March 31, 2016, compared with 0.9 percentage points for the same period of 2015.

Excess and surplus lines net favorable reserve development on prior accident years as a ratio to earned premiums was 31.8 percent for the first three months of 2016, compared with 13.9 percent for the same period of 2015. The net favorable reserve development recognized during the first three months of 2016 was distributed almost evenly among accident years 2015, 2014 and 2013. It was due primarily to lower-than-anticipated loss emergence on known claims. Reserve estimates are inherently uncertain as described in our 2015 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 46.

The underwriting expense ratio for the first three months of 2016 increased compared with the same period of 2015, as higher profit-sharing commissions for agencies offset the favorable effects of higher earned premiums and ongoing expense management efforts.

Excess and Surplus Lines Insurance Losses Incurred by Size

(Dollars in millions, net of reinsurance)	Three months ended March 31,
	2016			2015			% Change
Current accident year losses greater than $5,000,000	$	—		$	—		nm
Current accident year losses $1,000,000-$5,000,000	—			1			(100	)
Large loss prior accident year reserve development	—			—			nm
Total large losses incurred	—			1			(100	)
Losses incurred but not reported	(2		)	5			nm
Other losses excluding catastrophe losses	9			12			(25	)
Catastrophe losses	—			—			nm
Total losses incurred	$	7		$	18		(61	)
Ratios as a percent of earned premiums:							Pt. Change
Current accident year losses greater than $5,000,000	—		%	—		%	0.0
Current accident year losses $1,000,000-$5,000,000	—			2.5			(2.5	)
Large loss prior accident year reserve development	(0.4		)	—			(0.4	)
Total large loss ratio	(0.4		)	2.5			(2.9	)
Losses incurred but not reported	(5.4		)	11.8			(17.2	)
Other losses excluding catastrophe losses	20.8			29.9			(9.1	)
Catastrophe losses	0.1			0.8			(0.7	)
Total loss ratio	15.1		%	45.0		%	(29.9	)

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We continue to monitor new losses and case reserve increases greater than $1 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. In the first quarter of 2016, the excess and surplus lines total ratio for large losses, net of reinsurance, was 2.9 percentage points lower compared with last year’s first quarter. We believe results for the three-month period ended March 31, 2016, largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $1 million.

LIFE INSURANCE RESULTS

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Earned premiums	$	58		$	53		9
Separate account investment management fees	1			1			0
Total revenues	59			54			9
Contract holders' benefits incurred	63			60			5
Investment interest credited to contract holders'	(22		)	(21		)	(5	)
Underwriting expenses incurred	19			18			6
Total benefits and expenses	60			57			5
Life insurance segment loss	$	(1	)	$	(3	)	67

Overview

Performance highlights for the life insurance segment include:

• Revenues – Revenues increased for the three months ended March 31, 2016, primarily due to higher earned premiums from term insurance products.

Net in-force life insurance policy face amounts increased to $53.573 billion at March 31, 2016, from $52.735 billion at year-end 2015.

Fixed annuity deposits received for the three months ended March 31, 2016, were $12 million compared with $8 million for same period of 2015. Fixed annuity deposits have a minimal impact to earned premiums because deposits received are initially recorded as liabilities. Profit is earned over time by way of interest-rate spreads. We do not write variable or equity-indexed annuities.

Life Insurance Premiums

(Dollars in millions)	Three months ended March 31,
	2016		2015		% Change
Term life insurance	$	37	$	34	9
Universal life insurance	11		10		10
Other life insurance, annuity and disability income products	10		9		11
Net earned premiums	$	58	$	53	9

• Profitability – Our life insurance segment typically reports a small profit or loss on a GAAP basis because profits from investment income spreads are included in our investment segment results. We include only investment income credited to contract holders (including interest assumed in life insurance policy reserve calculations) in our life insurance segment results. A loss of $1 million for our life insurance segment in the first three months of 2016, compared with a loss of $3 million for the same period of 2015, was largely due to increased premium revenues in 2016.

Life segment benefits and expenses consist principally of contract holders’ (policyholders’) benefits incurred related to traditional life and interest-sensitive products and operating expenses incurred, net of deferred acquisition costs. Total benefits increased in the first three months of 2016. Mortality results increased from the same period of 2015 but were slightly less than our 2016 projections.

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Operating expenses for the first three months of 2016 increased slightly compared with the same period a year ago. For the first three months of both 2016 and 2015, unlocking of interest rate and other actuarial assumptions decreased the amount of expenses deferred to future periods, increasing operating expenses. The amount of expenses deferred to future periods was more significant in 2015.

Pretax earnings for the first three months of 2016 were reduced by $1 million due to unlocking of interest rates and other actuarial assumptions. For the comparable period of 2015, the effect of unlocking reduced pretax earnings by $2 million.

We recognize that assets under management, capital appreciation and investment income are integral to evaluating the success of the life insurance segment because of the long duration of life products. On a basis that includes investment income and realized gains or losses from life-insurance-related invested assets, the life insurance company reported a net profit of $10 million in the three months ended March 31, 2016, compared with a net profit of $8 million for the same period of 2015. The life insurance company portfolio had net after-tax realized investment gains of less than $1 million for the three months ended March 31, 2016, and for the same period in 2015.

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INVESTMENTS RESULTS

Overview

The investments segment contributes investment income and realized gains and losses to results of operations. Investments traditionally are our primary source of pretax and after-tax profits.

Investment Income

Pretax investment income increased 4 percent for the first quarter of 2016, compared with the same period of 2015. Interest income rose due to net purchases of fixed-maturity securities that offset the continuing effects of the low interest rate environment. Higher dividend income reflected rising dividend rates and net purchases of equity securities.

Investments Results

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Total investment income, net of expenses	$	145		$	139		4
Investment interest credited to contract holders'	(22		)	(21		)	(5	)
Realized investment gains, net	61			47			30
Investments profit, pretax	$	184		$	165		12

We continue to position our portfolio considering both the challenges presented by the current low interest rate environment and the risks presented by potential future inflation. As bonds in our generally laddered portfolio mature or are called over the near term, we will be challenged to replace their current yield. The table below shows the average pretax yield-to-amortized cost associated with expected principal redemptions for our fixed-maturity portfolio. The expected principal redemptions are based on par amounts and include dated maturities, calls and prefunded municipal bonds that we expect will be called during each respective time period.

(Dollars in millions)
At March 31, 2016	% Yield		Principal redemptions
Fixed-maturity yield profile:
Expected to mature during the remainder of 2016	4.40	%	$	497
Expected to mature during 2017	4.76		642
Expected to mature during 2018	5.77		976
Average yield and total expected redemptions from the remainder of 2016 through 2018	5.15		$	2,115

The table below shows the average pretax yield-to-amortized cost for fixed-maturity securities acquired during the periods indicated. The average yield of 4.65 percent for the first three months of 2016 was lower than the 4.70 percent average yield to amortized cost of the fixed-maturity securities portfolio at the end of 2015.

	Three months ended March 31,
	2016		2015
Average pretax yield-to-amortized cost on new fixed-maturities:
Acquired taxable fixed-maturities	4.77	%	4.34	%
Acquired tax-exempt fixed-maturities	3.03		3.13
Average total fixed-maturities acquired	4.12		3.84

While our bond portfolio more than covers our insurance reserve liabilities, we believe our diversified common stock portfolio of mainly blue chip, dividend-paying companies represents one of our best investment opportunities for the long term. In our 2015 Annual Report on Form 10-K, Item 1, Investments Segment, Page 21, and Item 7, Investments Outlook, Page 88, we discussed our portfolio strategies. We discuss risks related to our investment

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income and our fixed-maturity and equity investment portfolios in this quarterly report Item 3, Quantitative and Qualitative Disclosures About Market Risk.

The table below provides details about investment income. Average yields in this table are based on the average invested asset and cash amounts indicated in the table, using fixed-maturity securities valued at amortized cost and all other securities at fair value.

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Investment income:
Interest	$	109		$	105		4
Dividends	37			36			3
Other	1			—			nm
Less investment expenses	2			2			0
Investment income, pretax	145			139			4
Less income taxes	35			33			6
Total investment income, after-tax	$	110		$	106		4
Investment returns:
Effective tax rate	23.8		%	23.6		%
Average invested assets plus cash and cash equivalents	$	14,851		$	14,435
Average yield pretax	3.91		%	3.85		%
Average yield after-tax	2.96			2.94
Fixed-maturity returns:
Effective tax rate	27.3		%	27.0		%
Average amortized cost	$	9,383		$	8,929
Average yield pretax	4.65		%	4.70		%
Average yield after-tax	3.38			3.43

Net Realized Gains and Losses

We reported net realized investment gains of $61 million for the three months ended March 31, 2016, compared with $47 million for the first quarter of 2015. Substantially all of the first-quarter 2016 amount was from sales of various common and preferred stock holdings, compared with $43 million for the same period of 2015.

Investment gains or losses are recognized upon the sales of investments or as otherwise required under GAAP. The timing of realized gains or losses from sales can have a material effect on results in any quarter. However, such gains or losses usually have little, if any, effect on total shareholders’ equity because most equity and fixed-maturity investments are carried at fair value, with the unrealized gain or loss included as a component of accumulated other comprehensive income (AOCI). Accounting requirements for other-than-temporary impairment (OTTI) charges for the fixed-maturity portfolio are disclosed in our 2015 Annual Report on Form 10-K, Item 8, Note 1, Summary of Significant Accounting Policies, Page 123.

Of the 3,191 securities in the portfolio, four fixed-maturity securities with a fair value of $9 million were trading below 70 percent of amortized cost at March 31, 2016, and accounted for $5 million in unrealized losses. Our asset impairment committee regularly monitors the portfolio, including a quarterly review of the entire portfolio for potential OTTI charges. We believe that if the improving liquidity in the markets were to reverse or the economic recovery were to significantly stall, we could experience declines in portfolio values and possibly additional OTTI charges.

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The table below provides additional detail for OTTI charges:

(Dollars in millions)	Three months ended March 31,
	2016		2015
Fixed maturities:
Utilities	$	2	$	—
Total fixed maturities	2		—
Total	$	2	$	—

OTHER

We report as Other the noninvestment operations of the parent company and a noninsurance subsidiary, CFC Investment Company. We also report as Other the underwriting results of Cincinnati Re, our reinsurance assumed operation, including earned premiums, loss and loss expenses and underwriting expenses.

Total revenues for the first three months of 2016 for our Other operations increased, compared with 2015, primarily due to earned premiums from Cincinnati Re. Total expenses for Other also increased for the first three months of 2016, primarily due to losses and loss expenses and underwriting expenses from Cincinnati Re.

Other loss in the table below represents losses before income taxes. The net result of Cincinnati Re for the first three months of 2016 was a small profit. For both periods shown, Other loss was largely driven by interest expense from debt of the parent company.

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Interest and fees on loans and leases	$	1		$	2		(50	)
Earned premiums	10			—			nm
Total revenues	11			2			450
Interest expense	13			13			0
Loss and loss expenses	6			—			nm
Underwriting expenses	3			—			nm
Operating expenses	2			4			(50	)
Total expenses	24			17			41
Other loss	$	(13	)	$	(15	)	(13	)

TAXES

We had $77 million of income tax expense for the three months ended March 31, 2016, compared with $46 million for the same period of 2015. The effective tax rates for the three months ended March 31, 2016, was 29.1 percent compared with 26.4 percent for the same period last year. The change in our effective tax rate was primarily due to changes in pretax income from underwriting results and realized investment gains and losses, with small changes in the amount of permanent book-tax differences.

Historically, we have pursued a strategy of investing some portion of cash flow in tax-advantaged fixed-maturity and equity securities to minimize our overall tax liability and maximize after-tax earnings. See Tax-Exempt Fixed Maturities in this quarterly report Item 3, Quantitative and Qualitative Disclosures About Market Risk for further discussion on municipal bond purchases in our fixed-maturity investment portfolio. For our property casualty insurance subsidiaries, approximately 85 percent of interest from tax-advantaged fixed-maturity investments and approximately 60 percent of dividends from qualified equities are exempt from federal tax after applying proration from the 1986 Tax Reform Act. Our noninsurance companies own an immaterial amount of tax-advantaged fixed-maturity investments. For our noninsurance companies, the dividend received deduction exempts 70 percent of dividends from qualified equities. Our life insurance company does not own tax-advantaged fixed-maturity investments or equities subject to the dividend received deduction. Details about our effective tax rate are in this quarterly report Item 1, Note 9 – Income Taxes. 

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LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2016, shareholders’ equity was $6.735 billion compared with $6.427 billion at December 31, 2015. Total debt was $821 million at March 31, 2016, matching December 31, 2015. At March 31, 2016, cash and cash equivalents totaled $613 million compared with $544 million at December 31, 2015.

SOURCES OF LIQUIDITY

Subsidiary Dividends

Our lead insurance subsidiary declared dividends of $100 million to the parent company in the first quarter of 2016, matching the same period of 2015. For full-year 2015, subsidiary dividends declared totaled $447 million. State of Ohio regulatory requirements restrict the dividends our insurance subsidiary can pay. For full-year 2016, total dividends that our insurance subsidiary could pay to our parent company without regulatory approval are approximately $534 million.

Investing Activities

Investment income is a source of liquidity for both the parent company and its insurance subsidiary. We continue to focus on portfolio strategies to balance near-term income generation and long-term book value growth.

Parent company obligations can be funded with income on investments held at the parent-company level or through sales of securities in that portfolio, although our investment philosophy seeks to compound cash flows over the long term. These sources of capital can help minimize subsidiary dividends to the parent company, protecting insurance subsidiary capital.

See our 2015 Annual Report on Form 10-K, Item 1, Investments Segment, Page 21, for a discussion of our historic investment strategy, portfolio allocation and quality.

Insurance Underwriting

Our property casualty and life insurance underwriting operations provide liquidity because we generally receive premiums before paying losses under the policies purchased with those premiums. After satisfying our cash requirements, we use excess cash flows for investment, increasing future investment income.

Historically, cash receipts from property casualty and life insurance premiums, along with investment income, have been more than sufficient to pay claims, operating expenses and dividends to the parent company.

The table below shows a summary of operating cash flow for property casualty insurance (direct method):

(Dollars in millions)	Three months ended March 31,
	2016			2015			% Change
Premiums collected	$	1,164		$	1,087		7
Loss and loss expenses paid	(562		)	(546		)	(3	)
Commissions and other underwriting expenses paid	(442		)	(413		)	(7	)
Cash flow from underwriting	160			128			25
Investment income received	102			95			7
Cash flow from operations	$	262		$	223		17

Collected premiums for property casualty insurance rose $77 million during the first three months of 2016, compared with the same period in 2015. Loss and loss expenses paid increased $16 million, including a $2 million increase for catastrophe losses and loss expenses. Commissions and other underwriting expenses paid rose $29 million, primarily due to higher commissions paid to agencies, reflecting the increase in collected premiums.

We discuss our future obligations for claims payments and for underwriting expenses in our 2015 Annual Report on Form 10-K, Item 7, Contractual Obligations, Page 93, and Other Commitments also on Page 93.

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Capital Resources

At March 31, 2016, our debt-to-total-capital ratio was 10.9 percent, with $786 million in long-term debt and $35 million in borrowing on our revolving short-term line of credit. That line of credit also had a $35 million balance at December 31, 2015. At March 31, 2016, $190 million was available for future cash management needs. Based on our capital requirements at March 31, 2016, we do not anticipate a material increase in debt levels during the remainder of 2016. As a result, we expect changes in our debt-to-total-capital ratio to continue to be largely a function of the contribution of unrealized investment gains or losses to shareholders’ equity.

We provide details of our three, long-term notes in this quarterly report Item 1, Note 3 – Fair Value Measurements. None of the notes are encumbered by rating triggers.

Four independent ratings firms award insurer financial strength ratings to our property casualty insurance companies and three firms rate our life insurance company. Those firms made no changes to our parent company debt ratings during the first three months of 2016. Our debt ratings are discussed in our 2015 Annual Report on Form 10-K, Item 7, Liquidity and Capital Resources, Other Sources of Liquidity, Page 91.

Off-Balance Sheet Arrangements

We do not use any special-purpose financing vehicles or have any undisclosed off-balance sheet arrangements (as that term is defined in applicable SEC rules) that are reasonably likely to have a current or future material effect on the company’s financial condition, results of operation, liquidity, capital expenditures or capital resources. Similarly, the company holds no fair-value contracts for which a lack of marketplace quotations would necessitate the use of fair-value techniques.

USES OF LIQUIDITY

Our parent company and insurance subsidiary have contractual obligations and other commitments. In addition, one of our primary uses of cash is to enhance shareholder return.

Contractual Obligations

In our 2015 Annual Report on Form 10-K, Item 7, Contractual Obligations, Page 93 we estimated our future contractual obligations as of December 31, 2015. There have been no material changes to our estimates of future contractual obligations since our 2015 Annual Report on Form 10-K.

Other Commitments

In addition to our contractual obligations, we have other property casualty operational commitments.

• Commissions – Commissions paid were $302 million in the first three months of 2016. 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. Noncommission underwriting expenses paid were $140 million in the first three months of 2016.

• Technology costs – In addition to contractual obligations for hardware and software, we anticipate capitalizing approximately $5 million in spending for key technology initiatives in 2016. Capitalized development costs related to key technology initiatives were $2 million in the first three months of 2016. These activities are conducted at our discretion, and we have no material contractual obligations for activities planned as part of these projects.

We contributed $5 million to our qualified pension plan during the first three months of 2016. We do not anticipate further contributions to our qualified pension plan during the remainder of 2016.

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Investing Activities

After fulfilling operating requirements, we invest cash flows from underwriting, investment and other corporate activities in fixed-maturity and equity securities on an ongoing basis to help achieve our portfolio objectives. We discuss our investment strategy and certain portfolio attributes in this quarterly report Item 3, Quantitative and Qualitative Disclosures About Market Risk.

Uses of Capital

Uses of cash to enhance shareholder return include dividends to shareholders. In January 2016, the board of directors declared a regular quarterly cash dividend of 48 cents per share for an indicated annual rate of $1.92 per share. During the first three months of 2016, we used $74 million to pay cash dividends to shareholders.

PROPERTY CASUALTY INSURANCE RESERVES

For the business lines in the commercial and personal lines insurance segments, and in total for the excess and surplus lines segment, the following table details gross reserves among case, IBNR (incurred but not reported) and loss expense reserves, net of salvage and subrogation reserves. Reserving practices are discussed in our 2015 Annual Report on Form 10-K, Item 7, Property Casualty Insurance Loss and Loss Expense Obligations and Reserves, Page 94.

Total gross reserves at March 31, 2016, increased $90 million compared with December 31, 2015. Case reserves for losses decreased $3 million while IBNR reserves increased by $88 million and total loss expense reserves increased by $5 million. Accounting for most of the total gross increase was the aggregate of our commercial casualty and commercial auto lines of business.

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Property Casualty Gross Reserves

(Dollars in millions)	Loss reserves					Loss		Total
	Case		IBNR			expense		gross		Percent
At March 31, 2016	reserves		reserves			reserves		reserves		of total
Commercial lines insurance:
Commercial casualty	$	916	$	494		$	542	$	1,952	41.1	%
Commercial property	186		47			51		284		6.0
Commercial auto	337		78			93		508		10.7
Workers' compensation	380		557			93		1,030		21.7
Other commercial	125		17			90		232		4.9
Subtotal	1,944		1,193			869		4,006		84.4
Personal lines insurance:
Personal auto	208		—			60		268		5.6
Homeowner	81		16			24		121		2.5
Other personal	50		52			5		107		2.3
Subtotal	339		68			89		496		10.4
Excess and surplus lines	94		78			58		230		4.8
Cincinnati Re	1		17			—		18		0.4
Total	$	2,378	$	1,356		$	1,016	$	4,750	100.0	%
At December 31, 2015
Commercial lines insurance:
Commercial casualty	$	897	$	462		$	542	$	1,901	40.8	%
Commercial property	192		28			42		262		5.6
Commercial auto	330		66			89		485		10.4
Workers' compensation	389		549			91		1,029		22.1
Other commercial	139		17			92		248		5.3
Subtotal	1,947		1,122			856		3,925		84.2
Personal lines insurance:
Personal auto	211		(7		)	69		273		5.9
Homeowner	80		13			25		118		2.5
Other personal	52		50			5		107		2.3
Subtotal	343		56			99		498		10.7
Excess and surplus lines	91		80			56		227		4.9
Cincinnati Re	—		10			—		10		0.2
Total	$	2,381	$	1,268		$	1,011	$	4,660	100.0	%

LIFE POLICY AND INVESTMENT CONTRACT RESERVES

Gross life policy and investment contract reserves were $2.601 billion at March 31, 2016, compared with $2.583 billion at year-end 2015, reflecting continued growth in life insurance policies in force. We discuss our life insurance reserving practices in our 2015 Annual Report on Form 10-K, Item 7, Life Insurance Policyholder Obligations and Reserves, Page 101.

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OTHER MATTERS

SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are discussed in our 2015 Annual Report on Form 10-K, Item 8, Note 1, Summary of Significant Accounting Policies, Page 123, and updated in this quarterly report Item 1, Note 1, Accounting Policies.

In conjunction with those discussions, in the Management’s Discussion and Analysis in the 2015 Annual Report on Form 10-K, management reviewed the estimates and assumptions used to develop reported amounts related to the most significant policies. Management discussed the development and selection of those accounting estimates with the audit committee of the board of directors.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

Our greatest exposure to market risk is through our investment portfolio. Market risk is the potential for a decrease in securities’ fair value resulting from broad yet uncontrollable forces such as: inflation, economic growth or recession, interest rates, world political conditions or other widespread unpredictable events. It is comprised of many individual risks that, when combined, create a macroeconomic impact.

Our view of potential risks and our sensitivity to such risks is discussed in our 2015 Annual Report on Form 10-K, Item 7a, Quantitative and Qualitative Disclosures About Market Risk, Page 108.

The fair value of our investment portfolio was $14.825 billion at March 31, 2016, up $469 million from year-end 2015, including a $234 million increase in the fixed-maturity portfolio and a $235 million increase in the equity portfolio.

(Dollars in millions)	At March 31, 2016								At December 31, 2015
	Cost or amortized cost		Percent  of total		Fair value		Percent  of total		Cost or amortized cost		Percent  of total		Fair value		Percent  of total
Taxable fixed maturities	$	6,232	50.1	%	$	6,503	43.9	%	$	6,170	50.3	%	$	6,353	44.3	%
Tax-exempt fixed   maturities	3,210		25.8		3,381		22.8		3,154		25.7		3,297		23.0
Common equity    securities	2,810		22.6		4,720		31.8		2,749		22.4		4,485		31.2
Nonredeemable   preferred equity   securities	189		1.5		221		1.5		189		1.6		221		1.5
Total	$	12,441	100.0	%	$	14,825	100.0	%	$	12,262	100.0	%	$	14,356	100.0	%

At March 31, 2016, our consolidated investment portfolio included $54 million of assets for which values are based on prices or valuation techniques that require significant management judgment (Level 3 assets). This represented less than 1 percent of investment portfolio assets measured at fair value. See Item 1, Note 3, Fair Value Measurements, for additional discussion of our valuation techniques. We have generally obtained and evaluated two nonbinding quotes from brokers; then, our investment professionals determined our best estimate of fair value. These investments include private placements, small issues and various thinly traded securities.

In addition to our investment portfolio, the total investments amount reported in our condensed consolidated balance sheets includes Other invested assets. Other invested assets included $30 million of life policy loans plus $34 million of private equity investments at March 31, 2016.

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FIXED-MATURITY INVESTMENTS

By maintaining a well-diversified fixed-maturity portfolio, we attempt to reduce overall risk. We invest new money in the bond market on a regular basis, targeting what we believe to be optimal risk-adjusted, after-tax yields. Risk, in this context, includes interest rate, call, reinvestment rate, credit and liquidity risk. We do not make a concerted effort to alter duration on a portfolio basis in response to anticipated movements in interest rates. By regularly investing in the bond market, we build a broad, diversified portfolio that we believe mitigates the impact of adverse economic factors.

Our investment portfolio had no European sovereign debt holdings at March 31, 2016. On that date, we owned other European-based securities, primarily corporate bonds, totaling $333 million in fair value. The composition of our European-based holdings at March 31, 2016, did not materially change from the $339 million fair value total at year-end 2015. We discussed our European-based holdings in our 2015 Annual Report on Form 10-K, Item 7a, Quantitative and Qualitative Disclosures About Market Risk, Page 108.

In the first three months of 2016, the increase in fair value of our fixed-maturity portfolio was driven by the combination of net purchases of securities and an increase in net unrealized gains reflecting a decrease in interest rates. At March 31, 2016, our fixed-maturity portfolio with an average rating of A2/A was valued at 104.7 percent of its amortized cost, compared with 103.5 percent at December 31, 2015.

At March 31, 2016, our investment-grade and noninvestment-grade fixed-maturity securities represented 90.9 percent and 4.7 percent of the portfolio, respectively. The remaining 4.4 percent represented fixed-maturity securities that were not rated by Moody's or Standard & Poor's.

 Attributes of the fixed-maturity portfolio include:

	At March 31, 2016		At December 31, 2015
Weighted average yield-to-amortized cost	4.66	%	4.70	%
Weighted average maturity	7.0	yrs	6.9	yrs
Effective duration	4.8	yrs	4.7	yrs

We discuss maturities of our fixed-maturity portfolio in our 2015 Annual Report on Form 10-K, Item 8, Note 2, Investments, Page 130, and in this quarterly report Item 2, Investments Results.

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TAXABLE FIXED MATURITIES

Our taxable fixed-maturity portfolio, with a fair value of $6.503 billion at March 31, 2016, included:

(Dollars in millions)	At March 31, 2016		At December 31, 2015
Investment-grade corporate	$	5,167	$	5,060
States, municipalities and political subdivisions	322		314
Below investment-grade corporate	457		393
Commercial mortgage-backed	298		289
Government sponsored enterprises	240		278
Foreign government	10		10
Convertibles and bonds with warrants attached	5		5
United States government	4		4
Total	$	6,503	$	6,353

Our strategy is to buy, and typically hold, fixed-maturity investments to maturity, but we monitor credit profiles and fair value movements when determining holding periods for individual securities. With the exception of United States agency issues that include government-sponsored enterprises, no individual issuer’s securities accounted for more than 0.9 percent of the taxable fixed-maturity portfolio at March 31, 2016. Our investment-grade corporate bonds had an average rating of Baa1 by Moody’s or BBB+ by Standard & Poor’s and represented 79.5 percent of the taxable fixed-maturity portfolio’s fair value at March 31, 2016, including short-term investments, compared with 79.7 percent at year-end 2015.

The heaviest concentration in our investment-grade corporate bond portfolio, based on fair value at March 31, 2016, was the financial-related sectors. It represented 38.6 percent of our investment-grade corporate bond portfolio, compared with 37.9 percent at year-end 2015. At March 31, 2016, the real estate sector, including commercial mortgage-backed securities, accounted for 15.4 percent and the insurance sector accounted for 13.3 percent. No other sector exceeded 10 percent of our investment-grade corporate bond portfolio.

Most of the $322 million of securities issued by states, municipalities and political subdivisions included in our taxable fixed-maturity portfolio at March 31, 2016, were Build America Bonds.

Our taxable fixed-maturity portfolio at March 31, 2016, included $298 million of commercial mortgage-backed securities with an average rating of Aa1/AA.

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TAX-EXEMPT FIXED MATURITIES

At March 31, 2016, we had $3.381 billion of tax-exempt fixed-maturity securities with an average rating of Aa2/AA by Moody’s and Standard & Poor’s. We traditionally have purchased municipal bonds focusing on general obligation and essential services issues, such as water, waste disposal or others. The portfolio is well diversified among more than 1,400 municipal bond issues. No single municipal issuer accounted for more than 0.8 percent of the tax-exempt fixed-maturity portfolio at March 31, 2016.

INTEREST RATE SENSITIVITY ANALYSIS

Because of our strong surplus, long-term investment horizon and ability to hold most fixed-maturity investments until maturity, we believe the company is adequately positioned if interest rates were to rise. Although the fair values of our existing holdings may suffer, a higher rate environment would provide the opportunity to invest cash flow in higher-yielding securities, while reducing the likelihood of untimely redemptions of currently callable securities. While higher interest rates would be expected to continue to increase the number of fixed-maturity holdings trading below 100 percent of amortized cost, we believe lower fixed-maturity security values due solely to interest rate changes would not signal a decline in credit quality. We continue to manage the portfolio with an eye toward both meeting current income needs and managing interest rate risk.

Our dynamic financial planning model uses analytical tools to assess market risks. As part of this model, the effective duration of the fixed-maturity portfolio is continually monitored by our investment department to evaluate the theoretical impact of interest rate movements.

The table below summarizes the effect of hypothetical changes in interest rates on the fair value of the fixed-maturity portfolio:

(Dollars in millions)	Effect from interest rate change in basis points
	-200		-100		-		100		200
At March 31, 2016	$	10,867	$	10,366	$	9,884	$	9,407	$	8,948
At December 31, 2015	$	10,585	$	10,112	$	9,650	$	9,189	$	8,748

The effective duration of the fixed-maturity portfolio as of March 31, 2016, was 4.8 years, up from 4.7 years at year-end 2015. The above table is a theoretical presentation showing that an instantaneous, parallel shift in the yield curve of 100 basis points could produce an approximately 4.9 percent change in the fair value of the fixed-maturity portfolio. Generally speaking, the higher a bond is rated, the more directly correlated movements in its fair value are to changes in the general level of interest rates, exclusive of call features. The fair values of average- to lower-rated corporate bonds are additionally influenced by the expansion or contraction of credit spreads.

In our dynamic financial planning model, the selected interest rate change of 100 to 200 basis points represents our view of a shift in rates that is quite possible over a one-year period. The rates modeled should not be considered a prediction of future events as interest rates may be much more volatile in the future. The analysis is not intended to provide a precise forecast of the effect of changes in rates on our results or financial condition, nor does it take into account any actions that we might take to reduce exposure to such risks.

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EQUITY INVESTMENTS

Our equity investments, with a fair value totaling $4.941 billion at March 31, 2016, included $4.720 billion of common stock securities of companies generally with strong indications of paying and growing their dividends. Other criteria we evaluate include increasing sales and earnings, proven management and a favorable outlook. We believe our equity investment style is an appropriate long-term strategy. While our long-term financial position would be affected by prolonged changes in the market valuation of our investments, we believe our strong surplus position and cash flow provide a cushion against short-term fluctuations in valuation. Continued payment of cash dividends by the issuers of our common equity holdings can provide a floor to their valuation.

The table below summarizes the effect of hypothetical changes in market prices on fair value of our equity portfolio.

(Dollars in millions)	Effect from market price change in percent
		-30%		-20%		-10%		—		10%		20%		30%
At March 31, 2016		$	3,459	$	3,953	$	4,447	$	4,941	$	5,435	$	5,929	$	6,423
At December 31, 2015		$	3,294	$	3,765	$	4,235	$	4,706	$	5,177	$	5,647	$	6,118

At March 31, 2016, Apple Inc. (Nasdaq:AAPL) was our largest single common stock holding with a fair value of $153 million, or 3.2 percent of our publicly traded common stock portfolio and 1.0 percent of the total investment portfolio. Nineteen holdings among eight different sectors each had a fair value greater than $100 million.

Common Stock Portfolio Industry Sector Distribution

	Percent of publicly traded common stock portfolio
	At March 31, 2016				At December 31, 2015
	Cincinnati  Financial		S&P 500 Industry Weightings		Cincinnati Financial		S&P 500 Industry Weightings
Sector:
Information technology	18.0	%	20.8	%	18.4	%	20.7	%
Industrials	14.5		10.1		14.0		10.0
Financial	13.1		15.6		15.4		16.5
Healthcare	12.2		14.3		12.2		15.1
Consumer discretionary	11.7		12.9		10.6		12.9
Consumer staples	11.2		10.4		11.0		10.1
Energy	7.9		6.8		7.7		6.5
Materials	5.2		2.8		4.9		2.8
Utilities	4.0		3.5		3.8		3.0
Telecomm services	2.2		2.8		2.0		2.4
Total	100.0	%	100.0	%	100.0	%	100.0	%

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UNREALIZED INVESTMENT GAINS AND LOSSES

At March 31, 2016, unrealized investment gains before taxes for the consolidated investment portfolio totaled $2.497 billion and unrealized investment losses amounted to $113 million.

The net unrealized investment gains at March 31, 2016, consisted of a pretax net gain position in our fixed-maturity portfolio of $442 million and a net gain position in our equity portfolio of $1.942 billion. The net gain position in our fixed-maturity portfolio decreased in the first three months of 2016 due largely to credit spread widening in our corporate bond portfolio, among other factors. The net gain position for our current fixed-maturity holdings will naturally decline over time as individual securities mature. In addition, changes in interest rates can cause rapid, significant changes in fair values of fixed-maturity securities and the net gain position, as discussed in Quantitative and Qualitative Disclosures About Market Risk. Events or factors such as economic growth or recession can also affect the fair value of our equity securities. The seven largest contributors to our common stock portfolio net gain position were Honeywell International Inc. (NYSE:HON), Exxon Mobil Corporation (NYSE:XOM), The Procter & Gamble Company (NYSE:PG), Blackrock Inc. (NYSE:BLK), Johnson & Johnson (NYSE:JNJ), Hasbro Inc. (Nasdaq:HAS) and Microsoft Corporation (Nasdaq:MSFT), which had a combined net gain position of $597 million.

Unrealized Investment Losses

We expect the number of securities trading below amortized cost to fluctuate as interest rates rise or fall and credit spreads expand or contract due to prevailing economic conditions. Further, amortized costs for some securities are revised through OTTI recognized in prior periods. At March 31, 2016, 261 of the 3,191 securities we owned had fair values below amortized cost, compared with 414 of the 3,163 securities we owned at year-end 2015. The 261 holdings with fair values below cost or amortized cost at March 31, 2016, represented 9.9 percent of fair value of our investment portfolio and $113 million in unrealized losses.

• 213 of the 261 holdings had fair value between 90 percent and 100 percent of amortized cost at March 31, 2016. Thirteen of these 213 holdings are equity securities that may be subject to OTTI charges taken through earnings should they not recover by the recovery dates we determined. The fair value of these 13 equity securities was $184 million, and they accounted for $8 million in unrealized losses. The remaining 200 securities primarily consist of fixed-maturity securities whose current valuation is largely the result of interest rate factors. The fair value of these 200 securities was $877 million, and they accounted for $20 million in unrealized losses.

• 44 of the 261 holdings had fair value between 70 percent and 90 percent of amortized cost at March 31, 2016. Seven of these 44 holdings were equity securities that may be subject to OTTI charges taken through earnings should they not recover by the dates we determined. The fair value of these equity securities was $203 million, and they accounted for $37 million in unrealized losses. We believe the remaining 37 fixed-maturity securities will continue to pay interest and ultimately pay principal upon maturity. The issuers of these 37 securities have strong cash flow to service their debt and meet their contractual obligation to make principal payments. The fair value of these securities was $199 million, and they accounted for $43 million in unrealized losses.

• Four of the 261 holdings had fair value below 70 percent of amortized cost at March 31, 2016. None of these four holdings were equity securities that may be subject to OTTI charges taken through earnings should they not recover by the dates we determined. We believe the four remaining fixed-maturity securities will continue to pay interest and ultimately pay principal upon maturity. The issuers of these securities have strong cash flows to service their debt and meet their contractual obligation to make principal payments. The fair value of these securities was $9 million, and they accounted for $5 million in unrealized losses.

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The table below reviews fair values and unrealized losses by investment category and by the overall duration of the securities’ continuous unrealized loss position.

(Dollars in millions)	Less than 12 months				12 months or more				Total		Total
	Fair		Unrealized		Fair		Unrealized		fair		unrealized
At March 31, 2016	value		losses		value		losses		value		losses
Fixed maturity securities:
Corporate	$	801	$	43	$	153	$	23	$	954	$	66
States, municipalities and political subdivisions	28		—		4		—		32		—
Commercial mortgage-backed	49		1		2		1		51		2
Government-sponsored enterprises	29		—		19		—		48		—
Subtotal	907		44		178		24		1,085		68
Equity securities:
Common equities	345		44		—		—		345		44
Nonredeemable preferred equities	42		1		—		—		42		1
Subtotal	387		45		—		—		387		45
Total	$	1,294	$	89	$	178	$	24	$	1,472	$	113
At December 31, 2015
Fixed maturity securities:
Corporate	$	1,099	$	63	$	133	$	33	$	1,232	$	96
States, municipalities and political subdivisions	47		1		22		—		69		1
Commercial mortgage-backed	103		2		2		—		105		2
Government-sponsored enterprises	100		2		127		4		227		6
Subtotal	1,349		68		284		37		1,633		105
Equity securities:
Common equities	270		51		—		—		270		51
Nonredeemable preferred equities	35		—		—		—		35		—
Subtotal	305		51		—		—		305		51
Total	$	1,654	$	119	$	284	$	37	$	1,938	$	156

At March 31, 2016, 44 fixed-maturity securities with a total unrealized loss of $24 million had been in an unrealized loss position for 12 months or more. Of that total, two fixed-maturity securities with a fair value of $6 million had a fair value below 70 percent of amortized cost and accounted for $3 million in unrealized losses; 17 fixed-maturity securities with a fair value of $81 million had a fair value from 70 percent to less than 90 percent of amortized cost and accounted for $19 million in unrealized losses; and 25 fixed-maturity securities with a fair value of $91 million had fair values from 90 percent to less than 100 percent of amortized cost and accounted for $2 million in unrealized losses.

At March 31, 2016, no equity securities had been in an unrealized loss position for 12 months or more.

At March 31, 2016, applying our invested asset impairment policy, we determined that the total of $24 million, for securities in an unrealized loss position for 12 months or more in the table above, was not other-than-temporarily impaired.

During the first quarter of 2016, two securities were written down through an impairment charge. OTTI resulted in pretax, noncash charges of $2 million for the three months ended March 31, 2016. During the first three months of 2015, no securities were written down though impairment charges.

During full-year 2015, we wrote down 20 securities and recorded $52 million in OTTI charges. At December 31, 2015, 69 fixed-maturity investments with a total unrealized loss of $37 million had been in an unrealized loss position for 12 months or more. Of that total, five fixed-maturity investments had fair values below 70 percent of amortized cost. There were no equity security investments in an unrealized loss position for 12 months or more as of December 31, 2015.

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The following table summarizes the investment portfolio by severity of decline:

(Dollars in millions)
At March 31, 2016	Number of  issues	Cost or  amortized cost		Fair  value		Gross  unrealized  gain/loss			Gross investment income
Taxable fixed maturities:
Fair valued below 70% of amortized cost	4	$	14	$	9	$	(5	)	$	—
Fair valued at 70% to less than 100% of amortized cost	217	1,107		1,044		(63		)	13
Fair valued at 100% and above of amortized cost	1,213	5,111		5,450		339			66
Securities sold in current year	—	—		—		—			2
Total	1,434	6,232		6,503		271			81
Tax-exempt fixed maturities:
Fair valued below 70% of amortized cost	—	—		—		—			—
Fair valued at 70% to less than 100% of amortized cost	20	32		32		—			—
Fair valued at 100% and above of amortized cost	1,633	3,178		3,349		171			27
Securities sold in current year	—	—		—		—			1
Total	1,653	3,210		3,381		171			28
Common equities:
Fair valued below 70% of cost	—	—		—		—			—
Fair valued at 70% to less than 100% of cost	14	389		345		(44		)	3
Fair valued at 100% and above of cost	55	2,421		4,375		1,954			31
Securities sold in current year	—	—		—		—			—
Total	69	2,810		4,720		1,910			34
Nonredeemable preferred equities:
Fair valued below 70% of cost	—	—		—		—			—
Fair valued at 70% to less than 100% of cost	6	43		42		(1		)	1
Fair valued at 100% and above of cost	29	146		179		33			3
Securities sold in current year	—	—		—		—			—
Total	35	189		221		32			4
Portfolio summary:
Fair valued below 70% of cost or amortized cost	4	14		9		(5		)	—
Fair valued at 70% to less than 100% of cost or amortized cost	257	1,571		1,463		(108		)	17
Fair valued at 100% and above of cost or amortized cost	2,930	10,856		13,353		2,497			127
Investment income on securities sold in current year	—	—		—		—			3
Total	3,191	$	12,441	$	14,825	$	2,384		$	147
At December 31, 2015
Portfolio summary:
Fair valued below 70% of cost or amortized cost	9	$	76	$	47	$	(29	)	$	4
Fair valued at 70% to less than 100% of cost or amortized cost	405	2,018		1,891		(127		)	66
Fair valued at 100% and above of cost or amortized cost	2,749	10,168		12,418		2,250			478
Investment income on securities sold in current year	—	—		—		—			30
Total	3,163	$	12,262	$	14,356	$	2,094		$	578

See our 2015 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Asset Impairment, Page 50.

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Item 4.        Controls and Procedures

Evaluation of Disclosure Controls and Procedures – The company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)).

Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The company’s management, with the participation of the company’s chief executive officer and chief financial officer, has evaluated the effectiveness of the design and operation of the company’s disclosure controls and procedures as of March 31, 2016. Based upon that evaluation, the company’s chief executive officer and chief financial officer concluded that the design and operation of the company’s disclosure controls and procedures provided reasonable assurance that the disclosure controls and procedures are effective to ensure:

• 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.

Changes in Internal Control over Financial Reporting – During the three months ended March 31, 2016, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – Other Information

Item 1.    Legal Proceedings

Neither the company nor any of our subsidiaries are involved in any litigation believed to be material other than ordinary, routine litigation incidental to the nature of our business.

Item 1A.    Risk Factors

Our risk factors have not changed materially since they were described in our 2015 Annual Report on Form 10-K filed February 26, 2016.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

We did not sell any of our shares that were not registered under the Securities Act during the first three months of 2016. The board of directors has authorized share repurchases since 1996. Purchases are expected to be made generally through open market transactions. The board gives management discretion to purchase shares at reasonable prices in light of circumstances at the time of purchase, subject to SEC regulations. On October 24, 2007, the board of directors expanded the existing repurchase authorization to approximately 13 million shares. We have 4,099,493 shares available for purchase under our programs at March 31, 2016.

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, 2016	—	—	—	4,099,493
February 1-29, 2016	—	—	—	4,099,493
March 1-31, 2016	—	—	—	4,099,493
Totals	—	—	—

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Item 5.    Other Information

On April 25, 2016, The Cincinnati Insurance Company (CIC), a subsidiary of Cincinnati Financial Corporation, entered into a Continuing Reimbursement Agreement for Letters of Credit (Agreement) with U.S. Bank National Association (Bank). The Agreement is for a new unsecured letter of credit facility that will allow CIC to secure letters of credit totaling up to $25 million. CIC intends to use this facility primarily to support the collateral obligations of its assumed reinsurance operation. The Agreement is a continuing agreement and remains in effect until terminated, amended or replaced, and requires CIC to reimburse Bank on demand for any amounts drawn under a letter of credit issued by Bank pursuant to the terms of the Agreement. The Agreement includes other obligations including but not limited to those that require CIC to reimburse Bank for commissions, taxes and interest. Interest on all amounts due under the Agreement will accrue at the rate set forth in the Amended and Restated Credit Agreement entered into by Cincinnati Financial Corporation as of May 13, 2014, as may be further amended, restated or replaced.

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Item 6.    Exhibits

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)
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
10.1	Annual Incentive Compensation Award agreement granted to Steven J. Johnston on February 12, 2016 (incorporated by reference to Exhibit 10.1 filed with the company’s Current Report on Form 8-K dated February 18, 2016)
10.2	Annual Incentive Compensation Award agreement granted to Jacob F. Scherer, Jr. on February 12, 2016 (incorporated by reference to Exhibit 10.2 filed with the company’s Current Report on Form 8-K dated February 18, 2016)
10.3	Annual Incentive Compensation Award agreement granted to Michael J. Sewell on February 12, 2016 (incorporated by reference to Exhibit 10.3 filed with the company’s Current Report on Form 8-K dated February 18, 2016)
10.4	Annual Incentive Compensation Award agreement granted to Martin F. Hollenbeck on February 12, 2016 (incorporated by reference to Exhibit 10.4 filed with the company’s Current Report on Form 8-K dated February 18, 2016)
10.5	Annual Incentive Compensation Award agreement granted to Charles P. Stoneburner II on February 12, 2016 (incorporated by reference to Exhibit 10.5 filed with the company’s Current Report on Form 8-K dated February 18, 2016)
10.6	First Amendment of the Amended and Restated Credit Agreement by and among Cincinnati Financial Corporation, CFC Investment Company, PNC Bank, N.A., as Administrative Agent, PNC Capital Markets, LLC, as Sole Bookrunner and Joint Lead Arranger, Fifth Third Bank, N.A. as Joint Lead Arranger and Syndication Agent, The Huntington National Bank and U.S. Bank, N.A. as Documentation Agents, dated February 8, 2016 (incorporated by reference to the company’s Current Report on Form 8-K dated February 8, 2016)
10.7	Second Amendment of the Amended and Restated Credit Agreement by and among Cincinnati Financial Corporation, CFC Investment Company, PNC Bank, N.A., as Administrative Agent, PNC Capital Markets, LLC, as Sole Bookrunner and Joint Lead Arranger, Fifth Third Bank, N.A. as Joint Lead Arranger and Syndication Agent, The Huntington National Bank and U.S. Bank, N.A. as Documentation Agents, dated March 31, 2016 (incorporated by reference to the company’s Current Report on Form 8-K dated April 4, 2016)
10.8	Continuing Reimbursement Agreement for Letters of Credit by and between U.S. Bank and The Cincinnati Insurance Company, dated April 25, 2016.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CINCINNATI FINANCIAL CORPORATION

Date: April 26, 2016

/S/ Eric N. Mathews

Eric N. Mathews, CPCU, AIAF

Vice President, Assistant Secretary and Assistant Treasurer

(Principal Accounting Officer)

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EX-10.8

CONTINUING REIMBURSEMENT AGREEMENT FOR LETTERS OF CREDIT

This Continuing Reimbursement Agreement for Letters of Credit is made effective this 25^th day of April, 2016 by and between U.S. BANK NATIONAL ASSOCIATION ("Bank") and THE CINCINNATI INSURANCE COMPANY ("Applicant").

In consideration of the issuance by Bank or an affiliate of Bank (each such affiliated issuer, an "Other Issuer") of one or more Credits, Applicant agrees that the following terms shall apply to each Application and each Credit issued by Bank or any Other Issuer (either or both referred to herein as "Bank").

1.The Credit.

(a)From time to time, Applicant may request Bank to issue or request one of its subsidiaries or affiliates to issue one or more letters of credit (each, a "Credit") substantially in accordance with the terms of any application (each, an "Application") submitted to Bank by Applicant. All Credits will be deemed irrevocable unless otherwise stated in an Application. Bank may issue the Credit or request one of its affiliates to issue the Credit. Each Credit shall be issued by Bank in its sole discretion and at its sole option. Bank may sell, assign or participate all or any part of its rights and obligations under this Agreement, the Application and the Credit. Without limiting the foregoing, any Other Issuer may sell a participation in all or any part of its rights and obligations under this Agreement and the Credit to Bank.

(b)Bank hereby is authorized to set forth in the Credit the terms appearing in the Application, with such modifications as Bank in its discretion may determine are appropriate or necessary and is not materially different from such terms.

(c)All communications from Applicant to Bank relating to the Credit will be sent at Applicant’s risk. Bank shall have no responsibility for any inaccuracy of translation, or any error or delay in transmission or delivery by mail, telecommunication or any other method outside of Bank's reasonable control, including all communications made through a correspondent.

(d)Neither Bank nor its correspondents shall be in any way responsible for the performance of any beneficiary’s obligations to Applicant or for the form, sufficiency, accuracy, genuineness, authority of person signing, falsification or legal effect, of any documents required by the Credit if such documents appear in order on their face. Whether the documents conform to the terms of the Credit and whether any demand is timely and in proper form shall be independently determined by Bank in its sole discretion, which determination shall be final and binding on Applicant.

(e)Subject to Section 7(b), Bank may in its discretion honor Applicant’s request to increase the amount of the Credit, extend the time for making and honoring of demands under the Credit and otherwise modify the terms and conditions governing the Credit. In the event of any extension of the maturity or time for negotiation or presentation of the drafts or documents or any other modification of the terms or provisions of, or increase in the amount of, the Credit at the request or with the consent of Applicant, this Agreement shall be binding upon Applicant with regard to

(i)the Credit as so increased or otherwise modified, (ii) drafts, documents and property covered thereby, (iii) any action taken by Bank or Bank’s correspondents in accordance with such extension, increase or other modification, and (iv) any draft paid by Bank or any of Bank’s correspondents which is dated on or before the expiration of any time limit expressed in the Credit, regardless of when drawn or presented for payment and when or whether negotiated, provided the required documents are presented prior to the expiration of the Credit.

(f)Applicant shall promptly review all information, documents and instruments delivered to Applicant from time to time by Bank, including any Credits upon issuance and any amendments and all related presentations and negotiations, and shall notify Bank within seven banking days after receipt if Applicant claims that Bank has failed to comply with Applicant’s instructions or Bank’s obligations with respect to the Credit, has wrongfully honored or dishonored any presentation under the Credit or claims any other irregularity. If Applicant does not so notify Bank within such time period, Applicant shall be conclusively deemed to have waived and shall be precluded from asserting such claim(s).

2.Reimbursement Obligations. Applicant promises to pay Bank on demand at the address specified in the Application for Credit in the following amounts:

(a)The amount of each draft or other request for payment (hereinafter called a "draft") drawn under the Credit (whether drawn before, on or, if in accordance with the law applicable to the Credit, after the expiration date stated in the Credit). For amounts payable in United States currency, Applicant agrees to reimburse Bank in United States currency. For amounts payable in other currencies, Applicant agrees to reimburse Bank an equivalent amount in United States currency at Bank’s then current selling rate for such foreign currencies or Applicant will reimburse Bank by sending the foreign currency amount due Bank by wire transfer to the account and location designated by Bank, or at Bank’s option, in any other currency, place, form and manner acceptable to Bank. Upon request, Applicant will pay Bank in advance, in United States currency, all sums necessary for Bank to pay all such drafts upon presentation whether payable in United States currency or otherwise. If the draft is a time draft, Applicant shall make payment without demand sufficiently in advance of its maturity to enable Bank to arrange for funds to reach the place of payment when due.

(b)All commissions, at the rate fixed by Bank, shall be payable from time to time at such intervals as Bank may require and shall be nonrefundable, whether or not the Credit is drawn upon, reduced in time or amount or otherwise modified. Applicant also agrees to pay all of Bank's other standard fees and charges related to Credits.

(c)Subject to Section 6 and all taxes, levies, imposts, duties, charges, fees, deductions or withholdings of any nature whatsoever paid or incurred by Bank in connection with this Agreement, the Credit or any related transactions, and any liability with respect thereto (including but not limited to interest, penalties and expenses).

(d)Interest on all amounts due under this agreement from the applicable due date until paid will accrue interest at the rate set forth in the Amended and Restated Credit Agreement entered into by Cincinnati Financial Corporation as of May 13, 2014 (the “Credit Agreement”) as may be further amended, restated or replaced (the “Credit Agreement”).

(e)Without limiting Applicant’s obligations to any Other Issuer, but without duplication, Applicant promises to pay Bank on demand, at the Bank International Banking Office designated by Bank, an amount equal to all amounts which Bank pays or becomes obligated to pay to any Other Issuer with respect to the Credit, whether as a participant in the Credit or otherwise.

(f)Notwithstanding any other provision of this Agreement, Applicant’s obligation to make any payment hereunder to any Other Issuer shall, to the extent of such payment, be satisfied by payment to Bank as set forth in this Agreement.

Continuing Reimbursement Agreement 1 rev. 1/11

(g)Applicant instructs Bank to automatically deduct from the account set forth in Schedule I hereto all amounts which become due under the Agreement. Should there be insufficient funds in this account to reimburse Bank; Bank is authorized to deduct any remaining amounts due from any of Applicant's accounts with Bank. Applicant will pay all fees on the account which result from the automatic deductions, including any overdraft/NSF charges. If for any reason Bank does not charge the account for any amount due, or if an automatic deduction is reversed, the amount due is still owing to Bank as set forth herein.

3. Security and Insurance.

(a)For commercial credits, Applicant hereby grants Bank a continuous and continuing interest in any and all bills of lading, other documents of title, policies, certificates of insurance, chattel paper, and general intangibles accompanying or relative to a Credit or any drafts drawn thereunder, and any and all inventory, goods and other property shipped under, in connection with or relative to a Credit or any drafts drawn thereunder. In addition to all other rights which Bank may have, in the event Applicant defaults on a Credit, Applicant hereby authorizes Bank to set off and apply any and all deposits (general or special, time or demand, provisional or final), other than deposits in Bank’s account known as The Cincinnati Insurance Company New Mexico Claims Account, in New Mexico, USA, at any time held and other indebtedness at any time owing by Bank to or for the credit or the account of Applicant against any and all of the obligations of Applicant now or hereafter existing under this Agreement, irrespective of whether Bank shall have made any demand under this Agreement and although such deposits, indebtedness or obligations may be unmatured or contingent. Thirty (30) days prior to exercising the set off right authorized in the previous sentence, Bank will give written notice to Applicant of its intent to exercise such right, in sufficient detail, and applicant will have 30 days from the date it received written notice to cure any defaulted obligations.

(b)Bank may condition the issuance of certain Credits on the receipt of cash collateral. If at any time Bank requires cash collateral (or additional cash collateral), and if applicant agrees to such conditions, Applicant will deliver to Bank as security for any and all obligations of Applicant now or hereafter existing under this Agreement cash collateral in the amount of 105% of the value of the outstanding credits, or such value as is satisfactory to Bank. Applicant will execute and deliver to Bank such security agreements, pledge agreements, or other documents (“Security Documents”) requested by Bank covering such collateral.

(c)At Bank's request, Applicant will execute any financing statements and other documents or instruments as Bank may require to perfect the security interests granted or contemplated hereunder and will pay the cost of any filings in connection therewith.

(d)For commercial credits, Applicant shall keep any property described in the Credit adequately covered by insurance satisfactory to Bank, issued by companies satisfactory to Bank, and at Bank's request will furnish certificates or evidence thereof and will assign insurance policies or certificates to Bank and make losses, adjustments or proceeds payable to Bank. If any such policies procured by Applicant fails to provide for payment of the loss thereunder, Applicant hereby makes the loss payable to Bank under such policy and assigns to Bank all proceeds of such policy and agrees to accept proceeds of all insurance as Bank's agent and to hold same in trust for Bank, and forthwith to deliver the same to Bank, with Applicant's endorsement where necessary, and Bank or any of Bank's officers are hereby irrevocably empowered, with power of substitution, to endorse any check in the name of Applicant received in payment of any loss or adjustment.

(e)Bank shall not be liable for any failure to collect or demand payment of, or to protest or give any notice of non-payment of, any collateral or any part thereof or for any delay in so doing, nor shall Bank be under any obligation to take any action whatsoever with respect to the collateral or any part thereof. Bank shall use reasonable care in the custody and preservation of the collateral in Bank's possession but need not take any steps to preserve rights against prior parties or to keep the collateral identifiable. Bank shall have no obligation to comply with any recording, re- recording, filing, re-filing or other legal requirement necessary to establish or maintain the validity, priority or enforceability of, or Bank's right in and to, the collateral, or any part thereof. Bank may exercise any right of Applicant with respect to any collateral. Bank may endorse Applicant's name on any and all notes, checks, drafts, bills of exchange, money orders or commercial paper included in the collateral or representing the proceeds thereof.

4. Default and Remedies.

(a)Time is of the essence in this Agreement. The occurrence of any of the following shall be an Event of Default hereunder:

(i)Default in payment or performance of any of Applicant’s obligations hereunder or under any promissory note or other agreement between Bank and Applicant;

(ii) Default under any Security Documents securing Applicant’s obligations hereunder;

(iii) Levy or proceeding against any property of Applicant;

(iv)Death, dissolution, termination of existence, insolvency or business failure of, appointment of a receiver for any part of the property of, assignment for the benefit of creditors by, commencement of any proceeding under any bankruptcy or insolvency laws by or against, or entry of judgment against Applicant;

(v)Any warranty, representation or statement made or furnished to Bank by Applicant proves to have been false in any material respect when made or furnished;

(vi)Any event which gives the holder of any material debt obligation of Applicant (as defined in the Credit Agreement) the right to accelerate its maturity, whether or not such right is exercised; or

(vii) Any Material Adverse Change as defined in the Credit Agreement.

(b)Upon the occurrence and continuation of any Event of Default and at any time thereafter, Bank at its option and in addition to all other rights of Bank under this Agreement, any related agreement and applicable law, may (i) without notice or demand declare the amount for which the Credit was issued and any other amounts owing hereunder immediately due and payable; and (ii) to the extent Applicant provides any cash collateral, exercise any and all rights and remedies of a secured party under the Uniform Commercial Code and other applicable law.

5. Certain Warranties.

(a)Applicant warrants that the execution, delivery and performance of this Agreement are within its authority and are not in contravention of law, of any terms of any agreement, instrument, order or judgment to which Applicant is a party or by which it or its property may be bound or of any provision of its charter document or bylaws, and that it has obtained all necessary approvals and consents therefore.

(b)Applicant represents and warrants that any Credit, and transactions related thereto, shall be in compliance with any federal, state, local and foreign laws, regulations, treaties or customs applicable to Bank or Applicant, including without limitation the regulations promulgated by Office of Foreign Assets Control (OFAC), and any other foreign or domestic legal restriction on doing business with certain individuals or countries.

Continuing Reimbursement Agreement 2 rev. 1/11

(c)Applicant will procure promptly all necessary licenses for the export, import, shipping or warehousing of, or payment for property covered by the Credit and will comply with all foreign and U.S. laws, rules and regulations (including exchange control regulations) now or hereafter applicable to the transaction related to the Credit or applicable to the execution, delivery and performance by Applicant of this Agreement.

6. Changes to Regulations.

If after the effective date of this Agreement there shall occur any enactment, promulgation, imposition, implementation, interpretation or administration of, or change to, any Regulation, whether such Regulation was created before or after the date of this Agreement, which shall have the effect of imposing on Bank (or through Bank’s holding company) any tax (excluding taxes on its overall net income and franchise taxes), charge, fee, assessment or deduction of any kind whatsoever, additional reserve or capital adequacy requirements, special deposits or similar requirements against credit extended by Bank and/or against letters of credit issued by Bank, assets of, deposits with or for the account of Bank or any other conditions affecting the extensions of credit and/or issuance of letters of credit under this Agreement, then Applicant shall pay to Bank such additional amount as Bank deems necessary to compensate Bank for any increased cost to Bank attributable to the extension(s) of credit and/or issuance of letters of credit under this Agreement and/or for any reduction in the rate of return on Bank’s capital and/or Bank’s revenue attributable to such extension(s) of credit and/or issuance of letters of credit. As used above, the term “Regulation” shall include any federal, state or international law, governmental or quasi-governmental rule, regulation, policy, guideline or directive (including but not limited to the Dodd-Frank Wall Street Reform and Consumer Protection Act and enactments, issuances or similar pronouncements by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices or any similar authority and any successor thereto) that applies to Bank. Any amount payable to Bank under this paragraph shall be paid within 15 days following written demand, which demand shall set forth in reasonable detail the Bank’s good faith calculation of any amount claimed due from applicant. In addition, if Bank determines that such cost or reduction will be ongoing or recurring, Bank may by notice to Applicant elect to require payment of such amounts with regularly scheduled payments. Bank’s method of determining any amount payable to Bank under this paragraph shall be substantially the same as that method utilized by Bank in implementing similar provisions for similarly situated applicants. Bank’s determination of such additional amount shall be determinative in the absence of manifest error.

7. General Terms and Conditions.

(a)Each Application shall be subject to all terms and conditions of this Agreement. In addition, this Agreement shall apply to each Credit issued by Bank at the request of Applicant, including, without limitation, all Credits (if any) previously opened and outstanding on the date hereof.

(b)Notwithstanding any other term hereof, Applicant understands and agrees that the Credit can be revoked or amended only with the consent of the beneficiary of the Credit, Bank or Other Issuer of the Credit and any confirming bank.

(c)If Applicant requests Bank to issue a Credit for the account of a third party, whether affiliated with Applicant or otherwise (the "Account Party"), the Account Party shall have no rights against Bank. Bank may deal with Applicant as if Applicant were the named Account Party.

(d)Applicant shall give Bank prior written notice of any change of name, address or place of business. Any notice of any nature by Applicant to Bank must be given at Bank’s office to which the application was submitted.

(e)The singular includes the plural. If Applicant consists of more than one person, the obligations of Applicant hereunder are joint and several and are binding upon any marital community of which any Applicant is a member. This Agreement shall be binding on Applicant, its successors and assigns, and shall inure to the benefit of Bank or Bank’s successors, transferees and assigns. Notwithstanding the foregoing, Applicant may not assign its rights under this agreement without Bank’s prior written consent. Any change of control of Applicant shall require Bank’s prior written consent.

(f)Notwithstanding the title appearing on any Credit instrument, the rights and obligations of Bank and Applicant with respect to the Credit shall be as set forth herein.

(g)The Application and/or the Credit will set forth which rules or customs apply to the corresponding Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce ("ISP") or the Uniform Customs and Practice for Documentary Credits, as published by the International Chamber of Commerce ("UCP"). In any event, the rules or practices set forth in the Credit are incorporated herein and shall govern the Credit. This Agreement and the Credit shall be governed by the internal laws of the State in the United States of America in which the Credit was issued without regard to such State’s conflict of laws principles (the "Governing Laws") and the federal laws of the United States of America, except to the extent such laws are inconsistent with the rules adopted in the Application as set forth above.

(h)When possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement.

(i)Applicant hereby indemnifies and agrees to defend and hold harmless Bank, its officers, directors, agents, successors and assigns, from and against any and all liabilities, claims, demands, losses and expenses (including without limitation legal costs and attorney fees incurred in any appellate proceeding, proceeding under the bankruptcy code or receivership and post-judgment attorney fees incurred in enforcing any judgment), arising from or in connection with this Agreement, the Credit or any related transaction.

(j)Any action, inaction or omission taken or suffered by Bank or by any of Bank’s correspondents under or in connection with the Credit or any relative drafts, documents or property, if in good faith and in conformity with foreign or United States laws, regulations or customs applicable thereto, shall be binding upon Applicant and shall not place Bank or any of Bank’s correspondents under any resulting liability to Applicant. Without limiting the generality of the foregoing, Bank and Bank’s correspondents may act in reliance upon any oral, telephonic, telegraphic, electronic or written request or notice believed in good faith to have been authorized by Applicant, whether or not in fact given or signed by an authorized person.

(k)Bank’s waiver of any right on any occasion or occasions shall not be construed as a bar or waiver of any other right or of such right on any other occasion.

(l)Without notice to any Applicant and without affecting Bank’s rights or Applicant’s obligations, Bank may deal in any manner with any person who at any time is liable for, or provides any collateral for, any obligations of Applicant to Bank. Without limiting the foregoing, Bank may impair, release (with or without substitution of new collateral) and fail to perfect a security interest in, any collateral provided by any person; and sue, fail to sue, agree not to sue, release, and settle or compromise with, any person.

(m)Except as otherwise provided herein or in any Credit, all notices and other communications required or permitted to be given to any party hereto shall be in writing or an electronic medium that is retrievable in a perceivable form and shall be deemed given when delivered by hand, electronically, by overnight courier, or when deposited in the United States mail, postage prepaid, addressed as set forth in the Application.

Continuing Reimbursement Agreement 3 rev. 1/11

(n)Whether or not litigation or arbitration is commenced, Applicant promises to pay all attorney fees and other costs and expenses incurred by Bank in collecting overdue amounts or construing or enforcing any provision of this Agreement or the Credit, including but not limited to reasonable attorney fees at trial, in any arbitration, appellate proceeding, proceeding under the bankruptcy code or receivership and post-judgment attorney fees incurred in enforcing any judgment.

(o)If the Credit is issued pursuant to a loan agreement or other separate agreement, the terms of such other agreement shall control in the event of a conflict between the terms of this Agreement and such other agreement.

(p)This Agreement is a continuing agreement and shall remain in effect until terminated, amended or replaced. This Agreement may be terminated by Applicant or Bank by giving notice of termination to the other and may be amended or replaced by a written agreement signed by Applicant and accepted by Bank; provided, however that no such termination, amendment or replacement shall alter or affect the undertaking of Applicant or Bank with respect to any Credit issued, or commitment to issue, prior to such termination, amendment or replacement.

(q)This Agreement, as supplemented by the laws, rules and customs incorporated herein by subpart (g) to this part, and as supplemented by the terms of the Application, if any, constitutes the entire understanding between Bank and Applicant with respect to the matters treated herein and specifically supersedes any prior or contemporaneous oral agreements.

(r)Bank is authorized, but not obligated, to record electronically or otherwise any telephone and other oral communications between Bank and Applicant.

(s)All terms and conditions on the attached Schedule 1, and any replacement Schedule 1 are hereby incorporated herein. Applicant may change the provisions of Schedule 1 by executing and delivering a new Schedule 1 to Bank.

(t)In the event Applicant submits an Application or other instruction by facsimile transmission (each, a "Faxed Document"), Applicant agrees: (i) each Faxed Document shall be deemed to be an original document and shall be effective for all purposes as if it were an original;

(ii)Applicant shall retain the original of any Faxed Document and shall deliver it to Bank upon request; (iii) if Applicant sends Bank a manually signed confirmation of a Faxed Document, Bank shall have no duty to compare it to the previously received Faxed Document nor shall it have any liability or duty to act should the contents of the written confirmation differ therefrom. Any manually signed confirmation of a Faxed Document must be conspicuously marked "Previously transmitted by facsimile". Bank will not be liable for issuance of duplicate letters of credit or amendments thereto that result from Bank’s receipt of confirmations not so marked; (iv) Bank cannot effectively determine whether a particular facsimile request is valid. Therefore Applicant shall have sole responsibility for the security of using facsimile transmissions and for any authorized or unauthorized Faxed Document received by Bank, purportedly on behalf of Applicant.

(u)Bank shall transmit to Applicant information related to Credit via secure electronic transmissions. If Applicant elects to send or receive instructions or reports from Bank via unsecured electronic means, including, without limitation, facsimile transmission, voice mail, unsecured e-mail, pager or other unsecured electronic or telephonic methods (“Electronic Transmission”), Applicant acknowledges that such Electronic Transmissions are an inherently insecure communication method due to the possibility of error, delay and observation or receipt by unauthorized personnel. Bank may rely in good faith on Applicant’s instructions regarding how and to what number or e-mail address Electronic Transmissions should be sent and may rely on any Electronic Transmission that it reasonably believes to have been initiated by the Applicant. Should Applicant elect to send or receive unsecured Electronic Transmissions to or from Bank, Applicant assumes all risks, and Bank shall not be liable for any loss, that results from the non-receipt, disclosure, alteration or unauthorized access of any such unsecured Electronic Transmission.

8.Jury Trial Waiver. To the fullest extent permitted by law, Bank and Applicant hereby agree to waive trial by jury in any judicial proceeding involving, directly or indirectly, any matter (whether in tort, contract or otherwise) in any way arising out of, related to or connected with the Credit or this Agreement. Bank and Applicant represent and warrant to each other that this jury trial waiver is knowingly, willingly and voluntarily given.

9.IMPORTANT NOTICE.ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING PREPAYMENT OF A DEBT INCLUDING VERBAL PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE.

Applicant acknowledges receipt of a completed copy of this Agreement.

IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the day and year first above written.

APPLICANT:	BANK:
THE CINCINNATI INSURANCE COMPANY	U.S. BANK NATIONAL ASSOCIATION
By:/s/ Michael Sewell	By:/s/ Bonnie S. Wiskowski
Name: Michael Sewell	Name: Bonnie S. Wiskowski
Title: Chief Financial Officer	Title: Vice President

Continuing Reimbursement Agreement 4 rev. 1/11

SCHEDULE 1

AUTHORIZATION

CONTINUING REIMBURSEMENT AGREEMENT FOR LETTERS OF CREDIT

The provisions of this Schedule 1 are hereby incorporated into and made a part of the Continuing Reimbursement Agreement for Letters of Credit ("Agreement") executed by and between U.S. BANK NATIONAL ASSOCIATION, ("Bank") and THE CINCINNATI INSURANCE COMPANY ("Applicant"), dated April 25, 2016    . Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Agreement.

1.In addition to those authorized through U.S. Bank Global Trade or other electronic letter of credit application system offered by Bank, if applicable, any one of the persons whose name, title and signature appears below is authorized to give instructions to Bank and to execute and/or transmit Applications, requests for amendments, requests for extensions and other communications of any nature regarding any Credit issued by Bank for Applicant.

NAME	TITLE	SIGNATURE
Michael Sewell	Chief Financial Officer	/s/ Michael Sewell
Theresa Hoffer	Senior Vice President	/s/ Theresa Hoffer
James Faust	Vice President	/s/ James Faust
Andrew Schnell	Secretary	/s/ Andrew Schnell

2.In addition to those authorized through U.S. Bank Global Trade or other electronic letter of credit application system offered by Bank, if applicable, the following persons are entitled to waive discrepancies contained in documents presented under a Credit. (Applicant understands that upon any such waiver, Applicant is obligated to reimburse Bank to the same extent as if the documents fully complied with the terms of the Credit.):

NAME	TITLE	TELEPHONE NUMBER
Christina Scherpenberg	Assistant Treasurer	[ ]
Abbigail Pille	Accountant	[ ]
Tom Buschelmann	Accounting Manager	[ ]

3. Bank is instructed to automatically deduct from Account No.______________ all amounts which become due under the Agreement.

4.This Schedule 1 shall be effective upon receipt by Bank. Bank may rely on this Schedule I until it has been revoked in writing by Applicant and Bank has a reasonable opportunity to act on any such revocation.

APPLICANT:	BANK:
THE CINCINNATI INSURANCE COMPANY	U.S. BANK NATIONAL ASSOCIATION
By:/s/ Michael Sewell	By:/s/ Bonnie S. Wiskowski
Name: Michael Sewell	Name: Bonnie S. Wiskowski
Title: Chief Financial Officer	Title: Vice President
Date: April 25, 2016	Date: April 25, 2016

Continuing Reimbursement Agreement 5 rev. 1/11

EX-31.A

EXHIBIT 31A

CERTIFICATION PURUANT TO SECTION 302 OF

THE SARBANES OXLEY ACT OF 2002

I, Steven J. Johnston, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cincinnati Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 26, 2016

/S/ Steven J. Johnston

Steven J. Johnston, FCAS, MAAA, CFA, CERA

President and Chief Executive Officer

EX-31.B

EXHIBIT 31B

CERTIFICATION PURUANT TO SECTION 302 OF

THE SARBANES OXLEY ACT OF 2002

I, Michael J. Sewell, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cincinnati Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 26, 2016

/S/ Michael J. Sewell

Michael J. Sewell, CPA

Chief Financial Officer, Senior Vice President and Treasurer

EX-32

EXHIBIT 32

CERTIFICATION PURUANT TO SECTION 302 OF

THE SARBANES OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with this report on Form 10-Q for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Steven J. Johnston, the chief executive officer, and Michael J. Sewell, the chief financial officer, of Cincinnati Financial Corporation each certifies that, to the best of his knowledge:

1. the report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Cincinnati Financial Corporation.

Date: April 26, 2016

/S/ Steven J. Johnston

Steven J. Johnston, FCAS, MAAA, CFA, CERA

President and Chief Executive Officer

/S/ Michael J. Sewell

Michael J. Sewell, CPA

Chief Financial Officer, Senior Vice President and Treasurer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 22, 2016
Document Documentand Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	CINF
Entity Registrant Name	CINCINNATI FINANCIAL CORP
Entity Central Index Key	0000020286
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		164,479,622

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Investments
Fixed maturities, at fair value (amortized cost: 2016—$9,442; 2015—$9,324)	$ 9,884	$ 9,650
Equity securities, at fair value (cost: 2016—$2,999; 2015—$2,938)	4,941	4,706
Other invested assets	64	67
Total investments	14,889	14,423
Cash and cash equivalents	613	544
Investment income receivable	121	129
Finance receivable	60	62
Premiums receivable	1,468	1,431
Reinsurance recoverable	532	542
Prepaid reinsurance premiums	50	54
Deferred policy acquisition costs	618	616
Land, building and equipment, net, for company use (accumulated depreciation: 2016—$465; 2015—$459)	188	185
Other assets	135	154
Separate accounts	773	748
Total assets	19,447	18,888
Insurance reserves
Loss and loss expense reserves	4,804	4,718
Life policy and investment contract reserves	2,601	2,583
Unearned premiums	2,248	2,201
Other liabilities	675	717
Deferred income tax	751	638
Note payable	35	35
Long-term debt and capital lease obligations	825	821
Separate accounts	773	748
Total liabilities	12,712	12,461
Commitments and contingent liabilities (Note 12)	0	0
Shareholders' Equity
Common stock, par value—$2 per share; (authorized: 2016 and 2015—500 million shares; issued: 2016 and 2015—198.3 million shares)	397	397
Paid-in capital	1,230	1,232
Retained earnings	4,871	4,762
Accumulated other comprehensive income	1,531	1,344
Treasury stock at cost (2016— 33.9 million shares and 2015—34.4 million shares)	(1,294)	(1,308)
Total shareholders' equity	6,735	6,427
Total liabilities and shareholders' equity	$ 19,447	$ 18,888

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Fixed maturities, amortized cost	$ 9,442	$ 9,324
Equity securities, cost	2,999	2,938
Land, building and equipment, accumulated depreciation	$ 465	$ 459
Common stock, par value	$ 2	$ 2
Common stock, authorized	500.0	500.0
Common stock, issued	198.3	198.3
Common stock, outstanding	198.3	198.3
Treasury stock, shares	33.9	34.4

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Condensed Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues [Abstract]
Earned premiums	$ 1,154	$ 1,094
Investment income, net of expenses	145	139
Realized investment gains, net	61	47
Fee revenues	3	3
Other revenues	1	2
Total revenues	1,364	1,285
Benefits and Expenses
Insurance losses and contract holders' benefits	724	749
Underwriting, acquisition and insurance expenses	360	345
Interest expense	13	13
Other operating expenses	2	4
Total benefits and expenses	1,099	1,111
Income Before Income Taxes	265	174
Provision for Income Taxes
Current	65	46
Deferred	12	0
Total provision for income taxes	77	46
Net Income	$ 188	$ 128
Per Common Share
Net income-basic (in USD per share)	$ 1.14	$ 0.78
Net income-diluted (in USD per share)	$ 1.13	$ 0.77

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net Income	$ 188	$ 128
Change in unrealized gains on investments, net of tax of $100 and $(15), respectively	190	(28)
Amortization of pension actuarial loss and prior service cost, net of tax of $1 and $0, respectively	0	1
Change in life deferred acquisition costs, life policy reserves and other, net of tax of $(1) and $0, respectively	(3)	(1)
Other comprehensive income (loss), net of tax	187	(28)
Comprehensive Income	$ 375	$ 100

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax	$ 100	$ (15)
Other Comprehensive Income Loss, Pension And Other Postretirement Benefit Plans, Net Actuarial Loss And Prior Service Cost Arising During Period, Tax	1	0
Other Comprehensive Income, Change in Life Deferred Acquisition Costs, Life Policy Reserves and Other, Tax	$ (1)	$ 0

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Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Common equities	Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income	Treasury Stock
Beginning Balance at Dec. 31, 2014		$ 397	$ 1,214	$ 4,505	$ 1,744	$ (1,287)
Share-based awards		0	(11)			19
Share-based compensation			6
Other			1			1
Net Income	$ 128			128
Dividends declared				(76)
Other comprehensive income	(28)				(28)
Shares acquired - share repurchase authorization						0
Shares acquired - share-based compensation plans						(5)
Ending Balance at Mar. 31, 2015	6,608	$ 397	1,210	4,557	1,716	(1,272)
Beginning Balance (in shares) at Dec. 31, 2014		163.7
Share-based awards (in shares)		0.6
Shares acquired - share repurchase authorization (in shares)		0.0
Shares acquired - share-based compensation plans (in shares)		0.0
Other (in shares)		0.0
Ending Balance (in shares) at Mar. 31, 2015		164.3
Beginning Balance at Dec. 31, 2015	6,427	$ 397	1,232	4,762	1,344	(1,308)
Share-based awards		0	(10)			18
Share-based compensation			7
Other			1			1
Net Income	188			188
Dividends declared				(79)
Other comprehensive income	187				187
Shares acquired - share repurchase authorization						0
Shares acquired - share-based compensation plans						(5)
Ending Balance at Mar. 31, 2016	$ 6,735	$ 397	$ 1,230	$ 4,871	$ 1,531	$ (1,294)
Beginning Balance (in shares) at Dec. 31, 2015	198.3	163.9
Share-based awards (in shares)		0.5
Shares acquired - share repurchase authorization (in shares)		0.0
Shares acquired - share-based compensation plans (in shares)		0.0
Other (in shares)		0.0
Ending Balance (in shares) at Mar. 31, 2016	198.3	164.4

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows From Operating Activities
Net Income	$ 188	$ 128
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12	14
Realized investment gains, net	(61)	(47)
Stock-based compensation	7	7
Interest credited to contract holders'	13	12
Deferred income tax expense	12	0
Changes in:
Investment income receivable	8	0
Premiums and reinsurance receivable	(23)	(22)
Deferred policy acquisition costs	(9)	2
Other assets	(12)	4
Loss and loss expense reserves	86	138
Life policy reserves	22	20
Unearned premiums	47	27
Other liabilities	(98)	(100)
Current income tax receivable/payable	65	32
Net cash provided by operating activities	257	215
Cash Flows From Investing Activities
Sale of fixed maturities	14	13
Call or maturity of fixed maturities	368	267
Sale of equity securities	132	67
Purchase of fixed maturities	(496)	(348)
Purchase of equity securities	(129)	(67)
Purchase of short-term investments	0	(25)
Investment in finance receivables	(6)	(3)
Collection of finance receivables	8	8
Investment in buildings and equipment, net	(3)	(1)
Change in other invested assets, net	4	1
Net cash used in investing activities	(108)	(88)
Cash Flows From Financing Activities
Payment of cash dividends to shareholders	(74)	(71)
Proceeds from stock options exercised	9	7
Contract holders' funds deposited	26	20
Contract holders' funds withdrawn	(39)	(33)
Excess tax benefits on stock-based compensation	2	3
Other	(4)	(4)
Net cash used in financing activities	(80)	(78)
Net change in cash and cash equivalents	69	49
Cash and cash equivalents at beginning of year	544	591
Cash and cash equivalents at end of period	613	640
Supplemental Disclosures of Cash Flow Information:
Income taxes (refunded) paid	(1)	11
Noncash Activities
Conversion of securities	3	0
Equipment acquired under capital lease obligations	9	3
Cashless exercise of stock options	$ 5	$ 5

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Accounting Policies

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Accounting Policies

NOTE 1 — Accounting Policies

The condensed consolidated financial statements include the accounts of Cincinnati Financial Corporation and its consolidated subsidiaries, each of which is wholly owned. These statements are presented in conformity with accounting principles generally accepted in the United States of America (GAAP). All intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Our actual results could differ from those estimates. Our December 31, 2015, condensed consolidated balance sheet amounts are derived from the audited financial statements but do not include all disclosures required by GAAP.

Our March 31, 2016, condensed consolidated financial statements are unaudited. Certain financial information that is included in annual financial statements prepared in accordance with GAAP is not required for interim reporting and has been condensed or omitted. We believe that we have made all adjustments, consisting only of normal recurring accruals, that are necessary for fair presentation. These condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our 2015 Annual Report on Form 10-K. The results of operations for interim periods do not necessarily indicate results to be expected for the full year.

Adopted Accounting Updates

ASU 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that performance targets that affect vesting and that could be achieved after the requisite service period be treated as performance conditions. The effective date of ASU 2014-12 was for interim and annual reporting periods beginning after December 15, 2015. The company adopted this ASU and it did not have a material impact on our company’s financial position, cash flows or results of operations.

ASU 2015-02, Consolidation-Amendments to the Consolidation Analysis

In February 2015, the FASB issued ASU 2015-02, Consolidation-Amendments to the Consolidation Analysis. ASU 2015-02 makes amendments to the current consolidation guidance, focusing mainly on the investment management industry; however, entities across all industries may be impacted. The effective date of ASU 2015-02 was for interim and annual reporting periods beginning after December 15, 2015. The company adopted this ASU and it did not have a material impact on our company’s financial position, cash flows or results of operations.

Pending Accounting Updates

ASU 2014-09 Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Insurance contracts do not fall within the scope of this ASU. The effective date of ASU 2014-09 is for annual reporting periods beginning after December 15, 2017. The ASU has not yet been adopted and will not have a material impact on our company’s financial position, cash flows or results of operations.

ASU 2015-09, Financial Services-Insurance: Disclosures about Short-Duration Contracts

In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures About Short-Duration Contracts. ASU 2015-09 requires entities to provide additional disclosures about the liability for loss and loss expense reserves to increase the transparency of significant estimates. ASU 2015-09 also requires entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for loss and loss expense reserves, including reasons for the change and the effects on the financial statements. ASU 2015-09 also requires entities to disclose a rollforward of the liability of loss and loss expense reserves for annual and interim reporting periods. The effective date of ASU 2015-09 is for annual reporting periods beginning after December 15, 2015, and interim reporting periods within annual period beginning after December 15, 2016. The ASU has not yet been adopted and will not have a material impact on our company’s financial position, cash flows or results of operations, but the ASU will require additional disclosures to our annual and interim reporting periods.

ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The effective date of ASU 2016-01 is for interim and annual reporting periods beginning after December 15, 2017. The ASU has not yet been adopted. Management is currently evaluating the impact on our company’s consolidated financial position, cash flows and results of operations.

ASU 2016-02, Leases (Topic 842)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The main provision of ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The effective date of ASU 2016-02 is for interim and annual reporting periods beginning after December 15, 2018. The ASU has not yet been adopted. Management is currently evaluating the impact on our company’s consolidated financial position, cash flows and results of operations.

ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting

In March 2016, the FASB issued ASU 2016-07, Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. ASU 2016-07 eliminates the requirement to retroactively adjust an investment, results of operations, and retained earnings once an investment qualifies for use of the equity method. It requires the equity method investor to add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting without retroactive adjustment. The effective date of ASU 2016-07 is for interim and annual reporting periods beginning after December 15, 2016. The ASU has not yet been adopted; however, it is not expected to have a material impact on our company's consolidated financial position, cash flows or results of operations.

ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies and improves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The effective date of ASU 2016-09 is for interim and annual reporting periods beginning after December 15, 2016. The ASU has not yet been adopted; however, it is not expected to have a material impact on our company's consolidated financial position, cash flows or results of operations.

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Investments

3 Months Ended

Mar. 31, 2016

Investments [Abstract]

Investments

Investments

The following table provides cost or amortized cost, gross unrealized gains, gross unrealized losses and fair value for our investment portfolio:

(Dollars in millions)	Cost or amortized cost
			Gross unrealized				Fair value
At March 31, 2016			gains		losses
Fixed maturity securities:
Corporate	$	5,395	$	295	$	66	$	5,624
States, municipalities and political subdivisions	3,499		204		—		3,703
Commercial mortgage-backed	289		11		2		298
Government-sponsored enterprises	240		—		—		240
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
United States government	4		—		—		4
Subtotal	9,442		510		68		9,884
Equity securities:
Common equities	2,810		1,954		44		4,720
Nonredeemable preferred equities	189		33		1		221
Subtotal	2,999		1,987		45		4,941
Total	$	12,441	$	2,497	$	113	$	14,825
At December 31, 2015
Fixed maturity securities:
Corporate	$	5,294	$	255	$	96	$	5,453
States, municipalities and political subdivisions	3,440		172		1		3,611
Commercial mortgage-backed	287		4		2		289
Government-sponsored enterprises	284		—		6		278
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
United States government	4		—		—		4
Subtotal	9,324		431		105		9,650
Equity securities:
Common equities	2,749		1,787		51		4,485
Nonredeemable preferred equities	189		32		—		221
Subtotal	2,938		1,819		51		4,706
Total	$	12,262	$	2,250	$	156	$	14,356

The net unrealized investment gains in our fixed-maturity portfolio are primarily the result of the continued low interest rate environment that increased the fair value of our fixed-maturity portfolio. Our commercial mortgage-backed securities had an average rating of Aa1/AA at March 31, 2016, and December 31, 2015. The seven largest unrealized investment gains in our common stock portfolio are from Honeywell International Incorporated (NYSE:HON), Exxon Mobil Corporation (NYSE:XOM), The Procter & Gamble Company (NYSE:PG), BlackRock Inc. (NYSE:BLK), Johnson and Johnson (NYSE:JNJ), Hasbro Incorporated (Nasdaq:HAS), and Microsoft Corporation (Nasdaq:MSFT), which had a combined gross unrealized gain of $597 million. At March 31, 2016, Apple was our largest single common stock holding with a fair value of $153 million, whichwas3.2 percent of our publicly traded common stock portfolio and 1.0 percent of the total investment portfolio.

The table below provides fair values and gross unrealized losses by investment category and by the duration of the securities’ continuous unrealized loss positions:

(Dollars in millions)	Less than 12 months				12 months or more				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
At March 31, 2016
Fixed maturity securities:
Corporate	$	801	$	43	$	153	$	23	$	954	$	66
States, municipalities and political subdivisions	28		—		4		—		32		—
Commercial mortgage-backed	49		1		2		1		51		2
Government-sponsored enterprises	29		—		19		—		48		—
Subtotal	907		44		178		24		1,085		68
Equity securities:
Common equities	345		44		—		—		345		44
Nonredeemable preferred equities	42		1		—		—		42		1
Subtotal	387		45		—		—		387		45
Total	$	1,294	$	89	$	178	$	24	$	1,472	$	113
At December 31, 2015
Fixed maturity securities:
Corporate	$	1,099	$	63	$	133	$	33	$	1,232	$	96
States, municipalities and political subdivisions	47		1		22		—		69		1
Commercial mortgage-backed	103		2		2		—		105		2
Government-sponsored enterprises	100		2		127		4		227		6
Subtotal	1,349		68		284		37		1,633		105
Equity securities:
Common equities	270		51		—		—		270		51
Nonredeemable preferred equities	35		—		—		—		35		—
Subtotal	305		51		—		—		305		51
Total	$	1,654	$	119	$	284	$	37	$	1,938	$	156

Contractual maturity dates for fixed-maturity investments were:

(Dollars in millions)	Amortized cost		Fair value		% of fair value
At March 31, 2016
Maturity dates:
Due in one year or less	$	481	$	488	4.9	%
Due after one year through five years	3,017		3,202		32.4
Due after five years through ten years	3,676		3,797		38.4
Due after ten years	2,268		2,397		24.3
Total	$	9,442	$	9,884	100.0	%

Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties.

The following table provides investment income, realized investment gains and losses, the change in unrealized investment gains and losses, and other items:

(Dollars in millions)	Three months ended March 31,
	2016			2015
Investment income:
Interest	$	109		$	105
Dividends	37			36
Other	1			—
Total	147			141
Less investment expenses	2			2
Total	$	145		$	139
Realized investment gains and losses summary:
Fixed maturities:
Gross realized gains	$	3		$	3
Gross realized losses	(1		)	—
Other-than-temporary impairments	(2		)	—
Equity securities:
Gross realized gains	62			44
Gross realized losses	(1		)	(1		)
Other-than-temporary impairments	—			—
Other	—			1
Total	$	61		$	47
Change in unrealized investment gains and losses:
Fixed maturities	$	116		$	46
Equity securities	174			(89		)
Less income taxes	(100		)	15
Total	$	190		$	(28	)

During the three months ended March 31, 2016, there were no equity securities and two fixed-maturity securities other-than-temporarily impaired. There were no credit losses on fixed-maturity securities for which a portion of other-than-temporary impairment (OTTI) has been recognized in other comprehensive income for the three months ended March 31, 2016 and 2015. At March 31, 2016, 44 fixed-maturity investments with a total unrealized loss of $24 million had been in an unrealized loss position for 12 months or more. Of that total, two fixed-maturity investments had fair values below 70 percent of amortized cost. There were no equity investments in an unrealized loss position for 12 months or more as of March 31, 2016.

During 2015, we other-than-temporarily impaired 20 securities. At December 31, 2015, 69 fixed-maturity investments with a total unrealized loss of $37 million had been in an unrealized loss position for 12 months or more. Of that total, five fixed-maturity investments had fair values below 70 percent of amortized cost. There were no equity security investments in an unrealized loss position for 12 months or more as of December 31, 2015.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

In accordance with accounting guidance for fair value measurements and disclosures, we categorized our financial instruments, based on the priority of the observable and market-based data for the valuation technique used, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3). When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest observable input that has a significant impact on fair value measurement is used. Our valuation techniques have not changed from those used at December 31, 2015, and ultimately management determines fair value. See our 2015 Annual Report on Form 10-K, Item 8, Note 3, Fair Value Measurements, Page 133, for information on characteristics and valuation techniques used in determining fair value.

Fair Value Disclosures for Assets

The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at March 31, 2016, and December 31, 2015. We do not have any material liabilities carried at fair value. There were no transfers between Level 1 and Level 2.

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Fixed maturities, available for sale:
Corporate	$	—	$	5,573	$	51	$	5,624
States, municipalities and political subdivisions	—		3,703		—		3,703
Commercial mortgage-backed	—		298		—		298
Government-sponsored enterprises	—		240		—		240
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		5		—		5
United States government	4		—		—		4
Subtotal	4		9,829		51		9,884
Common equities, available for sale	4,720		—		—		4,720
Nonredeemable preferred equities, available for sale	—		219		2		221
Separate accounts taxable fixed maturities	—		755		1		756
Top Hat savings plan mutual funds and common   equity (included in Other assets)	22		—		—		22
Total	$	4,746	$	10,803	$	54	$	15,603
At December 31, 2015
Fixed maturities, available for sale:
Corporate	$	—	$	5,402	$	51	$	5,453
States, municipalities and political subdivisions	—		3,611		—		3,611
Commercial mortgage-backed	—		289		—		289
Government-sponsored enterprises	—		278		—		278
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		5		—		5
United States government	4		—		—		4
Subtotal	4		9,595		51		9,650
Common equities, available for sale	4,485		—		—		4,485
Nonredeemable preferred equities, available for sale	—		218		3		221
Separate accounts taxable fixed maturities	—		736		1		737
Top Hat savings plan mutual funds and common   equity (included in Other assets)	21		—		—		21
Total	$	4,510	$	10,549	$	55	$	15,114

Each financial instrument that was deemed to have significant unobservable inputs when determining valuation is identified in the following tables by security type with a summary of changes in fair value as of March 31, 2016. Total Level 3 assets continue to be less than 1 percent of financial assets measured at fair value in the condensed consolidated balance sheets. Assets presented in the table below were valued based primarily on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to us.

The following table provides the change in Level 3 assets for the three months ended March 31:

(Dollars in millions)	Asset fair value measurements using significant unobservable inputs (Level 3)
		Corporate fixed maturities			Separate accounts taxable fixed maturities		States, municipalities and political subdivisions fixed maturities		Nonredeemable preferred equities			Total
Beginning balance, January 1, 2016		$	51		$	1	$	—	$	3		$	55
Total gains or losses (realized/unrealized):
Included in net income		—			—		—		—			—
Included in other comprehensive income		—			—		—		(1		)	(1		)
Purchases		5			—		—		—			5
Sales		—			—		—		—			—
Transfers into Level 3		—			—		—		—			—
Transfers out of Level 3		(5		)	—		—		—			(5		)
Ending balance, March 31, 2016		$	51		$	1	$	—	$	2		$	54
Beginning balance, January 1, 2015		$	18		$	—	$	—	$	2		$	20
Total gains or losses (realized/unrealized):
Included in net income		—			—		—		—			—
Included in other comprehensive income		—			—		—		—			—
Purchases		—			—		—		—			—
Sales		—			—		—		—			—
Transfers into Level 3		—			—		1		—			1
Transfers out of Level 3		—			—		—		—			—
Ending balance, March 31, 2015		$	18		$	—	$	1	$	2		$	21

Additional disclosures for the Level 3 category are not material.

Fair Value Disclosures for Assets and Liabilities Not Carried at Fair Value

The disclosures below are presented to provide timely information about the effects of current market conditions on financial instruments that are not reported at fair value in our condensed consolidated financial statements.

This table summarizes the book value and principal amounts of our long-term debt:

(Dollars in millions)				Book value				Principal amount
				March 31,		December 31,		March 31,		December 31,
Interest rate		Year of issue		2016		2015		2016		2015
6.900	%	1998	Senior debentures, due 2028	$	26	$	26	$	28	$	28
6.920	%	2005	Senior debentures, due 2028	391		391		391		391
6.125	%	2004	Senior notes, due 2034	369		369		374		374
			Total	$	786	$	786	$	793	$	793

The following table shows fair values of our note payable and long-term debt:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Note payable	$	—	$	35	$	—	$	35
6.900% senior debentures, due 2028	—		33		—		33
6.920% senior debentures, due 2028	—		492		—		492
6.125% senior notes, due 2034	—		437		—		437
Total	$	—	$	997	$	—	$	997
At December 31, 2015
Note payable	$	—	$	35	$	—	$	35
6.900% senior debentures, due 2028	—		31		—		31
6.920% senior debentures, due 2028	—		480		—		480
6.125% senior notes, due 2034	—		425		—		425
Total	$	—	$	971	$	—	$	971

The following table shows the fair value of our life policy loans included in other invested assets:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Life policy loans	$	—	$	—	$	42	$	42
At December 31, 2015
Life policy loans	$	—	$	—	$	40	$	40

Outstanding principal and interest for these life policy loans totaled $30 million and $31 million at March 31, 2016, and December 31, 2015, respectively.

The following table shows fair values of our deferred annuities and structured settlements included in life policy and investment contract reserves:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Deferred annuities	$	—	$	—	$	917	$	917
Structured settlements	—		212		—		212
Total	$	—	$	212	$	917	$	1,129
At December 31, 2015
Deferred annuities	$	—	$	—	$	886	$	886
Structured settlements	—		208		—		208
Total	$	—	$	208	$	886	$	1,094

Recorded reserves for the deferred annuities were $860 million at March 31, 2016 and December 31, 2015. Recorded reserves for the structured settlements were $175 million and $174 million at March 31, 2016, and December 31, 2015, respectively.

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Property Casualty Loss and Loss Expenses

3 Months Ended

Mar. 31, 2016

Premiums Written, Net [Abstract]

Property Casualty Loss And Loss Expenses

Property Casualty Loss and Loss Expenses

This table summarizes activity for our consolidated property casualty loss and loss expense reserves:

(Dollars in millions)	Three months ended March 31,
	2016			2015
Gross loss and loss expense reserves, beginning of period	$	4,660		$	4,438
Less reinsurance recoverable	281			282
Net loss and loss expense reserves, beginning of period	4,379			4,156
Net incurred loss and loss expenses related to:
Current accident year	723			711
Prior accident years	(62		)	(22		)
Total incurred	661			689
Net paid loss and loss expenses related to:
Current accident year	146			147
Prior accident years	416			399
Total paid	562			546
Net loss and loss expense reserves, end of period	4,478			4,299
Plus reinsurance recoverable	272			278
Gross loss and loss expense reserves, end of period	$	4,750		$	4,577

We use actuarial methods, models and judgment to estimate, as of a financial statement date, the property casualty loss and loss expense reserves required to pay for and settle all outstanding insured claims, including incurred but not reported (IBNR) claims, as of that date. The actuarial estimate is subject to review and adjustment by an inter-departmental committee that includes actuarial management that is familiar with relevant company and industry business, claims and underwriting trends, as well as general economic and legal trends that could affect future loss and loss expense payments. The amount we will actually have to pay for claims can be highly uncertain. This uncertainty, together with the size of our reserves, makes the loss and loss expense reserves our most significant estimate. The reserve for loss and loss expenses in the condensed consolidated balance sheets also included $54 million at March 31, 2016, and $46 million at March 31, 2015, for certain life and health loss and loss expense reserves.

For the three months endedMarch 31, 2016, we experienced $62 million of favorable development on prior accident years, including $29 million of favorable development in commercial lines, $18 million of favorable development in personal lines, $14 million of favorable development in excess and surplus lines, and $1 million of favorable development in our reinsurance assumed operations. This included $7 million from favorable development of catastrophe losses for the three months endedMarch 31, 2016. We recognized favorable reserve development during the three months endedMarch 31, 2016, of $13 million for the workers' compensation line,

$8 million for the commercial property line, $13 million for the other commercial lines and $8 million for the homeowner line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. Our commercial auto line developed unfavorably by $8 million for the three months ended March 31, 2016, due to higher loss cost effects in recent accident years, resulting in an increase of our reserve estimate for claims that have not yet been settled.

For the three months endedMarch 31, 2015, we experienced $22 million of favorable development on prior accident years, including $14 million of favorable development in commercial lines, $3 million of favorable development in personal lines and $5 million of favorable development in excess and surplus lines. This included $11 million from favorable development of catastrophe losses for the three months endedMarch 31, 2015. We recognized favorable development during the three months ended March 31, 2015, of $15 million for the workers' compensation line, $11 million for the commercial property line and $7 million for the homeowner line due to reduced uncertainty of prior accident year loss and loss adjustment expenses for these lines. Our commercial auto line developed unfavorably by $11 million for the three months ended March 31, 2015, due to higher loss cost effects in recent accident years, resulting in an increase of our reserve estimate for claims that have not yet been settled.

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Life Policy and Investment Contract Reserves

3 Months Ended

Mar. 31, 2016

Liability for Future Policy Benefits [Abstract]

Life Policy And Investment Contract Reserves

Life Policy and Investment Contract Reserves

We establish the reserves for traditional life insurance policies based on expected expenses, mortality, morbidity, withdrawal rates, timing of claim presentation and investment yields, including a provision for uncertainty. Once these assumptions are established, they generally are maintained throughout the lives of the contracts. We use both our own experience and industry experience, adjusted for historical trends, in arriving at our assumptions for expected mortality, morbidity and withdrawal rates as well as for expected expenses. We base our assumptions for expected investment income on our own experience adjusted for current economic conditions.

We establish reserves for the company’s universal life, deferred annuity and structured settlement policies equal to the cumulative account balances, which include premium deposits plus credited interest less charges and withdrawals. Some of our universal life policies contain no-lapse guarantee provisions. For these policies, we establish a reserve in addition to the account balance, based on expected no-lapse guarantee benefits and expected policy assessments.

This table summarizes our life policy and investment contract reserves:

(Dollars in millions)	March 31, 2016		December 31, 2015
Ordinary/traditional life	$	956	$	943
Deferred annuities	860		860
Universal life	561		558
Structured settlements	175		174
Other	49		48
Total life policy and investment contract reserves	$	2,601	$	2,583

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Deferred Acquisition Costs

3 Months Ended

Mar. 31, 2016

Deferred Costs [Abstract]

Deferred Acquisition Costs

Deferred Policy Acquisition Costs

Expenses directly related to successfully acquired insurance policies – primarily commissions, premium taxes and underwriting costs – are deferred and amortized over the terms of the policies. We update our acquisition cost assumptions periodically to reflect actual experience, and we evaluate the costs for recoverability. The table below shows the deferred policy acquisition costs and asset reconciliation.

(Dollars in millions)	Three months ended March 31,
	2016			2015
Property casualty:
Deferred policy acquisition costs asset, beginning of period	$	388		$	379
Capitalized deferred policy acquisition costs	210			196
Amortized deferred policy acquisition costs	(201		)	(198		)
Deferred policy acquisition costs asset, end of period	$	397		$	377
Life:
Deferred policy acquisition costs asset, beginning of period	$	228		$	199
Capitalized deferred policy acquisition costs	12			11
Amortized deferred policy acquisition costs	(11		)	(11		)
Amortized shadow deferred policy acquisition costs	(8		)	(5		)
Deferred policy acquisition costs asset, end of period	$	221		$	194
Consolidated:
Deferred policy acquisition costs asset, beginning of period	$	616		$	578
Capitalized deferred policy acquisition costs	222			207
Amortized deferred policy acquisition costs	(212		)	(209		)
Amortized shadow deferred policy acquisition costs	(8		)	(5		)
Deferred policy acquisition costs asset, end of period	$	618		$	571

No premium deficiencies were recorded in the condensed consolidated statements of income, as the sum of the anticipated loss and loss adjustment expenses, policyholder dividends and unamortized deferred acquisition expenses did not exceed the related unearned premiums and anticipated investment income.

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2016

Accumulated Other Comprehensive Income [Abstract]

Comprehensive Income (Loss) Note

Accumulated Other Comprehensive Income

Accumulated other comprehensive income (AOCI) includes changes in unrealized gains and losses on investments, changes in pension obligations and changes in life deferred acquisition costs, life policy reserves and other as follows:

(Dollars in millions)	Three months ended March 31,
	2016									2015
	Before tax			Income tax			Net			Before tax			Income tax			Net
Investments:
AOCI, beginning of period	$	2,094		$	722		$	1,372		$	2,719		$	942		$	1,777
OCI excluding realized gains recognized in net income	351			121			230			3			1			2
Realized gains recognized in net income	(61		)	(21		)	(40		)	(46		)	(16		)	(30		)
OCI	290			100			190			(43		)	(15		)	(28		)
AOCI, end of period	$	2,384		$	822		$	1,562		$	2,676		$	927		$	1,749
Pension obligations:
AOCI, beginning of period	$	(42	)	$	(14	)	$	(28	)	$	(36	)	$	(12	)	$	(24	)
OCI excluding amortization recognized in net income	—			—			—			—			—			—
Amortization recognized in net income	1			1			—			1			—			1
OCI	1			1			—			1			—			1
AOCI, end of period	$	(41	)	$	(13	)	$	(28	)	$	(35	)	$	(12	)	$	(23	)
Life deferred acquisition costs, life policy reserves and other:
AOCI, beginning of period	$	1		$	1		$	—		$	(12	)	$	(3	)	$	(9	)
OCI excluding realized gains recognized in net income	(4		)	(1		)	(3		)	(1		)	(1		)	—
Realized gains recognized in net income	—			—			—			(1		)	—			(1		)
OCI	(4		)	(1		)	(3		)	(2		)	(1		)	(1		)
AOCI, end of period	$	(3	)	$	—		$	(3	)	$	(14	)	$	(4	)	$	(10	)
Summary of AOCI:
AOCI, beginning of period	$	2,053		$	709		$	1,344		$	2,671		$	927		$	1,744
Investments OCI	290			100			190			(43		)	(15		)	(28		)
Pension obligations OCI	1			1			—			1			—			1
Life deferred acquisition costs, life policy reserves and other OCI	(4		)	(1		)	(3		)	(2		)	(1		)	(1		)
Total OCI	287			100			187			(44		)	(16		)	(28		)
AOCI, end of period	$	2,340		$	809		$	1,531		$	2,627		$	911		$	1,716

Investments realized gains and life deferred acquisition costs, life policy reserves and other realized gains are recorded in the realized investment gains, net, line item in the condensed consolidated statements of income. Amortization on pension obligations is recorded in the insurance losses and contract holders' benefits and underwriting, acquisition and insurance expenses in the condensed consolidated statements of income.

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Reinsurance

3 Months Ended

Mar. 31, 2016

Reinsurance Disclosures [Abstract]

Reinsurance

Reinsurance

Primary components of our property casualty operations assumed reinsurance include involuntary and voluntary assumed as well as contracts from our reinsurance assumed operations, known as Cincinnati Re^SM. Primary components of our ceded reinsurance include a property per risk treaty, property excess treaty, casualty per occurrence treaty, casualty excess treaty, property catastrophe treaty and catastrophe bonds and retrocessions on our reinsurance assumed operations. Management's decisions about the appropriate level of risk retention are affected by various factors, including changes in our underwriting practices, capacity to retain risks and reinsurance market conditions.

Our condensed consolidated statements of income include earned consolidated property casualty insurance premiums on assumed and ceded business: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Direct earned premiums	$	1,119		$	1,076
Assumed earned premiums	15			2
Ceded earned premiums	(38		)	(37		)
Earned premiums	$	1,096		$	1,041

Our condensed consolidated statements of income include incurred consolidated property casualty insurance loss and loss expenses on assumed and ceded business:

(Dollars in millions)	Three months ended March 31,
	2016		2015
Direct incurred loss and loss expenses	$	648	$	691
Assumed incurred loss and loss expenses	10		(1		)
Ceded incurred loss and loss expenses	3		(1		)
Incurred loss and loss expenses	$	661	$	689

Our ceded incurred results generally vary with our catastrophe experience.

Our life insurance company purchases reinsurance for protection of a portion of the risk that is written. Primary components of our life reinsurance program include individual mortality coverage and aggregate catastrophe and accidental death coverage in excess of certain deductibles.

Our condensed consolidated statements of income include earned life insurance premiums on ceded business: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Direct earned premiums	$	71		$	65
Ceded earned premiums	(13		)	(12		)
Earned premiums	$	58		$	53

Our condensed consolidated statements of income include life insurance contract holders' benefits incurred on ceded business: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Direct contract holders' benefits incurred	$	76		$	72
Ceded contract holders' benefits incurred	(13		)	(12		)
Contract holders' benefits incurred	$	63		$	60

The ceded benefits incurred can vary depending on the type of life insurance policy held and the year the policy was sold.

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Income Taxes

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

As of March 31, 2016, and December 31, 2015, we had no liability for unrecognized tax benefits.

The differences between the 35 percent statutory federal income tax rate and our effective income tax rate were as follows:

(Dollars in millions)	Three months ended March 31,
	2016					2015
Tax at statutory rate:	$	93		35.0	%	$	61		35.0	%
Increase (decrease) resulting from:
Tax-exempt income from municipal bonds	(9		)	(3.4	)	(8		)	(4.6	)
Dividend received exclusion	(8		)	(3.0	)	(8		)	(4.6	)
Other	1			0.5		1			0.6
Provision for income taxes	$	77		29.1	%	$	46		26.4	%

The provision for federal income taxes is based upon filing a consolidated income tax return for the company and its subsidiaries. As of March 31, 2016, we had no operating or capital loss carry forwards.

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Net Income Per Common Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Net Income Per Common Share

Basic earnings per share are computed based on the weighted average number of common shares outstanding. Diluted earnings per share are computed based on the weighted average number of common and dilutive potential common shares outstanding using the treasury stock method. The table shows calculations for basic and diluted earnings per share:

(In millions except per share data)	Three months ended March 31,
	2016		2015
Numerator:
Net income—basic and diluted	$	188	$	128
Denominator:
Basic weighted-average common shares outstanding	164.2		164.0
Effect of share-based awards:
Stock options	1.0		1.0
Nonvested shares	0.8		0.6
Diluted weighted-average shares	166.0		165.6
Earnings per share:
Basic	$	1.14	$	0.78
Diluted	1.13		0.77
Number of anti-dilutive share-based awards:	0.4		0.7

The sources of dilution of our common shares are certain equity-based awards. See our 2015 Annual Report on Form 10-K, Item 8, Note 17, Share-Based Associate Compensation Plans, Page 152, for information about equity-based awards. The above table shows the number of anti-dilutive share-based awards for the three months endedMarch 31, 2016 and 2015. We did not include these share-based awards in the computation of net income per common share (diluted) because their exercise would have anti-dilutive effects.

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Employee Retirement Benefits

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Employee Retirement Benefits

Employee Retirement Benefits

The following summarizes the components of net periodic benefit cost for our qualified and supplemental pension plans:

(Dollars in millions)	Three months ended March 31,
	2016			2015
Service cost	$	3		$	3
Interest cost	3			3
Expected return on plan assets	(5		)	(4		)
Amortization of actuarial loss and prior service cost	1			1
Net periodic benefit cost	$	2		$	3

See our 2015 Annual Report on Form 10-K, Item 8, Note 13, Employee Retirement Benefits, Page 146, for information on our retirement benefits. We made matching contributions totaling $4 million to our 401(k) and Top Hat savings plans during both the first quarters of 2016 and 2015.

We contributed $5 million to our qualified pension plan during the first quarter of 2016. We do not anticipate further contributions to our qualified pension plan during the remainder of 2016.

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Commitments and Contingent Liabilities

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingent Liabilities

Commitments and Contingent Liabilities

In the ordinary course of conducting business, the company and its subsidiaries are named as defendants in various legal proceedings. Most of these proceedings are claims litigation involving the company's insurance subsidiaries in which the company is either defending or providing indemnity for third-party claims brought against insureds or litigating first-party coverage claims. The company accounts for such activity throughthe establishment of unpaid loss and loss expense reserves. We believe that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, is immaterial to our consolidated financial condition, results of operations and cash flows.

The company and its subsidiaries also are occasionally involved in other legal and regulatory proceedings, some of which assert claims for substantial amounts. These actions include, among others, putative class actions seeking certification of a state or national class. Such proceedings have alleged, for example, breach of an alleged duty to search national databases to ascertain unreported deaths of insureds underlife insurance policies. The company's insurance subsidiaries also are occasionally parties to individual actions in which extra-contractual damages, punitive damages or penalties are sought, such asclaims alleging bad faith handling of insuranceclaims or writing unauthorized coverage or claims alleging discrimination by former or current associates.

On a quarterly basis, we review these outstanding matters. Under current accounting guidance, we establish accruals when it is probable that a loss has been incurred and we can reasonably estimate its potential exposure. The company accounts for such probable and estimable losses, if any, through the establishment of legal expense reserves. Based on our quarterly review, we believe that our accruals for probable and estimable losses are reasonable and that the amounts accrued do not have a material effect on our consolidated financial condition or results of operations. However, if any one or more of these matters results in a judgment against us or settlement for an amount that is significantly greater than the amount accrued, the resulting liability could have a material effect on the company's consolidated results of operations or cash flows. Based on our most recent review, our estimate for any other matters for which the risk of loss is not probable, but more than remote, is less than $1 million.

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Segment Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

We operate primarily in two industries, property casualty insurance and life insurance. We regularly review our reporting segments to make decisions about allocating resources and assessing performance. Our reporting segments are:

• Commercial lines insurance

• Personal lines insurance

• Excess and surplus lines insurance

• Life insurance

• Investments

We report as Other the noninvestment operations of the parent company and its noninsurer subsidiary, CFC Investment Company and Cincinnati Re, our reinsurance assumed operations. See our 2015 Annual Report on Form 10-K, Item 8, Note 18, Segment Information, Page 155, for a description of revenue, income or loss before income taxes and identifiable assets for each of the five segments.

Segment information is summarized in the following table: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Revenues:
Commercial lines insurance
Commercial casualty	$	257		$	244
Commercial property	214			196
Commercial auto	144			136
Workers' compensation	89			93
Other commercial	56			64
Commercial lines insurance premiums	760			733
Fee revenues	1			1
Total commercial lines insurance	761			734
Personal lines insurance
Personal auto	131			123
Homeowner	119			114
Other personal	33			31
Personal lines insurance premiums	283			268
Fee revenues	1			1
Total personal lines insurance	284			269
Excess and surplus lines insurance	43			40
Life insurance premiums	58			53
Separate account investment management fees	1			1
Total life insurance	59			54
Investments
Investment income, net of expenses	145			139
Realized investment gains, net	61			47
Total investment revenue	206			186
Other	11			2
Total revenues	$	1,364		$	1,285
Income (loss) before income taxes:
Insurance underwriting results
Commercial lines insurance	$	50		$	26
Personal lines insurance	28			(3		)
Excess and surplus lines insurance	17			4
Life insurance	(1		)	(3		)
Investments	184			165
Other	(13		)	(15		)
Total income before income taxes	$	265		$	174

Identifiable assets:	March 31, 2016		December 31, 2015
Property casualty insurance	$	2,699	$	2,717
Life insurance	1,372		1,325
Investments	14,978		14,485
Other	398		361
Total	$	19,447	$	18,888

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Accounting Policies Pending Accounting Updates (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Compensation Related Costs, Policy [Policy Text Block]

ASU 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that performance targets that affect vesting and that could be achieved after the requisite service period be treated as performance conditions. The effective date of ASU 2014-12 was for interim and annual reporting periods beginning after December 15, 2015. The company adopted this ASU and it did not have a material impact on our company’s financial position, cash flows or results of operations.

Consolidation, Policy [Policy Text Block]

ASU 2015-02, Consolidation-Amendments to the Consolidation Analysis

In February 2015, the FASB issued ASU 2015-02, Consolidation-Amendments to the Consolidation Analysis. ASU 2015-02 makes amendments to the current consolidation guidance, focusing mainly on the investment management industry; however, entities across all industries may be impacted. The effective date of ASU 2015-02 was for interim and annual reporting periods beginning after December 15, 2015. The company adopted this ASU and it did not have a material impact on our company’s financial position, cash flows or results of operations.

Revenue Recognition, Policy [Policy Text Block]

ASU 2014-09 Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Insurance contracts do not fall within the scope of this ASU. The effective date of ASU 2014-09 is for annual reporting periods beginning after December 15, 2017. The ASU has not yet been adopted and will not have a material impact on our company’s financial position, cash flows or results of operations.

Short-Duration Contracts, Policy [Policy Text Block]

ASU 2015-09, Financial Services-Insurance: Disclosures about Short-Duration Contracts

In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures About Short-Duration Contracts. ASU 2015-09 requires entities to provide additional disclosures about the liability for loss and loss expense reserves to increase the transparency of significant estimates. ASU 2015-09 also requires entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for loss and loss expense reserves, including reasons for the change and the effects on the financial statements. ASU 2015-09 also requires entities to disclose a rollforward of the liability of loss and loss expense reserves for annual and interim reporting periods. The effective date of ASU 2015-09 is for annual reporting periods beginning after December 15, 2015, and interim reporting periods within annual period beginning after December 15, 2016. The ASU has not yet been adopted and will not have a material impact on our company’s financial position, cash flows or results of operations, but the ASU will require additional disclosures to our annual and interim reporting periods.

Fair Value of Financial Instruments, Policy [Policy Text Block]

ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The effective date of ASU 2016-01 is for interim and annual reporting periods beginning after December 15, 2017. The ASU has not yet been adopted. Management is currently evaluating the impact on our company’s consolidated financial position, cash flows and results of operations.

Lease, Policy [Policy Text Block]

ASU 2016-02, Leases (Topic 842)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The main provision of ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The effective date of ASU 2016-02 is for interim and annual reporting periods beginning after December 15, 2018. The ASU has not yet been adopted. Management is currently evaluating the impact on our company’s consolidated financial position, cash flows and results of operations.

Equity Method Investments, Policy [Policy Text Block]

ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting

In March 2016, the FASB issued ASU 2016-07, Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. ASU 2016-07 eliminates the requirement to retroactively adjust an investment, results of operations, and retained earnings once an investment qualifies for use of the equity method. It requires the equity method investor to add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting without retroactive adjustment. The effective date of ASU 2016-07 is for interim and annual reporting periods beginning after December 15, 2016. The ASU has not yet been adopted; however, it is not expected to have a material impact on our company's consolidated financial position, cash flows or results of operations.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies and improves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The effective date of ASU 2016-09 is for interim and annual reporting periods beginning after December 15, 2016. The ASU has not yet been adopted; however, it is not expected to have a material impact on our company's consolidated financial position, cash flows or results of operations.

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Investments (Tables)

3 Months Ended

Mar. 31, 2016

Investments [Abstract]

Analysis Of Cost Or Amortized Cost, Gross Unrealized Gains And Losses And Fair Value for Investments

The following table provides cost or amortized cost, gross unrealized gains, gross unrealized losses and fair value for our investment portfolio:

(Dollars in millions)	Cost or amortized cost
			Gross unrealized				Fair value
At March 31, 2016			gains		losses
Fixed maturity securities:
Corporate	$	5,395	$	295	$	66	$	5,624
States, municipalities and political subdivisions	3,499		204		—		3,703
Commercial mortgage-backed	289		11		2		298
Government-sponsored enterprises	240		—		—		240
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
United States government	4		—		—		4
Subtotal	9,442		510		68		9,884
Equity securities:
Common equities	2,810		1,954		44		4,720
Nonredeemable preferred equities	189		33		1		221
Subtotal	2,999		1,987		45		4,941
Total	$	12,441	$	2,497	$	113	$	14,825
At December 31, 2015
Fixed maturity securities:
Corporate	$	5,294	$	255	$	96	$	5,453
States, municipalities and political subdivisions	3,440		172		1		3,611
Commercial mortgage-backed	287		4		2		289
Government-sponsored enterprises	284		—		6		278
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
United States government	4		—		—		4
Subtotal	9,324		431		105		9,650
Equity securities:
Common equities	2,749		1,787		51		4,485
Nonredeemable preferred equities	189		32		—		221
Subtotal	2,938		1,819		51		4,706
Total	$	12,262	$	2,250	$	156	$	14,356

Fair Values And Unrealized Losses by Investment Category And By The Duration Of The Securities' Continuous Unrealized Loss Position

The table below provides fair values and gross unrealized losses by investment category and by the duration of the securities’ continuous unrealized loss positions:

(Dollars in millions)	Less than 12 months				12 months or more				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
At March 31, 2016
Fixed maturity securities:
Corporate	$	801	$	43	$	153	$	23	$	954	$	66
States, municipalities and political subdivisions	28		—		4		—		32		—
Commercial mortgage-backed	49		1		2		1		51		2
Government-sponsored enterprises	29		—		19		—		48		—
Subtotal	907		44		178		24		1,085		68
Equity securities:
Common equities	345		44		—		—		345		44
Nonredeemable preferred equities	42		1		—		—		42		1
Subtotal	387		45		—		—		387		45
Total	$	1,294	$	89	$	178	$	24	$	1,472	$	113
At December 31, 2015
Fixed maturity securities:
Corporate	$	1,099	$	63	$	133	$	33	$	1,232	$	96
States, municipalities and political subdivisions	47		1		22		—		69		1
Commercial mortgage-backed	103		2		2		—		105		2
Government-sponsored enterprises	100		2		127		4		227		6
Subtotal	1,349		68		284		37		1,633		105
Equity securities:
Common equities	270		51		—		—		270		51
Nonredeemable preferred equities	35		—		—		—		35		—
Subtotal	305		51		—		—		305		51
Total	$	1,654	$	119	$	284	$	37	$	1,938	$	156

Investments Classified by Contractual Maturity Date [Table Text Block]

Contractual maturity dates for fixed-maturity investments were:

(Dollars in millions)	Amortized cost		Fair value		% of fair value
At March 31, 2016
Maturity dates:
Due in one year or less	$	481	$	488	4.9	%
Due after one year through five years	3,017		3,202		32.4
Due after five years through ten years	3,676		3,797		38.4
Due after ten years	2,268		2,397		24.3
Total	$	9,442	$	9,884	100.0	%

Investment Income, Realized Investment Gains And Losses And Change In Unrealized Investment Gains And Losses

The following table provides investment income, realized investment gains and losses, the change in unrealized investment gains and losses, and other items:

(Dollars in millions)	Three months ended March 31,
	2016			2015
Investment income:
Interest	$	109		$	105
Dividends	37			36
Other	1			—
Total	147			141
Less investment expenses	2			2
Total	$	145		$	139
Realized investment gains and losses summary:
Fixed maturities:
Gross realized gains	$	3		$	3
Gross realized losses	(1		)	—
Other-than-temporary impairments	(2		)	—
Equity securities:
Gross realized gains	62			44
Gross realized losses	(1		)	(1		)
Other-than-temporary impairments	—			—
Other	—			1
Total	$	61		$	47
Change in unrealized investment gains and losses:
Fixed maturities	$	116		$	46
Equity securities	174			(89		)
Less income taxes	(100		)	15
Total	$	190		$	(28	)

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Value Hierarchy for Assets Measured at Fair Value on a Recurring Basis

The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at March 31, 2016, and December 31, 2015. We do not have any material liabilities carried at fair value. There were no transfers between Level 1 and Level 2.

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Fixed maturities, available for sale:
Corporate	$	—	$	5,573	$	51	$	5,624
States, municipalities and political subdivisions	—		3,703		—		3,703
Commercial mortgage-backed	—		298		—		298
Government-sponsored enterprises	—		240		—		240
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		5		—		5
United States government	4		—		—		4
Subtotal	4		9,829		51		9,884
Common equities, available for sale	4,720		—		—		4,720
Nonredeemable preferred equities, available for sale	—		219		2		221
Separate accounts taxable fixed maturities	—		755		1		756
Top Hat savings plan mutual funds and common   equity (included in Other assets)	22		—		—		22
Total	$	4,746	$	10,803	$	54	$	15,603
At December 31, 2015
Fixed maturities, available for sale:
Corporate	$	—	$	5,402	$	51	$	5,453
States, municipalities and political subdivisions	—		3,611		—		3,611
Commercial mortgage-backed	—		289		—		289
Government-sponsored enterprises	—		278		—		278
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		5		—		5
United States government	4		—		—		4
Subtotal	4		9,595		51		9,650
Common equities, available for sale	4,485		—		—		4,485
Nonredeemable preferred equities, available for sale	—		218		3		221
Separate accounts taxable fixed maturities	—		736		1		737
Top Hat savings plan mutual funds and common   equity (included in Other assets)	21		—		—		21
Total	$	4,510	$	10,549	$	55	$	15,114

Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

The following table provides the change in Level 3 assets for the three months ended March 31:

(Dollars in millions)	Asset fair value measurements using significant unobservable inputs (Level 3)
		Corporate fixed maturities			Separate accounts taxable fixed maturities		States, municipalities and political subdivisions fixed maturities		Nonredeemable preferred equities			Total
Beginning balance, January 1, 2016		$	51		$	1	$	—	$	3		$	55
Total gains or losses (realized/unrealized):
Included in net income		—			—		—		—			—
Included in other comprehensive income		—			—		—		(1		)	(1		)
Purchases		5			—		—		—			5
Sales		—			—		—		—			—
Transfers into Level 3		—			—		—		—			—
Transfers out of Level 3		(5		)	—		—		—			(5		)
Ending balance, March 31, 2016		$	51		$	1	$	—	$	2		$	54
Beginning balance, January 1, 2015		$	18		$	—	$	—	$	2		$	20
Total gains or losses (realized/unrealized):
Included in net income		—			—		—		—			—
Included in other comprehensive income		—			—		—		—			—
Purchases		—			—		—		—			—
Sales		—			—		—		—			—
Transfers into Level 3		—			—		1		—			1
Transfers out of Level 3		—			—		—		—			—
Ending balance, March 31, 2015		$	18		$	—	$	1	$	2		$	21

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

This table summarizes the book value and principal amounts of our long-term debt:

(Dollars in millions)				Book value				Principal amount
				March 31,		December 31,		March 31,		December 31,
Interest rate		Year of issue		2016		2015		2016		2015
6.900	%	1998	Senior debentures, due 2028	$	26	$	26	$	28	$	28
6.920	%	2005	Senior debentures, due 2028	391		391		391		391
6.125	%	2004	Senior notes, due 2034	369		369		374		374
			Total	$	786	$	786	$	793	$	793

Fair Value of Life Policy Loans

The following table shows the fair value of our life policy loans included in other invested assets:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Life policy loans	$	—	$	—	$	42	$	42
At December 31, 2015
Life policy loans	$	—	$	—	$	40	$	40

Debt

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Values of Deferred Annuities, Structured Settlements and Other Items

The following table shows fair values of our note payable and long-term debt:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Note payable	$	—	$	35	$	—	$	35
6.900% senior debentures, due 2028	—		33		—		33
6.920% senior debentures, due 2028	—		492		—		492
6.125% senior notes, due 2034	—		437		—		437
Total	$	—	$	997	$	—	$	997
At December 31, 2015
Note payable	$	—	$	35	$	—	$	35
6.900% senior debentures, due 2028	—		31		—		31
6.920% senior debentures, due 2028	—		480		—		480
6.125% senior notes, due 2034	—		425		—		425
Total	$	—	$	971	$	—	$	971

Deferred Annuities, Structured Settlements, And Other

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Values of Deferred Annuities, Structured Settlements and Other Items

The following table shows fair values of our deferred annuities and structured settlements included in life policy and investment contract reserves:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2016
Deferred annuities	$	—	$	—	$	917	$	917
Structured settlements	—		212		—		212
Total	$	—	$	212	$	917	$	1,129
At December 31, 2015
Deferred annuities	$	—	$	—	$	886	$	886
Structured settlements	—		208		—		208
Total	$	—	$	208	$	886	$	1,094

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Property Casualty Loss and Loss Expenses (Tables)

3 Months Ended

Mar. 31, 2016

Premiums Written, Net [Abstract]

Consolidated Property Casualty Loss And Loss Expense Reserves

This table summarizes activity for our consolidated property casualty loss and loss expense reserves:

(Dollars in millions)	Three months ended March 31,
	2016			2015
Gross loss and loss expense reserves, beginning of period	$	4,660		$	4,438
Less reinsurance recoverable	281			282
Net loss and loss expense reserves, beginning of period	4,379			4,156
Net incurred loss and loss expenses related to:
Current accident year	723			711
Prior accident years	(62		)	(22		)
Total incurred	661			689
Net paid loss and loss expenses related to:
Current accident year	146			147
Prior accident years	416			399
Total paid	562			546
Net loss and loss expense reserves, end of period	4,478			4,299
Plus reinsurance recoverable	272			278
Gross loss and loss expense reserves, end of period	$	4,750		$	4,577

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Life Policy and Investment Contract Reserves (Tables)

3 Months Ended

Mar. 31, 2016

Liability for Future Policy Benefits [Abstract]

Reserve For Losses Loss Adjustment Expenses Table [Text Block]

This table summarizes our life policy and investment contract reserves:

(Dollars in millions)	March 31, 2016		December 31, 2015
Ordinary/traditional life	$	956	$	943
Deferred annuities	860		860
Universal life	561		558
Structured settlements	175		174
Other	49		48
Total life policy and investment contract reserves	$	2,601	$	2,583

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Deferred Acquisition Costs (Tables)

3 Months Ended

Mar. 31, 2016

Deferred Costs [Abstract]

Deferred Policy Acquisition Costs And Asset Reconciliation, Including the Amortized Deferred Policy Acquisition Costs

The table below shows the deferred policy acquisition costs and asset reconciliation.

(Dollars in millions)	Three months ended March 31,
	2016			2015
Property casualty:
Deferred policy acquisition costs asset, beginning of period	$	388		$	379
Capitalized deferred policy acquisition costs	210			196
Amortized deferred policy acquisition costs	(201		)	(198		)
Deferred policy acquisition costs asset, end of period	$	397		$	377
Life:
Deferred policy acquisition costs asset, beginning of period	$	228		$	199
Capitalized deferred policy acquisition costs	12			11
Amortized deferred policy acquisition costs	(11		)	(11		)
Amortized shadow deferred policy acquisition costs	(8		)	(5		)
Deferred policy acquisition costs asset, end of period	$	221		$	194
Consolidated:
Deferred policy acquisition costs asset, beginning of period	$	616		$	578
Capitalized deferred policy acquisition costs	222			207
Amortized deferred policy acquisition costs	(212		)	(209		)
Amortized shadow deferred policy acquisition costs	(8		)	(5		)
Deferred policy acquisition costs asset, end of period	$	618		$	571

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2016

Accumulated Other Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

(Dollars in millions)	Three months ended March 31,
	2016									2015
	Before tax			Income tax			Net			Before tax			Income tax			Net
Investments:
AOCI, beginning of period	$	2,094		$	722		$	1,372		$	2,719		$	942		$	1,777
OCI excluding realized gains recognized in net income	351			121			230			3			1			2
Realized gains recognized in net income	(61		)	(21		)	(40		)	(46		)	(16		)	(30		)
OCI	290			100			190			(43		)	(15		)	(28		)
AOCI, end of period	$	2,384		$	822		$	1,562		$	2,676		$	927		$	1,749
Pension obligations:
AOCI, beginning of period	$	(42	)	$	(14	)	$	(28	)	$	(36	)	$	(12	)	$	(24	)
OCI excluding amortization recognized in net income	—			—			—			—			—			—
Amortization recognized in net income	1			1			—			1			—			1
OCI	1			1			—			1			—			1
AOCI, end of period	$	(41	)	$	(13	)	$	(28	)	$	(35	)	$	(12	)	$	(23	)
Life deferred acquisition costs, life policy reserves and other:
AOCI, beginning of period	$	1		$	1		$	—		$	(12	)	$	(3	)	$	(9	)
OCI excluding realized gains recognized in net income	(4		)	(1		)	(3		)	(1		)	(1		)	—
Realized gains recognized in net income	—			—			—			(1		)	—			(1		)
OCI	(4		)	(1		)	(3		)	(2		)	(1		)	(1		)
AOCI, end of period	$	(3	)	$	—		$	(3	)	$	(14	)	$	(4	)	$	(10	)
Summary of AOCI:
AOCI, beginning of period	$	2,053		$	709		$	1,344		$	2,671		$	927		$	1,744
Investments OCI	290			100			190			(43		)	(15		)	(28		)
Pension obligations OCI	1			1			—			1			—			1
Life deferred acquisition costs, life policy reserves and other OCI	(4		)	(1		)	(3		)	(2		)	(1		)	(1		)
Total OCI	287			100			187			(44		)	(16		)	(28		)
AOCI, end of period	$	2,340		$	809		$	1,531		$	2,627		$	911		$	1,716

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Reinsurance (Tables)

3 Months Ended

Mar. 31, 2016

Reinsurance Disclosures [Abstract]

Earned Consolidated Property Casualty Insurance Premiums On Assumed And Ceded Business

Our condensed consolidated statements of income include earned consolidated property casualty insurance premiums on assumed and ceded business: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Direct earned premiums	$	1,119		$	1,076
Assumed earned premiums	15			2
Ceded earned premiums	(38		)	(37		)
Earned premiums	$	1,096		$	1,041

Incurred Consolidated Property Casualty Insurance Loss And Loss Expenses On Assumed And Ceded Business

Our condensed consolidated statements of income include incurred consolidated property casualty insurance loss and loss expenses on assumed and ceded business:

(Dollars in millions)	Three months ended March 31,
	2016		2015
Direct incurred loss and loss expenses	$	648	$	691
Assumed incurred loss and loss expenses	10		(1		)
Ceded incurred loss and loss expenses	3		(1		)
Incurred loss and loss expenses	$	661	$	689

Earned Life Insurance Premiums On Ceded Business

Our condensed consolidated statements of income include earned life insurance premiums on ceded business: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Direct earned premiums	$	71		$	65
Ceded earned premiums	(13		)	(12		)
Earned premiums	$	58		$	53

Life Insurance Contract Holders' Benefits Incurred On Ceded Business

Our condensed consolidated statements of income include life insurance contract holders' benefits incurred on ceded business: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Direct contract holders' benefits incurred	$	76		$	72
Ceded contract holders' benefits incurred	(13		)	(12		)
Contract holders' benefits incurred	$	63		$	60

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Differences Between The 35 Percent Statutory Income Tax Rate And Effective Income Tax Rate

The differences between the 35 percent statutory federal income tax rate and our effective income tax rate were as follows:

(Dollars in millions)	Three months ended March 31,
	2016					2015
Tax at statutory rate:	$	93		35.0	%	$	61		35.0	%
Increase (decrease) resulting from:
Tax-exempt income from municipal bonds	(9		)	(3.4	)	(8		)	(4.6	)
Dividend received exclusion	(8		)	(3.0	)	(8		)	(4.6	)
Other	1			0.5		1			0.6
Provision for income taxes	$	77		29.1	%	$	46		26.4	%

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Net Income Per Common Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Calculations For Basic And Diluted Earnings Per Share

The table shows calculations for basic and diluted earnings per share:

(In millions except per share data)	Three months ended March 31,
	2016		2015
Numerator:
Net income—basic and diluted	$	188	$	128
Denominator:
Basic weighted-average common shares outstanding	164.2		164.0
Effect of share-based awards:
Stock options	1.0		1.0
Nonvested shares	0.8		0.6
Diluted weighted-average shares	166.0		165.6
Earnings per share:
Basic	$	1.14	$	0.78
Diluted	1.13		0.77
Number of anti-dilutive share-based awards:	0.4		0.7

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Employee Retirement Benefits (Tables)

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of Defined Benefit Plans Disclosures

The following summarizes the components of net periodic benefit cost for our qualified and supplemental pension plans:

(Dollars in millions)	Three months ended March 31,
	2016			2015
Service cost	$	3		$	3
Interest cost	3			3
Expected return on plan assets	(5		)	(4		)
Amortization of actuarial loss and prior service cost	1			1
Net periodic benefit cost	$	2		$	3

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Information

Segment information is summarized in the following table: 

(Dollars in millions)	Three months ended March 31,
	2016			2015
Revenues:
Commercial lines insurance
Commercial casualty	$	257		$	244
Commercial property	214			196
Commercial auto	144			136
Workers' compensation	89			93
Other commercial	56			64
Commercial lines insurance premiums	760			733
Fee revenues	1			1
Total commercial lines insurance	761			734
Personal lines insurance
Personal auto	131			123
Homeowner	119			114
Other personal	33			31
Personal lines insurance premiums	283			268
Fee revenues	1			1
Total personal lines insurance	284			269
Excess and surplus lines insurance	43			40
Life insurance premiums	58			53
Separate account investment management fees	1			1
Total life insurance	59			54
Investments
Investment income, net of expenses	145			139
Realized investment gains, net	61			47
Total investment revenue	206			186
Other	11			2
Total revenues	$	1,364		$	1,285
Income (loss) before income taxes:
Insurance underwriting results
Commercial lines insurance	$	50		$	26
Personal lines insurance	28			(3		)
Excess and surplus lines insurance	17			4
Life insurance	(1		)	(3		)
Investments	184			165
Other	(13		)	(15		)
Total income before income taxes	$	265		$	174

Identifiable assets:	March 31, 2016		December 31, 2015
Property casualty insurance	$	2,699	$	2,717
Life insurance	1,372		1,325
Investments	14,978		14,485
Other	398		361
Total	$	19,447	$	18,888

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Investments - Analysis of Cost or Amortized Cost, Gross Unrealized Gains and Losses and Fair Value for Investments (Detail) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Debt Securities
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	$ 9,442	$ 9,324
Gross Unrealized Gains	510	431
Gross Unrealized Losses	68	105
Fair Value	9,884	9,650
Debt Securities | Corporate
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	5,395	5,294
Gross Unrealized Gains	295	255
Gross Unrealized Losses	66	96
Fair Value	5,624	5,453
Debt Securities | States, municipalities and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	3,499	3,440
Gross Unrealized Gains	204	172
Gross Unrealized Losses	0	1
Fair Value	3,703	3,611
Debt Securities | Commercial mortgage-backed
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	289	287
Gross Unrealized Gains	11	4
Gross Unrealized Losses	2	2
Fair Value	298	289
Debt Securities | Government-sponsored enterprises
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	240	284
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	6
Fair Value	240	278
Debt Securities | Foreign government
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	10	10
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	10	10
Debt Securities | Convertibles and bonds with warrants attached
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	5	5
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	5	5
Debt Securities | United States government
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	4	4
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	4	4
Equity Securities
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	2,999	2,938
Gross Unrealized Gains	1,987	1,819
Gross Unrealized Losses	45	51
Fair Value	4,941	4,706
Equity Securities | Common equities
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	2,810	2,749
Gross Unrealized Gains	1,954	1,787
Gross Unrealized Losses	44	51
Fair Value	4,720	4,485
Equity Securities | Nonredeemable preferred equities
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	189	189
Gross Unrealized Gains	33	32
Gross Unrealized Losses	1	0
Fair Value	221	221
Fixed Maturities And Equity Securities
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	12,441	12,262
Gross Unrealized Gains	2,497	2,250
Gross Unrealized Losses	113	156
Fair Value	$ 14,825	$ 14,356

XML

Investments - Fair Values and Unrealized Losses by Investment Category and by Duration of Securities' Continuous Unrealized Loss Position (Detail) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 1,294	$ 1,654
Less than 12 months Unrealized Losses	89	119
12 months or more Fair Value	178	284
12 months or more Unrealized Losses	24	37
Total Fair Value	1,472	1,938
Total Unrealized Losses	113	156
Fixed Maturities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	907	1,349
Less than 12 months Unrealized Losses	44	68
12 months or more Fair Value	178	284
12 months or more Unrealized Losses	24	37
Total Fair Value	1,085	1,633
Total Unrealized Losses	68	105
Fixed Maturities | Corporate
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	801	1,099
Less than 12 months Unrealized Losses	43	63
12 months or more Fair Value	153	133
12 months or more Unrealized Losses	23	33
Total Fair Value	954	1,232
Total Unrealized Losses	66	96
Fixed Maturities | States, municipalities and political subdivisions
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	28	47
Less than 12 months Unrealized Losses	0	1
12 months or more Fair Value	4	22
12 months or more Unrealized Losses	0	0
Total Fair Value	32	69
Total Unrealized Losses	0	1
Fixed Maturities | Commercial mortgage-backed
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	49	103
Less than 12 months Unrealized Losses	1	2
12 months or more Fair Value	2	2
12 months or more Unrealized Losses	1	0
Total Fair Value	51	105
Total Unrealized Losses	2	2
Fixed Maturities | Government-sponsored enterprises
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	29	100
Less than 12 months Unrealized Losses	0	2
12 months or more Fair Value	19	127
12 months or more Unrealized Losses	0	4
Total Fair Value	48	227
Total Unrealized Losses	0	6
Equity Securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	387	305
Less than 12 months Unrealized Losses	45	51
12 months or more Fair Value	0	0
12 months or more Unrealized Losses	0	0
Total Fair Value	387	305
Total Unrealized Losses	45	51
Equity Securities | Common equities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	345	270
Less than 12 months Unrealized Losses	44	51
12 months or more Fair Value	0	0
12 months or more Unrealized Losses	0	0
Total Fair Value	345	270
Total Unrealized Losses	44	51
Equity Securities | Nonredeemable preferred equities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	42	35
Less than 12 months Unrealized Losses	1	0
12 months or more Fair Value	0	0
12 months or more Unrealized Losses	0	0
Total Fair Value	42	35
Total Unrealized Losses	$ 1	$ 0

XML

Investments - Schedule of Contractual Maturities of Investments (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Amortized cost
Due in one year or less	$ 481
Due after one year through five years	3,017
Due after five years through ten years	3,676
Due after ten years	2,268
Total	9,442	$ 9,324
Fair value
Due in one year or less	488
Due after one year through five years	3,202
Due after five years through ten years	3,797
Due after ten years	2,397
Total	$ 9,884	$ 9,650
% of fair value
Due in one year or less	4.90%
Due after one year through five years	32.40%
Due after five years through ten years	38.40%
Due after ten years	24.30%
Total	100.00%

XML

Investments - Realized Investment Gains and Losses and Change in Unrealized Investment Gains and Losses and Other Items (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Investment income summary:
Interest	$ 109	$ 105
Dividends	37	36
Other	1	0
Total	147	141
Less investment expenses	2	2
Total	145	139
Realized investment gains and losses summary:
Realized investment gains, net	61	47
Change in unrealized gains and losses summary:
Fixed maturities	190	(28)
Less income taxes	(100)	15
Fixed Maturities
Realized investment gains and losses summary:
Gross realized gains	3	3
Gross realized losses	(1)	0
Other-than-temporary impairments	(2)	0
Change in unrealized gains and losses summary:
Fixed maturities	116	46
Equity Securities
Realized investment gains and losses summary:
Gross realized gains	62	44
Gross realized losses	(1)	(1)
Other-than-temporary impairments	0	0
Other	0	1
Change in unrealized gains and losses summary:
Fixed maturities	$ 174	$ (89)

XML

Investments - Additional Information (Detail) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016 USD ($) security	Dec. 31, 2015 USD ($) security
Gain (Loss) on Investments [Line Items]
Largest Single Common Stock Holding	$ 153
Largest equity holdings to total equity portfolio	3.20%
Largest equity holdings to total portfolio	1.00%
Unrealized losses 12 months or more (equity investment less than $500,000)	$ 24	$ 37
Number Of Securities Continuous Unrealized Loss Position More Than Twelve Months and Below 70 Percent of Amortized Cost | security	2	5
Number Of Securities Other Than Temporary Impairment Losses		20
Fixed maturity investments, Percentage of amortized costs	70.00%	70.00%
Fixed Maturities
Gain (Loss) on Investments [Line Items]
Unrealized investment gains due to a net gain position	$ 510	$ 431
Number Of Securities Other Than Temporary Impairment Losses1 | security	2
Number Of Securities Continuous Unrealized Loss Position More Than Twelve Months | security	44	69
Unrealized losses 12 months or more (equity investment less than $500,000)	$ 24	$ 37
Equity Securities
Gain (Loss) on Investments [Line Items]
Unrealized investment gains due to a net gain position	$ 1,987	$ 1,819
Number Of Securities Other Than Temporary Impairment Losses1 | security	0
Number Of Securities Continuous Unrealized Loss Position More Than Twelve Months	0	0
Unrealized losses 12 months or more (equity investment less than $500,000)	$ 0	$ 0
Procter And Gamble Company, Exxon Mobile Corporation And Chevron Corporation [Member]
Gain (Loss) on Investments [Line Items]
Unrealized investment gains due to a net gain position	$ 597
Common equities
Gain (Loss) on Investments [Line Items]
Number of securities	7

XML

Fair Value Measurements - Fair Value Hierarchy for Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	$ 9,884	$ 9,650
Equity securities, at fair value	4,941	4,706
Separate accounts	773	748
Top Hat savings plan mutual funds and common equity (included in Other assets)	22	21
Fair value of asset	15,603	15,114
Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	9,884	9,650
Debt Securities | Corporate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	5,624	5,453
Debt Securities | States, municipalities and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	3,703	3,611
Debt Securities | Commercial mortgage-backed
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	298	289
Debt Securities | Government-sponsored enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	240	278
Debt Securities | Foreign government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	10	10
Debt Securities | Convertibles and bonds with warrants attached
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	5	5
Debt Securities | United States government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	4	4
Equity Securities | Common equities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	4,720	4,485
Equity Securities | Nonredeemable preferred equities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	221	221
Taxable Fixed Maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Separate accounts	756	737
Quoted prices in active markets for identical assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Top Hat savings plan mutual funds and common equity (included in Other assets)	22	21
Fair value of asset	4,746	4,510
Quoted prices in active markets for identical assets (Level 1) | Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	4	4
Quoted prices in active markets for identical assets (Level 1) | Debt Securities | Corporate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Quoted prices in active markets for identical assets (Level 1) | Debt Securities | States, municipalities and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Quoted prices in active markets for identical assets (Level 1) | Debt Securities | Commercial mortgage-backed
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Quoted prices in active markets for identical assets (Level 1) | Debt Securities | Government-sponsored enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Quoted prices in active markets for identical assets (Level 1) | Debt Securities | Foreign government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Quoted prices in active markets for identical assets (Level 1) | Debt Securities | Convertibles and bonds with warrants attached
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Quoted prices in active markets for identical assets (Level 1) | Debt Securities | United States government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	4	4
Quoted prices in active markets for identical assets (Level 1) | Equity Securities | Common equities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	4,720	4,485
Quoted prices in active markets for identical assets (Level 1) | Equity Securities | Nonredeemable preferred equities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	0	0
Quoted prices in active markets for identical assets (Level 1) | Taxable Fixed Maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Separate accounts	0	0
Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Top Hat savings plan mutual funds and common equity (included in Other assets)	0	0
Fair value of asset	10,803	10,549
Significant other observable inputs (Level 2) | Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	9,829	9,595
Significant other observable inputs (Level 2) | Debt Securities | Corporate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	5,573	5,402
Significant other observable inputs (Level 2) | Debt Securities | States, municipalities and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	3,703	3,611
Significant other observable inputs (Level 2) | Debt Securities | Commercial mortgage-backed
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	298	289
Significant other observable inputs (Level 2) | Debt Securities | Government-sponsored enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	240	278
Significant other observable inputs (Level 2) | Debt Securities | Foreign government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	10	10
Significant other observable inputs (Level 2) | Debt Securities | Convertibles and bonds with warrants attached
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	5	5
Significant other observable inputs (Level 2) | Debt Securities | United States government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Significant other observable inputs (Level 2) | Equity Securities | Common equities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	0	0
Significant other observable inputs (Level 2) | Equity Securities | Nonredeemable preferred equities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	219	218
Significant other observable inputs (Level 2) | Taxable Fixed Maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Separate accounts	755	736
Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Top Hat savings plan mutual funds and common equity (included in Other assets)	0	0
Fair value of asset	54	55
Significant unobservable inputs (Level 3) | Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	51	51
Significant unobservable inputs (Level 3) | Debt Securities | Corporate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	51	51
Significant unobservable inputs (Level 3) | Debt Securities | States, municipalities and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Significant unobservable inputs (Level 3) | Debt Securities | Commercial mortgage-backed
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Significant unobservable inputs (Level 3) | Debt Securities | Government-sponsored enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Significant unobservable inputs (Level 3) | Debt Securities | Foreign government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Significant unobservable inputs (Level 3) | Debt Securities | Convertibles and bonds with warrants attached
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Significant unobservable inputs (Level 3) | Debt Securities | United States government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, at fair value	0	0
Significant unobservable inputs (Level 3) | Equity Securities | Common equities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	0	0
Significant unobservable inputs (Level 3) | Equity Securities | Nonredeemable preferred equities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities, at fair value	2	3
Significant unobservable inputs (Level 3) | Taxable Fixed Maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Separate accounts	$ 1	$ 1

XML

Fair Value Measurements - Change in Level 3 Assets (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 55	$ 20
Total gains or losses (realized/unrealized):
Included in net income	0	0
Included in other comprehensive income	(1)	0
Purchases	5	0
Sales	0	0
Transfers into Level 3	0	1
Transfers out of Level 3	(5)	0
Ending balance	54	21
Corporate Fixed Maturities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	51	18
Total gains or losses (realized/unrealized):
Included in net income	0	0
Included in other comprehensive income	0	0
Purchases	5	0
Sales	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	(5)	0
Ending balance	51	18
Commercial mortgage-backed
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	1	0
Total gains or losses (realized/unrealized):
Included in net income	0	0
Included in other comprehensive income	0	0
Purchases	0	0
Sales	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Ending balance	1	0
States, Municipalities And Political Subdivisions Fixed Maturities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	0	0
Total gains or losses (realized/unrealized):
Included in net income	0	0
Included in other comprehensive income	0	0
Purchases	0	0
Sales	0	0
Transfers into Level 3	0	1
Transfers out of Level 3	0	0
Ending balance	0	1
Preferred Equities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	3	2
Total gains or losses (realized/unrealized):
Included in net income	0	0
Included in other comprehensive income	(1)	0
Purchases	0	0
Sales	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Ending balance	$ 2	$ 2

XML

Fair Value Measurements - Summary of Book Value and Principal Amounts of Long-Term Debt (Detail) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Book value	$ 786	$ 786
Principal amount of debt	$ 793	$ 793
Senior Debentures 6.900% Due 2028
Debt Instrument [Line Items]
Interest rate	6.90%	6.90%
Debt issuance year	1998	1998
Book value	$ 26	$ 26
Principal amount of debt	$ 28	$ 28
Senior Debentures 6.920% Due 2028
Debt Instrument [Line Items]
Interest rate	6.92%	6.92%
Debt issuance year	2005	2005
Book value	$ 391	$ 391
Principal amount of debt	$ 391	$ 391
Senior Notes 6.152% Due 2034
Debt Instrument [Line Items]
Interest rate	6.125%	6.125%
Debt issuance year	2004	2004
Book value	$ 369	$ 369
Principal amount of debt	$ 374	$ 374

XML

Fair Value Measurements - Fair Values of Note Payable and Long-Term Debt (Detail) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of note payable	$ 35	$ 35
Total	997	971
Finance receivable	$ 60	$ 62
Senior Debentures 6.900 % Due 2028
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate	6.90%	6.90%
Debt instrument, year of maturity	2028	2028
Fair value of senior debt	$ 33	$ 31
Senior Debentures 6.920 % Due 2028
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate	6.92%	6.92%
Debt instrument, year of maturity	2028	2028
Fair value of senior debt	$ 492	$ 480
Senior Notes 6.125 % Due 2034
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate	6.125%	6.125%
Debt instrument, year of maturity	2034	2034
Fair value of senior debt	$ 437	$ 425
Quoted prices in active markets for identical assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of note payable	0	0
Total	0	0
Quoted prices in active markets for identical assets (Level 1) | Senior Debentures 6.900 % Due 2028
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of senior debt	0	0
Quoted prices in active markets for identical assets (Level 1) | Senior Debentures 6.920 % Due 2028
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of senior debt	0	0
Quoted prices in active markets for identical assets (Level 1) | Senior Notes 6.125 % Due 2034
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of senior debt	0	0
Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of note payable	35	35
Total	997	971
Significant other observable inputs (Level 2) | Senior Debentures 6.900 % Due 2028
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of senior debt	33	31
Significant other observable inputs (Level 2) | Senior Debentures 6.920 % Due 2028
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of senior debt	492	480
Significant other observable inputs (Level 2) | Senior Notes 6.125 % Due 2034
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of senior debt	437	425
Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of note payable	0	0
Total	0	0
Significant unobservable inputs (Level 3) | Senior Debentures 6.900 % Due 2028
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of senior debt	0	0
Significant unobservable inputs (Level 3) | Senior Debentures 6.920 % Due 2028
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of senior debt	0	0
Significant unobservable inputs (Level 3) | Senior Notes 6.125 % Due 2034
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of senior debt	0	0
Deferred Annuities And Structured Settlements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability for Future Policy Benefits, Individual and Group Annuities and Supplementary Contracts	860	860
Policy Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Finance receivable	$ 30	$ 31

XML

Fair Value Measurements - Fair Value of Life Policy Loans (Detail) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Finance receivable	$ 60	$ 62
Fair value of life policy loans	42	40
Quoted prices in active markets for identical assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of life policy loans	0	0
Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of life policy loans	0	0
Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of life policy loans	42	40
Policy Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Finance receivable	$ 30	$ 31

XML

Fair Value Measurements - Fair Values of Deferred Annuities, Structured Settlements and Other Items (Detail) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	$ 1,129	$ 1,094
Deferred Annuities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	917	886
Structured Settlements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	212	208
Quoted prices in active markets for identical assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	0	0
Quoted prices in active markets for identical assets (Level 1) | Deferred Annuities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	0	0
Quoted prices in active markets for identical assets (Level 1) | Structured Settlements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	0	0
Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	212	208
Significant other observable inputs (Level 2) | Deferred Annuities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	0	0
Significant other observable inputs (Level 2) | Structured Settlements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	212	208
Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	917	886
Significant unobservable inputs (Level 3) | Deferred Annuities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	917	886
Significant unobservable inputs (Level 3) | Structured Settlements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value of life insurance liabilities	$ 0	$ 0

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Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Finance receivable	$ 60	$ 62
Loss and loss expense reserves	4,804	4,718
Life Policy Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Finance receivable	30	31
Deferred Annuities And Structured Settlements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability for Future Policy Benefits, Individual and Group Annuities and Supplementary Contracts	860	860
Loss and loss expense reserves	$ 175	$ 174
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Percentage Of Level 3 Assets To Total Financial Instruments Measured At Fair Value	1.00%

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Property Casualty Loss and Loss Expenses - Consolidated Property Casualty Loss and Loss Expense Reserves (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Summary of Consolidated Property Casualty Loss and Loss Expense Reserves [Roll Forward]
Gross loss and loss expense reserves, beginning of period	$ 4,660	$ 4,438
Less reinsurance recoverable	281	282
Net loss and loss expense reserves, beginning of period	4,379	4,156
Current accident year	723	711
Prior accident years	(62)	(22)
Total incurred	661	689
Current accident year	146	147
Prior accident years	416	399
Total paid	562	546
Net loss and loss expense reserves, end of period	4,478	4,299
Plus reinsurance recoverable	272	278
Gross loss and loss expense reserves, end of period	$ 4,750	$ 4,577

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Property Casualty Loss and Loss Expenses - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Reserve for loss and loss expenses	$ 4,750	$ 4,577	$ 4,660	$ 4,438
Prior accident years	(62)	(22)
Life and Health Loss Reserves
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Reserve for loss and loss expenses	54	46
Commercial Lines
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Prior accident years	(29)	(14)
Commercial Lines | Workers' Compensation
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Prior accident years	(13)	(15)
Commercial Lines | Other Commercial Lines [Member]
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Prior accident years	(13)
Commercial Lines | Commercial Auto
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Prior accident years	8	11
Commercial Lines | Commercial Property Segment [Member]
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Prior accident years	(8)	(11)
Personal Lines
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Prior accident years	(18)	(3)
Personal Lines | Home Owner Segment
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Prior accident years	(8)	(7)
Excess and Surplus Lines Insurance
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Prior accident years	(14)	(5)
Reinsurance assumed and other non segment [Member]
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Prior accident years	(1)
Consolidated Property and Casualty Insurance Entity | Catastrophe Development
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items]
Prior accident years	$ (7)	$ (11)

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Reserves in Addition to Account Balance, Based on Expected No-Lapse Guarantee Benefits and Expected Policy Assessments (Detail) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Liability for Future Policy Benefit, by Product Segment [Line Items]
Life policy and investment contract reserves	$ 2,601	$ 2,583
Ordinary/Traditional Life
Liability for Future Policy Benefit, by Product Segment [Line Items]
Life policy and investment contract reserves	956	943
Deferred Annuities
Liability for Future Policy Benefit, by Product Segment [Line Items]
Life policy and investment contract reserves	860	860
Universal Life
Liability for Future Policy Benefit, by Product Segment [Line Items]
Life policy and investment contract reserves	561	558
Structured Settlements
Liability for Future Policy Benefit, by Product Segment [Line Items]
Life policy and investment contract reserves	175	174
Other
Liability for Future Policy Benefit, by Product Segment [Line Items]
Life policy and investment contract reserves	$ 49	$ 48

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Deferred Acquisition Costs - Deferred Policy Acquisition Costs and Asset Reconciliation (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
Deferred policy acquisition costs asset, beginning of period	$ 616	$ 578
Capitalized deferred policy acquisition costs	222	207
Deferred Policy Acquisition Cost, Amortization Expense	(212)	(209)
Deferred Policy Acquisition Cost, Amortization Expense, Other	(8)	(5)
Deferred policy acquisition costs asset, end of period	618	571
Life Insurance Product Line [Member]
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
Deferred policy acquisition costs asset, beginning of period	228	199
Capitalized deferred policy acquisition costs	12	11
Deferred Policy Acquisition Cost, Amortization Expense	(11)	(11)
Deferred Policy Acquisition Cost, Amortization Expense, Other	(8)	(5)
Deferred policy acquisition costs asset, end of period	221	194
Consolidated Property and Casualty Insurance Entity
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
Deferred policy acquisition costs asset, beginning of period	388	379
Capitalized deferred policy acquisition costs	210	196
Deferred Policy Acquisition Cost, Amortization Expense	(201)	(198)
Deferred policy acquisition costs asset, end of period	$ 397	$ 377

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated other comprehensive income, net of tax, beginning of period	$ 1,531		$ 1,344
Accumulated other comprehensive income, net of tax, end of period	1,531
Accumulated Net Unrealized Investment Gain (Loss)
Accumulated Other Comprehensive Income Loss Before Tax [Abstract]
Accumulated other comprehensive income, before tax, beginning of period	2,094	$ 2,719
Other comprehensive income before reclassification, before tax	351	3
Reclassification adjustment, before tax	(61)	(46)
Effect on other comprehensive income, before tax	290	(43)
Accumulated other comprehensive income, before tax, end of period	2,384	2,676
Accumulated Other Comprehensive Income (Loss), Tax [Abstract]
Accumulated other comprehensive income, tax, beginning of period	722	942
Other comprehensive income before reclassification, tax	121	1
Reclassification adjustment, tax	(21)	(16)
Effect on other comprehensive income, tax	100	(15)
Accumulated other comprehensive income, tax, end of period	822	927
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated other comprehensive income, net of tax, beginning of period	1,562	1,749	1,372	$ 1,777
Other comprehensive income before reclassification, net of tax	230	2
Reclassification adjustment, net of tax	(40)	(30)
Effect on other comprehensive income, net of tax	190	(28)
Accumulated other comprehensive income, net of tax, end of period	1,562	1,749
Accumulated Defined Benefit Plans Adjustment
Accumulated Other Comprehensive Income Loss Before Tax [Abstract]
Accumulated other comprehensive income, before tax, beginning of period	(42)	(36)
Other comprehensive income before reclassification, before tax	0	0
Reclassification adjustment, before tax	1	1
Effect on other comprehensive income, before tax	1	1
Accumulated other comprehensive income, before tax, end of period	(41)	(35)
Accumulated Other Comprehensive Income (Loss), Tax [Abstract]
Accumulated other comprehensive income, tax, beginning of period	(14)	(12)
Other comprehensive income before reclassification, tax	0	0
Reclassification adjustment, tax	1	0
Effect on other comprehensive income, tax	1	0
Accumulated other comprehensive income, tax, end of period	(13)	(12)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated other comprehensive income, net of tax, beginning of period	(28)	(23)	(28)	(24)
Other comprehensive income before reclassification, net of tax	0	0
Reclassification adjustment, net of tax	0	1
Effect on other comprehensive income, net of tax	0	1
Accumulated other comprehensive income, net of tax, end of period	(28)	(23)
Accumulated Net Unrealized Gain (Loss) on Deferred Costs, Reserves And Other
Accumulated Other Comprehensive Income Loss Before Tax [Abstract]
Accumulated other comprehensive income, before tax, beginning of period	1	(12)
Other comprehensive income before reclassification, before tax	(4)	(1)
Reclassification adjustment, before tax	0	(1)
Effect on other comprehensive income, before tax	(4)	(2)
Accumulated other comprehensive income, before tax, end of period	(3)	(14)
Accumulated Other Comprehensive Income (Loss), Tax [Abstract]
Accumulated other comprehensive income, tax, beginning of period	1	(3)
Other comprehensive income before reclassification, tax	(1)	(1)
Reclassification adjustment, tax	0	0
Effect on other comprehensive income, tax	(1)	(1)
Accumulated other comprehensive income, tax, end of period	0	(4)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated other comprehensive income, net of tax, beginning of period	(3)	(10)	0	(9)
Other comprehensive income before reclassification, net of tax	(3)	0
Reclassification adjustment, net of tax	0	(1)
Effect on other comprehensive income, net of tax	(3)	(1)
Accumulated other comprehensive income, net of tax, end of period	(3)	(10)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income Loss Before Tax [Abstract]
Accumulated other comprehensive income, before tax, beginning of period	2,053	2,671
Change in unrealized gains, net, on investments available for sale, before tax	290	(43)
Change in pension obligations, before tax	1	1
Change in life deferred acquisition costs, life policy reserves and other, before tax	(4)	(2)
Effect on other comprehensive income, before tax	287	(44)
Accumulated other comprehensive income, before tax, end of period	2,340	2,627
Accumulated Other Comprehensive Income (Loss), Tax [Abstract]
Accumulated other comprehensive income, tax, beginning of period	709	927
Change in unrealized gains, net, on investments available for sale, tax	100	(15)
Change in pension obligations, tax	1	0
Change in life deferred acquisition costs, life policy reserves and other, tax	(1)	(1)
Effect on other comprehensive income, tax	100	(16)
Accumulated other comprehensive income, tax, end of period	809	911
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated other comprehensive income, net of tax, beginning of period	1,531	1,716	$ 1,344	$ 1,744
Change in unrealized gains, net, on investments available for sale, net of tax	190	(28)
Change in pension obligations, net of tax	0	1
Change in life deferred acquisition costs, life policy reserves and other, net of tax	(3)	(1)
Effect on other comprehensive income, net of tax	187	(28)
Accumulated other comprehensive income, net of tax, end of period	$ 1,531	$ 1,716

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Reinsurance - Earned Consolidated Property Casualty Insurance Premiums on Assumed and Ceded Business (Detail) - Consolidated Property and Casualty Insurance Entity - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Direct earned premiums	$ 1,119	$ 1,076
Assumed earned premiums	15	2
Ceded earned premiums	(38)	(37)
Earned premiums	$ 1,096	$ 1,041

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Reinsurance - Incurred Consolidated Property Casualty Insurance Loss and Loss Expenses on Assumed and Ceded Business (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Incurred loss and loss expenses	$ 724	$ 749
Consolidated Property and Casualty Insurance Entity
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Direct incurred loss and loss expenses	648	691
Assumed incurred loss and loss expenses	10	(1)
Ceded incurred loss and loss expenses	3	(1)
Incurred loss and loss expenses	$ 661	$ 689

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Reinsurance - Earned Life Insurance Premiums on Ceded Business (Detail) - Life Insurance Segment - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Direct earned premiums	$ 71	$ 65
Ceded earned premiums	(13)	(12)
Earned premiums	$ 58	$ 53

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Reinsurance - Life Insurance Contract Holders' Benefits Incurred on Ceded Business (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Insurance losses and contract holders' benefits	$ 724	$ 749
Life Insurance Segment
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Direct contract holders' benefits incurred	76	72
Ceded contract holders' benefits incurred	(13)	(12)
Insurance losses and contract holders' benefits	$ 63	$ 60

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Income Taxes - Differences Between 35 Percent Statutory Income Tax Rate and Effective Income Tax Rate (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Tax at statutory rate	$ 93	$ 61
Increase (decrease) resulting from:
Tax-exempt income from municipal bonds	(9)	(8)
Dividend received exclusion	(8)	(8)
Other	1	1
Total provision for income taxes	$ 77	$ 46
Tax at statutory rate	35.00%	35.00%
Increase (decrease) resulting from:
Tax-exempt income from municipal bonds	(3.40%)	(4.60%)
Dividend received exclusion	(3.00%)	(4.60%)
Other	0.50%	0.60%
Provision for income taxes	29.10%	26.40%

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Income Taxes (Narrative) (Details)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Tax at statutory rate, percentage	35.00%	35.00%

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Net Income Per Common Share - Calculations for Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Numerator:
Net income-basic and diluted	$ 188	$ 128
Denominator:
Basic weighted-average common shares outstanding (in shares)	164.2	164.0
Diluted weighted-average shares	166.0	165.6
Earnings per share:
Basic (in USD per share)	$ 1.14	$ 0.78
Diluted (in USD per share)	$ 1.13	$ 0.77
Number of anti-dilutive stock-based awards (in shares)	0.4	0.7
Stock Options
Denominator:
Effect of stock-based awards (in shares)	1.0	1.0
Nonvested shares
Denominator:
Effect of stock-based awards (in shares)	0.8	0.6

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Employee Retirement Benefits - Components of Net Periodic Costs for Qualified and Supplemental Pension Plans (Detail) - Qualified Pension Plans [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 3	$ 3
Interest cost	3	3
Expected return on plan assets	(5)	(4)
Amortization of actuarial loss and prior service cost	1	1
Net periodic benefit cost	$ 2	$ 3

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Employee Retirement Benefits - Defined Contribution Plan (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Matching contributions to 401(k) and Top Hat plans	$ 4	$ 4
Qualified Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Expected contributions by employer in the remainder of year	0
Pension contributions	$ 5

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Commitments and Contingent Liabilities (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Estimate for which the risk of loss is more than remote but not probable	$ 1

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Segment Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Earned premiums	$ 1,154	$ 1,094
Fee revenues	3	3
Investment income, net of expenses	145	139
Realized investment gains, net	61	47
Other	1	2
Total revenues	1,364	1,285
Income (loss) before income taxes	265	174
Identifiable assets	19,447		$ 18,888
Consolidated Property and Casualty Insurance Entity
Segment Reporting Information [Line Items]
Identifiable assets	2,699		2,717
Life Insurance Segment
Segment Reporting Information [Line Items]
Identifiable assets	1,372		1,325
Investments Segment
Segment Reporting Information [Line Items]
Identifiable assets	14,978		14,485
Operating Segments | Commercial Lines
Segment Reporting Information [Line Items]
Earned premiums	760	733
Fee revenues	1	1
Total revenues	761	734
Income (loss) before income taxes	50	26
Operating Segments | Personal Lines
Segment Reporting Information [Line Items]
Earned premiums	283	268
Fee revenues	1	1
Total revenues	284	269
Income (loss) before income taxes	28	(3)
Operating Segments | Excess and Surplus Lines Insurance
Segment Reporting Information [Line Items]
Earned premiums	43	40
Income (loss) before income taxes	17	4
Operating Segments | Life Insurance Segment
Segment Reporting Information [Line Items]
Earned premiums	58	53
Fee revenues	1	1
Total revenues	59	54
Income (loss) before income taxes	(1)	(3)
Operating Segments | Investments Segment
Segment Reporting Information [Line Items]
Investment income, net of expenses	145	139
Realized investment gains, net	61	47
Total revenues	206	186
Income (loss) before income taxes	184	165
Corporate and Other Non-Segment
Segment Reporting Information [Line Items]
Other	11	2
Income (loss) before income taxes	(13)	(15)
Identifiable assets	398		$ 361
Commercial Casualty | Operating Segments | Commercial Lines
Segment Reporting Information [Line Items]
Earned premiums	257	244
Commercial Property | Operating Segments | Commercial Lines
Segment Reporting Information [Line Items]
Earned premiums	214	196
Commercial Auto | Operating Segments | Commercial Lines
Segment Reporting Information [Line Items]
Earned premiums	144	136
Workers' Compensation | Operating Segments | Commercial Lines
Segment Reporting Information [Line Items]
Earned premiums	89	93
Other Commercial Lines | Operating Segments | Commercial Lines
Segment Reporting Information [Line Items]
Earned premiums	56	64
Personal Auto | Operating Segments | Personal Lines
Segment Reporting Information [Line Items]
Earned premiums	131	123
Home Owner Segment | Operating Segments | Personal Lines
Segment Reporting Information [Line Items]
Earned premiums	119	114
Other Personal Lines | Operating Segments | Personal Lines
Segment Reporting Information [Line Items]
Earned premiums	$ 33	$ 31

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Segment Information - Narrative (Details)	3 Months Ended
	Mar. 31, 2016 segment industry
Segment Reporting [Abstract]
Number of Industries Operating In | industry	2
Number of Reportable Segments | segment	5