.

0000906318-06-000069.txt : 20060802 0000906318-06-000069.hdr.sgml : 20060802 20060802072930 ACCESSION NUMBER: 0000906318-06-000069 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060802 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060802 DATE AS OF CHANGE: 20060802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINCINNATI FINANCIAL CORP CENTRAL INDEX KEY: 0000020286 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 310746871 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-04604 FILM NUMBER: 06996088 BUSINESS ADDRESS: STREET 1: 6200 S GILMORE RD CITY: FAIRFIELD STATE: OH ZIP: 45014 BUSINESS PHONE: 5138702000 MAIL ADDRESS: STREET 1: P.O. BOX 145496 CITY: CINCINNATI STATE: OH ZIP: 45250 8-K 1 cinfin8k8206.htm FORM 8-K .


UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)			August 2, 2006
CINCINNATI FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Ohio		0-4604		31-0746871
(State or other jurisdiction of incorporation)		(Commission File Number)		(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

(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

Item 2.02 Results of Operations and Financial Condition. On August 2, 2006, Cincinnati Financial Corporation issued the attached news release titled “Cincinnati Financial Second-quarter Net Income at 76 Cents per Share and Operating Income at 72 Cents on Higher Catastrophe Losses,” furnished as Exhibit 99.1 hereto and incorporated herein by reference. On August 2, 2006, the company also distributed the attached information titled “Supplemental Financial Data,” furnished as Exhibit 99.2 hereto and incorporated herein by reference. This report should not be deemed an admission as to the materiality of any information contained in the news release or supplemental financial data.

In accordance with general instruction B.2 of Form 8-K, the information furnished in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 7.01 Regulation FD Disclosure. On July 26, 2006, Cincinnati Financial Corporation issued the attached news release titled “Cincinnati Financial Subsidiaries Earn AA- (Very Strong) Financial Strength Ratings from Standard & Poor’s Ratings Services,” furnished as Exhibit 99.3 hereto and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(c)

Exhibits

Exhibit 99.1 – News release dated August 2, 2006, “Cincinnati Financial Second-quarter Net Income at 76 Cents per Share and Operating Income at 72 Cents on Higher Catastrophe Losses”

Exhibit 99.2 – Supplemental Financial Data dated August 2, 2006

Exhibit 99.3 – News release dated July 26, 2006, “Cincinnati Financial Subsidiaries Earn AA- (Very Strong) Financial Strength Ratings from Standard & Poor’s Ratings Services.”

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 hereunto duly authorized.

CINCINNATI FINANCIAL CORPORATION

Date August 2, 2006

By /s/Kenneth W. Stecher

Kenneth W. Stecher

Chief Financial Officer, Senior Vice President, Secretary and Treasurer

(Principal Accounting Officer)

EX-99 2 cinfinex991.htm EXHIBIT 99.1 Converted by EDGARwiz

CINCINNATI FINANCIAL CORPORATION

Mailing Address: P.O. BOX 145496

CINCINNATI, OHIO 45250-5496

(513) 870-2000

Investor Contact: Heather J. Wietzel

(513) 870-2768

Media Contact: Joan O. Shevchik

(513) 603-5323

Cincinnati Financial Second-quarter Net Income at 76 Cents per Share and Operating Income* at 72 Cents on Higher Catastrophe Losses

Cincinnati, August 2, 2006 – Cincinnati Financial Corporation (Nasdaq: CINF) today reported:

Lower second-quarter net and operating income as higher weather-related catastrophe losses offset healthy property casualty insurance underwriting performance and record investment income. 2006 second-quarter earnings included $3 million, or 2 cents per share, after tax of expense due to the January 1 adoption of stock option expensing.

Higher six-month net income as underwriting performance, investment income and $426 million in investment gains offset higher catastrophe losses.

Lower six-month operating income as $67 million, or 38 cents, from catastrophe losses and $8 million, or 5 cents, from stock option expensing offset underwriting performance and investment income. Catastrophe losses lowered operating income by $11 million, or 6 cents, in the 2005 six-month period.

Financial Highlights


(Dollars in millions except share data)	Three months ended June 30,					Six months ended June 30,
	2006		2005		Change %	2006		2005		Change %
Revenue Highlights
Earned premiums	$	822	$	794	3.6	$	1,627	$	1,571	3.6
Investment income		143		129	10.4		281		256	9.7
Total revenues		981		940	4.4		2,588		1,856	39.5
Income Statement Data
Net income	$	132	$	158	(16.0)	$	684	$	302	126.5
Net realized investment gains and losses		6		8	(26.9)		426		14	2,938.4
Operating income*	$	126	$	150	(15.4)	$	258	$	288	(10.5)
Per Share Data (diluted)
Net income	$	0.76	$	0.89	(14.6)	$	3.90	$	1.70	129.4
Net realized investment gains and losses		0.04		0.05	(20.0)		2.43		0.08	2,937.5
Operating income*	$	0.72	$	0.84	(14.3)	$	1.47	$	1.62	(9.3)

Cash dividend declared	$	0.335	$	0.305	9.8	$	0.670	$	0.595	12.6
Book value		—		—		$	35.02	$	35.08	(0.2)
Weighted average shares outstanding	175,022,367		177,097,493		(1.2)	175,615,017		177,451,366		(1.0)

Insurance Operations Highlights

3.0 percent and 3.5 percent increases in three- and six-month property casualty net written premiums. Strong commercial lines growth with six-month net written premiums up 6.3 percent and new business up 15.1 percent.

94.5 percent and 93.3 percent three- and six-month property casualty combined ratios.

Catastrophe losses contributed 8.0 and 6.5 percentage points to the 2006 three- and six-month combined ratios. In the comparable 2005 periods, catastrophe losses contributed 2.0 and 1.1 percentage points to the ratios.

Six cents and 10 cents contribution from life insurance segment to three- and six-month 2006 operating income.

Investment and Balance Sheet Highlights

10.4 percent and 9.7 percent growth in three- and six-month investment income.

Book value at June 30, 2006, up slightly from year-end 2005 level on lower number of shares outstanding.

Full-year 2006 Outlook Updated**

Property casualty written premiums now expected to grow at least 2 percent in 2006. Growth in commercial lines is more than offsetting expected decline in personal lines.

Combined ratio target remains 92 percent to 94 percent for 2006 although contribution from full-year catastrophe losses could exceed 4.5 percentage point assumption.

Investment income growth target raised to 8.0 percent to 8.5 percent range for 2006.

The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 13 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles or Statutory Accounting Principles.

Outlook and related assumptions are subject to the risks outlined in the company's forward-looking information safe-harbor statement (see Page 9).

Well-positioned in Property Casualty Marketplace

“Our commercial lines insurance business continues to report healthy growth, as well as its 12^th consecutive quarter of underwriting profits, even as market conditions grow increasingly competitive.” said John J. Schiff Jr., CPCU, chairman and chief executive officer. “Business policyholders are responding favorably to their local independent agents’ presentation of the Cincinnati value proposition – customized, multi-year coverage packages, superior claims service, our A++ rating from A.M. Best Co. and a local field force that provides underwriting, loss control, premium audit, marketing and other services. We believe the 6.3 percent six-month growth rate of commercial lines written premium exceeded the average for the commercial lines marketplace.

“As we anticipated, our personal lines premiums did not grow in the first half. We believe our new business and retention trends may begin to gradually reverse in the second half of the year, after the July 1 effective date of our limited program of policy credits. These credits incorporate insurance scores into the pricing of our personal auto and homeowner policies, reducing premiums for some preferred policyholders, who appreciate our homeowner-auto package, superior claims service and financial strength,” Schiff said.

“Again this year, policyholders have had ample opportunities to benefit from the Cincinnati relationship. From March through July, we’ve seen severe weather across the Midwest. Of almost 6,800 catastrophe claims reported between March and June, more than 88 percent are already closed. Our claims representatives’ prompt responses and personal approach reflect positively on our agents, supporting their marketing efforts to value-oriented clients.

“As competition continues in our regional markets, we believe our company can create real value for our policyholders, local independent agents, shareholders and company associates by outworking the competition. For Cincinnati, that means maintaining strong relationships with our established agencies, writing a significant portion of each agency’s business, giving outstanding claims service to their clients and attracting new agencies.”

Schiff added, “Our approach is to appoint only the most professionally managed agencies in each area where we see opportunities to bring Cincinnati’s insurance products and services to families and businesses. This high-quality representation is an advantage we have been carefully expanding. We have added 44 new agency locations in the first six months, and we’re targeting 55 to 60 new agency appointments for the year. These new appointments and other changes in agency structures brought total reporting agency locations to 1,283, a net increase of 31 since year-end 2005.”

2006 Property Casualty Outlook Update

Kenneth W. Stecher, chief financial officer and executive vice president noted, “In view of the healthy trends for our commercial lines area, we now believe our consolidated property casualty written premium growth will be at least 2 percent for the year compared with the 2.6 percent increase in 2005. We previously had anticipated 2006 property casualty written premiums would be flat to up slightly.

“Despite the level of catastrophe losses through the first six months of 2006, our combined ratio estimate for 2006 remains 92 percent to 94 percent on a GAAP basis compared with 89.2 percent on a GAAP basis in 2005. On a statutory basis, the combined ratio estimate for 2006 is 91 percent to 93 percent. We are maintaining our target at this level in part because of the favorable loss and loss expense ratio, excluding catastrophe losses, for the first six months of 2006.

“Catastrophe losses for the full year could exceed 4.5 percentage points on the combined ratio,” Stecher added. “We originally allowed for full-year catastrophe losses, net of reinsurance, of approximately $125 million to $145 million, contributing in the range of 4.0 to 4.5 percentage points to the full-year 2006 combined ratio. That level was above our historical range of 3.0 to 3.5 percentage points.

“Catastrophe losses in the second quarter of 2006 totaled $64 million, bringing the six month total to $103 million, or 6.5 percentage points on the six-month combined ratio, compared with a low $17 million, contributing 1.1 percentage points, in the first six months of 2005. In addition, we are estimating pretax catastrophe losses from two Midwestern storms in July at approximately $7 million, which will be included in third-quarter results.”

Stecher said, “We continue to believe that savings in 2006 from favorable loss reserve development from prior accident years is likely to improve the full-year combined ratio in the range of 2 to 3 percentage points. Net savings from favorable development improved this year’s second-quarter loss and loss expense ratio by 2.2 percentage points. For the first six months of 2006, development of prior period reserves was insignificant.”

Stecher noted. “In last year’s second quarter, savings improved the ratio by 5.8 percentage points. In the 2005 six-month period, savings improved the loss and loss expense ratio by 2.0 percentage points. In total, higher than normal savings, particularly for liability coverages, improved the full-year 2005 combined ratio by 5.2 percentage points and the 2004 combined ratio by 6.7 percentage points.”

Stecher added, “We continue to invest in infrastructure, particularly in technology, staff and physical plant, to help assure achievement of the company’s long-term objectives. In particular, we are making progress in introducing Web-based systems that improve service to and communication with our agencies. We have established a base on which to build over the next several years.”

Investment Operations Contribute to Net Income

Stecher said, “Investment income growth for the six months benefited from income on short-term investments purchased in the first quarter with proceeds from sale of our ALLTEL holdings and redeemed in June to pay taxes applicable to that sale. Higher investment income growth helped us achieve higher than expected earnings. We are raising our target for investment income growth based on the strong cash flows from our insurance operations, the higher-than-historical allocation of new cash flow to fixed-maturity securities over the last two years and the increase in the general level of interest rates.

“We remain committed to our buy-and-hold equity investing strategy, which we believe drives the company’s long-term growth and stability. When allocating available cash for investment between fixed-maturity securities, equities and share repurchase, we look at rating agency capitalization measures among other considerations.”

Schiff concluded, “We focus well beyond the short-term in our commitments to strong agency relationships, claims service excellence, loss reserve adequacy and total return investing. That approach has allowed us to continue targeting above-industry-average growth in written premiums and industry-leading profitability. We expect to continue that performance in 2006, on our way to rewarding shareholders over the long term.”

Property Casualty Insurance Operations


(Dollars in millions)	Three months ended June 30,							Six months ended June 30,
	2006			2005			Change %	2006			2005			Change %
Written premiums	$	814		$	791		3.0	$	1,643		$	1,588		3.5

Earned premiums	$	793		$	765		3.7	$	1,571		$	1,518		3.5

Loss and loss expenses excluding catastrophes		455			421		8.1		887			877		1.2
Catastrophe loss and loss expenses		64			15		326.6		103			17		505.8
Commission expenses		147			157		(6.2)		305			299		1.8
Underwriting expenses		79			75		4.8		162			141		15.0
Policyholder dividends		5			2		193.7		8			5		64.3
Underwriting profit	$	43		$	95		(54.5)	$	106		$	179		(41.1)

Ratios as a percent of earned premiums:
Loss and loss expenses excluding catastrophes		57.3	%		55.0	%			56.5	%		57.8	%
Catastrophe loss and loss expenses		8.0			2.0				6.5			1.1
Loss and loss expenses		65.3	%		57.0	%			63.0	%		58.9	%
Commission expenses		18.6			20.5				19.4			19.7
Underwriting expenses		9.9			9.8				10.4			9.3
Policyholder dividends		0.7			0.2				0.5			0.3
Combined ratio		94.5	%		87.5	%			93.3	%		88.2	%

Property Casualty Insurance Highlights

3.5 percent rise in six-month 2006 property casualty written premiums, with a 3.0 percent second-quarter increase.

$170 million in new business written directly by agencies compared with $152 million in last year’s six months. Second-quarter new business written directly by agencies rose 15.6 percent to $94 million from $81 million.

1,066 agency relationships with 1,283 reporting locations marketing our insurance products at June 30, 2006, up from 1,024 agency relationships with 1,252 locations at year-end 2005.

5.1 percentage point increase in six-month property casualty combined ratio. Higher catastrophe losses, a lower level of savings from favorable development of prior period reserves, stock option expensing, and higher underwriting expenses more than offset the effect of a single large commercial loss last year.

$64 million in second-quarter 2006 catastrophe losses, reflecting $67 million in weather events during the period and $3 million favorable development from prior period storms. Catastrophe losses added 8.0 percentage points to the three-month combined ratio. Three-month 2005 catastrophe losses added only 2.0 percentage points.

$103 million in six-month 2006 catastrophe losses added 6.5 percentage points to the six-month combined ratio. Six-month 2005 catastrophe losses added only 1.1 percentage points.


2006 Year-to-date Events	Dates	States Primarily Affected	Reported Claims (as of July 30)	Loss Estimate (pretax, net of reinsurance, as of June 30)
Midwest tornadoes and severe weather	March 11-13	Arkansas, Illinois, Indiana, Kansas, Missouri, Oklahoma	1,567	$35 million
Midwest wind and hail	April 2-3	Arkansas, Illinois, Indiana, Kentucky, Missouri, Tennessee	1,192	$19 million
Midwest wind and hail	April 6-8	Alabama, Georgia, Indiana, Kansas, Kentucky, Nebraska, Ohio, Tennessee	881	$11 million
Midwest wind and hail	April 13-15	Illinois, Indiana, Iowa, Wisconsin	2,578	$27 million
Midwest wind, hail and flood	June 18-22	Indiana, Ohio, Wisconsin	460	$7 million
East coast wind and flood	June 25-28	Maryland, New York, Pennsylvania, Virginia	52	$3 million

Three-month 2006 net savings from favorable development improved the loss and loss expense ratio by 2.2 percentage points. In last year’s second quarter, savings improved the ratio by 5.8 percentage points.

Six-month 2006 development of prior period reserves was insignificant. In the comparable 2005 period, savings improved the loss and loss expense ratio by 2.0 percentage points. The year-over-year difference largely related to development of commercial casualty losses, which can fluctuate due to the nature and size of commercial umbrella policies and limits.

Commercial Lines Insurance Operations


(Dollars in millions)	Three months ended June 30,							Six months ended June 30,
	2006			2005			Change %	2006			2005			Change %
Written premiums	$	603		$	567		6.5	$	1,271		$	1,195		6.3

Earned premiums	$	599		$	563		6.5	$	1,181		$	1,114		6.1

Loss and loss expenses excluding catastrophes		334			306		9.1		658			635		3.7
Catastrophe loss and loss expenses		34			2		1,290.6		63			9		637.0
Commission expenses		105			111		(4.9)		222			215		3.4
Underwriting expenses		63			56		12.8		116			96		21.3
Policyholder dividends		5			2		193.7		8			5		64.3
Underwriting profit	$	58		$	86		(32.2)	$	114		$	154		(26.8)

Ratios as a percent of earned premiums:
Loss and loss expenses excluding catastrophes		55.7	%		54.4	%			55.8	%		57.0	%
Catastrophe loss and loss expenses		5.6			0.4				5.3			0.8
Loss and loss expenses		61.3	%		54.8	%			61.1	%		57.8	%
Commission expenses		17.6			19.7				18.8			19.3
Underwriting expenses		10.5			10.0				9.8			8.6
Policyholder dividends		0.9			0.3				0.7			0.4
Combined ratio		90.3	%		84.8	%			90.4	%		86.1	%

Commercial Lines Insurance Highlights

6.3 percent growth in six-month 2006 commercial lines net written premiums with a 6.5 percent second-quarter increase.

$156 million in new commercial lines business written directly by agencies in six-months 2006, up 15.1 percent. Second-quarter new commercial lines business rose 18.6 percent to $86 million.

90.4 percent six-month 2006 commercial lines combined ratio. The 4.3 percentage-point increase primarily was due to a 4.5 percentage-point rise in the catastrophe loss ratio.

1.2 percentage-point improvement in six-month loss and loss expense ratio excluding catastrophes. A single large fire loss in last year’s first quarter increased the six-month 2005 ratio by 2.2 percentage points.

0.5 percentage-point decrease in six-month commercial lines commission expense ratio, primarily due to lower profit-sharing commissions resulting from lower overall underwriting profit.

1.5 percentage-point increase in noncommission expense ratio, including policyholder dividends. The rise largely was due to higher taxes, licenses and fee, and increased staffing expenses. Stock option expense contributed 0.6 percentage points to the six-month 2006 ratio.

Continued commercial lines growth anticipated as company maintains underwriting standards. The company believes its approach should allow it to maintain most of the positive underlying improvement in commercial lines profitability that has occurred over the past several years.

Personal Lines Insurance Operations


(Dollars in millions)	Three months ended June 30,							Six months ended June 30,
(Dollars in millions)	2006			2005			Change %	2006			2005			Change %
Written premiums	$	211		$	224		(5.9)	$	372		$	393		(5.1)

Earned premiums	$	194		$	202		(4.1)	$	390		$	404		(3.6)

Loss and loss expenses excluding catastrophes		121			115		5.2		229			242		(5.4)
Catastrophe loss and loss expenses		30			13		142.1		40			8		373.5
Commission expenses		42			46		(9.1)		83			84		(2.1)
Underwriting expenses		16			19		(18.5)		46			45		1.7
Underwriting profit (loss)	$	(15)		$	9		nm	$	(8)		$	25		nm

Ratios as a percent of earned premiums:
Loss and loss expenses excluding catastrophes		62.3	%		56.7	%			58.7	%		59.8	%
Catastrophe loss and loss expenses		15.6			6.2				10.3			2.1
Loss and loss expenses		77.9	%		62.9	%			69.0	%		61.9	%
Commission expenses		21.7			22.9				21.2			20.9
Underwriting expenses		8.0			9.5				11.8			11.2
Combined ratio		107.6	%		95.3	%			102.0	%		94.0	%

Personal Lines Insurance Highlights

5.1 percent decrease in six-month 2006 personal lines net written premiums with a 5.9 percent second-quarter decrease.

$14 million in new personal lines business written directly by agencies in the first six months of 2006, compared with $17 million in year-ago period. Second-quarter new personal lines business at $8 million compared with $9 million in the second quarter of 2005.

102.0 percent six-month 2006 personal lines combined ratio. The 8.0 percentage-point increase reflected an 8.2 percentage point rise in the contribution from catastrophe losses.

1.1 percentage-point improvement in six-month personal lines loss and loss expense ratio excluding catastrophe losses. The improvement reflected continued progress in restoring the homeowner business line to full-year profitability and another quarter of excellent personal auto results, offset by higher personal umbrella losses.

0.3 percentage-point increase in six-month commission expense ratio over the lower-than-normal level in the comparable 2005 period. The three-month commission expense ratio declined 1.2 percentage points, primarily due to lower profit-sharing commissions on the weaker personal lines underwriting profitability.

1.5 percentage-point decrease in three-month noncommission underwriting expense ratio, largely due to lower taxes, licenses and fees. The adoption of stock option expensing contributed 0.3 percentage points to the 2006 ratio.

0.6 percentage-point increase in six-month noncommission underwriting expense ratio. The adoption of stock option expensing added 0.6 percentage points to the 2006 ratio. Higher technology expenses and higher amortization of deferred acquisition costs offset lower taxes, licenses and fees.

Diamond, the company’s personal lines policy processing system, to be in use by year-end 2006 in 13 states that represent approximately 90 percent of total 2005 personal lines earned premium volume. First-half rollout to Georgia, Kentucky, Tennessee and Wisconsin agents completed on schedule. Minnesota and Missouri rollouts planned for later this year.

Decrease in full-year 2006 personal lines premiums expected. Effective July 1, a limited program of policy credits to incorporate insurance scores into pricing of personal auto and homeowner policies was introduced in most states where the Diamond system is in use. This program lowers premiums for some existing policyholders, but may contribute to higher levels of new business activity by making rates more competitive for agents’ better customers.

Life Insurance Operations


(In millions)	Three months ended June 30,					Six months ended June 30,
(In millions)	2006		2005		Change %	2006		2005		Change %
Written premiums	$	41	$	54	(23.5)	$	81	$	107	(24.0)

Earned premiums	$	29	$	29	1.8	$	56	$	53	5.7
Investment income, net of expenses		27		24	11.0		53		48	10.3
Other income		1		1	25.0		2		2	13.2
Total revenues, excluding realized investment gains and losses		57		54	6.3		111		103	8.0
Policyholder benefits		28		26	10.3		59		50	18.0
Expenses		13		14	(4.8)		24		25	(5.6)
Total benefits and expenses		41		40	4.8		83		75	10.0
Net income before income tax and realized investment gains and losses		16		14	10.4		28		28	2.6
Income tax		6		5	16.1		10		10	14.7
Net income before realized investment gains and losses	$	10	$	9	7.5	$	18	$	18	(3.6)

Life Insurance Highlights

$81 million in six-month total life insurance operations net written premiums, compared with $107 million in year-ago period. Written premiums for life insurance operations for all periods include life insurance, annuity and accident and health premiums.

10.7 percent increase to $33 million in statutory written premiums for term and other life insurance products in the first six months of 2006. Since late 2005, the company has de-emphasized annuities because of an unfavorable interest rate environment. Statutory written annuity premiums decreased to $17 million in the first six months of 2006 from $50 million in the comparable prior period.

5.5 percent rise in face amount of life policies in force to $54.330 billion at June 30, 2006, from $51.493 billion at year-end 2005.

$8 million increase in six-month benefits and expenses primarily due to higher mortality expenses compared with the year-earlier periods, although mortality experience remained within pricing guidelines. Adoption of stock option expensing added approximately $700,000 to other operating expenses.

29.7 percent rise in first-half 2006 term life insurance written premiums, benefiting from the 2005 introduction of a new series of term products. The Termsetter Plus series includes an optional return-of-premium feature. Response to the new portfolio has been favorable, with approximately 25 percent of applications requesting the return-of-premium feature.

Plans to introduce cash value accumulation universal life products for adults and children in the second half of 2006 to further round out the universal life portfolio.

Investment Operations


(In millions)		Three months ended June 30,					Six months ended June 30,
(In millions)		2006		2005	Change %		2006		2005	Change %
Investment income:
Interest	$	77	$	70	9.2	$	151	$	138	9.3
Dividends		65		59	11.2		127		117	8.8
Other		3		2	56.0		7		4	58.2
Investment expenses		(2)		(2)	(50.7)		(4)		(3)	(30.2)
Total net investment income		143		129	10.4		281		256	9.7
Investment interest credited to contract holders		(13)		(13)	(4.8)		(27)		(25)	(7.3)
Net realized investment gains and losses:
Realized investment gains and losses		10		13	(17.5)		669		29	2,223.3
Change in valuation of embedded derivatives		1		0	10.1		4		(7)	152.3
Other-than-temporary impairment charges		0		0	100.0		(1)		0	(64.9)
Net realized investment gains (losses)		11		13	(12.3)		672		22	2,996.7
Investment operations income	$	141	$	129	8.7	$	926	$	253	266.1

Balance Sheet


(Dollars in millions except share data)							At June 30,			At December 31,
(Dollars in millions except share data)								2006			2005
Balance sheet data
Invested assets							$	12,514		$	12,702
Total assets								16,936			16,003
Short-term debt								49			0
Long-term debt								791			791
Shareholders' equity								6,065			6,086
Book value per share								35.02			34.88
Debt-to-capital ratio								12.2	%		11.5	%

	Three months ended June 30,						Six months ended June 30,
		2006			2005			2006			2005
Performance measures
Comprehensive income (loss)	$	(86)		$	209		$	153		$	20
Return on equity, annualized		8.6	%		10.4	%		22.5	%		9.8	%
Return on equity, annualized, based on comprehensive income		(5.6)			13.8			5.1			0.6

Investment and Balance Sheet Highlights

9.7 percent increase in six-month pretax net investment income with 10.4 percent increase for the second quarter. Fifth Third Bancorp, the company’s largest equity holding, contributed 44.7 percent of total six-month dividend income.

Growth in investment income reflected the strong cash flow for new investments, higher interest income from the growing fixed-maturity portfolio and increased dividend income from the common stock portfolio. In addition, proceeds from the sale of the ALLTEL Corporation holding used to make the applicable tax payments in June 2006 were invested in short-term instruments that generated approximately $5 million in interest income in the first six months of 2006.

$23 million annually in additional investment income expected from dividend increases announced during the 12 months ended June 30, 2006, by Fifth Third and another 35 of the 48 common stock holdings in the equity portfolio.

$669 million in six-month net realized investment gains (pretax) including $647 million due to the first-quarter sale of the company’s holdings of ALLTEL common stock.

Invested assets at June 30, 2005, decreased from year-end 2005 primarily due to the first-quarter 2006 sale of ALLTEL holding and the tax obligation associated with the significant capital gain that was realized on that sale.

150,000 shares repurchased in second quarter. Raised six-month repurchase activity to 2.0 million shares for a total cost of $88 million.

$4.342 billion in statutory surplus for the property casualty insurance group at June 30, 2006, compared with $4.194 billion at year-end 2005. The ratio of common stock to statutory surplus for the property casualty insurance group portfolio was 92.4 percent at June 30, 2006, compared with 97.0 percent at year-end 2005.

31.1 percent ratio of investment securities held at the holding-company level to total holding-company-only assets at June 30, 2006, comfortably within management’s below-40 percent target.

Cincinnati Financial Corporation offers property and casualty insurance, its main business, through The Cincinnati Insurance Company, The Cincinnati Indemnity Company and The Cincinnati Casualty Company. The Cincinnati Life Insurance Company markets life and disability income insurance and annuities. CFC Investment Company offers commercial leasing and financing services. CinFin Capital Management Company provides asset management services to institutions, corporations and individuals. For additional information about the company, please visit www.cinfin.com.

For additional information or to register for this morning’s conference call webcast, please visit www.cinfin.com/investors.

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 2005 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 21. Although we often review or update our forward-looking statements when events warrant, we caution our readers that we undertake no obligation to do so.

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

Ability to obtain adequate reinsurance on acceptable terms, amount of reinsurance purchased, financial strength of reinsurers and the potential for non-payment or delay in payment by reinsurers

Increased frequency and/or severity of claims

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:

○

Downgrade 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 or

○

Regulations or laws that change industry or company practices for our agents.

Increased competition that could result in a significant reduction in the company’s premium growth rate

Underwriting and pricing methods adopted by competitors that could allow them to identify and flexibly price risks, which could decrease our competitive advantages

Actions of insurance departments, state attorneys general or other regulatory agencies that:

○

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

○

increase our expenses

○

place us at a disadvantage in the marketplace or

○

restrict our ability to execute our business model, including the way we compensate agents

Delays or inadequacies in the development, implementation, performance and benefits of technology projects and enhancements

Inaccurate estimates or assumptions used for critical accounting estimates, including loss reserves

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

Recession or other economic conditions or regulatory, accounting or tax changes resulting in lower demand for insurance products

Sustained decline in overall stock market values negatively affecting the company’s equity portfolio and book value; in particular a sustained decline in the market value of Fifth Third shares, a significant equity holding

Events that lead to a significant decline in the value of a particular security and impairment of the asset

Prolonged medium- and long-term low interest rate environment or other factors that limit the company’s ability to generate growth in investment income

Adverse outcomes from litigation or administrative proceedings

Investment activities or market value fluctuations that trigger restrictions applicable to the parent company under the Investment Company Act of 1940

Events, such as an avian flu epidemic, natural catastrophe or construction delays, 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, 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 recent measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain.

Cincinnati Financial Corporation

Consolidated Balance Sheets


(Dollars in millions except per share data)		June 30,		December 31,
(Dollars in millions except per share data)		2006		2005
		(unaudited)
ASSETS
Investments
Fixed maturities, at fair value (amortized cost: 2006—$5,700; 2005—$5,387)	$	5,629	$	5,476
Equity securities, at fair value (cost: 2006—$2,533; 2005—$2,128)		6,830		7,106
Short-term investments, at fair value (cost: 2005—$75)		0		75
Other invested assets		55		45
Cash and cash equivalents		203		119
Securities lending collateral		898		0
Investment income receivable		118		117
Finance receivable		106		105
Premiums receivable		1,192		1,116
Reinsurance receivable		691		681
Prepaid reinsurance premiums		13		14
Deferred policy acquisition costs		460		429
Land, building and equipment, net, for company use (accumulated depreciation: 2006—$246; 2005—$232)		184		168
Other assets		76		66
Separate accounts		481		486
Total assets	$	16,936	$	16,003

LIABILITIES
Insurance reserves
Loss and loss expense reserves	$	3,796	$	3,661
Life policy reserves		1,372		1,343
Unearned premiums		1,634		1,559
Securities lending payable		898		0
Other liabilities		547		455
Deferred income tax		1,303		1,622
Notes payable		49		0
6.125% senior notes due 2034		371		371
6.9% senior debentures due 2028		28		28
6.92% senior debenture due 2028		392		392
Separate accounts		481		486
Total liabilities		10,871		9,917

SHAREHOLDERS' EQUITY
Common stock, par value-$2 per share; authorized: 2006-500 million shares, 2005- 500 million shares; issued: 2006-195 million shares, 2005-194 million shares		391		389
Paid-in capital		997		969
Retained earnings		2,656		2,088
Accumulated other comprehensive income—unrealized gains on investments		2,753		3,284
Treasury stock at cost (2006—22 million shares, 2005—20 million shares)		(732)		(644)
Total shareholders' equity		6,065		6,086
Total liabilities and shareholders' equity	$	16,936	$	16,003

Cincinnati Financial Corporation

Consolidated Statements of Income


(In millions except per share data)		Three months ended June 30,				Six months ended June 30,
(In millions except per share data)		2006		2005		2006		2005
	(unaudited)				(unaudited)
REVENUES
Earned premiums
Property casualty	$	793	$	765	$	1,571	$	1,518
Life		29		29		56		53
Investment income, net of expenses		143		129		281		256
Realized investment gains and losses		11		13		671		22
Other income		5		4		9		7
Total revenues		981		940		2,588		1,856

BENEFITS AND EXPENSES
Insurance losses and policyholder benefits		546		461		1,047		942
Commissions		156		166		322		316
Other operating expenses		79		72		159		139
Taxes, licenses and fees		14		18		39		35
Increase in deferred policy acquisition costs		(7)		(7)		(22)		(18)
Interest expense		13		13		26		26
Other expenses		5		2		8		6
Total benefits and expenses		806		725		1,579		1,446

INCOME BEFORE INCOME TAXES		175		215		1,009		410

PROVISION (BENEFIT) FOR INCOME TAXES
Current		48		57		340		107
Deferred		(5)		0		(15)		1
Total provision for income taxes		43		57		325		108

NET INCOME	$	132	$	158	$	684	$	302

PER COMMON SHARE
Net income—basic	$	0.77	$	0.90	$	3.94	$	1.72
Net income—diluted	$	0.76	$	0.89	$	3.90	$	1.70

Since 1996, Cincinnati Financial has disclosed the estimated impact of stock options on net income and earnings per share in a Note to the Financial Statements. For the three and six months ended June 30, 2005, diluted net income would have been reduced by approximately 2 cents and 4 cents per share, if option expense, calculated using the binomial option-pricing model, were included as an expense.

***

Definitions of Non-GAAP Information and
Reconciliation to Comparable GAAP Measures

(See attached tables for 2006 and 2005 data; prior-period reconciliations available at www.cinfin.com/investors.)

Cincinnati Financial Corporation prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Statutory data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners’ (NAIC) Accounting Practices and Procedures Manual and therefore is not reconciled to GAAP data.

Management uses certain non-GAAP and non-statutory financial measures to evaluate its primary business areas – property casualty insurance, life insurance and investments – when analyzing both GAAP and certain non-GAAP measures may improve understanding of trends in the underlying business, helping avoid incorrect or misleading assumptions and conclusions about the success or failure of company strategies. Management adjustments to GAAP measures generally: apply to non-recurring events that are unrelated to business performance and distort short-term results; involve values that fluctuate based on events outside of management’s control; or relate to accounting refinements that affect comparability between periods, creating a need to analyze data on the same basis.

Operating income: Operating income is calculated by excluding net realized investment gains and losses (defined as realized investment gains and losses after applicable federal and state income taxes) from net income. Management evaluates operating income to measure the success of pricing, rate and underwriting strategies. While realized investment gains (or losses) are integral to the company’s insurance operations over the long term, the determination to realize investment gains or losses in any period may be subject to management’s discretion and is independent of the insurance underwriting process. Also, under applicable GAAP accounting requirements, gains and losses can be recognized from certain changes in market values of securities and embedded derivatives without actual realization. Management believes that the level of realized investment gain s or losses for any particular period, while it may be material, may not fully indicate the performance of ongoing underlying business operations in that period.

For these reasons, many investors and shareholders consider operating income to be one of the more meaningful measures for evaluating insurance company performance. Equity analysts who report on the insurance industry and the company generally focus on this metric in their analyses. The company presents operating income so that all investors have what management believes to be a useful supplement to GAAP information.

Statutory accounting rules: For public reporting, insurance companies prepare financial statements in accordance with GAAP. However, insurers also must calculate certain data according to statutory accounting rules as defined in the NAIC’s Accounting Practices and Procedures Manual, which may be, and has been, modified by various state insurance departments. Statutory data is publicly available, and various organizations use it to calculate aggregate industry data, study industry trends and compare insurance companies.

Written premium: Under statutory accounting rules, property casualty written premium is the amount recorded for policies issued and recognized on an annualized basis at the effective date of the policy. Management analyzes trends in written premium to assess business efforts. Earned premium, used in both statutory and GAAP accounting, is calculated ratably over the policy term. The difference between written and earned premium is unearned premium.

Written premium adjustment – statutory basis only: In 2002, the company refined its estimation process for matching property casualty written premiums to policy effective dates, which added $117 million to 2002 written premiums. To better assess ongoing business trends, management may exclude this adjustment when analyzing trends in written premiums and statutory ratios that make use of written premiums.

Codification: Adoption of Codification of Statutory Accounting Principles was required for Ohio-based insurance companies effective January 1, 2001. The adoption of Codification changed the manner in which the company recognized statutory property casualty written premiums. As a result, 2001 statutory written premiums included $402 million to account for unbooked premiums related to policies with effective dates prior to January 1, 2001. To better assess ongoing business trends, management excludes this $402 million when analyzing written premiums and statutory ratios that make use of written premiums.

Life insurance gross written premiums: In analyzing the life insurance company’s gross written premiums, management excludes five larger, single-pay life insurance policies (bank-owned life insurance or BOLIs) written in 2004, 2002, 2000 and 1999 to focus on the trend in premiums written through the independent agency distribution channel.

One-time charges or adjustments: Management analyzes earnings and profitability excluding the impact of one-time items.

○

In 2003, as the result of a settlement negotiated with a vendor, pretax results included the recovery of $23 million of the $39 million one-time, pretax charge incurred in 2000.

○

In 2000, the company recorded a one-time charge of $39 million, pre-tax, to write down previously capitalized costs related to the development of software to process property casualty policies.

○

In 2000, the company earned $5 million in interest in the first quarter from a $303 million single-premium BOLI policy that was booked at the end of 1999 and segregated as a separate account effective April 1, 2000. Investment income and realized investment gains and losses from separate accounts generally accrue directly to the contract holder and, therefore, are not included in the company’s consolidated financials.


Cincinnati Financial Corporation
Quarterly Net Income Reconciliation

(In millions except per share data)	Three months ended														Six months ended				Nine months ended			Twelve months ended
	12/31/06	9/30/06	6/30/06		3/31/06		12/31/05		9/30/05		6/30/05		3/31/05		6/30/06		6/30/05		9/30/06	9/30/05		12/31/06	12/31/05
																				&nbs p;
Net income			$	132	$	552	$	183	$	117	$	158	$	144	$	684	$	302		$	419		$	602
One-time item				0		0		0		0		0		0		0		0			0			0
Net income before one-time item				132		552		183		117		158		144		684		302			419			602
Net realized investment gains and losses				6		421		16		10		8		6		426		14			24			40
Operating income before one-time item				126		131		167		107		150		138		258		288			395			562
Less catastrophe losses				(41)		(26)		(28)		(43)		(9)		(2)		(67)		(11)			(54)			(82)
Operating income before catastrophe losses and one-time item			$	167	$	157	$	195	$	150	$	159	$	140	$	325	$	299		$	449		$	644

Diluted per share data																					&nbs p;
Net income			$	0.76	$	3.13	$	1.03	$	0.66	$	0.89	$	0.81	$	3.90	$	1.70		$	2.37		$	3.40
One-time item				0.00		0.00		0.00		0.00		0.00		0.00		0.00		0.00			0.00			0.00
Net income before one-time item				0.76		3.13		1.03		0.66		0.89		0.81		3.90		1.70			2.37			3.40
Net realized investment gains and losses				0.04		2.39		0.09		0.05		0.05		0.03		2.43		0.08			0.14			0.23
Operating income before one-time item				0.72		0.74		0.94		0.61		0.84		0.78		1.47		1.62			2.23			3.17
Less catastrophe losses				(0.24)		(0.14)		(0.16)		(0.24)		(0.05)		(0.01)		(0.38)		(0.06)			(0.30)			(0.46)
Operating income before catastrophe losses and one-time item			$	0.96	$	0.88	$	1.10	$	0.85	$	0.89	$	0.79	$	1.85	$	1.68		$	2.53		$	3.63

Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
equal the full year as each is computed independently.


Cincinnati Insurance Group
Quarterly Property Casualty Data - Consolidated

(Dollars in millions)	Three months ended																				Six months ended						Nine months ended				Twelve months ended
	12/31/06	9/30/06	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05			9/30/06	9/30/05			12/31/06	12/31/05
Premiums
Adjusted written premiums (statutory)			$	804		$	794		$	765		$	764		$	781		$	787		$	1,600		$	1,568			$	2,332			$	3,097
Written premium adjustment – statutory only				10			33			(38)			(3)			10			10			43			20				17				(21)
Reported written premiums (statutory)*			$	814		$	829		$	727		$	761		$	791		$	797		$	1,643		$	1,588			$	2,349			$	3,076
Unearned premiums change				(21)			(51)			48			4			(26)			(44)			(72)			(70)				(66)				(18)
Earned premiums			$	793		$	778		$	775		$	765		$	765		$	753		$	1,571		$	1,518			$	2,283			$	3,058

Statutory combined ratio
Reported statutory combined ratio*				93.7	%		89.6	%		85.8	%		96.6	%		86.6	%		87.3	%		91.7	%		86.9	%			90.1	%			89.0	%
Written premium adjustment – statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted statutory combined ratio				93.7	%		89.6	%		85.8	%		96.6	%		86.6	%		87.3	%		91.7	%		86.9	%			90.1	%			89.0	%
Less catastrophe losses				8.0			5.0			5.6			8.6			2.0			0.3			6.5			1.1				3.6				4.1
Adjusted statutory combined ratio excluding catastrophe losses				85.7	%		84.6	%		80.2	%		88.0	%		84.6	%		87.0	%		85.2	%		85.8	%			86.5	%			84.9	%

Reported commission expense ratio*				17.6	%		18.1	%		20.4	%		20.3	%		19.3	%		16.8	%		17.9	%		18.0	%			18.8	%			19.2	%
Written premium adjustment – statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted commission expense ratio				17.6	%		18.1	%		20.4	%		20.3	%		19.3	%		16.8	%		17.9	%		18.0	%			18.8	%			19.2	%

Reported other expense ratio*				10.8	%		10.8	%		11.6	%		10.8	%		10.3	%		9.8	%		10.8	%		10.0	%			10.2	%			10.5	%
Written premium adjustment – statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted other expense ratio				10.8	%		10.8	%		11.6	%		10.8	%		10.3	%		9.8	%		10.8	%		10.0	%			10.2	%			10.5	%

Reported statutory expense ratio*				28.4	%		28.9	%		32.0	%		31.1	%		29.6	%		26.6	%		28.7	%		28.0	%			29.0	%			29.7	%
Written premium adjustment – statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted statutory expense ratio				28.4	%		28.9	%		32.0	%		31.1	%		29.6	%		26.6	%		28.7	%		28.0	%			29.0	%			29.7	%

GAAP combined ratio
GAAP combined ratio				94.5	%		92.0	%		83.9	%		96.6	%		87.5	%		88.9	%		93.3	%		88.2	%			91.0	%			89.2	%
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
GAAP combined ratio before one-time item				94.5	%		92.0	%		83.9	%		96.6	%		87.5	%		88.9	%		93.3	%		88.2	%			91.0	%			89.2	%

Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts
may not equal the full year as each is computed independently.
nm - Not meaningful
* Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.


Cincinnati Insurance Group
Quarterly Property Casualty Data - Commercial Lines

(Dollars in millions)	Three months ended																				Six months ended						Nine months ended				Twelve months ended
	12/31/06	9/30/06	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05			9/30/06	9/30/05			12/31/06	12/31/05
Premiums
Adjusted written premiums (statutory)			$	593		$	635		$	584		$	547		$	557		$	617		$	1,228		$	1,174			$	1,721			$	2,306
Written premium adjustment -- statutory only				10			33			(36)			(1)			9			12			43			21				20				(16)
Reported written premiums (statutory)*			$	603		$	668		$	548		$	546		$	566		$	629		$	1,271		$	1,195			$	1,741			$	2,290
Unearned premiums change				(4)			(86)			28			18			(3)			(78)			(90)			(81)				(63)				(36)
Earned premiums			$	599		$	582		$	576		$	564		$	563		$	551		$	1,181		$	1,114			$	1,678			$	2,254

Statutory combined ratio
Reported statutory combined ratio*				89.6	%		87.5	%		84.3	%		95.5	%		83.9	%		85.5	%		88.6	%		84.6	%			88.1	%			87.1	%
Written premium adjustment -- statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted statutory combined ratio				89.6	%		87.5	%		84.3	%		95.5	%		83.9	%		85.5	%		88.6	%		84.6	%			88.1	%			87.1	%
Less catastrophe losses				5.6			5.1			2.4			9.5			0.4			1.1			5.3			0.8				3.6				3.4
Adjusted statutory combined ratio excluding catastrophe losses				84.0	%		82.4	%		81.9	%		86.0	%		83.5	%		84.4	%		83.3	%		83.8	%			84.5	%			83.7	%

GAAP combined ratio
GAAP combined ratio				90.3	%		90.5	%		82.1	%		95.2	%		84.8	%		87.5	%		90.4	%		86.1	%			89.2	%			87.4	%
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
GAAP combined ratio before one-time item				90.3	%		90.5	%		82.1	%		95.2	%		84.8	%		87.5	%		90.4	%		86.1	%			89.2	%			87.4	%

Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
equal the full year as each is computed independently.
nm - Not meaningful
* Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.


Cincinnati Insurance Group
Quarterly Property Casualty Data - Personal Lines

(Dollars in millions)	Three months ended																				Six months ended						Nine months ended				Twelve months ended
	12/31/06	9/30/06	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05			9/30/06	9/30/05			12/31/06	12/31/05
Premiums
Adjusted written premiums (statutory)			$	211		$	161		$	181		$	217		$	223		$	170		$	372		$	393			$	611			$	791
Written premium adjustment -- statutory only				0			0			(2)			(2)			1			(2)			0			(1)				(3)				(5)
Reported written premiums (statutory)*			$	211		$	161		$	179		$	215		$	224		$	168		$	372		$	392			$	608			$	786
Unearned premiums change				(17)			35			20			(14)			(22)			34			18			8				(3)				17
Earned premiums			$	194		$	196		$	199		$	201		$	202		$	202		$	390		$	404			$	605			$	804

Statutory combined ratio
Reported statutory combined ratio*				106.4	%		98.1	%		90.1	%		99.9	%		93.6	%		94.0	%		101.6	%		93.7	%			95.7	%			94.3	%
Written premium adjustment -- statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted statutory combined ratio				106.4	%		98.1	%		90.1	%		99.9	%		93.6	%		94.0	%		101.6	%		93.7	%			95.7	%			94.3	%
Less catastrophe losses				15.6			5.0			14.9			6.3			6.2			2.0			10.3			2.1				3.5				6.3
Adjusted statutory combined ratio excluding catastrophe losses				90.8	%		93.1	%		75.2	%		93.6	%		87.4	%		96.0	%		91.3	%		91.6	%			92.2	%			88.0	%

GAAP combined ratio
GAAP combined ratio				107.6	%		96.4	%		89.0	%		100.5	%		95.3	%		92.7	%		102.0	%		94.0	%			96.1	%			94.4	%
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
GAAP combined ratio before one-time item				107.6	%		96.4	%		89.0	%		100.5	%		95.3	%		92.7	%		102.0	%		94.0	%			96.1	%			94.4	%

Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
equal the full year as each is computed independently.
nm - Not meaningful
* Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

EX-99 3 cinfinex992.htm EXHIBIT 99.2 Cincinnati Financial Corporation

Cincinnati Financial Corporation

Supplemental Financial Data

June 30, 2006

Second Quarter

6200 South Gilmore Road

Fairfield, Ohio 45014-5141

www.cinfin.com/investors


Investor Contact:		Media Contact:		Shareholder Contact:
Heather J. Wietzel		Joan O. Shevchik		Jerry L. Litton
(513) 870-2768		(513) 603-5323		(513) 870-2639


Cincinnati Financial Corporation
		A.M. Best	Fitch	Moody’s	Standard & Poor’s

Corporate Debt		aa-	A+	A2	A

The Cincinnati Insurance Companies

		A.M. Best	Fitch	Moody’s	Standard & Poor’s

Property Casualty Group		A++	--	Aa3	AA-
The Cincinnati Insurance Company		A++	AA	Aa3	AA-
The Cincinnati Indemnity Company		A++	AA	Aa3	AA-
The Cincinnati Casualty Company		A++	AA	Aa3	AA-

The Cincinnati Life Insurance Company		A+	AA	--	AA-


	Ratings are as of August 1, 2006, under continuing review and subject to change and/or affirmation. For the latest ratings, select the Ratings tab on www.cinfin.com/investors.

	The consolidated financial statements and financial exhibits that follow are unaudited. These consolidated financial statements and exhibits should be read in conjunction with the consolidated financial statements and notes included in the Annual Report on Form 10-K for 2005. The results of operations for interim periods should be considered indicative of results to be expected for the full year.


	Cincinnati Financial Corporation
	Supplemental Financial Data
	Second Quarter 2006
		Page	Status
	Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures	3	8/2/2006

Consolidated
	Quick Reference	4	8/2/2006
	Consolidated Statements of Income	5	8/2/2006
	CFC and Subsidiary Consolidation – Six Months Ended June 30, 2006	6	8/2/2006
	CFC and Subsidiary Consolidation – Six Months Ended June 30, 2005	7	8/2/2006
	CFC and Subsidiary Consolidation – Three Months Ended June 30, 2006	8	8/2/2006
	CFC and Subsidiary Consolidation – Three Months Ended June 30, 2005	9	8/2/2006
	Consolidated Balance Sheets	10	8/2/2006
	10-Year Net Income Reconciliation	11	8/2/2006
	Quarterly Net Income Reconciliation	12	8/2/2006
	Top Holdings -- Common Stocks	13	8/2/2006

Property Casualty Insurance Operations
	GAAP Statements of Income	14	8/2/2006
	Statutory Statements of Income	15	8/2/2006
	Statutory Quarterly Analysis – Consolidated	16	8/2/2006
	Statutory Quarterly Analysis – Commercial Lines	17	8/2/2006
	Statutory Quarterly Analysis – Personal Lines	18	8/2/2006
	Direct Written Premiums by Line of Business and State	19	8/2/2006
	Quarterly Property Casualty Data – Commercial Lines of Business	20	8/2/2006
	Quarterly Property Casualty Data – Personal Lines of Business	21	8/2/2006

Reconciliation Data
	10-Year Property Casualty Data – Consolidated	22	8/2/2006
	6-Year Property Casualty Data – Commercial Lines	23	8/2/2006
	6-Year Property Casualty Data – Personal Lines	24	8/2/2006
	Quarterly Property Casualty Data – Consolidated	25	8/2/2006
	Quarterly Property Casualty Data – Commercial Lines	26	8/2/2006
	Quarterly Property Casualty Data – Personal Lines	27	8/2/2006

Life Insurance Operations
	GAAP Statements of Income	28	8/2/2006
	Statutory Statements of Income	29	8/2/2006
	Expenses as a Percentage of Premium	30	8/2/2006

2006 Second-Quarter Supplement

Definitions of Non-GAAP Information and
Reconciliation to Comparable GAAP Measures

Operating income: Operating income is calculated by excluding net realized investment gains and losses (defined as realized investment gains and losses after applicable federal and state income taxes) from net income. Management evaluates operating income to measure the success of pricing, rate and underwriting strategies. While realized investment gains (or losses) are integral to the company’s insurance operations over the long term, the determination to realize investment gains or losses in any period may be subject to management’s discretion and is independent of the insurance underwriting process. Also, under applicable GAAP accounting requirements, gains and losses can be recognized from certain changes in market values of securities and embedded derivatives without actual realization. Management believes that the level of realized investment gains or losses for any particular period, while it may be material, may not fully indicate the performance of ongoing underlying business operations in that period.

One-time charges or adjustments: Management analyzes earnings and profitability excluding the impact of one-time items.

○

In 2003, as the result of a settlement negotiated with a vendor, pretax results included the recovery of $23 million of the $39 million one-time, pretax charge incurred in 2000.

○

In 2000, the company recorded a one-time charge of $39 million, pre-tax, to write down previously capitalized costs related to the development of software to process property casualty policies.

○

2006 Second-Quarter Supplement


Cincinnati Financial Corporation
Quick Reference - Second Quarter 2006
(all data shown is for the three months ended or as of June 30, 2006)
(Based on reported data - see Pages 25-27 for adjusted data)
(Dollars in millions except share data)
Revenues:				Benefits and expenses:
Commercial lines net written premiums	$	603		Commercial lines losses	$	368
Year-over-year percentage change		6.5	%	Year-over-year percentage change		19.1	%
Personal lines net written premiums	$	211		Personal lines losses	$	151
Year-over-year percentage change		(5.9)	%	Year-over-year percentage change		18.7	%
Property casualty net written premiums	$	814		Property casualty losses	$	519
Year-over-year percentage change		3.0	%	Year-over-year percentage change		19.0	%
Commercial lines net earned premiums	$	599		Life and accident and health losses and policy benefits	$	28
Year-over-year percentage change		6.5	%	Year-over-year percentage change		10.3	%
Personal lines net earned premiums	$	194		Operating expenses	$	247
Year-over-year percentage change		(4.1)	%	Year-over-year percentage change		(1.5)	%
Property casualty net earned premiums	$	793		Interest expenses	$	13
Year-over-year percentage change		3.7	%	Year-over-year percentage change		(1.2)	%
Life and accident and health net earned premiums	$	29		Total expenses	$	806
Year-over-year percentage change		1.8	%	Year-over-year percentage change		11.2	%
Investment income	$	143		Income before income taxes	$	175
Year-over-year percentage change		10.4	%	Year-over-year percentage change		(18.4)	%
Realized gains on investments	$	11		Total income tax	$	43
Year-over-year percentage change		(12.3)	%	Year-over-year percentage change		(25.0)	%
Other income	$	5		Effective tax rate		24.5	%
Year-over-year percentage change		32.1	%
Total revenues	$	981		Ratios:
Year-over-year percentage change		4.4	%
				Commercial lines GAAP combined ratio		90.3	%
Income:				Personal lines GAAP combined ratio		107.6	%
				Property casualty GAAP combined ratio		94.5	%
Operating income	$	126
Year-over-year percentage change		(15.5)	%	Commercial lines STAT combined ratio		89.6	%
Net realized investment gains and losses	$	6		Personal lines STAT combined ratio		106.4	%
Year-over-year percentage change		(26.7)	%	Property casualty STAT combined ratio		93.7	%
Net income	$	132
Year-over-year percentage change		(16.0)	%	Return on equity based upon net income (annualized)		8.6	%
				Return on equity based upon operating income (annualized)		8.2	%
Per share: (diluted)
				Balance Sheet:
Operating income	$	0.72
Year-over-year percentage change		(14.3)	%	Fixed maturity investments	$	5,629
Net realized investment gains and losses	$	0.04		Equity securities		6,830
Year-over-year percentage change		(20.0)	%	Other invested assets		55
Net income	$	0.76		Total invested assets	$	12,514
Year-over-year percentage change		(14.6)	%
Book value	$	35.02		Property casualty and life loss and loss expense reserves	$	3,796
Year-over-year percentage change		0.4	%	Total debt		840
Weighted average shares -- diluted	175,022,367			Shareholders equity		6,065
Year-over-year percentage change		(1.2)	%

2006 Second-Quarter Supplement


Cincinnati Financial Corporation
Consolidated Statements of Income

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2006	2005	Change	% Change	2006	2005	Change	% Change
Revenues:
Premiums earned:
Property casualty	$ 827,658,862	$ 807,297,490	$ 20,361,372	2.52	$ 1,643,701,590	$ 1,601,793,433	$ 41,908,157	2.62
Life	38,150,148	38,053,773	96,375	0.25	73,024,692	69,570,579	3,454,113	4.96
Accident health	1,505,451	1,436,094	69,357	4.83	3,239,348	3,089,251	150,097	4.86
Premiums ceded	(44,895,865)	(53,058,355)	8,162,490	15.38	(93,506,571)	(104,008,726)	10,502,155	10.10
Total premiums earned	822,418,596	793,729,002	28,689,594	3.61	1,626,459,059	1,570,444,537	56,014,522	3.57
Investment income	142,723,984	129,330,585	13,393,399	10.36	281,257,037	256,369,855	24,887,182	9.71
Realized gain on investments	11,318,913	12,900,302	(1,581,389)	(12.26)	671,549,813	21,685,286	649,864,527	2,996.80
Other income	5,076,762	3,842,953	1,233,809	32.11	9,374,272	7,591,347	1,782,925	23.49
Total revenues	$ 981,538,255	$ 939,802,842	$ 41,735,413	4.44	$ 2,588,640,181	$ 1,856,091,025	$ 732,549,156	39.47

Benefits & expenses:
Losses & policy benefits	$ 591,893,064	$ 499,176,792	$ 92,716,272	18.57	$ 1,115,454,928	$ 1,037,034,037	$ 78,420,891	7.56
Reinsurance recoveries	(46,075,717)	(38,552,522)	(7,523,195)	(19.51)	(68,351,356)	(95,227,939)	26,876,583	28.22
Commissions	156,229,167	165,775,469	(9,546,302)	(5.76)	321,954,129	316,215,128	5,739,001	1.81
Other operating expenses	79,143,480	72,571,924	6,571,556	9.06	159,296,845	139,528,416	19,768,429	14.17
Interest expense	13,122,241	12,888,705	233,536	1.81	25,962,535	25,846,835	115,700	0.45
Taxes, licenses & fees	14,354,449	18,254,476	(3,900,027)	(21.36)	38,619,901	35,097,922	3,521,979	10.03
Incr deferred acq expense	(7,484,427)	(7,455,455)	(28,972)	(0.39)	(21,943,540)	(18,824,447)	(3,119,093)	(16.57)
Other expenses	4,976,451	2,187,945	2,788,506	127.45	8,308,658	6,035,551	2,273,107	37.66
Total expenses	$ 806,158,708	$ 724,847,334	$ 81,311,374	11.22	$ 1,579,302,100	$ 1,445,705,503	$ 133,596,597	9.24
Income before income taxes	$ 175,379,547	$ 214,955,508	$ (39,575,961)	(18.41)	$ 1,009,338,081	$ 410,385,522	$ 598,952,559	145.95

Provision for income taxes:
Current operating income	$ 43,141,111	$ 52,030,763	$ (8,889,652)	(17.09)	$ 95,662,282	$ 99,339,804	$ (3,677,522)	(3.70)
Realized investments gains and losses	5,332,924	4,738,333	594,591	12.55	244,982,108	7,646,452	237,335,656	3,103.87
Deferred	(5,581,248)	390,080	(5,971,328)	(1,530.80)	(15,779,762)	1,246,528	(17,026,290)	(1,365.90)
Total income taxes	$ 42,892,787	$ 57,159,176	$ (14,266,389)	(24.96)	$ 324,864,628	$ 108,232,784	$ 216,631,844	200.15

Net income	$ 132,486,760	$ 157,796,332	$ (25,309,572)	(16.04)	$ 684,473,453	$ 302,152,738	$ 382,320,715	126.53
Comprehensive net income	$ (86,182,691)	$ 209,090,156	$ (295,272,847)	(141.22)	$ 154,254,515	$ 20,010,967	$ 134,243,548	670.85

Operating income	$ 126,500,771	$ 149,634,362	$ (23,133,591)	(15.46)	$ 257,905,748	$ 288,113,904	$ (30,208,156)	(10.48)
Net realized investments gains and losses	$ 5,985,989	$ 8,161,970	$ (2,175,981)	(26.66)	$ 426,567,705	$ 14,038,834	$ 412,528,871	2,938.48

Net income per share:
Operating income	$ 0.73	$ 0.85	$ (0.12)	(14.12)	$ 1.49	$ 1.64	$ (0.15)	(9.15)
Net realized investments gains and losses	0.04	0.05	(0.01)	(20.00)	2.45	0.08	2.37	2,962.50
Net income per share (basic)	$ 0.77	$ 0.90	$ (0.13)	(14.44)	$ 3.94	$ 1.72	$ 2.22	129.07
Operating income	$ 0.72	$ 0.84	$ (0.12)	(14.29)	$ 1.47	$ 1.62	$ (0.15)	(9.26)
Net realized investments gains and losses	0.04	0.05	(0.01)	(20.00)	2.43	0.08	2.35	2,937.50
Net income per share (diluted)	$ 0.76	$ 0.89	$ (0.13)	(14.61)	$ 3.90	$ 1.70	$ 2.20	129.41
Dividends per share:
Paid	$ 0.335	$ 0.290	$ 0.045	15.52	$ 0.640	$ 0.552	$ 0.088	15.94
Declared	$ 0.335	$ 0.305	$ 0.030	9.84	$ 0.670	$ 0.595	$ 0.075	12.61
Number of shares:
Weighted avg - basic	173,275,927	175,226,612	(1,950,685)	(1.11)	173,724,517	175,389,421	(1,664,904)	(0.95)
Weighted avg - diluted	175,022,367	177,097,493	(2,075,126)	(1.17)	175,615,017	177,451,366	(1,836,349)	(1.03)

2006 Second-Quarter Supplement


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Six Months Ended June 30, 2006

	Total	CFC	CIC GROUP	CLIC	CFC-I	CINFIN	ELIM
Revenues:
Premiums earned:
Property casualty	$1,643,701,590	$ 0	$1,643,900,425	$ 0	$ 0	$ 0	$ (198,835)
Life	73,024,692	0	0	73,024,692	0	0	0
Accident health	3,239,348	0	0	3,239,348	0	0	0
Premiums ceded	(93,506,571)	0	(73,273,421)	(20,233,150)	0	0	0
Total earned premium	1,626,459,059	0	1,570,627,004	56,030,890	0	0	(198,835)
Investment income	281,257,037	48,379,457	181,458,991	53,390,153	0	96,683	(2,068,247)
Realized gain on investments	671,549,813	411,203,252	215,730,423	42,583,970	0	9,564	2,022,604
Other income	9,374,272	5,024,564	1,781,510	1,804,280	5,582,477	1,152,205	(5,970,764)
Total revenues	$2,588,640,181	$ 464,607,273	$1,969,597,928	$ 153,809,293	$ 5,582,477	$ 1,258,452	$ (6,215,242)

Benefits & expenses:
Losses & policy benefits	$1,115,454,928	$ 0	$1,041,018,485	$ 75,537,920	$ 0	$ 0	$ (1,101,477)
Reinsurance recoveries	(68,351,356)	0	(51,374,280)	(16,977,076)	0	0	0
Commissions	321,954,129	0	304,718,355	17,235,774	0	0	0
Other operating expenses	159,296,845	9,385,213	139,710,448	12,906,309	2,887,219	266,040	(5,858,384)
Interest expense	25,962,535	25,537,141	392,450	0	1,227,123	0	(1,194,179)
Taxes, licenses & fees	38,619,901	495,764	36,627,893	1,750,889	(278,423)	23,778	0
Incr deferred acq expenses	(21,943,540)	0	(14,250,247)	(7,693,293)	0	0	0
Other expenses	8,308,658	0	8,308,549	109	0	0	0
Total expenses	$1,579,302,100	$ 35,418,118	$1,465,151,653	$ 82,760,632	$ 3,835,919	$ 289,818	$ (8,154,040)

Income before income taxes	$1,009,338,081	$ 429,189,155	$ 504,446,275	$ 71,048,661	$ 1,746,558	$ 968,634	$ 1,938,798

Provision for income taxes:
Current operating income	$ 95,662,282	$ (1,702,042)	$ 91,031,427	$ 5,353,299	$ 665,871	$ 313,727	$ -
Capital gains/losses	244,982,108	154,113,138	75,961,232	14,904,390	0	3,348	0
Deferred	(15,779,762)	(5,195,539)	(16,679,885)	5,394,777	19,671	2,635	678,579
Total income tax	$ 324,864,628	$ 147,215,557	$ 150,312,774	$ 25,652,466	$ 685,542	$ 319,710	$ 678,579

Net income - current year	$ 684,473,453	$ 281,973,598	$ 354,133,501	$ 45,396,195	$ 1,061,016	$ 648,924	$ 1,260,219

Net income - prior year	$ 302,152,738	$ 16,166,143	$ 259,312,216	$ 23,354,996	$ 1,565,571	$ 637,672	$ 1,116,140

Change in net income	126.5%	1644.2%	36.6%	94.4%	-32.2%	1.8%

2006 Second-Quarter Supplement


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Six Months Ended June 30, 2005

	Total	CFC	CIC GROUP	CLIC	CFC-I	CINFIN	ELIM
Revenues:
Premiums earned:
Property casualty	$1,601,793,433	$ 0	$1,602,171,328	$ 0	$ 0	$ 0	$ (377,895)
Life	69,570,579	0	0	69,570,579	0	0	0
Accident health	3,089,251	0	0	3,089,251	0	0	0
Premiums ceded	(104,008,726)	0	(84,348,733)	(19,659,993)	0	0	0
Total earned premium	1,570,444,537	0	1,517,822,595	52,999,837	0	0	(377,895)
Investment income	256,367,172	42,321,541	163,734,128	48,396,996	783,018	63,053	1,068,436
Realized gain on investments	21,685,286	(2,084,034)	15,467,723	7,644,838	0	8,056	648,703
Other income	7,594,030	5,901,324	1,650,935	1,594,320	4,741,900	1,112,801	(7,407,250)
Total revenues	$1,856,091,025	$ 46,138,831	$1,698,675,381	$ 110,635,991	$ 5,524,918	$ 1,183,910	$ (6,068,006)

Benefits & expenses:
Losses & policy benefits	$1,037,034,038	$ 0	$ 958,955,510	$ 79,180,808	$ 0	$ 0	$ (1,102,280)
Reinsurance recoveries	(95,227,939)	0	(65,657,710)	(29,570,229)	0	0	0
Commissions	316,215,128	0	299,223,059	16,992,069	0	0	0
Other operating expenses	139,503,234	9,903,322	121,970,560	11,264,457	2,157,663	210,806	(6,003,574)
Interest expense	25,846,835	25,850,396	0	0	675,730	0	(679,291)
Taxes, licenses & fees	35,123,104	351,084	32,310,566	2,151,112	292,094	18,248	0
Incr deferred acq expenses	(18,824,447)	0	(14,041,675)	(4,782,772)	0	0	0
Other expenses	6,035,551	0	6,035,443	108	0	0	0
Total expenses	$1,445,705,504	$ 36,104,802	$1,338,795,753	$ 75,235,553	$ 3,125,487	$ 229,054	$ (7,785,145)

Income before income taxes	$ 410,385,521	$ 10,034,029	$ 359,879,628	$ 35,400,438	$ 2,399,431	$ 954,856	$ 1,717,139

Provision for income taxes:
Current operating income	$ 99,339,804	$ (11,230,521)	$ 103,005,087	$ 6,245,875	$ 1,002,354	$ 317,009	$ -
Capital gains/losses	7,646,452	(443,270)	5,413,703	2,675,693	0	326	0
Deferred	1,246,528	5,541,677	(7,851,378)	3,123,875	(168,494)	(151)	600,999
Total income tax	$ 108,232,784	$ (6,132,114)	$ 100,567,412	$ 12,045,443	$ 833,860	$ 317,184	$ 600,999

Net income - current year	$ 302,152,737	$ 16,166,143	$ 259,312,216	$ 23,354,995	$ 1,565,571	$ 637,672	$ 1,116,140

Net income - prior year	$ 301,438,228	$ 47,243,058	$ 323,579,153	$ 18,656,595	$ 1,431,148	$ 571,461	($90,043,187)

Change in net income	0.2%	-65.8%	-19.9%	25.2%	9.4%	11.6%

2006 Second-Quarter Supplement


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Three Months Ended June 30, 2006

	Total	CFC	CIC GROUP	CLIC	CFC-I	CINFIN	ELIM
Revenues:
Premiums earned:
Property casualty	$ 827,658,862	$ 0	$ 827,663,672	$ 0	$ 0	$ 0	$ (4,810)
Life	38,150,148	0	0	38,150,148	0	0	0
Accident health	1,505,451	0	0	1,505,451	0	0	0
Premiums ceded	(44,895,865)	0	(34,983,325)	(9,912,540)	0	0	0
Total earned premium	822,418,596	0	792,680,347	29,743,059	0	0	(4,810)
Investment income	142,723,984	24,703,035	92,143,031	27,114,967	0	52,081	(1,289,130)
Realized gain on investments	11,318,913	386,450	9,560,458	249,714	0	9,225	1,113,066
Other income	5,076,762	2,535,784	1,115,564	1,058,226	2,784,784	575,779	(2,993,375)
Total revenues	$ 981,538,255	$ 27,625,269	$ 895,499,400	$ 58,165,966	$ 2,784,784	$ 637,085	$ (3,174,249)

Benefits & expenses:
Losses & policy benefits	$ 591,893,064	$ 0	$ 546,240,564	$ 46,203,299	$ 0	$ 0	$ (550,799)
Reinsurance recoveries	(46,075,717)	0	(28,233,643)	(17,842,074)	0	0	0
Commissions	156,229,167	0	147,400,309	8,828,858	0	0	0
Other operating expenses	79,143,480	4,067,663	70,115,601	6,764,016	895,514	143,203	(2,842,517)
Interest expense	13,122,241	12,696,847	392,450	0	691,341	0	(658,397)
Taxes, licenses & fees	14,354,449	247,838	13,165,136	920,480	9,106	11,889	0
Incr deferred acq expenses	(7,484,427)	0	(4,733,539)	(2,750,888)	0	0	0
Other expenses	4,976,451	0	4,976,406	45	0	0	0
Total expenses	$ 806,158,708	$ 17,012,348	$ 749,323,284	$ 42,123,736	$ 1,595,961	$ 155,092	$ (4,051,713)

Income before income taxes	$ 175,379,547	$ 10,612,921	$ 146,176,116	$ 16,042,230	$ 1,188,823	$ 481,993	$ 877,464

Provision for income taxes:
Current operating income	$ 43,141,111	$ (2,812,998)	$ 42,120,489	$ 3,219,524	$ 461,071	$ 153,025	$ -
Capital gains/losses	5,332,924	1,565,910	3,676,147	87,400	0	3,467	0
Deferred	(5,581,248)	(407,100)	(7,872,373)	2,402,777	(13,949)	2,285	307,112
Total income tax	$ 42,892,787	$ (1,654,188)	$ 37,924,263	$ 5,709,701	$ 447,122	$ 158,777	$ 307,112

Net income - current year	$ 132,486,760	$ 12,267,109	$ 108,251,853	$ 10,332,529	$ 741,701	$ 323,216	$ 570,352

Net income - prior year	$ 157,796,333	$ 7,705,244	$ 135,510,300	$ 12,940,413	$ 717,806	$ 354,928	$ 567,642

Change in net income	-16.0%	59.2%	-20.1%	-20.2%	3.3%	-8.9%

2006 Second-Quarter Supplement


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Three Months Ended June 30, 2005

	Total	CFC	CIC GROUP	CLIC	CFC-I	CINFIN	ELIM
Revenues:
Premiums earned:
Property casualty	$ 807,297,492	$ 0	$ 807,470,314	$ 0	$ 0	$ 0	$ (172,822)
Life	38,053,773	0	0	38,053,773	0	0	0
Accident health	1,436,094	0	0	1,436,094	0	0	0
Premiums ceded	(53,058,357)	0	(42,791,656)	(10,266,701)	0	0	0
Total earned premium	793,729,002	0	764,678,658	29,223,166	0	0	(172,822)
Investment income	129,327,901	21,228,766	82,982,613	24,422,519	356,320	33,178	304,505
Realized gain on investments	12,900,303	(2,442,069)	9,414,823	5,352,141	0	6,617	568,791
Other income	3,845,636	3,051,964	722,052	846,798	2,400,047	561,390	(3,736,615)
Total revenues	$ 939,802,842	$ 21,838,661	$ 857,798,146	$ 59,844,624	$ 2,756,367	$ 601,185	$ (3,036,141)

Benefits & expenses:
Losses & policy benefits	$ 499,176,791	$ 0	$ 455,193,701	$ 44,534,290	$ 0	$ 0	$ (551,200)
Reinsurance recoveries	(38,552,521)	0	(19,742,198)	(18,810,323)	0	0	0
Commissions	165,775,469	0	157,079,211	8,696,258	0	0	0
Other operating expenses	72,558,984	4,003,223	63,597,860	6,726,436	1,132,022	89,035	(2,989,592)
Interest expense	12,888,705	12,888,705	0	0	368,645	0	(368,645)
Taxes, licenses & fees	18,267,417	522,757	16,534,001	1,073,625	156,034	(19,000)	0
Incr deferred acq expenses	(7,455,455)	0	(5,422,878)	(2,032,577)	0	0	0
Other expenses	2,187,945	0	2,187,901	44	0	0	0
Total expenses	$ 724,847,335	$ 17,414,685	$ 669,427,598	$ 40,187,753	$ 1,656,701	$ 70,035	$ (3,909,437)

Income before income taxes	$ 214,955,507	$ 4,423,976	$ 188,370,548	$ 19,656,871	$ 1,099,666	$ 531,150	$ 873,296

Provision for income taxes:
Current operating income	$ 52,030,764	$ (3,781,881)	$ 52,137,573	$ 3,031,405	$ 467,784	$ 175,883	$ -
Capital gains/losses	4,738,332	(598,727)	3,463,484	1,873,249	0	326	0
Deferred	390,078	1,099,340	(2,740,809)	1,811,804	(85,924)	13	305,654
Total income tax	$ 57,159,174	$ (3,281,268)	$ 52,860,248	$ 6,716,458	$ 381,860	$ 176,222	$ 305,654

Net income - current year	$ 157,796,333	$ 7,705,244	$ 135,510,300	$ 12,940,413	$ 717,806	$ 354,928	$ 567,642

Net income - prior year	$ 155,319,622	$ 27,121,903	$ 206,982,220	$ 10,213,346	$ 758,476	$ 286,864	$(90,043,187)

Change in net income	1.6%	-71.6%	-34.5%	26.7%	-5.4%	23.7%

2006 Second-Quarter Supplement


Cincinnati Financial Corporation
Consolidated Balance Sheets

(Dollars in millions except per share data)		June 30,		December 31,
		2006		2005
		(unaudited)
Assets
Investments
Fixed maturities, at fair value (amortized cost: 2006—$5,700; 2005—$5,387)	$	5,629	$	5,476
Equity securities, at fair value (cost: 2006—$2,533; 2005—$2,128)		6,830		7,106
Short-term investments, at fair value (cost: 2005—$75)		0		75
Other invested assets		55		45
Cash and cash equivalents		203		119
Securities lending collateral		898		0
Investment income receivable		118		118
Finance receivable		106		105
Premiums receivable		1,192		1,116
Reinsurance receivable		691		681
Prepaid reinsurance premiums		13		14
Deferred policy acquisition costs		460		428
Property and equipment, net, for company use (accumulated depreciation: 2006—$246; 2005—$232)		184		168
Other assets		76		66
Separate accounts		481		486
Total assets	$	16,936	$	16,003

Liabilities
Insurance reserves
Losses and loss expense	$	3,796	$	3,661
Life policy reserves		1,372		1,343
Unearned premiums		1,634		1,559
Securities lending payable		898		0
Other liabilities		547		455
Deferred income tax		1,303		1,622
Notes payable		49		0
6.125% senior debenture due 2034		371		371
6.90% senior debenture due 2028		28		28
6.92% senior debenture due 2028		392		392
Separate accounts		481		486
Total liabilities		10,871		9,917

Shareholders' equity
Common stock, par value-$2 per share; authorized: 2006-500 million shares, 2005- 500 million shares; issued: 2006-195 million shares, 2005-194 million shares		391		389
Paid-in capital		997		969
Retained earnings		2,656		2,088
Accumulated other comprehensive income-unrealized gains on investments		2,753		3,284
Treasury stock at cost (2006—22 million shares, 2005—20 million shares)		(732)		(644)
Total shareholders' equity		6,065		6,086
Total liabilities and shareholders' equity	$	16,936	$	16,003

2006 Second-Quarter Supplement


Cincinnati Financial Corporation
10-Year Net Income Reconciliation

(Dollars in millions except per share data)	Years ended December 31,
	2005			2004			2003			2002			2001			2000			1999			1998			1997			1996

Net income	$	602		$	584		$	374		$	238		$	193		$	118		$	255		$	242		$	299		$	224
One-time item		0			0			15			0			0			(25)			0			0			0			0
Net income before one-time item		602			584			359			238			193			143			255			242			299			224
Net realized investment gains and losses		40			60			(27)			(62)			(17)			(2)			0			43			45			31
Operating income before one-time item		562			524			386			300			210			145			255			199			254			193
Less catastrophe losses		(82)			(96)			(63)			(57)			(42)			(33)			(24)			(61)			(17)			(42)
Operating income before catastrophe losses and one-time item	$	644		$	620		$	449		$	357		$	252		$	178		$	279		$	260		$	271		$	235

Diluted per share data
Net income	$	3.40		$	3.28		$	2.10		$	1.32		$	1.07		$	0.67		$	1.37		$	1.28		$	1.61		$	1.17
One-time item		0.00			0.00			0.09			0.00			0.00			(0.14)			0.00			0.00			0.00			0.00
Net income before one-time item		3.40			3.28			2.01			1.32			1.07			0.81			1.37			1.28			1.61			1.17
Net realized investment gains and losses		0.23			0.34			(0.15)			(0.35)			(0.10)			(0.01)			0.00			0.23			0.26			0.16
Operating income before one-time item		3.17			2.94			2.16			1.67			1.17			0.82			1.37			1.05			1.35			1.01
Less catastrophe losses		(0.46)			(0.54)			(0.35)			(0.31)			(0.23)			(0.18)			(0.13)			(0.32)			(0.13)			(0.33)
Operating income before catastrophe losses and one-time item	$	3.63		$	3.48		$	2.51		$	1.98		$	1.40		$	1.00		$	1.50		$	1.37		$	1.49		$	1.35

Return on equity
Return on average equity		9.8	%		9.4	%		6.3	%		4.1	%		3.2	%		2.1	%		4.6	%		4.7	%		7.6	%		7.7	%
One-time item		0.0			0.0			(0.3)			0.0			0.0			0.4			0.0			0.0			0.0			0.0
Return on average equity before one-time item		9.8	%		9.4	%		6.0	%		4.1	%		3.2	%		2.5	%		4.6	%		4.7	%		7.6	%		7.7	%

Return on equity based on comprehensive income
ROE based on comprehensive income		1.6	%		4.6	%		13.8	%		(4.0)	%		2.5	%		13.1	%		1.9	%		19.6	%		42.6	%		20.3	%
One-time item		0.0			0.0			(0.3)			0.0			0.0			0.4			0.0			0.0			0.0			0.0
ROE based on comprehensive income before one-time item		1.6	%		4.6	%		13.5	%		(4.0)	%		2.5	%		13.5	%		1.9	%		19.6	%		42.6	%		20.3	%

Investment income, net of expenses	$	526		$	492		$	465		$	445		$	421		$	415		$	387		$	368		$	349		$	327
BOLI		0			0			0			0			0			(5)			0			0			0			0
Investment income before BOLI	$	526		$	492		$	465		$	445		$	421		$	410		$	387		$	368		$	349		$	327

Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts.

2006 Second-Quarter Supplement


Cincinnati Financial Corporation
Quarterly Net Income Reconciliation

(In millions except per share data)	Three months ended														Six months ended				Nine months ended			Twelve months ended
	12/31/06	9/30/06	6/30/06		3/31/06		12/31/05		9/30/05		6/30/05		3/31/05		6/30/06		6/30/05		9/30/06	9/30/05		12/31/06	12/31/05
																				&nbs p;
Net income			$	132	$	552	$	183	$	117	$	158	$	144	$	684	$	302		$	419		$	602
One-time item				0		0		0		0		0		0		0		0			0			0
Net income before one-time item				132		552		183		117		158		144		684		302			419			602
Net realized investment gains and losses				6		421		16		10		8		6		426		14			24			40
Operating income before one-time item				126		131		167		107		150		138		258		288			395			562
Less catastrophe losses				(41)		(26)		(28)		(43)		(9)		(2)		(67)		(11)			(54)			(82)
Operating income before catastrophe losses and one-time item			$	167	$	157	$	195	$	150	$	159	$	140	$	325	$	299		$	449		$	644

Diluted per share data																					&nbs p;
Net income			$	0.76	$	3.13	$	1.03	$	0.66	$	0.89	$	0.81	$	3.90	$	1.70		$	2.37		$	3.40
One-time item				0.00		0.00		0.00		0.00		0.00		0.00		0.00		0.00			0.00			0.00
Net income before one-time item				0.76		3.13		1.03		0.66		0.89		0.81		3.90		1.70			2.37			3.40
Net realized investment gains and losses				0.04		2.39		0.09		0.05		0.05		0.03		2.43		0.08			0.14			0.23
Operating income before one-time item				0.72		0.74		0.94		0.61		0.84		0.78		1.47		1.62			2.23			3.17
Less catastrophe losses				(0.24)		(0.14)		(0.16)		(0.24)		(0.05)		(0.01)		(0.38)		(0.06)			(0.30)			(0.46)
Operating income before catastrophe losses and one-time item			$	0.96	$	0.88	$	1.10	$	0.85	$	0.89	$	0.79	$	1.85	$	1.68		$	2.53		$	3.63

Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
equal the full year as each is computed independently.

2006 Second-Quarter Supplement


Cincinnati Financial Corporation
Top Holdings – Common Stocks

(Dollars in millions)	As of and for the six months ended June 30, 2006
	Actual cost		Fair value		Percent of fair value		Earned dividend income


Fifth Third Bancorp	$	283	$	2,689	40.6	%	$	57
ExxonMobil Corporation		134		550	8.3			6
The Procter & Gamble Company		192		406	6.1			4
National City Corporation		172		355	5.4			7
PNC Financial Services Group, Inc.		62		330	5.0			5
Johnson & Johnson		194		216	3.3			2
U.S. Bancorp		140		206	3.1			4
Wyeth		62		197	3.0			2
AllianceBernstein Holding L.P.		53		195	2.9			6
Wells Fargo & Company		96		182	2.8			3
Piedmont Natural Gas Company, Inc.		64		137	2.1			3
FirstMerit Corporation		54		112	1.7			3
Sky Financial Group, Inc.		91		110	1.7			2
All other common stock holdings		714		926	14.0			14
Total	$	2,311	$	6,611	100.0	%	$	118

2006 Second-Quarter Supplement


Cincinnati Insurance Group
GAAP Statements of Income

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2006	2005	Change	% Change	2006	2005	Change	% Change
Revenues:
Premiums earned:
Property casualty	$ 827,663,672	$ 807,470,312	$ 20,193,360	2.50	$ 1,643,900,425	$ 1,602,171,328	$ 41,729,097	2.60
Life	0	0	0	NA	0	0	0	NA
Accident health	0	0	0	NA	0	0	0	NA
Premiums ceded	(34,983,325)	(42,791,654)	7,808,329	18.25	(73,273,421)	(84,348,733)	11,075,312	13.13
Total premiums earned	792,680,347	764,678,658	28,001,689	3.66	1,570,627,004	1,517,822,595	52,804,409	3.48
Investment income	92,143,031	82,982,614	9,160,417	11.04	181,458,991	163,734,128	17,724,863	10.83
Realized gain on investments	9,560,458	9,414,822	145,636	1.55	215,730,423	15,467,723	200,262,700	1,294.71
Other income	1,115,564	722,052	393,512	54.50	1,781,510	1,650,935	130,575	7.91
Total revenues	$ 895,499,400	$ 857,798,146	$ 37,701,254	4.40	$ 1,969,597,928	$ 1,698,675,381	$ 270,922,547	15.95

Benefits & expenses:
Losses & policy benefits	$ 546,240,564	$ 455,193,702	$ 91,046,862	20.00	$ 1,041,018,485	$ 958,955,510	$ 82,062,975	8.56
Reinsurance recoveries	(28,233,643)	(19,742,199)	(8,491,444)	(43.01)	(51,374,280)	(65,657,710)	14,283,430	21.75
Commissions	147,400,309	157,079,211	(9,678,902)	(6.16)	304,718,355	299,223,059	5,495,296	1.84
Other operating expenses	70,115,601	63,597,860	6,517,741	10.25	139,710,448	121,970,560	17,739,888	14.54
Interest expense	392,450	0	392,450	NA	392,450	0	392,450	NA
Taxes, licenses & fees	13,165,136	16,534,001	(3,368,865)	(20.38)	36,627,893	32,310,566	4,317,327	13.36
Incr deferred acq expense	(4,733,539)	(5,422,878)	689,339	12.71	(14,250,247)	(14,041,675)	(208,572)	(1.49)
Other expenses	4,976,406	2,187,901	2,788,505	127.45	8,308,549	6,035,443	2,273,106	37.66
Total expenses	$ 749,323,284	$ 669,427,598	$ 79,895,686	11.93	$ 1,465,151,653	$ 1,338,795,753	$ 126,355,900	9.44
Income before income taxes	$ 146,176,116	$ 188,370,548	$ (42,194,432)	(22.40)	$ 504,446,275	$ 359,879,628	$ 144,566,647	40.17

Provision for income taxes:
Current operating income	$ 42,120,489	$ 52,137,573	$ (10,017,084)	(19.21)	$ 91,031,427	$ 103,005,087	$ (11,973,660)	(11.62)
Current realized investments gains and losses	3,676,147	3,463,484	212,663	6.14	75,961,232	5,413,703	70,547,529	1,303.13
Deferred	(7,872,373)	(2,740,809)	(5,131,564)	(187.23)	(16,679,885)	(7,851,378)	(8,828,507)	(112.45)
Total income taxes	$ 37,924,263	$ 52,860,248	$ (14,935,985)	(28.26)	$ 150,312,774	$ 100,567,412	$ 49,745,362	49.46

Net income	$ 108,251,853	$ 135,510,300	$ (27,258,447)	(20.12)	$ 354,133,501	$ 259,312,216	$ 94,821,285	36.57

2006 Second-Quarter Supplement


Cincinnati Insurance Group
Statutory Statements of Income

	For the Three Months Ended June 30,			For the Six Months Ended June 30,
	2006	2005	% Change	2006	2005	% Change
Underwriting income
Net premiums written	$ 814,234,256	$ 790,765,652	2.97	$ 1,643,009,334	$ 1,587,508,386	3.50
Unearned premiums increase	21,553,909	26,086,995		72,382,327	69,685,791
Earned premiums	792,680,347	764,678,658	3.66	1,570,627,007	1,517,822,595	3.48

Losses incurred	$ 439,338,289	$ 358,805,024	22.44	$ 828,027,319	$ 737,257,505	12.31
Allocated loss expenses incurred	38,264,131	39,571,544	(3.30)	71,497,650	75,307,150	(5.06)
Unallocated loss expenses incurred	40,404,510	37,074,934	8.98	90,119,248	80,733,145	11.63
Other underwriting expenses incurred	226,727,213	232,023,269	(2.28)	461,112,558	440,223,939	4.74
Workers compensation dividend incurred	5,832,528	1,743,134	234.60	9,750,386	5,136,069	89.84

Total underwriting deductions	$ 750,566,672	$ 669,217,904	12.16	$ 1,460,507,160	$ 1,338,657,808	9.10
Net underwriting gain (loss)	$ 42,113,675	$ 95,460,753	(55.88)	$ 110,119,846	$ 179,164,787	(38.54)

Investment income
Gross investment income earned	$ 93,464,237	$ 84,001,241	11.27	$ 183,620,102	$ 165,622,151	10.87
Net investment income earned	92,031,641	82,982,862	10.90	181,256,416	163,734,376	10.70
Net realized capital gains	6,827,130	9,749,866	(29.98)	141,070,859	21,933,169	543.19
Net investment gains (excl. subs)	$ 98,858,771	$ 92,732,728	6.61	$ 322,327,275	$ 185,667,546	73.60
Dividend from subsidiary
Net investment gains	$ 98,858,771	$ 92,732,728	6.61	$ 322,327,275	$ 185,667,546	73.60


Other income	$ 1,138,050	$ 292,286	289.36	$ 1,647,064	$ 770,562	113.75

Net income before federal income taxes	$ 142,110,496	$ 188,485,767	(24.60)	$ 434,094,186	$ 365,602,895	18.73
Federal and foreign income taxes incurred	$ 41,083,409	$ 55,601,056	(26.11)	$ 89,221,966	$ 108,418,790	(17.71)
Net income (statutory)	$ 101,027,087	$ 132,884,711	(23.97)	$ 344,872,220	$ 257,184,105	34.10

* Statutory data prepared in accordance with statutory accounting rules as defined by the National Association
of Insurance Commissioners and filed with the appropriate regulatory bodies.

2006 Second-Quarter Supplement


Cincinnati Insurance Group - Consolidated
Statutory Quarterly Analysis
(Based on reported data - see Page 25 for adjusted data)

(Dollars in millions)	Three months ended
	12/31/06	9/30/06		6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05		9/30/06		9/30/05		12/31/06		12/31/05
Net premiums written			$	814		$	829		$	727		$	761		$	791		$	797		$	1,643		$	1,588			$	2,349			$	3,076
Net premiums earned				793			778			775			765			765			753			1,571			1,518				2,283				3,058
Losses paid				380			347			378			348			336			345			727			681				1,029				1,407
Loss reserve change				60			42			(30)			72			23			33			101			56				129				99
Total losses incurred			$	440		$	389		$	348		$	420		$	359		$	378		$	828		$	737			$	1,158			$	1,506
Allocated loss expense paid				31			27			32			30			29			25			59			54				84				116
Allocated loss expense reserve change				7			6			(7)			10			10			11			13			21				31				24
Total allocated loss expense incurred			$	38		$	33		$	25		$	40		$	39		$	36		$	72		$	75			$	116			$	140
Unallocated loss expense paid				39			40			46			38			37			34			78			71				108				155
Unallocated loss expense reserve change				2			10			(2)			3			0			10			12			10				13				11
Total unallocated loss expense incurred			$	41		$	50		$	44		$	41		$	37		$	44		$	90		$	81			$	121			$	166
Underwriting expenses incurred				232			240			233			237			234			212			471			445				682				914
Underwriting profit (loss)			$	42		$	66		$	125		$	27		$	96		$	83		$	110		$	180			$	206			$	332

Loss Detail
Losses $1 million or more			$	46		$	32		$	38		$	27		$	28		$	43		$	79		$	71			$	98			$	136
Losses $250 thousand to $1 million				48			38			36			35			36			32			86			68				104				139
Development and case reserve increases of $250,000 or more				52			50			54			39			40			36			102			76				114				168
Large losses subtotal			$	146		$	120		$	128		$	101		$	104		$	111		$	267		$	215			$	316			$	443
IBNR incurred				(5)			6			(58)			20			14			13			1			27				47				(11)
Catastrophe losses incurred				64			39			44			66			15			2			103			17				83				127
Remaining incurred				234			224			234			234			226			252			457			478				712				947
Total losses incurred			$	439		$	389		$	348		$	420		$	359		$	378		$	828		$	737			$	1,158			$	1,506

Ratio Data
Loss ratio				55.4	%		50.0	%		44.9	%		54.9	%		46.9	%		50.3	%		52.7	%		48.6	%			50.7	%			49.2	%
Allocated loss expense ratio				4.8			4.3			3.2			5.3			5.2			4.7			4.6			5.0				5.1				4.6
Unallocated loss expense ratio				5.1			6.4			5.7			5.3			4.8			5.8			5.7			5.3				5.3				5.4
Net underwriting expense ratio				28.4			28.9			32.0			31.1			29.6			26.6			28.7			28.1				29.0				29.7
Statutory combined ratio				93.7	%		89.6	%		85.8	%		96.6	%		86.5	%		87.4	%		91.7	%		87.0	%			90.1	%			89.0	%
Statutory combined ratio excluding catastrophes				85.7	%		84.6	%		80.2	%		88.0	%		84.6	%		87.1	%		85.1	%		85.8	%			86.5	%			84.9	%

Loss Ratio
Losses $1 million or more				6.0	%		4.2	%		5.0	%		3.6	%		3.6	%		5.7	%		5.1	%		4.7	%			4.3	%			4.5	%
Losses $250 thousand to $1 million				6.0			4.9			4.5			4.6			4.8			4.3			5.5			4.5				4.5				4.5
Development and case reserve increases of $250,000 or more				7.4			6.4			6.9			5.1			5.2			4.7			6.9			5.0				5.0				5.5
Large losses subtotal				19.4	%		15.5	%		16.4	%		13.2	%		13.6	%		14.7	%		17.5	%		14.2	%			13.8	%			14.5	%
IBNR incurred				1.3			0.8			(7.4)			2.5			1.8			1.8			1.1			1.8				2.0				(0.4)
Total catastrophe losses incurred				8.0			5.0			5.6			8.6			1.9			0.3			6.5			1.1				3.6				4.1
Remaining incurred				26.7			28.6			30.3			30.6			29.6			33.5			27.6			31.5				31.2				31.0
Total loss ratio				55.4	%		50.0	%		44.9	%		54.9	%		46.9	%		50.3	%		52.7	%		48.6	%			50.7	%			49.2	%

Loss Claim Count
Losses $1 million or more				26			14			24			21			17			15			40			32				53				77
Losses $250 thousand to $1 million				88			95			92			81			93			73			183			166				247				339
Development and case reserve increases of $250,000 or more				85			85			100			72			61			67			170			128				200				300
Large losses total				199			194			216			174			171			155			393			326				500				716
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. NM - Not meaningful * Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

2006 Second-Quarter Supplement


Cincinnati Insurance Group - Commercial Lines
Statutory Quarterly Analysis
(Based on reported data - see Page 26 for adjusted data)

(Dollars in millions)	Three months ended																				Six months ended						Nine months ended				Twelve months ended
	12/31/06	9/30/06	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05			9/30/06	9/30/05			12/31/06	12/31/05
Net premiums written			$	603		$	668		$	548		$	546		$	567		$	629		$	1,271		$	1,195			$	1,741				$	2,290
Net premiums earned				599			582			576			564			563			551			1,181			1,114				1,678					2,254
Losses paid				251			234			256			228			214			219			485			434				662					918
Loss reserve change				53			53			(19)			67			32			51			105			84				151					132
Total losses incurred			$	304		$	287		$	237		$	295		$	246		$	270		$	590		$	518			$	813				$	1,050
Allocated loss expense paid				28			24			28			27			26			22			52			48				75					103
Allocated loss expense reserve change				6			5			(1)			9			10			10			12			20				29					28
Total allocated loss expense incurred			$	34		$	30		$	27		$	36		$	36		$	32		$	64		$	68			$	104				$	131
Unallocated loss expense paid				27			28			31			26			25			22			54			48				73					105
Unallocated loss expense reserve change				3			10			(1)			3			1			10			13			11				13					12
Total unallocated loss expense incurred			$	30		$	38		$	30		$	29		$	26		$	32		$	67		$	59			$	87				$	117
Underwriting expenses incurred				172			179			182			173			165			156			349			321				493					675
Underwriting profit (loss)			$	59		$	50		$	100		$	31		$	90		$	61		$	111		$	148			$	181				$	281

Loss Detail
Losses $1 million or more			$	40		$	30		$	31		$	24		$	26		$	43		$	70		$	68			$	93				$	124
Losses $250 thousand to $1 million				39			28			28			26			29			22			67			51				77					105
Development and case reserve increases of $250,000 or more				45			44			47			35			38			29			90			67				103					149
Large losses subtotal			$	124		$	103		$	106		$	86		$	93		$	94		$	227		$	186			$	272				$	378
IBNR incurred				(6)			6			(36)			17			12			12			0			24				41					6
Catastrophe losses incurred				34			30			14			53			2			6			63			9				62					76
Remaining incurred				152			149			153			139			139			159			300			298				437					590
Total losses incurred			$	304		$	287		$	237		$	295		$	246		$	271		$	590		$	517			$	813				$	1,050

Ratio Data
Loss ratio				50.7	%		49.2	%		41.1	%		52.4	%		43.8	%		49.1	%		50.0	%		46.4	%			48.4	%				46.6	%
Allocated loss expense ratio				5.7			5.1			4.7			6.5			6.4			5.8			5.4			6.1				6.2					5.8
Unallocated loss expense ratio				4.9			6.5			5.3			5.1			4.6			5.9			5.7			5.2				5.2					5.2
Net underwriting expense ratio				28.3			26.8			33.2			31.6			29.1			24.7			27.5			26.8				28.3					29.5
Statutory combined ratio				89.6	%		87.5	%		84.3	%		95.5	%		83.9	%		85.5	%		88.6	%		84.5	%			88.1	%				87.1	%
Statutory combined ratio excluding catastrophes				84.0	%		82.5	%		81.9	%		86.0	%		83.5	%		84.4	%		83.3	%		83.8	%			84.5	%				83.7	%

Loss Ratio
Losses $1 million or more				6.6	%		5.2	%		5.4	%		4.3	%		4.5	%		7.8	%		5.9	%		6.1	%			5.5	%				5.5	%
Losses $250 thousand to $1 million				6.5			4.8			4.8			4.7			5.2			3.9			5.7			4.5				4.6					4.6
Development and case reserve increases of $250,000 or more				7.6			7.6			8.1			6.3			6.8			5.3			7.6			6.0				6.1					6.6
Large losses subtotal				20.7	%		17.6	%		18.3	%		15.2	%		16.5	%		17.0	%		19.2	%		16.6	%			16.2	%				16.8	%
IBNR incurred				(1.0)			1.0			(6.1)			2.9			2.2			2.2			0.0			2.2				2.4					0.2
Total catastrophe losses incurred				5.6			5.1			2.4			9.5			0.4			1.1			5.3			0.8				3.7					3.4
Remaining incurred				25.4			25.6			26.5			24.7			24.7			28.8			25.5			26.8				26.1					26.2
Total loss ratio				50.7	%		49.2	%		41.1	%		52.4	%		43.8	%		49.1	%		50.0	%		46.4	%			48.4	%				46.6	%
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. NM - Not meaningful * Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

2006 Second-Quarter Supplement


Cincinnati Insurance Group - Personal Lines
Statutory Quarterly Analysis
(Based on reported data - see Page 27 for adjusted data)

(Dollars in millions)	Three months ended																				Six months ended						Nine months ended				Twelve months ended
	12/31/06	9/30/06	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05			9/30/06	9/30/05			12/31/06	12/31/05
Net premiums written			$	211		$	161		$	179		$	215		$	224		$	168		$	372		$	393			$	608				$	786
Net premiums earned				194			196			199			201			202			202			390			404				605					804
Losses paid				129			113			122			120			122			126			242			247				367					489
Loss reserve change				7			(11)			(11)			5			(9)			(18)			(4)			(27)				(22)					(33)
Total losses incurred			$	136		$	102		$	111		$	125		$	113		$	108		$	238		$	220			$	345				$	456
Allocated loss expense paid				3			3			4			3			3			3			7			6				9					13
Allocated loss expense reserve change				1			0			(6)			1			1			1			1			1				2					(4)
Total allocated loss expense incurred			$	4		$	3		$	(2)		$	4		$	4		$	4		$	8		$	7			$	11				$	9
Unallocated loss expense paid				12			12			15			12			12			12			24			23				35					50
Unallocated loss expense reserve change				(1)			0			(1)			0			(1)			0			(1)			(1)				0					(1)
Total unallocated loss expense incurred			$	11		$	12		$	14		$	12		$	11		$	12		$	23		$	22			$	35				$	49
Underwriting expenses incurred				60			61			51			64			69			56			122			125				189					239
Underwriting profit (loss)			$	(17)		$	17		$	25		$	(4)		$	5		$	22		$	(1)		$	30			$	26				$	51

Loss Detail
Losses $1 million or more			$	6		$	2		$	7		$	3		$	2		$	0		$	9		$	2			$	5				$	13
Losses $250 thousand to $1 million				9			10			8			9			8			10			19			18				27					34
Development and case reserve increases of $250,000 or more				7			5			7			3			2			7			12			9				12					19
Large losses subtotal			$	22		$	18		$	22		$	15		$	12		$	17		$	40		$	29			$	44				$	66
IBNR incurred				1			0			(22)			3			1			1			1			3				6					(17)
Catastrophe losses incurred				30			10			30			13			12			(4)			40			8				21					51
Remaining incurred				82			74			81			94			87			93			157			180				274					356
Total losses incurred			$	135		$	102		$	111		$	125		$	112		$	107		$	238		$	220			$	345				$	456

Ratio Data
Loss ratio				70.0	%		52.2	%		55.9	%		62.2	%		55.6	%		53.3	%		61.1	%		54.4	%			57.0	%				56.7	%
Allocated loss expense ratio				2.1			1.7			(1.2)			2.0			1.8			1.8			1.9			1.8				1.9					1.1
Unallocated loss expense ratio				5.8			6.2			7.0			6.1			5.5			5.7			6.0			5.6				5.8					6.1
Net underwriting expense ratio				28.5			38.0			28.4			29.7			30.7			33.2			32.6			31.8				31.0					30.4
Statutory combined ratio				106.4	%		98.1	%		90.1	%		99.9	%		93.6	%		94.0	%		101.6	%		93.6	%			95.7	%				94.3	%
Statutory combined ratio excluding catastrophes				90.8	%		93.1	%		75.2	%		93.6	%		87.4	%		96.0	%		91.3	%		91.5	%			92.2	%				88.0	%

Loss Ratio
Losses $1 million or more				3.5	%		1.2	%		3.6	%		1.5	%		1.1	%		0.0	%		2.3	%		0.6	%			0.9	%				1.6	%
Losses $250 thousand to $1 million				4.4			5.3			3.9			4.3			3.7			5.2			4.9			4.4				4.4					4.3
Development and case reserve increases of $250,000 or more				3.5			2.8			3.5			1.7			1.0			3.2			3.1			2.1				2.0					2.4
Large losses subtotal				11.4	%		9.2	%		11.0	%		7.6	%		5.8	%		8.4	%		10.3	%		7.1	%			7.3	%				8.2	%
IBNR incurred				0.7			0.0			(11.2)			1.4			0.6			0.7			0.3			0.7				0.9					(2.1)
Total catastrophe losses incurred				15.6			5.0			14.9			6.2			6.2			(2.0)			10.3			2.1				3.5					6.3
Remaining incurred				42.3			38.0			41.2			46.9			42.9			46.2			40.2			44.5				45.3					44.3
Total loss ratio				70.0	%		52.2	%		55.9	%		62.2	%		55.5	%		53.3	%		61.1	%		54.4	%			57.0	%				56.7	%
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. NM - Not meaningful * Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

2006 Second-Quarter Supplement


Cincinnati Insurance Group
Direct Written Premiums by Line of Business for the Six Months Ended June 30, 2006
(Dollars in millions)
																					06/30/06		6/30/05
	Comm		Comm		Specialty		Comm		Work		Surety &			Mach &		Home		Pers		Other	Agency		Agency		Change
State	Prop		Cas		Programs		Auto		Comp		Exec Risk			Equip		Owner		Auto		Personal		Direct	Direct		%

AL	$	5.6	$	9.8	$	3.3	$	4.3	$	0.5	$	0.7	$	0.3	$	10.6	$	8.3	$	2.2	$	45.6	$	44.8	1.8
AZ		3.2		6.0		0.4		4.9		0.1		0.4		0.3		0.1		0.0		0.1		15.5		13.8	11.4
AR		5.0		5.4		1.8		3.7		3.1		0.5		0.2		1.5		1.4		0.4		23.0		23.6	(2.7)
DE		0.2		0.3		0.0		0.3		0.6		0.0		0.0		0.0		0.0		0.0		1.4		0.3	334.4
FL		10.8		19.3		1.9		6.9		1.2		1.1		0.3		10.1		6.6		2.0		60.2		52.7	14.3
GA		9.9		14.1		3.2		10.5		6.6		3.1		0.3		13.3		16.1		3.2		80.3		76.4	4.9
ID		1.9		3.7		0.5		2.4		0.1		0.4		0.1		0.0		0.0		0.0		9.1		7.8	15.3
IL		24.1		44.0		6.3		19.6		33.0		4.0		1.4		9.5		13.4		3.1		158.4		154.0	3.0
IN		21.1		29.2		4.1		15.5		17.6		3.6		1.2		13.2		15.4		3.3		124.2		124.0	0.1
IA		6.5		11.1		2.2		4.8		12.1		1.3		0.6		2.1		2.3		1.0		44.0		44.5	(1.0)
KS		4.1		4.0		1.4		2.6		3.3		0.8		0.2		3.2		2.7		0.6		22.9		21.5	6.3
KY		8.7		10.5		2.5		7.6		1.8		1.1		0.5		7.1		10.4		2.0		52.2		52.5	(0.7)
MD		3.0		6.8		0.6		4.7		5.1		0.8		0.1		0.6		0.0		0.2		21.9		17.5	24.8
MI		14.6		22.5		6.8		10.8		10.3		2.6		1.0		8.2		7.5		1.7		86.0		86.2	(0.3)
MN		8.3		15.0		2.0		6.0		4.1		0.9		0.6		2.9		3.6		2.0		45.4		46.0	(1.7)
MO		9.4		14.0		2.7		6.0		8.5		0.8		0.5		2.4		1.7		0.5		46.5		43.0	8.4
MT		3.1		6.4		0.5		3.9		0.0		0.1		0.1		0.1		0.0		0.0		14.2		13.5	5.7
NE		2.7		4.1		0.9		2.2		4.8		0.6		0.2		0.7		0.7		0.2		17.1		18.4	(7.6)
NH		1.0		1.5		0.4		0.8		1.5		0.3		0.1		0.3		0.4		0.2		6.5		6.4	2.0
NY		3.3		13.7		0.6		5.0		1.3		1.3		0.2		0.0		0.0		0.0		25.4		22.2	14.4
NC		13.4		21.1		5.8		12.2		13.1		3.6		0.6		0.8		0.7		1.3		72.6		67.6	7.6
ND		1.5		2.2		0.4		1.2		0.0		0.4		0.1		0.3		0.3		0.1		6.5		7.0	(5.5)
OH		50.4		88.5		10.6		42.2		(0.3)		11.7		3.2		45.7		73.8		14.8		340.6		352.2	(3.3)
PA		15.5		25.5		4.9		16.7		31.2		2.9		0.8		3.0		4.0		1.6		106.1		103.5	2.5
SC		4.5		7.0		1.3		4.2		2.9		1.4		0.2		0.0		0.0		0.1		21.6		19.9	8.3
SD		1.4		2.4		0.3		1.1		2.6		0.2		0.0		0.0		0.0		0.0		8.0		7.0	18.0
TN		8.4		13.9		4.4		9.3		7.0		2.1		0.5		3.9		3.8		1.3		54.6		51.8	5.3
UT		1.4		3.2		0.1		1.9		0.0		0.8		0.2		0.0		0.0		0.0		7.6		6.4	21.6
VT		1.8		2.6		0.5		1.8		4.0		0.2		0.1		0.4		0.5		0.1		12.0		11.0	7.7
VA		13.5		19.8		2.5		13.7		12.2		2.5		0.5		4.0		5.2		1.4		75.3		65.9	14.4
WV		3.0		3.9		1.1		3.2		0.0		0.3		0.1		0.5		0.0		0.1		12.2		12.5	(1.5)
WI		10.4		18.0		2.5		8.1		16.4		1.3		0.8		4.0		5.5		1.7		68.7		69.2	(0.9)
All Other		2.1		3.4		0.0		1.6		2.4		0.6		0.0		0.1		0.0		0.3		10.5		8.5	22.4

Total Agency Direct	$	273.8	$	452.9	$	76.5	$	239.7	$	207.1	$	52.4	$	15.3	$	148.6	$	184.3	$	45.5	$	1,696.1	$	1,651.6	2.7
Other Direct		1.0		0.7		0.2		0.5		5.1		0.0		0.0		1.0		0.6		0.8		9.9		7.3	35.8
Total Direct	$	274.8	$	453.6	$	76.7	$	240.2	$	212.2	$	52.4	$	15.3	$	149.6	$	184.9	$	46.3	$	1,706.0	$	1,658.9	2.8

2006 Second-Quarter Supplement


Cincinnati Insurance Group
Quarterly Property Casualty Data - By Commercial Lines of Business

(Dollars in millions)	Three months ended																				Six months ended						Nine months ended				Twelve months ended
	12/31/06	9/30/06	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05			9/30/06	9/30/05			12/31/06	12/31/05
Commercial property:
Written premiums			$	122		$	134		$	115		$	113		$	122		$	126		$	256		$	248			$	361			$	476
Earned premiums				123			121			120			113			118			116			244			234			$	347				467
Loss and loss expenses ratio				55.8	%		72.6	%		52.8	%		89.1	%		42.4	%		68.8	%		64.2	%		55.5	%			68.2	%			64.2	%
Less catastrophe loss ratio				15.9			22.7			11.2			38.8			1.2			4.0			19.3			2.6				16.1				14.9
Loss and loss expenses excluding catastrophe loss ratio				39.9	%		49.9	%		41.6	%		50.3	%		41.2	%		64.8	%		44.9	%		52.9	%			52.1	%			49.3	%
																				& nbsp;
Commercial casualty:
Written premiums			$	209		$	228		$	189		$	182		$	193		$	217		$	437		$	409			$	590			$	779
Earned premiums				208			197			195			191			192			183			405			375				564				759
Loss and loss expenses ratio				51.8	%		51.3	%		5.1	%		47.7	%		54.3	%		51.2	%		51.6	%		53.0	%			51.8	%			39.8	%
Less catastrophe loss ratio				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Loss and loss expenses excluding catastrophe loss ratio				51.8	%		51.3	%		5.1	%		47.7	%		54.3	%		51.2	%		51.6	%		53.0	%			51.8	%			39.8	%
																				& nbsp;
Specialty package:
Written premiums			$	34		$	40		$	32		$	35		$	34		$	37		$	74		$	71			$	105			$	138
Earned premiums				35			36			34			34			34			34			71			68				103				137
Loss and loss expenses ratio				82.1	%		64.3	%		53.4	%		64.5	%		57.2	%		87.8	%		73.1	%		72.4	%			71.5	%			67.0	%
Less catastrophe loss ratio				29.2			3.6			4.6			4.5			1.8			4.4			16.2			3.1				5.4				5.2
Loss and loss expenses excluding catastrophe loss ratio				52.9	%		60.7	%		48.8	%		60.0	%		55.4	%		83.4	%		56.9	%		69.3	%			66.1	%			61.8	%

Commercial auto:																				&n bsp;
Written premiums			$	115		$	126		$	107		$	107		$	111		$	122		$	240		$	233			$	341			$	448
Earned premiums				112			112			117			115			113			113			224			225				340				457
Loss and loss expenses ratio				57.0	%		57.7	%		61.5	%		60.6	%		60.2	%		57.9	%		57.4	%		59.0	%			59.6	%			60.1	%
Less catastrophe loss ratio				3.1			0.6			0.0			0.2			0.3			0.0			1.9			0.1				0.1				0.1
Loss and loss expenses excluding catastrophe loss ratio				53.9	%		57.1	%		61.5	%		60.4	%		59.9	%		57.9	%		55.5	%		58.9	%			59.5	%			60.0	%

Workers' compensation:																				&n bsp;
Written premiums			$	91		$	111		$	80		$	76		$	83		$	100		$	203		$	183			$	258			$	338
Earned premiums				90			88			85			82			82			79			178			161				244				328
Loss and loss expenses ratio				83.1	%		78.6	%		134.2	%		73.8	%		77.0	%		76.5	%		80.8	%		76.8	%			75.9	%			90.9	%
Less catastrophe loss ratio				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Loss and loss expenses excluding catastrophe loss ratio				83.1	%		78.6	%		134.2	%		73.8	%		77.0	%		76.5	%		80.8	%		76.8	%			75.9	%			90.9	%

Surety and executive risk:																				&n bsp;
Written premiums			$	24		$	22		$	21		$	25		$	18		$	20		$	46		$	38			$	63			$	85
Earned premiums				24			21			21			21			19			19			45			38				59				80
Loss and loss expenses ratio				89.6	%		26.5	%		69.2	%		31.5	%		7.4	%		26.4	%		60.1	%		16.9	%			22.0	%			34.2	%
Less catastrophe loss ratio				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Loss and loss expenses excluding catastrophe loss ratio				89.6	%		26.5	%		69.2	%		31.5	%		7.4	%		26.4	%		60.1	%		16.9	%			22.0	%			34.2	%

Machinery and equipment:																				&n bsp;
Written premiums			$	8		$	7		$	6		$	7		$	6		$	7		$	15		$	13			$	20			$	26
Earned premiums				7			7			6			7			6			7			14			13				19				26
Loss and loss expenses ratio				27.0	%		32.2	%		31.6	%		21.5	%		24.1	%		12.3	%		29.6	%		18.1	%			19.3	%			22.4	%
Less catastrophe loss ratio				0.0			0.0			(0.1)			0.1			0.0			(0.6)			0.1			(0.2)				(0.1)				(0.1)
Loss and loss expenses excluding catastrophe loss ratio				27.0	%		32.2	%		31.7	%		21.4	%		24.1	%		12.9	%		29.5	%		18.3	%			19.4	%			22.5	%


Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
equal the full year as each is computed independently.

2006 Second-Quarter Supplement


Cincinnati Insurance Group
Quarterly Property Casualty Data - By Personal Lines of Business

(Dollars in millions)	Three months ended																				Six months ended						Nine months ended				Twelve months ended
	12/31/06	9/30/06	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05			9/30/06	9/30/05			12/31/06	12/31/05
Homeowner:
Written premiums			$	83		$	62		$	67		$	81		$	81		$	59		$	144		$	140			$	221			$	288
Earned premiums				74			73			71			72			70			69			146			139				211				282
Loss and loss expenses ratio				93.1	%		64.0	%		83.4	%		74.3	%		75.8	%		64.6	%		78.6	%		70.2	%			72.9	%			75.6	%
Less catastrophe loss ratio				33.1			11.1			43.2			11.5			14.5			(6.1)			22.1			4.3				8.0				17.0
Loss and loss expenses excluding catastrophe loss ratio				60.0	%		52.9	%		40.2	%		62.8	%		61.2	%		70.7	%		56.5	%		65.9	%			64.9	%			58.6	%

Personal auto:
Written premiums			$	104		$	79		$	89		$	112		$	119		$	89		$	184		$	208			$	321			$	409
Earned premiums				98			101			104			108			110			111			199			221				329				433
Loss and loss expenses ratio				65.8	%		60.1	%		54.0	%		65.0	%		59.9	%		60.4	%		62.9	%		60.1	%			61.7	%			59.9	%
Less catastrophe loss ratio				3.6			0.8			0.6			0.4			1.1			0.2			2.2			0.6				0.6				0.6
Loss and loss expenses excluding catastrophe loss ratio				62.2	%		59.3	%		53.4	%		64.6	%		58.8	%		60.2	%		60.7	%		59.5	%			61.1	%			59.3	%

Other personal:
Written premiums			$	24		$	20		$	21		$	23		$	24		$	20		$	44		$	45			$	68			$	89
Earned premiums				22			22			22			23			22			22			45			44				67				89
Loss and loss expenses ratio				80.9	%		47.4	%		37.0	%		66.9	%		38.3	%		49.5	%		64.2	%		41.7	%			47.1	%			44.6	%
Less Catastrophe loss ratio				10.8			3.8			2.0			5.0			1.0			3.9			7.4			2.5				3.3				3.0
Loss and loss expenses excluding catastrophe loss ratio				70.1	%		43.6	%		35.0	%		61.9	%		37.3	%		45.6	%		56.8	%		39.2	%			43.8	%			41.6	%


Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
equal the full year as each is computed independently.

2006 Second-Quarter Supplement


Cincinnati Insurance Group
10-Year Property Casualty Data - Consolidated

(Dollars in millions)	Years ended December 31,
	2005			2004			2003			2002			2001			2000			1999			1998			1997			1996
Premiums
Adjusted written premiums (statutory)*	$	3,097		$	3,026		$	2,789		$	2,496		$	2,188		$	1,936		$	1,681		$	1,558		$	1,472		$	1,384
Codification		0			0			0			0			402			(55)			0			0			0			0
Written premium adjustment -- statutory only		(21)			(29)			26			117			0			0			0			0			0			0
Reported written premiums (statutory)**		3,076			2,997			2,815			2,613			2,590			1,881			1,681			1,558			1,472			1,384
Unearned premiums change		(18)			(78)			(162)			(222)			(517)			(53)			(23)			(15)			(18)			(17)
Earned premiums (GAAP)	$	3,058		$	2,919		$	2,653		$	2,391		$	2,073		$	1,828		$	1,658		$	1,543		$	1,454		$	1,367
																								< /TD>
Year-over-year growth rate:
Adjusted written premiums (statutory)		2.3	%		8.5	%		11.7	%		14.0	%		13.0	%		15.2	%		7.9	%		5.8	%		6.4	%		6.8	%
Written premiums (statutory)		2.6	%		6.5	%		7.7	%		0.9	%		37.7	%		11.9	%		7.9	%		5.8	%		6.4	%		6.8	%
Earned premiums		4.8	%		10.0	%		11.0	%		15.3	%		13.4	%		10.3	%		7.5	%		6.1	%		6.4	%		8.2	%

Statutory combined ratio
Reported statutory combined ratio*		89.0	%		89.4	%		94.2	%		98.4	%		99.5	%		112.5	%		100.4	%		104.2	%		98.3	%		103.5	%
Codification		0.0			0.0			0.0			0.0			4.1			(0.9)			0.0			0.0			0.0			0.0
Written premium adjustment -- statutory only		nm			nm			nm			1.2			0.0			0.0			0.0			0.0			0.0			0.0
One-time item		0.0			0.0			0.8			0.0			0.0			(1.7)			0.0			0.0			0.0			0.0
Statutory combined ratio (adjusted)		89.0	%		89.4	%		95.0	%		99.6	%		103.6	%		109.9	%		100.4	%		104.2	%		98.3	%		103.5	%
Less catastrophe losses		4.1			5.1			3.6			3.6			3.1			2.7			2.5			6.1
Statutory combined ratio excluding catastrophe losses (adjusted)		84.9	%		84.3	%		91.4	%		96.0	%		100.5	%		107.2	%		97.9	%		98.1	%
																								< /TD>
Reported commission expense ratio*		19.2	%		19.2	%		17.6	%		15.9	%		13.9	%		17.4	%		17.4	%		17.6	%
Codification		0.0			0.0			0.0			0.0			2.6			(0.5)			0.0			0.0
Written premium adjustment -- statutory only		nm			nm			nm			0.8			0.0			0.0			0.0			0.0
One-time item		0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0
Commission expense ratio (adjusted)		19.2	%		19.2	%		17.6	%		16.7	%		16.5	%		16.9	%		17.4	%		17.6	%
																								< /TD>
Reported other expense ratio*		10.5	%		10.1	%		8.9	%		9.6	%		8.7	%		12.6	%		11.4	%		11.9	%
Codification		0.0			0.0			0.0			0.0			1.5			(0.4)			0.0			0.0
Written premium adjustment -- statutory only		nm			nm			nm			0.4			0.0			0.0			0.0			0.0
One-time item		0.0			0.0			0.8			0.0			0.0			(1.7)			0.0			0.0
Other expense ratio (adjusted)		10.5	%		10.1	%		9.7	%		10.0	%		10.2	%		10.5	%		11.4	%		11.9	%
																								< /TD>
Reported statutory expense ratio*		29.7	%		29.3	%		26.5	%		25.5	%		22.6	%		30.0	%		28.8	%		29.5	%
Codification		0.0			0.0			0.0			0.0			4.1			(0.9)			0.0			0.0
Written premium adjustment -- statutory only		nm			nm			nm			1.2			0.0			0.0			0.0			0.0
One-time item		0.0			0.0			0.8			0.0			0.0			(1.7)			0.0			0.0
Statutory expense ratio (adjusted)		29.7	%		29.3	%		27.3	%		26.7	%		26.7	%		27.4	%		28.8	%		29.5	%

GAAP combined ratio
GAAP combined ratio		89.2	%		89.8	%		94.7	%		99.7	%		104.9	%		112.8	%		100.2	%		104.3	%		98.4	%		103.6	%
One-time item		0.0			0.0			0.8			0.0			0.0			(2.1)			0.0			0.0			0.0			0.0
GAAP combined ratio before one-time item		89.2	%		89.8	%		95.5	%		99.7	%		104.9	%		110.7	%		100.2	%		104.3	%		98.4	%		103.6	%

Written premiums to surplus
Adjusted premiums to statutory surplus ratio		0.739			0.721			1.002			1.067			0.864
Written premium adjustment		(0.005)			(0.007)			0.010			0.050			0.159
Reported premiums to statutory surplus ratio		0.734			0.714			1.012			1.117			1.023

Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. nm - Not meaningful * Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. *Prior to 2001, property casualty written premiums were recognized as they were billed throughout the policy period. Effective January 1, 2001, written premiums have been recognized on an annualized basis at the effective date of the policy. Written premiums for 2000 were reclassified to conform with the 2001 presentation; information was not readily available to reclassify earlier year statutory data. The growth rates in written premiums between 1999 and 2000 are overstated because 1999 premiums are shown on a billed basis.*

2006 Second-Quarter Supplement


Cincinnati Insurance Group
6-Year Property Casualty Data - Commercial Lines

(Dollars in millions)	Years ended December 31,
	2005			2004			2003			2002			2001			2000
Premiums
Adjusted written premiums (statutory)*	$	2,306		$	2,209		$	2,009		$	1,795		$	1,551		$	1,326
Codification		0			0			0			0			276			(51)
Written premium adjustment – statutory only		(16)			(23)			22			110			0			0
Reported written premiums (statutory)**	$	2,290		$	2,186		$	2,031		$	1,905		$	1,827		$	1,275
Unearned premiums change		(36)			(60)			(123)			(184)			(374)			(43)
Earned premiums (GAAP)	$	2,254		$	2,126		$	1,908		$	1,721		$	1,453		$	1,232

Year-over-year growth rate:
Adjusted written premiums (statutory)		4.4	%		10.0	%		11.9	%		15.8	%		16.9	%		20.5	%
Written premiums (statutory)		4.7	%		7.6	%		6.6	%		4.2	%		43.3	%		15.9	%
Earned premiums		6.0	%		11.4	%		10.8	%		18.6	%		17.9	%		13.2	%

Statutory combined ratio
Reported statutory combined ratio*		87.1	%		83.7	%		90.9	%		95.3	%		96.7	%		117.2	%
Codification		0.0			0.0			0.0			0.0			4.0			(1.2)
Written premium adjustment – statutory only		nm			nm			nm			1.5			0.0			0.0
One-time item		0.0			0.0			0.7			0.0			0.0			(1.6)
Statutory combined ratio (adjusted)		87.1	%		83.7	%		91.6	%		96.8	%		100.7	%		114.4	%
Less catastrophe losses		3.4			3.4			2.2			2.3			1.9			1.5
Statutory combined ratio excluding catastrophe losses (adjusted)		83.7	%		80.3	%		89.4	%		94.5	%		98.8	%		112.9	%

GAAP combined ratio
GAAP combined ratio		87.4	%		84.1	%		91.3	%		96.6	%		101.7	%		117.2	%
One-time item		0.0			0.0			0.8			0.0			0.0			(2.0)
GAAP combined ratio before one-time item		87.4	%		84.1	%		92.1	%		96.6	%		101.7	%		115.2	%
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. nm - Not meaningful * Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. *Prior to 2001, property casualty written premiums were recognized as they were billed throughout the policy period. Effective January 1, 2001, written premiums have been recognized on an annualized basis at the effective date of the policy. Written premiums for 2000 were reclassified to conform with the 2001 presentation; information was not readily available to reclassify earlier year statutory data. The growth rates in written premiums between 1999 and 2000 are overstated because 1999 premiums are shown on a billed basis.*

2006 Second-Quarter Supplement


Cincinnati Insurance Group
6-Year Property Casualty Data - Personal Lines

(Dollars in millions)	Years ended December 31,
	2005			2004			2003			2002			2001			2000
Premiums
Adjusted written premiums (statutory)*	$	791		$	817		$	780		$	701		$	637		$	610
Codification		0			0			0			0			126			(4)
Written premium adjustment – statutory only		(5)			(6)			4			7			0			0
Reported written premiums (statutory)**	$	786		$	811		$	784		$	708		$	763		$	606
Unearned premiums change		18			(18)			(39)			(38)			(143)			(10)
Earned premiums (GAAP)	$	804		$	793		$	745		$	670		$	620		$	596

Year-over-year growth rate:
Adjusted written premiums (statutory)		(3.2)	%		4.7	%		12.0	%		9.8	%		4.6	%		5.0	%
Written premiums (statutory)		(3.0)	%		3.4	%		10.8	%		(7.2)	%		26.1	%		4.3	%
Earned premiums		1.4	%		6.4	%		11.2	%		8.1	%		4.0	%		4.6	%

Statutory combined ratio
Reported statutory combined ratio*		94.3	%		104.6	%		102.9	%		106.5	%		105.9	%		110.6	%
Codification		0.0			0.0			0.0			0.0			4.6			(0.2)
Written premium adjustment – statutory only		nm			nm			nm			0.3			0.0			0.0
One-time item		0.0			0.0			1.0			0.0			0.0			(2.0)
Statutory combined ratio (adjusted)		94.3	%		104.6	%		103.9	%		106.8	%		110.5	%		108.4	%
Less catastrophe losses		6.3			9.7			7.3			7.1			5.8			5.4
Statutory combined ratio excluding catastrophe losses (adjusted)		88.0	%		94.9	%		96.6	%		99.7	%		104.7	%		103.0	%

GAAP combined ratio
GAAP combined ratio		94.4	%		105.0	%		103.6	%		107.6	%		112.4	%		110.4	%
One-time item		0.0			0.0			1.1			0.0			0.0			(2.4)
GAAP combined ratio before one-time item		94.4	%		105.0	%		104.7	%		107.6	%		112.4	%		108.0	%
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. nm - Not meaningful * Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. **Prior to 2001, property casualty written premiums were recognized as they were billed throughout the policy period. Effective January 1, 2001, written premiums have been recognized on an annualized basis at the effective date of the policy. Written premiums for 2000 were reclassified to conform with the 2001 presentation; information was not readily available to reclassify earlier year statutory data. The growth rates in written premiums between 1999 and 2000 are overstated because 1999 premiums are shown on a billed basis.

2006 Second-Quarter Supplement


Cincinnati Insurance Group
Quarterly Property Casualty Data - Consolidated

(Dollars in millions)	Three months ended																				Six months ended						Nine months ended				Twelve months ended
	12/31/06	9/30/06	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05			9/30/06	9/30/05			12/31/06	12/31/05
Premiums
Adjusted written premiums (statutory)			$	804		$	794		$	765		$	764		$	781		$	787		$	1,600		$	1,568			$	2,332			$	3,097
Written premium adjustment – statutory only				10			33			(38)			(3)			10			10			43			20				17				(21)
Reported written premiums (statutory)*			$	814		$	829		$	727		$	761		$	791		$	797		$	1,643		$	1,588			$	2,349			$	3,076
Unearned premiums change				(21)			(51)			48			4			(26)			(44)			(72)			(70)				(66)				(18)
Earned premiums			$	793		$	778		$	775		$	765		$	765		$	753		$	1,571		$	1,518			$	2,283			$	3,058

Statutory combined ratio
Reported statutory combined ratio*				93.7	%		89.6	%		85.8	%		96.6	%		86.6	%		87.3	%		91.7	%		86.9	%			90.1	%			89.0	%
Written premium adjustment – statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted statutory combined ratio				93.7	%		89.6	%		85.8	%		96.6	%		86.6	%		87.3	%		91.7	%		86.9	%			90.1	%			89.0	%
Less catastrophe losses				8.0			5.0			5.6			8.6			2.0			0.3			6.5			1.1				3.6				4.1
Adjusted statutory combined ratio excluding catastrophe losses				85.7	%		84.6	%		80.2	%		88.0	%		84.6	%		87.0	%		85.2	%		85.8	%			86.5	%			84.9	%

Reported commission expense ratio*				17.6	%		18.1	%		20.4	%		20.3	%		19.3	%		16.8	%		17.9	%		18.0	%			18.8	%			19.2	%
Written premium adjustment – statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted commission expense ratio				17.6	%		18.1	%		20.4	%		20.3	%		19.3	%		16.8	%		17.9	%		18.0	%			18.8	%			19.2	%

Reported other expense ratio*				10.8	%		10.8	%		11.6	%		10.8	%		10.3	%		9.8	%		10.8	%		10.0	%			10.2	%			10.5	%
Written premium adjustment – statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted other expense ratio				10.8	%		10.8	%		11.6	%		10.8	%		10.3	%		9.8	%		10.8	%		10.0	%			10.2	%			10.5	%

Reported statutory expense ratio*				28.4	%		28.9	%		32.0	%		31.1	%		29.6	%		26.6	%		28.7	%		28.0	%			29.0	%			29.7	%
Written premium adjustment – statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted statutory expense ratio				28.4	%		28.9	%		32.0	%		31.1	%		29.6	%		26.6	%		28.7	%		28.0	%			29.0	%			29.7	%

GAAP combined ratio
GAAP combined ratio				94.5	%		92.0	%		83.9	%		96.6	%		87.5	%		88.9	%		93.3	%		88.2	%			91.0	%			89.2	%
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
GAAP combined ratio before one-time item				94.5	%		92.0	%		83.9	%		96.6	%		87.5	%		88.9	%		93.3	%		88.2	%			91.0	%			89.2	%

Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts
may not equal the full year as each is computed independently.
nm - Not meaningful
* Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

2006 Second-Quarter Supplement


Cincinnati Insurance Group
Quarterly Property Casualty Data - Commercial Lines

(Dollars in millions)	Three months ended																				Six months ended						Nine months ended				Twelve months ended
	12/31/06	9/30/06	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05			9/30/06	9/30/05			12/31/06	12/31/05
Premiums
Adjusted written premiums (statutory)			$	593		$	635		$	584		$	547		$	557		$	617		$	1,228		$	1,174			$	1,721			$	2,306
Written premium adjustment -- statutory only				10			33			(36)			(1)			9			12			43			21				20				(16)
Reported written premiums (statutory)*			$	603		$	668		$	548		$	546		$	566		$	629		$	1,271		$	1,195			$	1,741			$	2,290
Unearned premiums change				(4)			(86)			28			18			(3)			(78)			(90)			(81)				(63)				(36)
Earned premiums			$	599		$	582		$	576		$	564		$	563		$	551		$	1,181		$	1,114			$	1,678			$	2,254

Statutory combined ratio
Reported statutory combined ratio*				89.6	%		87.5	%		84.3	%		95.5	%		83.9	%		85.5	%		88.6	%		84.6	%			88.1	%			87.1	%
Written premium adjustment -- statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted statutory combined ratio				89.6	%		87.5	%		84.3	%		95.5	%		83.9	%		85.5	%		88.6	%		84.6	%			88.1	%			87.1	%
Less catastrophe losses				5.6			5.1			2.4			9.5			0.4			1.1			5.3			0.8				3.6				3.4
Adjusted statutory combined ratio excluding catastrophe losses				84.0	%		82.4	%		81.9	%		86.0	%		83.5	%		84.4	%		83.3	%		83.8	%			84.5	%			83.7	%

GAAP combined ratio
GAAP combined ratio				90.3	%		90.5	%		82.1	%		95.2	%		84.8	%		87.5	%		90.4	%		86.1	%			89.2	%			87.4	%
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
GAAP combined ratio before one-time item				90.3	%		90.5	%		82.1	%		95.2	%		84.8	%		87.5	%		90.4	%		86.1	%			89.2	%			87.4	%

Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
equal the full year as each is computed independently.
nm - Not meaningful
* Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

2006 Second-Quarter Supplement


Cincinnati Insurance Group
Quarterly Property Casualty Data - Personal Lines

(Dollars in millions)	Three months ended																				Six months ended						Nine months ended				Twelve months ended
	12/31/06	9/30/06	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			6/30/06			6/30/05			9/30/06	9/30/05			12/31/06	12/31/05
Premiums
Adjusted written premiums (statutory)			$	211		$	161		$	181		$	217		$	223		$	170		$	372		$	393			$	611			$	791
Written premium adjustment -- statutory only				0			0			(2)			(2)			1			(2)			0			(1)				(3)				(5)
Reported written premiums (statutory)*			$	211		$	161		$	179		$	215		$	224		$	168		$	372		$	392			$	608			$	786
Unearned premiums change				(17)			35			20			(14)			(22)			34			18			8				(3)				17
Earned premiums			$	194		$	196		$	199		$	201		$	202		$	202		$	390		$	404			$	605			$	804

Statutory combined ratio
Reported statutory combined ratio*				106.4	%		98.1	%		90.1	%		99.9	%		93.6	%		94.0	%		101.6	%		93.7	%			95.7	%			94.3	%
Written premium adjustment -- statutory only				nm			nm			nm			nm			nm			nm			nm			nm				nm				nm
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
Adjusted statutory combined ratio				106.4	%		98.1	%		90.1	%		99.9	%		93.6	%		94.0	%		101.6	%		93.7	%			95.7	%			94.3	%
Less catastrophe losses				15.6			5.0			14.9			6.3			6.2			2.0			10.3			2.1				3.5				6.3
Adjusted statutory combined ratio excluding catastrophe losses				90.8	%		93.1	%		75.2	%		93.6	%		87.4	%		96.0	%		91.3	%		91.6	%			92.2	%			88.0	%

GAAP combined ratio
GAAP combined ratio				107.6	%		96.4	%		89.0	%		100.5	%		95.3	%		92.7	%		102.0	%		94.0	%			96.1	%			94.4	%
One-time item				0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0				0.0				0.0
GAAP combined ratio before one-time item				107.6	%		96.4	%		89.0	%		100.5	%		95.3	%		92.7	%		102.0	%		94.0	%			96.1	%			94.4	%

Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
equal the full year as each is computed independently.
nm - Not meaningful
* Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

2006 Second-Quarter Supplement


The Cincinnati Life Insurance Company
GAAP Statements of Income

	For the three months ended June 30,				For the six months ended June 30,
	2006	2005	Change	% Change	2006	2005	Change	% Change
Revenues:
Premiums earned:
Property casualty	$ 0	$ 0	$ 0	NA	$ 0	$ 0	$ 0	NA
Life	38,150,148	38,053,773	96,374	0.25	73,024,692	69,570,579	3,454,113	4.96
Accident health	1,505,451	1,436,094	69,358	4.83	3,239,348	3,089,251	150,097	4.86
Premiums ceded	(9,912,540)	(10,266,701)	354,161	3.45	(20,233,150)	(19,659,993)	(573,157)	(2.92)
Total premiums earned	29,743,059	29,223,166	519,893	1.78	56,030,890	52,999,837	3,031,053	5.72
Investment income	27,114,967	24,422,519	2,692,448	11.02	53,390,153	48,396,996	4,993,157	10.32
Realized investment gains and losses	249,714	5,352,141	(5,102,427)	(95.33)	42,583,970	7,644,838	34,939,132	457.03
Other income	1,058,226	846,798	211,429	24.97	1,804,280	1,594,320	209,960	13.17
Total revenues	$ 58,165,966	$ 59,844,624	$ (1,678,657)	(2.81)	$ 153,809,293	$ 110,635,991	$ 43,173,302	39.02


Benefits & expenses:
Losses & policy benefits	$ 46,203,300	$ 44,534,290	$ 1,669,010	3.75	$ 75,537,921	$ 79,180,807	$ (3,642,886)	(4.60)
Reinsurance recoveries	(17,842,074)	(18,810,323)	968,250	5.15	(16,977,076)	(29,570,229)	12,593,153	42.59
Commissions	8,828,858	8,696,258	132,599	1.52	17,235,774	16,992,069	243,705	1.43
Other operating expenses	6,764,016	6,726,436	37,580	0.56	12,906,309	11,264,457	1,641,852	14.58
Interest expense	0	0	0	NA	0	0	0	NA
Taxes, licenses & fees	920,480	1,073,625	(153,145)	(14.26)	1,750,889	2,151,112	(400,223)	(18.61)
Incr deferred acq expense	(2,750,888)	(2,032,577)	(718,311)	(35.34)	(7,693,293)	(4,782,772)	(2,910,521)	(60.85)
Other expenses	45	44	1	2.27	109	108	1	0.93
Total expenses	$ 42,123,737	$ 40,187,753	$ 1,935,984	4.82	$ 82,760,633	$ 75,235,553	$ 7,525,081	10.00


Income before income taxes	$ 16,042,229	$ 19,656,871	$ (3,614,641)	(18.39)	$ 71,048,660	$ 35,400,439	$ 35,648,221	100.70

Provision for income taxes:
Current	$ 3,219,524	$ 3,031,405	$ 188,119	6.21	$ 5,353,299	$ 6,245,875	$ (892,576)	(14.29)
Current capital gains/losses	87,400	1,873,249	(1,785,849)	(95.33)	14,904,390	2,675,693	12,228,697	457.03
Deferred	2,402,777	1,811,804	590,973	32.62	5,394,777	3,123,875	2,270,902	72.70
Total income taxes	$ 5,709,701	$ 6,716,458	$ (1,006,757)	(14.99)	$ 25,652,466	$ 12,045,443	$ 13,607,023	112.96

Net income	$ 10,332,528	$ 12,940,413	$ (2,607,884)	(20.15)	$ 45,396,194	$ 23,354,995	$ 22,041,198	94.37

2006 Second-Quarter Supplement


The Cincinnati Life Insurance Company
Statutory Statements of Income

	For the three months ended June 30,			For the six months ended June 30,
	2006	2005	% Change	2006	2005	% Change

Net premiums written	$ 39,137,736.60	$ 50,826,408.30	(23.00)	$ 77,446,205.60	$ 100,310,028.60	(22.79)
Net investment income	27,114,966.43	24,422,518.82	11.02	53,390,152.92	48,396,996.07	10.32
Amortization of interest maintenance reserve	45,868.45	1,414,427.00	(96.76)	82,449.50	1,679,919.00	(95.09)
Commissions and expense allowances on reinsurance ceded	1,937,705.15	2,834,889.60	(31.65)	3,944,304.79	6,452,441.57	(38.87)
Income from fees associated with Separate Accounts	1,058,226.16	846,797.36	24.97	1,804,280.31	1,594,319.63	13.17
Total revenues	$ 69,294,502.78	$ 80,345,041.08	(13.75)	$ 136,667,393.12	$ 158,433,704.87	(13.74)

Death benefits and matured endowments	$ 10,198,197.55	$ 7,332,486.61	39.08	$ 20,638,449.33	$ 15,022,527.94	37.38
Annuity benefits	8,319,768.26	4,699,020.66	77.05	16,155,741.99	7,767,445.31	107.99
Disability benefits and benefits under accident and health contracts	534,746.58	521,623.60	2.52	658,776.64	562,209.61	17.18
Surrender benefits and group conversions	4,409,286.48	3,730,233.58	18.20	11,792,037.90	9,503,648.72	24.08
Interest and adjustments on deposit-type contract funds	1,903,705.42	2,751,374.83	(30.81)	4,754,857.41	5,023,109.51	(5.34)
Increase in aggregate reserves for life and accident and health contracts	23,805,462.82	40,627,409.96	(41.41)	45,356,445.82	77,628,755.97	(41.57)
Payments on supplementary contracts with life contingencies	78,606.39	75,156.91	4.59	154,083.84	147,405.58	4.53
Total benefit expenses	$ 49,249,773.50	$ 59,737,306.15	(17.56)	$ 99,510,392.93	$ 115,655,102.64	(13.96)

Commissions	$ 8,729,108.18	$ 8,696,258.57	0.38	$ 17,036,273.90	$ 16,992,069.38	0.26
General insurance expenses and taxes	8,332,437.85	7,904,098.10	5.42	16,727,746.78	15,818,695.39	5.75
Increase in loading on deferred and uncollected premiums	(1,618,597.44)	(1,309,051.35)	(23.65)	(2,972,289.32)	(3,805,278.35)	21.89
Net transfers to or (from) Separate Accounts	(211,220.00)	0.00	N/A	(211,220.00)	0.00	N/A
Other deductions	45.02	44.15	1.97	108.64	107.96	0.63
Total operating expenses	$ 15,231,773.61	$ 15,291,349.47	(0.39)	$ 30,580,620.00	$ 29,005,594.38	5.43

Federal and Foreign Income Taxes Incurred	2,914,409.88	3,589,629.00	(18.81)	4,803,602.10	6,577,240.00	(26.97)

Net gain from operations before realized capital gains or (losses)	$ 1,898,545.79	$ 1,726,756.46	9.95	$ 1,772,778.09	$ 7,195,767.85	(75.36)

Net realized gains or (losses) net of capital gains tax	0.22	109,922.36	(100.00)	27,697,575.73	1,320,603.67	1997.34

Net Income (Statutory)	$ 1,898,546.01	$ 1,836,678.82	3.37	$ 29,470,353.82	$ 8,516,371.52	246.04

* Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance
Commissioners and filed with the appropriate regulatory bodies.

2006 Second-Quarter Supplement


The Cincinnati Life Insurance Company
Expenses as a Percentage of Premium

	(Dollars in millions)	Three months ended																								Six months ended						Nine months ended				Twelve months ended
		12/31/06			09/30/06			06/30/06			03/31/06			12/31/05			09/30/05			06/30/05			03/31/05			06/30/06			06/30/05			09/30/06	09/30/05			12/31/06	12/31/05
	Gross Written Premiums							$	51		$	50		$	57		$	66		$	64		$	62		$	101		$	126			$	192			$	249
	Bank Owned Life Insurance (BOLI) Adjustment								0			0			0			0			0			0			0			0				0				0
	Adjusted Gross Written Premiums							$	51		$	50		$	57		$	66		$	64		$	62		$	101		$	126			$	192			$	249

	Insurance Expense							$	7		$	7		$	8		$	7		$	7		$	7		$	14		$	14			$	21			$	29

	Expense Ratio								13.5	%		14.5	%		14.4	%		10.3	%		10.7	%		10.9	%		14.0	%		10.8	%			10.8	%			11.7	%
	Expense Ratio based on Adjusted Gross Written Premium								13.5	%		14.5	%		14.4	%		10.3	%		10.7	%		10.9	%		14.0	%		10.8	%			10.8	%			11.7	%


																													&nbs p;
	(Dollars in millions)	Years ended December 31,
		2005			2004			2003			2002			2001			2000
	Gross Written Premiums	$	249		$	230		$	173		$	244		$	122		$	157
	Bank Owned Life Insurance (BOLI) Adjustment		0			(10)			0			(34)			0			(20)
	Adjusted Gross Written Premiums	$	249		$	220		$	173		$	210		$	122		$	137

	Insurance Expense	$	29		$	25		$	25		$	27		$	25		$	20

	Expense Ratio		11.7	%		11.1	%		14.8	%		10.9	%		20.6	%		12.9	%
	Expense Ratio based on Adjusted Gross Written Premium		11.7	%		11.6	%		14.8	%		12.6	%		20.6	%		14.8	%


	Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not
	equal the full year as each is computed independently.

2006 Second-Quarter Supplement

EX-99 4 cinfinex993.htm EXHIBIT 99.3 .

CINCINNATI FINANCIAL CORPORATION

Mailing Address: P.O. BOX 145496

CINCINNATI, OHIO 45250-5496

(513) 870-2000

Investor Contact: Heather J. Wietzel

(513) 870-2768

Media Contact: Joan O. Shevchik

(513) 603-5323

Cincinnati Financial Subsidiaries Earn AA- (Very Strong) Financial Strength Ratings from Standard & Poor’s Ratings Services

· S&P revised outlook to stable for Cincinnati Financial and its insurance operating subsidiaries

· S&P affirmed subsidiary counterparty credit and financial strength ratings at AA-

· S&P affirmed counterparty credit rating at A for Cincinnati Financial Corporation

Cincinnati, July 26, 2006—Cincinnati Financial Corporation (NASDAQ:CINF) – announced that on July 25, 2006, Standard & Poor’s Ratings Services affirmed its AA- (Very Strong) financial strength and counterparty credit ratings on the property casualty group and The Cincinnati Life Insurance Company and its A (Strong) counterparty credit rating on Cincinnati Financial Corporation.

At the same time, Standard & Poor’s revised its ratings outlook to stable from negative on the company, its property casualty operating companies and Cincinnati Life. Standard & Poor’s said the stable outlook reflected the improved results on the company’s homeowner book of business, as well as Standard & Poor’s view of the company’s ability to benefit from corrective actions it has effected over recent years. Standard & Poor’s believes the company’s unique approach to agency relationships should drive profitable growth even in a softer pricing environment.

Chairman and Chief Executive Officer John J. Schiff, Jr., CPCU, commented, “We are pleased that Standard & Poor’s has acknowledged the progress achieved in our underwriting and technology initiatives by assigning a stable outlook to its ratings. Our underwriters look at new and renewal policies case by case, with the goal of selecting, pricing and underwriting business in a way that contributes to each local agency’s success. We know that healthy agencies excel at providing our policyholders – the businesses and families of their communities – with outstanding service and customized insurance programs. In addition, we are using Web-based systems for policy quoting and production, as well as claims administration, to streamline processes for our agents and our company.”

6200 S. Gilmore Road, Fairfield, Ohio 45014-5141