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0000906318-06-000095.txt : 20061101 0000906318-06-000095.hdr.sgml : 20061101 20061101080249 ACCESSION NUMBER: 0000906318-06-000095 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20061101 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061101 DATE AS OF CHANGE: 20061101 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: 061177152 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 cinfin8k11106.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)			November 1, 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 November 1, 2006, Cincinnati Financial Corporation issued the attached news release titled “Cincinnati Financial Third-quarter Net Income and Operating Income* at 66 Cents,” furnished as Exhibit 99.1 hereto and incorporated herein by reference. On November 1, 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 9.01 Financial Statements and Exhibits.

(c)

Exhibits

Exhibit 99.1 – News release dated November 1, 2006, “Cincinnati Financial Third-quarter Net Income and Operating Income* at 66 Cents”

Exhibit 99.2 – Supplemental Financial Data dated November 1, 2006

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 November 1, 2006

By /s/ Kenneth W. Stecher

Kenneth W. Stecher

Chief Financial Officer, Executive Vice President, Secretary and Treasurer

(Principal Accounting Officer)

EX-99 2 ex991.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 Third-quarter Net Income and Operating Income* at 66 Cents

Cincinnati, November 1, 2006 – Cincinnati Financial Corporation (Nasdaq: CINF) today reported:

Third-quarter and nine-month net and operating income in line with previous announcement.

Record book value of $37.32 per share.

Results tempered by rising loss severity and by storm activity that will lead to record year for catastrophe losses.

Financial Highlights


(Dollars in millions except share data)		Three months ended September 30,					Nine months ended September 30,
(Dollars in millions except share data)		2006		2005	Change %		2006		2005	Change %
Revenue Highlights
Earned premiums	$	819	$	790	3.6	$	2,446	$	2,361	3.6
Investment income		144		134	7.5		425		390	9.0
Total revenues		967		944	2.4		3,556		2,801	27.0
Income Statement Data
Net income	$	115	$	117	(1.6)	$	800	$	419	90.7
Net realized investment gains and losses		0		10	(100.8)		427		24	1,690.9
Operating income*	$	115	$	107	7.5	$	373	$	395	(5.6)
Per Share Data (diluted)
Net income	$	0.66	$	0.66	0.0	$	4.56	$	2.37	92.4
Net realized investment gains and losses		0.00		0.05	nm		2.43		0.14	1,635.7
Operating income*	$	0.66	$	0.61	8.2	$	2.13	$	2.23	(4.5)

Book value						$	37.32	$	34.43	8.4
Cash dividend declared	$	0.335	$	0.305	9.8	$	1.005	$	0.90	11.7
Weighted average shares outstanding	175,260,063		176,806,267		(0.9)	175,542,616		177,212,677		(0.9)

Insurance Operations Highlights

2.4 percent and 3.2 percent increases in three- and nine-month property casualty net written premiums.

Strong commercial lines growth with three-month net written premiums up 6.5 percent and new business at $89 million.

Third-quarter personal lines new business up 14.4 percent. Rate changes made effective July 1, 2006, have better positioned personal lines products in certain markets.

96.1 percent and 94.2 percent three- and nine-month property casualty combined ratios, in line with previous announcement.

Catastrophe losses contributed 3.5 and 5.5 percentage points to the 2006 three- and nine-month combined ratios. In the comparable 2005 periods, catastrophe losses contributed 8.6 and 3.6 percentage points to the ratios.

5 cents and 15 cents contribution from the life insurance segment to three- and nine-month 2006 operating income.

Investment and Balance Sheet Highlights

7.5 percent and 9.0 percent growth in three- and nine-month pretax investment income.

Book value of $37.32 at September 30, 2006, up $2.44 from year-end 2005 level. Invested assets rose on new investments, interest-rate-driven improvement in bond values and appreciation of equity portfolio.

Full-year 2006 Outlook in Line with October 23, 2006, Announcement**

Property casualty written premiums target unchanged at 2+ percent growth in full-year 2006. Growth in commercial lines is more than offsetting the expected decline in personal lines.

Combined ratio target raised to a range of 94 percent to 95 percent including at least 5.0 percentage points from full-year catastrophe losses, from a range of 92 percent to 94 percent including 4.0 to 4.5 percentage points.

Investment income growth target unchanged at 8.0 percent to 8.5 percent range for full-year 2006.

The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 12 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).

Overall Results and Long-term Position

“Third-quarter property casualty underwriting results reflected the normal ebb and flow of the insurance business. As we reported on a preliminary basis on October 23, a few business lines showed some inconsistency because of rising loss severity, including higher new large losses. We are further studying those lines so they can receive the attention necessary. We are confident we are working effectively to address each set of circumstances appropriately,” said John J. Schiff, Jr., CPCU, chairman and chief executive officer. “Looking at the big picture, many aspects of our third-quarter performance were exemplary and strengthened our confidence in our long-term outlook..

“In the insurance area, our largest commercial and personal business lines reported healthy third-quarter results, in line with recent trends. Business policyholders are continuing to respond 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. Personal lines policyholders are responding favorably to agents’ presentation of new pricing for Cincinnati’s personal lines products, leading to the first quarter-over-quarter increase in new personal lines business since the fourth quarter of 2002. And our life insurance operation continued to contribute to income, an important balance to the inevitable swings in property casualty insurance results.”

Turning to investments, Schiff added, “Our buy-and-hold equity investing strategy drives the company’s long-term growth and stability and contributed again in the third quarter. Investment income growth was healthy, helped by dividends from our equity holdings. New investments, interest-rate driven improvement in bond values and appreciation of the equity portfolio led to higher investment assets and a $2.44 gain in book value from year-end to a record $37.32.”

Schiff said, “Our long-standing strategy is to be strong on agency relationships, claims service and reserving, and total return investing. We continued during the third quarter to protect and build on these advantages, providing a stable market for our agents’ business and producing steady value for our shareholders.”

Year-to-date Catastrophe Losses

James E. Benoski, vice chairman, chief insurance officer and president, said, “This year, as in 2005, policyholders have had ample opportunities to benefit from the Cincinnati relationship. After a number of second quarter storms, severe weather continued across the Midwest during the third quarter. Policyholders affected by an April hailstorm also continue to report claims, moving the total from that storm above our initial estimate. Of the more than 8,500 catastrophe claims reported for storms during the first nine months of this year, approximately 93 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.

“In early October, a Midwest storm caused heavy hail damage in central Ohio, resulting in at least $35 million of losses for our policyholders. Of the approximately 1,500 losses we have received from policyholders affected by that storm, more than 68 percent are already closed,” Benoski noted.

2006 Property Casualty Outlook Update

Kenneth W. Stecher, chief financial officer and executive vice president commented, “In view of the healthy investment income and premium trends, we remain comfortable with the targets for these measures we provided last quarter. Investment income growth should be between 8.0 and 8.5 percent. Our consolidated property casualty written premium growth should be at least 2 percent for the year compared with the 2.6 percent increase in 2005.

“As we announced on October 23, we have modified our expected range for the combined ratio to 94 percent to 95 percent, including at least 5.0 percentage points from full-year catastrophe losses. Catastrophe losses through nine months totaled $130 million, and we’ve already experienced one major storm in October. The rising level of large, non-catastrophe losses in the third quarter took away some of the cushion we had to handle this year’s higher level of catastrophe losses. Without any additional storms, we’re already at a record level that will add at least 5 percentage points to the full-year combined.”

Looking at other aspects of the combined ratio, Stecher said, “We continue to believe that savings in 2006 from favorable loss reserve development from prior accident years is likely to reduce the 2006 combined ratio by 2 to 3 percentage points, in line with historical levels. Net savings from favorable development improved this year’s third-quarter loss and loss expense ratio by 4.9 percentage points. For the first nine months of 2006, savings improved the ratio by 1.5 percentage points. In 2005 and 2004, savings – particularly for liability coverages – were at a higher-than-normal level.”

Opportunities

Schiff added, “We plan to finish the year with more agencies than ever, carefully appointing 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 made 49 agency appointments in the first nine months, near our target of 55 to 60 new agency appointments for the year. These new appointments and other changes in agency structures brought total reporting agency locations to 1,286, a net increase of 34 since year-end 2005.

“The agencies that market our insurance products recently helped The Cincinnati Insurance Companies rank among the top companies in a survey conducted by Greenwich Associates, an independent financial services research firm. Greenwich surveyed a broad cross-section of agents and brokers to statistically measure carriers on fundamental qualitative measures, including client loyalty, claims coordination, competitive pricing and coverage.”

Schiff concluded, “We continue to target above-industry-average growth in written premiums and industry-leading profitability. We believe that our 2006 performance will support our ability to reward shareholders over the long term.”

Property Casualty Insurance Operations


(Dollars in millions)		Three months ended September 30,							Nine months ended September 30,
(Dollars in millions)	2006			2005			Change %		2006			2005		Change %
Written premiums	$	780		$	761		2.4	$	2,423		$	2,349		3.2

Earned premiums	$	791		$	765		3.4	$	2,362		$	2,283		3.5

Loss and loss expenses excluding catastrophes		489			435		12.2		1,375			1,312		4.8
Catastrophe loss and loss expenses		27			66		(58.2)		130			83		57.2
Commission expenses		147			151		(2.6)		452			451		0.4
Underwriting expenses		94			84		11.4		256			225		13.7
Policyholder dividends		3			3		39.4		12			7		56.5
Underwriting profit	$	31		$	26		19.0	$	137		$	205		(33.4)

Ratios as a percent of earned premiums:
Loss and loss expenses excluding catastrophes		61.7	%		56.9	%			58.3	%		57.5	%
Catastrophe loss and loss expenses		3.5			8.6				5.5			3.6
Loss and loss expenses		65.2			65.5				63.8			61.1
Commission expenses		18.7			19.8				19.1			19.7
Underwriting expenses		11.8			11.0				10.8			9.9
Policyholder dividends		0.4			0.3				0.5			0.3
Combined ratio		96.1	%		96.6	%			94.2	%		91.0	%

Property Casualty Insurance Highlights

2.4 percent rise in three-month 2006 property casualty written premiums, with a 3.2 percent nine-month increase. The 2006 net written premium growth rates were increased by the net effect of reinsurance reinstatement premiums and assumed pool adjustments in the third quarter of 2005. These added 0.5 and 0.1 percentage points, respectively, to the growth rates for the three and nine months ended September 30, 2006.

$98 million in new business written directly by agencies compared with $79 million in last year’s three months. Nine-month new business rose 16.1 percent to $268 million from $231 million.

1,065 agency relationships with 1,286 reporting locations marketing our insurance products at September 30, 2006, up from 1,024 agency relationships with 1,252 locations at year-end 2005.

3.2 percentage point increase in the nine-month property casualty combined ratio due to rising loss severity, catastrophe losses, a lower level of savings from favorable development on prior period reserves and underwriting expenses, including stock option expensing.

$27 million in third-quarter 2006 catastrophe losses, reflecting $19 million from weather events during the period and $8 million of development on catastrophe events in prior periods. $130 million in nine-month 2006 catastrophe losses contributed 5.5 percentage points to the nine-month combined ratio.


2006 Year-to-date Events	Dates	States Primarily Affected	Reported Claims (as of October 27)	Loss Estimate (pretax, net of reinsurance)
Midwest tornadoes and severe weather	Mar. 11-13	Arkansas, Illinois, Indiana, Kansas, Missouri, Oklahoma	1,629	$38 million
Midwest wind and hail	Apr. 2-3	Arkansas, Illinois, Indiana, Kentucky, Missouri, Tennessee	1,227	$18 million
Midwest wind and hail	Apr. 6-8	Alabama, Georgia, Indiana, Kansas, Kentucky, Nebraska, Ohio, Tennessee	976	$10 million
Midwest wind and hail	Apr. 13-15	Illinois, Indiana, Iowa, Wisconsin	3,360	$38 million
Midwest wind, hail and flood	Jun. 18-22	Indiana, Ohio, Wisconsin	535	$5 million
Midwest wind, hail and flood	Jul. 19-21	Illinois, Kentucky, Missouri, Tennessee and Wisconsin	472	$6 million
Midwest wind, hail and flood	Aug. 23-25	Illinois, Indiana, Minnesota, Wisconsin	337	$8 million
Midwest wind, hail and flood	Oct. 2-4	Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, Wisconsin	1,479	$35 million

Three-month 2006 net savings from favorable development on prior period reserves improved the combined ratio by 4.9 percentage points. In last year’s third quarter, savings improved the ratio by 6.5 percentage points.

Nine-month 2006 net savings from favorable development improved the combined ratio by 1.5 percentage points. In the comparable 2005 period, savings improved the ratio by 3.5 percentage points. The year-over-year differences largely related to development on commercial casualty losses, which can fluctuate due to the nature and size of liability policies and limits, such as those on commercial umbrella policies.

Commercial Lines Insurance Operations


(Dollars in millions)		Three months ended September 30,							Nine months ended September 30,
(Dollars in millions)		2006			2005		Change %		2006			2005		Change %
Written premiums	$	582		$	546		6.5	$	1,853		$	1,741		6.4

Earned premiums	$	602		$	564		6.7	$	1,783		$	1,678		6.3

Loss and loss expenses excluding catastrophes		363			307		18.1		1,020			942		8.4
Catastrophe loss and loss expenses		14			53		(73.4)		77			62		24.4
Commission expenses		109			110		(0.5)		331			325		2.1
Underwriting expenses		74			64		14.2		190			160		18.5
Policyholder dividends		3			3		39.4		12			7		56.5
Underwriting profit	$	39		$	27		44.9	$	153		$	182		(16.0)

Ratios as a percent of earned premiums:
Loss and loss expenses excluding catastrophes		60.2	%		54.4	%			57.3	%		56.1	%
Catastrophe loss and loss expenses		2.3			9.5				4.3			3.7
Loss and loss expenses		62.5			63.9				61.6			59.8
Commission expenses		18.2			19.5				18.6			19.4
Underwriting expenses		12.2			11.4				10.6			9.5
Policyholder dividends		0.5			0.4				0.6			0.5
Combined ratio		93.4	%		95.2	%			91.4	%		89.2	%

Commercial Lines Insurance Highlights

6.5 percent growth in three-month 2006 commercial lines net written premiums with a 6.4 percent nine-month increase. 2006 net written premium growth rates were increased by the effect of reinsurance reinstatement premiums in the third quarter of 2005. These added 1.0 and 0.3 percentage points, respectively, to the growth rates for the three and nine months ended September 30, 2006.

$89 million in new commercial lines business written directly by agencies in third-quarter 2006, up 25.1 percent. Nine-month new commercial lines business rose 18.5 percent to $244 million.

91.4 percent nine-month 2006 commercial lines combined ratio. The ratio rose 2.2 percentage points largely because of higher catastrophe losses, a lower level of savings from favorable development on prior period reserves and rising loss severity, including an increase in the number of losses greater than $1 million.

0.8 percentage-point decrease in nine-month commercial lines commission expense ratio, primarily due to lower profit-sharing commissions on lower overall underwriting profits.

1.2 percentage-point increase in nine-month noncommission expense ratio, including policyholder dividends. The rise largely was due to higher technology and staffing expenses. Stock option expense contributed 0.5 percentage points.

Commercial property and commercial casualty – the company’s two largest commercial business lines – reported strong growth and healthy profitability, with nine-month loss and loss expense ratios excluding catastrophes improved from the year ago period.

Commercial auto and workers’ compensation results in line with previous announcement. In addition to rising loss severity and a higher number of new large losses, commercial auto results reflected the increasing competition in the commercial lines marketplace and workers’ compensation reflected a review we made of established case reserves.

Continued commercial lines growth anticipated due to strong agency relationships, which promoted healthy new business growth and policyholder retention.

Personal Lines Insurance Operations


(Dollars in millions)		Three months ended September 30,							Nine months ended September 30,
(Dollars in millions)		2006			2005		Change %		2006			2005		Change %
Written premiums	$	198		$	215		(8.0)	$	570		$	608		(6.1)

Earned premiums	$	189		$	201		(5.9)	$	579		$	605		(4.4)

Loss and loss expenses excluding catastrophes		126			128		(1.9)		355			370		(4.2)
Catastrophe loss and loss expenses		13			13		6.4		53			21		153.9
Commission expenses		38			41		(8.0)		121			126		(4.1)
Underwriting expenses		20			20		2.3		66			65		1.9
Underwriting profit (loss)	$	(8)		$	(1)		(670.2)	$	(16)		$	23		(169.2)

Ratios as a percent of earned premiums:
Loss and loss expenses excluding catastrophes		66.6	%		63.9	%			61.3	%		61.1	%
Catastrophe loss and loss expenses		7.1			6.3				9.2			3.5
Loss and loss expenses		73.7			70.2				70.5	%		64.6
Commission expenses		20.1			20.5				20.8			20.8
Underwriting expenses		10.6			9.8				11.5			10.7
Combined ratio		104.4	%		100.5	%			102.8	%		96.1	%

Personal Lines Insurance Highlights

8.0 percent decrease in three-month 2006 personal lines net written premiums with a 6.1 percent nine-month decrease. 2006 net written premium growth rates include the net effect of reinsurance reinstatement premiums and assumed pool adjustments in the third quarter of 2005. These reduced the decline by 0.8 and 0.3 percentage points, respectively, for the three and nine months ended September 30, 2006.

14.4 percent increase in third-quarter new personal lines business to $9 million compared with $8 million in the third quarter of 2005, the first quarter-over-quarter increase in new personal lines business since the fourth quarter of 2002. New personal lines business written directly by agencies was $24 million in the first nine months of 2006, compared with $25 million in year-ago period.

102.8 percent nine-month 2006 personal lines combined ratio. The 6.7 percentage-point increase reflected a 5.7 percentage point rise in the contribution from catastrophe losses.

Increase in three- and nine-month noncommission underwriting expense ratio, largely due to higher technology and staffing expenses. The adoption of stock option expensing contributed 0.4 and 0.5 percentage points to the three- and nine-month increases, respectively.

Diamond, the company’s personal lines policy processing system, in use in 13 states that represent approximately 90 percent of total 2005 personal lines earned premium volume. 2006 rollout to Georgia, Kentucky, Minnesota, Missouri, Tennessee and Wisconsin agents completed on schedule. Plans for 2007 include the introduction of Diamond in Pennsylvania, Virginia and other low-volume states.

Personal auto – the company’s largest personal business line – reported healthy profitability, with the nine-month loss and loss expense ratio excluding catastrophe losses improved from the year ago period.

Homeowner results in line with previous announcement. In addition to rising loss severity and a higher number of new large losses, homeowner results reflect industrywide trends of higher material costs and insured property values as well as rising deductibles.

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. These changes can contribute to higher levels of new business and improved policyholder retention by making rates more competitive for agents’ better customers.

Life Insurance Operations


(In millions)	Three months ended September 30,					Nine months ended September 30,
(In millions)	2006		2005		Change %	2006		2005		Change %
Written premiums	$	40	$	56	(28.7)	$	121	$	163	(25.6)

Earned premiums	$	28	$	25	9.4	$	84	$	78	6.9
Investment income, net of expenses		27		25	9.2		81		73	10.0
Other income		0		1	(20.6)		2		3	0.5
Total revenues, excluding realized investment gains and losses		55		51	8.8		167		154	8.3
Policyholder benefits		33		27	21.2		92		77	19.2
Expenses		9		12	(19.8)		33		37	(9.9)
Total benefits and expenses		42		39	9.1		125		114	9.7
Net income before income tax and realized investment gains and losses		13		12	7.8		42		40	4.2
Income tax		4		4	7.0		15		13	12.4
Net income before realized investment gains and losses	$	9	$	8	8.2	$	27	$	27	0.0

Life Insurance Highlights

$121 million in nine-month total life insurance operations net written premiums, compared with $163 million in year-ago period. Written premiums include life insurance, annuity and accident and health premiums.

13.2 percent increase to $94 million in statutory written premiums for term and other life insurance products in the first nine 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 $24 million in the first nine months of 2006 from $77 million in the comparable prior period.

8.2 percent rise in face amount of life policies in force to $55.691 billion at September 30, 2006, from $51.493 billion at year-end 2005.

$11 million increase in nine-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 $1 million to other operating expenses.

29.4 percent rise in first-nine month 2006 term life insurance written premiums, benefiting from the 2005 introduction of a new series of term products. 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.

Cash value accumulation universal life products introduced for adults and children to further round out the universal life portfolio.

Investment Operations


(In millions)		Three months ended September 30,					Nine months ended September 30,
(In millions)		2006		2005	Change %		2006		2005	Change %
Investment income:
Interest	$	74	$	70	6.1	$	225	$	208	8.2
Dividends		67		64	5.2		194		180	7.5
Other		4		2	130.0		11		6	78.8
Investment expenses		(1)		(2)	9.9		(5)		(4)	(14.4)
Total net investment income		144		134	7.5		425		390	9.0
Investment interest credited to contract holders		(14)		(13)	(3.4)		(40)		(38)	(6.0)
Net realized investment gains and losses:
Realized investment gains and losses		(2)		12	(117.3)		667		41	1,519.9
Change in valuation of embedded derivatives		2		5	(56.0)		5		(2)	353.6
Other-than-temporary impairment charges		0		(1)	nm		(1)		(1)	41.7
Net realized investment gains (losses)		0		16	nm		671		38	1,683.6
Investment operations income	$	130	$	137	(4.8)	$	1,056	$	390	171.1

Balance Sheet


(Dollars in millions except share data)							At September 30,			At December 31,
(Dollars in millions except share data)								2006			2005
Balance sheet data
Invested assets							$	13,104		$	12,702
Total assets								17,671			16,003
Short-term debt								49			0
Long-term debt								791			791
Shareholders' equity								6,464			6,086
Book value per share								37.32			34.88
Debt-to-capital ratio								11.5	%		11.5	%

	Three months ended Sept. 30,						Nine months ended Sept. 30,
		2006			2005			2006			2005
Performance measures
Comprehensive income (loss)	$	455		$	(59)		$	609		$	(39)
Return on equity, annualized		7.4	%		7.7	%		17.0	%		9.1	%
Return on equity, annualized, based on comprehensive income		29.1			(3.9)			12.9			(0.8)

Investment and Balance Sheet Highlights

7.5 percent increase in three-month pretax net investment income with 9.0 percent increase for the nine months. Fifth Third Bancorp, the company’s largest equity holding, contributed 44.2 percent of total nine-month dividend income.

Growth in investment income reflected 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 nine months of 2006.

$15 million annually in additional investment income expected from dividend increases announced during the 12 months ended September 30, 2006, by Fifth Third and another 37 of the 49 common stock holdings in the equity portfolio.

$671 million in nine-month net realized investment gains (pretax) including $647 million due to the first-quarter sale of the company’s holdings of ALLTEL common stock.

Book value of $37.32 at September 30, 2006, up $2.44 from year-end 2005 level. Invested assets at September 30, 2006, rose from year-end 2005 because of new investments, interest-rate-driven improvement in bond values and appreciation of the equity portfolio.

142,566 shares repurchased in third quarter. Raised nine-month repurchase activity to 2.15 million shares for a total cost of $95 million.

$4.616 billion in statutory surplus for the property casualty insurance group at September 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 92.6 percent at September 30, 2006, compared with 97.0 percent at year-end 2005.

30.9 percent ratio of investment securities held at the holding-company level to total holding-company-only assets at September 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

Increased frequency and/or severity of claims

Inaccurate estimates or assumptions used for critical accounting estimates

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

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.

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

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 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

○

Add assessments for guaranty funds, other insurance related assessments or mandatory reinsurance arrangements; or that impair our ability to recover such assessments through future surcharges or other rate changes

○

Limit our ability to set fair, adequate and reasonable rates

○

Place us at a disadvantage in the marketplace or

○

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

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 Bancorp (NASDAQ:FITB) shares, a significant equity holding

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

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)		September 30,		December 31,
(Dollars in millions except per share data)		2006		2005
		(unaudited)
ASSETS
Investments
Fixed maturities, at fair value (amortized cost: 2006—$5,719; 2005—$5,387)	$	5,790	$	5,476
Equity securities, at fair value (cost: 2006—$2,574; 2005—$2,128)		7,256		7,106
Short-term investments, at fair value (amortized cost: 2005—$75)		0		75
Other invested assets		58		45
Cash and cash equivalents		239		119
Securities lending collateral		1,016		0
Investment income receivable		115		117
Finance receivable		106		105
Premiums receivable		1,166		1,116
Reinsurance receivable		701		681
Prepaid reinsurance premiums		13		14
Deferred policy acquisition costs		458		429
Land, building and equipment, net, for company use (accumulated depreciation: 2006—$253; 2005—$232)		185		168
Other assets		63		66
Separate accounts		505		486
Total assets	$	17,671	$	16,003

LIABILITIES
Insurance reserves
Loss and loss expense reserves	$	3,878	$	3,661
Life policy reserves		1,389		1,343
Unearned premiums		1,623		1,559
Securities lending payable		1,016		0
Other liabilities		459		455
Deferred income tax		1,497		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		505		486
Total liabilities		11,207		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		1,005		969
Retained earnings		2,714		2,088
Accumulated other comprehensive income		3,093		3,284
Treasury stock at cost (2006—22 million shares, 2005—20 million shares)		(739)		(644)
Total shareholders' equity		6,464		6,086
Total liabilities and shareholders' equity	$	17,671	$	16,003

Cincinnati Financial Corporation

Consolidated Statements of Income


(In millions except per share data)		Three months ended Sept. 30,				Nine months ended Sept. 30,
(In millions except per share data)		2006		2005		2006		2005
	(unaudited)				(unaudited)
REVENUES
Earned premiums
Property casualty	$	791	$	765	$	2,362	$	2,283
Life		28		25		84		78
Investment income, net of expenses		144		134		425		390
Realized investment gains and losses		0		16		671		38
Other income		4		4		14		12
Total revenues		967		944		3,556		2,801

BENEFITS AND EXPENSES
Insurance losses and policyholder benefits		549		528		1,596		1,470
Commissions		156		160		478		476
Other operating expenses		83		74		243		213
Taxes, licenses and fees		19		17		58		52
Increase in deferred policy acquisition costs		(5)		(5)		(27)		(23)
Interest expense		13		13		39		39
Other expenses		4		6		12		12
Total benefits and expenses		819		793		2,399		2,239

INCOME BEFORE INCOME TAXES		148		151		1,157		562

PROVISION (BENEFIT) FOR INCOME TAXES
Current		23		19		363		126
Deferred		10		15		(6)		17
Total provision for income taxes		33		34		357		143

NET INCOME	$	115	$	117	$	800	$	419

PER COMMON SHARE
Net income—basic	$	0.67	$	0.67	$	4.61	$	2.39
Net income—diluted	$	0.66	$	0.66	$	4.56	$	2.37

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 nine months ended September 30, 2005, diluted net income would have been reduced by approximately 2 cents and 6 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

Net income		$	115	$	132	$	552	$	183	$	117	$	158	$	144	$	684	$	302	$	800	$	419		$	602
One-time item			0		0		0		0		0		0		0		0		0		0		0			0
Net income before one-time item			115		132		552		183		117		158		144		684		302		800		419			602
Net realized investment gains and losses			0		6		421		16		10		8		6		426		14		427		24			40
Operating income before one-time item			115		126		131		167		107		150		138		258		288		373		395			562
Less catastrophe losses			(18)		(41)		(26)		(28)		(43)		(9)		(2)		(67)		(11)		(85)		(54)			(82)
Operating income before catastrophe losses and one-time item		$	133	$	167	$	157	$	195	$	150	$	159	$	140	$	325	$	299	$	458	$	449		$	644

Diluted per share data
Net income		$	0.66	$	0.76	$	3.13	$	1.03	$	0.66	$	0.89	$	0.81	$	3.90	$	1.70	$	2.13	$	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		0.00			0.00
Net income before one-time item			0.66		0.76		3.13		1.03		0.66		0.89		0.81		3.90		1.70		2.13		2.37			3.40
Net realized investment gains and losses			0.00		0.04		2.39		0.09		0.05		0.05		0.03		2.43		0.08		2.43		0.14			0.23
Operating income before one-time item			0.66		0.72		0.74		0.94		0.61		0.84		0.78		1.47		1.62		4.56		2.23			3.17
Less catastrophe losses			(0.10)		(0.24)		(0.14)		(0.16)		(0.24)		(0.05)		(0.01)		(0.38)		(0.06)		(0.48)		(0.30)			(0.46)
Operating income before catastrophe losses and one-time item		$	0.76	$	0.96	$	0.88	$	1.10	$	0.85	$	0.89	$	0.79	$	1.85	$	1.68	$	5.04	$	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)		$	787		$	804		$	796		$	765		$	764		$	780		$	787		$	1,600		$	1,567		$	2,387		$	2,332			$	3,097
Written premium adjustment – statutory only			(7)			10			33			(38)			(3)			10			10			43			20			36			17				(21)
Reported written premiums (statutory)*		$	780		$	814		$	829		$	727		$	761		$	790		$	797		$	1,643		$	1,587		$	2,423		$	2,349			$	3,076
Unearned premiums change			11			(21)			(51)			48			4			(25)			(44)			(72)			(73)			(60)			(66)				(19)
Earned premiums		$	791		$	793		$	778		$	775		$	765		$	765		$	753		$	1,571		$	1,518		$	2,362		$	2,283			$	3,058

Statutory combined ratio
Reported statutory combined ratio*			96.4	%		93.7	%		89.6	%		85.8	%		96.6	%		86.6	%		87.3	%		91.7	%		86.9	%		93.2	%		90.1	%			89.0	%
Written premium adjustment – statutory only			nm			nm			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			0.0				0.0
Adjusted statutory combined ratio			96.4	%		93.7	%		89.6	%		85.8	%		96.6	%		86.6	%		87.3	%		91.7	%		86.9	%		93.2	%		90.1	%			89.0	%
Less catastrophe losses			3.5			8.0			5.0			5.6			8.6			2.0			0.3			6.5			1.1			5.5			3.6				4.1
Adjusted statutory combined ratio excluding catastrophe losses			92.9	%		85.7	%		84.6	%		80.2	%		88.0	%		84.6	%		87.0	%		85.2	%		85.8	%		87.7	%		86.5	%			84.9	%

Reported commission expense ratio*			19.3	%		17.6	%		18.1	%		20.4	%		20.3	%		19.3	%		16.8	%		17.9	%		18.0	%		18.3	%		18.8	%			19.2	%
Written premium adjustment – statutory only			nm			nm			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			0.0				0.0
Adjusted commission expense ratio			19.3	%		17.6	%		18.1	%		20.4	%		20.3	%		19.3	%		16.8	%		17.9	%		18.0	%		18.3	%		18.8	%			19.2	%

Reported other expense ratio*			11.9	%		10.8	%		10.8	%		11.6	%		10.8	%		10.3	%		9.8	%		10.8	%		10.0	%		11.2	%		10.2	%			10.5	%
Written premium adjustment – statutory only			nm			nm			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			0.0				0.0
Adjusted other expense ratio			11.9	%		10.8	%		10.8	%		11.6	%		10.8	%		10.3	%		9.8	%		10.8	%		10.0	%		11.2	%		10.2	%			10.5	%
																						&nbs p;
Reported statutory expense ratio*			31.2	%		28.4	%		28.9	%		32.0	%		31.1	%		29.6	%		26.6	%		28.7	%		28.0	%		29.5	%		29.0	%			29.7	%
Written premium adjustment – statutory only			nm			nm			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			0.0				0.0
Adjusted statutory expense ratio			31.2	%		28.4	%		28.9	%		32.0	%		31.1	%		29.6	%		26.6	%		28.7	%		28.0	%		29.5	%		29.0	%			29.7	%

GAAP combined ratio
GAAP combined ratio			96.1	%		94.5	%		92.0	%		83.9	%		96.6	%		87.5	%		88.9	%		93.3	%		88.2	%		94.2	%		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			0.0				0.0
GAAP combined ratio before one-time item			96.1	%		94.5	%		92.0	%		83.9	%		96.6	%		87.5	%		88.9	%		93.3	%		88.2	%		94.2	%		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																							< /TD>
* 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)		$	589		$	593		$	635		$	584		$	547		$	557		$	617		$	1,228		$	1,174		$	1,817		$	1,721			$	2,306
Written premium adjustment -- statutory only			(7)			10			33			(36)			(1)			9			12			43			21			36			20				(16)
Reported written premiums (statutory)*		$	582		$	603		$	668		$	548		$	546		$	566		$	629		$	1,271		$	1,195		$	1,853		$	1,741			$	2,290
Unearned premiums change			20			(4)			(86)			28			18			(3)			(78)			(90)			(81)			(69)			(63)				(36)
Earned premiums		$	602		$	599		$	582		$	576		$	564		$	563		$	551		$	1,181		$	1,114		$	1,783		$	1,678			$	2,254

Statutory combined ratio
Reported statutory combined ratio*			94.1	%		89.6	%		87.5	%		84.3	%		95.5	%		83.9	%		85.5	%		88.6	%		84.6	%		90.3	%		88.1	%			87.1	%
Written premium adjustment -- statutory only			nm			nm			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			0.0				0.0
Adjusted statutory combined ratio			94.1	%		89.6	%		87.5	%		84.3	%		95.5	%		83.9	%		85.5	%		88.6	%		84.6	%		90.3	%		88.1	%			87.1	%
Less catastrophe losses			2.3			5.6			5.1			2.4			9.5			0.4			1.1			5.3			0.8			4.3			3.6				3.4
Adjusted statutory combined ratio excluding catastrophe losses			91.8	%		84.0	%		82.4	%		81.9	%		86.0	%		83.5	%		84.4	%		83.3	%		83.8	%		86.0	%		84.5	%			83.7	%

GAAP combined ratio
GAAP combined ratio			93.4	%		90.3	%		90.5	%		82.1	%		95.2	%		84.8	%		87.5	%		90.4	%		86.1	%		91.4	%		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			0.0				0.0
GAAP combined ratio before one-time item			93.4	%		90.3	%		90.5	%		82.1	%		95.2	%		84.8	%		87.5	%		90.4	%		86.1	%		91.4	%		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			3/31/0			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)		$	198		$	211		$	161		$	181		$	217		$	223		$	170		$	372		$	393		$	570		$	611			$	791
Written premium adjustment -- statutory only			0			0			0			(2)			(2)			1			(2)			0			(1)			0			(3)				(5)
Reported written premiums (statutory)*		$	198		$	211		$	161		$	179		$	215		$	224		$	168		$	372		$	392		$	570		$	608			$	786
Unearned premiums change			(9)			(17)			35			20			(14)			(22)			34			18			8			9			(3)				17
Earned premiums		$	189		$	194		$	196		$	199		$	201		$	202		$	202		$	390		$	404		$	579		$	605			$	804
																																		;
Statutory combined ratio
Reported statutory combined ratio*			104.0	%		106.4	%		98.1	%		90.1	%		99.9	%		93.6	%		94.0	%		101.6	%		93.7	%		102.3	%		95.7	%			94.3	%
Written premium adjustment -- statutory only			nm			nm			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			0.0				0.0
Adjusted statutory combined ratio			104.0	%		106.4	%		98.1	%		90.1	%		99.9	%		93.6	%		94.0	%		101.6	%		93.7	%		102.3	%		95.7	%			94.3	%
Less catastrophe losses			7.0			15.6			5.0			14.9			6.3			6.2			2.0			10.3			2.1			9.2			3.5				6.3
Adjusted statutory combined ratio excluding catastrophe losses			97.0	%		90.8	%		93.1	%		75.2	%		93.6	%		87.4	%		96.0	%		91.3	%		91.6	%		93.1	%		92.2	%			88.0	%

GAAP combined ratio
GAAP combined ratio			104.4	%		107.6	%		96.4	%		89.0	%		100.5	%		95.3	%		92.7	%		102.0	%		94.0	%		102.8	%		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			0.0				0.0
GAAP combined ratio before one-time item			104.4	%		107.6	%		96.4	%		89.0	%		100.5	%		95.3	%		92.7	%		102.0	%		94.0	%		102.8	%		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 ex992.htm EXHIBIT 99.2 Cincinnati Financial Corporation


Cincinnati Financial Corporation
Supplemental Financial Data
September 30, 2006
Third 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 November 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 not be considered indicative of results to be expected for the full year.


	Cincinnati Financial Corporation
	Supplemental Financial Data
	Third Quarter 2006

		Page	Status
	Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures	3	11/1/2006

Consolidated
	Quick Reference	4	11/1/2006
	Consolidated Statements of Income	5	11/1/2006
	CFC and Subsidiary Consolidation – Nine Months Ended September 30, 2006	6	11/1/2006
	CFC and Subsidiary Consolidation – Nine Months Ended September 30, 2005	7	11/1/2006
	CFC and Subsidiary Consolidation – Three Months Ended September 30, 2006	8	11/1/2006
	CFC and Subsidiary Consolidation – Three Months Ended September 30, 2005	9	11/1/2006
	Consolidated Balance Sheets	10	11/1/2006
	10-Year Net Income Reconciliation	11	11/1/2006
	Quarterly Net Income Reconciliation	12	11/1/2006
	Top Holdings -- Common Stocks	13	11/1/2006

Property Casualty Insurance Operations
	GAAP Statements of Income	14	11/1/2006
	Statutory Statements of Income	15	11/1/2006
	Statutory Quarterly Analysis – Consolidated	16	11/1/2006
	Statutory Quarterly Analysis – Commercial Lines	17	11/1/2006
	Statutory Quarterly Analysis – Personal Lines	18	11/1/2006
	Direct Written Premiums by Line of Business and State	19	11/1/2006
	Quarterly Property Casualty Data – Commercial Lines of Business	20	11/1/2006
	Quarterly Property Casualty Data – Personal Lines of Business	21	11/1/2006

Reconciliation Data
	10-Year Property Casualty Data – Consolidated	22	11/1/2006
	6-Year Property Casualty Data – Commercial Lines	23	11/1/2006
	6-Year Property Casualty Data – Personal Lines	24	11/1/2006
	Quarterly Property Casualty Data – Consolidated	25	11/1/2006
	Quarterly Property Casualty Data – Commercial Lines	26	11/1/2006
	Quarterly Property Casualty Data – Personal Lines	27	11/1/2006

Life Insurance Operations
	GAAP Statements of Income	28	11/1/2006
	Statutory Statements of Income	29	11/1/2006
	Expenses as a Percentage of Premium	30	11/1/2006

2006 Third-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 Third-Quarter Supplement


Cincinnati Financial Corporation
Quick Reference - Third Quarter 2006
(all data shown is for the three months ended or as of September 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	$	582		Commercial lines loss and loss expenses	$	377
Year-over-year percentage change		6.5	%	Year-over-year percentage change		4.5	%
Personal lines net written premiums	$	198		Personal lines loss and loss expenses	$	139
Year-over-year percentage change		(8.0)	%	Year-over-year percentage change		(1.2)	%
Property casualty net written premiums	$	780		Property casualty loss and loss expenses	$	516
Year-over-year percentage change		2.4	%	Year-over-year percentage change		2.9	%
Commercial lines net earned premiums	$	602		Life and accident and health losses and policy benefits	$	33
Year-over-year percentage change		6.7	%	Year-over-year percentage change		21.2	%
Personal lines net earned premiums	$	189		Operating expenses	$	257
Year-over-year percentage change		(5.9)	%	Year-over-year percentage change		2.2	%
Property casualty net earned premiums	$	791		Interest expenses	$	13
Year-over-year percentage change		3.4	%	Year-over-year percentage change		1.6	%
Life and accident and health net earned premiums	$	28		Total expenses	$	819
Year-over-year percentage change		9.4	%	Year-over-year percentage change		3.3	%
Investment income	$	144		Income before income taxes	$	148
Year-over-year percentage change		7.5	%	Year-over-year percentage change		(2.4)	%
Realized gains on investments	$	0		Total income tax	$	33
Year-over-year percentage change		nm	%	Year-over-year percentage change		(5.2)	%
Other income	$	4		Effective tax rate		21.9	%
Year-over-year percentage change		(2.6)	%
Total revenues	$	967		Ratios:
Year-over-year percentage change		2.4	%
				Commercial lines GAAP combined ratio		93.4	%
Income:				Personal lines GAAP combined ratio		104.4	%
				Property casualty GAAP combined ratio		96.1	%
Operating income	$	115
Year-over-year percentage change		7.5	%	Commercial lines STAT combined ratio		94.1	%
Net realized investment gains and losses	$	0		Personal lines STAT combined ratio		104.0	%
Year-over-year percentage change		nm	%	Property casualty STAT combined ratio		96.4	%
Net income	$	115
Year-over-year percentage change		(1.6)	%	Return on equity based upon net income (annualized)		7.4	%
				Return on equity based upon operating income (annualized)		7.4	%
Per share: (diluted)
				Balance Sheet:
Operating income	$	0.66
Year-over-year percentage change		8.2	%	Fixed maturity investments	$	5,790
Net realized investment gains and losses	$	0.00		Equity securities		7,256
Year-over-year percentage change		nm	%	Other invested assets		58
Net income	$	0.66		Total invested assets	$	13,104
Year-over-year percentage change		0.0	%
Book value	$	37.32		Property casualty and life loss and loss expense reserves	$	3,878
Year-over-year percentage change		8.4	%	Total debt		840
Weighted average shares -- diluted	175,260,063			Shareholders equity		6,464
Year-over-year percentage change		(0.9)	%

2006 Third-Quarter Supplement


Cincinnati Financial Corporation
Consolidated Statements of Income
		For the Three Months Ended September 30,							For the Nine Months Ended September 30,
		2006		2005		Change	% Change		2006		2005		Change	% Change
Revenues:
Premiums earned:
Property casualty	$	832,224,817	$	816,434,954	$	15,789,863	1.93	$	2,475,926,407	$	$2,418,228,387	$	57,698,020	2.39
Life		36,294,277		33,816,806		2,477,471	7.33		109,318,969		103,387,385		5,931,584	5.74
Accident health		1,709,173		1,640,686		68,487	4.17		4,948,521		4,729,937		218,584	4.62
Premiums ceded		(51,268,668)		(61,598,673)		10,330,005	16.77		(144,775,239)		(165,607,399)		20,832,160	12.58
Total premiums earned		818,959,599		790,293,773		28,665,826	3.63		2,445,418,658		2,360,738,310		84,680,348	3.59
Investment income		143,775,266		133,715,046		10,060,220	7.52		425,032,304		390,084,902		34,947,402	8.96
Realized gain on investments		(172,581)		15,956,443		(16,129,024)	(101.08)		671,377,232		37,641,729		633,735,503	1,683.60
Other income		4,404,807		4,522,882		(118,075)	(2.61)		13,779,080		12,114,228		1,664,852	13.74
Total revenues	$	966,967,091	$	944,488,144	$	22,478,947	2.38	$	3,555,607,274	$	2,800,579,169	$	755,028,105	26.96

Benefits & expenses:
Losses & policy benefits	$	578,846,827	$	591,433,357	$	(12,586,530)	(2.13)	$	1,694,301,755	$	1,628,467,395	$	65,834,360	4.04
Reinsurance recoveries		(30,315,757)		(63,310,660)		32,994,903	52.12		(98,667,113)		(158,538,599)		59,871,486	37.76
Commissions		155,791,819		160,017,630		(4,225,811)	(2.64)		477,745,948		476,232,758		1,513,190	0.32
Other operating expenses		83,215,761		73,763,514		9,452,247	12.81		242,512,606		213,291,931		29,220,675	13.70
Interest expense		13,349,408		13,137,277		212,131	1.61		39,311,943		38,984,112		327,831	0.84
Taxes, licenses & fees		19,382,354		16,966,814		2,415,540	14.24		58,002,253		52,064,735		5,937,518	11.40
Incr deferred acq expense		(4,798,858)		(4,753,685)		(45,173)	(0.95)		(26,742,398)		(23,578,132)		(3,164,266)	(13.42)
Other expenses		3,789,308		5,906,680		(2,117,372)	(35.85)		12,097,966		11,942,231		155,735	1.30
Total expenses	$	819,260,862	$	793,160,927	$	26,099,935	3.29	$	2,398,562,960	$	2,238,866,431	$	159,696,529	7.13
Income before income taxes	$	147,706,229	$	151,327,217	$	(3,620,988)	(2.39)	$	1,157,044,314	$	561,712,738	$	595,331,576	105.99

Provision for income taxes:
Current operating income	$	23,097,937	$	12,662,082	$	10,435,855	82.42	$	118,760,218	$	112,001,886	$	6,758,332	6.03
Realized investments gains and losses		(89,965)		6,181,378		(6,271,343)	(101.46)		244,892,142		13,827,830		231,064,312	1,671.01
Deferred		9,386,153		15,338,400		(5,952,247)	(38.81)		(6,393,609)		16,584,928		(22,978,537)	(138.55)
Total income taxes	$	32,394,125	$	34,181,860	$	(1,787,735)	(5.23)	$	357,258,751	$	142,414,644	$	214,844,107	150.86

Net income	$	115,312,104	$	117,145,357	$	(1,833,253)	(1.56)	$	799,785,563	$	419,298,094	$	380,487,469	90.74
Comprehensive net income	$	455,185,004	$	(58,836,741)	$	514,021,755	(873.64)	$	609,439,522	$	(38,825,775)	$	648,265,297	(1,669.68)

Operating income	$	115,394,725	$	107,370,292	$	8,024,433	7.47	$	373,300,473	$	395,484,195	$	(22,183,722)	(5.61)
Net realized investments gains and losses	$	(82,615)	$	9,775,065	$	(9,857,680)	(100.85)	$	426,485,090	$	23,813,899	$	402,671,191	1,690.91

Net income per share:
Operating income	$	0.67	$	0.61	$	0.06	9.84	$	2.15	$	2.26	$	(0.11)	(4.87)
Net realized investments gains and losses		0.00		0.06		(0.06)	(100.00)		2.46		0.13		2.33	1,792.31
Net income per share (basic)	$	0.67	$	0.67	$	0.00	0.00	$	4.61	$	2.39	$	2.22	92.89
Operating income	$	0.66	$	0.61	$	0.05	8.20	$	2.13	$	2.23	$	(0.10)	(4.48)
Net realized investments gains and losses		0.00		0.05		(0.05)	(100.00)		2.43		0.14		2.29	1,635.71
Net income per share (diluted)	$	0.66	$	0.66	$	-	0.00	$	4.56	$	2.37	$	2.19	92.41
Dividends per share:
Paid	$	0.335	$	0.305	$	0.030	9.84	$	0.975	$	0.857	$	0.118	13.77
Declared	$	0.335	$	0.305	$	0.030	9.84	$	1.005	$	0.900	$	0.105	11.67
Number of shares:
Weighted avg - basic		173,224,254		174,811,150		(1,586,896)	(0.91)		173,555,925		175,194,545		(1,638,620)	(0.94)
Weighted avg - diluted		175,260,063		176,806,267		(1,546,204)	(0.87)		175,542,616		177,212,677		(1,670,061)	(0.94)

2006 Third-Quarter Supplement


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Nine Months Ended September 30, 2006
												& nbsp;
	Total		CFC		CIC GROUP		CLIC		CFC-I		CINFIN		SELIM
Revenues:
Premiums earned:
Property casualty	$	2,475,926,407	$	0	$	$2,476,130,642	$	0	$	0	$	0	$	(204,235)
Life		109,318,969		0		0		109,318,969		0		0		0
Accident health		4,948,521		0		0		4,948,521		0		0		0
Premiums ceded		(144,775,239)		0		(114,086,242)		(30,688,997)		0		0		0
Total earned premium		2,445,418,658		0		2,362,044,400		83,578,493		0		0		(204,235)
Investment income		425,032,304		72,886,606		273,650,490		80,603,825		46,800		152,135		(2,307,553)
Realized gain on investments		671,377,232		408,476,440		218,522,618		42,327,225		(541,501)		13,974		2,578,476
Other income		13,779,080		7,562,069		2,543,187		2,559,919		8,325,040		1,752,535		(8,963,671)
Total revenues	$	3,555,607,274	$	488,925,115	$	2,856,760,695	$	209,069,462	$	7,830,339	$	1,918,644	$	(8,896,983)

Benefits & expenses:
Losses & policy benefits	$	1,694,301,755	$	0	$	1,577,665,678	$	118,288,412	$	0	$	0	$	(1,652,335)
Reinsurance recoveries		(98,667,113)		0		(71,961,815)		(26,705,298)		0		0		0
Commissions		477,745,948		0		452,075,295		25,670,653		0		0		0
Other operating expenses		242,512,606		14,648,994		212,430,180		19,784,207		3,954,490		395,698		(8,700,963)
Interest expense		39,311,943		38,152,316		392,450		0		1,961,356		0		(1,194,179)
Taxes, licenses & fees		58,002,253		867,522		55,196,080		2,144,949		(241,964)		35,667		0
Incr deferred acq expenses		(26,742,398)		0		(12,504,697)		(14,237,700)		0		0		0
Other expenses		12,097,966		0		12,097,857		108		0		0		0
Total expenses	$	2,398,562,960	$	53,668,832	$	2,225,391,028	$	124,945,331	$	5,673,882	$	431,365	$	(11,547,477)

Income before income taxes	$	1,157,044,314	$	435,256,283	$	631,369,667	$	84,124,131	$	2,156,457	$	1,487,279	$	2,650,494

Provision for income taxes:
Current operating income	$	118,760,218	$	(3,584,929)	$	115,636,895	$	5,319,857	$	909,580	$	478,815	$	-
Capital gains/losses		244,892,142		152,440,557		77,515,165		14,931,529		0		4,891		0
Deferred		(6,393,609)		(5,488,385)		(11,476,491)		9,777,623		(142,061)		8,032		927,673
Total income tax	$	357,258,751	$	143,367,243	$	181,675,569	$	30,029,009	$	767,519	$	491,738	$	927,673

Net income - current year	$	799,785,563	$	291,889,040	$	449,694,098	$	54,095,122	$	1,388,938	$	995,541	$	1,722,821

Net income - prior year	$	419,298,094	$	27,733,445	$	354,886,734	$	31,469,807	$	2,651,223	$	908,027	$	1,648,858

Change in net income		90.7%		952.5%		26.7%		71.9%		-47.6%		9.6%

2006 Third-Quarter Supplement


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

	Total		CFC		CIC GROUP		CLIC		CFC-I		CINFIN		ELIM
Revenues:
Premiums earned:
Property casualty	$	2,418,228,387	$	0	$	2,418,671,941	$	0	$	0	$	0	$	(443,554)
Life		103,387,385		0		0		103,387,385		0		0		0
Accident health		4,729,937		0		0		4,729,937		0		0		0
Premiums ceded		(165,607,399)		0		(135,659,874)		(29,947,525)		0		0		0
Total earned premium		2,360,738,310		0		2,283,012,067		78,169,797		0		0		(443,554)
Investment income		390,084,902		64,294,291		250,431,732		73,310,458		798,193		97,329		1,152,899
Realized gain on investments		37,641,729		843,339		28,137,043		7,356,820		0		(79,278)		1,383,805
Other income		12,114,228		9,318,419		2,448,898		2,545,788		7,274,534		1,689,454		(11,162,865)
Total revenues	$	2,800,579,169	$	74,456,049	$	2,564,029,740	$	161,382,863	$	8,072,727	$	1,707,505	$	(9,069,715)

Benefits & expenses:
Losses & policy benefits	$	1,628,467,395	$	0	$	1,501,898,504	$	128,224,954	$	0	$	0	$	(1,656,063)
Reinsurance recoveries		(158,538,599)		0		(107,171,591)		(51,367,008)		0		0		0
Commissions		476,232,758		0		450,455,747		25,777,011		0		0		0
Other operating expenses		213,291,931		15,702,843		185,451,011		17,860,479		2,851,948		318,173		(8,892,523)
Interest expense		38,984,112		39,002,632		0		0		1,039,313		0		(1,057,833)
Taxes, licenses & fees		52,064,735		(578,709)		49,018,411		3,172,446		424,839		27,748		0
Incr deferred acq expenses		(23,578,132)		0		(13,811,253)		(9,766,879)		0		0		0
Other expenses		11,942,231		0		11,942,123		108		0		0		0
Total expenses	$	2,238,866,431	$	54,126,766	$	2,077,782,952	$	113,901,111	$	4,316,100	$	345,921	$	(11,606,419)

Income before income taxes	$	561,712,738	$	20,329,283	$	486,246,788	$	47,481,752	$	3,756,627	$	1,361,584	$	2,536,704

Provision for income taxes:
Current operating income	$	112,001,886	$	(13,972,411)	$	115,007,157	$	9,098,378	$	1,387,999	$	480,763	$	-
Capital gains/losses		13,827,830		607,712		10,674,562		2,574,887		0		(29,331)		0
Deferred		16,584,928		5,960,537		5,678,335		4,338,680		(282,595)		2,125		887,846
Total income tax	$	142,414,644	$	(7,404,162)	$	131,360,054	$	16,011,945	$	1,105,404	$	453,557	$	887,846

Net income - current year	$	419,298,094	$	27,733,445	$	354,886,734	$	31,469,807	$	2,651,223	$	908,027	$	1,648,858

Net income - prior year	$	391,575,234	$	68,027,300	$	386,869,008	$	23,966,096	$	788,358	$	894,629		($88,970,157)

Change in net income		7.1%		-59.2%		-8.3%		31.3%		236.3%		1.5%

2006 Third-Quarter Supplement


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

	Total		CFC		CIC GROUP		CLIC		CFC-I		CINFIN		ELIM
Revenues:
Premiums earned:
Property casualty	$	832,224,817	$	0	$	832,230,217	$	0	$	0	$	0	$	(5,400)
Life		36,294,277		0		0		36,294,277		0		0		0
Accident health		1,709,173		0		0		1,709,173		0		0		0
Premiums ceded		(51,268,668)		0		(40,812,821)		(10,455,847)		0		0		0
Total earned premium		818,959,599		0		791,417,396		27,547,603		0		0		(5,400)
Investment income		143,775,267		24,507,149		92,191,499		27,213,672		46,800		55,452		(239,306)
Realized gain on investments		(172,581)		(2,726,812)		2,792,195		(256,745)		(541,501)		4,410		555,872
Other income		4,404,808		2,537,505		761,677		755,639		2,742,563		600,330		(2,992,907)
Total revenues	$	966,967,093	$	24,317,842	$	887,162,767	$	55,260,169	$	2,247,862	$	660,192	$	(2,681,741)

Benefits & expenses:
Losses & policy benefits	$	578,846,827	$	0	$	536,647,193	$	42,750,492	$	0	$	0	$	(550,858)
Reinsurance recoveries		(30,315,757)		0		(20,587,535)		(9,728,222)		0		0		0
Commissions		155,791,819		0		147,356,940		8,434,879		0		0		0
Other operating expenses		83,215,761		5,263,781		72,719,732		6,877,898		1,067,271		129,658		(2,842,579)
Interest expense		13,349,408		12,615,175		0		0		734,233		0		0
Taxes, licenses & fees		19,382,352		371,758		18,568,187		394,060		36,459		11,889		0
Incr deferred acq expenses		(4,798,858)		0		1,745,550		(6,544,407)		0		0		0
Other expenses		3,789,308		0		3,789,308		(1)		0		0		0
Total expenses	$	819,260,860	$	18,250,714	$	760,239,375	$	42,184,699	$	1,837,963	$	141,547	$	(3,393,437)

Income before income taxes	$	147,706,233	$	6,067,128	$	126,923,392	$	13,075,470	$	409,899	$	518,645	$	711,696

Provision for income taxes:
Current operating income	$	23,097,936	$	(1,882,887)	$	24,605,468	$	(33,442)	$	243,709	$	165,088	$	-
Capital gains/losses		(89,966)		(1,672,581)		1,553,933		27,139		0		1,543		0
Deferred		9,386,153		(292,846)		5,203,394		4,382,846		(161,732)		5,397		249,094
Total income tax	$	32,394,123	$	(3,848,314)	$	31,362,795	$	4,376,543	$	81,977	$	172,028	$	249,094

Net income - current year	$	115,312,110	$	9,915,442	$	95,560,597	$	8,698,927	$	327,922	$	346,617	$	462,602

Net income - prior year	$	117,145,356	$	11,567,302	$	95,574,518	$	8,114,811	$	1,085,652	$	270,355	$	532,718

Change in net income		-1.6%		-14.3%		0.0%		7.2%		-69.8%		28.2%

2006 Third-Quarter Supplement


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

		Total		CFC		CIC GROUP		CLIC		CFC-I		CINFIN		ELIM
Revenues:
Premiums earned:
Property casualty	$	816,434,954	$	0	$	816,500,613	$	0	$	0	$	0	$	(65,659)
Life		33,816,806		0		0		33,816,806		0		0		0
Accident health		1,640,686		0		0		1,640,686		0		0		0
Premiums ceded		(61,598,673)		0		(51,311,141)		(10,287,532)		0		0		0
Total earned premium		790,293,773		0		765,189,472		25,169,960		0		0		(65,659)
Investment income		133,717,730		21,972,750		86,697,604		24,913,462		15,175		34,276		84,463
Realized gain on investments		15,956,443		2,927,373		12,669,320		(288,018)		0		(87,334)		735,102
Other income		4,520,198		3,417,095		797,963		951,468		2,532,634		576,653		(3,755,615)
Total revenues	$	944,488,144	$	28,317,218	$	865,354,359	$	50,746,872	$	2,547,809	$	523,595	$	(3,001,709)

Benefits & expenses:
Losses & policy benefits	$	591,433,357	$	0	$	542,942,994	$	49,044,146	$	0	$	0	$	(553,783)
Reinsurance recoveries		(63,310,660)		0		(41,513,881)		(21,796,779)		0		0		0
Commissions		160,017,630		0		151,232,688		8,784,942		0		0		0
Other operating expenses		73,788,697		5,799,521		63,480,451		6,596,022		694,285		107,367		(2,888,949)
Interest expense		13,137,277		13,152,236		0		0		363,583		0		(378,542)
Taxes, licenses & fees		16,941,631		(929,793)		16,707,845		1,021,334		132,745		9,500		0
Incr deferred acq expenses		(4,753,685)		0		230,422		(4,984,107)		0		0		0
Other expenses		5,906,680		0		5,906,680		0		0		0		0
Total expenses	$	793,160,927	$	18,021,964	$	738,987,199	$	38,665,558	$	1,190,613	$	116,867	$	(3,821,274)

Income before income taxes	$	151,327,217	$	10,295,254	$	126,367,160	$	12,081,314	$	1,357,196	$	406,728	$	819,565

Provision for income taxes:
Current operating income	$	12,662,082	$	(2,741,890)	$	12,002,070	$	2,852,503	$	385,645	$	163,754	$	-
Capital gains/losses		6,181,378		1,050,982		5,260,859		(100,806)		0		(29,657)		0
Deferred		15,338,400		418,860		13,529,713		1,214,805		(114,101)		2,276		286,847
Total income tax	$	34,181,860	$	(1,272,048)	$	30,792,642	$	3,966,502	$	271,544	$	136,373	$	286,847

Net income - current year	$	117,145,357	$	11,567,302	$	95,574,518	$	8,114,812	$	1,085,652	$	270,355	$	532,718

Net income - prior year	$	90,137,006	$	20,784,242	$	63,289,855	$	5,309,501	$	(642,790)	$	323,168	$	1,073,030

Change in net income		30.0%		-44.3%		51.0%		52.8%		-268.9%		-16.3%

2006 Third-Quarter Supplement


Cincinnati Financial Corporation
Consolidated Balance Sheets

(Dollars in millions except per share data)		September 30,		December 31,
		2006		2005
		(unaudited)
Assets
Investments
Fixed maturities, at fair value (amortized cost: 2006—$5,719; 2005—$5,387)	$	5,790	$	5,476
Equity securities, at fair value (cost: 2006—$2,574; 2005—$2,128)		7,256		7,106
Short-term investments, at fair value (amortized cost: 2005—$75)		0		75
Other invested assets		58		45
Cash and cash equivalents		239		119
Securities lending collateral		1,016		0
Investment income receivable		115		118
Finance receivable		106		105
Premiums receivable		1,166		1,116
Reinsurance receivable		701		681
Prepaid reinsurance premiums		13		14
Deferred policy acquisition costs		458		428
Property and equipment, net, for company use (accumulated depreciation: 2006—$253; 2005—$232)		185		168
Other assets		63		66
Separate accounts		505		486
Total assets	$	17,671	$	16,003

Liabilities
Insurance reserves
Losses and loss expense	$	3,878	$	3,661
Life policy reserves		1,389		1,343
Unearned premiums		1,623		1,559
Securities lending payable		1,016		0
Other liabilities		459		455
Deferred income tax		1,497		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		505		486
Total liabilities		11,207		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		1,005		969
Retained earnings		2,714		2,088
Accumulated other comprehensive income		3,093		3,284
Treasury stock at cost (2006—22 million shares, 2005—20 million shares)		(739)		(644)
Total shareholders' equity		6,464		6,086
Total liabilities and shareholders' equity	$	17,671	$	16,003

2006 Third-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 Third-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

Net income		$	115	$	132	$	552	$	183	$	117	$	158	$	144	$	684	$	302	$	800	$	419		$	602
One-time item			0		0		0		0		0		0		0		0		0		0		0			0
Net income before one-time item			115		132		552		183		117		158		144		684		302		800		419			602
Net realized investment gains and losses			0		6		421		16		10		8		6		426		14		427		24			40
Operating income before one-time item			115		126		131		167		107		150		138		258		288		373		395			562
Less catastrophe losses			(18)		(41)		(26)		(28)		(43)		(9)		(2)		(67)		(11)		(85)		(54)			(82)
Operating income before catastrophe losses and one-time item		$	133	$	167	$	157	$	195	$	150	$	159	$	140	$	325	$	299	$	458	$	449		$	644

Diluted per share data
Net income		$	0.66	$	0.76	$	3.13	$	1.03	$	0.66	$	0.89	$	0.81	$	3.90	$	1.70	$	2.13	$	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		0.00			0.00
Net income before one-time item			0.66		0.76		3.13		1.03		0.66		0.89		0.81		3.90		1.70		2.13		2.37			3.40
Net realized investment gains and losses			0.00		0.04		2.39		0.09		0.05		0.05		0.03		2.43		0.08		2.43		0.14			0.23
Operating income before one-time item			0.66		0.72		0.74		0.94		0.61		0.84		0.78		1.47		1.62		4.56		2.23			3.17
Less catastrophe losses			(0.10)		(0.24)		(0.14)		(0.16)		(0.24)		(0.05)		(0.01)		(0.38)		(0.06)		(0.48)		(0.30)			(0.46)
Operating income before catastrophe losses and one-time item		$	0.76	$	0.96	$	0.88	$	1.10	$	0.85	$	0.89	$	0.79	$	1.85	$	1.68	$	5.04	$	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 Third-Quarter Supplement


Cincinnati Financial Corporation
Top Holdings – Common Stocks

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


Fifth Third Bancorp	$	283	$	2,771	39.5	%	$	86
ExxonMobil Corporation		134		601	8.6			9
The Procter & Gamble Company		192		452	6.4			6
National City Corporation		172		359	5.1			11
PNC Financial Services Group, Inc.		62		341	4.8			7
Johnson & Johnson		194		234	3.3			4
AllianceBernstein Holding L.P.		60		228	3.2			9
Wyeth		62		225	3.2			3
U.S. Bancorp		140		222	3.2			7
Wells Fargo & Company		96		196	2.8			4
Piedmont Natural Gas Company, Inc.		64		143	2.0			4
FirstMerit Corporation		54		124	1.8			4
Sky Financial Group, Inc.		91		116	1.6			3
All other common stock holdings		754		1,020	14.5			22
Total	$	2,358	$	7,032	100.0	%	$	179

2006 Third-Quarter Supplement


Cincinnati Insurance Group
GAAP Statements of Income

		For the Three Months Ended September 30,							For the Nine Months Ended September 30,
		2006		2005		Change	% Change		2006		2005		Change	% Change
Revenues:
Premiums earned:
Property casualty	$	832,230,217	$	816,500,613	$	15,729,604	1.93	$	2,476,130,642	$	2,418,671,941	$	57,458,701	2.38
Life		0		0		0	NA		0		0		0	NA
Accident health		0		0		0	NA		0		0		0	NA
Premiums ceded		(40,812,821)		(51,311,141)		10,498,320	20.46		(114,086,242)		(135,659,874)		21,573,632	15.90
Total premiums earned		791,417,396		765,189,472		26,227,924	3.43		2,362,044,400		2,283,012,067		79,032,333	3.46
Investment income		92,191,499		86,697,604		5,493,895	6.34		273,650,490		250,431,732		23,218,758	9.27
Realized gain on investments		2,792,195		12,669,320		(9,877,125)	(77.96)		218,522,618		28,137,043		190,385,575	676.64
Other income		761,677		797,963		(36,286)	(4.55)		2,543,187		2,448,898		94,289	3.85
Total revenues	$	887,162,767	$	865,354,359	$	21,808,408	2.52	$	2,856,760,695	$	2,564,029,740	$	292,730,955	11.42

Benefits & expenses:
Losses & policy benefits	$	536,647,193	$	542,942,994	$	(6,295,801)	(1.16)	$	1,577,665,678	$	1,501,898,504	$	75,767,174	5.04
Reinsurance recoveries		(20,587,535)		(41,513,881)		20,926,346	50.41		(71,961,815)		(107,171,591)		35,209,776	32.85
Commissions		147,356,940		151,232,688		(3,875,748)	(2.56)		452,075,295		450,455,747		1,619,548	0.36
Other operating expenses		72,719,732		63,480,451		9,239,281	14.55		212,430,180		185,451,011		26,979,169	14.55
Interest expense		0		0		0	NA		392,450		0		392,450	NA
Taxes, licenses & fees		18,568,187		16,707,845		1,860,342	11.13		55,196,080		49,018,411		6,177,669	12.60
Incr deferred acq expense		1,745,550		230,422		1,515,128	657.54		(12,504,697)		(13,811,253)		1,306,556	9.46
Other expenses		3,789,308		5,906,680		(2,117,372)	(35.85)		12,097,857		11,942,123		155,734	1.30
Total expenses	$	760,239,375	$	738,987,199	$	21,252,176	2.88	$	2,225,391,028	$	2,077,782,952	$	147,608,076	7.10
Income before income taxes	$	126,923,392	$	126,367,160	$	556,232	0.44	$	631,369,667	$	486,246,788	$	145,122,879	29.85

Provision for income taxes:
Current operating income	$	24,605,468	$	12,002,070	$	12,603,398	105.01	$	115,636,895	$	115,007,157	$	629,738	0.55
Current realized investments gains and losses		1,553,933		5,260,859		(3,706,926)	(70.46)		77,515,165		10,674,562		66,840,603	626.17
Deferred		5,203,394		13,529,713		(8,326,319)	(61.54)		(11,476,491)		5,678,335		(17,154,826)	(302.11)
Total income taxes	$	31,362,795	$	30,792,642	$	570,153	1.85	$	181,675,569	$	131,360,054	$	50,315,515	38.30

Net income	$	95,560,597	$	95,574,518	$	(13,921)	(0.01)	$	446,694,098	$	354,886,734	$	94,807,364	26.71

2006 Third-Quarter Supplement


Cincinnati Insurance Group
Statutory Statements of Income

		For the Three Months Ended September 30,					For the Nine Months Ended September 30,
		2006		2005	% Change		2006		2005	% Change
Underwriting income
Net premiums written	$	779,850,450	$	761,322,000	2.43	$	2,422,859,784	$	2,348,830,386	3.15
Unearned premiums increase		(11,566,946)		(3,867,472)			60,815,381		65,818,319
Earned premiums		791,417,397		765,189,472	3.43		2,362,044,403		2,283,012,067	3.46

Losses incurred	$	433,550,671	$	420,377,700	3.13	$	1,261,577,990	$	1,157,635,205	8.98
Allocated loss expenses incurred		39,943,837		40,348,512	(1.00)		111,441,487		115,655,662	(3.64)
Unallocated loss expenses incurred		42,565,137		40,702,901	4.58		132,684,385		121,436,046	9.26
Other underwriting expenses incurred		240,710,680		234,156,444	2.80		701,823,238		674,380,383	4.07
Workers compensation dividend incurred		2,457,033		2,353,786	4.39		12,207,419		7,489,855	62.99

Total underwriting deductions	$	759,227,358	$	737,939,344	2.88	$	2,219,734,519	$	2,076,597,151	6.89
Net underwriting gain (loss)	$	32,190,038	$	27,250,128	18.13	$	142,309,885	$	206,414,916	(31.06)

Investment income
Gross investment income earned	$	93,222,475	$	87,831,257	6.14	$	277,045,152	$	253,453,408	9.31
Net investment income earned		92,191,500		86,697,354	6.34		273,650,490		250,431,731	9.27
Net realized capital gains		778,019		9,825,710	(92.08)		141,848,878		31,758,879	346.64
Net investment gains (excl. subs)	$	92,969,519	$	96,523,064	(3.68)	$	415,499,368	$	282,190,610	47.24
Dividend from subsidiary		14,000,000					14,000,000
Net investment gains	$	106,969,519	$	96,523,064	10.82	$	429,499,368	$	282,190,610	52.20


Other income	$	424,108	$	(2,772,932)	N/A	$	1,869,864	$	(2,002,370)	N/A

Net income before federal income taxes	$	139,583,665	$	121,000,261	15.36	$	573,679,116	$	486,603,155	17.89
Federal and foreign income taxes incurred	$	23,941,392	$	17,262,929	38.69	$	113,163,358	$	125,681,719	(9.96)
Net income (statutory)	$	115,642,273	$	103,737,331	11.48	$	460,515,758	$	360,921,436	27.59

* 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 Third-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																						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		$	780		$	814		$	829		$	727		$	761		$	791		$	797		$	1,643		$	1,588		$	2,423		$	2,349			$	3,076
Net premiums earned			791			793			778			775			765			765			753			1,571			1,518			2,362			2,283				3,058
Losses paid			367			380			347			378			348			336			345			727			681			1,094			1,029				1,407
Loss reserve change			66			60			42			(30)			72			23			33			101			57			167			129				99
Total losses incurred		$	433		$	440		$	389		$	348		$	420		$	359		$	378		$	828		$	738		$	1,261		$	1,158			$	1,506
Allocated loss expense paid			33			31			27			32			30			29			25			59			54			91			84				116
Allocated loss expense reserve change			7			7			5			(7)			10			11			11			13			21			20			31				24
Total allocated loss expense incurred		$	40		$	38		$	32		$	25		$	40		$	40		$	36		$	72		$	75		$	111		$	115			$	140
Unallocated loss expense paid			40			39			40			46			38			37			34			78			71			118			108				155
Unallocated loss expense reserve change			3			2			10			(2)			3			0			10			12			10			15			13				11
Total unallocated loss expense incurred		$	43		$	41		$	50		$	44		$	41		$	37		$	44		$	90		$	81		$	133		$	121			$	166
Underwriting expenses incurred			243			232			240			233			237			234			212			471			446			714			682				914
Underwriting profit (loss)		$	32		$	42		$	67		$	125		$	27		$	95		$	83		$	110		$	178		$	142		$	207			$	332

Loss Detail
Losses $1 million or more		$	60		$	46		$	32		$	38		$	27		$	28		$	43		$	79		$	70		$	139		$	98			$	137
Losses $250 thousand to $1 million			49			48			38			36			35			37			32			86			69			135			104				139
Development and case reserve increases of $250,000 or more			50			52			49			54			38			40			36			102			76			151			115				168
Large losses subtotal		$	159		$	146		$	119		$	128		$	100		$	105		$	111		$	267		$	215		$	425		$	317			$	444
IBNR incurred			11			(5)			6			(58)			20			13			13			1			27			12			47				(11)
Catastrophe losses incurred			27			64			40			44			66			14			2			103			17			130			83				127
Remaining incurred			236			234			223			234			233			226			252			457			478			694			711				946
Total losses incurred		$	433		$	439		$	388		$	348		$	419		$	358		$	378		$	828		$	737		$	1,261		$	1,158			$	1,506

Ratio Data
Loss ratio			54.8	%		55.4	%		50.0	%		44.9	%		54.9	%		46.9	%		50.3	%		52.7	%		48.6	%		53.4	%		50.7	%			49.2	%
Allocated loss expense ratio			5.0			4.8			4.3			3.2			5.3			5.2			4.7			4.6			5.0			4.7			5.1				4.6
Unallocated loss expense ratio			5.4			5.1			6.4			5.7			5.3			4.8			5.8			5.7			5.3			5.6			5.3				5.4
Net underwriting expense ratio			31.2			28.4			28.9			32.0			31.1			29.6			26.6			28.7			28.0			29.5			29.0		`		29.7
Statutory combined ratio			96.4	%		93.7	%		89.6	%		85.8	%		96.6	%		86.5	%		87.4	%		91.7	%		86.9	%		93.2	%		90.1	%			88.9	%
Statutory combined ratio excluding catastrophes			92.9	%		85.7	%		84.6	%		80.2	%		88.0	%		84.6	%		87.1	%		85.1	%		85.8	%		87.7	%		86.5	%			84.9	%

Loss Ratio
Losses $1 million or more			7.6	%		6.0	%		4.2	%		5.0	%		3.6	%		3.6	%		5.7	%		5.1	%		4.7	%		5.9	%		4.3	%			4.5	%
Losses $250 thousand to $1 million			6.2			6.0			4.9			4.5			4.6			4.8			4.3			5.5			4.5			5.7			4.5				4.5
Development and case reserve increases of $250,000 or more			6.3			7.4			6.4			6.9			5.1			5.2			4.7			6.9			5.0			6.4			5.0				5.5
Large losses subtotal			20.1	%		19.4	%		15.5	%		16.4	%		13.3	%		13.6	%		14.7	%		17.5	%		14.2	%		18.0	%		13.8	%			14.5	%
IBNR incurred			1.3			1.3			0.8			(7.4)			2.5			1.8			1.8			1.1			1.8			0.5			2.0				(0.4)
Total catastrophe losses incurred			3.5			8.0			5.0			5.6			8.6			1.9			0.3			6.5			1.1			5.5			3.6				4.1
Remaining incurred			29.9			26.7			28.6			30.3			30.6			29.6			33.5			27.6			31.5			29.4			31.2				31.0
Total loss ratio			54.8	%		55.4	%		49.9	%		44.9	%		55.0	%		46.9	%		50.3	%		52.7	%		48.6	%		53.4	%		50.6	%			49.2	%

Loss Claim Count
Losses $1 million or more			32			26			14			24			21			17			15			40			32			72			53				77
Losses $250 thousand to $1 million			103			88			95			92			81			93			73			183			166			286			247				339
Development and case reserve increases of $250,000 or more			104			85			85			100			72			61			67			170			128			274			200				300
Large losses total			239			199			194			216			174			171			155			393			326			632			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 defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

2006 Third-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		$	582	$	603		$	668		$	548		$	546		$	567		$	629		$	1,271		$	1,195		$	1,852		$	1,741				$	2,290
Net premiums earned			602		599			582			576			564			563			551			1,181			1,114			1,783			1,678					2,254
Losses paid			247		251			234			256			228			214			219			485			434			732			662					918
Loss reserve change			63		53			53			(19)			67			32			51			105			84			168			151					132
Total losses incurred		$	310	$	304		$	287		$	237		$	295		$	246		$	270		$	590		$	518		$	901		$	813				$	1,050
Allocated loss expense paid			30		28			24			28			27			26			22			52			48			81			75					103
Allocated loss expense reserve change			7		6			5			(1)			9			10			10			12			20			19			29					28
Total allocated loss expense incurred		$	37	$	34		$	29		$	27		$	36		$	36		$	32		$	64		$	68		$	100		$	104				$	131
Unallocated loss expense paid			27		27			28			31			26			25			22			54			48			81			73					105
Unallocated loss expense reserve change			3		3			10			(1)			3			1			10			13			11			15			13					12
Total unallocated loss expense incurred		$	30	$	30		$	38		$	30		$	29		$	26		$	32		$	67		$	59		$	97		$	86				$	117
Underwriting expenses incurred			185		172			179			182			173			165			156			349			321			536			493					675
Underwriting profit (loss)		$	40	$	59		$	49		$	100		$	31		$	90		$	61		$	111		$	148		$	150		$	182				$	281
																																< /TD>
Loss Detail
Losses $1 million or more		$	51	$	40		$	30		$	31		$	24		$	26		$	43		$	70		$	68		$	121		$	93				$	124
Losses $250 thousand to $1 million			37		39			28			28			26			29			22			67			51			104			77					105
Development and case reserve increases of $250,000 or more			45		45			44			47			35			38			29			90			67			135			103					149
Large losses subtotal		$	133	$	124		$	102		$	106		$	85		$	93		$	94		$	227		$	186		$	360		$	273				$	378
IBNR incurred			10		(6)			6			(36)			17			12			12			0			24			10			41					6
Catastrophe losses incurred			14		34			30			14			53			2			6			63			9			77			62					76
Remaining incurred			153		152			149			153			139			139			159			300			298			454			437					590
Total losses incurred		$	310	$	304		$	287		$	237		$	294		$	246		$	271		$	590		$	517		$	901		$	813				$	1,050
																																< /TD>
Ratio Data
Loss ratio			51.5		50.7	%		49.2	%		41.1	%		52.4	%		43.8	%		49.1	%		50.0	%		46.5	%		50.5	%		48.4	%				46.6	%
Allocated loss expense ratio			6.0		5.7			5.1			4.7			6.5			6.4			5.8			5.4			6.1			5.6			6.2					5.8
Unallocated loss expense ratio			5.0		4.9			6.5			5.3			5.1			4.6			5.9			5.7			5.2			5.4			5.2					5.2
Net underwriting expense ratio			31.6		28.3			26.8			33.2			31.6			29.1			24.7			27.5			26.8			28.8			28.3					29.5
Statutory combined ratio			94.1		89.6	%		87.6	%		84.3	%		95.6	%		83.9	%		85.5	%		88.6	%		84.6	%		90.3	%		88.1	%				87.1	%
Statutory combined ratio excluding catastrophes			91.7		84.0	%		82.5	%		81.9	%		86.0	%		83.5	%		84.4	%		83.3	%		83.8	%		86.0	%		84.5	%				83.7	%
																																< /TD>
Loss Ratio
Losses $1 million or more			8.5		6.6	%		5.2	%		5.4	%		4.3	%		4.5	%		7.8	%		5.9	%		6.1	%		6.8	%		5.5	%				5.5	%
Losses $250 thousand to $1 million			6.1		6.5			4.8			4.8			4.7			5.2			3.9			5.7			4.5			5.8			4.6					4.6
Development and case reserve increases of $250,000 or more			7.5		7.6			7.6			8.1			6.3			6.8			5.3			7.6			6.0			7.6			6.1					6.6
Large losses subtotal			22.1		20.7	%		17.6	%		18.3	%		15.3	%		16.5	%		17.0	%		19.2	%		16.6	%		20.2	%		16.2	%				16.7	%
IBNR incurred			1.7		(1.0)			1.0			(6.1)			2.9			2.2			2.2			0.0			2.2			0.6			2.4					0.2
Total catastrophe losses incurred			2.4		5.6			5.1			2.4			9.5			0.4			1.1			5.3			0.8			4.3			3.7					3.4
Remaining incurred			25.4		25.4			25.6			26.5			24.7			24.7			28.8			25.5			26.8			25.5			26.1					26.2
Total loss ratio			51.5		50.7	%		49.3	%		41.1	%		52.4	%		43.8	%		49.1	%		50.0	%		46.4	%		50.5	%		48.4	%				46.5	%
																					& nbsp;
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 defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

2006 Third-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		$	198		$	211		$	161		$	179		$	215		$	224		$	168		$	372		$	393		$	570		$	608				$	786
Net premiums earned			189			194			196			199			201			202			202			390			404			579			605					804
Losses paid			119			129			113			122			120			122			126			242			247			362			367					489
Loss reserve change			3			7			(11)			(11)			5			(9)			(18)			(4)			(27)			(1)			(22)					(33)
Total losses incurred		$	122		$	136		$	102		$	111		$	125		$	113		$	108		$	238		$	220		$	361		$	345				$	456
Allocated loss expense paid			3			3			3			4			3			3			3			7			6			10			9					13
Allocated loss expense reserve change			1			1			0			(6)			1			1			1			1			1			1			2					(4)
Total allocated loss expense incurred		$	4		$	4		$	3		$	(2)		$	4		$	4		$	4		$	8		$	7		$	11		$	11				$	9
Unallocated loss expense paid			12			12			12			15			12			12			12			24			23			36			35					50
Unallocated loss expense reserve change			1			(1)			0			(1)			0			(1)			0			(1)			(1)			0			0					(1)
Total unallocated loss expense incurred		$	13		$	11		$	12		$	14		$	12		$	11		$	12		$	23		$	22		$	36		$	35				$	49
Underwriting expenses incurred			58			60			61			51			64			69			56			122			125			179			189					239
Underwriting profit (loss)		$	(8)		$	(17)		$	18		$	25		$	(4)		$	5		$	22		$	(1)		$	30		$	(8)		$	25				$	51
																										&nb sp;
Loss Detail
Losses $1 million or more		$	10		$	6		$	2		$	7		$	3		$	2		$	0		$	9		$	2		$	18		$	5				$	13
Losses $250 thousand to $1 million			12			9			10			8			9			8			10			19			18			31			27					34
Development and case reserve increases of $250,000 or more			4			7			5			7			3			2			7			12			9			16			12					19
Large losses subtotal		$	26		$	22		$	17		$	22		$	15		$	12		$	17		$	40		$	29		$	65		$	44				$	66
IBNR incurred			1			1			0			(22)			3			1			1			1			3			1			6					(17)
Catastrophe losses incurred			13			30			10			30			13			12			(4)			40			8			54			21					51
Remaining incurred			82			82			74			81			94			87			93			157			180			241			274					356
Total losses incurred		$	122		$	135		$	101		$	111		$	125		$	112		$	107		$	238		$	220		$	361		$	345				$	456
																										&nb sp;
Ratio Data
Loss ratio			65.1	%		70.0	%		52.2	%		55.9	%		62.2	%		55.6	%		53.3	%		61.1	%		54.4	%		62.4	%		57.0	%				56.7	%
Allocated loss expense ratio			1.9			2.1			1.7			(1.2)			2.0			1.8			1.8			1.9			1.8			2.0			1.9					1.1
Unallocated loss expense ratio			6.6			5.8			6.2			7.0			6.1			5.5			5.7			6.0			5.6			6.1			5.8					6.1
Net underwriting expense ratio			30.4			28.5			38.0			28.4			29.7			30.7			33.2			32.6			31.8			31.8			31.0					30.4
Statutory combined ratio			104.0	%		106.4	%		98.1	%		90.1	%		100.0	%		93.6	%		94.0	%		101.6	%		93.6	%		102.3	%		95.7	%				94.3	%
Statutory combined ratio excluding catastrophes			97.0	%		90.8	%		93.1	%		75.2	%		93.6	%		87.4	%		96.0	%		91.3	%		91.5	%		93.1	%		92.2	%				88.0	%
																										&nb sp;
Loss Ratio
Losses $1 million or more			5.0	%		3.5	%		1.2	%		3.6	%		1.5	%		1.1	%		0.0	%		2.3	%		0.6	%		3.2	%		0.9	%				1.6	%
Losses $250 thousand to $1 million			6.4			4.4			5.3			3.9			4.3			3.7			5.2			4.9			4.4			5.4			4.4					4.3
Development and case reserve increases of $250,000 or more			2.1			3.5			2.8			3.5			1.7			1.0			3.2			3.1			2.1			2.8			2.0					2.4
Large losses subtotal			13.6	%		11.4	%		9.3	%		11.0	%		7.5	%		5.8	%		8.4	%		10.3	%		7.1	%		11.4	%		7.3	%				8.3	%
IBNR incurred			0.1			0.7			0.0			(11.2)			1.4			0.6			0.7			0.3			0.7			0.3			0.9					(2.1)
Total catastrophe losses incurred			7.1			15.6			5.0			14.9			6.2			6.2			(2.0)			10.3			2.1			9.2			3.5					6.3
Remaining incurred			44.4			42.3			38.0			41.2			46.9			42.9			46.2			40.2			44.5			41.5			45.3					44.3
Total loss ratio			65.1	%		70.0	%		52.3	%		55.9	%		62.0	%		55.5	%		53.3	%		61.1	%		54.4	%		62.4	%		57.0	%				56.8	%

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 defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

2006 Third-Quarter Supplement

< /TR>


Cincinnati Insurance Group
Direct Written Premiums by Line of Business for the Nine Months Ended September 30, 2006
(Dollars in millions)
																					09/30/2006		9/30/2005
		Comm		Comm	Comm			Workers'	Specialty		Surety &			Mach. &	Pers		Home		Other		Agency		Agency		Change
State		Casualty		Prop	Auto			Comp	Packages		Exec Risk			Equip	Auto		Owner			Personal	Direct		Direct		%

AL	$	14.5	$	9.0	$	6.3	$	1.1	$	5.0	$	1.1	$	0.4	$	12.4	$	16.1	$	3.4	$	69.3	$	67.8	2.3
AZ		9.2		4.4		7.3		0.4		0.8		0.5		0.3		0.0		0.1		0.1		23.1		21.1	9.5
AR		8.5		7.6		5.3		4.4		2.8		0.8		0.3		2.1		2.3		0.6		34.7		34.8	0.1
DE		0.5		0.3		0.5		1.2		0.0		0.1		0.0		0.0		0.0		0.0		2.6		0.6	352.8
FL		28.8		16.8		10.2		2.6		3.0		1.8		0.5		9.8		15.2		2.9		91.6		80.6	13.5
GA		20.5		14.9		14.8		9.3		4.9		5.4		0.5		24.7		20.4		4.9		120.3		112.4	7.0
ID		5.4		2.7		3.5		0.0		0.7		0.5		0.2		0.0		0.0		0.0		13.0		11.4	13.9
IL		63.7		36.6		27.0		44.9		9.7		6.6		2.1		20.2		14.7		4.7		230.2		225.3	2.2
IN		40.7		30.2		21.9		24.6		6.0		5.5		1.8		23.1		20.4		5.0		179.2		180.1	(0.5)
IA		17.4		11.5		7.4		18.0		3.3		2.0		1.1		3.7		3.4		1.5		69.3		68.6	1.2
KS		5.5		5.8		3.7		5.1		2.1		1.1		0.3		4.1		5.0		1.0		33.7		33.2	2.1
KY		15.6		14.1		11.2		2.9		3.6		1.9		0.7		15.9		11.2		3.0		80.1		80.2	0.1
MD		10.5		4.4		7.8		9.0		0.8		1.1		0.2		0.0		1.0		0.4		35.2		29.7	18.4
MI		32.9		20.6		15.0		14.9		10.1		4.0		1.4		11.2		12.9		2.6		125.6		128.0	(2.0)
MN		21.9		11.7		8.3		5.8		2.8		1.8		0.8		5.5		4.3		2.4		65.3		66.4	(1.6)
MO		20.1		13.9		9.1		13.4		4.0		1.5		0.8		2.5		3.6		0.7		69.6		65.2	6.9
MT		9.5		4.8		5.7		0.0		0.7		0.2		0.2		0.0		0.1		0.0		21.2		19.7	7.7
NE		6.0		3.9		3.0		6.6		1.2		0.8		0.3		1.1		1.0		0.3		24.2		26.4	(8.7)
NH		2.3		1.6		1.2		2.0		0.5		0.4		0.1		0.7		0.6		0.3		9.7		9.2	5.9
NY		20.6		5.1		7.5		2.0		0.8		2.3		0.3		0.0		0.0		0.0		38.6		33.4	15.9
NC		31.2		21.4		19.1		20.2		8.5		6.1		1.0		1.1		1.3		2.0		111.9		102.3	9.3
ND		2.9		2.4		2.0		0.0		0.6		0.5		0.2		0.5		0.5		0.2		9.8		10.7	(8.4)
OH		125.4		74.2		59.5		(0.3)		15.8		18.9		3.5		112.1		71.6		22.9		503.6		528.0	(4.6)
PA		36.3		22.3		24.0		42.3		6.9		4.7		1.3		6.2		4.8		2.5		151.3		149.5	1.1
SC		10.5		6.4		6.1		3.7		1.8		2.2		0.2		0.0		0.0		0.2		31.1		28.4	9.6
SD		3.5		2.2		1.7		3.5		0.4		0.3		0.1		0.0		0.0		0.0		11.7		9.6	22.3
TN		19.5		13.0		13.0		9.8		6.2		3.6		0.8		6.1		6.2		2.1		80.3		75.2	6.8
UT		6.2		2.3		3.1		0.0		0.2		1.1		0.2		0.0		0.0		0.0		13.1		8.9	49.5
VT		3.9		2.6		2.4		5.5		0.6		0.4		0.1		0.7		0.6		0.2		17.0		15.9	8.6
VA		28.2		19.9		19.0		17.8		3.8		4.0		0.8		8.2		6.4		2.2		110.3		100.5	9.5
WV		7.0		4.6		4.9		0.0		1.7		0.6		0.3		0.0		0.7		0.2		20.0		19.1	4.6
WI		24.4		14.5		10.7		20.3		3.6		1.8		1.3		8.5		6.2		2.6		93.9		96.2	(2.5)
All Other		4.8		2.7		2.6		3.8		0.0		0.9		0.1		0.0		0.1		0.0		15.0		12.1	19.6

Total Agency Direct	$	657.9	$	408.4	$	344.8	$	294.8	$	112.9	$	84.5	$	22.2	$	280.4	$	230.7	$	68.9	$	2,505.5	$	2,450.5	2.2
Other Direct		0.9		1.6		0.7		7.0		0.3		0.0		-		0.8		2.2		1.3		14.8		16.6	(9.6)
Total Direct	$	658.8	$	410.0	$	345.5	$	301.8	$	113.2	$	84.5	$	22.2	$	281.2	$	232.9	$	70.2	$	2,520.3	$	2,467.1	2.2

2006 Third-Quarter Supplement

< TD style="border-bottom:1pt solid #000000" width=16.067>


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 casualty:
Written premiums		$	196		$	209		$	228		$	189		$	183		$	191		$	217		$	437		$	409		$	634		$	590			$	779
Earned premiums			207			208			197			195			193			190			183			405			373			613			564				759
Loss and loss expense ratio			49.4	%		50.3	%		51.3	%		5.1	%		49.3	%		55.5	%		51.1	%		51.6	%		53.9	%		50.8	%		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			0.0				0.0
Loss and loss expense excluding catastrophe loss ratio			49.4	%		50.3	%		51.3	%		5.1	%		49.3	%		55.5	%		51.1	%		51.6	%		53.9	%		50.8	%		51.8	%			39.8	%

Commercial property:
Written premiums		$	126		$	122		$	134		$	115		$	113		$	122		$	126		$	256		$	248		$	381		$	361			$	476
Earned premiums			123			123			121			120			113			118			116			244			234			367		$	347				467
Loss and loss expense ratio			54.9	%		57.0	%		72.6	%		52.8	%		94.3	%		43.0	%		68.8	%		64.2	%		55.5	%		61.0	%		68.2	%			64.2	%
Less catastrophe loss ratio			9.9			15.9			22.7			11.2			44.0			1.2			4.0			19.3			2.6			16.1			16.1				14.9
Loss and loss expense excluding catastrophe loss ratio			45.0	%		41.1	%		49.9	%		41.6	%		50.3	%		41.8	%		64.8	%		44.9	%		52.9	%		44.9	%		52.1	%			49.3	%

Commercial auto:
Written premiums		$	105		$	115		$	126		$	107		$	107		$	111		$	122		$	240		$	233		$	345		$	341			$	448
Earned premiums			113			112			112			117			115			113			113			224			225			337			340				457
Loss and loss expense ratio			72.8	%		59.1	%		57.7	%		61.5	%		60.6	%		59.0	%		57.9	%		57.4	%		59.0	%		62.5	%		59.6	%			60.1	%
Less catastrophe loss ratio			(0.5)			3.1			0.6			0.0			0.2			0.2			0.0			1.9			0.1			1.0			0.2				0.1
Loss and loss expense excluding catastrophe loss ratio			73.3	%		56.0	%		57.1	%		61.5	%		60.4	%		58.8	%		57.9	%		55.5	%		58.9	%		61.5	%		59.4	%			60.0	%

Workers' compensation:
Written premiums		$	85		$	91		$	111		$	80		$	75		$	83		$	100		$	203		$	183		$	288		$	258			$	338
Earned premiums			93			90			88			85			82			82			79			178			161			271			244				328
Loss and loss expense ratio			90.3	%		82.6	%		78.5	%		134.2	%		74.0	%		77.1	%		76.5	%		80.8	%		76.8	%		84.1	%		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			0.0				0.0
Loss and loss expense excluding catastrophe loss ratio			90.3	%		82.6	%		78.5	%		134.2	%		74.0	%		77.1	%		76.5	%		80.8	%		76.8	%		84.1	%		75.9	%			90.9	%

Specialty packages:
Written premiums		$	35		$	34		$	40		$	32		$	35		$	34		$	37		$	74		$	71		$	109		$	105			$	138
Earned premiums			35			35			36			34			34			34			34			71			68			106			103				137
Loss and loss expense ratio			74.2	%		84.0	%		64.3	%		53.4	%		69.9	%		57.2	%		87.8	%		73.1	%		72.4	%		73.5	%		71.5	%			67.0	%
Less catastrophe loss ratio			7.1			29.2			3.6			4.6			9.9			1.8			4.4			16.2			3.1			13.3			5.4				5.2
Loss and loss expenses excluding catastrophe loss ratio			67.1	%		54.8	%		60.7	%		48.8	%		60.0	%		55.4	%		83.4	%		56.9	%		69.3	%		60.2	%		66.1	%			61.8	%

Surety and executive risk:
Written premiums		$	28		$	24		$	22		$	21		$	25		$	18		$	20		$	46		$	38		$	74		$	63			$	85
Earned premiums			24			24			21			21			21			19			19			45			38			69			59				80
Loss and loss expense ratio			47.3	%		92.4	%		26.4	%		69.2	%		31.5	%		7.4	%		26.4	%		60.1	%		16.9	%		55.6	%		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			0.0				0.0
Loss and loss expense excluding catastrophe loss ratio			47.3	%		92.4	%		26.4	%		69.2	%		31.5	%		7.4	%		26.4	%		60.1	%		16.9	%		55.6	%		22.0	%			34.2	%

Machinery and equipment:
Written premiums		$	7		$	8		$	7		$	6		$	7		$	6		$	7		$	15		$	13		$	22		$	20			$	26
Earned premiums			7			7			7			6			7			6			7			14			13			20			19				26
Loss and loss expense ratio			45.2	%		27.4	%		32.2	%		31.6	%		21.5	%		24.1	%		12.3	%		29.6	%		18.1	%		34.8	%		19.3	%			22.4	%
Less catastrophe loss ratio			2.1			0.0			0.0			(0.1)			0.2			0.3			(0.6)			0.1			(0.2)			0.8			0.0				(0.1)
Loss and loss expense excluding catastrophe loss ratio			43.1	%		27.4	%		32.2	%		31.7	%		21.3	%		23.8	%		12.9	%		29.5	%		18.3	%		34.0	%		19.3	%			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 Third-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
Personal auto:																																& nbsp;
Written premiums		$	96		$	104		$	79		$	89		$	112		$	119		$	89		$	184		$	208		$	279		$	321			$	409
Earned premiums			95			98			101			104			108			110			111			199			221			294			329				433
Loss and loss expense ratio			60.6	%		68.8	%		60.1	%		54.0	%		65.0	%		61.0	%		60.4	%		62.9	%		60.1	%		62.2	%		61.7	%			59.9	%
Less catastrophe loss ratio			1.4			3.6			0.8			0.6			0.4			1.1			0.2			2.2			0.6			2.0			0.5				0.6
Loss and loss expense excluding catastrophe loss ratio			59.2	%		65.2	%		59.3	%		53.4	%		64.6	%		59.9	%		60.2	%		60.7	%		59.5	%		60.2	%		61.2	%			59.3	%
																															& nbsp;
Homeowner:																																& nbsp;
Written premiums		$	79		$	83		$	62		$	67		$	81		$	81		$	59		$	144		$	140		$	224		$	221			$	288
Earned premiums			72			74			73			71			72			70			69			146			139			219			211				282
Loss and loss expense ratio			93.9	%		89.2	%		64.0	%		83.4	%		78.0	%		75.0	%		64.6	%		78.7	%		70.3	%		83.7	%		72.9	%			75.6	%
Less catastrophe loss ratio			15.0			33.1			11.1			43.2			15.2			14.7			(6.1)			22.1			4.4			19.8			8.0				16.9
Loss and loss expense excluding catastrophe loss ratio			78.9	%		56.1	%		52.9	%		40.2	%		62.8	%		60.3	%		70.7	%		56.6	%		65.9	%		63.9	%		64.9	%			58.7	%
																																& nbsp;
Other personal:																																& nbsp;
Written premiums		$	23		$	24		$	20		$	21		$	23		$	24		$	20		$	44		$	45		$	67		$	68			$	89
Earned premiums			22			22			22			22			23			22			22			45			45			66			67				89
Loss and loss expense ratio			63.3	%		72.5	%		47.4	%		37.0	%		58.0	%		32.6	%		49.5	%		63.9	%		37.2	%		63.9	%		47.1	%			44.6	%
Less Catastrophe loss ratio			5.2			10.8			3.8			2.0			5.0			1.0			3.9			7.3			2.5			6.6			3.3				3.0
Loss and loss expense excluding catastrophe loss ratio			58.1	%		61.7	%		43.6	%		35.0	%		53.0	%		31.6	%		45.6	%		56.6	%		34.7	%		57.3	%		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 Third-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

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	%

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	%

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	%

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 Third-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 Third-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 Third-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)		$	787		$	804		$	796		$	765		$	764		$	780		$	787		$	1,600		$	1,567		$	2,387		$	2,332			$	3,097
Written premium adjustment – statutory only			(7)			10			33			(38)			(3)			10			10			43			20			36			17				(21)
Reported written premiums (statutory)*		$	780		$	814		$	829		$	727		$	761		$	790		$	797		$	1,643		$	1,587		$	2,423		$	2,349			$	3,076
Unearned premiums change			11			(21)			(51)			48			4			(25)			(44)			(72)			(73)			(60)			(66)				(19)
Earned premiums		$	791		$	793		$	778		$	775		$	765		$	765		$	753		$	1,571		$	1,518		$	2,362		$	2,283			$	3,058

Statutory combined ratio
Reported statutory combined ratio*			96.4	%		93.7	%		89.6	%		85.8	%		96.6	%		86.6	%		87.3	%		91.7	%		86.9	%		93.2	%		90.1	%			89.0	%
Written premium adjustment – statutory only			nm			nm			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			0.0				0.0
Adjusted statutory combined ratio			96.4	%		93.7	%		89.6	%		85.8	%		96.6	%		86.6	%		87.3	%		91.7	%		86.9	%		93.2	%		90.1	%			89.0	%
Less catastrophe losses			3.5			8.0			5.0			5.6			8.6			2.0			0.3			6.5			1.1			5.5			3.6				4.1
Adjusted statutory combined ratio excluding catastrophe losses			92.9	%		85.7	%		84.6	%		80.2	%		88.0	%		84.6	%		87.0	%		85.2	%		85.8	%		87.7	%		86.5	%			84.9	%

Reported commission expense ratio*			19.3	%		17.6	%		18.1	%		20.4	%		20.3	%		19.3	%		16.8	%		17.9	%		18.0	%		18.3	%		18.8	%			19.2	%
Written premium adjustment – statutory only			nm			nm			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			0.0				0.0
Adjusted commission expense ratio			19.3	%		17.6	%		18.1	%		20.4	%		20.3	%		19.3	%		16.8	%		17.9	%		18.0	%		18.3	%		18.8	%			19.2	%

Reported other expense ratio*			11.9	%		10.8	%		10.8	%		11.6	%		10.8	%		10.3	%		9.8	%		10.8	%		10.0	%		11.2	%		10.2	%			10.5	%
Written premium adjustment – statutory only			nm			nm			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			0.0				0.0
Adjusted other expense ratio			11.9	%		10.8	%		10.8	%		11.6	%		10.8	%		10.3	%		9.8	%		10.8	%		10.0	%		11.2	%		10.2	%			10.5	%
																						&nbs p;
Reported statutory expense ratio*			31.2	%		28.4	%		28.9	%		32.0	%		31.1	%		29.6	%		26.6	%		28.7	%		28.0	%		29.5	%		29.0	%			29.7	%
Written premium adjustment – statutory only			nm			nm			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			0.0				0.0
Adjusted statutory expense ratio			31.2	%		28.4	%		28.9	%		32.0	%		31.1	%		29.6	%		26.6	%		28.7	%		28.0	%		29.5	%		29.0	%			29.7	%

GAAP combined ratio
GAAP combined ratio			96.1	%		94.5	%		92.0	%		83.9	%		96.6	%		87.5	%		88.9	%		93.3	%		88.2	%		94.2	%		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			0.0				0.0
GAAP combined ratio before one-time item			96.1	%		94.5	%		92.0	%		83.9	%		96.6	%		87.5	%		88.9	%		93.3	%		88.2	%		94.2	%		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																							< /TD>
* 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 Third-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)		$	589		$	593		$	635		$	584		$	547		$	557		$	617		$	1,228		$	1,174		$	1,817		$	1,721			$	2,306
Written premium adjustment -- statutory only			(7)			10			33			(36)			(1)			9			12			43			21			36			20				(16)
Reported written premiums (statutory)*		$	582		$	603		$	668		$	548		$	546		$	566		$	629		$	1,271		$	1,195		$	1,853		$	1,741			$	2,290
Unearned premiums change			20			(4)			(86)			28			18			(3)			(78)			(90)			(81)			(69)			(63)				(36)
Earned premiums		$	602		$	599		$	582		$	576		$	564		$	563		$	551		$	1,181		$	1,114		$	1,783		$	1,678			$	2,254

Statutory combined ratio
Reported statutory combined ratio*			94.1	%		89.6	%		87.5	%		84.3	%		95.5	%		83.9	%		85.5	%		88.6	%		84.6	%		90.3	%		88.1	%			87.1	%
Written premium adjustment -- statutory only			nm			nm			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			0.0				0.0
Adjusted statutory combined ratio			94.1	%		89.6	%		87.5	%		84.3	%		95.5	%		83.9	%		85.5	%		88.6	%		84.6	%		90.3	%		88.1	%			87.1	%
Less catastrophe losses			2.3			5.6			5.1			2.4			9.5			0.4			1.1			5.3			0.8			4.3			3.6				3.4
Adjusted statutory combined ratio excluding catastrophe losses			91.8	%		84.0	%		82.4	%		81.9	%		86.0	%		83.5	%		84.4	%		83.3	%		83.8	%		86.0	%		84.5	%			83.7	%

GAAP combined ratio
GAAP combined ratio			93.4	%		90.3	%		90.5	%		82.1	%		95.2	%		84.8	%		87.5	%		90.4	%		86.1	%		91.4	%		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			0.0				0.0
GAAP combined ratio before one-time item			93.4	%		90.3	%		90.5	%		82.1	%		95.2	%		84.8	%		87.5	%		90.4	%		86.1	%		91.4	%		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 Third-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			3/31/0			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)		$	198		$	211		$	161		$	181		$	217		$	223		$	170		$	372		$	393		$	570		$	611			$	791
Written premium adjustment -- statutory only			0			0			0			(2)			(2)			1			(2)			0			(1)			0			(3)				(5)
Reported written premiums (statutory)*		$	198		$	211		$	161		$	179		$	215		$	224		$	168		$	372		$	392		$	570		$	608			$	786
Unearned premiums change			(9)			(17)			35			20			(14)			(22)			34			18			8			9			(3)				17
Earned premiums		$	189		$	194		$	196		$	199		$	201		$	202		$	202		$	390		$	404		$	579		$	605			$	804
																																		;
Statutory combined ratio
Reported statutory combined ratio*			104.0	%		106.4	%		98.1	%		90.1	%		99.9	%		93.6	%		94.0	%		101.6	%		93.7	%		102.3	%		95.7	%			94.3	%
Written premium adjustment -- statutory only			nm			nm			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			0.0				0.0
Adjusted statutory combined ratio			104.0	%		106.4	%		98.1	%		90.1	%		99.9	%		93.6	%		94.0	%		101.6	%		93.7	%		102.3	%		95.7	%			94.3	%
Less catastrophe losses			7.0			15.6			5.0			14.9			6.3			6.2			2.0			10.3			2.1			9.2			3.5				6.3
Adjusted statutory combined ratio excluding catastrophe losses			97.0	%		90.8	%		93.1	%		75.2	%		93.6	%		87.4	%		96.0	%		91.3	%		91.6	%		93.1	%		92.2	%			88.0	%

GAAP combined ratio
GAAP combined ratio			104.4	%		107.6	%		96.4	%		89.0	%		100.5	%		95.3	%		92.7	%		102.0	%		94.0	%		102.8	%		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			0.0				0.0
GAAP combined ratio before one-time item			104.4	%		107.6	%		96.4	%		89.0	%		100.5	%		95.3	%		92.7	%		102.0	%		94.0	%		102.8	%		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 Third-Quarter Supplement


The Cincinnati Life Insurance Company
GAAP Statements of Income

		For the three months ended September 30,							For the nine months ended September 30,
		2006		2005		Change	% Change		2006		2005		Change	% Change
Revenues:
Premiums earned:
Property casualty	$	0	$	0	$	0	NA	$	0	$	0	$	0	NA
Life		36,294,277		33,816,806		2,477,471	7.33		109,318,969		103,387,385		5,931,584	5.74
Accident health		1,709,173		1,640,686		68,487	4.17		4,948,521		4,729,937		218,584	4.62
Premiums ceded		(10,455,847)		(10,287,532)		(168,315)	(1.64)		(30,688,997)		(29,947,525)		(741,472)	(2.48)
Total premiums earned		27,547,603		25,169,960		2,377,643	9.45		83,578,493		78,169,797		5,408,696	6.92
Investment income		27,213,672		24,913,462		2,300,210	9.23		80,603,825		73,310,458		7,293,367	9.95
Realized investment gains and losses		(256,745)		(288,018)		31,273	10.86		42,327,225		7,356,820		34,970,405	475.35
Other income		755,639		951,468		(195,829)	(20.58)		2,559,919		2,545,788		14,131	0.56
Total revenues	$	55,260,169	$	50,746,872	$	4,513,297	8.89	$	209,069,462	$	161,382,863	$	47,686,599	29.55


Benefits & expenses:
Losses & policy benefits	$	42,750,492	$	49,044,146	$	(6,293,654)	(12.83)	$	118,288,412	$	128,224,954	$	(9,936,542)	(7.75)
Reinsurance recoveries		(9,728,222)		(21,796,779)		12,068,557	55.37		(26,705,298)		(51,367,008)		24,661,710	48.01
Commissions		8,434,879		8,784,942		(350,063)	(3.98)		25,670,653		25,777,011		(106,358)	(0.41)
Other operating expenses		6,877,898		6,596,022		281,876	4.27		19,784,207		17,860,479		1,923,728	10.77
Interest expense		0		0		0	NA		0		0		0	NA
Taxes, licenses & fees		394,060		1,021,334		(627,274)	(61.42)		2,144,949		3,172,446		(1,027,497)	(32.39)
Incr deferred acq expense		(6,544,407)		(4,984,107)		(1,560,300)	(31.31)		(14,237,700)		(9,766,879)		(4,470,821)	(45.78)
Other expenses		(1)		0		(1)	NA		108		108		0	0.00
Total expenses	$	42,184,699	$	38,665,558	$	3,519,141	9.10	$	124,945,331	$	113,901,111	$	11,044,220	9.70


Income before income taxes	$	13,075,470	$	12,081,314	$	994,156	8.23	$	84,124,131	$	47,481,752	$	36,642,379	77.17

Provision for income taxes:
Current	$	(33,442)	$	2,852,503	$	(2,885,945)	(101.17)	$	5,319,857	$	9,098,378	$	(3,778,521)	(41.53)
Current capital gains/losses		27,139		(100,806)		127,945	126.92		14,931,529		2,574,887		12,356,642	479.89
Deferred		4,382,846		1,214,805		3,168,041	260.79		9,777,623		4,338,680		5,438,943	125.36
Total income taxes	$	4,376,543	$	3,966,502	$	410,041	10.34	$	30,029,009	$	16,011,945	$	14,017,064	87.54

Net income	$	8,698,927	$	8,114,812	$	584,115	7.20	$	54,095,122	$	31,469,807	$	22,625,315	71.90

2006 Third-Quarter Supplement


The Cincinnati Life Insurance Company
Statutory Statements of Income

		For the three months ended September 30,					For the nine months ended September 30,
		2006		2005	% Change		2006		2005	% Change

Net premiums written	$	37,886,042	$	53,439,050	(29.10)	$	115,332,247	$	153,749,079	(24.99)
Net investment income		27,213,672		24,913,462	9.23		80,603,825		73,310,458	9.95
Amortization of interest maintenance reserve		17,827		1,422,108	(98.75)		100,277		3,102,027	(96.77)
Commissions and expense allowances on reinsurance ceded		1,834,459		2,309,463	(20.57)		5,778,763		8,761,904	(34.05)
Income from fees associated with Separate Accounts		755,639		951,468	(20.58)		2,559,919		2,545,788	0.56
Total revenues	$	67,707,638	$	83,035,551	(18.46)	$	204,375,031	$	241,469,256	(15.36)

Death benefits and matured endowments	$	9,459,133	$	10,595,563	(10.73)	$	30,097,582	$	25,618,091	17.49
Annuity benefits		10,463,908		9,024,180	15.95		26,619,650		16,791,625	58.53
Disability benefits and benefits under accident and health contracts		556,563		484,157	14.96		1,215,340		1,046,366	16.15
Surrender benefits and group conversions		4,468,607		5,407,125	(17.36)		16,260,645		14,910,773	9.05
Interest and adjustments on deposit-type contract funds		2,259,707		2,463,402	(8.27)		7,014,565		7,486,511	(6.30)
Increase in aggregate reserves for life and accident and health contracts		26,543,268		37,868,789	(29.91)		71,899,714		115,497,545	(37.75)
Payments on supplementary contracts with life contingencies		77,577		73,218	5.95		231,661		220,624	5.00
Total benefit expenses	$	53,828,763	$	65,916,433	(18.34)	$	153,339,156	$	181,571,535	(15.55)

Commissions	$	8,319,379	$	8,784,942	(5.30)	$	25,355,653	$	25,777,011	(1.63)
General insurance expenses and taxes		7,487,053		8,223,280	(8.95)		24,214,800		24,041,975	0.72
Increase in loading on deferred and uncollected premiums		(1,506,574)		(768,211)	(96.11)		(4,478,863)		(4,573,489)	2.07
Net transfers to or (from) Separate Accounts					N/A		(211,220)			N/A
Other deductions					N/A		109		108	0.63
Total operating expenses	$	14,299,858	$	16,240,011	(11.95)	$	44,880,478	$	45,245,606	(0.81)

Federal and Foreign Income Taxes Incurred		219,114		2,696,011	(91.87)		5,022,716		9,273,251	(45.84)

Net gain from operations before realized capital gains or (losses)	$	(640,097)	$	(1,816,904)	64.77	$	1,132,681	$	5,378,864	(78.94)

Net realized gains or (losses) net of capital gains tax		(57,569)		(1,000,054)	94.24		27,640,006		320,550	8522.69

Net Income (Statutory)	$	(697,666)	$	(2,816,958)	75.23	$	28,772,687	$	5,699,414	404.84

* 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 Third-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				$	50		$	51		$	50		$	57		$	66		$	64		$	62		$	101		$	126		$	152		$	192			$	249
Bank Owned Life Insurance (BOLI) Adjustment					0			0			0			0			0			0			0			0			0			0			0				0
Adjusted Gross Written Premiums				$	50		$	51		$	50		$	57		$	66		$	64		$	62		$	101		$	126		$	152		$	192			$	249

Insurance Expense				$	7		$	7		$	7		$	8		$	7		$	7		$	7		$	14		$	14		$	23		$	21			$	29

Expense Ratio					14.7	%		13.5	%		14.5	%		14.4	%		10.3	%		10.7	%		10.9	%		14.0	%		10.8	%		14.9	%		10.8	%			11.7	%
Expense Ratio based on Adjusted Gross Written Premium					14.7	%		13.5	%		14.5	%		14.4	%		10.3	%		10.7	%		10.9	%		14.0	%		10.8	%		14.9	%		10.8	%			11.7	%



(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	%

																									&nbs p;
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 Third-Quarter Supplement