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0000906318-07-000067.txt : 20070502 0000906318-07-000067.hdr.sgml : 20070502 20070502073027 ACCESSION NUMBER: 0000906318-07-000067 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070502 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070502 DATE AS OF CHANGE: 20070502 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: 07808311 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 cinfin8k5207.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: May 2, 2007 (Date of earliest event reported)

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

N/A (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 May 2, 2007, Cincinnati Financial Corporation issued the attached news release titled “Cincinnati Financial First-quarter 2007 Net Income at $1.11 per Share and Operating Income* at 88 Cents,” furnished as Exhibit 99.1 hereto and incorporated herein by reference. On May 2, 2007, 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 May 2, 2007, “Cincinnati Financial First-quarter 2007 Net Income at $1.11 per Share and Operating Income* at 88 Cents”

Exhibit 99.2 – Supplemental Financial Data dated May 2, 2007

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: May 2, 2007	/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 First-quarter 2007 Net Income at $1.11 per Share and

Operating Income* at 88 Cents

Cincinnati, May 2, 2007 – Cincinnati Financial Corporation (Nasdaq: CINF) today reported:

Net income of $1.11 per share, below year-ago level that included high realized gains on investments.

Operating income up 18.9 percent to 88 cents per share on healthy insurance results and higher investment income.

Property casualty underwriting profits of $81 million reflect strong commercial lines insurance performance including lower catastrophe losses.

Financial Highlights


(Dollars in millions except share data)		Three months ended March 31,
(Dollars in millions except share data)		2007		2006	Change %
Revenue Highlights
Earned premiums	$	815	$	804	1.3
Investment income		148		139	7.1
Total revenues		1,031		1,607	(35.9)
Income Statement Data
Net income	$	194	$	552	(64.8)
Net realized investment gains and losses		41		421	(90.2)
Operating income*	$	153	$	131	16.4
Per Share Data (diluted)
Net income	$	1.11	$	3.13	(64.5)
Net realized investment gains and losses		0.23		2.39	(90.4)
Operating income*	$	0.88	$	0.74	18.9

Book value	$	39.08	$	35.85	9.0
Cash dividend declared	$	0.355	$	0.335	6.0
Weighted average shares outstanding		174,274,157		176,127,404	(1.1)

Insurance Operations Highlights

2.1 percent increase in first-quarter property casualty net written premiums.

Strong commercial lines growth with first-quarter 2007 net written premiums up 3.8 percent and new business written by our agencies up 2.8 percent to $72 million.

Decline in personal lines net written premiums slowed to 5.1 percent for first-quarter 2007. New business was up 25.4 percent to $8 million and retention rates remained above 90 percent as pricing changes made July 1, 2006, continue to improve agents’ ability to market personal lines.

89.6 percent first-quarter 2007 property casualty combined ratio, reflecting low catastrophe losses from first-quarter storms and reduced loss estimates for prior-year storms.

7 cents per share contribution from the life insurance operations to first-quarter operating income, up from 4 cents.

Investment and Balance Sheet Highlights

7.1 percent growth in first-quarter pretax investment income.

Book value of $39.08 per share compared with $39.38 at year-end 2006.

1.9 million reduction in average shares outstanding. First-quarter repurchases of the company's common stock totaled 1.49 million shares at a cost of $64 million.

Full-year 2007 Outlook**

Property casualty net written premiums expected to grow at low-single-digit rate in 2007. New agency appointments and new states to help drive long-term growth.

Combined ratio now expected to be at or below 97 percent in 2007, assuming catastrophe losses contribute approximately 5.0 percentage points.

Investment income growth target at 6.5 percent to 7.0 percent range for 2007.

The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 11 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 8).

New States and New Agency Appointments to Support Continued Growth

“The value that local independent insurance agents bring to The Cincinnati Insurance Companies again proved itself in this year’s first quarter,” said John J. Schiff, Jr., CPCU, chairman and chief executive officer. “Their quality business submissions are helping us achieve profitable commercial lines premium growth. They are again selling the value of our homeowner and personal auto policies, as seen in our improved personal lines new business growth and policy retention.

“With special efforts and teamwork, our agents, field representatives and headquarters associates have maintained positive underwriting momentum in the face of commercial lines competition that is softening pricing and pressuring margins across the industry. For our commercial and personal lines of insurance, loss severity continues to be higher than one year ago, although our severity measures held steady at the same level we saw in the second half of 2006,” Schiff noted. “We have faced similarly challenging market conditions in the past, benefiting from agent and policyholder loyalty that grows out of our commitment to offer outstanding service and market stability through all stages of the pricing cycle.”

James E. Benoski, vice chairman, chief insurance officer and president, said, “We continue to invest in tools to meet our agents’ long-term needs. We plan to increase their ease of doing business with us in 2007, further rolling out our Web-based policy processing systems and other tools. Cincinnati has earned a generous share of each agency’s business over the years by offering the products and services they need to protect their local businesses and families. Our agents have indicated their desire to have Cincinnati available as a market for commercial accounts that require the flexibility of excess and surplus lines coverage. We now are taking steps to establish a new subsidiary to tap that opportunity for our agencies and our company. In 2008, we expect to begin seeing some premiums from excess and surplus lines.”

Benoski added, “In addition to growing with our current agencies, we also continue to build relationships with selected new agencies, whether by making agency appointments in our active states or by entering new geographic areas. We completed 12 agency appointments in the first three months, a good start toward achieving our target of approximately 55 to 60 for the year. These new appointments and other changes in agency structures brought total reporting agency locations to 1,291, compared with 1,289 at year-end 2006.

“Our preparations to begin actively marketing in New Mexico and eastern Washington are on schedule for the second half of 2007, with agencies in those areas showing great interest in securing Cincinnati appointments.”

2007 Property Casualty Outlook Update

Kenneth W. Stecher, chief financial officer and executive vice president commented, “While we expect competition to continue accelerating in most property casualty business lines, we believe that our strong agency relationships will lead to full-year 2007 net written premium growth in the low single-digits. That estimate takes into account an anticipated $22 million increase in the premiums we pay for reinsurance.”

Stecher added, “Overall profitability was solid in the first quarter due to strong results from commercial lines, reflecting the benefits of low catastrophe losses and savings from favorable development on prior period reserves. With those benefits as well as a favorable expense comparison, first-quarter personal lines profitability also was acceptable. We remain concerned, however, about personal lines pricing and loss activity.

“In light of our solid first-quarter performance, in mid-April we announced that we believe that the full-year combined ratio could be at or below 97 percent on either a GAAP or statutory basis. We make several assumptions to arrive at this estimate. First, we assume that catastrophe losses will contribute approximately 5.0 percentage points to the full-year ratio, down from 5.5 percentage points in 2006.

“Second, we assume that the loss and loss expense ratio will rise on competitive pricing and higher loss costs. Third, we will benefit from full-year favorable reserve development in line with the 2 percentage points in savings from favorable development on prior period reserves that we averaged between 2000 and 2003.

“Finally, we are assuming a full-year underwriting expense ratio of approximately 31.5 percent, reflecting continued investment in people and technology during a period of slowing premium growth,” Stecher said.

Investment Strategy Key to Long-term Growth and Stability

Schiff continued, “After paying from cash flow all current liabilities such as claims, expenses, taxes and interest, we invest the remainder to generate income while increasing policyholder surplus and shareholders’ equity. In the first quarter of 2007, we continued to buy fixed income securities to support our insurance liabilities.

“In seeking long-term growth and stability, we also buy and hold common stocks of companies that regularly pay and increase their dividends,” Schiff noted. “We are looking for pretax investment income growth in the range of 6.5 percent to 7.0 percent in 2007, and we continue to select and hold securities in our portfolio that give us an opportunity to further build book value, an important measure of our long-term success.”

Property Casualty Insurance Operations


(Dollars in millions)	Three months ended March 31,
(Dollars in millions)	2007			2006			Change %
Written premiums	$	846		$	829		2.1

Earned premiums	$	785		$	778		0.8

Loss and loss expenses excluding catastrophes		455			432		5.1
Catastrophe loss and loss expenses		3			39		(91.8)
Commission expenses		161			157		2.5
Underwriting expenses		82			84		(2.8)
Policyholder dividends		3			4		(2.1)
Underwriting profit	$	81		$	62		30.9

Ratios as a percent of earned premiums:
Loss and loss expenses excluding catastrophes		57.9	%		55.6	%
Catastrophe loss and loss expenses		0.4			5.0
Loss and loss expenses		58.3			60.6
Commission expenses		20.5			20.2
Underwriting expenses		10.4			10.8
Policyholder dividends		0.4			0.4
Combined ratio		89.6	%		92.0	%

2.1 percent rise in first-quarter property casualty net written premiums.

$80 million in first-quarter new business written directly by agencies, up 4.8 percent.

1,065 agency relationships with 1,291 reporting locations marketing our insurance products at March 31, 2007, compared with 1,066 agency relationships with 1,289 locations at year-end 2006.

89.6 percent first-quarter 2007 property casualty combined ratio. The ratio improved by 2.4 percentage points largely due to lower catastrophe losses and savings from favorable development of prior period reserves.

$3 million in net first-quarter 2007 catastrophe losses, reflecting $16 million from four weather events during the quarter, mitigated by $13 million in reduced estimates of losses from catastrophes in earlier years, in particular an October 2006 hail storm.

Catastrophe Loss and Loss Expenses Incurred


(In millions, net of reinsurance)			Three months ended March 31,
				Commercial		Personal
Dates	Cause of loss	Region		lines		lines		Total
2007
Jan. 12-15	Wind, hail, ice, snow	Midwest	$	2	$	1	$	3
Feb. 14-15	Wind, hail, ice, snow	Mid-Atlantic		1		1		2
Feb. 23-25	Wind, hail, ice, snow	Midwest		3		0		3
Mar. 1-2	Wind, hail, flood	South		6		2		8
Development on 2006 and prior catastrophes				(2)		(11)		(13)
Calendar year incurred total			$	10	$	(7)	$	3
2006
Mar. 11-13	Wind, hail	Midwest, Mid-Atlantic	$	28	$	10	$	38
Development on 2005 and prior catastrophes				1		0		1
Calendar year incurred total			$	29	$	10	$	39

First-quarter 2007 net savings from favorable development on prior period reserves improved the combined ratio by 4.0 percentage points. Excluding reduced estimates for prior year catastrophe losses, net savings from favorable development improved the combined ratio by 2.3 percentage points. In last year’s first quarter, reserve strengthening increased the combined ratio by 2.5 percentage points.

Commercial Lines Insurance Operations


(Dollars in millions)	Three months ended March 31,
(Dollars in millions)	2007			2006			Change %
Written premiums	$	693		$	668		3.8

Earned premiums	$	604		$	582		3.7

Loss and loss expenses excluding catastrophes		344			324		5.8
Catastrophe loss and loss expenses		10			29		(63.9)
Commission expenses		123			117		5.6
Underwriting expenses		57			53		5.9
Policyholder dividends		3			4		(2.1)
Underwriting profit	$	67		$	55		21.3

Ratios as a percent of earned premiums:
Loss and loss expenses excluding catastrophes		56.9	%		55.7	%
Catastrophe loss and loss expenses		1.8			5.1
Loss and loss expenses		58.7			60.8
Commission expenses		20.4			20.0
Underwriting expenses		9.3			9.1
Policyholder dividends		0.5			0.6
Combined ratio		88.9	%		90.5	%

3.8 percent growth in first-quarter commercial lines net written premiums.

$72 million in new commercial lines business written directly by agencies in first-quarter 2007, up 2.8 percent.

88.9 percent first-quarter 2007 commercial lines combined ratio. The ratio improved 1.6 percentage points largely because lower catastrophe losses and savings from favorable development of prior period reserves offset softer pricing and higher loss severity.

56.9 percent commercial lines loss and loss expense ratio excluding catastrophe losses. The ratio rose 1.2 percentage points because of softer pricing and higher loss severity mitigated by reserve development. New large losses in the commercial auto and workers’ compensation business lines were in line with the third and fourth quarters of 2006.

First-quarter 2007 commercial lines net savings from favorable development on prior period reserves improved the combined ratio by 2.5 percentage points. Excluding reduced estimates for prior year catastrophe losses, net savings from favorable reserve development improved the ratio by 2.1 percentage points. In last year’s first quarter, reserve strengthening raised the combined ratio by 2.7 percentage points.

0.4 percentage-point increase in first-quarter 2007 commercial lines commission expense ratio and 0.2 percentage point increase in underwriting expense ratio.

Commercial casualty, commercial property and workers’ compensation – three of the company’s four largest commercial business lines – reported net written premium growth in the first quarter of 2007. New business and policy retention continued to offset pricing pressures due to competitive market conditions. In line with recent quarters, the fourth of the largest business lines – commercial auto – saw net written premiums decline slightly due to softer pricing.

First-quarter rollout of CinciBridge™ integrates agency management systems used by all agencies with WinCPP®, the company’s online, real-time commercial lines rate quoting system.

Upcoming rollout of CinciBridge will integrate agency management systems with e-CLAS®, the company’s processing system for Businessowner (BOP) and Dentist’s Package (DBOP) Policies. e-CLAS currently is available in 10 states representing 56 percent of BOP and DBOP premiums. 2007 plans for e-CLAS rollout include 10 additional states.

Personal Lines Insurance Operations


(Dollars in millions)	Three months ended March 31,
(Dollars in millions)	2007			2006			Change %
Written premiums	$	153		$	161		(5.1)

Earned premiums	$	181		$	196		(7.6)

Loss and loss expenses excluding catastrophes		111			108		2.8
Catastrophe loss and loss expenses		(7)			10		(176.3)
Commission expenses		38			40		(6.6)
Underwriting expenses		25			31		(18.0)
Underwriting profit	$	14		$	7		107.1

Ratios as a percent of earned premiums:
Loss and loss expenses excluding catastrophes		61.4	%		55.1	%
Catastrophe loss and loss expenses		(4.1)			5.0
Loss and loss expenses		57.3			60.1
Commission expenses		20.9			20.7
Underwriting expenses		13.8			15.6
Combined ratio		92.0	%		96.4	%

5.1 percent decrease in first-quarter personal lines net written premiums because of higher reinsurance premiums and pricing changes made in mid-2006 that lowered rates while improving policyholder retention and new business.

First-quarter 2007 personal lines new business rose 25.4 percent to $8 million. Third consecutive quarter of improvement in the new business growth rate following July 2006 introduction of a limited program of policy credits for homeowner and personal auto pricing in most of the states in which the company’s personal lines policy processing system is in use. These changes also lowered premiums for some current policyholders.

92.0 percent first-quarter 2007 personal lines combined ratio. The 4.4 percentage-point improvement primarily was due to $7 million in net savings from catastrophe losses compared with $10 million in catastrophe losses in the first quarter of 2006, and a favorable 2007 expense comparison.

61.4 percent personal lines loss and loss expense ratio excluding catastrophe losses. The ratio rose 6.3 percentage points because of the lower pricing, normal loss cost trends and higher loss severity mitigated by reserve development.

First-quarter 2007 personal lines net savings from favorable development on prior period reserves improved the combined ratio by 9.1 percentage points. Excluding reduced estimates for prior year catastrophe losses, net savings from favorable development was 3.0 percentage points. In last year’s first quarter, reserve strengthening raised the combined ratio by 2.0 percentage points.

0.2 percentage-point increase in first-quarter personal lines commission expense ratio, primarily due to changes in the mix of personal business compared with the year-ago period.

1.8 percentage point improvement in personal lines underwriting expense ratio. In the first three months of 2006, underwriting expenses were high due to normal fluctuations in operating expenses and the timing of expense items.

Agencies writing personal lines policies in 15 states now use Diamond, the company’s personal lines policy processing system, with rollout to two other states planned for later in 2007. Approximately 95 percent of total 2006 personal lines earned premium volume was written in active Diamond states.

New product offerings for 2007 and 2008 include the rollout of a new coverage endorsement – Replacement Cost Auto. This optional coverage provides for replacement of a totaled auto with a new auto, if the accident occurs in the first three years after the policyholder purchases a new car. An optional endorsement for personal auto policies that includes eight additional coverages will be rolled out in the third quarter of 2007. These coverages will increase towing and rental limits, pay for lock replacement if the policyholder’s keys are lost or stolen and pay for accidental deployment of an airbag, among others.

Personal lines have been added recently in 24 of our commercial lines agencies and with a target of an additional 25 commercial lines agencies during the remainder of the year. Expanding into these agencies would provide additional sources of premiums and help diversify the personal lines portfolio.

Life Insurance Operations


(In millions)		Three months ended March 31,
(In millions)		2007		2006	Change %
Written premiums	$	42	$	40	5.5

Earned premiums	$	30	$	26	15.7
Investment income, net of expenses		28		26	7.8
Other income		1		1	83.1
Total revenues, excluding realized investment gains and losses		59		53	12.7
Policyholder benefits		27		30	(9.8)
Expenses		13		10	28.7
Total benefits and expenses		40		40	0.1
Net income before income tax and realized investment gains and losses		19		13	53.3
Income tax		6		5	31.9
Net income before realized investment gains and losses	$	13	$	8	67.8

$42 million in total first-quarter 2007 life insurance segment net written premiums. Written premiums include life insurance, annuity and accident and health premiums.

13.0 percent increase to $33 million in statutory written premiums for term and other life insurance products. Since late 2005, the company has de-emphasized annuities because of an unfavorable interest rate environment. Statutory written annuity premiums decreased to $8 million in first-quarter 2007 from $9 million in first-quarter 2006.

30.1 percent rise in first-quarter term life insurance written premiums reflecting marketing advantages of competitive, up-to-date products, providing close personal attention and exhibiting financial strength and stability.

2.6 percent rise in face amount of life policies in force to $58.450 billion at March 31, 2007, from $56.871 billion at year-end 2006.

$5 million increase in first-quarter 2007 operating profit due to favorable mortality experience and persistency as well as healthy earned premium growth.

2007 plans include continued enhancement of term and other life insurance products, including an expanded worksite product portfolio and introduction of two new universal and whole life products. The priority continues to be expansion within the insurance agencies currently marketing our property casualty insurance products.

Investment Operations


(In millions)		Three months ended March 31,
(In millions)		2007		2006	Change %
Investment income:
Interest	$	76	$	74	2.2
Dividends		72		62	16.7
Other		3		4	(18.0)
Investment expenses		(3)		(1)	(102.0)
Total net investment income		148		139	7.1
Investment interest credited to contract holders		(14)		(14)	2.8
Net realized investment gains and losses:
Realized investment gains and losses		61		659	(90.7)
Change in valuation of derivatives		1		2	(56.2)
Other-than-temporary impairment charges		0		(1)	100.0
Net realized investment gains		62		660	(90.6)
Investment operations income	$	196	$	785	(75.0)

7.1 percent increase in first-quarter pretax net investment income. Fifth Third Bancorp, the company’s largest equity holding, contributed 42.3 percent of first-quarter 2007 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.

$21 million annually in additional investment income expected during 2007 from dividend increases announced during the past 12 months by Fifth Third and another 42 of our 47 publicly traded common stock holdings.

$62 million in net realized investment gains during the first quarter of 2007 compared with $660 million in the first quarter of 2006, which included $647 million from the sale of the company’s holdings of Alltel common stock.

Balance Sheet


(Dollars in millions except share data)	At March 31,			At December 31,
(Dollars in millions except share data)		2007			2006
Balance sheet data
Invested assets	$	13,641		$	13,759
Total assets		18,221			17,222
Short-term debt		49			49
Long-term debt		791			791
Shareholders' equity		6,708			6,808
Book value per share		39.08			39.38
Debt-to-capital ratio		11.1	%		11.0	%

	Three months ended March 31,
		2007			2006
Performance measures
Comprehensive income	$	13		$	240
Return on equity		11.5	%		35.9	%
Return on equity based on comprehensive income		0.8			15.7

Book value of $39.08 at March 31, 2007, compared with $39.38 at year-end 2006, due to a decline in the market value of our equity portfolio.

$4.741 billion in statutory surplus for the property casualty insurance group at March 31, 2007, compared with $4.723 billion at year-end 2006. The ratio of common stock to statutory surplus for the property casualty insurance group portfolio was 96.0 percent at March 31, 2007, compared with 97.3 percent at year-end 2006.

30.9 percent ratio of investment securities held at the holding-company level to total holding-company-only assets at March 31, 2007, comfortably within management’s below-40 percent target.

1,491,000 shares repurchased in first quarter at a total cost of $64 million.

Cincinnati Financial Corporation offers property and casualty insurance, our 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 2006 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 20. 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

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:

○

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

○

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 low interest rate environment or other factors that limit the company’s ability to generate growth in investment income or interest-rate fluctuations that result in declining values of fixed-maturity investments

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 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)		March 31,		December 31,
(Dollars in millions except per share data)		2007		2006
	(unaudited)
ASSETS
Investments
Fixed maturities, at fair value (amortized cost: 2007—$5,785; 2006—$5,739)	$	5,864	$	5,805
Equity securities, at fair value (cost: 2007—$2,802; 2006—$2,621)		7,687		7,799
Short-term investments, at fair value (amortized cost: 2007—$19; 2006—$95)		19		95
Other invested assets		71		60
Total investments		13,641		13,759

Cash and cash equivalents		197		202
Securities lending collateral		984		0
Investment income receivable		117		121
Finance receivable		103		108
Premiums receivable		1,173		1,128
Reinsurance receivable		727		683
Prepaid reinsurance premiums		12		13
Deferred policy acquisition costs		467		453
Land, building and equipment, net, for company use (accumulated depreciation: 2007—$268; 2006—$261)		204		193
Other assets		85		58
Separate accounts		511		504
Total assets	$	18,221	$	17,222

LIABILITIES
Insurance reserves
Loss and loss expense reserves	$	3,928	$	3,896
Life policy reserves		1,427		1,409
Unearned premiums		1,640		1,579
Securities lending payable		984		0
Other liabilities		652		533
Deferred income tax		1,531		1,653
Note payable		49		49
6.125% senior notes due 2034		371		371
6.9% senior debentures due 2028		28		28
6.92% senior debentures due 2028		392		392
Separate accounts		511		504
Total liabilities		11,513		10,414

SHAREHOLDERS' EQUITY
Common stock, par value—$2 per share; (authorized: 2007—500 million shares, 2006—500 million shares; issued: 2007—196 million shares, 2006—196 million shares)		392		391
Paid-in capital		1,027		1,015
Retained earnings		2,923		2,786
Accumulated other comprehensive income		3,193		3,379
Treasury stock at cost (2007—24 million shares, 2006—23 million shares)		(827)		(763)
Total shareholders' equity		6,708		6,808
Total liabilities and shareholders' equity	$	18,221	$	17,222

Cincinnati Financial Corporation

Consolidated Statements of Income


(In millions except per share data)		Three months ended March 31,
(In millions except per share data)		2007		2006
		(unaudited)
REVENUES
Earned premiums
Property casualty	$	785	$	778
Life		30		26
Investment income, net of expenses		148		139
Realized investment gains and losses		62		660
Other income		6		4
Total revenues		1,031		1,607

BENEFITS AND EXPENSES
Insurance losses and policyholder benefits		484		501
Commissions		170		166
Other operating expenses		88		83
Taxes, licenses and fees		20		24
Increase in deferred policy acquisition costs		(15)		(14)
Interest expense		13		13
Total benefits and expenses		760		773

INCOME BEFORE INCOME TAXES		271		834

PROVISION (BENEFIT) FOR INCOME TAXES
Current		77		292
Deferred		0		(10)
Total provision for income taxes		77		282

NET INCOME	$	194	$	552

PER COMMON SHARE
Net income—basic	$	1.12	$	3.17
Net income—diluted	$	1.11	$	3.13

***

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

(See attached tables for 2007 and 2006 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
	12/31/07	9/30/07	6/30/07	3/31/07		12/31/06		9/30/06		6/30/06		3/31/06		6/30/07	6/30/06		9/30/07	9/30/06		12/31/07	12/31/06

Net income				$	194	$	130	$	115	$	132	$	552		$	684		$	800		$	930
Net realized investment gains and losses					41		8		-		6		421			426			427			434
Operating income					153		122		115		126		131			258			373			496
Less catastrophe losses					(2)		(29)		(18)		(41)		(26)			(67)			(85)			(113)
Operating income before catastrophe losses				$	155	$	151	$	133	$	167	$	157		$	325		$	458		$	609

Diluted per share data
Net income				$	1.11	$	0.75	$	0.66	$	0.76	$	3.13		$	3.90		$	4.56		$	5.30
Net realized investment gains and losses					0.23		0.05		-		0.04		2.39			2.43			2.43			2.48
Operating income					0.88		0.70		0.66		0.72		0.74			1.47			2.13			2.82
Less catastrophe losses					(0.01)		(0.16)		(0.10)		(0.24)		(0.14)			(0.38)			(0.48)			(0.65)
Operating income before catastrophe losses				$	0.89	$	0.86	$	0.76	$	0.96	$	0.88		$	1.85	$	$	2.61		$	3.47

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
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Premiums
Adjusted written premiums (statutory)				$	811		$	785		$	787		$	804		$	796			$	1,600			$	2,387			$	3,172
Written premium adjustment – statutory only					35			(30)			(7)			10			33				43				36				6
Reported written premiums (statutory)*				$	846		$	755		$	780		$	814		$	829			$	1,643			$	2,423			$	3,178
Unearned premiums change					(61)			47			11			(21)			(51)				(72)				(60)				(14)
Earned premiums				$	785		$	802		$	791		$	793		$	778			$	1,571			$	2,363			$	3,164
																									;
Statutory combined ratio
Statutory combined ratio					87.7	%		95.9	%		96.4	%		93.7	%		89.6	%			91.7	%			93.2	%			93.9	%
Less catastrophe losses					0.4			5.5			3.5			8.0			5.0				6.5				5.5				4.1
Statutory combined ratio excluding catastrophe losses					87.3	%		90.4	%		92.9	%		85.7	%		84.6	%			85.2	%			87.7	%			89.8	%

Commission expense ratio					18.0	%		19.9	%		19.3	%		17.6	%		18.2	%			17.9	%			18.3	%			18.7	%
Other expense ratio					11.4	%		13.4	%		11.9	%		10.8	%		10.8	%			10.8	%			11.2	%			11.7	%
Statutory expense ratio					29.4	%		33.3	%		31.2	%		28.4	%		29.0	%			28.7	%			29.5	%			30.4	%

GAAP combined ratio
GAAP combined ratio					89.6	%		94.5	%		96.1	%		94.5	%		92.0	%			93.3	%			94.2	%			94.3	%
																									&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.
*nm – Not meaningful
*Statutory data prepared in accordance with statutory accounting rules ad 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
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Premiums
Adjusted written premiums (statutory)				$	658		$	618		$	589		$	593		$	635			$	1,228			$	1,817			$	2,435
Written premium adjustment -- statutory only					35			(29)			(7)			10			33				43				36				7
Reported written premiums (statutory)*				$	693		$	589		$	582		$	603		$	668			$	1,271			$	1,853			$	2,442
Unearned premiums change					(89)			30			20			(4)			(86)				(90)				(69)				(40)
Earned premiums				$	604		$	619		$	602		$	599		$	582			$	1,181			$	1,784			$	2,402

Statutory combined ratio
Statutory combined ratio					86.5	%		92.4	%		94.1	%		89.6	%		87.5	%			88.6	%			90.3	%			90.8	%
Less catastrophe losses					1.8			1.9			2.3			5.6			5.1				5.3				4.3				3.7
Statutory combined ratio excluding catastrophe losses					84.7	%		90.5	%		91.8	%		84.0	%		82.4	%			83.3	%			86.0	%			87.1	%
																		&nb sp;
GAAP combined ratio
GAAP combined ratio					88.9	%		91.1	%		93.4	%		90.3	%		90.5	%			90.4	%			91.4	%			91.3	%

*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 ad 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
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Premiums
Adjusted written premiums (statutory)				$	153		$	167		$	198		$	211		$	161			$	372			$	570			$	737
Written premium adjustment -- statutory only					-			(1)			-			-			-				-				-				(1)
Reported written premiums (statutory)*				$	153		$	166		$	198		$	211		$	161			$	372			$	570			$	736
Unearned premiums change					28			17			(9)			(17)			35				18				9				26
Earned premiums				$	181		$	183		$	189		$	194		$	196			$	390			$	579			$	762

Statutory combined ratio
Statutory combined ratio					93.5	%		107.7	%		104.0	%		106.4	%		98.1	%			101.6	%			102.3	%			103.6	%
Less catastrophe losses					(4.1)			17.9			7.1			15.6			5.0				10.3				9.2				11.3
Statutory combined ratio excluding catastrophe losses					97.6	%		89.8	%		96.9	%		90.8	%		93.1	%			91.3	%			93.1	%			92.3	%

GAAP combined ratio
GAAP combined ratio					92.0	%		106.0	%		104.4	%		107.6	%		96.4	%			102.0	%			102.8	%			103.6	%

*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.
*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
March 31, 2007
First 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 May 2, 2007, 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 2006. The results of operations for interim periods should not be considered indicative of results to be expected for the full year. Certain 2006 interim period data has been updated to correct rounding differences.


	Supplemental Financial Data
	First Quarter 2007

		Page	Status
	Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures	3	5/2/2007

Consolidated
	Quick Reference	4	5/2/2007
	Consolidated Statements of Income	5	5/2/2007
	CFC and Subsidiary Consolidation – Three Months Ended March 31, 2007	6	5/2/2007
	CFC and Subsidiary Consolidation – Three Months Ended March 31, 2006	7	5/2/2007
	Consolidated Balance Sheets	8	5/2/2007
	10-Year Net Income Reconciliation	9	5/2/2007
	Quarterly Net Income Reconciliation	10	5/2/2007
	Top Holdings -- Common Stocks	11	5/2/2007

Property Casualty Insurance Operations
	GAAP Statements of Income	12	5/2/2007
	Statutory Statements of Income	13	5/2/2007
	Statutory Quarterly Analysis – Consolidated	14	5/2/2007
	Statutory Quarterly Analysis – Commercial Lines	15	5/2/2007
	Statutory Quarterly Analysis – Personal Lines	16	5/2/2007
	Direct Written Premiums by Line of Business and State	17	5/2/2007
	Quarterly Property Casualty Data – Commercial Lines of Business	18	5/2/2007
	Quarterly Property Casualty Data – Personal Lines of Business	19	5/2/2007

Reconciliation Data
	10-Year Property Casualty Data – Consolidated	20	5/2/2007
	6-Year Property Casualty Data – Commercial Lines	21	5/2/2007
	6-Year Property Casualty Data – Personal Lines	22	5/2/2007
	Quarterly Property Casualty Data – Consolidated	23	5/2/2007
	Quarterly Property Casualty Data – Commercial Lines	24	5/2/2007
	Quarterly Property Casualty Data – Personal Lines	25	5/2/2007

Life Insurance Operations
	GAAP Statements of Income	26	5/2/2007
	Statutory Statements of Income	27	5/2/2007
	Expenses as a Percentage of Premium	28	5/2/2007

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

Cincinnati Financial Corporation prepares its public consolidated 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.

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, w hile it may be material, may not fully indicate the performance of ongoing underlying business operations in that period.

Statutory accounting rules: For public reporting, insurance companies prepare consolidated 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.

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 a $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.

○

2007 First-Quarter Supplement


Cincinnati Financial Corporation
Quick Reference - First Quarter 2007
(all data shown is for the three months ended or as of March 31, 2007)
(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	$	693		Commercial lines loss and loss expenses	$	354
Year-over-year percentage change		3.8	%	Year-over-year percentage change		0.0	%
Personal lines net written premiums	$	153		Personal lines loss and loss expenses	$	104
Year-over-year percentage change		(5.1)	%	Year-over-year percentage change		(12.0)	%
Property casualty net written premiums	$	846		Property casualty loss and loss expenses	$	458
Year-over-year percentage change		2.1	%	Year-over-year percentage change		(3.0)	%
Commercial lines net earned premiums	$	604		Life and accident and health losses and policy benefits	$	27
Year-over-year percentage change		3.7	%	Year-over-year percentage change		(9.8)	%
Personal lines net earned premiums	$	181		Operating expenses	$	262
Year-over-year percentage change		(7.6)	%	Year-over-year percentage change		1.4	%
Property casualty net earned premiums	$	785		Interest expenses	$	13
Year-over-year percentage change		0.8	%	Year-over-year percentage change		2.0	%
Life and accident and health net earned premiums	$	30		Total expenses	$	760
Year-over-year percentage change		15.7	%	Year-over-year percentage change		(1.7)	%
Investment income	$	148		Income before income taxes	$	271
Year-over-year percentage change		7.1	%	Year-over-year percentage change		(67.5)	%
Realized gains on investments	$	62		Total income tax	$	77
Year-over-year percentage change		(90.6)	%	Year-over-year percentage change		(72.7)	%
Other income	$	6		Effective tax rate		28.4	%
Year-over-year percentage change		32.4	%
Total revenues	$	1,031		Ratios:
Year-over-year percentage change		(35.9)	%
				Commercial lines GAAP combined ratio		88.9	%
Income:				Personal lines GAAP combined ratio		92.0	%
				Property casualty GAAP combined ratio		89.6	%
Operating income	$	153
Year-over-year percentage change		16.4	%	Commercial lines STAT combined ratio		86.5	%
Net realized investment gains and losses	$	41		Personal lines STAT combined ratio		93.5	%
Year-over-year percentage change		(90.2)	%	Property casualty STAT combined ratio		87.7	%
Net income	$	194
Year-over-year percentage change		(64.8)	%	Return on equity based upon net income		11.5	%
				Return on equity based upon operating income		9.1	%
Per share (diluted):
				Balance Sheet:
Operating income	$	0.88
Year-over-year percentage change		18.9	%	Fixed maturity investments	$	5,864
Net realized investment gains and losses	$	0.23		Equity securities		7,687
Year-over-year percentage change		(90.4)	%	Short-term investments		19
Net income	$	1.11		Other invested assets		71
Year-over-year percentage change		(64.5)	%	Total invested assets	$	13,641
Book value	$	39.08
Year-over-year percentage change		9.0	%	Property casualty and life loss and loss expense reserves	$	3,928
Weighted average shares -- diluted		174,274,157		Total debt		840
Year-over-year percentage change		(1.1)	%	Shareholders equity		6,708

2007 First-Quarter Supplement


Cincinnati Financial Corporation
Consolidated Statements of Income
		For the Three Months Ended March 31,
		2007		2006		Change	% Change
Revenues:
Premiums earned:
Property casualty	$	827,290,658	$	816,042,728	$	11,247,930	1.38
Life		38,946,474		34,874,544		4,071,930	11.68
Accident health		1,758,851		1,733,897		24,954	1.44
Premiums ceded		(53,348,919)		(48,610,706)		(4,738,213)	9.75
Total premiums earned		814,647,064		804,040,463		10,606,601	1.32
Investment income		148,394,366		138,533,053		9,861,313	7.12
Realized gain on investments		62,178,232		660,230,900		(598,052,668)	(90.58)
Other income		5,688,868		4,297,510		1,391,358	32.38
Total revenues	$	1,030,908,530	$	1,607,101,926	$	(576,193,396)	(35.85)
Benefits & expenses:
Losses & policy benefits	$	515,031,815	$	523,561,864	$	(8,530,049)	(1.63)
Reinsurance recoveries		(30,808,929)		(22,275,639)		(8,533,290)	38.31
Commissions		170,152,772		165,724,962		4,427,810	2.67
Other operating expenses		84,040,679		80,153,365		3,887,314	4.85
Interest expense		13,092,923		12,840,294		252,629	1.97
Taxes, licenses & fees		19,942,931		24,265,452		(4,322,521)	(17.81)
Incr deferred acq expense		(15,654,691)		(14,459,113)		(1,195,578)	8.27
Other expenses		4,163,281		3,332,207		831,074	24.94
Total expenses	$	759,960,781	$	773,143,392	$	(13,182,611)	(1.71)
Income before income taxes	$	270,947,749	$	833,958,534	$	(563,010,785)	(67.51)
Provision for income taxes:
Current operating income	$	55,525,989	$	52,521,171	$	3,004,818	5.72
Realized investments gains and losses		21,059,042		239,649,184		(218,590,142)	(91.21)
Deferred		234,546		(10,198,514)		10,433,060	(102.30)
Total income taxes	$	76,819,577	$	281,971,841	$	(205,152,264)	(72.76)
Net income	$	194,128,172	$	551,986,693	$	(357,858,521)	(64.83)
Comprehensive net income	$	12,947,899	$	240,437,206	$	(227,489,307)	(94.61)
Operating income	$	153,008,982	$	131,404,977	$	21,604,005	16.44
Net realized investments gains and losses	$	41,119,190	$	420,581,716	$	(379,462,526)	(90.22)
Net income per share:
Operating income	$	0.88	$	0.75	$	0.13	17.33
Net realized investments gains and losses		0.24		2.42		(2.18)	(90.08)
Net income per share (basic)	$	1.12	$	3.17	$	(2.05)	(64.67)
Operating income	$	0.88	$	0.74	$	0.14	18.92
Net realized investments gains and losses		0.23		2.39		(2.16)	(90.38)
Net income per share (diluted)	$	1.11	$	3.13	$	(2.02)	(64.54)
Dividends per share:
Paid	$	0.335	$	0.305	$	0.03	9.84
Declared		0.355		0.335		0.02	5.97
Number of shares:
Weighted avg - basic		172,648,988		174,178,090		(1,529,102)	(0.88)
Weighted avg - diluted		174,274,157		176,127,404		(1,853,247)	(1.05)

2007 First-Quarter Supplement


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Three Months Ended March 31, 2007

		Total		CFC		CIC GROUP		CLIC		CFC-I		CINFIN		ELIM
Revenues:
Premiums earned:
Property casualty	$	827,290,658	$	-	$	827,572,247	$	-	$	-	$	-	$	(281,589)
Life		38,946,474		-		-		38,946,474		-		-		-
Accident health		1,758,851		-		-		1,758,851		-		-		-
Premiums ceded		(53,348,919)		-		(43,062,577)		(10,286,342)		-		-		-
Total earned premium		814,647,064		-		784,509,670		30,418,983		-		-		(281,589)
Investment income		148,394,366		23,901,549		96,609,154		28,312,584		610		60,444		(489,975)
Realized gain on investments		62,178,232		20,568,924		29,908,765		8,144,413		-		(7,639)		3,563,769
Other income		5,688,868		2,414,799		1,587,659		1,365,571		2,767,261		623,172		(3,069,594)
Total revenues	$	1,030,908,530	$	46,885,272	$	912,615,248	$	68,241,551	$	2,767,871	$	675,977	$	(277,389)

Benefits & expenses:
Losses & policy benefits	$	515,031,815	$	-	$	478,692,221	$	36,890,212	$	-	$	-	$	(550,618)
Reinsurance recoveries		(30,808,929)		-		(21,156,004)		(9,652,925)		-		-		-
Commissions		170,152,772		-		161,213,497		8,939,275		-		-		-
Other operating expenses		84,040,679		5,184,101		73,340,516		7,485,553		959,996		250,608		(3,180,095)
Interest expense		13,092,923		12,359,761		-		-		744,031		-		(10,869)
Taxes, licenses & fees		19,942,931		306,756		18,655,793		946,862		18,075		15,445		-
Incr deferred acq expenses		(15,654,691)		-		(11,718,254)		(3,936,437)		-		-		-
Other expenses		4,163,281		-		4,163,217		64		-		-		-
Total expenses	$	759,960,781	$	17,850,618	$	703,190,986	$	40,672,604	$	1,722,102	$	266,053	$	(3,741,582)

Income before income taxes	$	270,947,749	$	29,034,654	$	209,424,262	$	27,568,947	$	1,045,769	$	409,924	$	3,464,193

Provision for income taxes:
Current operating income	$	55,525,989	$	1,638,528	$	50,616,959	$	2,700,754	$	417,915	$	151,833	$	-
Capital gains/losses		21,059,042		7,554,673		10,633,068		2,870,544		-		757		-
Deferred		234,546		710,111		(5,755,376)		4,059,429		11,579		(3,665)		1,212,468
Total income tax	$	76,819,577	$	9,903,312	$	55,494,651	$	9,630,727	$	429,494	$	148,925	$	1,212,468

Net income - current year	$	194,128,172	$	19,131,342	$	153,929,611	$	17,938,220	$	616,275	$	260,999	$	2,251,725

Net income - prior year	$	551,986,693	$	269,706,489	$	245,881,648	$	35,063,666	$	319,315	$	325,708	$	689,867

Change in net income		-64.8%		-92.9%		-37.4%		-48.8%		93.0%		-19.9%

2007 First-Quarter Supplement


Cincinnati Financial Corporation and Subsidiaries
Consolidated Statements of Income for the Three Months Ended March 31, 2006

	Total		CFC		CIC GROUP		CLIC		CFC-I		CINFIN		ELIM
Revenues:
Premiums earned:
Property casualty	$	816,042,728	$	-	$	816,236,753	$	-	$	-	$	-	$	(194,025)
Life		34,874,544		-		-		34,874,544		-		-		-
Accident health		1,733,897		-		-		1,733,897		-		-		-
Premiums ceded		852,651,169		-		816,236,753		36,608,441		-		-		(194,025)
Total earned premium		804,040,463		-		777,946,657		26,287,831		-		-		(194,025)
Investment income		138,533,053		23,676,422		89,315,960		26,275,186		-		44,602		(779,117)
Realized gain on investments		660,230,900		410,816,802		206,169,965		42,334,256		-		339		909,538
Other income		4,297,510		2,488,780		665,946		746,054		2,797,693		576,426		(2,977,389)
Total revenues	$	1,607,101,926	$	436,982,004	$	1,074,098,528	$	95,643,327	$	2,797,693	$	621,367	$	(3,040,993)

Benefits & expenses:
Losses & policy benefits	$	524,355,214	$	-	$	494,777,921	$	30,127,971	$	-	$	-	$	(550,678)
Reinsurance recoveries		(23,068,989)		-		(23,140,637)		71,648		-		-		-
Commissions		165,724,962		-		157,318,046		8,406,916		-		-		-
Other operating expenses		80,153,365		5,317,550		69,594,847		6,142,293		1,991,705		122,837		(3,015,867)
Interest expense		12,840,294		12,840,294		-		-		535,782		-		(535,782)
Taxes, licenses & fees		24,265,452		247,926		23,462,757		830,409		(287,529)		11,889		-
Incr deferred acq expenses		(14,459,113)		-		(9,516,708)		(4,942,405)		-		-		-
Other expenses		3,332,207		-		3,332,143		64		-		-		-
Total expenses	$	773,143,392	$	18,405,770	$	715,828,369	$	40,636,896	$	2,239,958	$	134,726	$	(4,102,327)

Income before income taxes	$	833,958,534	$	418,576,234	$	358,270,159	$	55,006,431	$	557,735	$	486,641	$	1,061,334

Provision for income taxes:
Current operating income	$	52,521,171	$	1,110,956	$	48,910,938	$	2,133,775	$	204,800	$	160,702	$	-
Capital gains/losses		239,649,184		152,547,228		72,285,085		14,816,990		-		(119)		-
Deferred		(10,198,514)		(4,788,439)		(8,807,512)		2,992,000		33,620		350		371,467
Total income tax	$	281,971,841	$	148,869,745	$	112,388,511	$	19,942,765	$	238,420	$	160,933	$	371,467

Net income - current year	$	551,986,693	$	269,706,489	$	245,881,648	$	35,063,666	$	319,315	$	325,708	$	689,867

Net income - prior year	$	144,356,404	$	8,460,899	$	123,801,916	$	10,414,582	$	847,765	$	282,744	$	548,498

Change in net income		282.4%		3087.7%		98.6%		236.7%		-62.3%		15.2%

2007 First-Quarter Supplement


Cincinnati Financial Corporation
Consolidated Balance Sheets

(Dollars in millions except per share data)	March 31,	December 31,
	2007	2006
	(unaudited)
Assets
Investments
Fixed maturities, at fair value (amortized cost: 2007—$5,785; 2006—$5,739)	$ 5,864	$ 5,805
Equity securities, at fair value (cost: 2007—$2,802; 2006—$2,621)	7,687	7,799
Short-term investments, at fair value (amortized cost: 2007—$19; 2006—$95)	19	95
Other invested assets	71	60
Total investments	13,641	13,759

Cash and cash equivalents	197	202
Securities lending collateral	984	-
Investment income receivable	117	121
Finance receivable	103	108
Premiums receivable	1,173	1,128
Reinsurance receivable	727	683
Prepaid reinsurance premiums	12	13
Deferred policy acquisition costs	467	453
Property and equipment, net, for company use (accumulated depreciation: 2007—$268; 2006—$261)	204	193
Other assets	85	58
Separate accounts	511	504
Total assets	$ 18,221	$ 17,222

Liabilities
Insurance reserves
Losses and loss expense	$ 3,928	$ 3,896
Life policy reserves	1,427	1,409
Unearned premiums	1,640	1,579
Securities lending payable	984	-
Other liabilities	652	533
Deferred income tax	1,531	1,653
Notes payable	49	49
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	511	504
Total liabilities	11,513	10,414

Shareholders' equity
Common stock, par value-$2 per share; authorized: 2007-500 million shares, 2006- 500 million shares; issued: 2007-196 million shares, 2006-196 million shares	392	391
Paid-in capital	1,027	1,015
Retained earnings	2,923	2,786
Accumulated other comprehensive income	3,193	3,379
Treasury stock at cost (2007—24 million shares, 2006—23 million shares)	(827)	(763)
Total shareholders' equity	6,708	6,808
Total liabilities and shareholders' equity	$ 18,221	$ 17,222

2007 First-Quarter Supplement


Cincinnati Financial Corporation
10-Year Net Income Reconciliation

(Dollars in millions except per share data)	Years ended December 31,
	2006			2005			2004			2003			2002			2001			2000			1999			1998			1997

Net income	$	930		$	602		$	584		$	374		$	238		$	193		$	118		$	255		$	242		$	299
One-time item		-			-			-			15			-			-			(25)			-			-			-
Net income before one-time item		930			602			584			389			238			193			93			255			242			299
Net realized investment gains and losses		434			40			60			(27)			(62)			(17)			(2)			-			43			45
Operating income before one-time item		496			562			524			416			300			210			95			255			199			254
Less catastrophe losses		(113)			(82)			(96)			(63)			(57)			(42)			(33)			(24)			(61)			(17)
Operating income before catastrophe losses and one-time item	$	609		$	644		$	620		$	479		$	357		$	252		$	128		$	279		$	260		$	271

Diluted per share data
Net income	$	5.30		$	3.40		$	3.28		$	2.10		$	1.32		$	1.07		$	0.67		$	1.37		$	1.28		$	1.61
One-time item		-			-			-			0.09			-			-			(0.14)			-			-			-
Net income before one-time item		5.30			3.40			3.28			2.01			1.32			1.07			0.81			1.37			1.28			1.61
Net realized investment gains and losses		2.48			0.23			0.34			(0.15)			(0.35)			(0.10)			(0.01)			-			0.23			0.26
Operating income before one-time item		2.82			3.17			2.94			2.16			1.67			1.17			0.82			1.37			1.05			1.35
Less catastrophe losses		(0.65)			(0.46)			(0.54)			(0.35)			(0.31)			(0.23)			(0.18)			(0.13)			(0.32)			(0.13)
Operating income before catastrophe losses and one-time item	$	3.47		$	3.63		$	3.48		$	2.51		$	1.98		$	1.40		$	1.00		$	1.50		$	1.37		$	1.48

Return on equity
Return on average equity		14.4	%		9.8	%		9.4	%		6.3	%		4.1	%		3.2	%		2.1	%		4.6	%		4.7	%		7.6	%
One-time item		-			-			-			(0.3)			-			-			0.4			-			-			-
Return on average equity before one-time item		14.4	%		9.8	%		9.4	%		6.0	%		4.1	%		3.2	%		2.5	%		4.6	%		4.7	%		7.6	%

Return on equity based on comprehensive income
ROE based on comprehensive income		16.4	%		1.6	%		4.6	%		13.8	%		(4.0)	%		2.5	%		13.1	%		1.9	%		19.6	%		42.6	%
One-time item		-			-			-			(0.3)			-			-			0.4			-			-			-
ROE based on comprehensive income before one-time item		16.4	%		1.6	%		4.6	%		13.5	%		(4.0)	%		2.5	%		13.5	%		1.9	%		19.6	%		42.6	%

Investment income
Investment income, net of expenses	$	570		$	526		$	492		$	465		$	445		$	421		$	415		$	387		$	368		$	349
BOLI		-			-			-			-			-			-			(5)			-			-			-
Investment income before BOLI	$	570		$	526		$	492		$	465		$	445		$	421		$	410		$	387		$	368		$	349

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

2007 First-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
	12/31/07	9/30/07	6/30/07	3/31/07		12/31/06		9/30/06		6/30/06		3/31/06		6/30/07	6/30/06		9/30/07	9/30/06		12/31/07	12/31/06

Net income				$	194	$	130	$	115	$	132	$	552		$	684		$	800		$	930
Net realized investment gains and losses					41		8		-		6		421			426			427			434
Operating income					153		122		115		126		131			258			373			496
Less catastrophe losses					(2)		(29)		(18)		(41)		(26)			(67)			(85)			(113)
Operating income before catastrophe losses				$	155	$	151	$	133	$	167	$	157		$	325		$	458		$	609

Diluted per share data
Net income				$	1.11	$	0.75	$	0.66	$	0.76	$	3.13		$	3.90		$	4.56		$	5.30
Net realized investment gains and losses					0.23		0.05		-		0.04		2.39			2.43			2.43			2.48
Operating income					0.88		0.70		0.66		0.72		0.74			1.47			2.13			2.82
Less catastrophe losses					(0.01)		(0.16)		(0.10)		(0.24)		(0.14)			(0.38)			(0.48)			(0.65)
Operating income before catastrophe losses				$	0.89	$	0.86	$	0.76	$	0.96	$	0.88		$	1.85	$	$	2.61		$	3.47

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.

2007 First-Quarter Supplement


Cincinnati Financial Corporation
Top Holdings – Common Stocks

(Dollars in millions)	As of and for three months ended March 31, 2007
	Actual cost		Fair value		Percent of fair value		Earned dividend income


Fifth Third Bancorp	$	283	$	2,816	37.8	%	$	31
Exxon Mobil Corporation		112		621	8.3			3
The Procter & Gamble Company		203		472	6.3			2
National City Corporation		171		365	4.9			4
PNC Financial Services Group, Inc.		62		339	4.6			3
AllianceBernstein Holding L.P.		69		302	4.1			5
U.S. Bancorp		184		276	3.7			3
Johnson & Johnson		218		241	3.2			1
Wyeth		62		222	3.0			1
Wells Fargo & Company		103		194	2.6			2
Piedmont Natural Gas Company, Inc.		64		149	2.0			1
Sky Financial Group, Inc.		91		125	1.7			1
Wachovia Corp		102		103	1.4			1
All other common stock holdings		845		1,223	16.4			9
Total	$	2,569	$	7,448	100.0	%	$	67

2007 First-Quarter Supplement


Cincinnati Insurance Group
GAAP Statements of Income

	For the Three Months Ended March 31,
		2007		2006		Change	% Change
Revenues:
Premiums earned:
Property casualty	$	827,572,247	$	816,236,753	$	11,335,494	1.39
Life		-		-		-	-
Accident health		-		-		-	-
Premiums ceded		(43,062,577)		(38,290,096)		(4,772,481)	12.46
Total premiums earned		784,509,670		777,946,657		6,563,013	0.84
Investment income		96,609,154		89,315,960		7,293,194	8.17
Realized gain on investments		29,908,765		206,169,965		(176,261,200)	(85.49)
Other income		1,587,659		665,946		921,713	138.41
Total revenues	$	912,615,248	$	1,074,098,528	$	(161,483,280)	(15.03)

Benefits & expenses:
Losses & policy benefits	$	478,692,221	$	494,777,921	$	(16,085,700)	(3.25)
Reinsurance recoveries		(21,156,004)		(23,140,637)		1,984,633	(8.58)
Commissions		161,213,497		157,318,046		3,895,451	2.48
Other operating expenses		73,340,516		69,594,847		3,745,669	5.38
Interest expense		-		-		-	-
Taxes, licenses & fees		18,655,793		23,462,757		(4,806,964)	(20.49)
Incr deferred acq expense		(11,718,254)		(9,516,708)		(2,201,546)	23.13
Other expenses		4,163,217		3,332,143		831,074	24.94
Total expenses	$	703,190,986	$	715,828,369	$	(12,637,383)	(1.77)
Income before income taxes	$	209,424,262	$	358,270,159	$	(148,845,897)	(41.55)

Provision for income taxes:
Current operating income	$	50,616,959	$	48,910,938	$	1,706,021	3.49
Current realized investments gains and losses		10,633,068		72,285,085		(61,652,017)	(85.29)
Deferred		(5,755,376)		(8,807,512)		3,052,136	(34.65)
Total income taxes	$	55,494,651	$	112,388,511	$	(56,893,860)	(50.62)
	$		$		$
Net income		153,929,611		245,881,648		(91,952,037)	(37.40)

2007 First-Quarter Supplement


Cincinnati Insurance Group
Statutory Statements of Income

	For the Three Months Ended March 31,
	2007		2006		% Change
Underwriting income
Net premiums written	$	845,799,750	$	828,775,078	2.05
Unearned premiums increase		61,290,080		50,828,418	20.58
Earned premiums		784,509,670		777,946,660	0.84

Losses incurred		370,753,035		388,689,030	(4.61)
Allocated loss expenses incurred		39,076,308		33,233,518	17.58
Unallocated loss expenses incurred		47,706,874		49,714,738	(4.04)
Other underwriting expenses incurred		244,742,340		235,921,105	3.74
Workers compensation dividend incurred		3,649,164		3,917,858	(6.86)

Total underwriting deductions	$	705,927,721	$	711,476,249	(0.78)
Net underwriting gain (loss)		78,581,950		66,470,411	18.22

Investment income
Gross investment income earned		97,847,031		90,155,865	8.53
Net investment income earned		96,629,259		89,224,775	8.30
Net realized capital gains		19,559,182		134,243,729	(85.43)
Net investment gains (excl. subs)	$	116,188,441	$	223,468,504	(48.01)
Dividend from subsidiary		-		-	-
Net investment gains	$	116,188,441	$	223,468,504	(48.01)


Other income	$	1,516,535	$	509,014	197.94

Net income before federal income taxes	$	196,286,926	$	290,447,929	(32.42)
Federal and foreign income taxes incurred	$	49,751,322	$	48,138,557	3.35
Net income (statutory)	$	146,535,604	$	242,309,372	(39.53)
* 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.

2007 First-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
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Net premiums written				$	846		$	755		$	780		$	814		$	829			$	1,643			$	2,423				$	3,178
Net premiums earned				$	785		$	802		$	791		$	793		$	778			$	1,571			$	2,362				$	3,164
																		&nb sp;
Losses paid				$	365		$	375		$	366		$	379		$	345				727			$	1,094				$	1,469
Loss reserve change					6			4			66			60			42				101				167					172
Total losses incurred				$	371		$	379		$	432		$	439		$	387			$	828			$	1,261				$	1,641
Allocated loss expense paid					31			37			33			31			27				59				91					127
Allocated loss expense reserve change					8			35			8			7			6				13				20					56
Total allocated loss expense incurred				$	39		$	72		$	41		$	38		$	33			$	72			$	111				$	183
Unallocated loss expense paid					46			49			39			39			40				78				117					167
Unallocated loss expense reserve change					2			2			4			3			10				12				15					17
Total unallocated loss expense incurred				$	48		$	51		$	43		$	42		$	50			$	90			$	132				$	184
Underwriting expenses incurred					248			251			243			232			240				471				715					965
Underwriting profit (loss)				$	79		$	49		$	32		$	42		$	67			$	110			$	143				$	191

Loss Detail
Losses $1 million or more				$	50		$	63		$	61		$	46		$	32			$	79			$	139				$	203
Losses $250 thousand to $1 million					48			43			49			48			38				86				135					178
Development and case reserve increases of $250,000 or more					53			64			49			52			49				102				151					215
Large losses subtotal				$	151		$	170		$	159		$	146		$	119			$	267			$	425				$	596
IBNR incurred					7			(57)			11			(5)			6				1				11					(47)
Catastrophe losses incurred					3			44			27			64			39				103				131					175
Remaining incurred					210			222			235			234			223				457				694					917
Total losses incurred				$	371		$	379		$	432		$	439		$	387			$	828			$	1,261				$	1,641

Ratio Data
Loss ratio					47.2	%		47.2	%		54.8	%		55.4	%		49.9	%			52.7	%			53.4	%				51.9	%
Allocated loss expense ratio					5.0			9.0			5.0			4.8			4.3				4.6				4.7					5.8
Unallocated loss expense ratio					6.1			6.4			5.4			5.1			6.4				5.7				5.6					5.8
Net underwriting expense ratio					29.4			33.3			31.2			28.4			29.0				28.7				29.5					30.4
Statutory combined ratio					87.7	%		95.9	%		96.4	%		93.7	%		89.6	%			91.7	%			93.2	%				93.9	%
Statutory combined ratio excluding catastrophes					87.3	%		90.4	%		92.9	%		85.7	%		84.6	%			85.1	%			87.7	%				88.4	%

Loss Ratio
Losses $1 million or more					6.4	%		7.9	%		7.6	%		6.0	%		4.2	%			5.1	%			5.9	%				6.4	%
Losses $250 thousand to $1 million					6.0			5.3			6.2			6.0			4.9				5.5				5.7					5.6
Development and case reserve increases of $250,000 or more					6.8			8.0			6.3			7.4			6.3				6.9				6.4					6.8
Large losses subtotal					19.2	%		21.2	%		20.1	%		19.4	%		15.4	%			17.5	%			18.0	%				18.8	%
IBNR incurred					1.0			(7.2)			1.3			1.3			0.8				1.1				0.5					(1.4)
Total catastrophe losses incurred					0.4			5.5			3.5			8.0			5.0				6.5				5.5					5.5
Remaining incurred					26.6			27.7			29.9			26.7			28.7				27.6				29.4					29.0
Total loss ratio					47.2	%		47.2	%		54.8	%		55.4	%		49.9	%			52.7	%			53.4	%				51.9	%

Loss Claim Count
Losses $1 million or more					28			33			32			26			14				40				72					105
Losses $250 thousand to $1 million					108			97			103			88			95				183				286					383
Development and case reserve increases of $250,000 or more					93			94			104			85			85				170				274					368
Large losses total					229			224			239			199			194				393				632					856
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.

2007 First-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
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Net premiums written				$	693		$	589		$	582		$	603		$	668			$	1,271			$	1,853				$	2,442
Net premiums earned				$	604		$	619		$	602		$	599		$	582			$	1,181			$	1,783				$	2,402

Losses paid				$	260		$	256		$	247		$	251		$	233			$	485			$	732				$	988
Loss reserve change					23			5			63			53			53				105				168					174
Total losses incurred				$	283		$	261		$	310		$	304		$	286			$	590			$	900				$	1,162
Allocated loss expense paid					28			33			30			28			24				52				81					114
Allocated loss expense reserve change					8			37			7			6			5				12				19					56
Total allocated loss expense incurred				$	36		$	70		$	37		$	34		$	29			$	64			$	100				$	170
Unallocated loss expense paid					32			34			27			27			28				54				81					116
Unallocated loss expense reserve change					3			3			3			3			10				13				15					18
Total unallocated loss expense incurred				$	35		$	37		$	30		$	30		$	38			$	67			$	96				$	134
Underwriting expenses incurred					193			194			185			172			179				349				536					727
Underwriting profit (loss)				$	57		$	57		$	40		$	59		$	50			$	111			$	151				$	209
																									;
Loss Detail
Losses $1 million or more				$	45		$	59		$	51		$	40		$	30			$	70			$	121				$	180
Losses $250 thousand to $1 million					38			35			37			39			28				67				104					139
Development and case reserve increases of $250,000 or more					49			58			45			45			44				90				135					193
Large losses subtotal				$	132		$	152		$	133		$	124		$	102			$	227			$	360				$	512
IBNR incurred					7			(45)			10			(6)			6				-				10					(36)
Catastrophe losses incurred					10			11			14			34			29				63				77					89
Remaining incurred					134			143			153			152			149				300				453					597
Total losses incurred				$	283		$	261		$	310		$	304		$	286			$	590			$	900				$	1,162
																									;
Ratio Data
Loss ratio					46.8	%		42.2	%		51.5	%		50.7	%		49.2	%			50.0	%			50.5	%				48.4	%
Allocated loss expense ratio					5.9			11.3			6.0			5.7			5.1				5.4				5.6					7.1
Unallocated loss expense ratio					6.0			6.0			5.0			4.9			6.5				5.7				5.4					5.5
Net underwriting expense ratio					27.8			32.9			31.6			28.3			26.7				27.5				28.8					29.8
Statutory combined ratio					86.5	%		92.4	%		94.1	%		89.6	%		86.5	%			88.6	%			90.3	%				90.8	%
Statutory combined ratio excluding catastrophes					84.7	%		90.5	%		91.7	%		84.0	%		82.4	%			83.3	%			86.0	%				87.1	%
																									;
Loss Ratio
Losses $1 million or more					7.4	%		9.6	%		8.5	%		6.6	%		5.2	%			5.9	%			6.8	%				7.5	%
Losses $250 thousand to $1 million					6.2			5.6			6.1			6.5			4.8				5.7				5.8					5.8
Development and case reserve increases of $250,000 or more					8.2			9.4			7.5			7.6			7.6				7.6				7.6					8.0
Large losses subtotal					21.8	%		24.6	%		22.1	%		20.7	%		17.6	%			19.2	%			20.2	%				21.3	%
IBNR incurred					1.2			(7.3)			1.7			(1.0)			1.0				-				0.6					(1.5)
Total catastrophe losses incurred					1.8			1.9			2.3			5.6			5.1				5.3				4.3					3.7
Remaining incurred					22.0			23.0			25.4			25.4			25.5				25.5				25.4					24.9
Total loss ratio					46.8	%		42.2	%		51.5	%		50.7	%		49.2	%			50.0	%			50.5	%				48.4	%
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 regulatory bodies.

2007 First-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
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Net premiums written				$	153		$	166		$	198		$	211		$	161			$	372			$	570			$	736
Net premiums earned				$	181		$	183		$	189		$	194		$	196			$	390			$	579			$	762

Losses paid				$	105		$	119		$	119		$	128		$	112			$	242			$	362			$	481
Loss reserve change					(17)			(1)			3			7			(11)				(4)				(1)				(2)
Total losses incurred				$	88		$	118		$	122		$	135		$	101			$	238			$	361			$	479
Allocated loss expense paid					3			4			3			3			4				7				10				13
Allocated loss expense reserve change					-			(2)			1			1			1				1				1				-
Total allocated loss expense incurred				$	3		$	2		$	4		$	4		$	5			$	8			$	11			$	13
Unallocated loss expense paid					14			15			12			12			12				24				36				51
Unallocated loss expense reserve change					(1)			(1)			1			-			-				(1)				-				(1)
Total unallocated loss expense incurred				$	13		$	14		$	13		$	12		$	12			$	23			$	36			$	50
Underwriting expenses incurred					55			57			58			60			61				122				179				238
Underwriting profit (loss)				$	22		$	(8)		$	(8)		$	(17)		$	17			$	(1)			$	(8)			$	(18)
																									< /TD>
Loss Detail
Losses $1 million or more				$	5		$	4		$	10		$	6		$	2			$	9			$	18			$	23
Losses $250 thousand to $1 million					10			8			12			9			10				19				31				39
Development and case reserve increases of $250,000 or more					4			6			4			7			5				12				16				22
Large losses subtotal				$	19		$	18		$	26		$	22		$	17			$	40			$	65			$	84
IBNR incurred					-			(12)			1			1			-				1				1				(11)
Catastrophe losses incurred					(7)			33			13			30			10				40				54				86
Remaining incurred					76			79			82			82			74				157				241				320
Total losses incurred				$	88		$	118		$	122		$	135		$	101			$	238			$	361			$	479
																									< /TD>
Ratio Data
Loss ratio					48.9	%		64.4	%		65.1	%		70.0	%		52.2	%			61.1	%			62.4	%			62.9	%
Allocated loss expense ratio					1.8			1.2			1.9			2.1			1.7				1.9				2.0				1.7
Unallocated loss expense ratio					6.6			7.8			6.6			5.8			6.2				6.0				6.1				6.6
Net underwriting expense ratio					36.2			34.3			30.4			28.5			38.0				32.6				31.8				32.4
Statutory combined ratio					93.5	%		107.7	%		104.0	%		106.4	%		98.1	%			101.6	%			102.3	%			103.6	%
Statutory combined ratio excluding catastrophes					97.6	%		89.8	%		96.9	%		90.8	%		93.1	%			91.3	%			93.1	%			92.3	%
																									< /TD>
Loss Ratio
Losses $1 million or more					3.0	%		2.2	%		5.0	%		3.5	%		1.2	%			2.3	%			3.2	%			3.0	%
Losses $250 thousand to $1 million					5.4			4.5			6.4			4.4			5.3				4.9				5.4				5.2
Development and case reserve increases of $250,000 or more					2.2			3.4			2.1			3.5			2.7				3.1				2.8				2.9
Large losses subtotal					10.6	%		10.1	%		13.5	%		11.4	%		9.2	%			10.3	%			11.4	%			11.1	%
IBNR incurred					-			(6.8)			0.1			0.7			-				0.3				0.3				(1.5)
Total catastrophe losses incurred					(4.1)			17.9			7.1			15.6			5.0				10.3				9.2				11.3
Remaining incurred					42.4			43.2			44.4			42.3			38.0				40.2				41.5				42.0
Total loss ratio					48.9	%		64.4	%		65.1	%		70.0	%		52.2	%			61.1	%			62.4	%			62.9	%
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.

2007 First-Quarter Supplement


Cincinnati Insurance Group
Direct Written Premiums by Risk State by Line of Business for the Three Months Ended March 31, 2007
(Dollars in millions)
																					3/31/2007		3/31/2006
	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	$	5.6	$	4.5	$	2.3	$	0.4	$	2.0	$	0.5	$	0.1	$	3.4	$	4.8	$	1.0	$	24.5	$	21.7	12.7
AZ		3.9		1.8		2.3		0.1		0.3		0.1		0.1		0.0		0.0		0.0		8.7		8.0	7.7
AR		2.7		2.0		1.5		1.7		1.2		0.5		0.1		0.6		0.7		0.2		11.3		12.4	(9.5)
DE		0.2		0.2		0.1		0.7		0.0		0.0		0.0		0.0		0.0		0.0		1.4		0.6	94.0
FL		11.0		7.2		3.5		0.6		1.0		0.5		0.2		3.2		7.3		1.0		35.6		29.4	21.3
GA		8.0		5.1		5.7		3.5		1.9		1.7		0.2		7.1		5.8		1.5		40.5		39.4	2.8
ID		2.4		0.9		1.4		0.0		0.3		0.4		0.1		0.0		0.0		0.0		5.6		4.1	29.5
IL		23.4		13.2		10.1		17.2		3.6		1.8		0.7		5.1		3.9		1.5		80.5		80.8	(0.4)
IN		16.8		11.5		8.5		9.6		2.2		1.6		0.7		5.7		5.2		1.4		63.3		63.2	(0.1)
IA		6.5		3.5		2.6		7.2		1.3		0.7		0.3		0.9		0.9		0.4		24.3		23.5	2.7
KS		2.7		2.7		1.2		2.3		0.9		0.4		0.1		1.0		1.2		0.3		12.8		11.7	10.5
KY		5.9		5.4		4.1		0.9		1.3		0.7		0.2		4.1		3.1		0.9		26.5		25.5	3.8
MD		4.1		1.6		3.2		2.8		0.3		0.5		0.1		0.0		0.3		0.1		13.0		10.6	23.3
MI		10.6		6.7		5.0		5.6		3.3		1.4		0.4		3.0		3.0		0.7		39.9		43.5	(8.3)
MN		8.1		5.0		3.3		2.8		1.4		0.7		0.3		1.5		1.3		0.9		25.3		23.2	8.7
MO		8.2		5.4		3.3		5.1		1.6		0.4		0.3		0.6		1.0		0.2		26.1		24.4	7.0
MT		3.9		1.9		2.0		0.1		0.3		0.1		0.1		0.0		0.0		0.0		8.4		7.1	17.4
NE		2.0		1.5		0.8		2.1		0.5		0.4		0.1		0.2		0.3		0.1		8.0		9.7	(18.9)
NH		0.9		0.7		0.4		0.9		0.2		0.1		0.0		0.2		0.2		0.1		3.6		3.6	(0.3)
NY		7.7		1.6		2.2		0.9		0.3		1.0		0.1		0.0		0.0		0.0		13.8		11.2	23.1
NC		12.2		7.5		5.9		7.9		3.2		1.9		0.3		0.3		0.3		0.6		40.2		36.8	9.0
ND		1.4		1.0		0.7		0.0		0.2		0.2		0.0		0.1		0.1		0.0		3.9		3.7	0.7
OH		47.9		25.6		18.8		(0.4)		5.7		5.9		1.2		27.7		18.9		6.6		158.0		163.1	(3.1)
PA		14.3		8.2		8.5		15.9		2.6		1.8		0.5		1.7		1.2		0.8		55.6		55.0	1.0
SC		3.8		2.2		2.1		1.6		0.6		0.6		0.1		0.0		0.0		0.1		11.1		10.2	9.7
SD		1.2		0.7		0.7		1.6		0.1		0.2		0.0		0.0		0.0		0.0		4.7		4.2	9.2
TN		7.7		4.9		4.8		4.3		2.6		1.1		0.3		1.8		1.9		0.7		30.3		29.9	1.0
UT		2.9		1.1		1.3		0.1		0.1		0.5		0.1		0.0		0.0		0.0		6.1		4.1	46.8
VT		1.3		1.0		0.7		2.0		0.3		0.1		0.1		0.2		0.2		0.1		5.9		5.5	10.7
VA		10.7		8.0		7.7		8.0		1.3		1.1		0.3		2.1		1.6		0.6		41.4		40.3	2.7
WV		2.8		1.8		1.7		0.0		0.6		0.2		0.1		0.0		0.2		0.1		7.5		7.2	5.7
WI		9.3		5.0		3.3		9.6		1.3		0.7		0.4		2.0		1.5		0.7		33.8		36.7	7.4
All Other		2.6		1.1		1.2		1.4		0.0		0.3		0.0		0.0		0.1		0.0		6.8		6.0	22.8
Total Agency Direct	$	252.5	$	150.3	$	121.1	$	116.6	$	42.7	$	28.2	$	7.8	$	72.8	$	65.3	$	20.8	$	878.1	$	856.3	2.5
Other Direct		0.0		0.0		0.2		0.1		0.2		1.7		0.0		0.7		0.2		0.4		3.5		3.9	(11.7)
Total Direct	$	252.5	$	150.3	$	121.4	$	116.7	$	42.9	$	29.8	$	7.8	$	73.5	$	65.4	$	21.2	$	881.6	$	860.2	2.4

2007 First-Quarter Supplement


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

(Dollars in millions)	Three months ended																		Six months ended				Nine months ended				Twelve months ended
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Commercial Casualty
Written premiums				$	245		$	204		$	196		$	209		$	228			$	408			$	590			$	779
Earned premiums					209			219			207			208			197				373				564				759
Loss and loss expenses ratio					53.5	%		58.8	%		49.4	%		51.8	%		51.3	%			53.7	%			51.6	%			39.7	%
Less catastrophe loss ratio					-			-			-			-			-				-				-				-
Loss and loss expenses excluding catastrophe loss ratio					53.5	%		58.8	%		49.4	%		51.8	%		51.3	%			53.7	%			51.6	%			39.7	%

Commercial property:
Written premiums				$	138		$	124		$	126		$	122		$	134			$	261			$	382			$	502
Earned premiums					123			123			123			123			121				247				366				493
Loss and loss expenses ratio					53.6	%		47.0	%		54.9	%		55.8	%		72.6	%			53.6	%			65.6	%			62.0	%
Less catastrophe loss ratio					6.9			7.1			9.9			15.9			22.7				2.5				15.3				14.1
Loss and loss expenses excluding catastrophe loss ratio					46.7	%		39.9	%		45.0	%		39.9	%		49.9	%			51.1	%			50.3	%			47.9	%

Commercial auto:
Written premiums				$	124		$	105		$	105		$	115		$	126			$	233			$	341			$	448
Earned premiums					113			116			113			112			112				226				340				457
Loss and loss expenses ratio					64.6	%		58.5	%		72.8	%		57.0	%		57.7	%			59.0	%			59.6	%			60.1	%
Less catastrophe loss ratio					(0.2)			0.6			(0.5)			3.1			0.6				0.1				0.1				0.1
Loss and loss expenses excluding catastrophe loss ratio					64.8	%		57.9	%		73.3	%		53.9	%		57.1	%			58.9	%			59.5	%			60.0	%

Workers' compensation:
Written premiums				$	113		$	91		$	85		$	91		$	111			$	182			$	258			$	338
Earned premiums					92			95			93			90			88				161				244				328
Loss and loss expenses ratio					76.5	%		89.3	%		90.3	%		83.1	%		78.6	%			76.9	%			75.9	%			90.9	%
Less catastrophe loss ratio					-			-			-			-			-				-				-				-
Loss and loss expenses excluding catastrophe loss ratio					76.5	%		89.3	%		90.3	%		83.1	%		78.6	%			76.9	%			75.9	%			90.9	%

Specialty package:
Written premiums				$	41		$	35		$	35		$	34		$	40			$	71			$	105			$	138
Earned premiums					36			35			35			35			36				68				103				137
Loss and loss expenses ratio					69.6	%		44.9	%		74.2	%		82.1	%		64.3	%			72.4	%			71.5	%			67.0	%
Less Catastrophe loss ratio					7.0			5.8			7.1			29.2			3.6				3.1				5.4				5.2
Loss and loss expenses excluding catastrophe loss ratio					62.6	%		39.1	%		67.1	%		52.9	%		60.7	%			69.3	%			66.1	%			61.8	%

Surety and executive risk:
Written premiums				$	25		$	23		$	28		$	24		$	22			$	38			$	63			$	85
Earned premiums					24			24			24			24			21				38				59				80
Loss and loss expenses ratio					24.0	%		36.3	%		47.3	%		89.6	%		26.5	%			16.9	%			22.0	%			34.2	%
Less catastrophe loss ratio					-			-			-			-			-				-				-				-
Loss and loss expenses excluding catastrophe loss ratio					24.0	%		36.3	%		47.3	%		89.6	%		26.5	%			16.9	%			22.0	%			34.2	%

Machinery and equipment:
Written premiums				$	7		$	7		$	7		$	8		$	7			$	15			$	22			$	29
Earned premiums					7			7			7			7			7				14				20				27
Loss and loss expense ratio					28.2	%		62.4	%		45.2	%		27.0	%		32.2	%			29.6	%			34.8	%			42.0	%
Less catastrophe loss ratio					(1.6)			(0.5)			2.1			-			-				0.1				0.8				0.4
Loss and loss expense excluding catastrophe loss ratio					29.8	%		62.9	%		43.1	%		27.0	%		32.2	%			29.5	%			34.0	%			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.

2007 First-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
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Personal auto:
Written premiums				$	72		$	79		$	96		$	104		$	79			$	184			$	279			$	359
Earned premiums					88			91			95			98			101				199				294				385
Loss and loss expenses ratio					66.5	%		74.3	%		60.6	%		65.8	%		60.1	%			62.9	%			62.2	%			65.0	%
Less catastrophe loss ratio					(2.3)			5.7			1.4			3.6			0.8				2.2				2.0			0	2.8
Loss and loss expenses excluding catastrophe loss ratio					68.8	%		68.6	%		59.2	%		62.2	%		59.3	%			60.7	%			60.2	%			62.2	%

Homeowner:
Written premiums				$	61		$	66		$	79		$	83		$	62			$	144			$	224			$	290
Earned premiums					71			70			72			74			73				146				219				289
Loss and loss expenses ratio					50.0	%		80.8	%		93.9	%		93.1	%		64.0	%			78.6	%			83.7	%			83.0	%
Less catastrophe loss ratio					(7.5)			36.0			15.0			33.1			11.1				22.1				19.8				23.7
Loss and loss expenses excluding catastrophe loss ratio					57.5	%		44.8	%		78.9	%		60.0	%		52.9	%			56.5	%			63.9	%			59.3	%

Other personal:
Written premiums				$	20		$	21		$	23		$	24		$	20			$	44			$	67			$	87
Earned premiums					22			22			22			22			22				45				66				88
Loss and loss expenses ratio					43.4	%		45.6	%		63.3	%		80.9	%		47.4	%			64.2	%			63.9	%			59.4	%
Less Catastrophe loss ratio					(0.1)			9.9			5.2			10.8			3.8				7.4				6.6				7.4
Loss and loss expenses excluding catastrophe loss ratio					43.5	%		35.7	%		58.1	%		70.1	%		43.6	%			56.8	%			57.3	%			52.0	%

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.*

2007 First-Quarter Supplement

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Cincinnati Insurance Group
10-Year Property Casualty Data - Consolidated

(Dollars in millions)	Years ended December 31,
	2006			2005			2004			2003			2002			2001			2000			1999			1998			1997
Premiums
Adjusted written premiums (statutory)*	$	3,172		$	3,097		$	3,026		$	2,789		$	2,496		$	2,188		$	1,936		$	1,681		$	1,558		$	1,472
Codification		-			-			-			-			-			402			(55)			-			-			-
Written premium adjustment -- statutory only		6			(21)			(29)			26			117			-			-			-			-			-
Reported written premiums (statutory)**		3,178			3,076			2,997			2,815			2,613			2,590			1,881			1,681			1,558			1,472
Unearned premiums change		(14)			(18)			(78)			(162)			(222)			(517)			(53)			(23)			(15)			(18)
Earned premiums (GAAP)	$	3,164		$	3,058		$	2,919		$	2,653		$	2,391		$	2,073		$	1,828		$	1,658		$	1,543		$	1,454

Year-over-year growth rate:
Adjusted written premiums (statutory)		2.4	%		2.3	%		8.5	%		11.7	%		14.0	%		13.0	%		15.2	%		7.9	%		5.8	%		6.4	%
Written premiums (statutory)		3.3	%		2.6	%		6.5	%		7.7	%		0.9	%		37.7	%		11.9	%		7.9	%		5.8	%		6.4	%
Earned premiums		3.5	%		4.8	%		10.0	%		11.0	%		15.3	%		13.4	%		10.3	%		7.5	%		6.1	%		6.4	%

Statutory combined ratio
Reported statutory combined ratio*		93.9	%		89.0			89.4	%		94.2	%		98.4	%		99.5	%		112.5	%		100.4	%		104.2	%		98.3	%
Codification		-			-			-			-			-			4.1			(0.9)			-			-			-
Written premium adjustment -- statutory only		nm			nm			nm			nm			1.2			-			-			-			-			-
One-time item		-			-			-			0.8			-			-			(1.7)			-			-			-
Statutory combined ratio (adjusted)		93.9	%		89.0	%		89.4	%		95.0	%		99.6	%		103.6	%		109.9	%		100.4	%		104.2	%		98.3	%
Less catastrophe losses		5.5			4.1			5.1			3.6			3.6			3.1			2.7			2.5			6.1
Statutory combined ratio excluding catastrophe losses (adjusted)		88.4	%		84.9	%		84.3	%		91.4	%		96.0	%		100.5	%		107.2	%		97.9	%		98.1	%

Reported commission expense ratio*		18.7	%		19.3	%		19.2	%		17.6	%		15.9	%		13.9	%		17.4	%		17.4	%		17.6	%
Codification		-			-			-			-			-			2.6			(0.5)			-			-
Written premium adjustment -- statutory only		nm			nm			nm			nm			0.8			-			-			-			-
One-time item		-			-			-			-			-			-			-			-			-
Commission expense ratio (adjusted)		18.7	%		19.3	%		19.2	%		17.6	%		16.7	%		16.5	%		16.9	%		17.4	%		17.6	%

Reported other expense ratio*		11.7	%		10.5	%		10.1	%		8.9	%		9.6	%		8.7	%		12.6	%		11.4	%		11.9	%
Codification		-			-			-			-			-			1.5			(0.4)			-			-
Written premium adjustment -- statutory only		nm			nm			nm			nm			0.4			-			-			-			-
One-time item		-			-			-			0.8			-			-			(1.7)			-			-
Other expense ratio (adjusted)		11.7	%		10.5	%		10.1	%		9.7	%		10.0	%		10.2	%		10.5	%		11.4	%		11.9	%

Reported statutory expense ratio*		30.4	%		29.8	%		29.3	%		26.5	%		25.5	%		22.6	%		30.0	%		28.8	%		29.5	%
Codification		-			-			-			-			-			4.1			(0.9)			-			-
Written premium adjustment -- statutory only		nm			nm			nm			nm			1.2			-			-			-			-
One-time item		-			-			-			0.8			-			-			(1.7)			-			-
Statutory expense ratio (adjusted)		30.4	%		29.8	%		29.3	%		27.3	%		26.7	%		26.7	%		27.4	%		28.8	%		29.5	%

GAAP combined ratio
GAAP combined ratio		94.3	%		89.2	%		89.8	%		94.7	%		99.7	%		104.9	%		112.8	%		100.2	%		104.3	%		98.4	%
One-time item		-			-			-			0.8			-			-			(2.1)			-			-			-
GAAP combined ratio before one-time item		94.3	%		89.2	%		89.8	%		95.5	%		99.7	%		104.9	%		110.7	%		100.2	%		104.3	%		98.4	%

Written premiums to surplus
Adjusted premiums to statutory surplus ratio		0.672			0.739			0.721			1.002			1.067			0.864
Written premium adjustment		0.001			(0.005)			(0.007)			0.010			0.050			0.159
Reported premiums to statutory surplus ratio		0.673			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.*

2007 First-Quarter Supplement


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

(Dollars in millions)	Years ended December 31,
	2006			2005			2004			2003			2002			2001
Premiums
Adjusted written premiums (statutory)*	$	2,435		$	2,306		$	2,209		$	2,009		$	1,795		$	1,551
Codification		-			-			-			-			-			276
Written premium adjustment – statutory only		7			(16)			(23)			22			110			-
Reported written premiums (statutory)	$	2,442		$	2,290		$	2,186		$	2,031		$	1,905		$	1,827
Unearned premiums change		(40)			(36)			(60)			(123)			(184)			(374)
Earned premiums (GAAP)	$	2,402		$	2,254		$	2,126		$	1,908		$	1,721		$	1,453

Year-over-year growth rate:
Adjusted written premiums (statutory)		5.6	%		4.4	%		10.0	%		11.9	%		15.8	%		16.9	%
Written premiums (statutory)		6.6	%		4.8	%		7.6	%		6.6	%		4.2	%		43.3	%
Earned premiums		6.6	%		6.0	%		11.4	%		10.8	%		18.6	%		17.9	%

Statutory combined ratio
Reported statutory combined ratio*		90.8	%		87.1			83.7	%		90.9	%		95.3	%		96.7	%
Codification		-			-			-			-			-			4.0
Written premium adjustment – statutory only		nm			nm			nm			nm			1.5			-
One-time item		-			-			-			0.7			-			-
Statutory combined ratio (adjusted)		90.8	%		87.1	%		83.7	%		91.6	%		96.8	%		100.7	%
Less catastrophe losses		3.7			3.4			3.4			2.2			2.3			1.9
Statutory combined ratio excluding catastrophe losses (adjusted)		87.1	%		83.7	%		80.3	%		89.4	%		94.5	%		98.8	%

GAAP combined ratio
GAAP combined ratio		91.3	%		87.4	%		84.1	%		91.3	%		96.6	%		101.7	%
One-time item		-			-			-			0.8			-			-
GAAP combined ratio before one-time item		91.3	%		87.4	%		84.1	%		92.1	%		96.6	%		101.7	%

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

2007 First-Quarter Supplement


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

(Dollars in millions)	Years ended December 31,
	2006			2005			2004			2003			2002			2001
Premiums
Adjusted written premiums (statutory)*	$	737		$	791		$	817		$	780		$	701		$	637
Codification		-			-			-			-			-			126
Written premium adjustment – statutory only		(1)			(5)			(6)			4			7			-
Reported written premiums (statutory)	$	736		$	786		$	811		$	784		$	708		$	763
Unearned premiums change		26			18			(18)			(39)			(38)			(143)
Earned premiums (GAAP)	$	762		$	804		$	793		$	745		$	670		$	620

Year-over-year growth rate:
Adjusted written premiums (statutory)		(6.8)	%		(3.2)	%		4.7	%		12.0	%		9.8	%		4.6	%
Written premiums (statutory)		(6.4)	%		(3.1)	%		3.4	%		10.8	%		(7.2)	%		26.1	%
Earned premiums		(5.2)	%		1.4	%		6.4	%		11.2	%		8.1	%		4.0	%

Statutory combined ratio
Reported statutory combined ratio*		103.6	%		94.3			104.6	%		102.9	%		106.5	%		105.9	%
Codification		-			-			-			-			-			4.6
Written premium adjustment – statutory only		nm			nm			nm			nm			0.3			-
One-time item		-			-			-			1.0			-			-
Statutory combined ratio (adjusted)		103.6	%		94.3	%		104.6	%		103.9	%		106.8	%		110.5	%
Less catastrophe losses		11.3			6.3			9.7			7.3			7.1			5.8
Statutory combined ratio excluding catastrophe losses (adjusted)		92.3	%		88.0	%		94.9	%		96.6	%		99.7	%		104.7	%

GAAP combined ratio
GAAP combined ratio		103.6	%		94.4	%		105.0	%		103.6	%		107.6	%		112.4	%
One-time item		-			-			-			1.1			-			-
GAAP combined ratio before one-time item		103.6	%		94.4	%		105.0	%		104.7	%		107.6	%		112.4	%

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.*

2007 First-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
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Premiums
Adjusted written premiums (statutory)				$	811		$	785		$	787		$	804		$	796			$	1,600			$	2,387			$	3,172
Written premium adjustment – statutory only					35			(30)			(7)			10			33				43				36				6
Reported written premiums (statutory)*				$	846		$	755		$	780		$	814		$	829			$	1,643			$	2,423			$	3,178
Unearned premiums change					(61)			47			11			(21)			(51)				(72)				(60)				(14)
Earned premiums				$	785		$	802		$	791		$	793		$	778			$	1,571			$	2,363			$	3,164
																									&nb sp;
Statutory combined ratio
Statutory combined ratio					87.7	%		95.9	%		96.4	%		93.7	%		89.6	%			91.7	%			93.2	%			93.9	%
Less catastrophe losses					0.4			5.5			3.5			8.0			5.0				6.5				5.5				4.1
Statutory combined ratio excluding catastrophe losses					87.3	%		90.4	%		92.9	%		85.7	%		84.6	%			85.2	%			87.7	%			89.8	%

Commission expense ratio					18.0	%		19.9	%		19.3	%		17.6	%		18.2	%			17.9	%			18.3	%			18.7	%
Other expense ratio					11.4	%		13.4	%		11.9	%		10.8	%		10.8	%			10.8	%			11.2	%			11.7	%
Statutory expense ratio					29.4	%		33.3	%		31.2	%		28.4	%		29.0	%			28.7	%			29.5	%			30.4	%

GAAP combined ratio
GAAP combined ratio					89.6	%		94.5	%		96.1	%		94.5	%		92.0	%			93.3	%			94.2	%			94.3	%
																									&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.
*nm – Not meaningful
*Statutory data prepared in accordance with statutory accounting rules ad defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies.

2007 First-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
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Premiums
Adjusted written premiums (statutory)				$	658		$	618		$	589		$	593		$	635			$	1,228			$	1,817			$	2,435
Written premium adjustment -- statutory only					35			(29)			(7)			10			33				43				36				7
Reported written premiums (statutory)*				$	693		$	589		$	582		$	603		$	668			$	1,271			$	1,853			$	2,442
Unearned premiums change					(89)			30			20			(4)			(86)				(90)				(69)				(40)
Earned premiums				$	604		$	619		$	602		$	599		$	582			$	1,181			$	1,784			$	2,402

Statutory combined ratio
Statutory combined ratio					86.5	%		92.4	%		94.1	%		89.6	%		87.5	%			88.6	%			90.3	%			90.8	%
Less catastrophe losses					1.8			1.9			2.3			5.6			5.1				5.3				4.3				3.7
Statutory combined ratio excluding catastrophe losses					84.7	%		90.5	%		91.8	%		84.0	%		82.4	%			83.3	%			86.0	%			87.1	%

GAAP combined ratio
GAAP combined ratio					88.9	%		91.1	%		93.4	%		90.3	%		90.5	%			90.4	%			91.4	%			91.3	%

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

2007 First-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
	12/31/07	9/30/07	6/30/07	3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			6/30/07	6/30/06			9/30/07	9/30/06			12/31/07	12/31/06
Premiums
Adjusted written premiums (statutory)				$	153		$	167		$	198		$	211		$	161			$	372			$	570			$	737
Written premium adjustment -- statutory only					-			(1)			-			-			-				-				-				(1)
Reported written premiums (statutory)*				$	153		$	166		$	198		$	211		$	161			$	372			$	570			$	736
Unearned premiums change					28			17			(9)			(17)			35				18				9				26
Earned premiums				$	181		$	183		$	189		$	194		$	196			$	390			$	579			$	762

Statutory combined ratio
Statutory combined ratio					93.5	%		107.7	%		104.0	%		106.4	%		98.1	%			101.6	%			102.3	%			103.6	%
Less catastrophe losses					(4.1)			17.9			7.1			15.6			5.0				10.3				9.2				11.3
Statutory combined ratio excluding catastrophe losses					97.6	%		89.8	%		96.9	%		90.8	%		93.1	%			91.3	%			93.1	%			92.3	%

GAAP combined ratio
GAAP combined ratio					92.0	%		106.0	%		104.4	%		107.6	%		96.4	%			102.0	%			102.8	%			103.6	%

*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.
*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.

2007 First-Quarter Supplement


The Cincinnati Life Insurance Company
GAAP Statements of Income

	For the Three Months Ended March 31,
		2007		2006		Change	% Change
Revenues:
Premiums earned:
Property casualty	$	-	$	-	$	-	-
Life		38,946,474		34,874,544		4,071,930	11.68
Accident health		1,758,851		1,733,897		24,954	1.44
Premiums ceded		(10,286,342)		(10,320,610)		34,268	(0.33)
Total premiums earned		30,418,983		26,287,831		4,131,152	15.72
Investment income		28,312,584		26,275,186		2,037,398	7.75
Realized investment gains and losses		8,144,413		42,334,256		(34,189,843)	(80.76)
Other income		1,365,571		746,054		619,517	83.04
Total revenues	$	68,241,551	$	95,643,327	$	(27,401,776)	(28.65)


Benefits & expenses:
Losses & policy benefits	$	36,890,212	$	29,334,621	$	7,555,591	25.76
Reinsurance recoveries		(9,652,925)		864,998		(10,517,923)	(1,215.95)
Commissions		8,939,275		8,406,916		532,359	6.33
Other operating expenses		7,485,553		6,142,293		1,343,260	21.87
Interest expense		-		-		-	-
Taxes, licenses & fees		946,862		830,409		116,453	14.02
Incr deferred acq expense		(3,936,437)		(4,942,405)		1,005,968	(20.35)
Other expenses		64		64		-	0.00
Total expenses	$	40,672,604	$	40,636,896	$	35,708	0.09


Income before income taxes	$	27,568,947	$	55,006,431	$	(27,437,484)	(49.88)

Provision for income taxes:
Current	$	2,700,754	$	2,133,775	$	566,979	26.57
Current capital gains/losses		2,870,544		14,816,990		(11,946,446)	(80.63)
Deferred		4,059,429		2,992,000		1,067,429	35.68
Total income taxes	$	9,630,727	$	19,942,765	$	(10,312,038)	(51.71)

Net income	$	17,938,220	$	35,063,666	$	(17,125,446)	(48.84)

2007 First-Quarter Supplement


The Cincinnati Life Insurance Company
Statutory Statements of Income

	For the Three Months Ended March 31,
		2007		2006	% Change

Net premiums written	$	40,441,018	$	38,308,469	5.57
Net investment income		28,317,576		26,275,186	7.77
Amortization of interest maintenance reserve		18,286		36,581	(50.01)
Commissions and expense allowances on reinsurance ceded		1,962,088		2,006,600	(2.22)
Income from fees associated with Separate Accounts		1,365,571		746,054	83.04
Total revenues	$	72,104,539	$	67,372,890	7.02

Death benefits and matured endowments		7,025,780		10,440,252	(32.70)
Annuity benefits		8,446,244		7,835,974	7.79
Disability benefits and benefits under accident and health contracts		392,588		124,030	216.53
Surrender benefits and group conversions		4,872,348		7,382,751	(34.00)
Interest and adjustments on deposit-type contract funds		2,701,644		2,851,152	(5.24)
Increase in aggregate reserves for life and accident and health contracts		27,127,730		21,550,983	25.88
Payments on supplementary contracts with life contingencies		90,522		75,477	19.93
Total benefit expenses	$	50,656,856	$	50,260,619	0.79

Commissions	$	8,834,275	$	8,307,166	6.35
General insurance expenses and taxes		9,826,285		8,395,309	17.04
Increase in loading on deferred and uncollected premiums		(1,378,574)		(1,353,692)	1.84
Net transfers to or (from) Separate Accounts		-		-	-
Other deductions		64		64	0.60
Total operating expenses	$	17,282,050	$	15,348,846	12.60

Federal and Foreign Income Taxes Incurred		2,611,204		1,889,192	38.22

Net gain from operations before realized capital gains or (losses)	$	1,554,429	$	(125,768)	(1,335.95)

Net realized gains or (losses) net of capital gains tax		5,811,552		27,697,576	(79.02)

Net Income (Statutory)	$	7,365,981	$	27,571,808	(73.28)

* 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.

2007 First-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
	12/31/07			09/30/07			06/30/07			03/31/07			12/31/06			09/30/06			06/30/06			03/31/06			06/30/07	06/30/06			09/30/07	09/30/06			12/31/07	12/31/06
Gross Written Premiums										$	53		$	54		$	50		$	51		$	50			$	101			$	152			$	206
Bank Owned Life Insurance (BOLI) Adjustment											-			-			-			-			-				-				-				-
Adjusted Gross Written Premiums										$	53		$	54		$	50		$	51		$	50			$	101			$	152			$	206

Insurance Expense										$	9		$	10		$	7		$	7		$	7			$	14			$	21			$	31

Expense Ratio											17.7	%		17.8	%		14.7	%		13.5	%		14.5	%			14.0	%			14.0	%			15.0	%
Expense Ratio based on Adjusted Gross Written Premium											17.7	%		17.8	%		14.7	%		13.5	%		14.5	%			14.0	%			14.0	%			15.0	%



(Dollars in millions)	Years ended December 31,
	2006			2005			2004			2003			2002			2001			2000
Gross Written Premiums	$	206		$	249		$	230		$	173		$	244		$	122		$	157
Bank Owned Life Insurance (BOLI) Adjustment		-			-			(10)			-			(34)			-			(20)
Adjusted Gross Written Premiums	$	206		$	249		$	220		$	173		$	210		$	122		$	137

Insurance Expense	$	31		$	29		$	25		$	25		$	27		$	25		$	20

Expense Ratio		15.0	%		11.7	%		11.1	%		14.8	%		10.9	%		20.6	%		12.9	%
Expense Ratio based on Adjusted Gross Written Premium		15.0	%		11.7	%		11.6	%		14.8	%		12.6	%		20.6	%		14.8	%

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

2007 First-Quarter Supplement