Company Name: Cincinnati Financial Corporation
Stock Market: NASDAQ (CINF)
Industry Sector: Fire, Marine & Casualty Insurance
Yearly Revenue: $4.26 billion (as of December 31, 2007)
Operating Income: $1.24 billion (as of December 31, 2007)
Net Income: $855 million (as of December 31, 2007)
Total Assets: $16.64 billion (as of December 31, 2007)
Key People: John J. Schiff, Jr., CPCU (Chairman and Chief Executive Officer); Kenneth W. Stecher (Chief Financial Officer, Executive Vice President, Secretary and Treasurer)
Headquarters Address: 6200 S. Gilmore Road
Fairfield, Ohio 45014-5141
Number of Employees: 4,087
Website Address: www.cinfin.com
Company Overview
Cincinnati Financial Corporation, an Ohio corporation, was formed in 1968. The Cincinnati Insurance Company, its lead subsidiary, was founded in 1950. Its main business is focused on marketing property casualty insurance.
Cincinnati Financial Corporation has four wholly owned subsidiaries, which are comprised of CSU Producer Resources Inc., Cincinnati Insurance Company, CinFin Capital Management Company, and CFC Investment Company. The parent company is responsible for shareholder dividends and corporate borrowings. The Cincinnati Insurance Company also has four wholly owned insurance subsidiaries.
In connection with the Cincinnati Insurance Company, its standard market property casualty insurance group also consists of subsidiaries; The Cincinnati Indemnity Company, as well as The Cincinnati Casualty Company. This group sells a wide variety of programs, such as homeowner policies and auto policies in 34 states. The Cincinnati Insurance Company’s other subsidiaries are The Cincinnati Specialty Underwriters Insurance Company, which started offering surplus insurance product lines in January 2008; and The Cincinnati Life Insurance Company, which sells disability income policies and annuities, and life insurance policies.
Cincinnati Financial’s three other subsidiaries include CinFin Capital Management Company, which offers services for asset management to individuals, institutions, and corporations; CSU Producer Resources provides insurance brokerage services to its independent agencies for their clients’ access to its excess and surplus lines insurance products; and CFC Investment Company provides commercial leasing, as well as financing services to its agents, clients, and other consumers.
Cincinnati Financial Corporation was founded over 50 years ago by independent agencies to assist the ability of local agents to give the people and businesses in its communities quality financial protection. The company actively markets its personal lines insurance products in 22 of the 34 states. Beginning in January 2008, it sells excess and surplus lines policies in 5 states via the same agencies that are offering its standard market property casualty insurance.
Current Financial Overview
Cincinnati Financial Corporation did not attain some of its objectives for creating value for shareholders in 2007. During that year, the company recorded less new property casualty business compared with the previous year. The market pricing trends resulted in partially lower written premiums, and some pressures were placed on its existing accident year margins. Agencies maintained their successful marketing of the company’s products to improve their accounts. They gave Cincinnati Financial $325 million of new property casualty business. They also helped the company in maintaining the persistency of renewals in over 90 percent of its accounts. Its investment strategy, focused on equity, headed towards another year of record investment income, despite the decrease in the market values of its common stocks in the financial sector that led to lower book value and invested assets.
or more than 57 years, its growth largely has been motivated by increasing its business share written by the agencies that sell the products of the company, improvement of those agencies, appointing new agencies, and periodic entry into new states. Towards 2008, the company targets 65 new agency appointments
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