10-K – 2026-02-23 – cinf-20251231.htm

The fair values of our taxable fixed-maturity securities portfolio at the end of the last two years were:
(Dollars in millions) At December 31,
  2025 2024
Investment-grade corporate $ 9,505   $ 8,070 
Government-sponsored enterprises 2,359   2,274 
States, municipalities and political subdivisions 806   782 
Asset-backed 797   551 
United States government 313   226 
Noninvestment-grade corporate 206   310 

Foreign government 24   30 

Total $ 14,010   $ 12,243 

 
While our strategy typically is to buy and hold fixed-maturity investments to maturity, we monitor credit profiles and fair value movements when determining holding periods for individual securities. With the exception of U.S. agency issues, no individual issuer's securities accounted for more than 0.8% of the taxable fixed-maturity portfolio at year-end 2025. Investment-grade corporate bonds had an average rating of Baa1 by Moody’s or BBB+ by S&P at year-end 2025. Our taxable fixed-maturity portfolio included $797 million of asset-backed securities with an average rating of Aa2/AA at year-end 2025.
 
Relative to a broad bond market index such as the Barclay’s Aggregate, we are most heavily exposed to the investment-grade corporate bond asset class. Within that asset class, we have a weighting of 28.8% for the financial sector, lower than the 35.9% weighting for the financial sectors of the BofA U.S. Corporate Index.
 
At December 31, 2025, we had $4.113 billion of tax-exempt fixed-maturity securities with an average rating of Aa2/AA by Moody’s and S&P. The portfolio is well diversified among approximately 2,000 municipal bond issuers. No single municipal issuer accounted for more than 0.5% of the tax-exempt fixed-maturity portfolio at year-end 2025.
 
Our short-term investments consist of commercial paper purchased within one year of maturity. We make short-term investments primarily with funds to be used to make upcoming cash payments, such as dividends, taxes or other corporate purposes. At year-end 2025, we had $148 million of short-term investments compared with $298 million at year-end 2024.

Equity Securities Investments
After covering both our intermediate and long-range insurance obligations with fixed-maturity investments, we historically have used some available cash flow to invest in equity securities. Our equity securities portfolio includes common stocks and nonredeemable preferred stocks, primarily in larger-capitalization companies but sometimes in smaller entities with attractive growth prospects. Investments in equity securities have played an important role in achieving our portfolio objectives and have contributed to both growth of investment income and portfolio appreciation. We remain committed to our long-term equity focus, which we believe is a key factor to our company’s long-term growth and stability. We believe our strategy of primarily investing in a diversified selection of high-quality, larger-capitalization, dividend-increasing companies generally results in reduced volatility relative to the broader equity markets.
 
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For federal income tax purposes, taxes on gains from appreciated investments generally are not due until securities are sold. We believe that the appreciated value of equity securities, compared with the cost of securities that is generally used as a tax basis, is a useful measure to help evaluate how fair value can change over time. On this basis, the net unrealized investment gains at year-end 2025 consisted of a net gain position in our equity portfolio of $8.539 billion. Events or factors such as economic growth or recession can affect the fair value of our equity securities.

At year-end 2025, Apple Inc. (Nasdaq:AAPL) was our largest single common stock investment, comprising 7.7% of our publicly traded common stock portfolio and 3.1% of the entire investment portfolio. The five largest holdings in our common stock portfolio were Apple, Microsoft (Nasdaq:MSFT), Broadcom Inc. (Nasdaq:AVGO), JPMorgan Chase & Co (NYSE:JPM) and Lam Research Corporation (Nasdaq:LRCX), which had a combined fair value of $3.718 billion or 30.1% of our publicly traded common stock portfolio. The parent company held 41.4% of our common stock holdings (measured by fair value). The distribution of the portfolio among sectors is shown in the table below.
 
Common Stock Portfolio Sector Distribution
  Percent of common stock portfolio
  At December 31, 2025 At December 31, 2024
  Cincinnati
Financial S&P 500
Weightings Cincinnati
Financial S&P 500 Weightings
Sector:        
Information technology 35.4   % 34.4   % 32.6  % 32.5  %
Industrials 14.4   8.2   14.3  8.2 
Financial 13.0   13.4   12.4  13.6 
Healthcare 10.0   9.6   10.8  10.1 
Consumer discretionary 7.3   10.4   7.6  11.2 
Consumer staples 6.5   4.7   6.9  5.5 
Energy 4.2   2.8   4.2  3.2 
Materials 3.3   1.8   4.7  1.9 
Utilities 3.0   2.3   3.1  2.3 
Real estate 1.9   1.8   2.1  2.1 
Telecomm services 1.0   10.6   1.3  9.4 
Total 100.0   % 100.0   % 100.0  % 100.0  %

 
We evaluate nonredeemable preferred stocks in a manner similar to our evaluation of fixed-maturity investments, seeking attractive relative yields. We generally focus on investment-grade nonredeemable preferred stocks issued by companies with strong histories of paying common dividends, providing us with another layer of protection. Consideration is also given to nonredeemable preferred stocks that offer a dividend received deduction for income tax purposes. During 2025, we purchased $20 million of nonredeemable preferred stocks. We did not purchase any nonredeemable preferred stocks during 2024.
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Other
What we report as Other includes the noninvestment operations of the parent company and its noninsurer subsidiary, CFC Investment Company. At year-end 2025, this subsidiary had $146 million in receivables related to its commercial leasing and financing services, compared with $120 million in receivables at year-end 2024.

We also report as Other the results of Cincinnati Re, which has contracts, also referred to as treaties, with other insurance or reinsurance companies to assume a portion of their insured risk in exchange for a portion of premiums from insurance policies covering those risks. The treaties and their exposure to losses are diverse in nature, including various lines of business and geographies for the reinsured risks. Some of our treaties reflect a type of contract commonly referred to as participating or proportional, typically sharing premiums and losses between the reinsured entity and us, as reinsurer, on a pro rata basis. Some are a contract type commonly referred to as excess of loss, where we indemnify the reinsured entity only for losses exceeding a predetermined amount.

Net written premiums for Cincinnati Re totaled $591 million in 2025, compared with $597 million in 2024. Approximately 34% of 2025 net written premiums was for property exposures that include risk of loss from natural catastrophes and approximately 50% was for casualty exposures from various liability risks. The remainder of approximately 16% was a combination of what we consider to be more specialized coverages that include, but are not limited to, credit risk transfer related to residential mortgages, marine and energy risks and cyber risks.

Also reported as Other are the results of Cincinnati Global, our London-based global specialty underwriter for Lloyd's Syndicate 318. We provide capability for appointed independent agencies to offer their clients insurance solutions in the Lloyd’s market through our insurance brokerage, CSU Producer Resources. Cincinnati Global and CSU Producer Resources partner by offering a variety of products through a binder authority agreement, enhancing our ability to serve more of our agent’s clients and bring quality business to Cincinnati Global.

Net written premiums for Cincinnati Global totaled $334 million in 2025, compared with $303 million in 2024. We continued to diversify its premiums to reduce underwriting profit volatility effects of property insurance. A significant portion of the 2025 premiums were for U.S. and international property exposures that include risk of loss from natural catastrophes, including approximately 33% classified as direct and facultative and 15% as binder, where binding authority has been granted to various coverholders. The coverholders are mostly in the U.S., and we believe they have the ability to successfully underwrite and manage risks. The remainder, approximately 52%, was for other classes of business that include trade credit, terrorism, political violence, consortia, specie coverage for high-value portable property and contingency insurance with coverage for film and entertainment risks or event cancellation.
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Regulation
The business of insurance in the United States (U.S.) is primarily regulated by state law. All of our U.S. insurance company subsidiaries are domiciled in the state of Ohio except The Cincinnati Specialty Underwriters Insurance Company, which is domiciled in the state of Delaware. Each domestic insurance subsidiary is primarily governed by the insurance laws and regulations in its respective state of domicile. We also are subject to regulatory authorities of all states in which we write insurance. The state laws and regulations that have the most significant effect on our insurance operations and financial reporting are discussed below.
• Insurance Holding Company Regulation – We are regulated as an insurance holding company system in the respective states of domicile of our lead standard market property casualty company subsidiary and its surplus lines insurance subsidiary. These regulations require that we annually furnish financial and other information about the governance and operations of the individual companies within the holding company system. Information about the risks posed by any noninsurance company subsidiaries must also be disclosed. All transactions within a holding company system affecting insurers must be fair and equitable. Notice to the state insurance commissioner is required prior to the consummation of transactions affecting the ownership or control of an insurer and prior to certain material transactions between an insurer and any person or entity in its holding company group. In addition, some of those transactions cannot be consummated without the commissioner’s prior approval.
• Subsidiary Dividends – The Cincinnati Insurance Company is fully owned by Cincinnati Financial Corporation and is our lead insurance subsidiary. The dividend-paying capacity of The Cincinnati Insurance Company and its fully owned subsidiaries is regulated by the laws of the applicable state of domicile. Under these laws, our domestic insurance subsidiaries must provide a 10-day advance informational notice to the insurance commissioner for the domiciliary state prior to payment of any dividend or distribution to its shareholders. Generally, the most our domestic insurance subsidiaries can pay without prior regulatory approval is the greater of 10% of statutory capital and surplus or 100% of statutory net income for the prior calendar year.
The domestic insurance company subsidiaries must give 30 days of notice to, and obtain prior approval from, the state insurance commissioner before the payment of an extraordinary dividend as defined by the state’s insurance code. You can find information about the dividends paid by our lead insurance subsidiary during 2025 in Item 8, Note 9 of the Consolidated Financial Statements.
• Insurance Operations – All of our domestic insurance subsidiaries are subject to licensing and supervision by departments of insurance in the states in which they do business. The nature and extent of such regulations vary, but generally are rooted in statutes that delegate regulatory, supervisory and administrative powers to state insurance departments. Such regulations, supervision and administration of the domestic insurance subsidiaries include: the standards of solvency that must be met and maintained; the licensing of insurers and their agents and brokers; the nature and limitations on investments; deposits of securities for the benefit of policyholders; regulation of standard market policy forms and premium rates; policy cancellations and nonrenewals; test audit programs; periodic examination of the affairs of insurance companies; annual and other reports required to be filed on the financial condition of insurers or for other purposes; requirements regarding reserves for unearned premiums, losses and other matters; the nature of and limitations on dividends to policyholders and shareholders; the nature and extent of required participation in insurance guaranty funds; the involuntary assumption of hard-to-place or high-risk insurance business, primarily workers’ compensation insurance; and the collection, remittance and reporting of certain taxes and fees. Our primary insurance regulators in the U.S. have adopted the Model Audit Rule for annual statutory financial reporting. This regulation closely mirrors the Sarbanes-Oxley Act on matters such as auditor independence, corporate governance and internal controls over financial reporting. The regulation permits the audit committee of Cincinnati Financial Corporation’s board of directors to also serve as the audit committee of each of our insurance subsidiaries for purposes of this regulation.
• Insurance Guaranty Associations – For certain obligations of insolvent insurance companies to policyholders and claimants, states assess each member insurer in an amount relative to the insurer’s proportionate share of business written by all member insurers in the state. While the amount of such assessments has not been material in recent years, we cannot predict the amount and timing of any future assessments or refunds on our insurance subsidiaries under these laws.
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• Shared Market and Joint Underwriting Plans – Assigned risk plans, reinsurance facilities and joint underwriting associations are mechanisms that generally provide applicants with various basic insurance coverages when they are not available in voluntary markets. States can require participation based upon the amount of an insurance company’s voluntary market share, and underwriting results related to these pools could be adverse to our company.
• Statutory Accounting – For public reporting, domestic insurance companies prepare financial statements in accordance with GAAP. However, certain data also must be calculated according to statutory accounting rules as defined in the NAIC’s Accounting Practices and Procedures Manual. While not a substitute for any GAAP measure of performance, statutory data frequently is used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies.
• Insurance Reserves – State insurance laws require that property casualty and life insurers annually analyze the adequacy of reserves. Our appointed actuaries must submit an opinion that reserves are adequate for policy claims-paying obligations and related expenses.
• Investment Regulation – Insurance company investments must comply with laws and regulations pertaining to the type, quality and concentration of investments. Such laws and regulations permit investments in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate and certain other investments, subject to specified limits and other qualifications.
• Risk-Based Capital Requirements – The NAIC’s risk-based capital (RBC) requirements for property casualty and life insurers serve as an early warning tool for the NAIC and state regulators to identify companies that may be undercapitalized and may merit further regulatory action. The NAIC has a standard formula for annually assessing RBC. The formula for calculating RBC for property casualty companies takes into account asset and credit risks but places more emphasis on underwriting factors for reserving and pricing. The formula for calculating RBC for life insurance companies takes into account factors relating to insurance, business, asset and interest-rate risks.
Although the federal government and its regulatory agencies generally do not directly regulate the business of insurance, federal legislation and administrative rules adopted can affect our business. Privacy laws, such as the Gramm-Leach-Bliley Act, the Fair Credit Reporting Act and the Health Insurance Portability and Accounting Act (HIPAA) are the federal laws that most affect our day-to-day operations. These apply to us because we gather and use personal nonpublic information to underwrite insurance and process claims. We also are subject to other federal laws, such as the Terrorism Risk Insurance Act (TRIA), anti-money laundering laws (AML), the Nonadmitted and Reinsurance Reform Act (NRRA), the U.S. Foreign Corrupt Practices Act (FCPA), and the rules and regulations of the Office of Foreign Assets Control (OFAC).

Title V of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) created the Federal Insurance Office to monitor the insurance industry and gather information to identify issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance industry that affects the United States’ financial system and to recommend to the Financial Stability Oversight Council that it designate an insurer as a systemically significant entity requiring additional supervision by the Federal Reserve Board. We do not expect Dodd-Frank to result in federal oversight of our operations as a systemically significant entity.
 
We do not expect to have any material effects on our expenditures, earnings or competitive position as a result of compliance with any federal, state or local provisions enacted or adopted relating to the protection of the environment. We currently do not have any material estimated capital expenditures for environmental control facilities.
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We operate in limited foreign jurisdictions. Our foreign insurance subsidiary, Cincinnati Global Underwriting Ltd., based in the United Kingdom (U.K.), holds a group of companies led by our managing agency, Cincinnati Global Underwriting Agency Ltd., of Lloyd’s Syndicate 318, which is regulated by The Prudential Regulation Authority (PRA) and The Financial Conduct Authority (FCA). The PRA’s primary objective with respect to insurers is to promote the safety and soundness of insurers for the protection of policyholders, while the FCA has three operational objectives: (i) to secure an appropriate degree of protection for consumers; (ii) to protect and enhance the integrity of the U.K. financial system; and (iii) to promote effective competition in the interests of consumers in the financial services markets. The PRA/FCA’s Senior Managers and Certification Regime provides regulatory frameworks for standards of fitness and propriety, conduct and accountability for individuals in positions of responsibility at insurers. The PRA and FCA have also delegated certain additional regulatory responsibilities to the Council of Lloyd’s. By virtue of Lloyd’s international licenses, we can write business in various countries throughout the world. In each such country, we are subject to the laws and insurance regulations of that jurisdiction.

Our operations in the U.K. are further subject to regulations retained following the U.K.’s exit from the European Union (EU). Generally, these requirements were adopted by the EU and then implemented by enabling legislation in the member countries. Significant areas of oversight in the U.K. include capital, solvency and risk management requirements (Solvency II), competition law and antitrust regulation, intermediary and distribution regulation, climate change, gender discrimination and data protection and privacy (General Data Protection Regulation).

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Enterprise Risk Management
We manage enterprise risk, including cybersecurity risk, through formal risk management programs overseen by an executive officer of the company. Our ERM framework includes an enterprise risk management committee, which is responsible for overseeing risk activities and is comprised of senior executive-level risk owners from across the enterprise. The risk committee's activities are supported by a team of representatives from business areas that focus on identifying, evaluating and developing risk plans for emerging risks, including cybersecurity risks. A comprehensive report is provided quarterly to our chairman and chief executive officer and also to our board of directors and our senior executive team, as appropriate, on the status of risk metrics relative to identified tolerances and limits, risk assessments and risk plans. The use of operational audits, strategic plans and departmental business plans, as well as our culture of open communications and fundamental respect for our Code of Conduct, continue to help us manage risks on an ongoing basis. Our efforts to assess, identify and manage material risks from cybersecurity threats is further discussed in Item 1C, Cybersecurity.

Our risk management programs include a formalized risk appetite element and a risk identification and quantification process. The overall enterprise objective is to appropriately balance risk and reward to achieve an appropriate return on risk capital. Our key risks are discussed in Item 1A, Risk Factors, including risks related to natural catastrophes, investments and operations.

We continue to study emerging risks, including climate change risk and its potential financial effects on our results of operations and on those we insure. These effects include deterioration in the credit quality of our municipal or corporate bond portfolios and increased losses without sufficient corresponding increases in premiums. As with any risk, we seek to identify the extent of the risk exposure and possible actions to mitigate potential negative effects of risk at an enterprise level.

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I TEM 1 A .   Risk Factors
Our business involves various risks and uncertainties that may affect achievement of our business objectives. Many of the risks could have ramifications across our organization. For example, risks related to setting insurance rates and establishing and adjusting loss reserves could have an impact on our investment activities, growth and overall results if actual results differ from our assumptions, judgments or estimates in these areas.

The following discussion should be viewed as a starting point for understanding the significant risks we face. We organized the risks within each section to express the level of impact each could have on the company’s value. This ordering contemplates both the magnitude and probability of a particular risk. It is not a definitive summary of their potential impacts or of our strategies to manage and control the risks. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for a discussion of those strategies.

If any risks or uncertainties discussed here have or will develop into actual events, they could have a material adverse effect on our business, financial condition, results of operations or cash flows. The failure of our risk management strategies could also have a material adverse impact. In that case, the market price of our common stock could decline materially.

Readers should carefully consider this information together with the other information we have provided in this report, other reports and materials we file periodically with the Securities and Exchange Commission, news releases and other information we disseminate publicly.

Risks related to insurance operations

Loss reserves, our largest liability, are based on estimates and could be inadequate to cover actual losses.
Our consolidated financial statements are prepared using GAAP. These principles require us to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes. Actual results could differ materially from those estimates. For a discussion of the significant accounting policies we use to prepare our financial statements, the material implications of uncertainties associated with the methods, assumptions and estimates underlying our critical accounting policies and the process used to determine our loss reserves, refer to Item 8, Note 1 of the Consolidated Financial Statements, and Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves and Life Insurance Policy Reserves.

Our most critical accounting estimate is loss reserves. Loss reserves are estimates and are inherently uncertain; they do not and cannot represent an exact measure of liability. Inflationary scenarios, especially scenarios outside of historical norms, or regulatory changes that affect the assumptions underlying our critical accounting estimates, may make it more difficult to estimate loss reserves. Examples of inflation effects include adverse changes in the tort environment caused by more aggressive attorney involvement in insurance claims, increased litigation, expanded theories of liability, higher jury awards, lawsuit abuse and third-party litigation funding. Accordingly, our loss reserves for past periods could prove to be inadequate to cover our actual losses and related expenses. Any changes in these estimates are reflected in our results of operations during the period in which the changes are made. An increase in our loss reserves would decrease earnings, while a decrease in our loss reserves would increase earnings.

Unforeseen losses, or unintended coverages, the type and magnitude of which we cannot predict, may emerge. These additional losses could arise from changes in the legal environment, new or amended laws and regulations, climate change, catastrophic events, increases in loss severity or frequency, environmental claims, mass torts or other causes such as social inflation. Such future losses could be substantial. Elevated inflation in recent periods has significantly increased our loss costs in our auto and property businesses. It is possible that inflation could remain at high levels for a prolonged period or increase further, leading to additional increases in our loss costs. In addition, a significant portion of claims costs consists of medical costs. As a result, an increase in medical inflation could materially and adversely impact our loss costs and our loss reserves. Recent changes in the macroeconomic environment have impacted medical labor and materials costs, the potential persistency of which could result in future loss costs that are higher than our current expectations.

Our life policy reserves are also subject to uncertainty. Periods of higher death claims outside of long-term historical norms and not anticipated within our actuarial models could make our life policy reserves inadequate to cover actual future death claims. Increases in estimates of future death claims would increase life policy reserve levels and in turn decrease earnings.
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In addition to the risks stated above, Cincinnati Re reserves are subject to uncertainty because a reinsurer relies on the original underwriting decisions and claims reserving practices of ceding companies. As a result, we are subject to the risk that ceding companies may not have adequately evaluated the risks reinsured by us and the premiums ceded may not adequately compensate us for the risks we assume. In addition, there is generally a longer lapse of time from the occurrence of the event to the reporting of the loss or benefit to the reinsurer and ultimate resolution or settlement of the loss. Similar risks exist for Cincinnati Global due to potential delays in loss reporting.

Because of the inherent uncertainties involved in setting reserves, we cannot provide assurance that our existing reserves or future reserves will prove adequate in light of subsequent events. Our results of operations and financial condition have in the past been, and in the future could be, materially affected by adverse loss development for events that we insured in prior periods.

We could experience an unusually high level of losses due to natural or man-made catastrophe, terrorism or epidemic events or risk concentrations.
Our insurance operations expose us to claims arising out of catastrophes, which can be man-made or caused by natural perils in the U.S. or worldwide. Man-made catastrophes include, but are not limited to, industrial accidents, terrorist attacks, wars, cyberattacks, infrastructure failures, social unrest and riot. Other man-made events, such as hydraulic fracturing could cause damage from earth movement, while chemicals and other contaminants could create environmental and/or health hazards that in turn generate insurance losses. The geographic regions in which we market insurance and reinsurance are exposed to numerous natural catastrophes, such as:
• Hurricanes
• Earthquakes
• Landslides
• Severe convective storms, tornadoes, windstorms, hailstorms and flooding
• Wildfires
• Winter storms

On a worldwide basis, in the event of a severe catastrophic event or terrorist attack we may be exposed to material losses through our Cincinnati Re and Cincinnati Global operations. Due to the nature of these events, we are unable to precisely predict the frequency, severity or potential cost of catastrophe occurrences.

The extent of losses from a catastrophe is a function of both the total amount of insured and reinsured exposure in the area affected by the event and the severity of the event. Our ability to appropriately manage catastrophe risk depends partially on catastrophe models, which may be affected by inaccurate or incomplete data, the uncertainty of the frequency and severity of future events and the uncertain impact of climate change. Additionally, these models are recalibrated and changed over time, with more data availability and changing opinions regarding the effect of current or emerging loss patterns and conditions. See Item 7, Liquidity and Capital Resources, Modeled Catastrophe Loss Exposure, for a further discussion of the loss estimates derived from these models.

According to these models, probable maximum loss estimates from a single hurricane event that combines the effects of property casualty insurance written on a direct basis by The Cincinnati Insurance Companies, the Cincinnati Re reinsurance portfolio and risks insured by Cincinnati Global include the following amounts, net of amounts recoverable through reinsurance ceded and income taxes, and including the effects of estimated reinstatement premiums: $632 million for a once-in-a-100-year event and $987 million for a once-in-a-250-year event. See Item 7, Liquidity and Capital Resources, Modeled Catastrophe Loss Exposure, for a discussion of modeled losses considered in evaluating our risk mitigation strategy, which includes our ceded reinsurance program.

The occurrence of terrorist attacks in the geographic areas we serve could result in substantially higher claims under our insurance policies than we have anticipated. Some of our insurance policies provide coverage for terrorism risk in all areas we serve, including Tier 1 and Tier 2 cities. We have exposure to small co-op utilities, water utilities, wholesale fuel distributors, small shopping malls and small colleges throughout our 46 active states. Because of the number of associates located at our Fairfield, Ohio, headquarters, it is also exposed to terrorism risk. Additionally, our life insurance subsidiary could be adversely affected in the event of a terrorist event or an epidemic, particularly if the epidemic were to affect a broad range of the population or affect the overall economy.
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A catastrophe or epidemic event also could affect our operations by damaging our headquarters facility, injuring associates and visitors or disrupting our associates’ ability to perform their assigned tasks. Our associate health plan is self-funded and could similarly be affected.

Our results of operations would be adversely affected if the level of losses we experience over a period of time were to exceed our actuarially determined expectations. In addition, our financial condition may be adversely affected if we were required to sell securities prior to maturity or at unfavorable prices to pay an unusually high level of loss and loss expenses. Securities pricing might be even less favorable as a result of widespread losses and catastrophic events impacting a number of other companies and insurers. We also have been and may in the future be exposed to state guaranty fund assessments if other carriers in a state cannot meet their obligations to policyholders.

We market our standard market property casualty insurance products in 46 states, but our business is concentrated in the Midwest and Southeast, with a growing presence in California and New York. Our geographic concentration links our performance to business, economic, environmental and regulatory conditions in some states more than others. We also have exposure in states where we do not actively market insurance when clients of our independent agencies have businesses or properties in multiple states or we provide insurance through Cincinnati Global and reinsurance through Cincinnati Re.

Cincinnati Re and Cincinnati Global provide reinsurance or insurance coverage for property catastrophe events on a worldwide basis, including coverage for losses due to war, terrorism or political violence. Wars can occur anywhere, and our results of operations could be adversely affected, especially if effects of wars expand over time and space. We have limited direct exposure within our insurance operations to businesses or individuals in Russia, Ukraine or Gaza. We have exposure within our insurance operations, primarily through reinsurance treaties, to insured losses related to wars that include risks in the Middle East region. If hostilities expand in these regions or war breaks out in a new region, causing a high frequency of loss events, or a single extreme event, during the coverage period of our treaties or policies, our financial position and results of operations could be materially affected. Cincinnati Re is staffed with seasoned underwriting and analytical associates who strive to assume risks that we understand, both quantitatively and qualitatively, but given their global scope, a failure of their risk selection and modeling could materially affect our financial position and results of operations. We are also expanding Cincinnati Global, our global specialty underwriter with premiums primarily for U.S. and international property exposures. Cincinnati Global also writes North American and United Kingdom (U.K.) contingency and event cancellation coverage and worldwide credit and political risk coverage and political violence coverage. If there is a high frequency of large property catastrophe or terrorism events, or a single extreme event, during the coverage period of Cincinnati Global’s policies, our financial position and results of operations could be materially affected.

Climate change may adversely impact our results of operations and/or our financial position.
Scientists have linked global climate change from rising planet temperatures over the last several decades to a number of factors that contribute to the increased unpredictability, frequency, duration and severity of weather events. This includes changing weather patterns, a rise in ocean temperatures and sea level. Certain catastrophe models assume an increase in frequency and severity of certain weather or other events, which could result in a disproportionate impact on insurers with certain geographic concentrations of risk. Changes in climate and/or weather patterns may increase the frequency and/or intensity of severe weather and natural catastrophe events, including hurricanes, heavy precipitation events, heavy wind events, flash flooding, sea level rise, droughts, heat waves and wildfires potentially leading to increased insured losses. A continuation of these trends would also likely increase the risks of writing property insurance in coastal areas or areas susceptible to wildfires or flooding, or in areas susceptible to heavy wind events. The risk could be even greater in jurisdictions that restrict pricing and underwriting flexibility. We cannot predict how legal, regulatory or social responses to concerns about climate change may impact our business.

Our pricing and capital models could be flawed.  
We use various actuarial pricing methods, predictive pricing and underwriting models, stochastic models and/or forecasting techniques to help us understand our business, analyze risk and estimate future trends. The output of these techniques and models assists us in making underwriting, pricing, reinsurance, reserving and capital decisions and helps us set our strategic direction. These models contain numerous assumptions, including the assumption that the data used is sufficient and accurate. They are also subject to uncertainties and limitations inherent in any statistical analysis. Actual results may be materially different from modeled output, resulting in pricing our products incorrectly, overestimating or underestimating reserves, or inaccurately forecasting the impact of modeled events on our results. This could materially adversely impact the results of our operations.
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Our ability to properly underwrite and price risks and increased competition could adversely affect our results.
Our financial condition, results of operations and cash flows depend on our ability to underwrite and set rates accurately for a full spectrum of risks. We establish our pricing based on assumptions about the level of losses that may occur within classes of business, geographic regions and other criteria.

To properly price our products, we must collect, properly analyze and use data to make decisions and take appropriate action; the data must be sufficient, reliable and accessible. We also need to develop appropriate rating methodologies and formulae; and we need to identify and respond to trends quickly. We may overestimate or underestimate loss cost trends or these trends may unexpectedly change – such as inflation in recent years outside of historical norms – leading to losing business by pricing risks above our competitors or charging rates too low to maintain profitability. Legal trends in recent years have also made it more difficult to determine adequate pricing, including adverse changes in the tort environment caused by more aggressive attorney involvement in insurance claims, increased litigation, expanded theories of liability, higher jury awards, lawsuit abuse and third-party litigation funding. If rates are not accurate, we may not generate enough premiums to offset losses and expenses, or we may not be competitive in the marketplace. Cincinnati Global has additional risks due to its reliance on coverholders in underwriting parts of its business.

Our ability to set appropriate rates are hampered if states where we write business refuse to allow rate increases that we believe are necessary to cover the risks insured. A state could also hamper our ability to set appropriate rates if it no longer allows us to use factors that we believe are predictive of loss, such as credit-based factors. Limitations on our ability to use various types of artificial intelligence (AI) in the development of pricing precision could adversely affect underwriting results. Multiple states require us to purchase reinsurance from a mandatory reinsurance fund. Such reinsurance funds can create a credit risk for insurers if not adequately funded by the state and, in some cases, the existence of a reinsurance fund could affect the prices charged for our policies. The effect of these and similar arrangements could reduce our profitability in any given period or limit our ability to grow our business.

The insurance industry is cyclical and competitive. From time to time, the industry goes through prolonged periods of intense competition during which it is more difficult to attract new business, retain existing business and maintain profitability. Competition in our insurance business is based on many factors, including:
• Competitiveness of premiums charged
• Relationships among carriers, agents, brokers and policyholders
• Underwriting and pricing methodologies
• Compensation provided to agents
• Underwriting discipline
• Terms and conditions of insurance coverage
• Speed with which products are brought to market
• Product and marketing innovations, including advertising
• Technological competence and innovation
• Ability to control expenses
• Quality of services and tools provided to agents and policyholders
• Claims satisfaction and reputation

We compete with major U.S., Bermudian, European, and other international insurers and reinsurers and with underwriting syndicates, some of which have greater financial, marketing and management resources than we do. Industry consolidation, including business combinations among insurance and other financial services companies, has resulted in larger competitors with even greater financial resources. We also compete with new companies that continue to enter the insurance and reinsurance markets. In addition, capital market participants have created alternative products that are intended to compete with Cincinnati Re's reinsurance products. Increased competition could result in fewer submissions, lower premium rates, and less favorable policy terms and conditions, which could reduce our underwriting margins and have a material adverse effect on our results of operations and financial condition.
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If our pricing were incorrect or we were unable to compete effectively because of one or more of these factors, our premium writings could decline and our results of operations and financial condition could be materially adversely affected. Large competitors could intentionally disrupt the market by targeting certain lines or underpricing the market. See the discussion of our Commercial Lines, Personal Lines, Excess and Surplus Lines and Life Insurance Segments in Item 1, Our Segments, for a discussion of our competitive position in the insurance marketplace.

We rely primarily on independent insurance agents to distribute our products.
We market our main products, insurance policies for businesses and individuals, through independent, nonexclusive insurance agents. These agents sell our competitors’ products and are not obligated to promote our products. We must offer insurance products that meet the needs of these agents and their clients. We need to maintain good relationships with the agents who market our products. If we do not, these agents may market our competitors’ products instead of ours. This could lead to a less desirable mix of business and affect our results of operations.

Certain events or conditions could diminish our agents’ desire to produce business for us and the competitive advantage that our independent agents enjoy, including:
• Downgrade of the financial strength ratings of our insurance subsidiaries.
• Concerns that doing business with us is difficult or not profitable, perceptions that our level of service is no longer a distinguishing characteristic in the marketplace, perceptions that our products do not meet the needs of our agents’ clients or perceptions that our business practices are not compatible with agents’ business models.
• Mergers and acquisitions of agencies could result in a concentration of a significant amount of premium in one agency or a small number of agencies.
• Delays in the development, implementation, performance and benefits of technology systems and enhancements or independent agent perceptions that our technology solutions do not match their needs.

Certain changes to our independent agency appointment strategy could affect our results of operations, including:
• A reduction in the number of independent agencies marketing our products.
• The failure of agencies to successfully market our products or pay amounts due to us,
• Changes in the strategy or operations of agencies or the choice of agencies to reduce their writings of our products.
• Inability to replace underperforming or nonperforming agencies with agencies that produce adequate and profitable premiums.
• A decline in the quality of independent agencies we are appointing.
 
Our ability to react to changes in consumer behavior and preferences.
The appeal of our value proposition could be affected by an unexpected change in the commoditization of insurance products. Policyholders may choose a competitor’s product rather than our own because of real or perceived differences in price, terms and conditions, coverage or service. If the quality of the independent agencies with which we do business were to decline, that also might cause policyholders to purchase their insurance through different agencies or channels. Consumers, especially in the personal insurance industry segment, may increasingly choose to purchase insurance from distribution channels other than independent insurance agents. Increased advertising by insurers, especially direct marketers, could cause consumers to shift their buying habits, bypassing independent agents altogether. Innovation, new or changing technologies and/or buying trends or consumer preferences could reduce or eliminate the need or demand for products we sell.

Economic downturns or other events have in the past and may in the future result in a softening of the insurance market and agents or consumers choosing a competitor’s product that may in turn adversely affect our premium revenues and underwriting profit. Such economic events experienced during recent periods included elevated inflation, global supply chain disruptions, implementation of tariffs, increasing interest rates, tightening credit markets and higher fuel costs.

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Our ability to obtain or collect on our reinsurance protection could affect our business, financial condition, results of operations or cash flows.
We buy property casualty and life reinsurance coverage to mitigate the liquidity risk and earnings volatility risk of an unexpected rise in claims severity or frequency from catastrophic events or a single large loss. The availability, amount and cost of reinsurance depend on market conditions and may vary significantly. If we were unable to obtain reinsurance on acceptable terms and in appropriate amounts, our business and financial condition could be adversely affected. Our reinsurers might experience significant losses, potentially jeopardizing their ability to pay losses we cede to them. It could also reduce the availability of reinsurance. If we cannot obtain adequate reinsurance or primary insurance coverage at a reasonable cost, it could constrain how much business we can write.

In addition, we are subject to credit risk with respect to our reinsurers. Although we purchase reinsurance to manage our risks and exposures to losses, this reinsurance does not discharge our direct obligations under the policies we write. We would remain liable to our policyholders even if we were unable to recover what we believe we are entitled to receive under our reinsurance contracts. Reinsurers might refuse or fail to pay losses that we cede to them, or they might delay payment. For long-tail claims, the creditworthiness of our reinsurers may change before we can recover amounts to which we are entitled. A reinsurer’s insolvency, inability or unwillingness to make payments under the terms of its reinsurance agreement with our insurance subsidiaries could have a material adverse effect on our financial position, results of operations or cash flows. See Item 7, Liquidity and Capital Resources, 2026 Reinsurance Ceded Programs, for a discussion of selected reinsurance transactions.

Our credit ratings or financial strength ratings of our insurance subsidiaries could be downgraded.
We believe our strong insurer financial strength ratings, in particular, the A+ (Superior) ratings from A.M. Best for our standard market property casualty insurance group and each subsidiary in that group, are an important competitive advantage. If our property casualty or life insurance subsidiary insurer financial strength ratings were to be downgraded, our agents might find it more difficult to market our products or might choose to emphasize the products of other carriers. Additionally, a downgrade in our ratings may adversely impact our Cincinnati Re operations by reducing our ability to market our reinsurance products or compete with other highly rated reinsurers. A downgrade in one or more of our company’s credit or debt ratings could adversely impact our borrowing costs or access to capital. Our ratings are subject to periodic review and there is no assurance that our ratings will not be changed. Rating agencies could change or expand their requirements or could find that our insurance subsidiaries no longer meet the criteria established for current ratings. See Item 1, Our Business and Our Strategy, Financial Strength, for additional discussion of our financial strength ratings.
 
International operations subject us to additional regulation and expose us to additional investment, political and economic risks.
International risks include restrictions such as price controls, capital controls, currency exchange limits, ownership limits and other restrictive or anti-competitive governmental actions or requirements, which could have an adverse effect on our business and reputation. Our business activities outside the U.S., including in the U.K., subject us to political and economic risks, including foreign currency and credit risk. Cincinnati Global in particular is subject to continued political and economic disruptions in the U.K. from its withdrawal from the European Union.

Business activities outside the U.S. subject us to additional domestic and foreign laws and regulations, including the Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws in other countries that prohibit the making of improper payments to foreign officials. In addition, insurers in the U.K. (including managing agents and members of Lloyd’s of London) are subject to Solvency II and the U.K. regulatory regime, which itself includes rules promulgated by Lloyd's. Although we have policies and controls in place that are designed to ensure compliance with these laws and regulatory requirements, if those controls are ineffective and an employee or intermediary fails to comply with applicable laws and regulations, we could suffer civil and criminal penalties and our business and reputation could be adversely affected. Some countries have laws and regulations that lack clarity and, even with local expertise and effective controls, it can be difficult to determine the exact requirements of, and potential liability under, the local laws. Failure to comply with local laws in a particular market may result in substantial liability and could have a significant and negative effect not only on our business in that market but also on our reputation generally.

Business activities at Cincinnati Global are subject to Lloyd's approval of a business plan each year. There is risk that Cincinnati Global's plan will not be approved or will be limited. As a Lloyd’s managing agent and syndicate, Cincinnati Global is exposed to various risks and their associated uncertainties, including Lloyd’s rating agency
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ratings and reputation. Cincinnati Global also has an obligation to maintain funds at Lloyd’s to support its underwriting activities and periodic assessment of its capital, governance and other aspects of its business.
 

Risks related to investments or other financial matters

Financial disruption or a prolonged economic downturn could affect our investment performance.
Events, such as global supply chain disruptions, implementation of tariffs, an increasing interest rate environment and inflationary pressures, have contributed to significant disruption and volatility for financial markets and decreased economic activity. In the event that these conditions occur or continue, recur or result in a prolonged economic downturn or recession, they could materially and adversely impact our financial condition, results of operations or cash flows. These market conditions have in the past, and could in the future, cause our investment income or the value of securities we own to decrease. Additionally, the companies we invest in might be severely affected by a severe catastrophic event, terrorist attack, or epidemic event, which could in turn lower their stock value and affect our financial condition and results of operations.

Our ability to achieve our performance objectives could be affected by changes in the financial, credit and capital markets or the general economy.
We invest premiums received from policyholders and other available cash to generate investment income and capital appreciation, while also maintaining sufficient liquidity to pay covered claims and operating expenses, service our debt obligations and pay dividends. The value of our invested assets is an important component of shareholders’ equity or book value per share and changes in their valuation can have a significant impact. Changes in book value per share is a key performance objective as discussed in Item 7, Executive Summary of Management’s Discussion and Analysis.

For fixed-maturity investments such as bonds, which represented 58.5% of the fair value of our investment portfolio at the end of 2025, the inverse relationship between interest rates and bond prices leads to falling bond values during periods of increasing interest rates. Significant increases in the general level of interest rates, such as we experienced during recent periods, have an adverse effect on our shareholders’ equity.

Investment income is an important component of our revenues and net income. The ability to increase investment income and generate longer-term growth in book value is affected by factors beyond our control, such as: inflation, trade policy, economic growth, interest rates, world political conditions, changes in laws and regulations, future actions or inactions of the U.S. government, epidemic events, terrorism attacks or threats, war, adverse events affecting other companies in our industry or the industries in which we invest, market events leading to credit constriction, and other widespread unpredictable events. These events have in the past and may in the future adversely affect the economy generally and cause our investment income or the value of securities we own to decrease. Wars can occur anywhere in the world and have an adverse effect on our investment portfolio, especially if effects of wars expand over time and space. We do not have material exposure to investments based in Russia, Ukraine, Israel or Gaza. If there is significant expansion of wars beyond these regions, it may have adverse effects on our investment performance. Any significant decline in our investment income will have an adverse effect on our net income, and thereby on our shareholders’ equity and our statutory capital and surplus. For a more detailed discussion of risks associated with our investments, refer to Item 7A, Quantitative and Qualitative Disclosures About Market Risk.

We have issued universal life contracts with guaranteed minimum returns, referred to as bank-owned life insurance contracts (BOLIs). A BOLI is designed with the bank as the policy owner and the policy beneficiary. We legally segregate and record as separate accounts the assets and liabilities for certain BOLIs, when required by the specific contract provisions. Minimum investment returns, account values and death benefits are guaranteed by us for our separate account BOLIs. We could incur losses in the performance of these guarantees.

We also have life policy reserves established for traditional life policies including term, whole life and other products. Reserve variability can occur as reserves are based on certain cash flow assumptions as well as a discount rate assumption. Life policy reserves are required to be recorded using a discount rate assumption that is updated quarterly. As the discount rate increases during the quarter, life policy reserves decrease and accumulated other comprehensive income (AOCI) increases. Conversely, as the discount rate decreases during the quarter, life policy reserves increase and AOCI decreases. A significant decrease in discount rates, relative to the prior quarter, would have an adverse effect on shareholders' equity.

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Our investment performance also could suffer because of the types of investments, industry groups and/or individual securities in which we choose to invest. Market value changes related to these choices could cause a material change in our financial condition or results of operations.

Our investments in private equity, private credit, real property assets, private limited partnerships, and other alternative investments are subject to a higher level of illiquidity, economic volatility and real estate market deterioration. They lack quoted prices and active trade markets, and are subject to changing tax laws and an increased focus from the SEC and other regulators. These alternative investments have in the past, and may in the future result in reduced net investment returns, losses on sales of these investments, and/or the writing down the value of these investments, which would result in an adverse impact on operating results.

We also are exposed to credit risk related to guarantee and indemnification arrangements, which support our alternative investments and insurance operations. Our exposure to these guarantee and indemnification risks could materially and adversely affect our results of operations.

At year-end 2025, common stock holdings made up 40.0% of our investment portfolio. Adverse news or events affecting the global or U.S. economy or the equity markets, such as we experienced during recent years, will affect our net income, book value and overall results, and could affect our ability to pay our common stock dividend. See Item 7, Investments Results, and Item 7A, Quantitative and Qualitative Disclosures About Market Risk, for a discussion of our investment activities.

Deterioration in the banking sector or in banks with which we have relationships could affect our results of operations. Our ability to maintain or obtain short-term lines of credit could be affected if the banks from which we obtain these lines are acquired, fail or are otherwise negatively affected. We may lose premium revenue if a bank that owns appointed agencies were to change its strategies. We could experience increased losses in our director and officer liability line of business if claims were made against insured financial institutions.

A deterioration of credit and market conditions could also impair our ability to access credit markets and could affect existing or future lending arrangements. In addition, a failure to comply with covenants and other requirements under our credit facilities, senior debt and other debt obligations could have a material adverse effect on us and our ability to access the credit markets.

Our overall results are affected if a significant portion of our commercial lines or personal lines policyholders are adversely affected by marked or prolonged economic downturns and events such as a downturn in construction and related sectors, tightening credit markets and higher fuel costs experienced during recent periods. Such events make it more difficult for policyholders to finance new projects, complete projects or expand their businesses, and can lead to lower premiums from reduced payrolls and sales and lower purchases of equipment and vehicles. These events could also cause claims, including surety claims, to increase due to a policyholder’s inability to secure necessary financing to complete projects or to collect on underlying lines of credit in the claims process. Such economic downturns and events have a greater impact in the construction sector where we have a concentration of risks and in geographic areas that are hardest hit by economic downturns.

Deteriorating economic conditions could also increase the degree of credit risk associated with amounts due from independent agents who collect premiums for payment to us and could hamper our ability to recover amounts due from reinsurers.

Our status as an insurance holding company with no direct operations could affect our ability to pay dividends in the future.
Cincinnati Financial Corporation is a regulated holding company that transacts substantially all of its business through its subsidiaries. Our primary assets are the stock in our operating subsidiaries and our investments. Consequently, our cash flow to pay cash dividends and interest on our long-term debt depends on dividends we receive from our operating subsidiaries and income earned on investments held at the parent-company level.

Dividends received from our lead insurance subsidiary are restricted by the insurance laws of Ohio, its domiciliary state. These laws establish minimum solvency and liquidity thresholds and limits. Generally, the maximum dividend that may be paid is limited to the greater of 10% of statutory capital and surplus or 100% of statutory net income for the prior calendar year. Dividends exceeding these limitations may be paid only with prior approval of the Ohio Department of Insurance. Meanwhile, other subsidiaries are also limited in their payment of dividends to the lead
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insurance subsidiary under applicable insurance laws. We might not be able to receive dividends in the amounts necessary to meet our debt obligations or to pay dividends on our common stock without liquidating securities. See Item 1, Regulation, and Item 8, Note 9 of the Consolidated Financial Statements, for a discussion of insurance holding company dividend regulations.

General risk factors

The effects of changes in industry practices, laws and regulations on our business are uncertain.
As industry practices and legal, judicial, legislative, regulatory, political, social and other environmental conditions change, unexpected and unintended issues related to insurance pricing, claims and coverage emerge. There has been increased regulatory scrutiny of the use of machine learning and AI, and it is likely that we will be subject to new regulations that could materially adversely affect our operations or ability to write business profitably in one or more jurisdictions. These issues, and others, may adversely affect our business by impeding our ability to obtain adequate rates for covered risks or otherwise extending coverage beyond our underwriting intent, by increasing the number or size of claims, by varying assumptions underlying our critical accounting estimates or by increasing duties owed to policyholders beyond contractual obligations. In some instances, unforeseeable emerging and latent claim and coverage issues and court decisions or legislative changes may not become apparent until sometime after we have issued the insurance policies that could be affected by the changes. As a result, the full extent of liability under our insurance contracts may not be known for many years after a policy is issued and our pricing and reserve estimates may not accurately reflect its effect.

Some of our existing or potential shareholders, policyholders, associates, regulators, and other stakeholders will evaluate our business practices according to a variety of sustainability guidelines and expectations, including those related to climate change, inclusive diversity and equity, data privacy, and the well-being of our employees. Our business practices and disclosures are evaluated against sustainability guidelines, which are continually evolving and not always well defined or readily measurable today. Our practices may not change in the particular ways or at the rate stakeholders expect, leading to business or reputational challenges.

We are required to adopt new or revised accounting standards issued by recognized authoritative organizations, including the Financial Accounting Standards Board (FASB) and the SEC. Future changes required to be adopted could change the current accounting treatment that we apply and could result in material adverse effects on our results of operations, financial position or cash flows.

Our investment income benefits from tax rate preferences for municipal bond interest and dividend income from equity securities. Market valuations for these securities also benefit from the tax-preference aspect of current tax laws, affecting the value of our investment portfolio and also shareholders’ equity. Future changes in tax laws, or other changes such as regulations for applicability of alternative minimum taxes, could result in material adverse effects on our results of operations and financial condition.

The NAIC, state insurance regulators and state legislators continually re-examine existing laws and regulations governing insurance companies and insurance holding companies, specifically focusing on modifications to statutory accounting principles, interpretations of existing laws, regulations relating to product forms and pricing methodologies and the development of new laws and regulations that affect a variety of financial and nonfinancial components of our business. Any proposed or future legislation, regulation or NAIC initiatives, if adopted, may be more restrictive on our ability to conduct business than current regulatory requirements or may result in higher costs. The loss or significant restriction on the use of a particular variable, such as credit, in pricing and underwriting our products could lead to future unprofitability and increased costs.

Federal laws and regulations and the influence of international laws and regulations, including those that may be enacted in the wake of the financial and credit crises, may have adverse effects on our business, potentially including a change from a state-based system of regulation to a system of federal regulation, the repeal of the McCarran Ferguson Act, and/or measures under the Dodd-Frank Act that established the Federal Insurance Office and Financial Stability Oversight Council. The expansion of federal measures that change the scope of insurance and financial regulation may restrict our ability to conduct our insurance business, govern our corporate affairs or increase our cost of doing business.

In addition, climate change and climate change transitions may continue to lead to new or enhanced regulation, which may be difficult or costly to comply with, or impact assets that we invest in, which may result in realized and
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unrealized losses in future periods that could have a material adverse impact on our results of operations and/or financial position. It is not possible to foresee the impacts of potential future climate regulation, or which, if any, assets, industries or markets may be materially and adversely affected by global climate change and global climate change transitions, nor is it possible to foresee the magnitude of such effects. The effects of such changes could adversely affect our results of operations. See Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves and Life Insurance Policy Reserves, for a discussion of our reserving practices.

Elevated inflation negatively impacts profit and the value of investments.
Inflation in various forms, such as we experienced in recent periods, reduces underwriting profitability due to higher losses and loss expenses to repair damaged autos or other property that we insure. Inflationary volatility has and may in the future have an increased impact on us due to the three-year rates offered on some of our commercial lines policies. Elevated inflation can also be in the form of social inflation of litigation costs, jury awards and settlement expectations. In addition to adverse effects on the fair value of our equity portfolio, inflationary pressures can also cause or contribute to, or are the result of, increases in interest rates, which reduces the fair value of our fixed-maturity portfolio.

Managing technology initiatives and meeting data security requirements are significant challenges.
We use technology to process, store, retrieve, evaluate and use customer and company data and information. Our information technology and telecommunications systems, in turn, interface with and rely upon third-party systems. We must be able to access our systems to provide insurance quotes, process premium payments, make changes to existing policies, file and pay claims, provide customer support, manage our investment portfolios, report on financial results and perform other necessary business functions. Systems failures or outages could compromise our ability to perform these business functions in a timely manner, which could harm our ability to conduct business and hurt our relationships with our business partners and customers. In the event of a disaster such as a natural catastrophe, a pandemic, civil unrest, an industrial accident, a cyberattack, a blackout, a terrorist attack (including conventional, nuclear, biological, chemical or radiological) or war, systems upon which we rely may be inaccessible to our associates or independent agents for an extended period of time. Even if our associates and independent agents are able to report to work, they may be unable to perform their duties for an extended period of time if our data or systems used to conduct our business are disabled or destroyed. While technology can streamline many business processes and reduce the costs of operations, technology initiatives present short-term cost and also have implementation and operational risks. In addition, we may have inaccurate expense projections, implementation schedules or expectations regarding the effectiveness and user acceptance of the end product. These issues could escalate over time. If we were unable to find and retain associates with key technical knowledge, our ability to develop and deploy key technology solutions could be hampered.

Our systems have been, and will likely continue to be, subject to viruses or other malicious code, unauthorized access, cyberattacks, cyber frauds or other computer-related penetrations. Increasing sophistication of cyber criminals and terrorists make keeping up with new threats difficult and could result in a breach. Patching and other measures to protect existing systems and servers could be inadequate, especially on systems that are being retired. Controls employed by our U.S., off-shore and cloud vendors could prove inadequate. We could also experience a breach by intentional or negligent conduct on the part of associates or other internal or external sources. Independent agencies with access to our systems and servers expose us to additional cyber threats. Our systems and those of third-party vendors may become vulnerable to damage or disruption due to circumstances beyond our or their control, such as from catastrophic events, power anomalies or outages, natural disasters, network failures, viruses, ransomware and malware.

A breach of our security or the security of a vendor that results in unauthorized access to our data could expose us to a disruption or challenges relating to our daily operations as well as to data loss, litigation, damages, fines and penalties, significant increases in compliance costs and reputational damage. From time to time we have had to, and in the future we may need to, increase or expend resources to investigate or remediate vulnerabilities as a result of data security incidents. Such resources are costly in time and expense, and detract from resources spent on or are otherwise devoted to our core operations. In addition, depending on the nature of an incident, we may not be able to detect an incident readily, assess its severity or impact, or appropriately respond in a timely manner, which could increase our risk and exposures. See Item 1C, Cybersecurity, for further discussion of our cybersecurity risk management, strategy and governance.

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Any failure to protect the confidentiality of customer information could adversely affect our reputation or expose us to fines, penalties or litigation, which could impact our business, financial condition and results of operations.
We necessarily collect, use and hold data concerning individuals and businesses with whom we have a relationship. We are required to safeguard the confidential personal information of our customers and applicants. We are subject to an increasing number of federal, state, local and international laws and regulations regarding privacy and data security, as well as contractual commitments. These laws and regulations are rapidly evolving, complex, vary significantly among jurisdictions, and sometimes conflict. In the absence of updated, uniform federal privacy legislation, there is a growing trend in the states in which we operate, to adopt comprehensive privacy legislation that provides consumers with various privacy rights and imposes significant compliance burdens on covered companies. Failure to comply with data security or privacy laws or regulations could subject us to regulatory enforcement actions and fines, penalties, litigation, private rights of action or public statements against us by consumer advocacy groups or others if confidential customer information is misappropriated from our computer systems, those of our vendors, our independent agents or others with whom we do business, or otherwise. Despite the security measures that may be in place, any such systems may be vulnerable to the types of attacks and security incidents described above. Any well-publicized compromise of security could deter people from entering into transactions that involve transmitting confidential information, impart reputational or other harm, and/or have a material adverse effect on our business. Additionally, privacy legislation may make our business partners more reluctant to share information with us that is useful in conducting our business.

Our business depends on the uninterrupted operation of our facilities, systems, people and business functions.
Our business depends on our associates’ ability to perform necessary business functions, such as processing new and renewal policies and handling claims. We increasingly rely on technology and systems to accomplish these business functions in an efficient and uninterrupted fashion. Our inability to access our headquarters facilities for certain critical functions or a failure of technology, telecommunications or other systems or the loss or failure of services provided by key vendors, could significantly impair our ability to perform such functions on a timely basis or affect the accuracy of transactions. If sustained or repeated, such a business interruption or system failure could result in a deterioration of our ability to write and process new and renewal business, serve our agents and policyholders, pay claims in a timely manner, collect receivables or perform other necessary business functions. If our disaster recovery and business continuity plans did not sufficiently consider, address or reverse the circumstances of an interruption or failure, this could result in a materially adverse effect on our operating results and financial condition.

Our ability to successfully execute business functions also depends on hiring and retaining the qualified associates we employ. Competition for high-quality executives and other key associates occurs within the insurance industry and from other industries. We also must effectively develop and manage associates, including providing training and resources. Such tools and information can allow them to effectively perform critical business functions and adapt to changing business needs. During tight labor markets, such as we experienced in recent years, there is intense competition for associates qualified to execute important business functions. Many markets in which we operate are experiencing a low unemployment rate and labor shortages are affecting many industries. If we are unable to attract and retain certain associates, or if we fail to provide adequate training or resources, or fail to provide a work environment that is attractive to associates, we could limit the success of executing our strategic plans and vital business functions. Additionally, loss of key personnel or an inability to successfully execute on succession plans could negatively impact growth, operating results, financial condition, essential business relationships, profitability, and other business operations.

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I TEM 1 B .    Unresolved Staff Comments
None
 

ITEM 1C.      Cybersecurity

Risk Management and Strategy
As discussed further in Item 1, Regulation, Enterprise Risk Management, we manage cybersecurity as part of our overall enterprise risk programs .

As part of this program to keep our systems and data secure and to assist in understanding, assessing, identifying and managing material risks from cybersecurity threats, we take various measures through internal risk management efforts and testing by third-party experts. Those measures assess our cybersecurity program structure and capabilities and include blocking attempted cyber intrusions, defending against service disruptions, performing frequent vulnerability assessments and maintaining procedures to ensure timely notification of critical cybersecurity incidents and performance of related disclosure controls. We also have developed procedures and reporting processes when we identify an attempted cyber intrusion to the systems of one of our independent agents.

Additionally, the company uses third-party service providers, or vendors, in the course of conducting its operations . As such, the company has measures in place to help identify material risks from cybersecurity threats associated with the use of those vendors. When work with a vendor is evaluated, we consider, among other items, the availability of system and organization control reports, the use of artificial intelligence, interactions with our systems, the data involved and its level of sensitivity, the amount of data the vendor will process, where the data will be stored, how the data will be protected, what they will do with the data and destruction of data. Once a vendor is approved by the appropriate personnel, expectations regarding incident reporting are established and followed.

We are not aware of having experienced a material cybersecurity incident and we take commercially reasonable measures, described above and below, to monitor and respond to threats to keep our systems and data secure. However, we acknowledge that administrative, technical and internal accounting controls as well as other preventative actions may be insufficient to prevent security breaches to our systems or those of third parties with whom we do business due to, among other factors, changing technologies as well as criminal and state-sponsored cybercrime and cyber threats. Further, a material breach of our security or the security of a vendor that results in unauthorized access to our data could expose us to a disruption or challenges relating to our daily operations as well as to data loss, litigation, damages, fines and penalties, significant increases in compliance costs and reputational damage and could affect the company's strategy, results of operations or financial condition. See Item 1A, Risk Factors, for additional details.

Governance
Cybersecurity matters are an important part of reporting to our board of directors, executive management team, risk committee and disclosure committee. From a board perspective, the audit committee oversees the company's cybersecurity efforts along with additional oversight from the entire board. Two members of the audit committee have obtained certifications in cybersecurity oversight. Each quarter, the chief information officer and chief information security officer report to the audit committee on cybersecurity risks and controls. Also occurring each quarter, the entire board, and our senior executive team, as appropriate, receives a comprehensive report from the chief risk officer on the status and management of risk and other metrics relative to identified tolerances and limits, risk assessments and risk plans. Additionally, the chief risk officer has direct access to all members of the board of directors and presents in person at board meetings twice each year.

At the executive management and management levels, the chief information security officer leads the process of assessing and managing material risks from cybersecurity threats. Our chief information security officer has over 25 years of experience as a technology professional with in-depth knowledge of IT management processes and holds multiple degrees and professional designations, including as a certified information systems security professional (CISSP). The chief information security officer also works in collaboration with our chief information officer and chief risk officer and is supported by a cross-functional group of qualified and experienced professionals across various committees and functions. On a quarterly basis, the chief information officer provides a cybersecurity update to the disclosure committee and, on a monthly basis, the information security office team delivers a cybersecurity report to members of the senior executive team. Also refer to Item 10, Directors, Executive Officers and Corporate Governance, for additional qualification, experience and responsibility details.
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Associates involved in this area stay informed of industry trends and evolving threats using various resources including government authorities, peers, continuous education, industry publications, news outlets and other external parties that provide pertinent information. We take administrative, technical and internal accounting control measures to protect against cybersecurity incidents, including actions to monitor for, prevent, detect, mitigate and remediate any incidents that occur. These measures and actions include endpoint controls, multi-factor authentication and general cybersecurity education directed at our workforce and independent agents.

From a monitoring perspective, generally speaking, our information security office associates monitor the environment for threats, events and potential incidents. Depending on the potential severity of any identified incident, the company's incident response process, modeled after National Institute for Standards and Technology (NIST) frameworks, is initiated. As part of this process, each incident is evaluated and inventoried by our incident response team and reported to our legal compliance subcommittee for further action. Depending on severity, certain other internal and external parties may participate in the incident response process from a compliance and financial reporting perspective.

Incidents, regardless of severity, are evaluated and documented and are shared with the audit committee. In 2025, the audit committee received four updates on matters related to cybersecurity. The process of evaluating and documenting individual incidents, even when not deemed material, assists in determining how previous incidents have or may reasonably likely have a material effect on the company in the future.

I TEM 2.    Properties
Cincinnati Financial Corporation owns our headquarters building located on 107 acres of land in Fairfield, Ohio. This building has 1,508,200 square feet of total space. The property, including land is recorded in our financial statements at $127 million at December 31, 2025, and is classified as Land, building and equipment, net, for company use. John J. & Thomas R. Schiff & Co. Inc., a related party, occupies 9,056 square feet (less than 1%). This property is used for the operations described in the Consolidated Financial Statements and accompanying Notes.

Cincinnati Financial Corporation owns Gilmore Pointe, located on the northwest corner of our headquarters property. This four-story building contains approximately 103,000 square feet of usable space. The property is recorded in the financial statements at $3 million at December 31, 2025, and is classified as investment property in Other invested assets. At December 31, 2025, unaffiliated tenants occupied 90%, with no Cincinnati Financial affiliates occupying the property.

The Cincinnati Insurance Company owns the CFC Winton Center used for multiple operations with approximately 48,000 square feet of total space, located approximately six miles from our headquarters. The property, including land, is recorded in our financial statements at $7 million at December 31, 2025, and is classified as Land, building and equipment, net, for company use.

We lease office space located in London, United Kingdom, for our Cincinnati Global operations. We also lease office space throughout the U.S. to support our insurance operations.
 

I TEM 3.    Legal Proceedings
Neither the company nor any of our subsidiaries are involved in any litigation believed to be material other than ordinary, routine litigation incidental to the nature of our business.
 

I TEM 4.    Mine Safety Disclosures
This item is not applicable to the company.
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Part II

I TEM 5.    Market for the Registrant’s Common Equity, Related Stockholder Matters and
        Issuer Purchases of Equity Securities
Cincinnati Financial Corporation had 13,881 shareholders of record as of December 31, 2025. Our common shares are traded under the symbol CINF on Nasdaq.

Cumulative Total Return
As depicted in the graph below, the five-year total return on a $100 investment made December 31, 2020, assuming the reinvestment of all dividends, was 111.5% for Cincinnati Financial Corporation’s common stock compared with 96.2% for the S&P 500 Index and 121.7% for the S&P Composite 1500 Property & Casualty Insurance Index.
 
The following graph depicts $100 invested on December 31, 2020, in stock or index, including reinvestment of dividends. The years shown represent each respective fiscal year ending December 31.
 
Comparison of Five-Year Cumulative Total Return
The S&P 500 Index includes a representative sample of 500 leading companies in a cross section of industries of the U.S. economy. At year-end 2025, the S&P Composite 1500 Property & Casualty Insurance Index included 32 companies.

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Issuances and Purchases of Equity Securities
The following summarizes securities authorized for issuance under our equity compensation plans as of December 31, 2025:

Plan category Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights at
December 31, 2025 Weighted-average exercise
price of outstanding
options, warrants and rights Number of securities remaining
available for future issuance under
equity compensation plan (excluding
securities reflected in column (a)) at
December 31, 2025
  (a) (b) (c)
Equity compensation plans
    approved by security holders 3,460,112  $ 104.98  10,480,633 
Equity compensation plans not
    approved by security holders —  —  — 
    Total 3,460,112  $ 104.98  10,480,633 

 
The number of securities remaining available for future issuance includes: 9 million shares available for issuance under the Cincinnati Financial Corporation 2024 Stock Compensation Plan (the 2024 Plan), 1,270,093 shares available for issuance under the Cincinnati Financial Corporation 2016 Stock Compensation Plan (the 2016 Plan), and 210,540 shares available for issuance of share grants under the Director’s Stock Plan of 2018. The number of securities remaining available for future issuance assumes the number of securities to be issued from performance-based awards are issued at the target-level performance level. Both the 2024 Plan and the 2016 Plan allow for issuance of stock options, service-based or performance-based restricted stock units, stock appreciation rights or other equity-based grants. Awards other than stock options granted from the 2024 and 2016 plans are counted as three shares against the plan for each one share of common stock actually issued. Additional information about share-based associate compensation granted under our equity compensation plans is available in Item 8, Note 17 of the Consolidated Financial Statements.

We discuss the factors that affect our ability to pay cash dividends and repurchase shares, as well as the objectives of our repurchase program, in Item 7, Liquidity and Capital Resources. Regulatory restrictions on dividends our insurance subsidiaries can pay to the parent company are discussed in Item 8, Note 9 of the Consolidated Financial Statements.

The following summarizes shares purchased under our repurchase programs:
Period Total number
of shares
purchased Average
price paid
per share Total number of shares
purchased as part of
publicly announced
plans or programs Maximum number of
shares that may yet be
purchased under the
plans or programs

October 1-31, 2025 278,618  $ 153.03  278,618  4,632,388 
November 1-30, 2025 372,120  159.88  372,120  4,260,268 
December 1-31, 2025 —  —  —  4,260,268 
Totals 650,738  156.94  650,738   

 
We did not sell any of our shares that were not registered under the Securities Act during 2025. Our repurchase program does not have an expiration date. Our repurchase program was expanded on January 26, 2018, by
15 million shares. We have 4,260,268 shares available for purchase under our programs at December 31, 2025. During 2025, we repurchased 1,354,238 shares at an average price of $151.04.

I TEM 6.    [Reserved]
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I TEM 7.    Management's Discussion and Analysis of Financial Condition and
Results of Operations

Introduction
The purpose of Management’s Discussion and Analysis is to provide an understanding of Cincinnati Financial Corporation’s consolidated results of operations and financial condition. Our Management’s Discussion and Analysis should be read in conjunction with Item 8, Consolidated Financial Statements and related Notes. We present per share data on a diluted basis unless otherwise noted, adjusting those amounts for all stock splits and stock dividends.
 
We begin with an executive summary of our results of operations, followed by other highlights and details about critical accounting estimates. In several instances, we refer to estimated industry data so that we can provide information on our performance within the context of the overall insurance industry. Unless otherwise noted, the industry data is prepared by A.M. Best, a leading insurance industry statistical, analytical and financial strength rating organization. Information from A.M. Best is presented on a statutory accounting basis for insurance company regulation in the United States of America. When we provide our results on a comparable statutory accounting basis, we label it as such; all other company data is presented in accordance with accounting principles generally accepted in the United States of America (GAAP).

Through The Cincinnati Insurance Company, Cincinnati Financial Corporation is one of the 25 largest property casualty insurers in the nation, based on net written premium volume for the first nine months of 2025, among more than 2,000 U.S. stock and mutual companies operating independently or in groups. We market our insurance products through a select group of independent insurance agencies in 46 states as discussed in Item 1, Our Business and Our Strategy.
 
The U.S. economy, the insurance industry and our company continue to face many challenges. Our long-term perspective has allowed us to address immediate challenges while also focusing on the major decisions that best position the company for success through all market cycles. We believe that this forward-looking view consistently benefits our shareholders, agents, policyholders and associates.
 
To measure our progress, we have defined a measure of value creation that we believe captures the contribution of our insurance operations, the success of our investment strategy and the importance we place on paying cash dividends to shareholders. We refer to this measure as our value creation ratio (VCR) and it is made up of two primary components: (1) our rate of growth in book value per share plus (2) the ratio of dividends declared per share to beginning book value per share. This measure, intended to be all-inclusive regarding changes in book value per share, uses originally reported book value per share in cases where book value per share has been adjusted, such as after the adoption of Accounting Standards Updates with a cumulative effect of a change in accounting.

The primary sources of our company’s net income are summarized below. We discuss contributions to net income and VCR by source in Corporate Financial Highlights, followed by more detailed discussion in Financial Results.

• Underwriting profit (loss) – Includes revenues from earned premiums for insurance and reinsurance policies or contracts, reduced by losses and loss expenses from associated insurance coverages. Those revenues are further reduced by underwriting expenses associated with marketing policies or related to administration of our insurance operations. The net result represents an underwriting profit when revenues exceed losses and expenses.
• Investment income – Is generated primarily from investing the premiums collected for insurance policies sold, until funds are needed to pay losses for insurance claims or other expenses. Interest income from bonds or dividend income from stocks are the main categories of our investment income, with additional contribution from compounding effects over time.
• Investment gains and losses – Occur from appreciation or depreciation of invested assets over time. Gains or losses are generally recognized from changes in market values of equity securities without a sale or when invested assets are sold or become impaired.
 
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Executive Summary
Our value creation ratio, defined above, is our primary performance target. VCR trends are shown in the table below.
One
year Three-year
% average Five-year
% average
Value creation ratio:      
As of December 31, 2025 18.8   % 19.4   % 13.8   %
As of December 31, 2024 19.8  8.2  13.0 
As of December 31, 2023 19.5  10.2  15.2 

 
We are targeting an annual value creation ratio averaging 10% to 13% over the next five-year period. At 18.8% for 2025, our performance was above the high end of that range. We also exceeded the high end of the range for both the three-year and five-year periods that ended in December 2025.

The table below shows the primary contributors of our value creation ratio on a percentage basis. Analysis of the contributors aids understanding of our financial performance. Our financial results are further analyzed in the Corporate Financial Highlights section below.
  Years ended December 31, 2025-2024 2024-2023
  2025 2024 2023 Pt. Change Pt. Change
Value creation ratio major contributors:      
Net income before investment gains 9.1   % 9.9  % 9.1  % (0.8) 0.8 
Change in fixed-maturity securities, realized and unrealized gains 2.0   (0.6) 1.9  2.6   (2.5)
Change in equity securities, investment gains 8.2   9.6  8.6  (1.4) 1.0 
Other (0.5) 0.9  (0.1) (1.4) 1.0 
Value creation ratio 18.8   % 19.8  % 19.5  % (1.0) 0.3 

 
The 2025 value creation ratio decreased by 1.0 percentage points, compared with 2024, and again included a significant contribution from operating results, as shown in the table above. The 2025 ratio decrease included 0.8 percentage points from net income before investment gains and 0.2 percentage points in overall net gains from our investment portfolio and other items. The increase in 2024, compared with 2023, was primarily due to an increase in operating results which was partially offset by a reduction in overall net gains from our investment portfolio.

We believe our value creation ratio is a useful measure. The table below shows calculations for VCR.
(Dollars are per share) Years ended December 31,
  2025 2024 2023

Value creation ratio:      
End of period book value* $ 102.35   $ 89.11  $ 77.06 
Less beginning of period book value 89.11   77.06  67.01 
Change in book value 13.24   12.05  10.05 
Dividend declared to shareholders 3.48   3.24  3.00 
Total value creation $ 16.72   $ 15.29  $ 13.05 

Value creation ratio from change in book value** 14.9   % 15.6  % 15.0  %
Value creation ratio from dividends declared to shareholders*** 3.9   4.2  4.5 
Value creation ratio 18.8   % 19.8  % 19.5  %

* Book value per share is calculated by dividing end of period total shareholders' equity by end of period shares outstanding
** Change in book value divided by the beginning of year book value
*** Dividend declared to shareholders divided by beginning of year book value
 
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When looking at our longer-term objectives, we see three primary performance drivers for our value creation ratio: 
• Premium growth – We believe over any five-year period our agency relationships and initiatives can lead to a property casualty written premium growth rate that exceeds the industry average. The compound annual growth rate of our net written premiums was 11.4% over the five-year period 2021 through 2025, exceeding the 8.8% estimated growth rate for the property casualty insurance industry, with 2025 representing industry data reported through the first nine months of 2025. The industry’s growth rate excludes its mortgage and financial guaranty lines of business.
• Combined ratio – We believe our underwriting philosophy and initiatives can drive performance to achieve our underwriting profitability target of a GAAP combined ratio over any five-year period that consistently averages within the range of 92% to 98% in the future. Our GAAP combined ratio averaged 93.9% over the five-year period 2021 through 2025, within the performance target range. Performance as measured by the combined ratio is discussed in Consolidated Property Casualty Insurance Results. Our statutory combined ratio averaged 93.6% over the five-year period 2021 through 2025, compared with an estimated 99.6% for the property casualty industry, with 2025 representing industry data reported through the first nine months of 2025. The industry’s ratio again excludes its mortgage and financial guaranty lines of business.
• Investment contribution – We believe our investment philosophy and initiatives can drive investment income growth and lead to a total return on our equity investment portfolio over a five-year period that exceeds the five-year total return of the S&P 500 Index.
◦ Investment income growth, on a pretax basis, had a compound annual growth rate of 11.7% over the five-year period 2021 through 2025.
◦ Over the five years ended December 31, 2025, our equity portfolio compound annual total return was 12.4% compared with a compound annual total return of 14.4% for the Index. Our equity portfolio favors larger-capitalization, high-quality, dividend-growing stocks with a slight value orientation. For the year 2025, our equity portfolio total return was 15.7%, compared with 17.9% for the Index.
 
The board of directors is committed to rewarding shareholders directly through cash dividends and share repurchase authorizations. Through 2025, the company has increased the annual cash dividend rate for 65 consecutive years, a record we believe is matched by only seven other publicly traded U.S. companies. In addition to regular dividends, strong capital and excellent company performance has provided opportunities to further reward shareholders. The board regularly evaluates relevant factors in dividend-related decisions, and the 2025 increase to the regular dividend reflected confidence in our outstanding capital, liquidity and financial flexibility, as well as progress of our initiatives to improve earnings performance while growing insurance premium revenues. We discuss our financial position in more detail in Liquidity and Capital Resources. 

Our view of the shareholder value we can create over the next five years relies largely on three assumptions – each highly dependent on the external environment. First, we anticipate our property casualty average insurance prices will increase in proportion to, or in excess of, our loss cost trends. Second, we assume that the economy can maintain a long-term growth track. Third, we assume that valuations of our marketable securities will vary within a typical range over time, based on historical trends. If those assumptions prove to be inaccurate, we may not be able to achieve our performance targets even if we accomplish our strategic objectives.

We discuss in Item 1A, Risk Factors, many potential risks to our business and our ability to achieve our qualitative and quantitative objectives.
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Corporate Financial Highlights
In addition to the value creation ratio discussion and analysis in the Executive Summary, we further analyze our financial results in the sections below.
 
Balance Sheet Data
(Dollars in millions, except share data) At December 31, At December 31,
  2025 2024
Total investments $ 31,783   $ 28,378 
Total assets 41,002   36,501 
Short-term debt 25   25 
Long-term debt 790   790 
Shareholders' equity 15,911   13,935 
Book value per share 102.35   89.11 
Debt-to-total-capital ratio 4.9   % 5.5  %

 
Total investments increased by 12% during 2025 on a fair value basis. Entering 2026, we believe the portfolio continues to be well diversified and is well positioned to withstand short-term fluctuations. We discuss our investment strategy in Item 1, Investments Segment, and results for the segment in Investments Results. Total assets also increased by 12%, compared with year-end 2024. Shareholders’ equity increased by 14% and book value per share increased by 15%, for reasons discussed in the preceding Executive Summary.
 
The amount of our debt obligations at year-end 2025 matched year-end 2024. Our 4.9% ratio of debt to total capital (debt plus shareholders’ equity) at year-end 2025 decreased by 0.6 percentage points compared with the prior-year ratio.
 
Income Statement and Per Share Data
(In millions, except per share data) Years ended December 31, 2025-2024 2024-2023
  2025 2024 2023 Change % Change %
Earned premiums $ 9,983   $ 8,889  $ 7,958  12   12 
Investment income, net of expenses (pretax) 1,165   1,025  894  14   15 
Investment gains and losses, net (pretax) 1,442   1,391  1,127  4   23 
Total revenues 12,631   11,337  10,013  11   13 
Net income 2,393   2,292  1,843  4   24 
Comprehensive income 2,668   2,418  2,022  10   20 
Net income per share - diluted 15.17   14.53  11.66  4   25 
Cash dividends declared per share 3.48   3.24  3.00  7   8 
Diluted weighted average shares outstanding 157.7   157.8  158.1  0   0 

 
Net income rose by $101 million in 2025, compared with 2024, including a $44 million increase in net investment gains on an after-tax basis. The improved 2025 net income also included a $112 million increase in investment income after taxes partially offset by a decrease in property casualty underwriting income of $62 million after taxes, as discussed below. Our investment operation’s performance is discussed further in Investments Results. Net income of $2.292 billion in 2024, representing a $449 million increase compared with net income for 2023, included a $204 million increase in net investment gains after taxes. The improved 2024 net income also included an increase in property casualty underwriting income of $141 million after taxes and a $104 million increase in investment income after taxes.

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Contribution from Insurance Operations
(Dollars in millions) Years ended December 31, 2025-2024 2024-2023
2025 2024 2023 Change % Change %
Consolidated property casualty data:
Net written premiums $ 10,082   $ 9,243  $ 8,046  9   15 
Earned premiums 9,653   8,568  7,645  13   12 
Underwriting profit 501   580  401  (14) 45 

                    Pt. Change Pt. Change
GAAP combined ratio 94.9   % 93.4  % 94.9  % 1.5   (1.5)
Statutory combined ratio 94.7   92.9  94.6  1.8   (1.7)
Written premium to statutory surplus 1.0   1.0  1.1  0.0   (0.1)

 
Property casualty net written premiums grew 9% and earned premiums grew 13% in 2025. The growth reflected average renewal price increases, premium growth initiatives and a higher level of insured exposures, including a contribution to net written premium growth of less than 1 percentage point from Cincinnati Re and Cincinnati Global in total. Growth in 2024 net written premiums and earned premiums was driven by factors similar to 2025. Trends and related factors are discussed in Commercial Lines, Personal Lines and Excess and Surplus Lines Insurance Results.
 
Our property casualty insurance operations generated an underwriting profit for each of the three years ending in 2025. The $79 million decrease in 2025 underwriting profit, compared with 2024, included a $249 million increase in losses from natural catastrophe events and $13 million less benefit from net favorable reserve development on prior accident years before catastrophe losses. The $179 million increase in 2024, compared with 2023, included a $66 million increase in losses from catastrophe events and $27 million less benefit from net favorable reserve development on prior accident years before catastrophe losses.
 
We measure property casualty underwriting profitability primarily by the combined ratio. Our combined ratio measures the percentage of each earned premium dollar spent on claims plus all expenses related to our property casualty operations, all on a pretax basis. A lower ratio indicates more favorable results and better underlying performance. A ratio below 100% represents an underwriting profit.

Initiatives to improve our combined ratio are discussed in Item 1, Our Business and Our Strategy. In 2025, 2024 and 2023, favorable development on reserves for claims that occurred in prior accident years helped offset other incurred losses and loss expenses. Reserve development is discussed further in Property Casualty Loss and Loss Expense Obligations and Reserves. Losses from weather-related catastrophes are another important item influencing the combined ratio and are discussed along with other factors in Financial Results for our property casualty business and related segments.
 
Our life insurance segment reported a profit of $65 million in 2025, $57 million in 2024 and $41 million in 2023. We discuss results for the segment in Life Insurance Results. Most of this segment’s investment income is included in our investments segment results. In addition to investment income, investment gains and losses from the life insurance investment portfolio are also included in our investments segment results.

Critical Accounting Estimates
Cincinnati Financial Corporation’s financial statements are prepared using U.S. GAAP. These principles require management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes. Actual results could differ materially from those estimates.
 
The significant accounting policies used in the preparation of the financial statements are discussed in Item 8, Note 1 of the Consolidated Financial Statements. In conjunction with that discussion, material implications of uncertainties associated with the methods, assumptions and estimates underlying the company’s critical accounting policies are discussed below. The audit committee of the board of directors reviews the annual financial statements with management and the independent registered public accounting firm. These discussions cover: the quality of earnings; review of reserves and accruals; reconsideration of the suitability of accounting principles; review of highly
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judgmental areas including critical accounting estimates; audit adjustments; and such other inquiries as may be appropriate.
 
Property Casualty Insurance Loss and Loss Expense Reserves
We establish loss and loss expense reserves for our property casualty insurance business as balance sheet liabilities. Unpaid loss and loss expenses are the estimated amounts necessary to pay for and settle all outstanding insured claims, including incurred but not reported (IBNR) claims. These reserves account for unpaid loss and loss expenses as of a financial statement date.
 
For some lines of business that we write, a considerable and uncertain amount of time can elapse between the occurrence, reporting and payment of insured claims. The amount we will actually have to pay for such claims also can be highly uncertain. This uncertainty, together with the size of our reserves, makes the loss and loss expense reserves our most significant estimate. Gross loss and loss expense reserves were $11.450 billion at year-end 2025 compared with $9.937 billion at year-end 2024.
 
How Reserves Are Established
Our field claims representatives establish case reserves when claims are reported to the company to provide for our unpaid loss and loss expense obligation associated with known claims. Field claims managers supervise and review all claims with case reserves less than $100,000. Additionally, a headquarters supervisor and regional claims manager review claims under $100,000 if litigation or a certain specialty claim is involved. All claims with case reserves of $100,000 or greater are reviewed and approved by experienced headquarters supervisors and regional claims managers. Upper-level headquarters claims managers also review case reserves of $175,000 or more.
 
Our claims representatives base their case reserve estimates primarily upon case-by-case evaluations that consider:
• type of claim involved
• circumstances surrounding each claim
• policy provisions pertaining to each claim
• potential for subrogation or salvage recoverable
• general insurance reserving practices

Case reserves of all sizes are generally reviewed on a 90-day cycle, or more frequently if new information about a loss becomes available. As part of the review process, we monitor industry trends, cost trends, relevant court cases, legislative activity and other current events in an effort to ascertain new or additional loss exposures.
 
We also establish IBNR reserves to provide for all unpaid loss and loss expenses not accounted for by case reserves:
• For events designated as natural catastrophes resulting in losses incurred related to premiums written on a direct basis by The Cincinnati Insurance Companies, we calculate IBNR reserves directly as a result of an estimated IBNR claim count and an estimated average claim amount for each event. Once case reserves are established for a catastrophe event, we reduce the IBNR reserves. Our claims department management coordinates the assessment of these events and prepares the related IBNR reserve estimates. Such an assessment involves a comprehensive analysis of the nature of the event, of policyholder exposures within the affected geographic area and of available claims intelligence. Depending on the nature of the event, available claims intelligence could include surveys of field claims representatives within the affected geographic area, feedback from a catastrophe claims team sent into the area, as well as data on claims reported as of the financial statement date.
To determine whether an event is designated as a catastrophe, related to premiums written on a direct basis by The Cincinnati Insurance Companies, we generally use the catastrophe definition provided by Property Claims Service (PCS), a division of Insurance Services Office. PCS defines a catastrophe as an event that causes U.S., Puerto Rico and U.S. Virgin Islands damage of $25 million or more in insured property losses and affects a significant number of policyholders and insureds.
• For events designated as natural catastrophes resulting in losses for Cincinnati Re and Cincinnati Global, we begin with a review of in-force policies, treaties and related limits likely to be affected by each event. For both Cincinnati Re and Cincinnati Global, use of information from third-party catastrophe models, industry estimates,
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and our own proprietary adjustments are used for the estimate of ultimate losses for each catastrophe event. Incurred losses from catastrophe events for both Cincinnati Re and Cincinnati Global can be designated catastrophes by PCS, or deemed as a catastrophe by the international insurance industry or, for Cincinnati Re, as reported by ceding companies. IBNR reserves are calculated as the difference between the estimate of the ultimate loss and loss expenses and the sum of total loss and loss expense payments and total case reserves.
• For asbestos and environmental claims, we calculate IBNR reserves by deriving an actuarially-based estimate of total unpaid loss and loss expenses. We then reduce the estimate by total case reserves. We discuss the reserve analysis that applies to asbestos and environmental reserves in Liquidity and Capital Resources, Asbestos and Environmental Loss and Loss Expense Reserves.
• For loss expenses that pertain primarily to salaries and other costs related to our claims associates, also referred to as adjusting and other expense or AOE, we calculate reserves based on an analysis of the relationship between paid losses and paid AOE. Reserves for AOE are allocated to company, line of business and accident year based on a claim count algorithm. Claim counts reported and used in the reserving process are primarily measured by insurance coverages that are triggered when a loss occurs and a reserve is established. Coverages are defined as unique combinations of certain attributes such as line of business and cause of loss. Claims that are opened and closed without payment are included in the reported claim counts. Claim counts are presented on a direct basis only and do not reflect any assumed or ceded reinsurance.
• For all other claims and events, including reinsurance assumed or ceded, IBNR reserves are calculated as the difference between an actuarial estimate of the ultimate cost of total loss and loss expenses incurred reduced by the sum of total loss and loss expense payments and total case reserves estimated for individual claims. Reserve amounts for those other claims and events are significant, and represent the majority of amounts shown as IBNR reserves and loss expense reserves in the table included in Liquidity and Capital Resources, Property Casualty Loss and Loss Expense Obligations and Reserves. We discuss below the development of actuarially based estimates of the ultimate cost of total loss and loss expenses incurred.

Our actuarial staff applies significant judgment in selecting models and estimating model parameters when preparing reserve analyses. Unpaid loss and loss expenses are inherently uncertain as to timing and amount. Uncertainties relating to model appropriateness, parameter estimates and actual loss and loss expense amounts are referred to as model, parameter and process uncertainty, respectively. Our management and actuarial staff address these uncertainties in the reserving process in a variety of ways.
 
Our actuarial staff bases its IBNR reserve estimates for these losses primarily on the indications of methods and models that analyze accident year data. Accident year is the year in which an insured claim, loss or loss expense occurred. The specific methods and models that our actuaries have used for the past several years are:
• paid and reported loss development methods
• paid and reported loss Bornhuetter-Ferguson methods
• stochastic reserving models

Our actuarial staff uses diagnostics to evaluate the appropriateness of the models and methods listed above. The appropriateness of these models and methods for estimating IBNR reserves tends to depend on the tail for a line of business. Tail refers to the time interval between a typical claim’s occurrence and its settlement. The loss development and Bornhuetter-Ferguson methods, particularly the reported loss variations, tend to produce more appropriate IBNR reserve estimates for our short-tail lines such as homeowner and commercial property. For our mid-tail and long-tail lines, all models and methods provide useful insights.
 
Our actuarial staff also devotes significant time and effort to the estimation of model and method parameters. The loss development and Bornhuetter-Ferguson methods require the estimation of numerous loss development factors. The Bornhuetter-Ferguson methods also involve the estimation of numerous expected loss ratios by accident year. Stochastic reserving models can involve the estimation of development trends, calendar year inflation trends and exposure levels. Consequently, our actuarial staff monitors a number of trends and measures to gain key business insights necessary for exercising appropriate judgment when estimating the parameters mentioned, such as: 
• company and industry pricing
• company and industry exposure
• company and industry loss frequency and severity
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• past large loss events
• company and industry premium
• company in-force policy count

These trends and measures also support the estimation of expected accident year loss ratios needed for applying the Bornhuetter-Ferguson methods and for assessing the reasonability of all IBNR reserve estimates computed. Our actuarial staff reviews these trends and measures quarterly, updating parameters derived from them as necessary.
 
Quarterly, our actuarial staff summarizes their reserve analysis by preparing an actuarial best estimate and a range of reasonable IBNR reserves intended to reflect the uncertainty of the estimate. An inter-departmental committee that includes our actuarial management team reviews the results of each quarterly reserve analysis. The committee establishes management’s best estimate of IBNR reserves, which is the amount that is included in each period’s financial statements. In addition to the information provided by actuarial staff, the committee also considers factors such as:
• large loss activity and trends in large losses
• new business activity
• judicial decisions
• general economic trends such as inflation
• trends in litigiousness and legal expenses
• product and underwriting changes
• changes in claims practices

The determination of management’s best estimate, like the preparation of the reserve analysis that supports it, involves considerable judgment. Changes in reserving data or the trends and factors that influence reserving data may signal fundamental shifts or may simply reflect single-period anomalies. Even if a change reflects a fundamental shift, the full extent of the change may not become evident until years later. Moreover, since our methods and models do not explicitly relate many of the factors we consider directly to reserve levels, we typically cannot quantify the precise impact of such factors on the adequacy of reserves prospectively or retrospectively.
 
Due to the uncertainties described above, our ultimate loss experience could prove better or worse than our carried reserves reflect. To the extent that reserves are inadequate and increased, the amount of the increase is a charge in the period that the deficiency is recognized, raising our loss and loss expense ratio and reducing earnings. To the extent that reserves are redundant and released, the amount of the release is a credit in the period that the redundancy is recognized, reducing our loss and loss expense ratio and increasing earnings.
 
Key Assumptions – Loss Reserving
Our actuarial staff makes a number of key assumptions when using their methods and models to derive IBNR reserve estimates. Appropriate reliance on these key assumptions essentially entails determinations of the likelihood that statistically significant patterns in historical data may extend into the future. The four most significant of the key assumptions used by our actuarial staff and approved by management are:
• Emergence of loss and defense and cost containment expenses, also referred to as DCCE, on an accident year basis. Historical paid loss, reported loss and paid DCCE data for the business lines we analyze contain patterns that reflect how unpaid losses, unreported losses and unpaid DCCE as of a financial statement date will emerge in the future. Unless our actuarial staff or management identifies reasons or factors that invalidate the extension of historical patterns into the future, these patterns can be used to make projections necessary for estimating IBNR reserves. Our actuaries significantly rely on this assumption in the application of all methods and models mentioned above.
• Calendar year inflation. For long-tail and mid-tail business lines, calendar year inflation trends for future paid losses and paid DCCE do not vary significantly from a stable, long-term average. Our actuaries base reserve estimates derived from stochastic reserving models on this assumption.
• Exposure levels. Historical earned premiums, when adjusted to reflect common levels of product pricing and loss cost inflation, can serve as a proxy for historical exposures. Our actuaries require this assumption to estimate expected loss ratios and expected DCCE ratios used by the Bornhuetter-Ferguson reserving methods. They may
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also use this assumption to establish exposure levels for recent accident years, characterized by “green” or immature data, when working with stochastic reserving models.
• Claims having atypical emergence patterns. Characteristics of certain subsets of claims, such as high frequency, high severity, or mass tort claims, have the potential to distort patterns contained in historical paid loss, reported loss and paid DCCE data. When testing indicates this to be the case for a particular subset of claims, our actuaries segregate these claims from the data and analyze them separately. Subsets of claims that could fall into this category include hurricane claims or claims for other weather events where total losses we incurred were very large, individual large claims and asbestos and environmental claims.

These key assumptions have not changed for several years. Paid losses, reported losses and paid DCCE are subject to random as well as systematic influences. As a result, actual paid losses, reported losses and paid DCCE are virtually certain to differ from projections. Such differences are consistent with what specific models for our business lines predict and with the related patterns in the historical data used to develop these models. As a result, management does not closely monitor statistically insignificant differences between actual and projected data.
 
Reserve Estimate Variability
Management believes that the standard error of a reserve estimate, a measure of the estimate’s variability, provides the most appropriate measure of the estimate’s sensitivity. The reserves we establish depend on the models we use and the related parameters we estimate in the course of conducting reserve analyses. However, the actual amount required to settle all outstanding insured claims, including IBNR claims, as of a financial statement date depends on stochastic, or random, elements as well as the systematic elements captured by our models and estimated model parameters. For the lines of business we write, process uncertainty – the inherent variability of loss and loss expense payments – typically contributes more to the imprecision of a reserve estimate than parameter uncertainty.
 
Consequently, a sensitivity measure that ignores process uncertainty would provide an incomplete picture of the reserve estimate’s sensitivity. Since a reserve estimate’s standard error accounts for both process and parameter uncertainty, it reflects the estimate’s full sensitivity to a range of reasonably likely scenarios.
 
The table below provides standard errors and reserve ranges by major property casualty lines of business and in total for net loss and loss expense reserves as well as the potential effects on our net income, assuming a 21% federal tax rate. Standard errors and reserve ranges for assorted groupings of these lines of business cannot be computed by simply adding the standard errors and reserve ranges of the component lines of business, since such an approach would ignore the effects of product diversification. See Liquidity and Capital Resources, Property Casualty Loss and Loss Expense Obligations and Reserves, Range of Reasonable Reserves, for more details on our total reserve range. While the table reflects our assessment of the most likely range within which each line’s actual unpaid loss and loss expenses may fall, one or more lines’ actual unpaid loss and loss expenses could nonetheless fall outside of the indicated ranges.
(Dollars in millions) Net loss and loss expense range of reserves  
  Carried reserves Low point High point Standard error Net income
effect
 
At December 31, 2025          
Total $ 11,012   $ 10,073   $ 11,141   $ 534   $ 422  

Commercial casualty $ 3,837   $ 3,498   $ 4,047   $ 274   $ 217  
Commercial property 495   368   520   76   60  
Commercial auto 1,085   1,003   1,116   57   45  
Workers' compensation 1,013   855   1,047   96   76  
Personal auto 580   533   620   44   35  
Homeowners 571   484   580   48   38  
Excess and surplus 1,268   1,081   1,384   152   120  

 
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Life Policy and Investment Contract Reserves
We establish the reserves for traditional life policies, including term, whole life and other products based on certain cash flow assumptions including mortality and lapse rates. These assumptions are established based on our current expectations and are reviewed annually to determine any necessary updates. They are also updated on an interim basis if evidence suggests that they should be revised. We use both our own experience and industry experience, adjusted for historical trends, in arriving at our cash flow assumptions. These reserves also include a discount rate assumption that is based on upper-medium grade fixed-income instrument yields (market value discount rates) and is updated quarterly.

The gross reserve balance for term and whole life policy reserves was $1.529 billion, or 51.1%, of total life policy and investment contract reserves at December 31, 2025. The following table summarizes the sensitivity, on a net basis, of our term and whole life policy reserves and reinsurance recoverable amounts to hypothetical changes in key assumptions and the resulting increase/(decrease) to pretax net income and pretax other comprehensive income:

(Dollars in millions) At December 31, 2025
Pretax Net Income Pretax Other Comprehensive Income
Assumptions set by actuaries and approved by management:
Mortality
Effect of a 1% increase $ (7) $ —  
Effect of a 1% decrease 7   —  

Lapse rates
Effect of a 10% increase $ 21   $ (4)
Effect of a 10% decrease (20) 3  
Assumptions set by market values:
Market value discount rate
Effect of a 100 basis point increase $ —   $ 160  
Effect of a 100 basis point decrease —   (198)

We establish reserves for our universal life, deferred annuity and other investment contracts, equal to the cumulative account balances, which include premium deposits plus credited interest less charges and withdrawals. Charges include surrender and contract administration charges as well as asset-based fees. The reserve balance for these contracts was $1.225 billion, or 40.9%, of total life policy and investment contract reserves, at December 31, 2025.

Some of our universal life insurance policies contain no-lapse guarantee provisions. For these policies, we establish a reserve, or other additional liability, in addition to the account balance based on expected no-lapse guarantee benefits and expected policy assessments. Key assumptions used to establish this other additional liability reserve are expected investment returns and projected lapse rates. These assumptions, and other relevant inputs, are reviewed annually and on an interim basis in line with the process described above for traditional life policies. The reserve balance was $138 million, or 4.6%, of total life policy and investment contract reserves at December 31, 2025, and is included as a component of universal life reserves in Item 8, Note 5 of the Consolidated Financial Statements.

Asset Impairment
Our investment portfolio is our largest asset. We monitor the fixed-maturity portfolio and all other assets for signs of credit-related or other impairment. We monitor decreases in the fair value of invested assets and the need for an allowance for credit losses for our fixed-maturity portfolio; allowances for expected credit losses on receivable and recoverable assets considering past events, current conditions and reasonable and supportable forecasts; an accumulation of company costs in excess of the amount originally expected to acquire or construct an asset; or other factors such as bankruptcy, deterioration of creditworthiness or failure to pay interest; and changes in legal factors or in the business climate.
 
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The application of our invested assets impairment policy resulted in no write-downs of impaired securities intended to be sold in 2025 or 2024. Write-downs of impaired securities intended to be sold reduced our income before income taxes by $4 million in 2023. Write-downs represent noncash charges to income and are reported as investment losses. The application of our noninvested assets impairment policy did not have a material effect on our financial condition in 2025 or 2024.

Our internal investment portfolio managers monitor their assigned portfolios. If a fixed-maturity security is valued below amortized cost, the portfolio managers undertake additional reviews. Such declines often occur in conjunction with events taking place in the overall economy and market, combined with events specific to the industry or operations of the issuing organization. Managers review quantitative measurements such as a declining trend in fair value and the extent of the fair value decline, as well as qualitative measures such as pending events, credit ratings and issuer liquidity. We are even more proactive when these declines in valuation are greater than might be anticipated when viewed in the context of overall economic and market conditions. We provide detailed information about fixed-maturity securities fair valued in a continuous loss position at year-end 2025 in Item 7A, Quantitative and Qualitative Disclosures About Market Risk.

An available for sale fixed-maturity security is impaired if the fair value of the security is below amortized cost. The impaired loss is charged to net income when we have the intent to sell the security or it is more likely than not we will be required to sell the security before recovery of the amortized cost. For impaired securities we intend to hold, an allowance for credit related losses is recorded in investment losses when the company determines a credit loss has been incurred based on certain factors such as adverse conditions, credit rating downgrades or failure of the issuer to make scheduled principal or interest payments. A credit loss is determined using a discounted cash flow analysis by comparing the present value of expected cash flows with the amortized cost basis, limited to the difference between fair value and amortized cost. Noncredit losses are recognized in other comprehensive income as a change in unrealized gains and losses on investments. We provide information about valuations of our invested assets in Item 8, Note 2 of the Consolidated Financial Statements.

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Fair Value Measurements
 
Valuation of Financial Instruments
Fair value is defined as the exit price or the amount that would be (1) received to sell an asset or (2) paid to transfer a liability in an orderly transaction between marketplace participants at the measurement date. When determining an exit price, we must, whenever possible, rely upon observable market data.
 
We have categorized our financial instruments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level that is significant to the fair value measurement of the instrument. While we consider pricing data from outside services, we ultimately determine whether the data or inputs used by these outside services are observable or unobservable.
 
Financial assets and liabilities recorded in the Consolidated Balance Sheets are categorized based on the inputs to the valuation techniques as described in Item 8, Note 3 of the Consolidated Financial Statements.
 
Level 1 and Level 2 Valuation Techniques
Substantially all of the $30.965 billion of securities in our investment portfolio at year-end 2025, measured at fair value, are classified as Level 1 or Level 2. Financial assets that fall within Level 1 and Level 2 are priced according to observable data from identical or similar securities that have traded in the marketplace. Also within Level 2 are securities that are valued by outside services or brokers where we have evaluated and verified the pricing methodology and determined that the inputs are observable.
   

Recent Accounting Pronouncements
Information about recent accounting pronouncements is provided in Item 8, Note 1 of the Consolidated Financial Statements.
 
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Financial Results
Consolidated financial results primarily reflect the results of our five reporting segments. These segments are defined based on financial information we use to evaluate performance and to determine the allocation of assets.
• Commercial lines insurance
• Personal lines insurance
• Excess and surplus lines insurance
• Life insurance
• Investments

We report as Other the noninvestment operations of the parent company and its noninsurer subsidiary, CFC Investment Company. In addition, Other includes the financial results of our reinsurance assumed operations, known as Cincinnati Re ® , and our London-based global specialty underwriter, known as Cincinnati Global Underwriting Ltd. SM (Cincinnati Global).
 
We measure profit or loss for our commercial lines, personal lines, excess and surplus lines and life insurance segments based upon underwriting results (profit or loss), which represent net earned premium less loss and loss expenses, or contract holders’ benefits incurred, and underwriting expenses on a pretax basis. We also evaluate results for our consolidated property casualty insurance operations. That is the total of our standard market segments (commercial lines and personal lines), our excess and surplus lines insurance segment, Cincinnati Re and Cincinnati Global. For analysis of our consolidated property casualty insurance results, it is important to include the earned premiums, loss and loss expenses and also underwriting expenses reported as Other. Underwriting results and segment pretax operating income are not substitutes for net income determined in accordance with GAAP.
 
For our consolidated property casualty insurance operations as well as the insurance segments, statutory accounting data and ratios are key performance indicators that we use to assess business trends and to make comparisons to industry results, since GAAP-based industry data generally is not as readily available.
 
Investments held by the parent company and the investment portfolios for the insurance subsidiaries are managed and reported as the investments segment, separate from our underwriting business. Net investment income and net investment gains and losses for our investment portfolios are discussed in Investments Results.
 
The calculations of segment data are described in more detail in Item 8, Note 18 of the Consolidated Financial Statements. The following sections provide analysis and discussion of results of operations for each of the five segments.
 
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Consolidated Property Casualty Insurance Results
Earned and net written premiums for our consolidated property casualty operations grew in 2025, reflecting average renewal price increases, a higher level of insured exposures and strategic initiatives for targeted growth. A key measure of property casualty profitability is underwriting profit or loss. Our 2025 underwriting profit of $501 million was $79 million less than in 2024, including a $249 million unfavorable effect from a higher amount of catastrophe losses, primarily from the January 2025 wildfires in southern California. Prior accident year loss experience before catastrophes during 2025 was $13 million less favorable than in 2024. When estimating the ultimate cost of total loss and loss expenses, we consider many factors, including trends for inflation, historical paid and reported losses, large loss activity and other data or information for the industry and our company. Higher losses and loss expenses, especially for liability lines of business, reflect increased uncertainty of estimated ultimate losses. Until longer-term paid loss cost trends or other inflation effects become more clear, we intend to remain prudent in reserving for estimated ultimate losses. We continue working to improve underwriting profitability, such as through higher pricing and our ongoing initiatives to improve pricing precision and loss experience related to claims and loss control practices. Underwriting profit trends are discussed further below.
 
The table below highlights property casualty results, with analysis and discussion in the sections that follow. That analysis and discussion includes sections by segment.

Overview – Three-Year Highlights
(Dollars in millions) Years ended December 31, 2025-2024 2024-2023
  2025 2024 2023 Change % Change %
Earned premiums $ 9,653   $ 8,568  $ 7,645  13   12 
Fee revenues 14   12  11  17   9 
Total revenues 9,667   8,580  7,656  13   12 
Loss and loss expenses from:          
Current accident year before catastrophe losses 5,485   4,848  4,463  13   9 
Current accident year catastrophe losses 1,046   824  710  27   16 
Prior accident years before catastrophe losses (128) (141) (168) 9   16 
Prior accident years catastrophe losses (68) (95) (47) 28   (102)
Loss and loss expenses 6,335   5,436  4,958  17   10 
Underwriting expenses 2,831   2,564  2,297  10   12 
Underwriting profit $ 501   $ 580  $ 401  (14) 45 

Ratios as a percent of earned premiums: Pt. Change Pt. Change
Current accident year before catastrophe losses 56.8   % 56.6  % 58.4  % 0.2   (1.8)
Current accident year catastrophe losses 10.8   9.6  9.3  1.2   0.3 
Prior accident years before catastrophe losses (1.3) (1.6) (2.2) 0.3   0.6 
Prior accident years catastrophe losses (0.7) (1.1) (0.6) 0.4   (0.5)
Loss and loss expenses 65.6   63.5  64.9  2.1   (1.4)
Underwriting expenses 29.3   29.9  30.0  (0.6) (0.1)
Combined ratio 94.9   % 93.4  % 94.9  % 1.5   (1.5)

Combined ratio: 94.9   % 93.4  % 94.9  % 1.5   (1.5)
Contribution from catastrophe losses and prior years
    reserve development 8.8   6.9  6.5  1.9   0.4 
Combined ratio before catastrophe losses and prior years
    reserve development 86.1   % 86.5  % 88.4  % (0.4) (1.9)

 
Performance highlights for consolidated property casualty operations include:
• Premiums – Agency renewal written premiums increased $943 million or 13% in 2025, compared with 2024, and continued to contribute to growth in earned premiums and net written premiums that rose in each of our property casualty insurance segments. The renewal premium increase was largely due to average renewal price
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increases and a higher level of insured exposures. Price increases with enhanced precision continue to benefit operating results.
New business written premiums produced through agencies decreased $67 million in 2025, compared with 2024. Agents appointed during 2025 or 2024 produced a 2025 increase in standard lines new business of $87 million. Growth initiatives also favorably affect growth in subsequent years, particularly as newer agency relationships mature over time.
Cincinnati Re produced $591 million of 2025 net written premiums, a $6 million decrease in other written premiums, compared with 2024. Cincinnati Re assumes risks through reinsurance treaties and in some cases cedes part of the risk and related premiums to one or more unaffiliated reinsurance companies through transactions known as retrocessions. The decrease included a $12 million net favorable effect from estimated premiums to reinstate treaties affected by the California wildfires. In 2025, earned premiums for Cincinnati Re totaled $582 million.
Net written premiums for Cincinnati Global were $334 million in 2025, an increase of $31 million in other written premiums, compared with 2024. In 2025, earned premiums for Cincinnati Global totaled $311 million.
Other written premiums also include premiums ceded to reinsurers as part of our ceded reinsurance program. An increase in ceded premiums, other than Cincinnati Re and Cincinnati Global premiums, reduced net written premium growth by $58 million in 2025. Other written premiums for 2025 included a net unfavorable amount of $52 million for reinsurance treaty reinstatement premiums related to the California wildfires, including a favorable $12 million for Cincinnati Re and an unfavorable $64 million for our personal lines insurance segment.
The table below analyzes premium revenue components and trends.
(Dollars in millions) Years ended December 31, 2025-2024 2024-2023
  2025 2024 2023 Change % Change %
Agency renewal written premiums $ 8,023   $ 7,080  $ 6,261  13   13 
Agency new business written premiums 1,474   1,541  1,177  (4) 31 
Other written premiums 585   622  608  (6) 2 
Net written premiums 10,082   9,243  8,046  9   15 
Unearned premium change (429) (675) (401) 36   (68)
Earned premiums $ 9,653   $ 8,568  $ 7,645  13   12 

 
• Combined ratio – The combined ratio increased by 1.5 percentage points in 2025, compared with 2024, including a 1.6 percentage-point increase in the ratio for catastrophe losses. The 2025 ratio for current accident year losses and loss expenses before catastrophes increased by 0.2 percentage points. That ratio increase included an increase of 1.4 points for the IBNR portion and a decrease of 1.2 points for the case incurred portion. Price increases and other underwriting efforts have helped to manage effects of losses that include inflation effects. The remainder of the 2025 combined ratio increase included a decrease of 0.6 percentage points in the ratio for underwriting expenses, partially offset by 0.3 percentage points less benefit in the ratio for prior accident year losses and loss expenses before catastrophes. We further discuss ratios related to reserve development in the sections that follow the Catastrophe Losses Incurred table below.
Our statutory combined ratio was 94.7% in 2025 compared with 92.9% in 2024 and 94.6% in 2023. The estimated statutory combined ratio for the property casualty industry, with the industry’s ratio excluding its mortgage and financial guaranty lines of business and based on industry data reported through the first nine months of 2025, was 94.0% in 2025, 98.9% in 2024 and 101.9% in 2023. The contribution of catastrophe losses to our statutory combined ratio was 10.1 percentage points in 2025, 8.4 percentage points in 2024 and 8.8 percentage points in 2023, compared with industry estimates of 8.0, 7.7 and 8.5 percentage points, respectively, with 2025 representing industry data reported through the first nine months of 2025. Components of the combined ratio are discussed below.
Catastrophe loss trends are an important factor in assessing trends for overall underwriting results. Our 10-year historical annual average contribution of catastrophe losses to the combined ratio was 8.6 percentage points at December 31, 2025. Our five-year average was 9.0 percentage points.
Net losses from catastrophes for 2025 included recoveries from various reinsurers that participate in our reinsurance ceded treaties. The recovery related to the California wildfires based on loss estimates as of December 31, 2025, was $435 million, excluding reinsurance recoveries from Cincinnati Re.

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During 2025, there was no recovery from reinsurers for losses pertaining to the Cincinnati Re only reinsurance program effective June 1, 2025. For the program effective June 1, 2024, recoveries of $34 million were estimated for the 2025 California wildfires. See Item 7, Liquidity and Capital Resources, 2026 Reinsurance Ceded Programs, for a discussion of the Cincinnati Re only reinsurance program and other reinsurance coverage.

The following table shows catastrophe losses incurred for the past two calendar years, net of reinsurance, as well as the effect of loss development on prior period catastrophe reserves. We individually list declared catastrophe events for which our incurred losses reached or exceeded $25 million.

Catastrophe Losses Incurred
(Dollars in millions, net of reinsurance)       Excess and surplus lines  
      Commercial lines Personal lines  
Dates Events Regions Other Total
2025            
Jan. 7-28 Wildfire West $ 1   $ 325   $ —   $ 122   $ 448  
Mar. 14-17 Flood, Lightning, Wind Midwest, Northeast, South 56   96   1   1   154  
Apr. 1-7 Flood, Lightning, Wind Midwest, South 14   32   —   —   46  
May 15-16 Flood, Lightning, Wind Midwest, Northeast 31   91   1   2   125  

All other 2025 catastrophes   86   165   2   20   273  
Development on 2024 and prior catastrophes (20) (37) (2) (9) (68)
Calendar year incurred total   $ 168   $ 672   $ 2   $ 136   $ 978  

2024            
Mar. 12-17 Flood, Lightning, Wind Midwest, South $ 30  $ 31  $ —  $ —  $ 61 
Mar. 31 - Apr. 4 Flood, Lightning, Wind Midwest, Northeast, South 9  23  —  —  32 
May 6-10 Flood, Lightning, Wind Midwest, South 25  30  1  —  56 
May 25-26 Flood, Lightning, Wind Midwest, South 38  29  1  —  68 
Jul. 13-18 Flood, Lightning, Wind Midwest, Northeast 18  11  —  —  29 
Sep. 25-28 Flood, Lightning, Wind Midwest, South (Helene) 55  133  2  43  233 
Oct. 9-10 Flood, Lightning, Wind South (Milton) 6  3  —  61  70 

All other 2024 catastrophes   92  149  4  30  275 
Development on 2023 and prior catastrophes (31) (43) —  (21) (95)
Calendar year incurred total   $ 242  $ 366  $ 8  $ 113  $ 729 

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Consolidated Property Casualty Insurance Loss and Loss Expenses
Loss and loss expenses include both net paid losses and reserve changes for unpaid losses as well as the associated loss expenses. For all property casualty lines of business in aggregate, net loss and loss expense reserves at December 31, 2025, were $1.344 billion higher than at year-end 2024, including $1.143 billion for incurred but not reported (IBNR) reserves. The $1.344 billion reserve increase raised year-end 2024 net loss and loss expense reserves by 14%, compared with a 13% increase in 2025 earned premiums.

Most of the incurred losses and loss expenses shown in the consolidated property casualty insurance results three-year highlights table are for the respective current accident years, with reserve development on prior accident years shown separately. Since less than half of our consolidated property casualty current accident year incurred losses and loss expenses represents net paid amounts, the majority represents reserves for our estimate of ultimate losses and loss expenses. These reserves develop over time, and we re-estimate previously reported reserves as we learn more about the development of the related claims. The table below illustrates that development. For example, the 66.2% accident year 2024 loss and loss expense ratio reported as of December 31, 2024, developed favorably by 3.2 percentage points to 63.0% due to claims settling for less than previously estimated, or due to updated reserve estimates for unpaid claims, as of December 31, 2025. Accident years 2024 and 2023 have both developed favorably, as indicated by the progression over time for the ratios in the table.
(Dollars in millions)            
Accident year loss and loss expenses incurred and ratios to earned premiums:      
Accident year: 2025 2024 2023 2025 2024 2023
as of December 31, 2025 $ 6,531   $ 5,396   $ 4,796   67.6   % 63.0   % 62.7   %
as of December 31, 2024   5,672  4,804    66.2  62.8 
as of December 31, 2023     5,173      67.7 

 
Catastrophe loss trends, discussed above, accounted for some of the movement in the current accident year loss and loss expense ratio for 2025, compared with 2024. Catastrophe losses added 10.8 percentage points in 2025, 9.6 points in 2024 and 9.3 points in 2023 to the respective consolidated property casualty current accident year loss and loss expense ratios in the table above.
 
The 56.8% ratio for current accident year loss and loss expenses before catastrophe losses for 2025 increased 0.2 percentage points compared with the 56.6% accident year 2024 ratio measured as of December 31, 2024. The increase included a 0.4 percentage-point increase in the ratio for current accident year losses of $2 million or more per claim, shown in the table below. It also included an unfavorable 0.3 points for the net effect of $52 million for reinsurance treaty reinstatement premiums related to the January 2025 wildfires in southern California.
 
Reserve development on prior accident years continued to net to a favorable amount in 2025, and was primarily due to less-than-anticipated loss emergence on known claims. We recognized $196   million of favorable development in 2025, compared with $236 million in 2024 and $215 million in 2023. Of the $40 million decrease in 2025, compared with 2024, $46 million was attributable to our commercial auto line of business. Approximately 97% of our net favorable reserve development on prior accident years recognized during 2025 occurred in our commercial property and workers' compensation lines of business. In 2024, our workers' compensation, commercial property and homeowner lines of business were responsible for approximately 89% of the favorable reserve development. As discussed in Liquidity and Capital Resources, Property Casualty Loss and Loss Expense Obligations and Reserves, Property Casualty Insurance Development of Estimated Reserves by Accident Year, commercial casualty and workers' compensation are considered long-tail lines with the potential for revisions inherent in estimating reserves. Favorable development recognized during 2023 was primarily from our workers’ compensation, commercial property and homeowner lines of business. Development by accident year is further discussed in Liquidity and Capital Resources, Property Casualty Insurance Development of Estimated Reserves by Accident Year.
 
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Consolidated Property Casualty Insurance Losses by Size
(Dollars in millions, net of reinsurance) Years ended December 31, 2025-2024 2024-2023
  2025 2024 2023 Change % Change %
Current accident year losses greater than $5,000,000 $ 116   $ 68  $ 141  71   (52)
Current accident year losses $2,000,000-$5,000,000 156   138  144  13   (4)
Large loss prior accident year reserve development 172   75  94  129   (20)
Total large losses incurred 444   281  379  58   (26)
Losses incurred but not reported 814   783  596  4   31 
Other losses excluding catastrophe losses 3,046   2,782  2,571  9   8 
Catastrophe losses 939   704  634  33   11 
Total losses incurred $ 5,243   $ 4,550  $ 4,180  15   9 

Ratios as a percent of earned premiums:       Pt. Change Pt. Change
Current accident year losses greater than $5,000,000 1.2   % 0.8  % 1.9  % 0.4   (1.1)
Current accident year losses $2,000,000-$5,000,000 1.6   1.6  1.9  0.0   (0.3)
Large loss prior accident year reserve development 1.8   0.9  1.2  0.9   (0.3)
Total large loss ratio 4.6   3.3  5.0  1.3   (1.7)
Losses incurred but not reported 8.4   9.1  7.8  (0.7) 1.3 
Other losses excluding catastrophe losses 31.6   32.5  33.6  (0.9) (1.1)
Catastrophe losses 9.7   8.2  8.3  1.5   (0.1)
Total loss ratio 54.3   % 53.1  % 54.7  % 1.2   (1.6)

 
In 2025, total large losses incurred increased by $163 million, or 58%, net of reinsurance, largely due to an increase for our commercial lines insurance segment. The corresponding 2025 ratio increased 1.3 percentage points, compared with 2024. The large loss data in the table above does not include Cincinnati Re and Cincinnati Global. Our analysis of large losses incurred indicated no unexpected concentration of these losses and reserve increases by geographic region, policy inception, agency or field marketing territory. We believe the inherent volatility of aggregate loss experience for our portfolio of larger policies is greater than that of our portfolio of smaller policies, and we continue to monitor the volatility in addition to general inflationary trends in loss costs.
 
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Consolidated Property Casualty Insurance Underwriting Expenses
(Dollars in millions) Years ended December 31, 2025-2024 2024-2023
  2025 2024 2023 Change % Change %
Commission expenses $ 1,845   $ 1,605  $ 1,438  15   12 
Other underwriting expenses 981   953  854  3   12 
Policyholder dividends 5   6  5  (17) 20 
Total underwriting expenses $ 2,831   $ 2,564  $ 2,297  10   12 

Ratios as a percent of earned premiums:       Pt. Change Pt. Change
Commission expenses 19.1   % 18.7  % 18.8  % 0.4   (0.1)
Other underwriting expenses 10.1   11.1  11.1  (1.0) 0.0 
Policyholder dividends 0.1   0.1  0.1  0.0   0.0 
Total underwriting expense ratio 29.3   % 29.9  % 30.0  % (0.6) (0.1)

 
Consolidated property casualty commission expenses rose $240 million, or 15%, in 2025, with profit-sharing commissions for agencies increasing by $41 million. The 2025 ratio of commission expenses as a percent of earned premiums increased by 0.4 percentage points, compared with 2024. The ratio for 2024 decreased compared with 2023. In 2025, other underwriting expenses as a percent of earned premiums decreased by 1.0 percentage points, compared with 2024, as earned premiums rose faster than other underwriting expenses. The ratio improvement was primarily from a decrease in employee-related expenses. The 2025 ratio also included an unfavorable 0.2 points for the effect of reinstatement premiums. In 2024, other underwriting expenses as a percent of earned premiums matched 2023, as earned premiums kept pace with other underwriting expenses. The three-year period ending in 2025 also included ongoing expense management efforts.
 
Commission expenses include our profit-sharing commissions, which are primarily based on one-year and three-year profitability of an agency’s business. The aggregate profit trend for agencies that earn these profit-based commissions can differ from the aggregate profit trend for all agencies reflected in our consolidated property casualty results.
 
Salaries, benefits and payroll taxes for our associates account for approximately half of our property casualty other underwriting expenses. Most of our associates either provide direct service to the property casualty portion of our agencies’ businesses or provide support to those associates.
 
Discussions below of our property casualty insurance segments provide additional details about our results.

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Commercial Lines Insurance Results
 
Overview – Three-Year Highlights
(Dollars in millions) Years ended December 31, 2025-2024 2024-2023
  2025 2024 2023 Change % Change %
Earned premiums $ 4,863   $ 4,486  $ 4,264  8   5 
Fee revenues 5   4  4  25   0 
Total revenues 4,868   4,490  4,268  8   5 
Loss and loss expenses from:        
Current accident year before catastrophe losses 2,912   2,660  2,594  9   3 
Current accident year catastrophe losses 188   273  316  (31) (14)
Prior accident years before catastrophe losses (110) (107) (112) (3) 4 
Prior accident years catastrophe losses (20) (31) (11) 35   (182)
Loss and loss expenses 2,970   2,795  2,787  6   0 
Underwriting expenses 1,459   1,384  1,313  5   5 
Underwriting profit $ 439   $ 311  $ 168  41   85 
Ratios as a percent of earned premiums:       Pt. Change Pt. Change
Current accident year before catastrophe losses 59.9   % 59.3  % 60.8  % 0.6   (1.5)
Current accident year catastrophe losses 3.9   6.1  7.4  (2.2) (1.3)
Prior accident years before catastrophe losses (2.3) (2.4) (2.6) 0.1   0.2 
Prior accident years catastrophe losses (0.4) (0.7) (0.2) 0.3   (0.5)
Loss and loss expenses 61.1   62.3  65.4  (1.2) (3.1)
Underwriting expenses 30.0   30.9  30.8  (0.9) 0.1 
Combined ratio 91.1   % 93.2  % 96.2  % (2.1) (3.0)

Combined ratio: 91.1   % 93.2  % 96.2  % (2.1) (3.0)
Contribution from catastrophe losses and prior years
    reserve development 1.2   3.0  4.6  (1.8) (1.6)
Combined ratio before catastrophe losses and prior years
    reserve development 89.9   % 90.2  % 91.6  % (0.3) (1.4)

 
Performance highlights for the commercial lines insurance segment include:
• Premiums – Earned premiums and net written premiums rose in 2025, including a $263 million, or 6%, increase in renewal written premiums that continued to include higher average pricing and a higher level of insured exposures. New business written premiums in 2025 increased $27 million, or 4%, compared with 2024, as we continued to carefully underwrite each policy in a highly competitive market.
• Combined ratio – The 2025 combined ratio improved by 2.1 percentage points compared with 2024, including a 1.9 percentage-point decrease in the ratio component for catastrophe losses. The 2025 combined ratio improvement was partially offset by 0.6 points from a higher ratio for current accident year loss and loss expenses before catastrophe losses, compared with 2024. That ratio increase included an increase of 1.9 points for the IBNR portion and a decrease of 1.3 points for the case incurred portion. Price increases and other underwriting actions have helped to manage effects of losses that include inflation effects. Development on prior accident years loss and loss expense reserves before catastrophes during 2025 was 0.1 percentage points less favorable than in 2024, as discussed below.
Pricing precision and other initiatives to improve commercial lines underwriting profitability complement our business practices that continue to leverage the local presence of our field associates. Field marketing representatives meet with local agencies to assess each risk, determine limits of insurance and establish appropriate terms and conditions. They underwrite new business, with collaboration and expertise from headquarters associates as needed, while field loss control, machinery and equipment and claims representatives conduct on-site inspections. Field claims representatives also assist underwriters by preparing full reports on their first-hand observations of risk quality.
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Our commercial lines statutory combined ratio was 90.3% in 2025, compared with 92.2% in 2024 and 95.6% in 2023. The contribution of catastrophe losses to our commercial lines statutory combined ratio was 3.5 percentage points in 2025, 5.4 percentage points in 2024 and 7.2 percentage points in 2023.

Commercial Lines Insurance Premiums
(Dollars in millions) Years ended December 31, 2025-2024 2024-2023
  2025 2024 2023 Change % Change %
Agency renewal written premiums $ 4,350   $ 4,087  $ 3,876  6   5 
Agency new business written premiums 768   741  584  4   27 
Other written premiums (120) (138) (124) 13   (11)
Net written premiums 4,998   4,690  4,336  7   8 
Unearned premium change (135) (204) (72) 34   (183)
Earned premiums $ 4,863   $ 4,486  $ 4,264  8   5 

 
We continue to refine our use of predictive analytics tools to improve pricing precision as we further segment commercial lines policies, emphasizing identification and retention of policies we believe have relatively stronger price adequacy. These tools better align individual insurance policy pricing to risk attributes, providing our underwriters with enhanced abilities to target profitability and to discuss pricing impacts with our agencies. We also continue to leverage our local relationships with agents through the efforts of our teams that work closely with them. We believe our field focus is unique and has several advantages, including providing us with quality intelligence on local market conditions. We seek to maintain appropriate pricing discipline for both new and renewal business as management continues to emphasize the importance of our agencies and underwriters assessing account quality to make careful decisions on a case-by-case basis whether to write new business or renew a policy. Premium rate credits may be used to retain renewals of quality business and to earn new business, but we do so selectively in order to avoid commercial accounts that we believe have insufficient profit margins.
 
Our 6% increase in 2025 agency renewal written premiums included higher average pricing. We measure average changes in commercial lines renewal pricing as the rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for respective policies. In 2025, our standard commercial lines policies averaged an estimated pricing change at a percentage in the mid-single-digit range. Our average commercial lines pricing change includes the flat pricing effect of certain coverages within package policies written for a three-year term that were in force but did not expire during the period being measured. Therefore, the average commercial lines pricing change we report reflects a blend of policies that did not expire and other policies that did expire during the measurement period.

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For only those commercial lines policies that did expire and were then renewed during 2025, we estimate that the average price increase was at a percentage near the high end of the mid-single-digit range. During 2025, we continued to further segment our commercial lines policies, emphasizing identification and retention of policies we believed had relatively stronger price adequacy. Conversely, we continued to seek more aggressive renewal terms and conditions on policies we believed had relatively weaker pricing, in turn retaining fewer of those policies.

Our 2025 increase of 6% for the commercial lines segment's agency renewal written premiums also included a higher level of insured exposures, in addition to other factors such as changes in policy retention rates or changes in mix of business that can cause variations in average premiums per policy. Part of the insured exposure increase reflects our response to inflation effects that increase the cost of building materials to repair damaged commercial structures. We use building valuation software to automate much of that underwriting process and may also manually adjust premiums to reflect property costs.

Changes in the economy can affect insured exposures that directly relate to premium amounts charged for some policies. For commercial accounts, we usually calculate initial estimates for general liability premiums based on estimated sales or payroll volume, while we calculate workers’ compensation premiums based on estimated payroll volume. A change in sales or payroll volume generally indicates a change in demand for a business’s goods or services, as well as a change in its exposure to risk. Policyholders who experience sales or payroll volume changes due to economic factors may also have other exposures requiring insurance, such as commercial auto or commercial property. Premium levels for these other types of coverages generally are not linked directly to sales or payroll volumes.

Premiums resulting from audits of actual sales or payrolls that confirmed or adjusted initial premium estimates are part of net written premiums and earned premiums. They also contribute to increases or decreases in our agency renewal written premiums. The contribution to our commercial lines earned premiums was $92 million, $107 million and $157 million in 2025, 2024 and 2023, respectively. The contribution on a net written premium basis was $92 million, $108 million and $136 million in 2025, 2024 and 2023, respectively. These net written premium amounts are included with agency renewal written premiums in the Commercial Lines Insurance Premiums table above.
 
In 2025, our commercial lines new business premiums written by our agencies increased $27 million, or 4%, compared with 2024, as we continued to carefully underwrite each policy in a highly competitive market. New business premium volume in recent years has been significantly influenced by new agency appointments. Agencies appointed since the beginning of 2024 produced commercial lines new business written premiums of $80 million, in aggregate, during 2025, up $58 million from what they produced during 2024. All other agencies contributed the remaining $688 million, down $31 million from the $719 million they produced in 2024.

For new business, our field associates are frequently meeting with our agents to: help judge the quality of each account; emphasize the Cincinnati value proposition; call on sales prospects with those agents; and provide appropriate quotes after carefully evaluating risk exposures. Some of our new business comes from accounts that are not new to the agent. We believe these seasoned accounts tend to be priced more accurately than business that is new to us and the agency. As we appoint new agencies who choose to move accounts to us, we report these accounts as new business to us.

Other written premiums primarily consist of premiums that are ceded to reinsurers and lower our net written premiums. A decrease in ceded premiums increased net written premium growth by $17 million in 2025.

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Commercial Lines Insurance Loss and Loss Expenses
Loss and loss expenses include both net paid losses and reserve changes for unpaid losses as well as the associated loss expenses. Most of the incurred losses and loss expenses shown in the commercial lines insurance segment three-year highlights table are for the respective current accident years, with reserve development on prior accident years shown separately. Since less than half of our commercial lines insurance segment current accident year incurred losses and loss expenses represents net paid amounts, the majority represents reserves for our estimate of ultimate losses and loss expenses. These reserves develop over time, and we re-estimate previously reported reserves as we learn more about development on the related claims. The table below illustrates that development. For example, the 65.4% accident year 2024 loss and loss expense ratio reported as of December 31, 2024, developed favorably by 3.5 percentage points to 61.9% due to claims settling for less than previously estimated, or due to updates to reserve estimates for unpaid claims, as of December 31, 2025. Accident years 2024 and 2023 for the commercial lines insurance segment have both developed favorably, as indicated by the progression over time of the ratios in the table.
(Dollars in millions)            
Accident year loss and loss expenses incurred and ratios to earned premiums:      
Accident year: 2025 2024 2023 2025 2024 2023
as of December 31, 2025 $ 3,100   $ 2,775   $ 2,672   63.8   % 61.9   % 62.7   %
as of December 31, 2024   2,933  2,693    65.4  63.2 
as of December 31, 2023     2,910      68.2 

 
Catastrophe losses, as discussed in Consolidated Property Casualty Insurance Results, explain some of the movement in the current accident year loss and loss expense ratio for accident year 2025, compared with 2024. Catastrophe losses added 3.9 percentage points in 2025, 6.1 points in 2024 and 7.4 points in 2023 to the respective commercial lines current accident year loss and loss expense ratios in the table above.

The 59.9% ratio for current accident year loss and loss expenses before catastrophe losses for 2025 increased 0.6 percentage points compared with the 59.3% accident year 2024 ratio measured as of December 31, 2024. The change included an increase in large losses incurred, described below including a table with corresponding ratios for new losses above $2 million, with a 0.6 percentage-point increase in the 2025 ratio. Contributions to the ratio increase included inflation effects that were partially offset by favorable impacts from various initiatives, such as those to improve pricing precision, risk selection and loss experience related to claims and loss control practices.
 
Commercial lines reserve development on prior accident years of $130 million in 2025 continued to net to a favorable amount and provided a smaller benefit than the $138 million recognized in 2024. The $8 million net decrease in 2025, compared with 2024, included $46 million from our commercial auto line of business and $18 million from our workers' compensation line of business, partially offset by a $52 million increase from our commercial property line of business. Most of our commercial lines net favorable reserve development on prior accident years recognized during 2025 occurred in our commercial property and workers’ compensation lines of business. Net unfavorable reserve development on prior accident years of $41 million for commercial auto and $21 million for commercial casualty was recognized during 2025. Favorable development recognized during 2024 and 2023 was also mostly from our workers’ compensation and commercial property lines of business. As discussed in Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, stable paid and reported loss patterns are a key assumption used to make projections necessary for estimating IBNR reserves. Development by accident year and other trends for commercial lines loss and loss expenses and the related ratios are further discussed in Liquidity and Capital Resources, Property Casualty Insurance Development of Estimated Reserves by Accident Year.
 
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Commercial Lines Insurance Losses by Size
(Dollars in millions, net of reinsurance) Years ended December 31, 2025-2024 2024-2023
  2025 2024 2023 Change % Change %
Current accident year losses greater than $5,000,000 $ 71   $ 51  $ 109  39   (53)
Current accident year losses $2,000,000-$5,000,000 83   70  99  19   (29)
Large loss prior accident year reserve development 142   73  89  95   (18)
Total large losses incurred 296   194  297  53   (35)
Losses incurred but not reported 380   470  328  (19) 43 
Other losses excluding catastrophe losses 1,514   1,417  1,393  7   2 
Catastrophe losses 157   231  291  (32) (21)
Total losses incurred $ 2,347   $ 2,312  $ 2,309  2   0 

Ratios as a percent of earned premiums:       Pt. Change Pt. Change
Current accident year losses greater than $5,000,000 1.5   % 1.1  % 2.5  % 0.4   (1.4)
Current accident year losses $2,000,000-$5,000,000 1.7   1.5  2.3  0.2   (0.8)
Large loss prior accident year reserve development 2.9   1.7  2.1  1.2   (0.4)
Total large loss ratio 6.1   4.3  6.9  1.8   (2.6)
Losses incurred but not reported 7.8   10.5  7.7  (2.7) 2.8 
Other losses excluding catastrophe losses 31.2   31.5  32.7  (0.3) (1.2)
Catastrophe losses 3.2   5.2  6.8  (2.0) (1.6)
Total loss ratio 48.3   % 51.5  % 54.1  % (3.2) (2.6)

 
In 2025, total large losses incurred increased by $102 million, or 53%, net of reinsurance. The corresponding 2025 ratio increased 1.8 percentage points, compared with 2024. The 2025 increase on a dollar basis was primarily due to an increase of $66 million for our commercial property line of business and $46 million for our commercial casualty line of business. The commercial casualty increase included $49 million from prior accident years. In 2024, total large losses incurred and the corresponding ratio were lower than in 2023, largely due to lower amounts of large losses for our commercial property line of business. Our analysis indicated no unexpected concentration of these losses and reserve increases by geographic region, policy inception, agency or field marketing territory. We believe the inherent volatility of aggregate loss experience for our portfolio of larger policies is greater than that of our portfolio of smaller policies, and we continue to monitor the volatility in addition to general inflationary trends in loss costs.
 
Commercial Lines Insurance Underwriting Expenses
(Dollars in millions) Years ended December 31, 2025-2024 2024-2023
  2025 2024 2023 Change % Change %
Commission expenses $ 900   $ 818  $ 780  10   5 
Other underwriting expenses 554   560  528  (1) 6 
Policyholder dividends 5   6  5  (17) 20 
Total underwriting expenses $ 1,459   $ 1,384  $ 1,313  5   5 
Ratios as a percent of earned premiums:       Pt. Change Pt. Change
Commission expenses 18.5   % 18.2  % 18.3  % 0.3   (0.1)
Other underwriting expenses 11.4   12.6  12.4  (1.2) 0.2 
Policyholder dividends 0.1   0.1  0.1  0.0   0.0 
Total underwriting expense ratio 30.0   % 30.9  % 30.8  % (0.9) 0.1 

 
Commercial lines commission expenses as a percent of earned premiums increased slightly in 2025, compared with 2024, reflecting an increase in the ratio for profit-sharing commissions for agencies. The ratio for 2024 decreased slightly compared with 2023. In 2025, other underwriting expenses as a percent of earned premiums decreased, compared with 2024, as other underwriting expenses decreased, primarily from employee-related expenses. In 2024, other underwriting expenses as a percent of earned premiums increased, compared with 2023, as earned
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premiums rose at a slower pace than other underwriting expenses. The three-year period ending in 2025 also included ongoing expense management efforts.
 
Commercial Lines Insurance Outlook
Managing our commercial lines insurance segment includes efforts to address challenges in the commercial lines market of the U.S. property casualty industry. Competitive pressure is increasing and we continue to respond with enhanced pricing analytics and careful risk selection. We are committed to our agencies and focus on a long-term strategy when considering how to successfully navigate market pressures and changing conditions while profitably growing this segment.

We intend to grow through additional agency appointments, expansion of our local field presence, enhancing underwriting expertise and cross-selling or product expansion that meets the needs of an even larger percentage of our agencies' total commercial portfolio. Our goal is to provide flexibility in our process so that we can deliver an industry-leading agency experience to all of our agents as we work to be the first and last solution when they are considering business placement.

We intend to keep marketing our products to a broad range of business classes with a total account approach, while also continuing to diversify our book of business. Work continues to improve our pricing precision that enhances our segmentation of commercial risks, as underwriters emphasize underwriting discipline and careful management of rate levels. They seek to accurately assess risk by matching exposures and terms and conditions with appropriate premiums, evaluating each account on its individual characteristics. We believe that our initiatives to continually improve pricing precision and underwriting decision processes to manage loss cost effects will continue to benefit commercial lines profitability during 2026.

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