AM Best Affirms Credit Ratings of Cincinnati Financial Corporation and Subsidiaries

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) of the property/casualty (P/C) insurance subsidiaries of Cincinnati Financial Corporation (CFC) and The Cincinnati Life Insurance Company. Additionally, AM Best has affirmed the Long-Term ICR of “a” (Excellent) and the Long-Term Issue Credit Ratings (Long-Term IR) of CFC, the companies’ publicly traded parent. The outlook of these Credit Ratings (ratings) is stable. All companies except The Cincinnati Specialty Underwriters Insurance Company (CSU) are domiciled in Fairfield, OH. CSU is domiciled in Delaware. (See below for a detailed listing of the P/C companies and Long-Term IRs.)

The ratings reflect CFC’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

CFC maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by a conservative operating strategy with strict underwriting guidelines, which has led to favorable reserve development over a prolonged period of time, a comprehensive reinsurance program, favorable liquidity and financial flexibility. CFC has an extensive stock portfolio consisting of dividend-paying stocks, which supplements investment income. Although this exposes surplus and risk-adjusted capitalization to equity market fluctuations, CFC has been able to manage these instances. AM Best believes capitalization will remain supportive of CFC’s ratings. CFC, which is predominantly a P/C group of insurers that market its products primarily through independent insurance agencies, has recorded underwriting profits each year since 2012 with operating metrics that generally outperform its peers.

CFC’s favorable business profile assessment is underpinned by its diversified portfolio of commercial and personal lines business as well as its life and non-admitted insurance products. Also contributing to the favorable business profile assessment is CFC’s global geographic footprint and the group’s strong U.S. P/C market position.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa” (Superior) have been affirmed, each with a stable outlook, for The Cincinnati Insurance Company and its P/C subsidiaries:

• The Cincinnati Indemnity Company
• The Cincinnati Casualty Company
• The Cincinnati Specialty Underwriters Insurance Company

The following Long-Term IRs have been affirmed, each with a stable outlook:

Cincinnati Financial Corporation—
-- “a” (Excellent) on $28.0 million 6.90% senior unsecured debentures, due 2028
-- “a” (Excellent) on $374 million 6.125% senior unsecured notes, due 2034
-- “a” (Excellent) on $391 million 6.92% senior unsecured debentures, due 2028

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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