Cincinnati Financial Corp. CINF

Cincinnati Financial Corporation, incorporated on March 4, 1992, is an insurance holding company. As of December 31, 2016, the Company was engaged in the business of property casualty insurance marketed through independent insurance agencies in 41 states. The Company operates through five segments: Commercial lines insurance, Personal lines insurance, Excess and surplus lines insurance, and Life insurance and Investments. The Company's subsidiaries include The Cincinnati Insurance Company, CSU Producer Resources Inc. and CFC Investment Company. The Cincinnati Insurance Company owns four additional insurance subsidiaries. The Company's market property casualty insurance group includes two of those subsidiaries: The Cincinnati Casualty Company and The Cincinnati Indemnity Company. This group writes a range of business, homeowner and auto policies. Other subsidiaries of The Cincinnati Insurance Company includes The Cincinnati Life Insurance Company, which provides life insurance, disability income policies and fixed annuities, and The Cincinnati Specialty Underwriters Insurance Company, which offers excess and surplus lines insurance products.

The two non-insurance subsidiaries of Cincinnati Financial Corporation are CSU Producer Resources Inc., which offer insurance brokerage services to independent agencies, so that their clients can access the Company's excess and surplus lines insurance products, and CFC Investment Company, which offers commercial leasing and financing services to its agencies, their clients, and other customers. The Company offers an array of insurance products through the independent agency distribution channel. The Company offers insurance coverages for business property and liability, automobiles and homes.

Commercial Lines Insurance Segment

The Company's Commercial Lines Insurance Segment provides five commercial business lines: commercial casualty, commercial property, commercial auto, workers' compensation and other commercial lines. Commercial casualty provides coverage to businesses against third-party liability from accidents occurring on their premises or arising out of their operations, including injuries sustained from products or liability related to professional services. Specialized casualty policies may include similar coverage, such as umbrella liability or employment practices. The commercial casualty business line includes liability coverage written as part of commercial package policies. Commercial property provides coverage for loss or damage to buildings, inventory and equipment caused by covered causes of loss, such as fire, wind, hail, water, theft and vandalism, as well as business interruption resulting from a covered loss. Commercial property also includes other coverages, such as inland marine insurance, which covers losses related to builder's risk, cargo or equipment. Various property coverages can be written as standalone policies or can be added to a commercial package policy.

The Commercial auto business line protects businesses against liability to others for both bodily injury and property damage, medical payments to insureds and occupants of their vehicles, physical damage to an insured's own vehicle from collision and various other perils, and damages caused by uninsured motorists. Workers' compensation covers employers for government-specified benefits from work-related injuries to employees. Other commercial lines include various other types of insurance products for businesses, including management liability and surety, specialty packages, and machinery and equipment. The management liability and surety business line includes director and officer (D&O) liability insurance, which covers liability for actual or alleged errors in judgment, breaches of duty or other wrongful acts related to activities of organizations and can optionally include other liability coverages. Specialty packages include coverages for property, liability and business interruption tailored to meet the needs of specific industry classes, such as artisan contractors, dentists or smaller main street businesses. The Machinery and equipment is a specialized coverage that provides protection for loss or damage to boilers and machinery, including production and computer equipment and business interruption, due to sudden and accidental mechanical breakdown, steam explosion or artificially generated electrical current.

Personal Lines Insurance Segment

The personal lines property insurance segment writes personal lines coverage in accounts that include both auto and homeowner coverages, as well as coverages that are part of its other personal business line. The Company provides line of business data for three business lines: Personal auto, Homeowner and other personal lines. The Personal auto protects against liability to others for both bodily injury and property damage, medical payments to insureds and occupants of their vehicle, physical damage to an insured's own vehicle from collision and various other perils, and damages caused by uninsured motorists. In addition, various states require policies to provide first-party personal injury protection, referred to as no-fault coverage. Homeowner protects against losses to dwellings and contents from a range of perils, as well as liability arising out of personal activities both on and off the covered premises. The Company also offers coverage for condominium unit owners and renters. The other personal lines include insurance products it offers to individuals, such as dwelling fire, inland marine, personal umbrella liability and watercraft coverages.

Excess and Surplus Lines Insurance Segment

The excess and surplus lines insurance segment covers business risks with characteristics, such as the nature of the business or its claim history that are difficult to profitably insure in the standard commercial lines market. It provides coverages for commercial casualty and commercial property. The commercial casualty covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, including injuries sustained from products. Other coverages available include miscellaneous errors and omissions, professional liability and excess liability. Typical businesses covered include contractors, manufacturers, real estate owners and managers, retail, consultants, and bars or taverns. Policies covering liability at special events are also available. Commercial property insures buildings, inventory, equipment and business income from loss or damage due to causes, such as fire, wind, hail, water, theft and vandalism.

Life Insurance Segment

The Company's life insurance segment supports its agency-centered business model. The Company focuses on life products that feature a stream of payments. The life insurance business lines include four lines of business: term life insurance, universal life insurance, worksite products and whole life insurance. Under term life insurance policies, a death benefit is payable only if the insured dies during a specific period of time. Policy options include a return of premium provision, a benefit equal to the sum of all paid base premiums that is payable if the insured person survives to the end of the term. The policies are fully underwritten. Universal life insurance comprises long-duration life insurance policies. The worksite products include term life insurance, return of premium term life insurance, whole life insurance, universal life and disability insurance offered to employees through their employer. Premiums are collected by the employer using payroll deduction. Policies are issued using an underwriting approach and on a guaranteed issue basis. Worksite insurance products provide its property casualty agency force with cross-serving opportunities for both commercial and personal accounts.

Whole life insurance policies provide life insurance for the entire lifetime of the insured. While premiums are fixed, they must be paid as scheduled. These policies provide guaranteed cash values that are available as loans collateralized by the cash surrender value. The policies are fully underwritten.

Investments Segment

The revenues of the investments segment are from net investment income and from realized investment gains, and losses from investment portfolios managed for the holding company and each of the operating subsidiaries. The cash it generates from insurance operations has been invested in two categories of investments: fixed-maturity investments and equity investments. Fixed-maturity investments include taxable and tax-exempt bonds and redeemable preferred stocks. The equity investments include common and nonredeemable preferred stocks.