CINCINNATI FINANCIAL CORP Q4 FY2025 earnings call

• Operating Performance: Had excellent fourth quarter and full year 2025 operating performance, with net income up, investment income growth, and strong combined ratio results.
• Insurance Segments: Commercial lines combined ratio improved, personal lines had higher combined ratio due to catastrophe losses, excess and surplus lines improved, reinsurance segments had strong results.
• Reinsurance Ceded Programs: Renewed primary property-casualty treaties, per-risk treaties had average premium rate decrease, property catastrophe treaty increased top to $2,000,000,000.
• Investment Results: Investment income up, bond interest income grew, dividend income stable, portfolio valuation changes favorable.
• Expense Management: Property-casualty underwriting expense ratio decreased.
• Loss Reserves: Consistent approach, net addition to reserves, favorable reserve development in prior accident years.
• Capital Management: Returned capital to shareholders, book value record high.
• Intelligent Automation: Embracing generative AI, creating chatbot for underwriters, AI center of excellence.

Commercial lines: 2025 combined ratio was 91.1%, improving by 2.1 percentage points, with net written premiums growing 7%. Personal lines: 2025 combined ratio was 103.6%, increasing by 6.1 percentage points, and net written premiums grew 14%. Excess and surplus lines: 2025 combined ratio was 88.4%, improving by 5.6 percentage points, with net written premiums growing 11%. Cincinnati Re: 2025 combined ratio was 95.9%, with net written premiums decreasing 1%. Cincinnati Global: 2025 combined ratio was 79.2% with 10% premium growth. Life insurance subsidiary: Annual net income increased 16%, and term life insurance earned premiums grew 3%.

• Full year 2025 value creation ratio 18.8% exceeded the 10% to 13% target range.
• Expect 2026 ceded premiums for treaties to be approximately $204,000,000.
• Confidence in pricing and risk selection across lines, with room for improvement in all lines.

• Catastrophe losses pose a significant risk, impacting the combined ratio.
• Legal system abuse affects the commercial casualty line, causing uncertainty.
• Softening pricing in some lines, particularly commercial property and casualty, presents challenges.

Q: About commercial casualty line uncertainty and tech investments A: Stephen Spray discusses pricing softness, risk selection, and tech application across lines Q: About commercial competition and personal lines derisking A: Stephen Spray talks about competition leaning towards large accounts, progress on personal lines derisking Q: About reinsurance program, workers' comp, and commercial lines competition A: Michael James Sewell and Stephen Spray discuss reinsurance, reserve releases, and competitive environment Q: About commercial auto renewal pricing and investment income growth A: Stephen Spray and Steve Soloria discuss commercial auto pricing and investment outlook