Insurance Company Analysis:
A Practical Application
Andrew S. Benson
Lil
Jntroduction:
Insurance company analysis is a complex task which involves some
unique strategies.
Typical college finance courses teach fundamental
concepts, while focusing on the statements generated by manufacturing
firms.
Courses which include a closer look
at financial intermediaries
tend to focus upon depository institutions such as banks.
However,
insurance company analysis is largely left to those who are in the
industry, or to brokerage firms.
The following analysis is an example to
follow using specific sources and criteria.
The explinations provided
should serve as a starting point for exposure to insurance company
analysis.
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Practical
Application:
In early 1991, you have just accepted a position in the trust
department of a bank in Cincinnati, Ohio. Your boss has heard good things
about insurance stocks in the Wall Street Journal and wants to examine
two local corporations for possible investments.
Your boss delegates the
research to you, and would like you to prepare an analysis.
The companies
are local, so that they can be monitored through local news and word of
mouth.
The two insurance holding companies are Cincinnati Financial
Corporation and Ohio Casualty Corporation.
Getting
Started:
First, gather all of the information available from the local library.
find background data,
Stock Reports.
To
look for both corporations in Standard & Poor's
Each report contains two short pages of background,
developments and historical data.
These are ten year summaries including
premium income from Property/Casualty operations and Life/Health
operations.
Also listed are investment income, total revenues, loss
ratios, net income and return on equity.
These items fall under income
data.
Balance sheet data breaks down assets and liabilities, including equity.
A majority of the assets of an insurance company are held as investments.
With expenses and losses combined, loss ratios are near or over 100% of
revenues in insurance underwriting.
Insurance carriers make most of
their profits by investing the premiums which are paid in advance by
policyholders.
Additional data includes a ten year summary of stock price
ranges and earnings per share.
Book values and dividends are also listed.
Another excellent source is Value Line's Investment Survey. A single
page contains a brief description of the business provides information on
recent developments.
A few items from the income statement and balance
sheet are provided for the past fifteen years.
There are also projections
of these figures for the next one, two and five years.
Looking for industry data can be more challenging.
Traditional sources
such as Robert Morris Associates Annual Studies and Key Norms and
Industry Ratios are inadequate. They may skip the SIC code for insurance
or only provide data on one type of insurer.
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The quickest source is Best's Aggregates and Averages.
Property/Casualty edition and a Life/Health edition.
historical data broken down into lists and graphs.
subsidiaries is Best's Insurance Reports.
It comes in a
There is plenty of
Available for the
This book is published annually
and is broken down into Property/Casualty and Life/Health companies.
The information here explores financial statements of each subsidiary in
great detail in a standardized format.
Using the Reader's Guide to Periodical Literature or a computerized
version in the library, gather supplemental information for the report.
Searching under the company names,
find articles about the company with
background data or analysts' opinions.
Journals often provide data not
commonly available from more technical sources.
Call or write each company for recent annual reports and consolidated
balance sheets and income statements.
Consolidated information
combines the results of all subsidiaries with the parent operation.
statements can be found in each year's annual report.
not include consolidated data.
These
Best's reports do
It is essential to have this information.
Most companies will provide this data free of charge.
Other sources of information are filings with the state insurance
commissioner's office, or the National Association of Insurance
Commissioners.
If your library does not have Best's Insurance Reports,
the state commissioner will have them.
for the copies of this information.
The NAIC will provide data in greater
detail and can even customize the data.
form or on computer disk.
However, expect to pay a little
Outputs can be obtained in printed
However, prices are very prohibitive.
minimum charge is $400 for this research.
The
Given these sources of
information, raw data can be sorted and compiled on a spreadsheet to get
a better picture of a company.
To begin, sort through the background data
and recent articles about each company.
Cincinnati
Financial
Corporation:
Cincinnati Financial Corporation was incorporated in 1968.
Cincinnati
Financial was created as a holding company, lead by Cincinnati Insurance
Company, founded in 1950.
Other Property/Casualty companies include
The Cincinnati Casualty Company and The Cincinnati Indemnity Company.
The Life/Health carrier is The Cincinnati Life Insurance Company.
There
is also a leasing subsidiary named The Cincinnati Investment Company.1
Forbes
magazine of Jan. 7, 1992 listed Cincinnati Financial
Corporation as seventh in profitability among all publicly traded
diversified insurance companies. 2 The Sep. 2, 1991 National Underwriter
listed Cincinnati Financial as one of the top fifty Property/Casualty
insurers in safety and profitability.3
The management is lead by Robert Morgan, Cheif Executive Officer and
President.
He has ben with the company for 25 years.
John J. Schiff is a
founder of the company and a member of the Executive Committee.
His
son, John J. Schiff, Jr. is Chairman of the Board.
Cincinna.ti Financial Corporation is agent driven, and forms lasting
relationships with the 934 independent agencies which offer its products.
These agencies are located in 21 states, mostly in the Midwest and South.
Cincinnati Financial tries to build a volume of one million dollars in
premium with each agency, and provides commissions above industry
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norms.
This is possible because other operating expenses are kept low.
Cincinnati Financial Corporation has continually raised dividends for
31 years while reinvesting approximately over 700/0 of earnings.
Cincinnati Financial is traded over the counter under the symbol CINF.
It
is listed on NASDAQ (National Association of Securities Dealers
Automated Quotation System.)
Cincinnati Financial responds to the consumer.
Recent developments
include special policies for churches, dentists, contactors and
condominium owners.
Business coverage was extended to include
wholesalers, funeral directors and printers.
A new computer system is
almost complete which includes added flexibility for all staff members.
The new database will increase efficiency and reduce costs.
computer support is being provided to agents.
provide rates more quickly and accurately.
Additional
This will enable agencies to
Policies will be issued more
quickly with this new technology.4
Cincinnati Financial is active in providing agents with brochures for
loss prevention and works with trade associations in loss prevention.
Slow expansion to new states has been the key to growth above the
industry average .. Gross premiums in 1991 were up 12% compared to 3.5%
for the industry.s
The insurance industry has gained assets at nearly 8.4%
annually over the last 30 years.6
Statutory requirements are the most
important aspect of opening new areas or increasing business policies
offered.
Cincinnati Financial Corporation is active in the Midwest, South and
Southeast.
Operations extend as far west as Kansas.
slowly while writing new business in Nebraska
Growth continues
and Iowa.
Commercial
lines will make a debut in Vermont and New Hampshire by mid 1992.7
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Cincinnati Investment Company supports the independent agencies by
leasing and financing vehicles to agents and clients.
agency loyalty.
This inspires more
All corporate purchasing authority is centralized within
this subsidiary.
Investment earnings continue to be the key to profitability.
Superior
return on investments make up for insurance operations combined loss/
expense ratios of near 100%. A buy and hold strategy has been in place for
35 years in equity securities.
Nearly half of investments are in stocks.
The corporation consistently watches for new insurance regulations
and voices concerns at state and federal levels.
regulation,
effecti~e
Key issues include sound
legislation and fair treatment in the courts.8
Allen Fulkerson is president of a mutual fund which specializes in
insurance companies and banks.
Barron '5. 9
He voiced some opinions recently in
Since insurance protects against economic loss,
always a basic demand for insurance products.
there is
Insurance does not make
headlines very often, and investor are not as attracted to insurance
stocks.
It is not a rapid growth business, but there is solid growth.
Mr.
Fulkerson likes to use five year averages, and emphasizes return on
equity, book value and dividend growth.
In his opinion, Cincinnati Financial is well run, but not widely followed
by investors.
Over half of the stocks are owned by board members,
employees, families and independent agents.
are written in Ohio.
One third of the premiums
They have stayed out of California and the urban
Northeast. They have a good geographical empahsis and loyal agents.
Mr.
Fulkerson believes Cincinnati Financial is in a position to continue to do
well.
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Cincinnati Financial Corporation's stock portfolio is solid despite
stock market fluctuations.
Investments are heavily concentrated in the
Midwest, where management can follow the local companies.
include a 20% interest in Fifth Third Bank.
Holdings
This bank is one of the
strongest regional bank holding companies in the nation.
Cincinnati Financial has stayed away from the tough state regulation in
Massachusetts, New Jersey and California.
Nearly all agents in the states
of operation are shareholders through incentives.
Combined with other
benefits, agents tend to write quality business instead of just producing
sheer volume.
Development of specialized policies has further heightened
Cincinnati Financial's reputation among agents.10
Seventy percent of Cincinnati Financial Corporation's independent
agents rate the company as the best.
Agents are satisfied because claims
are settled quickly by local adjustors.
The biggest drawback in recent
news is investors' fears about two million shares of PNC Bank stock in the
investment portfolio.
acquisitions.
The stocks have been volitile due to new
Thirty percent of the total equity securities are in various
bank stocks, and Cincinnati Financial is confident in its holdings. 11
Earlier concerns for Cincinnati Financial's portfolio revolved around
the $4.7 million loss from two bond defaults.
This occured in late 1990,
but was offset by record investment gains that year combined with
federal tax credits.
Many of Cincinnati Financial's holdings are in low
volitility utilities. Some analysts point out that it only affected excess
capital, without affecting the core insurance business. 12
Ohio Casualty Corporation
Ohio Casualty Corporation started with Ohio Casualty Insurance
Company, which was incorporated in 1919.
Ohio Casualty Corporation is
traded over the counter under the symbol Ohio Casualty.
NASDAQ.
It ranks among the leading 50 domestic groups in writing
Joseph L. Marcum is Chairman of the Board
Property/Casualty business.
and Cheif Executive Officer.
years.
It is listed on
He has been with the company for nearly 45
Lauren N. Patch is the President.
The corporation consists of
Property/Casualty operations through Ohio Casualty Insurance Company,
West American Insurance Company, Ohio Security Insurance Company and
Ohio Life Insurance Company is the
American Fire and Casualty Company.
single life insurance subsidiary.13
In 1991, net income reached a 72 year high. Combined expense/ loss
ratios hover around 105%
,
while the industry average is near 110 %
is a good sign for Ohio Casualty.
they had to collect from reinsurers.
Oakland, California fires.
However,
•
This
this was also the first year
This was due to loss exposure in the
Property/Casualty premiums grew 1.6% while
writings in California decreased 18%.
California brings in the most
premium volume, but management reduced writings to 15% of premiums
from 22% in 1988.
This is because rates are being suppressed in this
state. 14
Management has let writings in Pennsylvania drop 12% due to
legislation regarding premium control. New Jersey premiums increased 9%
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due to legislation which forces insurance companies to write auto
insurance in addition to other lines.
Premiums went up 10% in the other
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38 states of operation.
premuim volume.
Auto insurance is a full 47% of Ohio Casualty's
Thirty-nine percent of business is in California,
Pennsylvania and New Jersey.
Regulators are lowering premiums and have
prevented rat'e increases on 25% of Ohio Casualty's Property/Casualty
business. 15
Proposition 103 in California is designed to provide a refund to
policyholders.
This ruling was passed in 1988, and ordered insurers to
reduce rates to 20% below 1987 levels.
However, the state supreme court
ruled earlier that insurance companies are entitled to a fair rate of return
in California. 16
Ohio Casualty is contesting the rollbacks, but has set
aside reserves in case refunds must be paid.
also contesting the rollbacks.
straight years.17
State Farm and Allstate are
This state has been unprofitable for five
In addition, 87 claims from Oakland area policyholders
reported losses of over $17 million.
The net loss to Ohio Casualty after
reinsurance was $9 million. 18
Investment returns have been strong, but rates of reinvestment are
presently low, which will hurt future profitability.
the investment portfolio.
Bonds make up 83% of
Equities account for 15% of the total.
After
concerns about their level of investment in junk bonds, they have actively
worked to reduce the risk of the portfolio.
commercial property investments.
They have no real estate or
Ohio Casualty maintains a fixed income
strategy, focusing on bonds of intermediate duration.
Equities are
purchased based upon a buy and hold strategy.
In early 1990, $500 million of the $700 million Property/Casualty bond
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portfolio was in junk bonds.
life portfolio.
There was also another $200 million in the
These figures were published in Mar. 26, 1990 copy of
Business Insurance. 19
However, junk bond holdings were diversified
among 106 companies in 46 industries.
Ohio Casualty's CEO, Mr. Marcum
claimed that only $470 million of total assets are in junk bonds.
Management points out that losses on paper are not realized if the bonds
are held to term.
Sherson Lehman Brothers maintained its analysis that
35% of the $2.5 billion in investments consisted of junk bonds.20
As of May of 1991, Ohio Casualty pared junk bond holdings to $310
million according to company sources. 21
They attribute this reduction to
the perception in the marketplace and not to the risk of the holdings.
Management feels that they are a good long term investment, while equity
in surplus provides an adequate buffer.
Ohio Casualty is presently looking
into upgrading data processing technology.
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This should improve service
and reduce costs.
Presently, a database is organizing company data for
more efficient use.
The company is developing policies which expand
commercial property coverage.
multiple accounts.
Credits are given to larger accounts and
This attracts and retains larger premium commercial
accounts.
Underwriting expenses increased 7%, however, the company has had
realized gains in the past year.
and 1989.
This compares to realized losses in 1990
In 1990, Ohio Casualty repurchased three million shares
common stock using bank debt as financing.
in 1991.
of
No shares were repurchased
The savings in dividend payouts more than paid for the after tax
cost of debt.
Ohio Casualty adopted a plan recentlt to protect shareholders in case
of a takeover attempt. 22
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This plan would allow stockholders to acquire
additional stock at a set price if anyone acquired 20% of the common
stock.
Company officials say it is meant to encourage a buyer to negotiate
with the board of directors.
Compiling Data:
In addition this backgound research, put all data from income
statements and balance sheets into a yearly side-by-side format for
comparison.
Consolidated data is available from the corporation, and
supplemental data can be added from the Standard and Poor's Stock
Reports for stock prices.
However, in order to measure the companies against the industry, the
Property/Casualty subsidiaries must be segregated and looked at
seperately.
This is by far the key business of the corporations, and
industry data is available exclusively for Property/Casualty operations.
Industry data is also available for Life/Health operations, but this is not
the driving force behind these organizations.
Construction of standard statements for historical data is the most
time consuming aspect of research.
However, after placing the data on
spreadsheets, ratio analysis is fairly easy.
Examples of breakdowns of
relevant data are contained in the exhibits of the Appendix.
Insurance Accounting:
Before tackling the analysis of these companies, some insurance
terminology must be discussed.
Insurance has some unique accounting
principles which can clear up many questions arising from a quick glance
of the balance sheets and income statements.
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First, "policyholders' surplus" is an insurance accounting term which
means "owners' equity."
This term indicates that stockholder interests
are subordinated to policyholders' claims.
The mission of an insurance
company is to maximize stockholder wealth subject to an accaptable level
of risk.23
In insurance, the acceptable risk is set forth by state insurance
commissioners and state laws governing insurance.
Policyholders' surplus is also referred to as simply "surplus."
The key
variables which dictate changes in surplus are underwriting results and
investment performance.
Other factors include the adequacy of loss
reserves and the growth rate established by premiums written and
retained earnings.
Liabilities include loss reserves.
They are seperate
accounts, and not an allocated portion of retained earnings.
techniques are used to estimate reserves for losses.
year by year and line by line.
Actuarial
They are calculated
Minimum standards must be met using
regulatory formulas.
This should prevent companies from grossly
understating losses.
Companies are free to reserve above minimum levels,
however, the market perceives these reserves as losses to be paid.
Loss reserves are only established for losses reported but not settled,
or those assumed to have occured but have not been reported. They are not
meant for losses expected to occur in the future.
Loss reserves would
theoretically liquidate all unsettled claims against an insurer.
State
insurance departments examine the adequacy of loss reserves and can
enforce new levels of reserves if needed.
Underestimating loss reserves
would boost current equity levels, but loss expenses would be greater in
the future.
Loss adjustment expense reserves are for all expenses connected with
adjustment or recording of policy claims.
is set aside for a specific claim.
If the expense is "allocated", it
"Unallocated" expenses go toward
overhead such as salaries and rent.
The claims are settled by claims
adjustors and lawyers.
Unearned premiums reflect the premiums collected, but for which
service has not been provided.
This situation develops from the fact that
policyholders pay in advance for coverage.
until the end of the coverage period.
Premiums are not fully earned
Unearned premiums represent the
aggregate amount to be refunded if all outstanding policies were
cancelled.
These reserves become income on a pro-rata basis during the
period of coverage.
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Two types of reporting for insurers include Generally Accepted
Accounting Principles (GAAP) and statutory reporting.
subsidiaries found in Best's Insurance Reports
accounting.
Statements of
utilize statutory
Assets which are not liquid are not listed as admitted assets.
Examples include supplies, equipment, premiums over 90 days past due,
automobiles, and loans made to certain company employees.
However, the consolidated statements of the parent companies report
these assets under GAAP guidelines. The assets are shown and
depreciated over their useful lives.
For insurance companies, some balance sheet items are calculated
differently.
For example, bonds are not valued at market prices.
Insurance companies tend to hold bonds for long periods, so bonds are
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amortized toward their par value.
This depends upon whether they were
bought at a premium or a discount.
This essentially helps to stabalize
surplus levels. 24
Stock is valued at the year end market value.
cost or market, whichever is lower.
outstanding stock.
Real estate is valued at
Capital paid up is the par value of
Capital paid in is the additional premium paid over par
when stock was initially issued.
Unrealized gains or losses on bonds do not exist due to this accounting
method.
However, unrealized gains or losses in equities are added to
policyholders' surplus.
This may understate return on equity, because the
unrealized gain is not added to net income.
Another problem is that
addition of this unrealized gain does not account for the taxes due if it
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were realized.
Property Casualty Operations:
Using the background data from available financial statements, there
must be a beginning to the analysis.
is the Property/Casualty business.
The basic foundation of each company
Property/Casualty is 90% of Ohio
Casualty's operations, and 75% of Cincinnati Financial's operation.
following data can be computed from exhibits 1,2,3,7,8
& 9.
The
Property/Casualty Industry Growth
Compounded 1987-1991
CINF
OCN)
Industry
2.0%
4.1%
-2.8%
Premiums Earned
7.1%
Net Income
16.1%
-3.4%
Total Assets
16.0%
6.9%
9.0%
Surplus
20.7%
9.8%
11.1%
Using this snapshot, it is obvious that Cincinnati Financial is growing
faster than Ohio Casualty and
the Property/Casualty industry.
Ohio
Casualty is experiencing lower than average growth with a drop in net
income despite growing assets.
Cincinnati Financial writes Property/Casualty insurance in only 22
states while Ohio Casualty writes in 41 states.
Cincinnati Financial has
the competitive edge in future growth potential.
Since Ohio Casualty has
390/0 of premium writngs in states with premium restrictions, premium
growth will be difficult.
Premium volumes are decreasing in California
and Pennsylvania while expansion in New Jersey is in the largely
unprofitable line of auto insurance. 25
Ohio Casualty seems to be creating
less net income with more assets, which is not a healthy sign.
What is happening within the companies to produce these results?
Part of the reason has to do with expenses and loss ratios.
information can be calculated from exhibits 10, 11 & 12.
The following
Average deviation from
QlNE
OCAS
Combined Ratio
-6.1%
-2.2%
Loss Ratio
-9.2%
-8.5 %
Expense Ratio
3.1%
6.3%
industry in
%.
1987-1991
Both companies have controlled costs to a level below the industry in
losses.
However, their expenses are slightly higher.
The net effect is
that Cincinnati Financial has a larger cushion in order to be profitable
with a goal of combined expenses below 100% for underwriting.
With a
better than average loss history, controlling expenses could be the key to
making Ohio Casualty more profitable.
Looking at the common sized
income statements, it appears that loss adjustment expenses are fine, but
general underwriting expenses need attention.
When companies experience combined loss ratios above 100%, they are
more dependent upon investment income to carry net income.
Looking
again, it is easy to see that the industry counts on about 14% of total
income to come from investments.
With superior combined ratios, both
companies can afford to rely less upon investment income.
Ohio Casualty
keeps expenses at half of the industry norm while Cincinnati Financial
keeps them at one fifth of the industry norm.
Net income as a percentage of total premiums and investment income
have hovered around 3%
for the industry in the last three years.
Ohio
Casualty averaged nearly 5% while Cincinnati Financial is closer to 9%.
Over a five year period, Cincinnati Financial averaged 4.9% above industry
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levels and Ohio Casualty was 1.7% above industry levels.
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Looking at the common sized balance sheets, each company has a
different strategy of investing assets.
In 1991, Cincinnati Financial had
32.4% of total assets in stocks and 46.7% in bonds for a total of 79.1 %.
Ohio casualty had 13.5% in stocks, 70.5% in bonds and 84.00/0 total. The
industry had 11.3% in stocks, 61.2% in bonds and 72.5% total.
Both companies keep more assets in long term securities than the
market.
Cincinnati Financial keeps more in stocks.
This strategey
requires more research into state law governing investment of premiums.
A synopsis of these laws are available through the NAIC's legal research
department.
A less complicated strategy is used by Ohio Casualty, putting
assets into bonds.
Bonds are more acceptable to regulators because their
yeild is known if they are held to maturity.
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However, the bond market is
well known as having less potential total returns over the long run.
This
aggregate statement is based upon compounded returns since 1926 .26
Although stocks tend to be riskier than bonds in the aggregate sense,
there are risky bonds and less volatile stocks in the market.
Casualty has a large investment in junk bonds.
Ohio
Cincinnati Financial has a
large holding of less volatile stocks such as banking, insurance and
utilities.
Looking at the ratio of net investment income/ invested assets,
both companies bring in a little more than the industry average of 7%.
However, it must be kept in mind that unrealized gains do not appear in
this numerator.
Unrealized gains from Ohio Casualty were 3.5% of total
assets or less in the last five years while Cincinnati Financial has
fluxuated from 7%
to 15.8%.
This can change the perception of how much
return on an investment a shareholder may expect.
It appears that the growth of the surplus account has been helped by
large unrealized gains at Cincinnati Financial.
Bond portfolios are
unaffected due to the previously mentioned accounting procedure.
Rates
of reinvestment are low now which will affect Ohio Casualty more than
Cincinnati Financial.
One measure of the risk of each parent company's stock is the Beta.
Calculated by Standard & Poor's Stock Guide, Ohio Casualty has a Beta of
.73 and Cincinnati Financial has a beta of .65.27 The Value Line
Investment Survey calculates the betas at .85 and .80 respectively.28
This implies that Cincinnati Financial stock is less volatile than Ohio
Casualty stock in the market.
This could very well be a function of the
underlying invested assets as well as the insurance operation.
Cincinnati
Financial's stock fluctuates as news develops about one of its large
investments, PNC Bank.29
Ohio Casualty stock fluctuates with
speculation of its junk bond valuation.30
On the asset side of the balance sheet, Premium Balances are listed.
These are the insurer's equivalent to accounts receivable.
The industry
average has been near 8%" of assets for the last six years.
Ohio Casualty
has succesfutly reduced this figure from 8.7% in 1985 to 6.90/0 in 1991.
CINF brought their figure down from a high of 8.1 in 1986 to 4.5% in 1991.
This frees funds to be invested in more profitable assets.
Policyholders' surplus for the industry varies from 24.4%
total liabilities and equity.
below for most years.
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unexpected losses.
to 26.4% of
Ohio Casualty has maintained levels of 21 % or
This surplus is to be used as a safety net to absorb
Surplus also provides a cushion in case an insurer
ceases operation and must pay refunds to policyholders.
Ohio Casualty has
lower capitalization than the industry, which implies added risk.
Cincinnati Financial maintains levels between 27.6%
seven years.
and 350/0 in the past
This allows 3% to 7% more protection for policyholders than
the average insurance company.
In order to further examine the Property/Casualty operations, refer to
exhibits 10, 11 & 12.
Liquidity is the first subject, and it can be
measured in many different ways.
Surlplus/Unearned Premiums
all policies were terminated.
above one.
Here are a few basic ratios.
measures how adequate the capital is if
A good rule of thumb is for this ratio to be
The industry ratio has climbed to 1.88 in 1991.
is doing better, but has peaked in 1991 at 1.06.
Ohio Casualty
Cincinnati Financial
appears to be strong with a 1991 ratio of 2.62.
Cash & Invested Assets/ Unearned Premium Reserves + Loss and Loss
Ajdustment Expense Reserves
is the next ratio for liquidity.
Instead of
using surplus, investments could be liquidated to pay if all policies were
cancelled and all losses and expenses were paid.
However, the market
value of the bond portfolio may yeild a gain or loss not shown in this ratio.
Solvency is quickest when using liquid assets.
The industry average is
near 1.3 for the last five years, while Ohio Casualty is at 1.3 and
Cincinnati Financial is slightly safer at 1.45.
A similar formula is found when taking liabilities and dividing them by
liquid assets.
Liquid assets are all of the listed unaffiliated assets.
There should be fewer liabilities than liquid assets, therefore the
resulting number should be below one.
The smaller the number, the more
assets would be leftover for the stockholders.
.85 for 1991 and Ohio Casualty is the same.
liquid Life/Healthwith a ratio of .73 in 1991.
The
industry average is
Cincinnati Financial is more
Efficiency can be neasured using insurance terms in familiar ratios.
Premiums Earned/ Surplus is a measured used to match premium volume
the level of capital.
The higher the number, the more volume is produced
per invested dollar.
The industry ratio has varied from 1.4 to 1.56 in the
last three years.
Cincinnati Financial has varied from 1.23 to 1.74, but
this ratio reflects the large surplus of the company.
higher levels from 2.28 to 3.09.
Ohio Casualty has
However, higher losses have come,
indicating that the volume is not necessarily quality business.
Premiums Earned/Assets
is another measure of the level of premiums
earned based on the level of assets available.
Cincinnati Financial
performed 5% better than the industry in 1991, and Ohio Casualty
performed 12% above the industry in the same period.
A measure of investment risk is Equity Securities/ Surplus.
equation
shows these securities as a percentage of surplus.
This
Equities are
generally more volatile than bonds, so this is a measure of market risk.
1991, this value was 43%.
their 1991 ratio is 62%.
In
Despite Ohio Casualty's large loan portfolio,
This is more risky than the industry.
suprisingly, Cincinnati Financial has a ratio of 96%.
Not
But with risk, comes
return as Cincinnati Financial's unrealized gains demonstrate.
A way to measure leverage is Assets/Surplus.
near 4.0 in the last five years.
The industry average is
Ohio Casualty has varied from 4.64 to 5.77.
Their higher leverage helps them to make up for a lower return on assets.
Cincinnati Financial has leverage ranging from 2.96 to 3.63.
figure is due to a strong surplus.
This lower
Profitability can be broken down into different ratios.
Premiums Earned is a type of profit margin.
Ohio Casualty
Net Income/
Both Cincinnati Financial and
do as well, or slightly better than the industry in this
respect.
Net Income/Total Assets is return on assets.
profitability and efficiency.
This shows how much the firm is really
getting relative to its asset base.
one percent for three years.
Is shows both
The industry average has been a dismal
Ohio Casualty has performed well with ratios
from two to four percent in the same period.
Cincinnati Financial has done
even better with ratios fromfour to six percent.
Net Income/ Surplus is the measure for return on equity.
average is 6.2% for the last six years.
,-
The industry
The average for Ohio Casualty is
17.2%. The avera.ge for Cincinnati Financial is 16.8%. Both companies do
very well in this area, but for differnt reasons.
Cincinnati Financial has a
superior return on assets while Ohio Casualty has better leverage.
Life/Health
Operations:
Looking toward the life subsidiaries, we utilize exhibits 13 through 21.
Specifically, the income statements reveal growth in premium volume.
At
a compounded rate since 1988, Cincinnati Financial's premiums have
grown 8.4%
annually.
operations in1988.
This is after they consolidated all Life/Health
Over the same period, Ohio Casualty has lost 2.1 %
annually while investment income has gained at a rate of 6.6%.
resulted in increased total income growth of 3.3% annually.
This
Cincinnati
Financial has experienced annual income growth of 7.2% over the same
period.
Cincinnati Financial also has strong net income of 15.9% of total
income as a five year average.
Net income at Ohio Casualty has fallen
from 11.50/0 of total income in 1987 to 2.8% in 1991.
Ohio Casualty suffers from greater losses due to payouts coupled with
larger increases in payment reserve levels.
These constitute 91.8%
of
total income and could be improved through stricter underwriting or
increased premiums.
60.10/0.
Cincinnati Financial's combined expenses here total
This puts Cincinnati Financial at a clear advantage.
The following are five year
percentage averages from 1987-1991.
See
exhibit 21.
-
Industry
.cINE
OCAS
Net Income/Premiums
25.6
11.0
5.8
Premiums/Assets
16.4
17.8
15.4
Assets/Surplus
2.76
8.36
13.9
Net Income/Surplus
11.2
16.4
1.8
Net I nco me/ Assets
4.2
2.2
1.0
Cincinnati Financial's profit margin, expressed as Net Income/
Premiums, is far above the industry while Ohio Casualty has a respectable
margin above the industry.
develops more business
It is also easy to see that Ohio Casualty
p~ert:lium
for its level of assets.
However, both
compnaies are slightly over the industry ratios in this measure of
efficiency.
Notably, return on assets as measured by Net Income/Assets
is very low in the industry.
This has not been reflected upon Ohio Casualty
or Cincinnati Financial as they average 2.2 and 4.2 respectively.
In this
respect, Life/Health operations are a profitable diversification from
Property/Casualty.
Return on equity is measured as Net Income/Assets.
R.O.E. is strong for
Cincinnati Financial, but is not as high as Ohio Casualty due to a strong
surplus level at Cincinnati Financial.
due to good leverage.
Ohio Casualty has a superior R.O.E.
Unfortunately, the averages cloud the fact that Ohio
Casualty is diong very poorly in the Life/Health business with 1991 R.O.E
of 5%.
Cincinnati Financial was more stable in1991 at 9%
•
Ohio Casualty's assets have climbed at a five year compounded annual
rate of 14.7%.
However, this growth is not translating into more profits.
Cincinnati Financial's assets have grown at a 9.7% annual rate over the
same period.
Cincinnati Financial appears to remain stable in the
Life/Health area.
Consolidated
Information:
The consolidated information is contained in exhibits 22 to 31.
However, the in depth breakdown has been accomplished, and the
consolidated statements and ratios are a reflection of the underlying
analysis.
operation.
This analysis is chiefly influenced by the Property/Casualty
However, additional information can still be analyzed to
further understand some properties which are unique to analysis of the
parent company.
For example, when calculating return on equity for Cincinnati
Financial, the five year average is 13.0%.
Casualty.
This figure is 14.2% for Ohio
However, the consolidated balance sheet provides us with
unrealized gains.
These gains are also a benefit to the stockholder in
terms of added value.
income.
These returns are added to surplus, but not to net
Perhaps a better picture of return on equity could be referred to
as adjusted return on euqity.
Simply take Net Income + Unrealized
Gains/Surplus. The average over the same period is now 40.2% for
Cincinnati Financial and 24.8% for Ohio Casualty.
strength for the two companies.
This shows an area of
Cincinnati Financial has the largest gains
in this area.
More information can be uncovered by looking at the stocks and
dividends of the parent company.
Annually compounded
growth results for
the most recent seven years follow.
QNE
OCAS
Oper. Earnings per Share
8.7
11.4
Earnings per Share
7.2
4.8
Dividends per Share
13.7
8.7
6.0
7.2
12.3
9.1
PIC Premiums per Share
Investment Income per Share
Both companies keep boosting earnings and dividends, but growth and
profitability do not often go hand in hand.
retained earnings.
Growth is also a function of
Cincinnati Financial needs more retained earnings that
Ohio Casualty because Cincinnati Financial is in a better position to grow
in the future.
Cincinnati Financial reinvested 69% of earnings while Ohio
Casualty reinvested 59%.
The rest was paid in dividends.
Book value
-
continues to grow, but the company which runs lean and has good levels of
surplus will come out ahead in the long run.
Adequate capital and cost cutting is needed when the insurance market
turns soft.
In a soft market, prices are competitive and it is more
difficult to make a profit.
In a hard market, premiums rise throughout the
industry, usually to make up for premium levels which were depressed
enough to hurt insurers.
This environment presents growth opportunities
to those insurers who do not have to raise rates as quicky, while possibly
picking up new clients for a long term relationship.
Conclusion:
Ohio Casualty is doing a little better than the industry average
overall, but they are constricted by heavy asset concentration in
California, Pennsylvania, and New Jersey.
is steadily doing worse.
Their life insurance subsidiary
They appear to be a company with a higher risk
level than is merited by possible returns.
gives this company a B+ rating. 31
distance, expenses may climb.
Standard & Poor's Stock Guide
With Proposition 13 looming in the
It would be difficult to recommend this
stock to diversify the trust department portfolio.
Although the risk as
defined by Beta is lower than the general market, the returns do not Ohio
Casualtyappear to be forthcoming.
Cincinnati Financial Corporation is prossssperous in both
Property/Casualty and Life/Health.
successful equity investments.
-
Cincinnati Financial an A.32
Surplus is high and is boltered by
Standard & Poor's Stock Guide rates
With Property/Casualty operations only in 22
-
states, expansion is a natural step.
Cincinnati Financial will survive
pricing wars and can benefit from the next hard market.
This company
would make an excellent addition to the trust portfolio.
Fundamental analysis of an insurance company is essential.
performance of the stock itself is not an adequate guide.
Past
The reasons for
success or failure must be obtained, and a projection of how the business
may hold up in the future is very important.
described in Best's Insurance Reports.
techniques illustrated by this
More advanced analysis is
However, learning the basic
practical application can be enough to
provide insights to any level of investor.
Appendix
.-.,
Exhibit 1
Cincinnati Financial Property/Casualty Balance Sheet
Exhibit 2
Ohio Casualty Property/Casualty Balance Sheet
Exhibit 3
Property/Casualty Industry Balance Sheet
Exhibit 4
Cincinnati Financial Property/Casualty Balance Sheet %
Exhibit 5
Ohio Casualty Property/Casualty Balance Sheet %
Exhibit 6
Property/Casualty Industry Balance Sheet %
Exhibit 7
Cincinnati Financial Property/Casualty Income Stmt. $ and %
Exhibit 8
Ohio Casualty Property/Casualty Income Stmt. $ and %
Exhibit 9
Property/Casualty Industry Income Stmt. $ and %
Exhibit 10
Cincinnati Financial Property/Casualty Ratios
Exhibit 11
Ohio Casualty Property/Casualty Ratios
Exhibit 12
Property/Casualty Industry Ratios
Exhibit 13
Cincinnati Financial Life Balance Sheet
Exhibit 14
Ohio Casualty Life Bal.ance Sheet
Exhibit 15
Cincinnati Financial Life Balance Sheet %
Exhibit 16
Ohio Casualty Life Balance Sheet %
Exhibit 17
Cincinnati Financial Life Income Stmt.
Exhibit 18
Ohio Casualty Life Income Stmt.
Exhibit 19
Cincinnati Financial Life Income Stmt. %
Exhibit 20
Ohio Casualty Life IncQme Stmt. %
Exhibit 21
Life Ratios for Cincinnati Financial, Ohio Casualty and Industry
Exhibit 22
Cincinnati Financial 9~msolidated Balance Sheet
Exhibit 23
Ohio Casualty Consolidated Balance Sheet
Exhibit 24
Cincinnati Financial Consolidated Balance Sheet %
Exhibit 25
Ohio Casualty Consolidated Balance Sheet %
Exhibit 26
Cincinnati Financial Consolidated Income Stmt.
Exhibit 27
Ohio Casualty Consolidated Income Stmt.
Exhibit 28
Cincinnati Financial Consolidated Income Stmt. %
Exhibit 29
Ohio Casualty Consolidated Income Stmt. %
Exhibit 30
Cincinnati Financial Consolidated Ratios
Exhibit 31
Ohio Casualty Consolidated Ratios
CINF PIC Operations
EXHIBIT 1
ADMITTED ASSETS ($000)
j2~Wi!j
12~1LaQ
12L~WH;l
j~ll!Hl
12~lleZ
j2l~lle§
12Lalle~
Unaffiliated investments
Cash & short-term invest
Bonds
113,896
64,666
52,701
44,164
39,611
41,541
42,697
1,016,435
896,907
853,580
773,484
635,177
501,879
391,876
Preferred stock
269,723
179,100
145,375
111,167
111,585
80,971
64,924
Common stock
434,823
302,569
324,504
235,078
174,132
166,770
131,141
0
0
0
0
Other investments
Accrued interest
Total unaffil invest
Investments in affiliates
Premium balances
Other assets
Total (statement)
0
0
22
292Ze
26,2§Q
25 Qge
222:32
HU1Q5
15655
12 eaa
1,864,155
1,469,503
1,401,278
1,186,125
979,310
806,817
643,327
178,069
156,162
147,526
135,026
115,419
25,910
21,534
98,075
89,463
88,030
82,038
82,622
75,077
59,132
2Q,aH
22,~eZ
1~,66§
1,197,725
930,291
739,658
a~,al~
16,Z~~
lZ,ZQ2
jQ,2;lQ
2,174,613
1,731,872
1,654,537
1,413,418
LIABILITIES ,SURPLUS & OTHER FUNDS ($000)
j2~llaQ
j2LalLe9
l~llaa
12~lleZ
12Lalle§
12L;llla~
986,212
832,582
631,485
533,518
377,369
272,009
40,611
34,608
741,723
32,883
36,209
280,404
254,000
244,011
224,545
20,921
218,840
16,205
203,745
165,600
Other liabilities
61,071
32,191
40,064
21,724
3,062
27,130
21,373
Conditional reserve funds
ZQ,Z:2Z
lQl.lae
1Ql,aaZ
Z6,ga~
~~,62j
;lj cza
a,Zja
1,439,056
1,254,517
1,160,077
990,896
851,102
655,527
480,453
3,260
3,260
3,260
3,260
3,260
2,510
2,510
96,364
96,364
96,364
96,366
96,366
12,897
12,897
6:3~,9;l2
aa~,ea5
;l22 e95
2~e,99Z
25a,a5§
2~a,Z9a
Z:3555Z
aZZ,Z;ll
~ZZ :355
~9~ ~§Q
~22,521
2,174,613
1,731,872
1,654,537
1,413,418
j2~Mn
Losses & adjustment exp
Commissions, taxes, exp
Unearned premiums
Total liabilities
Capital paid up
Assigned surplus
Unassigned surplus
Policyholders' surplus
Total
:3~e
12,752
62:3
2HZ6~
2592Q5
1,197,725
930,291
739,658
This data is a compilation of data from Best's Insurance Reports, Property/Casualty Edition (1986-1992).
(
(
(
OCAS PIC Operations
EXHIBIT 2
ADMITTED ASSETS ($000)
12QW~1
12QllaQ
12lJll~U!
]2QHee
12QlleZ
12l311e§
12lJ1le~
Unaffiliated investments
Cash & short-term invest
Bonds
Preferred stock
Common stock
Other investments
Accrued interest
Total unaffil invest
Investments in affiliates
Premium balances
Other assets
Total (statement)
89,992
346,614
124,102
261,819
110,675
214,230
126,856
2,104,498
1,658,791
1,733,244
1,551,967
1,575,843
1,372,640
1,165,988
97,506
53,235
56,427
39,789
18,798
303,713
253,309
37,596
337,307
326,136
274,976
8,277
254,140
196,628
29,611
0
0
0
0
41,180
5,335
61Z
JS,Z§l
HS
~Q~ZZ
as,Z::i§
JQ §B::i
28 §S3
2,679,507
2,388,305
2,323,839
2,220,187
2,019,047
1,879,972
1,523,490
50,098
42,269
43,703
40,621
35,887
29,358
24,182
205,124
212,789
192,491
181,547
170,194
172,169
151,309
~2
~3
~aa§2
~J,a11
Za,HJ
J1.122
§3,Q:2J
~2,~aQ
Ja,Ha
2,984,590
2,687,275
2,639,776
2,473,477
2,288,181
2,124,079
1,737,130
LIABILITIES ,SURPLUS & OTHER FUNDS ($000)
Losses & adjustment exp
Commissions, taxes, exp
Unearned premiums
Other liabilities
Conditional reserve funds
Total liabilities
Capital paid up
Assigned surplus
Unassigned surplus
Policyholders' surplus
Total
12QHa1
12lJllaQ
12lJ1 lea
12l311~HI
12Q1leZ
12lJlle§
12Qlle~
1,566,139
1,483,985
1,370,054
1,252,404
1,171,392
981,335
806,473
76,512
71,826
66,666
72,761
67,748
65,320
605,215
581,991
551,587
538,165
524,476
521,485
51,488
441,745
91,742
76,332
84,651
102,803
72,292
97,545
51,695
1,~§§
Z,2S2
J~,21~
~~,12Q
a,SJ1
~,e~e
::i,Q~a
2,341,174
2,221,416
2,108,172
2,021,293
1,845,739
1,671,543
1,356,450
2,951
2,951
2,951
2,951
2,951
2,951
5,548
5,543
~~~,QJZ
JZ2,la~
5,508
5,545
5,551
5,548
2,951
5,548
§a~,a~z
~~z,a§a
~2J,lQJ
~~a,2a~
~3J,a~J
6~J ~l§
2,984,590
~§5
a5S
2,687,275
6Q~
~521SJ
~~2 ~~2
2,639,776
2,473,477
2,288,181
531
~::i2
53§
aBQ §ZS
2,124,079
1,737,130
This data is a compilation of data from Best's Insurance Reports, Property/Casualty Edition (1986-1992).
(
(
(
INDUSTRY DATA- PIC ORGANIZATIONS
Unaffiliated investments
Cash & short-term invest
Bonds
Preferred stock
Common stock
Other investments
Accrued interest
Total unaffil invest
Investments in affiliates
Premium balances
Other assets
Total (statement)
EXHIBIT 3
ADMITIED ASSETS ($000)
l2Qll9l
12lal 19Q
l2la1l69
12Qll66
l2Qll6Z
l2lal~§
30,935,399
368,012,182
36,868,754
33,507,534
310,817,572
33,607,366
283,149,719
29,684,166
252,756,273
27,834,118
214,201,844
9,859,669
51,879,856
9,129,266
41,126,801
8,749,204
38,135,660
10,296,354
10,554,886
8,553,845
9,806,122
58,141,615
13,261,336
332,521,783
9,423,912
46,483,855
13,501,245
7,480,715
37,586,742
7,392,633
Z 90l ala
Z Z~Q,Z~5
Z5aa ~Z9
Z Ha,Z25
a :39a 592
5520,Qaa
488,058,272
28,772,422
446,540,294
26,666,785
423,949,464
24,131,913
384,711,763
22,467,539
344,277,740
300,016,088
19,464,248
17,204,758
49,101,160
47,167,586
45,276,573
42,499,412
35,650,857
32,062,345
a~,~la,22~
601,445,078
a~,Z~2,Jl
Q
556,106,775
aa,§2Z,a~9
526,985,299
29,ZZQ §QZ
2Z,alZ,ZQ2
2~,5~a,a~§
479,449,321
426,710,547
374,826,537
LIABILITIES ,SURPLUS & OTHER FUNDS ($000)
Losses & adjustment exp
Commissions, taxes, exp
Unearned premiums
Other liabilities
Conditional reserve funds
Total liabilities
Capital paid up
Assigned surplus
Unassigned surplus
Policyholders' surplus
Total
12Qll9l
12Qll9Q
12la1l69
]213ll66
12Qll6Z
l2lal~§
307,140,815
289,394,806
269,294,236
7,744,375
84,572,401
7,133,876
82,576,633
6,744,442
79,940,663
244,038,743
6,274,444
184,395,180
4,939,613
37,771,205
33,312,012
31,581,674
77,239,321
29,355,710
217,646,172
5,698,580
72,301,979
23,725,535
20,573,795
67,537,821
~,~::l6,Zla
~,Ha,H~
5 ~5l,a~6
~,§Q5,§~9
a a~2,Q6l
2,5~9,9§~
442,787,514
6,927,089
417,565,472
6,539,284
393,012,863
361,513,877
322,714,347
279,996,374
6,829,473
70,754,280
64,791,634
60,315,269
6,600,048
55,325,850
6,434,642
48,964,865
5,873,523
44,758,553
6Q,9Z§,19~
§Z 21Q,a65
§§,a2Z,§9~
~5,962,5~5
~6,59§ §9~
~~,196,Q6Z
156 65Z 56~
1aa,5~l,aCa
laa 9Z2,~a6
llZ aa5
~~~
lOa 996 2CO
601,445,078
556,106,775
526,985,299
479,449,321
426,710,547
a~
aac l6a
374,826,537
This data is a compilation of data from Best's Aggregates and Averages, Property/Casualty Edition (1986-1992).
(
(
(
CINF PIC Operations
EXHIBIT 4
ADMITIED ASSETS ($000)
12l~ll~1
Unaffiliated investments
Cash & short-term invest
12l~ll~Q
3.7%
12l~laU~
12l~llfH~
12lJllaZ
Bonds
Preferred stock
12.4%
Common stock
Other investments
20.0%
0.0%
Accrued interest
Total unaffil invest
l,J,,/q
1 5,,/q
l,5,,/q
1 fZ,,/q
1 fZ,,/q
l,Z,,/q
1 Z"/q
85.7%
84.7%
8.9%
83.9%
86.7%
2.8%
87.0%
9.6%
81.8%
9.6%
5.3%
5.8%
6.9%
8.1%
8.0%
10.3%
17.5%
0.0%
Investments in affiliates
8.2%
84.9%
9.0%
Premium balances
4.5%
5.2%
Other assets
Total (statement)
3.1%
54.7%
8.8%
7.9%
16.6%
0.0%
0.0%
19.6%
0.0%
3.3%
l2l~lla5
5.2%
46.7%
51.8%
3.2%
51.6%
12l~lla§
53.0%
4.5%
53.9%
9.3%
8.7%
14.5%
17.9%
0.0%
5.8%
53.0%
8.8%
17.7%
0.0%
2.9%
l,§O{q
l,QO{q
1.1 O{q
Q,ZO{q
l,ZO{q
2~"fq
2,lO{q
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
LIABILITIES ,SURPLUS & OTHER FUNDS ($000)
12l~1l~1
Losses & adjustment exp
Commissions, taxes, exp
Unearned premiums
Other liabilities
Conditional reserve funds
Total liabilities
Capital paid up
Assigned surplus
Unassigned surplus
Policyholders' surplus
Total
12l~ll~Q
12lJllaa
12lJllaa
12l~llafZ
12lJl la5
12.9%
48.1%
2.0%
14.7%
2.8%
1.9%
2.4%
15.9%
1.5%
J,JO{q
~,aO{q
§.lO{q
5 ~O{q
~,§O{q
~,~%
1 2,,/q
66.2%
72.4%
0.2%
70.1%
70.1%
71.1%
70.5%
65.0%
0.2%
5.8%
0.2%
6.8%
0.3%
8.0%
0.3%
1.4%
0.3%
1.7%
2J,~O{q
2Q,§,,/q
2aS%
2Z,~O{q
~~,QO{q
295°tll
3:2 Q%
100.0%
100.0%
100.0%
45.4%
1.9%
0.1%
4.4%
5.6%
2.0%
14.7%
44.7%
2.6%
12lJllaZ
44.8%
2a,2°{q
J3 aOtll
2l,aO{q
2Z fZ%
2S sotll
22 ,aO{q
29 S"/"1
100.0%
100.0%
100.0%
100.0%
44.5%
1.7%
18.3%
40.6%
1.7%
21.9%
36.8%
1.7%
22.4%
0.3%
2.9%
2.9%
This data is a compilation of data from Best's Insurance Reports, Property/Casualty Edition (1986-1992).
(
(
(
OCAS PIC Operations
EXHIBIT 5
ADMITTED ASSETS ($000)
12l~WU
Unaffiliated investments
Cash & short-term invest
12l~1 L~Q
12l~lla~
3.0%
70.5%
12.9%
61.7%
4.7%
65.7%
3.3%
2.1%
10.2%
2.0%
9.4%
1.4%
1.4%
12.8%
1.1%
l,~O(q
l,~o/'il
89.8%
1.7%
Premium balances
Other assets
Total (statement)
Bonds
Preferred stock
Common stock
Other investments
Accrued interest
Total unaffil invest
Investments in affiliates
12L~llaa
10.6%
12lallaZ
12/31/86
12/31/85
10.1%
7.3%
64.6%
67.1%
0.4%
0.3%
11.3%
62.7%
4.8%
68.9%
1.6%
13.2%
0.8%
12.0%
0.0%
0.0%
12.0%
0.0%
l,6°/'il
l,6°/'il
1 ZO/'il
l,~ot'il
1 ZOf'il
88.9%
1.6%
88.0%
1.7%
89.8%
1.6%
88.2%
1.6%
88.5%
1.4%
87.7%
1.4%
6.9%
7.9%
7.3%
7.3%
7.4%
8.1%
8.7%
l,zo/'il
l,6°/'il
~,Qo/'il
l,ao/'i!
2,aO/q
2,QOfq
2,2%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
0.0%
LIABILITIES ,SURPLUS & OTHER FUNDS ($000)
12L~1l~1
Losses & adjustment exp
Commissions, taxes, exp
Unearned premiums
Other liabilities
Conditional reserve funds
Total liabilities
Capital paid up
Assigned surplus
Unassigned surplus
Policyholders' surplus
Total
12L~ll~0
52.5%
2.6%
20.3%
55.2%
2.7%
21.7%
3.1%
2.8%
12QlLa~
51.9%
12lJllaa
12lJ1laZ
12/31166
12l~1l6~
51.2%
3.0%
22.9%
46.2%
46.4%
2.5%
20.9%
50.6%
2.9%
21.8%
3.1%
24.6%
3.0%
25.4%
3.2%
4.2%
3.2%
4.6%
3.0%
0,1%
Q,aot'i!
l,Jot'i!
2,2Ofq
Q,1Ofq
Q,a%
Q,a%
78.4%
82.7%
79.9%
80.7%
78.7%
78.1%
0.1%
0.2%
0.1%
0.2%
0.2%
0.1%
0.2%
0.1%
0.2%
0.1%
0.2%
81.7%
0.1%
0.3%
0.3%
21,~Ot'i!
1a,ao/'i!
2Q 1°/'il
lZ,aO/q
18 JO/'il
1a,Qot'i!
19 JO/'il
2Q,~Ot'i!
21,~ot'i!
21 6°/'il
1Z,QOt'il
1Z,Jo/'il
21 aO/'il
21,9°/'il
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
This data is a compilation of data from Best's Insurance Reports, Property/Casualty Edition (1986-1992).
(
(
(
INDUSTRY DATA- PIC ORGANIZATIONS EXHIBIT 6
ADMITTED ASSETS ($000)
12L;JU~ 1
Unaffiliated investments
Cash & short-term invest
Bonds
5.1%
61.2%
12La1L~Q
12QWUl
12LJ 1Lflfl
12LJl Lfll
6.6%
59.8%
6.4%
59.0%
7.0%
59.1%
1.7%
1.9%
9.8%
1.9%
8.6%
2.1%
8.9%
2.0%
2.2%
2.0%
12QUfla
7.0%
7.4%
57.1%
59.2%
Preferred stock
Common stock
1.6%
9.7%
Other investments
2.2%
Accrued interest
Total unaffil invest
lJ%
l,~°fq
l.~Ofq
1 ~Ofq
1 ~':(q
1 ~':(q
81.1%
80.3%
4.8%
4.8%
80.2%
4.7%
80.7%
4.6%
80.0%
Investments in affiliates
80.4%
4.6%
Premium balances
Other assets
Total (statement)
8.2%
8.5%
8.6%
8.9%
8.4%
8.6%
~,9°,q
2,~0,q
a,~O,q
2,2%
2,~%!
e flO,q
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
8.4%
2.4%
2.0%
10.0%
2.0%
4.6%
LIABILITIES ,SURPLUS & OTHER FUNDS ($000)
12LalL91
Losses & adjustment exp
Commissions, taxes, exp
Unearned premiums
Other liabilities
Conditional reserve funds
Total liabilities
Capital paid up
Assigned surplus
Unassigned surplus
Policyholders' surplus
Total
12La1L9Q
12LalLfl9
12LalLfla
12LJ1 Lal
12lalLaa
50.9%
14.8%
51.1%
1.3%
15.2%
1.3%
16.1%
51.0%
1.3%
16.9%
6.0%
6.0%
6.1%
5.6%
18.0%
5.5%
Q,9O,q
Q,9O,q
l,Qo,q
l,Qo,q
Q,aO,q
Q,lO,q
73.6%
75.1%
74.6%
75.4%
75.6%
74.7%
1.2%
11.8%
1.2%
11.7%
1.3%
1.4%
11.5%
1.5%
11.4%
11.5%
1.6%
11.9%
12,1°,'!
S,:(q
2~ ~O,q
11,ZO,q
6O
,q
2~ ~Otq
100.0%
100.0%
100.0%
100.0%
51.1%
1.3%
52.0%
1.3%
14.1%
6.3%
1J,~0,q
26 ~O,q
100.0%
2~
12,ZO,q
2~
11,~0,q
49.2%
1.3%
11,aO,q
aotq
2~
100.0%
This data is a compilation of data from Best's Aggregates and Averages, Property/Casualty Edition (1986-1992).
(
(
(
CINF PIC Operations
EXHIBIT 7
STATEMENT OF INCOME ($000)
l,{~ll~l
Premiums earned
Losses incurred
Loss adj exp incurred
Undrw exp incurred
Other deduct & inc
Div. to Policyholders
Net underwrtg income
Investment income
Investment expenses
Income taxes
Net income
Premium + Invest. Income
903,892
556,635
83,389
268,787
-9,041
e,~Q,
-4,380
127,912
1,581
1,~j{~Q
1~1{6~
1~alle6
l~~lleZ
828,564
510,014
74,705
243,492
-6,997
g,ZQa
647
117,512
1,684
771,505
475,445
69,290
229,742
-5,509
g,18Z
-3,650
100,094
1,432
713,148
392,863
72,274
220,467
-3,782
687,691
425,250
71,133
193,561
-1,793
2Q99~
;31 fll ~
90,132
95,481
2~ lZ9
70,833
1,031,804
946,076
871,599
6.~ag
,,~a~
24,890
85,606
1,233
-2,895
68,997
1,126
1 ,~laU~
601,715
364,438
60,692
165,557
3,956
1.Q6Q
5,992
55,831
1,040
2~ ~9~
84,769
15.a29
49,607
1,9a,
58,85'1
25,589
798,754
756,688
657,546
491,921
l~l{6Z
90.9%
56.2%
9.4%
25.6%
-0.2%
Q,aO('!
-0.4%
9.1%
0.1%
2,QO('!
6,6%
l2l31le§
91.5%
55.4%
9.2%
25.2%
0.6%
Q.20('!
0.9%
8.5%
0.2%
Q,aO('!
9,0%
l2Qlle5
90.7%
61.1%
8.5%
25.5%
-0.2%
Q,2°,'!
-4.4%
9.3%
0.2%
100.0% .
100.0%
100.0%
l,~lle~
-22fl~
446,121
300,346
41,667
125,515
-832
1.QQ6
-21,583
45,800
912
CINF PIC Operations
STATEMENT OF INCOME ($000)
Premiums earned
Losses incurred
Loss adj exp incurred
Undrw exp incurred
Other deduct & inc
Div. to Policyholders
Net underwrtg income
Investment income
Investment expenses
Income taxes
Net income
Premium + Invest. Income
12Q1l91
87.6%
53.9%
8.1%
26.1%
-0.9%
Q,6%
-0.4%
12.4%
0.2%
a,lo,,!
8,7%
12Q1LSQ
87.6%
53.9%
7.9%
25.7%
-0.7%
Q,ZOt'!
0.1%
12.4%
0.2%
100.0%
10,1%
12la1l8a
88.5%
54.5%
7.9%
26.4%
-0.6%
Q,Zo,,!
-0.4%
11.5%
0.2%
2,6°,'!
8,1%
l2l:3lle8
89.3%
49.2%
9.0%
27.6%
-0.5%
Q,6°,'!
3.1%
10.7%
0.2%
a,lo,,!
10,6%
100.0%
100.0%
100.0%
2,2°t'!
-Q,~o('!
5,2%
This data is a compilation of data from Best's Insurance Reports, Property/Casualty Edition (1986-1992).
(
(
(
OCAS PIC Operations
EXHIBIT 8
STATEMENT OF INCOME ($000)
12131191
]2La1lB9
1,364,177
] 2LallBB
1,339,552
] 2La]/8§
]213]la~
1,469,055
] 213119Q
1,438,001
]2lallBZ
Premiums earned
1,356,629
1,221,916
998,716
Losses incurred
887,758
882,262
797,649
738,856
770,448
732,954
631,897
Loss adj exp incurred
155,427
157,554
164,411
158,830
172,250
144,186
118,853
Undrw exp incurred
477,616
459,889
432,942
435,706
433,293
403,743
346,578
7,669
1,622
3,830
2,053
3,126
2,246
879
Div. to Policyholders
2Q.] ]1
Net underwrtg income
-79,529
2a.Q9§
-86,422
2Q.B§§
-55,521
]9.a§9
-15,262
]Z ~BZ
-40,075
]B.1QQ
-79,613
22.Q1~
-121,536
Investment income
197,876
187,572
193,429
175,210
161,918
146,332
126,934
6,313
5,989
5,760
5,455
5,017
4,947
4,991
3] ]2£1
2Za91
3Z] lQ
::iQ£1aZ
23 Z26
-Z§Z
-::iQ::i
80,906
67,167
95.038
103,596
93,100
62,539
912
1,666,931
1,625,573
1,557,606
1,514,762
1,518,547
1,368,248
1,125,650
Other deduct & inc
Investment expenses
Income taxes
Net income
Premium + Invest. income
OCAS PIC Operations
STATEMENT OF INCOME ($000)
12L311Ba
87.6%
]2Q]LBB
88.4%
]213M~§
]2/3]LB~
88.1%
]2la1l9Q
88.5%
]213]l£1Z
Premiums earned
89.3%
89.3%
88.7%
Losses incurred
53.3%
54.3%
51.2%
48.8%
50.7%
53.6%
56.1%
9.3%
9.7%
10.6%
10.5%
11.3%
10.5%
10.6%
Undrw exp incurred
28.7%
28.3%
27.8%
28.8%
28.5%
29.5%
30.8%
Other deduct & inc
0.5%
0.1%
0.2%
0.1%
0.2%
0.2%
0.1%
]213]/91
Loss adj exp incurred
Div. to Policyholders
],2°t'l
],1°t'l
] ,3Of'l
],3°t'l
Net underwrtg income
-4.8%
-5.3%
-3.6%
-1.0%
],2%
-2.6%
],3%
-5.8%
2 Qot'l
-10.8%
Investment income
11.9%
11.5%
12.4%
11.6%
10.7%
10.7%
11.3%
0.4%
0.4%
0.4%
0.4%
0.3%
0.4%
0.4%
Investment expenses
Income taxes
1,~W'l
l.Z%
2.~°ti!
~ ~Of'l
] ,got'l
-Q,] Of'l
Q,Qot'l
Net income
4,9%
4,1%
6,1%
6,8%
6,1%
4,6%
~,1%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Premium + Invest. income
This data is a compilation of data from Best's Insurance Reports, Property/Casualty Edition (1986-1992).
(
(
(
INDUSTRY DATA- PIC ORGANIZATIONS
EXHIBIT 9
STATEMENT OF INCOME ($000)
Premiums earned
Losses incurred
12Qll~1
12Qll~Q
H~L~lLa~
12Q1Laa
12L~lLaZ
222,150,735
1 52,134,113
215,952,506
149,964,056
27,791,852
206,669,462
143,087,385
199,978,326
132,829,438
188,989,175
125,931,022
26,285,084
23,866,755
21,448,875
51,942,721
363,849
49,045,206
Loss adj exp incurred
28,075,837
Undrw exp incurred
59,128,687
960,135
56,916,970
495,394
54,248,850
1,428,187
~Q§
2,§~9,Z~§
2,Z]~,~2Q
2,ZZ~,9~a
2,~~g,2~a
-20,929,943
-21,093,464
-11,800,395
-10,620,184
36,783,019
-21,855,522
35,321,768
2,536,299
2,420,647
33,383,657
2,176,400
29,553,785
1,830,516
25,544,148
1,584,167
2 9~~ 2J6
3666 Z66
Other deduct & inc
Div. to Policyholders
Net underwrtg income
Investment income
Investment expenses
Income taxes
Net income
Premium + Invest. income
2,Zal
-2C 9~Z
J e~6,996
8,921,000
7,986,603
258,933,754
251,274,274
7,169,555 ___12,256,108
240,053,119
229,532,111
637,998
J,3~Z
eze
9,992,727
214,533,323
INDUSTRY DATA- PIC ORGANIZATIONS
STATEMENT OF INCOME ($000)
12Q1l91
12Q1~Q
12L~lLa9
]2QlLaa
85.8%
85.9%
86.1%
87.1%
88.1%
Losses incurred
Loss adj exp incurred
Undrw exp incurred
58.8%
10.8%
59.6%
10.9%
22.6%
57.9%
10.4%
22.6%
58.7%
10.0%
22.8%
59.7%
11.1%
22.7%
Other deduct & inc
Div. to Policyholders
0.4%
0.2%
0.6%
0.2%
22.9%
0.3%
1.1 at'!
l.l~'!
1.1 at'!
],2%
1.2%
-5.1%
-5.0%
11.9%
0.7%
Premiums earned
Net underwrtg income
-8.1%
-8.7%
-8.8%
Investment income
Investment expenses
14.2%
13.9%
12L~lLaZ
1.0%
14.1%
1.0%
0.9%
12.9%
0.8%
Income taxes
C,Qot'!
1,2%
l,2°t'!
1.§ot'!
1.§%
Net income
3,4%
3,2%
3,0%
~%
4,7%
100.0%
100.0%
100.0%
100.0%
100.0%
Premium + Invest. income
This data is a compilation of data from Best's Aggregates and Averages, Property/Casualty Edition (1986-1992).
(
(
(
CINF PIC Ratio Analysis
Liquidity:
Liquidity:
Liquidity:
Surplus/Unearned Premo Reserve
Cash+lnvested Assetsl
Unearned Prem Res.+Loss and Loss Adj. Exp.
Liabilitiesl Liquid Assets
Profitability:
Net Invest. Income/lnvest Assets
Net Incomel Premo Earned
Profitability:
Net Incomel Surplus
Efficiency:
Net Incomel Assets
Leverage:
Assets/Surpl us
Equity Securitiesl Surplus
Profitability:
Invest. Risk:
Efficiency:
Efficiency:
Efficiency:
Efficiency:
Efficiency:
(
EXHIBIT 10
Premo Earnedl Surplus
Premo EarnedlAssets
Combined Loss Ratio
Loss Ratio
Expense ratio
(
HHU
H~~Q
l~e~
l~ee
l~eZ
l~e§
2.62
1.88
2.03
1.88
1.58
1.35
1.56
0.73
0.07
0.10
0.12
0.04
2.96
0.96
1.23
0.42
99.7
70.1
29.6
1.41
0.82
0.08
0.12
0.20
0.06
3.63
1.01
1.74
0.48
99.6
71.2
28.4
1.48
0.80
0.07
0.09
0.14
0.04
3.35
0.95
1.56
0.47
99.7
67.7
32.0
1.44
0.81
0.07
0.12
0.20
0.06
3.35
0.82
1.69
0.50
95.9
65.2
30.7
1.35
0.84
0.07
0.07
0.14
0.04
3.46
0.82
1.98
0.57
99.7
72.2
27.5
1.46
0.77
0.07
0.10
0.21
0.06
3.39
0.90
2.19
0.65
96.5
70.6
25.9
(
OCAS PIC Ratio Analysis
EXHIBIT 11
Liquidity:
Surplus/Unearned Premo Reserve
Liquidity:
Cash+lnvested Assets/
Unearned Prem Res.+Loss and Loss Adj. Exp.
Liquidity:
Liabilities/ Liquid Assets
Profitability:
Profitability:
Net Invest. Income/Invest Assets
Profitability:
Net Income/ Surplus
Efficiency:
Leverage:
Net Income/ Assets
Net Income/ Premo Earned
Invest. Risk:
Assets/Surplus
Equity Securities/ Surplus
Efficiency:
Efficiency:
Premo Earned/ Surplus
Premo Earned/Assets
Efficiency:
Combined Loss Ratio
Efficiency:
Efficiency:
Loss Ratio
(
Expense ratio
l~~l
l~~Q
l~~~
l~aa
l~aZ
l~ae
1.06
0.80
0.96
0.84
0.84
0.87
1.28
0.85
0.07
0.06
0.13
0.03
4.64
0.62
2.28
0.49
104.9
71.0
33.9
1.32
0.81
0.08
0.05
0.14
0.02
5.77
0.66
3.09
0.54
105.3
72.3
33.0
1.27
0.86
0.08
0.07
0.18
0.04
4.97
0.74
2.57
0.52
103.7
70.5
33.2
1.39
0.81
0.08
0.08
0.23
0.04
5.47
0.81
2.96
0.54
100.8
67.0
33.8
1.26
0.87
0.08
0.07
0.21
0.04
5.17
0.66
3.07
0.59
102.9
69.5
33.4
1.39
0.80
0.08
0.05
0.14
0.03
4.69
0.58
2.70
0.58
104.4
71.8
32.6
(
(
Industry PIC Ratio Analysis
EXHIBIT 12
Liquidity:
Surplus/Unearned Premo Reserve
Liquidity:
liquidity:
Cash+lnvested Assetsl
Unearned Prem Res.+Loss and Loss Adj. Exp.
Liabilitiesl Liquid Assets
Profitability:
Profitability:
Net Invest. Income/lnvest Assets
Net Incomel Premo Earned
Profitability:
Net Income/ Surplus
Efficiency:
Net Income/ Assets
Leverage:
Invest. Risk:
Assets/Surplus
Equity Securities/ Surplus
Efficiency:
Efficiency:
Premo Earned/ Surplus
Efficiency:
Premo Earned/Assets
Combined Loss Ratio
Efficiency:
Efficiency:
Loss Ratio
Expense ratio
(
Hl~l
l~~Q
l~e~
l~ee
l~eZ
1.88
1.68
1.68
1.53
1.44
1.32
0.85
0.07
0.04
0.06
0.01
3.79
0.43
1.40
0.37
107.6
81.1
26.4
1.30
0.86
0.07
0.04
0.06
0.01
4.01
0.40
1.56
0.39
108.3
82.3
26.0
1.31
0.86
0.07
0.03
0.05
0.01
3.93
0.46
1.54
0.39
107.9
82.0
26.0
1.30
0.86
0.07
0.06
0.10
0.03
4.07
0.43
1.70
0.42
104
78.3
25.7
1.29
0.86
0.07
0.05
0.10
0.02
4.10
0.45
1.82
0.44
103.3
77.9
25.3
(
(
CINF Life/Health
EXHIBIT 13
ASSETS ($000)
lZQll91
lZQll~Q
12131/89
12131/88
12/31/87
ASSETS
284,688
248,323
219,670
214,528
216,084
Total preferred stocks
58,887
40,571
39,771
36,030
30,539
Total common stocks
95,701
63,550
84,631
73,544
51,834
Policy loans
14,633
13,351
12,424
11,718
11,369
6,630
6,613
6,728
7,172
8,566
Total bonds
Life & annty premo due
8,779
7,904
7,525
6,968
6,988
Other Assets
a;t~e~
2J,ZlJ
2~,~ZQ
l~,Jae
21,J~2
Total Assets
502,802
404,025
395,719
369,298
346,722
259,601
223,543
198,713
178,931
173,914
Accrued invest income
LIABILITIES
Net policy reserves
9,011
7,548
8,167
12,147
7,916
16,987
7,461
12,285
18,114
Comm taxes expenses
Securities val reserve
39,633
4,364
17,733
31,635
24,246
Policy claims
10,645
Other Liabilities
~~Il
~ ~9J
a 59a
a 9all
Total Liabilities
324,732
247,863
248,193
234,273
231,304
Common stock
Paid-in capital &
1,500
1,500
1,500
1,500
1,500
contrib. surplus
2,000
2,000
2,000
2,000
2,000
Unassigned Surplus
1H56~
152662
H~Q26
1a1 526
111.919
Total Owners' Equity
178,069
156,162
147,526
135,026
115,419
502,802
404,025
395,719
369,298
346,722
Total Liabilities and Equity
~
aa5
This data is a compilation of data from Best's Insurance Reports, Life/Health Edition (1988-1992).
(
{
(
OCAS Life/Health
EXHIBIT 14
ASSETS ($000)
12QW~1
ASSETS
Total bonds
Total preferred stocks
Total common stocks
Policy loans
Life & annty premo due
12Qll~Q
12l;Jlle~
12Q1l88
12Ql18Z
259,695
500
248,668
184,134
146,202
2,053
238,462
5,021
7,073
9,562
24,244
5,203
12,682
4,734
5,936
4,252
3,240
4,143
2,598
3,826
3,131
3,089
2,968
2,858
2,674
4,627
4,363
5,058
6,218
5,514
Other Assets
21,~Ze
l~,ea~
2~228
lZ Q;J2
l~,aZ~
Total Assets
319,115
296,172
287,085
223,994
184,364
LIABILITIES
Net policy reserves
235,018
206,090
176,186
143,877
120,941
814
1,769
12,710
578
4,275
8,710
Accrued invest income
Policy claims
Comm taxes expenses
Securities val reserve
599
953
645
1,313
2,988
1,279
2,184
1,321
11,173
Other Liabilities
~2~Z2
~~ ~Jg
§~2J~
J~8~§
2J~Z~
Total Liabilities
282,490
266,036
254,559
194,025
157,977
Common stock
Paid-in capital &
1,100
1,100
1,100
1,100
1,100
contrib. surplus
600
600
600
600
600
Unassigned Surplus
Total Owners' Equity
Total Liabilities and Equity
925
28 !1J5
JQ B2Z
213 2§9
2~
36,625
30,135
32,527
29,969
26,387
319,115
296,172
287,085
223,994
184,364
a~
§BZ
This data is a compilation of data from Best's Insurance Reports, Life/Health Edition (1988-1992).
(
(
(
CINF Life/Health
EXHIBIT 15
ASSETS ($000)
12lall~1
12/31/90
12/31/89
12131188
12/31/87
ASSETS
Total bonds
Total preferred stocks
56.6%
11.7%
61.5%
10.0%
55.5%
58.1%
62.3%
10.1%
9.8%
8.8%
Total common stocks
19.0%
2.9%
15.7%
21.4%
3.1%
19.9%
14.9%
3.3%
1.3%
3.3%
1.6%
Accrued invest income
1.7%
2.0%
1.9%
1.9%
2.0%
Other Assets
Total Assets
e,ZO{cz
~,~~cz
2,a%
~,2%
e,2°{cz
100.0%
100.0%
100.0%
100.0%
100.0%
51.6%
55.3%
50.2%
48.5%
50.2%
1.8%
1.9%
2.0%
2.1%
2.0%
3.3%
8.6%
5.2%
3.1%
7.0%
Policy loans
Life & annty premo due
LIABILITIES
Net policy reserves
Policy claims
Comm taxes expenses
1.7%
3.2%
1.9%
2.5%
1.1%
4.3%
4.5%
Other Liabilities
Total Liabilities
!l9°{q
1 lO{q
1 ZO{q
1 l~q
1 J0ls!
64.6%
61.3%
62.7%
63.4%
66.7%
Common stock
0.3%
0.4%
0.4%
0.4%
0.4%
Securities val reserve
Paid-in capital &
contrib. surplus
Unassigned Surplus
Total Owners' Equity
Total Liabilities and Equity
2.4%
7.9%
0.4%
0.5%
0.5%
0.5%
0.6%
ZO{q
JZ BO{q
Jg ~O{cz
J5 gO{q
J2 JO{q
35.4%
38.7%
37.3%
36.6%
33.3%
100.0%
100.0%
100.0%
100.0%
100.0%
J~
This data is a compiiation of data from Best's Insurance Reports, Life/Health Edition (1988-1992).
(
(
(
OCAS Life/Health
EXHIBIT 16
ASSETS ($000)
12lJll~1
12lJll~Q
12lJ1l8S
12lJll88
12lJllaZ
ASSETS
Total bonds
Total preferred stocks
Total common stocks
Policy loans
81.4%
0.2"10
7.6%
1.6%
84.0%
0.7%
83.1%
1.7%
82.2%
4.3%
2.1%
1.4%
1.5%
1.0%
1.8%
1.3%
2.2%
2.5%
Life & annty premo due
1.0%
1.6%
1.0%
Accrued invest income
1.4%
1.7%
Other Assets
Total Assets
LIABILITIES
Net policy reserves
Policy claims
Comm taxes expenses
Securities val reserve
§,So~
§,zot~
a,!lcr~
3.2%
Z,§ot~
79.3%
5.2%
1.4%
2.1%
1.5%
2.5%
8,l°t~
100.0%
100.0%
100.0%
100.0%
100.0%
73.6%
69.6%
61.4%
64.2%
65.6%
0.2%
0.3%
0.4%
0.7%
0.4%
0.8%
0.3%
0.4%
0.9%
0.2%
0.5%
3.9%
5.7%
2.3%
4.7%
lJ,3°tq
18,zotq
22 ZO/q
156°/q
12 ZO/q
88.5%
89.8%
88.7%
86.6%
85.7%
Common stock
0.3%
0.4%
0.4%
0.5%
0.6%
Paid-in capital &
contrib. surplus
0.2%
0.2"/0
0.2%
0.3%
0.3%
Other Liabilities
Total Liabilities
Unassigned Surplus
1C,gOtq
g§%
HlZo/q
126°/q
13 ~o/q
Total Owners' Equity
11.5%
10.2%
11.3%
13.4%
14.3%
Total Liabilities and Equity
100.0%
100.0%
100.0%
100.0%
100.0%
This data is a compilation of data from Best's Insurance Reports, Life/Health Edition (1988-1992).
(
(
(
CINF Life/Health
EXHIBIT 17
STATEMENT OF INCOME ($000)
]2Qlla]
70,657
1,360
42,026
12Q1laQ
62,085
1,042
36,953
] 2lJllea
60,009
150
35,853
12131 lee
55,357
280
33,641
12La1~Z
H!l2
115,855
0
100,080
0
96,012
~ 550
93,828
-6
109,962
32,973
486
36,132
11,088
2,161
9,131
30,427
296
24,832
11,166
1,975
8,770
30,169
0
17,875
11,263
2,130
8,557
37,546
281
17,179
17,509
2,321
12,003
Total Expenses
-2 JO~
89,667
515
77,979
625
70,622
28,377
0
5,021
11,607
1,757
8,559
5QaO
60,405
51S
87,178
Income before taxes
Federal taxes
26,188
]0 0~1
22,101
Z.Qe2
25,390
1Q.~JJ
33,423
12.5QQ
22,784
a.92S
Net Income
16,137
15,019
14,957
20,923
13,855
Premiums
Supplementary Contracts
Net investment income
Other income
Total Income
Benefits
Supplementary Contracts
Incr reserves
Commissions
Ins. taxes, lise. & fees
Gen ins. expo
Other disbursements
78,350
695
30,924
This data is a compilation of data from Best's Insurance Reports, Life/Health Edition (1988-1992).
(
(
(
OCAS Life/Health
EXHIBIT 18
STATEMENT OF INCOME ($000)
12~ll~1
Premiums
Supplementary Contracts
Net investment income
38,628
4,312
26,231
12~1l~Q
12Lall~~
12Qllfl~
12LallflZ
37,939
2,737
68,011
41,212
1,549
40,425
27,073
2,050
28,486
21,600
1,168
17,450
Other income
1 aze
169Z
155
le6
Z6
Total Income
71,141
69,446
98,702
64,467
59,119
Benefits
Supplementary Contracts
34,895
28,369
1,104
14,070
10,114
9,247
939
32,246
561
22,935
383
21,001
2,724
2,729
1,104
7,448
3,183
974
6,887
1,168
5,920
1,051
5,359
Incr reserves
Commissions
Ins. taxes, lise. & fees
Gen ins. expo
Other disbursements
Total Expenses
1,510
28,884
3,288
1,267
8,042
-ll
29,909
3,008
5~a
-6 a62
ae 659
le 5~e
Z~aa
66,337
64,580
89,156
53,961
47,258
4,804
4,866
9,545
10,506
11,861
Income before taxes
Federal taxes
2.ala
l.~H
a.68a
a.Z5Q
5.Q5a
Net Income
1.986
3,453
5,662
6,756
6,803
This data is a compilation of data from Best's Insurance Reports, Life/Health Edition (1988-1992).
(
(
(
CINF Life/Health
EXHIBIT 19
STATEMENT OF INCOME ($OOO)
12l~1 L91
Premiums
12L~1l90
62.0%
12L~llS9
12L~lLaa
12l311aZ
59.0%
71.3%
37.3%
0.3%
35.9%
0.6%
28.1%
QQO/q
~,SOfq
QQO/q
100.0%
100.0%
100.0%
100.0%
28.5%
0.4%
30.4%
0.3%
31.4%
30.~k
34.1%
Incr reserves
31.2%
24.8%
0.0%
18.6%
0.0%
5.4%
0.3%
15.6%
Commissions
9.6%
1.9%
7.9%
11.2%
2.0%
11.7%
Ins. taxes, lisc. & fees
Gen ins. expo
12.4%
1.9%
61.0%
1.2%
36.3%
1.0%
36.9%
Other income
1 gOfq
Q,QOfq
Total Income
100.0%
Supplementary Contracts
Supplementary Contracts
Net investment income
Benefits
62.5%
0.2%
8.8%
2.2%
8.9%
9.1%
15.9%
2.1%
10.9%
-2 QO/q
QSO/q
Q,zo/q
S ~o/q
QSO/q
77.4%
77.9%
73.6%
64.4%
79.3%
Income before taxes
Federal taxes
22.6%
22.1%
26.4%
35.6%
20.7%
a,ZOfq
Z,lo/Q
10,9Of'l
13,3%
a l°/Q
Net Income
13.9%
15.0%
15.6%
22.3%
12.6%
Other disbursements
Total Expenses
This data is a compilation of data from Best's Insurance Reports, Life/Health Edition (1988-1992).
(
(
(
OCAS Life/Health
EXHIBIT 20
STATEMENT OF INCOME ($000)
12l~1l~1
12l~1l~Q
12~W!9
12{~1~S
12{allSZ
54.3%
6.1%
36.9%
54.6%
3.9%
39.0%
68.9%
2.1%
28.9%
63.9%
2.4%
33.5%
68.4%
2.0%
29.5%
Other income
26Of'i
2 ~Of'i
o2°t'i
o2°t'i
o10t'i
Total Income
100.0%
100.0%
100.0%
100.0%
100.0%
49.1%
2.1%
40.6%
4.6%
1.8%
11.3%
40.9%
1.6%
43.1%
4.3%
1.6%
10.7%
14.3%
1.0%
32.7%
3.2%
1.0%
7.0%
15.7%
0.9%
35.6%
4.2%
1.8%
9.2%
15.6%
0.6%
35.5%
4.6%
1.8%
9.1%
Premiums
Supplementary Contracts
Net investment income
Benefits
Supplementary Contracts
Incr reserves
Commissions
Ins. taxes, lise. & fees
Gen ins. expo
Other disbursements
Total Expenses
-162°t'i
-92Of'i
~1.3°t'i
163°&
12Z%
93.2%
93.0%
90.3%.
83.7%
79.9%
Income before taxes
6.8%
7.0%
9.7%
16.3%
20.1%
Federal taxes
Net Income
~
Qot'i
2.Qot'i
a.~Of'i
~.6°t'i
6.6°t'i
5.7%
10.5%
11.5%
2.8%
5.0%
This data is a compilation of data from Best's Insurance Reports, Life/Health Edition (1988-1992).
(
(
(
CINF Life Ratios
Profitability:
Net Income/Premiums
Efficiency:
Leverage:
Premiums! Assets
Assets/ Surplus
Profitability:
Net Income/ Surplus
Profitability:
Net Income/ Assets
EXHIBIT 21
1991
0.23
0.14
2.82
0.09
0.03
]~~Q
]~e~
]~ea
]~eZ
0.24
0.15
2.59
0.10
0.04
0.25
0.15
2.68
0.10
0.04
0.38
0.15
2.74
0.15
0.06
0.18
0.23
3.00
0.12
0.04
H~al
l~aQ
lae~
laee
laeZ
0.05
0.12
8.71
0.05
0.01
0.09
0.13
9.83
0.11
0.01
0.08
0.24
8.83
0.17
0.02
0.16
0.18
7.47
0.23
0.03
0.17
0.22
6.99
0.26
0.04
laal
l~aQ
laaa
laaa
laaZ
0.07
0.14
13.03
0.13
0.01
0.07
0.15
14.00
0.14
0.01
0.06
0.15
14.04
0.12
0.01
0.05
0.16
14.29
0.11
0.01
0.04
0.17
14.27
0.09
0.01
OCAS Life Ratios
Profitability:
Net Income/Premiums
Efficiency:
Premiums! Assets
Leverage:
Profitability:
Assets/ Surplus
Net Income/ Surplus
Profitability:
Net Income/ Assets
Industry Life Ratios
(
Profitability:
Net Income/Premiums
Efficiency:
Leverage:
Profitability:
Premiums! Assets
Assets/ Surplus
Net Income/ Surplus
Profitability:
Net Income/ Assets
(
(
CINF Consolidated
EXHIBIT 22
ASSETS ($000)
12l~ll91
12~W~Q
12131/89
Fixed
1,421,511
1,180,704
1,098,392
1,014,785
871,929
730,814
608,415
Equity
1,604,740
1,049,303
1,100,246
798,825
609,079
517,917
389,460
_12/31/88
_ 12131187
12131186
12131/85
ASSETS
Investments
41,086
38,231
34,847
27,704
20,226
19,533
21,911
57,150
39,490
35,067
23,918
26,450
35,495
17,182
170,864
157,662
159,968
142,602
141,276
126,126
102,592
Deferred Policy Acq. Costs
93,581
88,875
86,784
75,501
76,540
72,955
67,684
Property & Equip.
31,701
23,779
24,883
27,360
36,662
41,002
41,367
Other invested assets
Cash
Premium & oth. Recievables
Other Assets
Total Assets
15 JJ6
3.435.969
11.5Bl
11 ZZ5
2.589.625
2.551Jl6~
6 ZOC
___ 2.117.395 _
lC 29a
B BZ5
6~J5
1J92.j6j
_1.552.717
1.255.046
231,588
218,986
183,154
LIABILITIES
Insurance Reserves
Unearned Premiums
Policy Reserves
Losses & Loss Adjustment
228,699
258,373
248,288
271,230
233,782
208,819
177,675
161,622
140,724
123,634
1,015,179
861,661
770,192
657,192
569,665
412,286
309,085
284,750
Deferred & Other taxes
234,751
82,737
146,474
98,753
Other Liabilities
lBB 656
1~6 20~
15Z aa6
139435
1.994.568
1.582.757
33,135
32,916
Total Liabilities
70,721
78,161
62,806
926
122 JB6
106 CJB
L53L70a _~ •.301.1M _ . ---.l.158..522
Jl72.543
784.717
29,762
29,547
12~
SHAREHOLDERS' EQUITY
Common Stock at Par
32,665
32,427
31,882
Paid-in Capital
151,152
145,351
140,191
134,677
129,507
86,140
84,441
Retained Earnings
716,657
615,224
526,210
446,771
346,391
316,358
242,493
543,296
216,109
324,499
203,259
126,159
147,914
113,848
-2 Za2
-J,J12
1.02Q.25a
-l,~9J
0
815.641
Unrealized Gain or
(Loss) on Investments
Less Treasury shares
Total Shareholders' Equity
Total Liabilities & Equity
-2 aaa
1.Hl.~Q1
1.006868
3.435.96!L __ ----.2.S.89.6li _
2.55~
_-.2..117.395 _
!2~a,aa9
t.192..461_
Q
5BQ lZ1
_1.552.717
Q
~ZQ.a2a
1.255.046
This data is a compilation of data from Cincinnati Financial Corp. Annual Reports (1985-1991).
(
(
(
OCAS Consolidated
EXHIBIT 23
ASSETS ($000)
12Qll~1
ASSETS
Investments
Fixed
Equity
Other invested assets
Cash
Premium & oth. Recievables
Deferred Policy Acq. Costs
Property & Equip.
Other Assets
12Qll~Q
12lJM1~
12Q1l~~
12Q1l~Z
12lJ1~§
12La1~~
2,411,853
422,958
95,155
14,264
238,109
196,381
39,706
1,960,396
354,625
356,477
9,425
240,455
191,084
39,077
1,996,909
432,425
142,020
3,137
222,829
176,166
38,276
1,758,856
376,286
265,694
13,940
210,054
177,770
36,943
1,736,962
305,982
115,088
8,467
201,179
176,067
33,945
1,486,024
269,467
228,221
7,738
206,863
172,765
33,426
1,341,164
213,189
125,581
4,903
181,470
147,036
33,343
112 ~;3;3
101 ;3az
133 ~1f1
62~61
l~,Zla
3.531.25!l_
~.252Jl26 _ _
3..tl5..6ZL _
Policy Reserves
Losses & Loss Adjustment
Deferred & Other taxes
605,700
271,418
1,566,738
16,350
582,480
254,909
1,484,937
0
552,122
237,079
1,370,698
44,762
Other Liabilities
Total Liabilities
2.756.72<t _
Total Assets
2..922~
zo,aaa
2.682.JOa _
2~475.392
fIfI 06Z
2.112.753
LIABILITIES
Insurance Reserves
Unearned Premiums
SHAREHOLDERS' EQUITY
Common Stock at Par
Paid-in Capital
Retained Earnings
Unrealized Gain or
(Loss) on Investments
Less Treasury shares
Total Shareholders' Equity
Total Liabilities & Equity
538,760
174,569
1,253,217
53,015
525,226
139,253
1,171,970
67,989
522,333
106,390
982,369
77,894
442,553
79,826
807,048
35,581
2Z~ ~02
166,OOZ
la3,~al
162,23Z
laO ~O~
20S Z3f1
_2.601.728
2.3ZQJi68
2.203.542
2.066..6I5
La69.390
1.573.744
2,925
6,185
854,668
2,925
6,351
791,637
2,925
6,459
752,496
2,925
6,214
695,623
2,925
6,385
608,474
2,925
6,282
567,796
2,925
6,217
498,981
124,929
66,137
97,572
67,657
34,197
45,205
47,720
-2H,lZ2
-215652
6:21.HUl
-a~ ~~2
-53 ~3Z
-36,2~Z
ZZ:2,OlQ
Z16,~~2
fll~,Za1
-16206
flQflQQ2
:2aa.QQi
3.252.926
3.H5.6Z8
296516
ZH,~J:2
3.53~
2.922.02~
2.682.~
_ 2.475.392
-Hi S3~
2.112.753
This data is a compilation of data from Ohio Casualty Corp. Annual Reports (1985-1991).
(
(
(
CINF Consolidated
EXHIBIT 24
ASSETS ($000)
12L~1l1U
12L~lLI~Q
12/31/89
12/31/88
1 2/31 187 . -.12131LB.6
12/31/85
ASSETS
Investments
Fixed
Equity
Other invested assets
Cash
Premium & oth. Recievables
Deferred Policy Acq. Costs
Property & Equip.
Other Assets
Total Assets
LIABILITIES
Insurance Reserves
Unearned Premiums
Policy Reserves
Losses & Loss Adjustment
Deferred & Other taxes
Other Liabilities
Total Liabilities
SHAREHOLDERS' EQUITY
Common Stock at Par
Paid-in Capital
Retained Earnings
Unrealized Gain or
(Loss) on Investments
less Treasury shares
Total Shareholders' Equity
Total Liabilities & Equity
41.4%
46.7%
1.2%
1.7%
5.0%
2.7%
0.9%
45.6%
40.5%
1.5%
1.5%
6.1%
3.4%
0.9%
Q ~O{,.
Q ~O{,.
100.0%
8.3%
7.9%
29.5%
6.8%
47.9%
37.7%
1.3%
1.1%
6.7%
3.6%
1.3%
48.6%
34.0%
1.1%
1.5%
7.9%
4.3%
2.0%
47.1%
33.4%
1.3%
2.3%
8.1%
4.7%
2.6%
48.5%
31.0%
1.7%
1.4%
8.2%
5.4%
3.3%
Q :30(,.
Q,60(,.
Q 6°t,.
Q 5"t,.
100.0%
43.0%
43.1%
1.4%
1.4%
6.3%
3.4%
1.0%
Q~ot,.
100.0%
100.0%
1QO.O%
100..0%
100.0%
10.0%
9.0%
33.3%
3.2%
9.7%
8.2%
30.2%
5.7%
10.8%
8.4%
31.0%
4.7%
12.9%
9.0%
31.8%
3.9%
14.1%
9.1%
26.6%
5.0%
14.6%
9.9%
24.6%
5.0%
6°{,.
6,2°t,.
66°t,.
Z Qot,.
Z!W,.
IUO(q
58.0%
61.1%
60.0%
61.5%
.04..6%.
62.6%
62.5%
1.0%
4.4%
20.9%
1.3%
5.6%
23.8%
1.3%
5.5%
20.6%
1.5%
6.4%
21.1%
1.8%
7.2%
19.3%
1.9%
5.5%
20.4%
2.4%
6.7%
19.3%
15.8%
8.3%
12.7%
9.6%
7.0%
9.5%
9.1%
-Q 1!'iI
-Q,]Ot'il
-0 lOt..
-Q,1%
QQ"..
Q,QO(q
QQO(q
~2,QO{,.
~e,aot..
~Q,Q"t,.
~e,~"t,.
J~,~"t,.
JZ,~"t..
~Z,~O(q
100.0%.. _.100.0% _100.it%.
.100.0%
~ ~"t,.
100.0%
~
100.0% _100.0%
This data is a compilation of data from Cincinnati Financial Corp. Annual Reports (1985-1991).
(
(
(
OCAS Consolidated
EXHIBIT 25
ASSETS ($000)
:I ~l;311al
:I ~l;3:1laQ
:I Zl~jlaa
1Zl~:llae
1~l~l leZ
1~l;3llee
1~l;311a~
ASSETS
Investments
Fixed
68.3%
60.3%
63.5%
60.2%
64.8%
60.0%
63.5%
12.0%
10.9%
11.4%
4.3%
10.9%
10.1%
9.2%
Cash
11.0%
0.3%
13.7%
4.5%
12.9%
2.7%
0.4%
5.9%
0.2%
Premium & oth. Recievables
6.7%
Deferred Policy Acq. Costs
Property & Equip.
5.6%
1.1%
7.4%
5.9%
7.1%
5.6%
1.2%
1.2%
6.1%
1.3%
J lOfq
~
J"fq
2£Wq
Equity
Other invested assets
Other Assets
Total Assets
LIABILITIES
Insurance Reserves
Unearned Premiums
Policy Reserves
Losses & Loss Adjustment
Deferred & Other taxes
Other Liabilities
Total Liabilities
SHAREHOLDERS' EQUITY
Common Stock at Par
Paid-in Capital
Retained Earnings
Unrealized Gain or
(Loss) on Investments
Less Treasury shares
Total Shareholders' Equity
Total Liabilities & Equity
J 2°fq
0.1%
9.1%
0.5%
7.2%
~O.O~~o.oJl% _100~_~O~_
0.3%
0.3%
7.5%
6.6%
8.4%
1.3%
7.0%
1.4%
J9%
2.9°fq
1~ ~OO~%
8.6%
7.0%
1.6%
J :l°fq
~OO.O%
17.2%
17.9%
17.6%
18.4%
19.6%
21.1%
20.9%
7.7%
44.4%
0.5%
7.8%
6.0%
5.2%
43.7%
2.5%
4.3%
3.8%
45.6%
0.0%
7.5%
43.6%
1.4%
39.7%
3.1%
S.~"fq
afjOfq
38.2%
1.7%
5 JOfq
12 JOfq
fjQ%
Z.Jofq
99%
78.1%
80.0%
75.4%
75.4%
77.0%
75.5%
74.5%
0.1%
0.2%
0.1%
0.1%
0.2%
0.1%
0.1%
0.2%
0.2%
0.1%
0.3%
0.3%
24.2%
24.3%
23.9%
23.8%
0.2%
22.7%
22.9%
23.6%
42.9%
1.8%
0.1%
3.5%
2.0%
3.1%
2.3%
1.3%
1.8%
2.3%
-12 :I °fq
21.aOfq
-6 fj"fq
-2 ZOfq
-1 fl"fq
-Q ZOfq
2Q QOfq
2~,fjofq
-1 ~Ofq
2J,Q"fq
2~,l2°fq
-Q S"fq
2l2.l2°fq
100.0% _ 100.0%
100.0%
100.0%
l~~OO.O%
2~.fWq
100.0%
This data is a compilation of data from Ohio Casualty Corp. Annual Reports (1985-1991).
(
(
(
CINF Consolidated
EXHIBIT 26
STATEMENT OF INCOME ($000)
1~lLS8
947,576
12Qllli!Q
871,196
12Lal~li!
Premiums earned
Investment income less
813,313
768,409
12Lall8Z
766,476
12LalLS§
682,997
12Q1LS5
528,777
investment expenses
193,220
167,425
149,285
130,885
108,915
90,875
76,561
7,641
1,488
4,678
6,423
13,881
3,528
12 §li!8
1,161,135
8,822
1,048,931
Z,l:M
974,410
1Q,281
915,998
3,845
Z,ga§
886,922
l,Sa2
789,685
611,420
679,948
69,388
620,736
63,589
577,429
58,592
504,934
53,674
551,957
58,414
478,284
49,696
394,850
40,353
219,406
201,703
192,407
191,936
166,244
Total Expenses
15222
984.004
~99.17Z
12,82Z
841 255
762.737
145,918
Z.§8f2
1 Q.QZf2
784..3OQ ____ 683.973
111,176
a,Qf2f2
.5.49.434
Income before taxes
lZz.lal
149.zf24
1aa.l f2f2
15a.2§1
lQ2,§22
105.712
61.986
Income taxes
Net Income
ao 851
146.280
20
128.962
za,
18 §§5
114.490
S.~§8
12 ,~l
93.471
§
54.993
12131/91
Realized investment gain
or (loss)
Other income
Total Income
2,5f2~
Losses and Benefits and
loss adjustment expo
General Operating Exp.
Policy acquisition
costs (commis., fees)
Other Expenses
la,Hli!
_
12,H~a
,~
51a
128.748
93.154
aaa
This data is a compilation of data from Cincinnati Financial Corp. Annual Reports (1985-1991).
(
(,
(
OCAS Consolidated
EXHIBIT 27
STATEMENT OF INCOME ($000)
1Zl~ll~S
1,381,201
12{31~~
1Zl~ll~Z
12/31~§
lZ{31~5
1,488,619
1Z{31 liQ
1,455,914
1,384,578
1,400,985
1,260,690
1,034,448
218,081
204,121
216,403
191,479
174,238
154,578
131,545
7,518
-22,500
5,607
12{31/91
Premiums earned
Investment income less
investment expenses
Realized investment gain
or (loss)
Other income
Total Income
-20,513
-14,052
-18,666
34,413
Q
1,714,218
Q
1,637,535
Q
1,577,091
Q
1,562,005
Q
1,556,557
Q
1,449,681
1,069,825
1,066,523
985,662
943,890
985,186
913,221
781,902
109,021
99,719
89,339
84,145
75,101
73,861
72,158
411,096
387,965
385,652
382,108
386,150
334,691
276,102
Q
1.589.942
Q
1.554.207
Q
1.460.653
Q
1.410.143
Q
1.446.437 _
1Z4.ZZ6
83.3Z8
Q
1,171,600
Losses and Benefits and
loss adjustment expo
General Operating Exp.
Policy acquisition
costs (commis., fees)
Other Expenses
Total Expenses
Income before taxes
Income taxes
Net Income
HH22
-ZZ2
107.854
84.100
116,438
H~a~
1~_
151·86Z
23.~2§
128.036
-
Q
1.321.77~
Q
1.130.162
41,438
llQ.1ZQ
1Z7.9Q8
3] 56Z
251a~
-2 g~5
18.553 _ _ . 102.714
44.083
This data is a compilation of data from Ohio Casualty Corp. Annual Reports (1985-1991).
(
(
(
CINF Consolidated
EXHIBIT 28
STATEMENT OF INCOME ($000)
]2l~1l~]
]2l~]l~Q
]2l~lla~
]2l~llaa
]2l~llaZ
]2l~llag
12l~lla:2
Premiums earned
Investment income less
81.6%
83.1%
83.5%
83.9%
86.4%
86.5%
86.5%
investment expenses
16.6%
16.0%
15.3%
14.3%
12.3%
11.5%
12.5%
0.7%
0.1%
0.5%
0.4%
1.8%
0.6%
l.:l%
100.0%
Q,aO{~
Q,ZO{~
Q,aO(~
Q,2°{~
Q,~O{~
100.0%
100.0%
0.7%
1.1 O{~
100.0%
100.0%
100.0%
100.0%
58.6%
6.0%
59.2%
6.1%
59.3%
6.0%
55.1%
5.9%
62.2%
6.6%
60.6%
6.3%
64.6%
6.6%
18.9%
19.2%
19.7%
21.0%
18.7%
18.5%
18.2%
Realized investment gain
or (loss)
Other income
Total Income
Losses and Benefits and
loss adjustment expo
General Operating Exp.
Policy acquisition
costs (commis., fees)
1,~%
1,~O{~
1,~~~
1,~0(~
Q,aO{~
1,~O{~
Q,:2o(~
Total Expenses
84.7%
85.7%
86.3%
83.3%
88.4%
86.6%
89.9%
Income before taxes
1:2 3%
]4,3%
13.z%
19,Z%
11,g%
13,4%
10.1%
Income taxes
Net Income
2 Z°.(q
12.6%
2 Q0.(q
12.3%
1 ~O.(q
2 Z°.(q
14.1%
1 ] o.(q
10.5%
1 g0.(q
1 l°.(q
9.0%
Other Expenses
11.7%
11.8%
This data is a compilation of data from Cincinnati Financial Corp. Annual Reports (1985-1991).
(
(
(
OCAS Consolidated
EXHIBIT 29
STATEMENT OF INCOME ($000)
Premiums earned
Investment income less
86.8%
12Qlla9 12L~lLaa 12L~lLaZ
88.6%
88.9%
87.6%
90.0%
investment expenses
12.7%
12.5%
13.7%
12.3%
or (loss)
Other income
0.4%
Q,Q%
-1.4%
Q,QO{q
-1.3%
Q,QO{q
Total Income
100.0%
100.0%
62.4%
6.4%
24.0%
12L~1 L9]
12L~1 L9Q
12L~WH2
12L~lL85
87.0%
88.3%
11.2%
10.7%
11.2%
-0.9%
Q QO{q
-1.2%
Q,QO{q
2.4%
Q QO
i2
Q,Q%
100.0%
100.0%
100.0%
100.0%
100.0%
65.1%
6.1%
62.5%
5.7%
60.4%
5.4%
63.3%
63.0%
5.1%
66.7%
4.8%
23.7%
Q,QO{q
24.5%
24.5%
Q.QO{q
24.8%
23.1%
23.6%
Realized investment gain
0.5%
Losses and Benefits and
loss adjustment expo
General Operating Exp.
Policy acquisition
costs (commis., fees)
Other Expenses
Total Expenses
Q,Q%
92.8%
94.9%
Q.Q%
92.6%
o
6.2%
90.3%
Q.QOfq
92.9%
Q.Q i2
91.2%
Q QOfq
96.5%
Income before taxes
Z.2%
5.1%
Z.4%
9.Z%
7.1%
8.8%
3.5%
Income taxes
] OO{q
o OO/q
OS%
2 QO{q
1 ZO/II
-02%
Net Income
6.3%
5.1% .
6.4%
1 5"tq
8.2%
5.0%
7.1% _
3.8%
This data is a compilation of data from Ohio Casualty Corp. Annual Reports (1985-1991).
~
\
(
CINF Consolidated Ratio Analysis
EXHIBIT 30
l~~l
H~~Q
l~!l~
l~!lil
lSaZ
laD6
5.06
3.90
4.11
3.57
2.74
2.65
2.07
0.75
Liquidity:
Surplus/Unearned Premo Reserve
Liquidity:
Cash+lnvested Assetsl
Unearned Prem Res.+Loss and Loss Adj. Exp.
Liabilitiesl Liquid Assets
2.40
0.64
2.06
0.69
2.23
2.11
1.91
Liquidity:
0.68
0.70
0.76
0.07
0.12
Net Invest. Income/lnvest Assets
0.06
0.07
0.07
Net Incomel Premo Earned
Net Incomel Surplus
0.15
0.10
0.15
0.13
0.14
0.07
0.17
0.11
0.16
0.15
Profitability:
Efficiency:
Adj. Net Incomel Surplus
0.48
0.34
0.43
Net Incomel Assets
Assets/Surplus
0.05
2.57
0.04
2.50
0.35
0.05
Leverage:
0.04
2.38
0.41
0.06
2.60
2.83
0.06
2.68
Invest. Risk:
Efficiency:
Equity Securitiesl Surplus
1.11
0.66
1.04
1.08
0.98
0.87
0.34
0.80
0.32
0.94
0.36
0.96
1.21
0.89
1.18
0.43
0.44
Profitability:
Profitability:
Profitability:
Efficiency:
Premo Earnedl Surplus
Premo EarnedlAssets
0.28
0.07
0.14
0.16
0.42
Book value per share
$28.94
$20.37
$20.77
$16.79
$13.12
$11.92
Oper. Earn per share
$2.84
$2.94
$0.91
$2.59
$2.61
$0.81
$2.27
$2.33
$0.72
$2.57
$2.65
$1.89
$1.72
$1.93
$0.42
31%
$18.22
31%
$16.81
31%
$15.79
$3.90
$3.40
$40.94
$25.94
$29.94
$21.50
Earnings per share
Dividends per share
Payout Ratio
PIC Premo Earned per share
Invest. income per share
$0.59
22%
$1.94
$0.49
25%
$3.06
$14.68
$2.70
$14.37
$2.28
$27.56
$17.56
$20.31
$13.06
$23.94
$12.19
22%
$12.83
$1.94
Stock Price
High
Low
PIE Range
(
14 to 9
(
12 to 8
12 to 8
8 to 5
13 to 6
$25.31
$18.81
15 to 11
(
OCAS Consolidated Ratio Analysis
EXHIBIT 31
H~lll
lllllQ
llle~
l~ee
llleZ
1~8§
1.33
1.17
1.16
Liquidity:
SurpluslUnearned Premo Reserve
1.28
1.12
1.40
Liquidity:
1.36
0.94
1.30
0.97
1.34
1.35
Liquidity:
Cash+lnvested Assetsl
Unearned Prem Res.+Loss and Loss Adj. Exp.
Liabilities! Liquid Assets
0.92
0.91
1.28
0.95
1.32
0.94
Profitability:
Profitability:
Net Invest. Incomellnvest Assets
0.07
0.08
0.08
0.06
0.13
0.07
0.13
0.08
0.09
0.08
0.06
0.08
Net Incomel Premo Earned
Profitability:
Net Incomel Surplus
0.07
0.14
Profitability:
Adj. Net Incomel Surplus
0.30
0.23
0.26
Efficiency:
Leverage:
Net Incomel Assets
AssetslSurplus
0.03
4.56
0.03
5.00
0.03
4.06
Invest. Risk:
0.55
1.92
0.54
0.56
Efficiency:
Equity Securitiesl Surplus
Premo Earnedl Surplus
Efficiency:
Premo EarnedlAssets
0.42
2.24
0.45
1.78
0.44
0.08
0.17
0.18
0.13
0.27
0.04
0.18
0.03
0.04
4.07
4.36
4.08
0.52
1.93
0.47
0.50
2.28
0.44
0.52
0.24
2.08
0.51
Book value per share
$43.16
$36.38
$36.93
$33.30
$27.86
$26.80
Oper. Earn per share
$5.76
$5.47
Earnings per share
Dividends per share
$6.02
$2.48
$5.16
$4.38
$2.32
$6.53
$5.88
$1.88
$4.31
$3.48
$1.68
$3.02
$4.54
$1.50
Payout Ratio
PIC Premo Earned per share
Invest. income per share
41%
$4.74
$2.08
44%
$81.90
$11.55
53%
$80.34
$11.40
$65.02
$10.31
32%
$62.10
$8.88
48%
$61.39
$7.88
33%
$54.04
$50.25
$40.00
$50.75
$26.75
$52.50
$35.50
$38.25
$32.25
$49.25
$34.50
$45.50
$33.25
$6.84
Stock Price
High
Low
PIE Range
(
8 to 7
(
10 to 5
10 to 6
6 to 5
11 to 8
15 to 11
(
.--
End Notes
1.
Best's Insurance Reports Property Casualty Edition, 1992, A.M. Best Co., Inc.
(New York).
2.
Kichen, Steve, 1992, "Annual Report on American Industry," Forbes, 149:1,
94-104.
3.
Ward, John L., 1991, "Achieving Outstanding Results: 1991 ROI Top 50,"
National Underwriter Property Casualty/Risk Benefits Management Edition,
95:35,58.
--
4.
Annual Report, 1991, Cincinnati Financial Corporation.
5.
Lazo, Shirley, 1991, "Speaking of Dividends," Barron's, 72:7, 36.
6.
Eaton, Leslie, 1991, "Bucking the Trend," Barron's, 71 :50, 14-15.
7.
Annual Report, 1991, Cincinnati Financial Corporation.
8.
Annual Report, 1991, Cincinnati Financial Corporation.
9.
Eaton, LeSlie, 1991, "Bucking the Trend," Barron's, 71 :50, 14-15.
10.
Byrne, Harlan, 1991, "Cincinnati Financial Corporation," Barron's,71 :3, 49-50.
11.
Livenmeyer, Adrienne, 1990, "Cincinnati Financial: Bucking the Trend,"
Financial World, 159:25,14.
12.
Calise, Angela, 1990, "Cincinnati Financial Moves to Relieve Investor Fears,"
National Underwriter Property Casualty/Risk Benefits Management
Edition, 94:43, 63.
13.
Best's Insurance Reports Property Casualty Edition, 1992, A.M. Best Co., Inc.
(New York).
14.
Annual Report, 1991, Ohio Casualty Corporation.
15.
Annual Report, 1991, Ohio Casualty Corporation.
16.
Haggerty, Alfred, 1990, "Prop. 103 May Have Delayed Premium Rebates,"
National Underwriter Property Casualty/Risk Benefits Management
Edition, 95:44, 5,63.
17.
Haggerty, Alfred, 1990, "Prop. 103 May Have Delayed Premium Rebates,"
National Underwriter Property Casualty/Risk Benefits Management
Edition, 95:44, 5,63.
18.
~
p. A9d, col 4.
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