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Copyright 2009 Insurance Weekly News via VerticalNews.com Insurance Weekly News

9 January 2009

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CINCINNATI FINANCIAL CORPORATION; begin Cincinnati Insurance Marketing Business Insurance Policies in Texas



Cincinnati Financial Corporation (NASDAQ: CINF) announced that on 19 December 2008, its main property and casualty insurance subsidiary, The Cincinnati Insurance Company, appointed Watkins Insurance Group, with offices in Austin and Marble Falls, Texas, as the first independent agency in this State to market its policies. Cincinnati Insurance launched frameworks of the relationship to the company headquarters, welcoming representatives from Patrick Watkins, CIC, CRM, President, and Mike Mosley, CIC, Vice President.

Kenneth W. Stecher, president and CEO, said: "With a premium surplus is less than 0.9-for-1, our capacity and desire for growth remain very strong. Agents of our current and future states say they are willing to put their customers Cincinnati's industry-leading service compensation, extensive warranties, competitive multi-year policies and solid financial strength. With our entry into Texas, Cincinnati Insurance, will be actively marketing its policies in 35 states, expanding our geographic scope and the west where we opened the New Mexico and Washington in 2007, Utah in 2000 , Idaho and Montana in 1999, 1998. After our Texas operation is underway, we will look at the next appointment of agencies in Colorado and Wyoming. "

Local staff and provide service Benefits Marketplace

JF Scherer, Executive Vice President, said: "The company plans to appoint five other agencies in Austin, Dallas and Waco in the coming weeks and to add at least 10 others in 2009 with our first Texas policies January 1, 2009. The interior areas of the state of activation selected for a population of approximately 7.7 million.

"As we build our relationship with Texas and the growth of agents in the years to come, we will increase our premium income while spreading risk across states of the Midwest and South that have always represented the bulk of our activities. To provide support to local Texas agents, the experience of our marketing representatives Sean Givler, CIC, and Shawn Murphy, CPCU, have already moved to Austin and Dallas. As our company is based, we supplement this local presence, the Adding another representative for the marketing of Dallas / Fort Worth market and associates to provide claims, loss control, premium audit and other services in the region.

"Over the next two years, we expect to appoint a total of 30 branches in Texas. In recent years, agencies newly appointed Cincinnati were on average of total premium volume for damages of $ 25 million to $ 30 million range. Cincinnati generally works to win a share of this activity by about 5 percent in the first five years and 10 per cent in the first 10 years of a new relationship, "said Scherer.

H Best's A + (Superior) Rating with a stable outlook to the difference in Cincinnati

Stecher added, "Today, AM Best Co. has recognized the effect of economic and market disruptions on the value of investments in our portfolio and the reduction of dividend income in the future. They reduced our property and casualty group's rating of the insurer financial strength A + (Superior) from A + + (Superior). We believe life is now A (Excellent) and our excess and surplus lines view is confirmed to A (Excellent).

"Together with the changes in rating AM Best has upgraded its outlook on the overall rating to stable. Best noted our exposure to fluctuations in capital markets, but pointed out that the stable outlook on all ratings Cincinnati better reflects our risk management processes, liquidity, risk-adjusted capitalization exceeding our operating entities and the success of our company profile in targeted regional markets. "

Stecher added, "Our opinion of the property and casualty group compares favorably to those of many of our peers - only about 11 percent of the United States for property and casualty insurance groups benefit from higher ratings (A + or A + +). In fact, we are honored to be among those under 35 insurance groups that have taken place in the higher category ratings for 50 consecutive years or more.

"Agents understand the importance, especially in times like these, to choose an insurance policy that supports the health of financial resources. IARD Our operations are funded at levels higher than those historically associated with a company rated A + + by AM Best. We continue to focus on capital preservation and liquidity, and we have developed new investment guidelines that focus on diversification and reduce the concentrations.

"Since mid-summer, we have been rebalancing our investment portfolio newly adopted to take account of investment parameters in an effort to reduce volatility in the future. By mid-December, we reduced our financial sector holdings of less than 19 per cent of our portfolio, close to the Standard & Poor's 500 and the coefficient of 56.2 per cent at the end of 2007. Among other changes, we reduced our Fifth Third Bancorp holding approximately 14.5 million shares from 72.8 million just over a year. The ratio of our property and casualty subsidiaries Surplus stocks of the law is now almost 50 per cent.

Stecher noted, "As a result, despite economic and market turbulence that led to the unprecedented decline in market values, our portfolio experienced a broader index since September 30, 2008. On November 30, we believe that our law based on the risk capital ratio was around 775 percent to 800 percent, comparing favorably with 810 percent at the end of 2007. From December 15, we had about 9 , 5 billion in cash and invested assets, including $ 2.8 billion holdings of common shares, compared to $ 10.5 billion, including $ 3.9 billion common shares of farms, to September 30, 2008. "

Stecher added, "In addition, our parent company, Cincinnati Financial, has a low debt level compared to our total capital and over $ 1 billion of assets that add to the flexibility of the insurance subsidiaries. Our $ 795 million of long-term debt is not due until 2028 and 2032 and we have only 49 million in short-term borrowings on the $ 75 million line of credit. In addition, we currently have approximately $ 700 million in cash and a second line of untapped credit availability of $ 150 million. "

CinFin Capital Management Company to cease its activities as Sharpens Focus on Insurance

Stecher continued, "Our asset management services subsidiary CinFin Capital Management Company, has advised clients earlier this month it was closing on February 28, 2009. During the recent recession, the industry made satisfactorily in relation to appropriate benchmarks, and it is more profitable 10 years of operation. We have determined that sufficient future growth through referrals or agencies other routes would have required a substantial increase resources even as we prepare insurance initiatives. Many of our agencies did not see references to its services within the scope of their offerings to their customers. "

Consistency Drives Performance Award and dividends

Stecher concluded, "We remain comfortable with expectations for 2008 financial performance, we have discussed in our third quarter release on October 29. We expect that economic conditions and insurance price competition will continue to put pressure on industry results and our results in 2009. As we have always done, we will manage with an eye toward long-term growth, building relationships with agents and policyholders who turn to us for quality, service and stability. We have the strength and confidence of capital to invest in increasing our advantages in the insurance market. Our reserves have always practical product redundancies, with the claims liabilities covered by a highly-rated, diversified portfolio of bonds.

"Our strategic organization operates - creating value for our agents, policyholders and shareholders - to focus more directly on the insurance operations. Our insurance initiatives include increased activity in the new states, our selective appointment of the new agency representation, our new excess and surplus lines of business and technology initiatives to increase efficiency. We have succeeded in helping independent insurance agencies do an outstanding job in serving the public and businesses in their local communities.

"This is a good online test for all our business decisions, and this is a test that allows us to concentrate and go in the right direction to create value over time. At the future, we will continue this approach to date, reaffirming that we have the resources and commitment to constantly differentiate ourselves and police officers, still in the growth and pay dividends for shareholders. "

Cincinnati Financial Corporation offers property and casualty insurance, our main business, through our three business market, The Insurance Company Cincinnati, Cincinnati Indemnity Company and The Cincinnati Casualty Company. The Cincinnati Specialty Underwriters Insurance Company provides excess and surplus lines insurance. Insurance Company Cincinnati Life markets life and disability insurance and annuities. CSU Producer Resources Inc., is the excess and surplus lines brokerage, the same local independent agencies that offer our market policies. CFC Investment Company offers commercial leasing services and financing.
Keywords: Cincinnati Financial Corporation.

This article was prepared by Insurance Weekly News editors from staff and other reports. Copyright 2009 Insurance Weekly News via VerticalNews.com.

31 December 2008

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