CINCINNATI FINANCIAL CORP
For the period ended Dec 31, 2024. Filed Feb 24, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 24, 2025
CINF$185.48-1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-26.
0000020286-24-000014
IntroductionExecutive SummaryCritical Accounting EstimatesRecent Accounting PronouncementsFinancial ResultsLiquidity and Capital ResourcesSafe Harbor StatementCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-24.
0000020286-25-000009
IntroductionExecutive SummaryCritical Accounting EstimatesRecent Accounting PronouncementsFinancial ResultsLiquidity and Capital ResourcesSafe Harbor StatementThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 534 previous paragraphs and 533 current paragraphs.
347 unchanged; 158 reworded; 20 added; 22 removed; 7 previous and 8 current paragraphs rearranged.
Tables are not compared: 48 previous and 50 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
Effective June 1, 2024, we restructured our reinsurance program for Cincinnati Re only, providing retrocession coverages with various triggers, exclusions and unique features. The program included property catastrophe excess of loss coverage with a total available aggregate limit of $60 million in excess of $80 million per occurrence. During 2024, there was no recovery from reinsurers for losses pertaining to this program. See Item 7, Liquidity and Capital Resources, 2025 Reinsurance Ceded Programs, for a discussion of other reinsurance coverage.
Current report
We believe the life insurance market remains attractive. Life insurance ownership remains low compared to historical levels. While people like to research life insurance online, we believe they prefer to speak to a professional agent before making a purchase. Our strong agency relationships and expanding base of agencies gives us a competitive edge in satisfying the life insurance needs that exist for so many Americans.
Current report
Artificial intelligence and improved computing power will continue to allow us to improve our efficiency in writing new business and servicing it. Underwriting in particular will continue to evolve as we work to prudently adopt new, and refine existing models, to evaluate mortality risk without requiring invasive and time intensive traditional medical exams. We believe this improved buying experience will encourage more of our agencies to offer a life insurance product to their property casualty customers.
Current report
Within the life insurance market, we view the voluntary life space as particularly attractive. With our large commercial lines presence, our agencies have tremendous opportunities to serve the employees of these businesses with a simple, voluntary life product. We are enhancing our ability to enroll this business and service it more efficiently, including hiring dedicated associates to augment our agencies’ ability to conduct the enrollments. These accounts often lead to business life insurance opportunities that are designed to ensure the viability of the businesses in the event of a death of a key employee or business owner.
Current report
Federal Reserve inaction due to inconsistent inflation data points led to volatile interest rate levels over the course of 2024. With data seeming to indicate inflation was under control, the Federal Reserve pivoted and began its rate cutting program in late September.
Current report
With yields at highs not seen in years, we focused our purchase activity on fixed-maturity securities and diverted new money away from equity securities as the S&P 500 Index return in 2024 exceeded 20% for the second consecutive year. We benefited from our ongoing equity exposure but repositioned the portfolio to take advantage of the strength in stocks and the yields in the bond market.
Current report
Our investment portfolio is well-positioned to pursue market opportunities that present themselves in 2025. If yields remain high, we are ready to continue emphasizing bond purchases. If the stock market retrenches, we are prepared to take advantage of value opportunities, maintaining our longer-term approach of seeking both growth of investment income and portfolio appreciation. We discuss our portfolio strategies in Item 1, Our Segments, Investments Segment.
Current report
Our effective tax rate includes impacts from Cincinnati Global’s operations in the United Kingdom. The United Kingdom is one of several global jurisdictions that have enacted laws consistent with The Organisation for Economic Co-operation and Development (OECD) “Pillar Two” model rules aimed at imposing a global minimum tax rate of 15 percent. The UK’s Pillar Two laws, generally effective as of January 1, 2024, did not have a material impact on our effective tax rate in 2024.
Current report
According to these models, probable maximum loss estimates from a single hurricane event that combine the effects of property casualty insurance written on a direct basis by The Cincinnati Insurance Companies, the Cincinnati Re reinsurance portfolio and risks insured by Cincinnati Global include the following amounts, net of amounts recoverable through reinsurance ceded and also income taxes, and including the effects of estimated reinstatement premiums: $625 million for a once-in-a-100-year event and $949 million for a once-in-a-250-year event.
Current report
Based on treaties in effect at January 1, 2025, the largest loss exposure to us for Cincinnati Re is from natural catastrophe events. That exposure includes probable maximum loss estimates of the following amounts: $242 million for a once-in-a-100-year event and $321 million for a once-in-a-250-year event. Those effects are on a standalone basis and represent a single hurricane event and include the effects of income taxes, estimated reinstatement premiums and applicable reinsurance ceded, including any retrocessions for reinsurance assumed, and estimated reinstatement premiums. They are based on probable maximum loss estimates from the Verisk Touchstone version 10.0 catastrophe model.
Current report
At January 1, 2025, the largest loss exposure to us for Cincinnati Global is from natural catastrophe events. Cincinnati Global's exposure from such events includes probable maximum loss estimates of the following amounts: $65 million for a once-in-a-100-year event and $79 million for a once-in-a-250-year event. Those effects are on a standalone basis and represent a single hurricane event and include the effects of income taxes, applicable reinsurance ceded and estimated reinstatement premiums. They are based on probable maximum loss estimates from the Verisk Touchstone version 10.0 catastrophe model.
Current report
◦15.0% of losses between $1.300 billion and $1.450 billion
Current report
◦15.0% of losses between $1.450 billion and $1.500 billion
Current report
Effective in March 2024, we added a quota share reinsurance arrangement for personal lines earthquake risks in California that we insure through excess and surplus lines policies. We cede all of the related premiums to a reinsurer, therefore transferring substantially all of that risk. Ceded premiums for this treaty in 2024 totaled $1 million.
Current report
Effective June 1, 2024, we restructured our reinsurance program for Cincinnati Re only, providing retrocession coverages with various triggers, exclusions and unique features. That program included property catastrophe excess of loss coverage with a total available aggregate limit of $60 million in excess of $80 million per occurrence. Coverage for Cincinnati Re only with a total available aggregate limit of $20 million in excess of $80 million per occurrence expired during the second quarter of 2024. That expiration also included the shared coverage for Cincinnati Re and the direct business applying to catastrophe losses in excess of $600 million.
Current report
•Mergers, acquisitions and other consolidations of agencies that result in a concentration of a significant amount of premium in one agency or agency group and/or alter our competitive advantages
Removed paragraphs (22)
Previous report
As discussed in Item 8, Note 1, Summary of Significant Accounting Policies, effective January 1, 2023, we adopted ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. We adjusted applicable financial statements. Related financial data shown in Management's Discussion and Analysis of Financial Condition and Results of Operations also have been adjusted.
Previous report
During 2021 through 2023, SARS-CoV-2, also known as COVID-19 and recognized as a pandemic by the World Health Organization, continued to cause various effects in parts of the world. We believe it did not have a significant effect on our premium or investment revenues during 2023, 2022 or 2021. For future periods, renewal premium or new business premium amounts could decline due to reduced spending by businesses or consumers,
Previous report
Cincinnati Financial Corporation - 2023 10-K - Page 51 or if the basis for policy premiums, such as sales and payrolls of businesses we insure, decrease as a result of a weakening economy, pandemic or other reasons. Premium growth by segment is discussed below in Financial Results.
Previous report
Effective June 1, 2023, we restructured our reinsurance program for Cincinnati Re that included property catastrophe excess of loss coverage. The restructured treaties are for a period of one year and provide $40 million of coverage for various combinations of occurrences for business written in North America on a direct basis and by Cincinnati Re. Cincinnati Global catastrophe losses are not applicable to the treaty. There is a per occurrence limit of $20 million for Cincinnati Re catastrophe losses in excess of $80 million per event. The remaining coverage is for business written by Cincinnati Re and on a direct basis that applies to catastrophe losses in excess of $600 million per event. During 2023, there was no recovery from reinsurers for losses pertaining to these treaties.
Previous report
Commercial umbrella coverages are part of our commercial casualty line of business that help protect businesses against liability from occurrences such as accidents or injuries. Following a significantly unfavorable effect on our 2022 ratios for losses and expenses, commercial umbrella contributed a favorable decrease of approximately 2.2 percentage points to the commercial lines segment 2023 ratio for loss and loss expenses decrease of 3.2% shown in the table above. Incurred losses and loss expenses for commercial umbrella coverages of $346 million in 2023 decreased $70 million, or 17%, compared with 2022, including an increase in net paid losses of $7 million. The $70 million decrease in losses and loss expenses included a decrease of $39 million or 24% for the IBNR portion, while earned premiums of $502 million increased 1%. The estimated combined ratio for commercial umbrella for 2023 was 98%, compared with an estimated 112% for 2022, and its 2023 earned premiums represented approximately 34% of our commercial casualty premiums. Severe losses from commercial auto accidents were the primary source of our commercial umbrella claims during 2023 and also in recent years.
Previous report
We believe the life insurance market remains attractive. With life insurance ownership still low compared to historical levels, we will see more opportunities for growth as our property casualty agency footprint continues to expand. Our expertise with large face amount cases has allowed us to increase our average premium and face amount per policy. As more of our agencies uncover business insurance opportunities, we expect this trend to continue.
Previous report
Merger and acquisition activity in the independent agency channel can disrupt our ability to get consistent life insurance sales from affected agency relationships. We counter this by following the property casualty lead in assigning a local field representative to every relationship, and a sales leader to every national account. We are confident that our focus on building and strengthening these relationships will continue to lead to long-term profitable growth in the years ahead, despite any short-term disruptions.
Previous report
The rising interest rate environment has benefited us. The higher yields available in the fixed income market have allowed us to reinvest securities at attractive rates, boosting our investment income. We will be paying close attention to any signals the Federal Reserve may send regarding the potential for rate cuts in 2024. A decision to significantly lower the overnight lending rate would likely lead to lower investment income for us over time.
Previous report
The pace and magnitude of Federal Reserve actions in 2023 softened as many of the economic data points (except labor measures) showed a slowdown from 2022 levels. Credit spreads tightened but the 10-year treasury yield remained unchanged year over year. A late year-end rally led to positive returns across most asset classes.
Previous report
We continued to take advantage of interest rates that were higher than rates from maturing bonds during 2023 but maintained a balanced approach to our allocation between bonds and stocks. We will continue our focus on near-term income generation with an eye to long-term book value growth within the framework of our corporate liquidity as well as adherence to insurance department regulations and rating agency commentary. We discuss our portfolio strategies in Item 1, Our Segments, Investments Segment.
Previous report
In consideration of the data’s credibility, we analyze commercial and personal umbrella liability reserves together and then allocate the derived total reserve estimate to the commercial and personal coverages. Consequently, the umbrella factors that contributed to commercial lines reserve development also contributed to personal lines reserve development through the other personal line, of which personal umbrella coverages are a part.
Previous report
Effective June 1, 2023, we restructured our reinsurance program for Cincinnati Re that included property catastrophe excess of loss coverage. The restructured treaties are for a period of one year and provide $40 million of coverage for various combinations of occurrences for business written in North America on a direct basis and by Cincinnati Re. Cincinnati Global catastrophe losses are not applicable to the treaty. There is a per occurrence limit of $20 million for Cincinnati Re catastrophe losses in excess of $80 million per event. The remaining coverage is for business written by Cincinnati Re and on a direct basis that applies to catastrophe losses in excess of $600 million per event.
Previous report
•Ongoing developments concerning business interruption insurance claims and litigation related to the COVID-19 pandemic that affect our estimates of losses and loss adjustment expenses or our ability to reasonably estimate such losses, such as:
Previous report
◦The continuing duration of the pandemic and governmental actions to limit the spread of the virus that may produce additional economic losses
Previous report
◦The number of policyholders that will ultimately submit claims or file lawsuits
Previous report
◦The lack of submitted proofs of loss for allegedly covered claims
Previous report
◦Judicial rulings in similar litigation involving other companies in the insurance industry
Previous report
◦Differences in state laws and developing case law
Previous report
◦Litigation trends, including varying legal theories advanced by policyholders
Previous report
◦Whether and to what degree any class of policyholders may be certified
Previous report
•Changing consumer insurance-buying habits and consolidation of independent insurance agencies could alter our competitive advantages
Reworded paragraphs (158)
Previous wording
We are targeting an annual value creation ratio averaging 10% to 13% over the next five-year period. At 19.5% for 2023, our performance was above the high end of that range. It was within the range for the three-year period and above the high end of the range for the five-year period, both that ended in December 2023.
Current wording
We are targeting an annual value creation ratio averaging 10% to 13% over the next five-year period. At 19.8% for 2024, our performance was above the high end of that range. It was below the low end of the range for the three-year period and at the high end of the range for the five-year period, both that ended in December 2024.
Previous wording
The 2023 value creation ratio improved by 34.1 percentage points, compared with 2022, and again included a significant contribution from operating results, as shown in the table above, that was 3.9 percentage-points higher than last year. The 2023 ratio improvement was primarily due to a higher valuation for our investment portfolio, with increases of 17.9 percentage-points from our equity securities investment portfolio and 12.0 points from our fixed-maturity securities investment portfolio. The decrease in 2022, compared with 2021, was primarily due to a reduction in overall net gains from our investment portfolio.
Current wording
The 2024 value creation ratio improved by 0.3 percentage points, compared with 2023, and again included a significant contribution from operating results, as shown in the table above, that was 0.8 percentage-points higher than last year. The 2024 ratio improvement from operating results was partially offset by a reduction in overall net gains from our investment portfolio and other items, including a reduction of 2.5 percentage points from our fixed-maturity securities investment portfolio. The increase in 2023, compared with 2022, was primarily due to an increase in overall net gains from our investment portfolio.
Previous wording
•Premium growth – We believe over any five-year period our agency relationships and initiatives can lead to a property casualty written premium growth rate that exceeds the industry average. The compound annual growth rate of our net written premiums was 9.9% over the five-year period 2019 through 2023, exceeding the 6.9% estimated growth rate for the property casualty insurance industry, with 2023 representing industry data reported through the first nine months of 2023. The industry’s growth rate excludes its mortgage and financial guaranty lines of business.
Current wording
•Premium growth – We believe over any five-year period our agency relationships and initiatives can lead to a property casualty written premium growth rate that exceeds the industry average. The compound annual growth rate of our net written premiums was 10.9% over the five-year period 2020 through 2024, exceeding the 7.9% estimated growth rate for the property casualty insurance industry, with 2024 representing industry data reported through the first nine months of 2024. The industry’s growth rate excludes its mortgage and financial guaranty lines of business.
Previous wording
•Combined ratio – We believe our underwriting philosophy and initiatives can drive performance to achieve our underwriting profitability target of a GAAP combined ratio over any five-year period that consistently averages within the range of 92% to 98% in the future, better than our target of 95% to 100% during 2012 through 2023. We changed the target because we believe we can continue to perform at a high level. Our GAAP combined ratio averaged 94.6% over the five-year period 2019 through 2023, slightly better than the performance target range for that period. Performance as measured by the combined ratio is discussed in Consolidated Property Casualty Insurance Results. Our statutory combined ratio averaged 94.1% over the five-year period 2019 through 2023, compared with an estimated 101.1% for the property casualty industry, with 2023 representing industry data reported through the first nine months of 2023. The industry’s ratio again excludes its mortgage and financial guaranty lines of business.
Current wording
•Combined ratio – We believe our underwriting philosophy and initiatives can drive performance to achieve our underwriting profitability target of a GAAP combined ratio over any five-year period that consistently averages within the range of 92% to 98% in the future. Our GAAP combined ratio averaged 94.6% over the five-year period 2020 through 2024, within the performance target range. Performance as measured by the combined ratio is discussed in Consolidated Property Casualty Insurance Results. Our statutory combined ratio averaged 94.0% over the five-year period 2020 through 2024, compared with an estimated 100.7% for the property casualty industry, with 2024 representing industry data reported through the first nine months of 2024. The industry’s ratio again excludes its mortgage and financial guaranty lines of business.
Previous wording
◦Investment income growth, on a pretax basis, had a compound annual growth rate of 7.6% over the five-year period 2019 through 2023.
Current wording
◦Investment income growth, on a pretax basis, had a compound annual growth rate of 9.7% over the five-year period 2020 through 2024.
Previous wording
◦Over the five years ended December 31, 2023, our equity portfolio compound annual total return was 15.0% compared with a compound annual total return of 15.7% for the Index. Our equity portfolio favors larger-capitalization, high-quality, dividend-growing stocks with a slight value orientation. For the year 2023, our equity portfolio total return was 15.2%, compared with 26.3% for the Index.
Current wording
◦Over the five years ended December 31, 2024, our equity portfolio compound annual total return was 12.2% compared with a compound annual total return of 14.5% for the Index. Our equity portfolio favors larger-capitalization, high-quality, dividend-growing stocks with a slight value orientation. For the year 2024, our equity portfolio total return was 16.5%, compared with 25.0% for the Index.
Previous wording
The board of directors is committed to rewarding shareholders directly through cash dividends and share repurchase authorizations. Through 2023, the company has increased the annual cash dividend rate for 63 consecutive years, a record we believe is matched by only seven other publicly traded U.S. companies. In addition to regular dividends, strong capital and excellent company performance has provided opportunities to further reward shareholders. The board regularly evaluates relevant factors in dividend-related decisions, and the 2023 increase to the regular dividend reflected confidence in our outstanding capital, liquidity and financial flexibility, as well as progress of our initiatives to improve earnings performance while growing insurance premium revenues. We discuss our financial position in more detail in Liquidity and Capital Resources.
Current wording
In addition to regular dividends, strong capital and excellent company performance has provided opportunities to further reward shareholders. The board regularly evaluates relevant factors in dividend-related decisions, and the 2024 increase to the regular dividend reflected confidence in our outstanding capital, liquidity and financial flexibility, as well as progress of our initiatives to improve earnings performance while growing insurance premium revenues. We discuss our financial position in more detail in Liquidity and Capital Resources.
Previous wording
Total investments increased by 13% during 2023 on a fair value basis, and included an increase in our securities portfolio valuation that added to an 8% increase in its cost basis. Entering 2024, we believe the portfolio continues to be well diversified and is well positioned to withstand short-term fluctuations. We discuss our investment strategy in Item 1, Investments Segment, and results for the segment in Investments Results. Total assets increased by 10%, compared with year-end 2022. Shareholders’ equity increased by 15% and book value per share also increased by 15%, for reasons discussed in the preceding Executive Summary.
Current wording
Total investments increased by 12% during 2024 on a fair value basis. Entering 2025, we believe the portfolio continues to be well diversified and is well positioned to withstand short-term fluctuations. We discuss our investment strategy in Item 1, Investments Segment, and results for the segment in Investments Results. Total assets increased by 11%, compared with year-end 2023. Shareholders’ equity increased by 15% and book value per share increased by 16%, for reasons discussed in the preceding Executive Summary.
Previous wording
The amount of our debt obligations decreased by $24 million in 2023, compared with 2022. Our 6.3% ratio of debt to total capital (debt plus shareholders’ equity) at year-end 2023 decreased by 1.1 percentage points compared with the prior-year ratio.
Current wording
The amount of our debt obligations at year-end 2024 matched year-end 2023. Our 5.5% ratio of debt to total capital (debt plus shareholders’ equity) at year-end 2024 decreased by 0.8 percentage points compared with the prior-year ratio.
Previous wording
Net income rose by $2.330 billion in 2023, compared with net a net loss for 2022, including a $2.050 billion increase in net investment gains on an after-tax basis. The improved 2023 net income also included an increase in property casualty underwriting income of $206 million after taxes, as discussed below, and a $91 million increase in investment income after taxes. Our investment operation’s performance is discussed further in Investments Results. A net loss of $487 million in 2022, representing a $3.455 billion decrease compared with net income for 2021, included a $3.062 billion reduction in net investment gains after taxes. The reduced 2022 net income also included a decrease in property casualty underwriting income of $467 million after taxes and a $55 million increase in investment income after taxes.
Current wording
Net income rose by $449 million in 2024, compared with 2023, including a $204 million increase in net investment gains on an after-tax basis. The improved 2024 net income also included an increase in property casualty underwriting income of $141 million after taxes, as discussed below, and a $104 million increase in investment income after taxes. Our investment operation’s performance is discussed further in Investments Results. Net income of $1.843 billion in 2023, representing a $2.330 billion increase compared with net income for 2022, included a $2.050 billion increase in net investment gains after taxes. The improved 2023 net income also included an increase in property casualty underwriting income of $206 million after taxes and a $91 million increase in investment income after taxes.
Previous wording
During 2023, 2022 and 2021, there were no material changes to our estimates for incurred losses and expenses related to the pandemic. Factors used in estimating reserves for business interruption legal expenses related to the pandemic included estimates for attorney fees associated with the defense of such lawsuits filed against the company; litigation trends of such cases, including responding to amended and replead cases and cases on appeal; and trends in judicial decisions in cases filed against the company and other insurers. Loss experience for our insurance operations is influenced by many factors, as discussed in Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves. Because of various factors that affect exposure to certain insurance losses, such as less miles driven for vehicles or reduced sales and payrolls for businesses, there could be a reduction in future losses, and in some cases a generally corresponding reduction in premiums. Also, there could be losses or legal expenses that increase or otherwise occur independently of changes in the economy or changes in sales or payrolls of businesses we insure, due to inflation, pandemic effects or other factors.
Current wording
During 2024, 2023 and 2022, there were no material changes to our estimates for incurred losses and expenses related to the pandemic related to SARS-CoV-2, also known as COVID-19. Factors used in estimating reserves for business interruption losses or legal expenses related to the pandemic included estimates for attorney fees associated with the defense of such lawsuits filed against the company; litigation trends of such cases, including responding to amended and replead cases and cases on appeal; and trends in judicial decisions in cases filed
Previous wording
Property casualty net written premiums grew 10% and earned premiums also grew 10% in 2023. The growth reflected average renewal price increases, premium growth initiatives and a higher level of insured exposures, including a contribution to net written premium growth of less than 1 percentage point from Cincinnati Re and Cincinnati Global in total. Growth in 2022 net written premiums and earned premiums was driven by factors similar to 2023. Trends and related factors are discussed in Commercial Lines, Personal Lines and Excess and Surplus Lines Insurance Results.
Current wording
Property casualty net written premiums grew 15% and earned premiums grew 12% in 2024. The growth reflected average renewal price increases, premium growth initiatives and a higher level of insured exposures, including a contribution to net written premium growth of 1 percentage point from Cincinnati Re and Cincinnati Global in total. Growth in 2023 net written premiums and earned premiums was driven by factors similar to 2024. Trends and related factors are discussed in Commercial Lines, Personal Lines and Excess and Surplus Lines Insurance Results.
Previous wording
Our property casualty insurance operations generated an underwriting profit for each of the three years ending in 2023. Underwriting results improved in 2023, compared with 2022, due to improved overall insured loss experience before catastrophe effects, as price increases helped to offset elevated losses reflecting economic or other forms of inflation that increased our uncertainty regarding ultimate losses. Loss experience in 2022 was much worse than in 2021, including higher current accident year loss and loss expenses before catastrophe losses that rose 20%, exceeding earned premium growth of 12%. Loss experience is discussed further in Financial Results for our property casualty business and related segments. The $261 million improvement in 2023 underwriting profit, compared with 2022, also included a $31 million increase in losses from natural catastrophe events and $81 million more benefit from net favorable reserve development on prior accident years before catastrophe losses. The $591 million decrease in 2022, compared with excellent results in 2021, included a $135 million increase in losses from catastrophe events and $276 million less benefit from net favorable reserve development on prior accident years before catastrophe losses.
Current wording
Our property casualty insurance operations generated an underwriting profit for each of the three years ending in 2024. Underwriting results improved in both 2024 and 2023, compared with the respective prior-year period. For both years, the underwriting profit increase included improved overall insured loss experience before catastrophe effects, as price increases helped to offset elevated losses reflecting economic or other forms of inflation that increased our uncertainty regarding ultimate losses. Loss experience is discussed further in Financial Results for our property casualty business and related segments. The $179 million increase in 2024 underwriting profit, compared with 2023, included a $66 million increase in losses from natural catastrophe events and $27 million less benefit from net favorable reserve development on prior accident years before catastrophe losses. The $261 million increase in 2023, compared with 2022, included a $31 million increase in losses from catastrophe events and $81 million more benefit from net favorable reserve development on prior accident years before catastrophe losses.
Previous wording
We measure property casualty underwriting profitability primarily by the combined ratio. Our combined ratio measures the percentage of each earned premium dollar spent on claims plus all expenses related to our property casualty operations, all on a pretax basis. A lower ratio indicates more favorable results and better underlying performance. A ratio below 100% represents an underwriting profit. Initiatives to improve our combined ratio are discussed in Item 1, Our Business and Our Strategy, Strategic Initiatives. In 2023, 2022 and 2021, favorable development on reserves for claims that occurred in prior accident years helped offset other incurred losses and loss expenses. Reserve development is discussed further in Property Casualty Loss and Loss Expense
Current wording
We measure property casualty underwriting profitability primarily by the combined ratio. Our combined ratio measures the percentage of each earned premium dollar spent on claims plus all expenses related to our property casualty operations, all on a pretax basis. A lower ratio indicates more favorable results and better underlying performance. A ratio below 100% represents an underwriting profit.
Previous wording
Our life insurance segment reported a profit of $41 million in 2023 and profit of $27 million in 2022. We discuss results for the segment in Life Insurance Results. Most of this segment’s investment income is included in our investments segment results. In addition to investment income, investment gains from the life insurance investment portfolio are also included in our investments segment results.
Current wording
Our life insurance segment reported a profit of $57 million in 2024, $41 million in 2023 and $27 million in 2022. We discuss results for the segment in Life Insurance Results. Most of this segment’s investment income is included in our investments segment results. In addition to investment income, investment gains and losses from the life insurance investment portfolio are also included in our investments segment results.
Previous wording
For some lines of business that we write, a considerable and uncertain amount of time can elapse between the occurrence, reporting and payment of insured claims. The amount we will actually have to pay for such claims also can be highly uncertain. This uncertainty, together with the size of our reserves, makes the loss and loss expense reserves our most significant estimate. Gross loss and loss expense reserves were $8.975 billion at year-end 2023 compared with $8.336 billion at year-end 2022.
Current wording
For some lines of business that we write, a considerable and uncertain amount of time can elapse between the occurrence, reporting and payment of insured claims. The amount we will actually have to pay for such claims also can be highly uncertain. This uncertainty, together with the size of our reserves, makes the loss and loss expense reserves our most significant estimate. Gross loss and loss expense reserves were $9.937 billion at year-end 2024 compared with $8.975 billion at year-end 2023.
Previous wording
The gross reserve balance for term and whole life policy reserves was $1.500 billion, or 48.9%, of total life policy and investment contract reserves at December 31, 2023. The following table summarizes the sensitivity, on a net basis, of our term and whole life policy reserves and reinsurance recoverable amounts to hypothetical changes in key assumptions and the resulting increase/(decrease) to pretax net income and pretax other comprehensive income:
Current wording
The gross reserve balance for term and whole life policy reserves was $1.456 billion, or 49.2%, of total life policy and investment contract reserves at December 31, 2024. The following table summarizes the sensitivity, on a net basis, of our term and whole life policy reserves and reinsurance recoverable amounts to hypothetical changes in key assumptions and the resulting increase/(decrease) to pretax net income and pretax other comprehensive income:
Previous wording
We establish reserves for our universal life, deferred annuity and other investment contracts, equal to the cumulative account balances, which include premium deposits plus credited interest less charges and withdrawals. Charges include surrender and contract administration charges as well as asset-based fees. The reserve balance for these contracts was $1.343 billion, or 43.8%, of total life policy and investment contract reserves, at December 31, 2023.
Current wording
We establish reserves for our universal life, deferred annuity and other investment contracts, equal to the cumulative account balances, which include premium deposits plus credited interest less charges and withdrawals. Charges include surrender and contract administration charges as well as asset-based fees. The reserve balance for these contracts was $1.276 billion, or 43.1%, of total life policy and investment contract reserves, at December 31, 2024.
Previous wording
Some of our universal life insurance policies contain no-lapse guarantee provisions. For these policies, we establish a reserve, or other additional liability, in addition to the account balance based on expected no-lapse guarantee benefits and expected policy assessments. Key assumptions used to establish this other additional liability reserve are expected investment returns and projected lapse rates. These assumptions, and other relevant inputs, are reviewed annually and on an interim basis in line with the process described above for traditional life policies. The reserve balance was $128 million, or 4.2%, of total life policy and investment contract reserves at December 31, 2023, and is included as a component of universal life reserves in Item 8, Note 5 of the Consolidated Financial Statements.
Current wording
Some of our universal life insurance policies contain no-lapse guarantee provisions. For these policies, we establish a reserve, or other additional liability, in addition to the account balance based on expected no-lapse guarantee benefits and expected policy assessments. Key assumptions used to establish this other additional liability reserve are expected investment returns and projected lapse rates. These assumptions, and other relevant inputs, are reviewed annually and on an interim basis in line with the process described above for traditional life policies. The reserve balance was $130 million, or 4.4%, of total life policy and investment contract reserves at December 31, 2024, and is included as a component of universal life reserves in Item 8, Note 5 of the Consolidated Financial Statements.
Previous wording
The application of our invested assets impairment policy resulted in write-downs of impaired securities intended to be sold that reduced our income before income taxes by $4 million in 2023, $5 million in 2022 and $1 million in 2021. Write-downs represent noncash charges to income and are reported as investment losses. The application of our noninvested assets impairment policy did not have a material effect on our financial condition in 2023 or 2022.
Current wording
The application of our invested assets impairment policy resulted in write-downs of impaired securities intended to be sold that reduced our income before income taxes by less than $1 million in 2024, $4 million in 2023 and $5 million in 2022. Write-downs represent noncash charges to income and are reported as investment losses. The application of our noninvested assets impairment policy did not have a material effect on our financial condition in 2024 or 2023.
Previous wording
Substantially all of the $24.780 billion of securities in our investment portfolio at year-end 2023, measured at fair value, are classified as Level 1 or Level 2. Financial assets that fall within Level 1 and Level 2 are priced according to observable data from identical or similar securities that have traded in the marketplace. Also within Level 2 are securities that are valued by outside services or brokers where we have evaluated and verified the pricing methodology and determined that the inputs are observable.
Current wording
Substantially all of the $27.665 billion of securities in our investment portfolio at year-end 2024, measured at fair value, are classified as Level 1 or Level 2. Financial assets that fall within Level 1 and Level 2 are priced according to observable data from identical or similar securities that have traded in the marketplace. Also within Level 2 are securities that are valued by outside services or brokers where we have evaluated and verified the pricing methodology and determined that the inputs are observable.
Previous wording
Earned and net written premiums for our consolidated property casualty operations grew in 2023, reflecting average renewal price increases, a higher level of insured exposures and strategic initiatives for targeted growth. A key measure of property casualty profitability is underwriting profit or loss. Profit increased in 2023, reflecting improved overall insured loss experience before catastrophe effects, as price increases helped to offset elevated losses reflecting economic or other forms of inflation that increased our uncertainty regarding ultimate losses. Our 2023 underwriting profit of $401 million was $261 million more than in 2022, including a $31 million unfavorable effect from a higher amount of catastrophe losses, mostly caused by severe weather. Prior accident year loss experience before catastrophes during 2023 was more favorable than in 2022, and represented $81 million of the 2023 underwriting profit increase. We continue working to improve underwriting profitability, such as through higher pricing and our ongoing initiatives to improve pricing precision and loss experience related to claims and loss control practices. Underwriting profit trends are discussed further below.
Current wording
Earned and net written premiums for our consolidated property casualty operations grew in 2024, reflecting average renewal price increases, a higher level of insured exposures and strategic initiatives for targeted growth. A key measure of property casualty profitability is underwriting profit or loss. Profit increased in 2024, reflecting improved overall insured loss experience before catastrophe effects, as price increases helped to offset elevated losses reflecting economic or other forms of inflation that increased our uncertainty regarding ultimate losses. Our 2024 underwriting profit of $580 million was $179 million more than in 2023, including a $66 million unfavorable effect from a higher amount of catastrophe losses, mostly caused by severe weather. Prior accident year loss experience before catastrophes during 2024 was $27 million less favorable than in 2023. We continue working to improve underwriting profitability, such as through higher pricing and our ongoing initiatives to improve pricing precision and loss experience related to claims and loss control practices. Underwriting profit trends are discussed further below.
Previous wording
•Premiums – Agency renewal written premiums rose $596 million or 11% in 2023 and continued to contribute to growth in earned premiums and net written premiums that rose in each of our property casualty insurance segments. The renewal premium increase was largely due to average renewal price increases and a higher level of insured exposures. Price increases with enhanced precision continue to benefit operating results.
Current wording
•Premiums – Agency renewal written premiums increased $819 million or 13% in 2024, compared with 2023, and continued to contribute to growth in earned premiums and net written premiums that rose in each of our property casualty insurance segments. The renewal premium increase was largely due to average renewal price increases and a higher level of insured exposures. Price increases with enhanced precision continue to benefit operating results.
Previous wording
New business written premiums produced through agencies increased $145 million in 2023, compared with 2022. Agents appointed during 2023 or 2022 produced a 2023 increase in standard lines new business of $65 million.
Current wording
New business written premiums produced through agencies increased $364 million in 2024, compared with 2023. Agents appointed during 2024 or 2023 produced a 2024 increase in standard lines new business of $116 million. Growth initiatives also favorably affect growth in subsequent years, particularly as newer agency relationships mature over time.
Previous wording
Cincinnati Re produced $558 million of 2023 net written premiums and had a negative contribution of $27 million to growth in other written premiums, compared with 2022. Cincinnati Re assumes risks through reinsurance treaties and in some cases cedes part of the risk and related premiums to one or more unaffiliated reinsurance companies through transactions known as retrocessions. In 2023, earned premiums for Cincinnati Re totaled $529 million.
Current wording
Cincinnati Re produced $597 million of 2024 net written premiums and contributed $39 million to growth in other written premiums, compared with 2023. Cincinnati Re assumes risks through reinsurance treaties and in some cases cedes part of the risk and related premiums to one or more unaffiliated reinsurance companies through transactions known as retrocessions. In 2024, earned premiums for Cincinnati Re totaled $573 million.
Previous wording
Cincinnati Global had a positive contribution to the increase in other written premiums. Net written premiums were $280 million in 2023, and contributed $50 million of the growth in other written premiums, compared with 2022. In 2023, earned premiums for Cincinnati Global totaled $266 million.
Current wording
Cincinnati Global also contributed to the increase in other written premiums. Net written premiums were $303 million in 2024, and contributed $23 million of the growth in other written premiums, compared with 2023. In 2024, earned premiums for Cincinnati Global totaled $271 million.
Previous wording
Other written premiums also include premiums ceded to reinsurers as part of our ceded reinsurance program. An increase in ceded premiums, other than Cincinnati Re and Cincinnati Global premiums, reduced net written premium growth by $18 million in 2023.
Current wording
Other written premiums also include premiums ceded to reinsurers as part of our ceded reinsurance program. An increase in ceded premiums, other than Cincinnati Re and Cincinnati Global premiums, reduced net written premium growth by $49 million in 2024.
Previous wording
•Combined ratio – The combined ratio improved by 3.2 percentage points in 2023, compared with 2022, including a 0.5 percentage-point decrease in the ratio for catastrophe losses. The 2023 ratio for current accident year losses and loss expenses before catastrophes decreased by 1.8 percentage points. That ratio improvement included an increase of 1.9 points for the IBNR portion and a decrease of 3.7 points for the case incurred portion. Price increases and other underwriting efforts have helped to offset losses that have elevated significantly since 2021 due to inflation effects discussed below, as earned premiums in 2023 grew faster than those losses and loss expenses. The remainder of the 2023 combined ratio improvement included 0.9 percentage points more benefit in the ratio for prior accident year losses and loss expenses before catastrophes. We further discuss ratios related to reserve development in the sections that follow the Catastrophe Losses Incurred table below.
Current wording
•Combined ratio – The combined ratio improved by 1.5 percentage points in 2024, compared with 2023, including a 0.2 percentage-point decrease in the ratio for catastrophe losses. The 2024 ratio for current accident year losses and loss expenses before catastrophes decreased by 1.8 percentage points. That ratio improvement included an increase of 1.4 points for the IBNR portion and a decrease of 3.2 points for the case incurred portion. Price increases and other underwriting efforts have helped to offset losses that have elevated significantly since 2021 due to inflation effects discussed below, as earned premiums in 2024 grew faster than those losses and loss expenses. The remainder of the 2024 combined ratio improvement included a decrease of 0.1 percentage points in the ratio for underwriting expenses, offset by 0.6 percentage points less benefit in the ratio for prior accident year losses and loss expenses before catastrophes. We further discuss ratios related to reserve development in the sections that follow the Catastrophe Losses Incurred table below.
Previous wording
Our statutory combined ratio was 94.6% in 2023 compared with 97.7% in 2022 and 87.9% in 2021. The estimated statutory combined ratio for the property casualty industry, with the industry’s ratio excluding its mortgage and financial guaranty lines of business and based on industry data reported through the first nine months of 2023, was 103.4% in 2023, 104.0% in 2022 and 100.0% in 2021. The contribution of catastrophe losses to our statutory combined ratio was 8.8 percentage points in 2023, 8.9 percentage points in 2022 and 7.6 percentage points in 2021, compared with industry estimates of 9.8, 6.8 and 7.4 percentage points, respectively, with 2023 representing industry data reported through the first nine months of 2023. Components of the combined ratio are discussed below.
Current wording
Our statutory combined ratio was 92.9% in 2024 compared with 94.6% in 2023 and 97.7% in 2022. The estimated statutory combined ratio for the property casualty industry, with the industry’s ratio excluding its mortgage and financial guaranty lines of business and based on industry data reported through the first nine months of 2024, was 97.9% in 2024, 103.7% in 2023 and 103.1% in 2022. The contribution of catastrophe losses to our statutory combined ratio was 8.4 percentage points in 2024, 8.8 percentage points in 2023 and 8.9 percentage points in 2022, compared with industry estimates of 8.8, 7.8 and 6.7 percentage points, respectively, with 2024 representing industry data reported through the first nine months of 2023. Components of the combined ratio are discussed below.
Previous wording
Catastrophe loss trends are an important factor in assessing trends for overall underwriting results. Our 10-year historical annual average contribution of catastrophe losses to the combined ratio was 7.7 percentage points at December 31, 2023. Our five-year average was 8.8 percentage points.
Current wording
Catastrophe loss trends are an important factor in assessing trends for overall underwriting results. Our 10-year historical annual average contribution of catastrophe losses to the combined ratio was 8.0 percentage points at December 31, 2024. Our five-year average was 9.2 percentage points.
Previous wording
Loss and loss expenses include both net paid losses and reserve changes for unpaid losses as well as the associated loss expenses. For all property casualty lines of business in aggregate, net loss and loss expense reserves at December 31, 2023, were $682 million higher than at year-end 2022, including $634 million for incurred but not reported (IBNR) reserves. The $682 million reserve increase raised year-end 2022 net loss and loss expense reserves by 9%, compared with a 10% increase in 2023 earned premiums.
Current wording
Loss and loss expenses include both net paid losses and reserve changes for unpaid losses as well as the associated loss expenses. For all property casualty lines of business in aggregate, net loss and loss expense reserves at December 31, 2024, were $1.055 billion higher than at year-end 2023, including $998 million for incurred but not reported (IBNR) reserves. The $1.055 billion reserve increase raised year-end 2023 net loss and loss expense reserves by 12%, matching a 12% increase in 2024 earned premiums.
Previous wording
Most of the incurred losses and loss expenses shown in the consolidated property casualty insurance results three-year highlights table are for the respective current accident years, with reserve development on prior accident years shown separately. Since less than half of our consolidated property casualty current accident year incurred losses and loss expenses represents net paid amounts, the majority represents reserves for our estimate of ultimate losses and loss expenses. These reserves develop over time, and we re-estimate previously reported reserves as we learn more about the development of the related claims. The table below illustrates that development. For example, the 70.4% accident year 2022 loss and loss expense ratio reported as of December 31, 2022, developed favorably by 2.0 percentage points to 68.4% due to claims settling for less than previously estimated, or due to updated reserve estimates for unpaid claims, as of December 31, 2023. Accident years 2022 and 2021 have both developed favorably, as indicated by the progression over time for the ratios in the table.
Current wording
Most of the incurred losses and loss expenses shown in the consolidated property casualty insurance results three-year highlights table are for the respective current accident years, with reserve development on prior accident years shown separately. Since less than half of our consolidated property casualty current accident year incurred losses and loss expenses represents net paid amounts, the majority represents reserves for our estimate of ultimate losses and loss expenses. These reserves develop over time, and we re-estimate previously reported reserves as we learn more about the development of the related claims. The table below illustrates that development. For example, the 67.7% accident year 2023 loss and loss expense ratio reported as of December 31, 2023, developed favorably by 4.9 percentage points to 62.8% due to claims settling for less than previously estimated, or due to updated reserve estimates for unpaid claims, as of December 31, 2024. Accident years 2023 and 2022 have both developed favorably, as indicated by the progression over time for the ratios in the table.
Previous wording
Catastrophe loss trends, discussed above, accounted for some of the movement in the current accident year loss and loss expense ratio for 2023, compared with 2022. Catastrophe losses added 9.3 percentage points in 2023, 10.2 points in 2022 and 9.1 points in 2021 to the respective consolidated property casualty current accident year loss and loss expense ratios in the table above.
Current wording
Catastrophe loss trends, discussed above, accounted for some of the movement in the current accident year loss and loss expense ratio for 2024, compared with 2023. Catastrophe losses added 9.6 percentage points in 2024, 9.3 points in 2023 and 10.2 points in 2022 to the respective consolidated property casualty current accident year loss and loss expense ratios in the table above.
Previous wording
The 58.4% ratio for current accident year loss and loss expenses before catastrophe losses for 2023 decreased 1.8 percentage points compared with the 60.2% accident year 2022 ratio measured as of December 31, 2022. The decrease included a 0.3 percentage-point decrease in the ratio for current accident year losses of $2 million or more per claim, shown in the table below.
Current wording
The 56.6% ratio for current accident year loss and loss expenses before catastrophe losses for 2024 decreased 1.8 percentage points compared with the 58.4% accident year 2023 ratio measured as of December 31, 2023. The decrease included a 1.4 percentage-point decrease in the ratio for current accident year losses of $2 million or more per claim, shown in the table below.
Previous wording
Reserve development on prior accident years continued to net to a favorable amount in 2023, and was primarily due to less-than-anticipated loss emergence on known claims. We recognized $215 million of favorable development in 2023, compared with $159 million in 2022 and $428 million in 2021. Of the $56 million increase in 2023, compared with 2022, $45 million was attributable to our commercial auto and personal auto lines of business. Approximately 80% of our net favorable reserve development on prior accident years recognized during 2023 occurred in our workers' compensation, commercial property and homeowner lines of business. In 2022, our workers' compensation and homeowner lines of business were responsible for approximately 74% of the favorable reserve development. As discussed in Liquidity and Capital Resources, Property Casualty Loss and Loss Expense Obligations and Reserves, Property Casualty Insurance Development of Estimated Reserves by Accident Year, commercial casualty and workers' compensation are considered long-tail lines with the potential for revisions inherent in estimating reserves. Favorable development recognized during 2021 was primarily from our commercial casualty, commercial property and workers’ compensation lines of business. Development by accident year is further discussed in Liquidity and Capital Resources, Property Casualty Insurance Development of Estimated Reserves by Accident Year.
Current wording
Reserve development on prior accident years continued to net to a favorable amount in 2024, and was primarily due to less-than-anticipated loss emergence on known claims. We recognized $236 million of favorable development in 2024, compared with $215 million in 2023 and $159 million in 2022. Of the $21 million increase in 2024, compared with 2023, $19 million was attributable to our commercial property line of business. Approximately 89% of our net favorable reserve development on prior accident years recognized during 2024 occurred in our workers' compensation, commercial property and homeowner lines of business. In 2023, our workers' compensation, commercial property and homeowner lines of business were responsible for approximately 80% of the favorable reserve development. As discussed in Liquidity and Capital Resources, Property Casualty Loss and Loss Expense Obligations and Reserves, Property Casualty Insurance Development of Estimated Reserves by Accident Year, commercial casualty and workers' compensation are considered long-tail lines with the potential for revisions inherent in estimating reserves. Favorable development recognized during 2022 was primarily from our workers’ compensation and homeowner lines of business. Development by accident year is further discussed in Liquidity and Capital Resources, Property Casualty Insurance Development of Estimated Reserves by Accident Year.
Previous wording
In 2023, total large losses incurred increased by $71 million, or 23%, net of reinsurance, primarily due to an increase for our commercial lines insurance segment. The corresponding 2023 ratio increased 0.5 percentage points, compared with 2022. The large loss data included in the table above does not include Cincinnati Re and Cincinnati Global. Our analysis of large losses incurred indicated no unexpected concentration of these losses and reserve increases by geographic region, policy inception, agency or field marketing territory. We believe the inherent volatility of aggregate loss experience for our portfolio of larger policies is greater than that of our portfolio of smaller policies, and we continue to monitor the volatility in addition to general inflationary trends in loss costs.
Current wording
In 2024, total large losses incurred decreased by $98 million, or 26%, net of reinsurance, primarily due to a decrease for our commercial lines insurance segment. The corresponding 2024 ratio decreased 1.7 percentage points, compared with 2023. The large loss data included in the table above does not include Cincinnati Re and Cincinnati Global. Our analysis of large losses incurred indicated no unexpected concentration of these losses and reserve increases by geographic region, policy inception, agency or field marketing territory. We believe the inherent volatility of aggregate loss experience for our portfolio of larger policies is greater than that of our portfolio of smaller policies, and we continue to monitor the volatility in addition to general inflationary trends in loss costs.
Previous wording
Consolidated property casualty commission expenses rose $119 million, or 9%, in 2023, with profit-sharing commissions for agencies increasing by $10 million. The 2023 ratio of commission expenses as a percent of earned premiums decreased by 0.3 percentage points, compared with 2022. The 2023 ratio for other underwriting expenses increased by 0.3 percentage points, compared with 2022. Earned premiums rose at a slower pace than other underwriting expenses during 2023, and we continued to carefully manage expenses while also making strategic investments that include enhancement of underwriting expertise.
Current wording
Consolidated property casualty commission expenses rose $167 million, or 12%, in 2024, with profit-sharing commissions for agencies increasing by $18 million. The 2024 ratio of commission expenses as a percent of earned premiums decreased by 0.1 percentage points, compared with 2023. The ratio for 2023 decreased compared with 2022. In 2024, other underwriting expenses as a percent of earned premiums matched 2023, as earned premiums kept pace with other underwriting expenses. In 2023, other underwriting expenses as a percent of earned premiums increased, compared with 2022, as earned premiums rose at a slower pace than other underwriting expenses. The three-year period ending in 2024 also included ongoing expense management efforts.
Previous wording
•Premiums – Earned premiums and net written premiums rose in 2023, including a $204 million, or 6%, increase in renewal written premiums that continued to include higher average pricing and a higher level of insured exposures. New business written premiums in 2023 decreased $16 million, or 3%, compared with 2022, reflecting pricing discipline in a highly competitive environment.
Current wording
•Premiums – Earned premiums and net written premiums rose in 2024, including a $211 million, or 5%, increase in renewal written premiums that continued to include higher average pricing and a higher level of insured exposures. New business written premiums in 2024 increased $157 million, or 27%, compared with 2023, as we continued to carefully underwrite each policy in a highly competitive market.
Previous wording
•Combined ratio – The 2023 combined ratio improved by 3.0 percentage points compared with 2022, despite a 0.2 percentage-point increase in the ratio component for catastrophe losses. Development on prior accident years loss and loss expense reserves before catastrophes during 2023 was 1.3 percentage points more favorable than in 2022. The 2023 combined ratio also improved by 2.1 points due to a lower ratio for current accident year loss and loss expenses before catastrophe losses, compared with 2022. That ratio improvement included an increase of 2.4 points for the IBNR portion and a decrease of 4.5 points for the case incurred portion. Price increases and other underwriting actions have helped offset losses that have elevated significantly since 2021 due to inflation effects, as earned premiums in 2023 grew faster than those losses and loss expenses.
Current wording
•Combined ratio – The 2024 combined ratio improved by 3.0 percentage points compared with 2023, including a 1.8 percentage-point decrease in the ratio component for catastrophe losses. The 2024 combined ratio also improved by 1.5 points due to a lower ratio for current accident year loss and loss expenses before catastrophe losses, compared with 2023. That ratio improvement included an increase of 2.9 points for the IBNR portion and a decrease of 4.4 points for the case incurred portion. Price increases and other underwriting actions have helped offset losses that have elevated significantly since 2021 due to inflation effects, as earned premiums in 2024 grew faster than those losses and loss expenses. Development on prior accident years loss and loss expense reserves before catastrophes during 2024 was 0.2 percentage points less favorable than in 2023, as discussed below.
Previous wording
Our commercial lines statutory combined ratio was 95.6% in 2023, compared with 98.5% in 2022 and 83.2% in 2021. The contribution of catastrophe losses to our commercial lines statutory combined ratio was 7.2 percentage points in 2023, 7.0 percentage points in 2022 and 3.4 percentage points in 2021.
Current wording
Our commercial lines statutory combined ratio was 92.2% in 2024, compared with 95.6% in 2023 and 98.5% in 2022. The contribution of catastrophe losses to our commercial lines statutory combined ratio was 5.4 percentage points in 2024, 7.2 percentage points in 2023 and 7.0 percentage points in 2022.
Showing the first 40 of 158 pairs. Open the source sections for the rest.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
The board of directors is committed to rewarding shareholders directly through cash dividends and share repurchase authorizations. Through 2024, the company has increased the annual cash dividend rate for 64 consecutive years, a record we believe is matched by only seven other publicly traded U.S. companies.
Current report — wording carried from elsewhere
Cincinnati Financial Corporation - 2024 10-K - Page 49 against the company and other insurers. Loss experience for our insurance operations is influenced by many factors, as discussed in Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves. Also, there could be losses or legal expenses that increase due to inflation, pandemic effects or other factors.
Current report — wording carried from elsewhere
Initiatives to improve our combined ratio are discussed in Item 1, Our Business and Our Strategy, Strategic Initiatives. In 2024, 2023 and 2022, favorable development on reserves for claims that occurred in prior accident years helped offset other incurred losses and loss expenses. Reserve development is discussed further in Property Casualty Loss and Loss Expense Obligations and Reserves. Losses from weather-related catastrophes are another important item influencing the combined ratio and are discussed along with other factors in Financial Results for our property casualty business and related segments.
Current report — wording carried from elsewhere
Cincinnati Financial Corporation - 2024 10-K - Page 81 contract holder benefits increased slightly in 2023, compared with 2022, largely due to less favorable impacts from the unlocking of interest rate and other actuarial assumptions. Mortality experience was more favorable in 2024, compared with 2023, and net death claims were below our mortality projections.
Current report — wording carried from elsewhere
Cincinnati Financial Corporation - 2024 10-K - Page 94 through equity compensation plans, primarily due to vesting of service-based restricted stock units of equity awards granted in the past. The amount of future repurchases may be more, or less, than the past, depending on circumstances and discretion exercised by management. Our corporate Code of Conduct restricts repurchases during certain time periods. The details of the repurchase authorizations and activity are described in Item 5, Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Current report — wording carried from elsewhere
For business other than Cincinnati Re and Cincinnati Global:
Current report — wording carried from elsewhere
•Casualty excess treaty – We purchase a casualty reinsurance treaty that provides an additional $55 million in protection for certain casualty losses. This treaty, along with the casualty per occurrence treaty, provides a total of
Current report — wording carried from elsewhere
Cincinnati Financial Corporation - 2024 10-K - Page 106 a percentage of subject written premiums for the preceding calendar year. Our deductible in 2024 was $763 million (20% of 2023 subject premiums), and we estimate it is $815 million (20% of 2024 subject premiums) for 2025.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
Obligations and Reserves. Losses from weather-related catastrophes are another important item influencing the combined ratio and are discussed along with other factors in Financial Results for our property casualty business and related segments.
Previous report — wording carried elsewhere
Growth initiatives also favorably affect growth in subsequent years, particularly as newer agency relationships mature over time.
Previous report — wording carried elsewhere
Mortality experience was more favorable in 2023, compared with 2022, and net death claims were below our mortality projections.
Previous report — wording carried elsewhere
Item 5, Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Previous report — wording carried elsewhere
For casualty coverage on individual risks with limits exceeding $25 million, facultative reinsurance coverage is placed on an individual certificate basis. For risks with casualty limits that are between $25 million and $27 million, we sometimes forego facultative reinsurance and retain an additional $2 million of loss exposure.
Previous report — wording carried elsewhere
Cincinnati Financial Corporation - 2023 10-K - Page 111
Previous report — wording carried elsewhere
Cincinnati Financial Corporation - 2023 10-K - Page 112