CINCINNATI FINANCIAL CORP

Consolidated results reflect the operating results of each of our five segments along with the parent company, Cincinnati Re, Cincinnati Global and other activities reported as "Other." The five segments are:

•Commercial lines insurance

•Personal lines insurance

•Excess and surplus lines insurance

•Life insurance

•Investments

COMMERCIAL LINES INSURANCE RESULTS

Performance highlights for the commercial lines segment include:

•Premiums – Earned premiums and net written premiums for the commercial lines segment grew during the second quarter and first six months of 2025, compared with the same periods a year ago, primarily due to agency renewal written premium growth that continued to include higher average pricing as well as growth in agency new business written premiums. The table below analyzes the primary components of premiums. We continue to use predictive analytics tools to improve pricing precision and segmentation while leveraging our local relationships with agents through the efforts of our teams that work closely with them. We seek to maintain appropriate pricing discipline for both new and renewal business as our agents and underwriters assess account quality to make careful decisions on a policy-by-policy basis whether to write or renew a policy.

Agency renewal written premiums increased 9% for the second quarter and 8% for the first six months of 2025, compared with the same periods of 2024, including price increases. During the second quarter of 2025, our overall standard commercial lines policies averaged estimated renewal price increases at percentages near the high end of the mid-single-digit range. We continue to segment commercial lines policies, emphasizing identification and retention of those we believe have relatively stronger pricing. Conversely, we have been seeking stricter renewal terms and conditions on policies we believe have relatively weaker pricing, thus retaining fewer of those policies. We measure average changes in commercial lines renewal pricing as the percentage rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for the respective policies.

Our average overall commercial lines renewal pricing change includes the impact of flat pricing for certain coverages within package policies written for a three-year term that were in force but did not expire during the period being measured. Therefore, our reported change in average commercial lines renewal pricing reflects a blend of three-year policies that did not expire and other policies that did expire during the measurement period. For commercial lines policies that did expire and were then renewed during the second quarter of 2025, we estimate that our average percentage price increases were in the high-single-digit range for our commercial casualty and commercial property lines of business and in the mid-single-digit range for our commercial auto line of business. The estimated average percentage price change for workers' compensation was a decrease in the mid-single-digit range.

Our commercial lines segment's increase in agency renewal written premiums for the first six months of 2025 also included changes in the level of insured exposures. Part of the insured exposure increase reflects our response to inflation effects that increase the cost of building materials to repair damaged commercial structures. We use building valuation software to automate much of that underwriting process and may also manually adjust premiums to reflect property costs.

Renewal premiums for certain policies, primarily our commercial casualty and workers' compensation lines of business, include the results of policy audits that adjust initial premium amounts based on differences between estimated and actual sales or payroll related to a specific policy. Audits completed during the first six months of 2025 contributed $48 million to net written premiums, compared with $54 million for the same period of 2024.

New business written premiums for commercial lines increased $7 million and $28 million during the second quarter and first six months of 2025, compared with the same periods of 2024, as we continued to carefully underwrite each policy in a highly competitive market. Trend analysis for year-over-year comparisons of individual quarters is more difficult to assess for commercial lines new business written premiums, due to inherent variability. That variability is often driven by larger policies with annual premiums greater than $100,000.

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our commercial lines insurance segment, a decrease in ceded premiums increased net written premiums by approximately $3 million and $6 million for the second quarter and first six months of 2025, compared with the same periods of 2024.

Commercial Lines Insurance Premiums

•Combined ratio – The second-quarter 2025 commercial lines combined ratio improved by 6.2 percentage points, compared with the second quarter of 2024, including a decrease of 2.3 points in losses from catastrophes. The second-quarter combined ratio decreased by 0.4 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 4.9 points for the IBNR portion and a decrease of 5.3 points for the case incurred portion. For the first six months of 2025, the combined ratio improved by 5.5 percentage points, compared with the same period a year ago, including a decrease of 2.4 points in losses from catastrophes. The six-month 2025 combined ratio also included a decrease of 1.2 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 2.8 points for the IBNR portion and a decrease of 4.0 points for the case incurred portion. Underwriting results also included favorable reserve development on prior accident years, as discussed below. The current accident year ratios were measured as of June 30 of the respective years and included a decrease of 0.4 percentage points for the first six months of 2025 in the ratio for large losses of $2 million or more per claim, discussed below.

When estimating the ultimate cost of total loss and loss expenses, we consider many factors, including trends for inflation, historical paid and reported losses, large loss activity and other data or information for the industry or our company. Elevated inflation in recent years has been a driver of higher losses and loss expenses as costs have increased significantly to repair damaged business properties or autos that we insure, in addition to higher losses for liability coverages for some of our lines of business. Due to increased uncertainty regarding ultimate losses, we intend to remain prudent in reserving for estimated ultimate losses until longer-term loss cost trends become more clear.

Catastrophe losses and loss expenses accounted for 7.0 and 5.4 percentage points of the combined ratio for the second quarter and first six months of 2025, compared with 9.3 and 7.8 percentage points for the same periods a year ago. Through 2024, the 10-year annual average for that catastrophe measure for the commercial lines segment was 6.0 percentage points, and the five-year annual average was 6.6 percentage points.

The net effect of reserve development on prior accident years during the second quarter and first six months of 2025 was favorable for commercial lines overall by $42 million and $85 million, compared with $29 million and $67 million for the same periods in 2024. For the first six months of 2025, our commercial property and workers' compensation lines of business were the main contributors to the commercial lines net favorable reserve development, while our commercial auto line of business included net unfavorable development. The net favorable reserve development recognized during the first six months of 2025 for our commercial lines insurance segment was mainly for accident years 2024 and 2023 and was primarily due to lower-than-anticipated loss emergence on known claims. Our commercial casualty line of business included $3 million of favorable reserve development on prior accident years for the first six months of 2025. Reserve estimates are inherently uncertain as described in our 2024 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 51.

The commercial lines underwriting expense ratio decreased for the second quarter and first six months of 2025, compared with the same periods a year ago. The decreases were primarily due to premium growth outpacing growth in various expenses. The ratio for both periods also included ongoing expense management efforts.

Commercial Lines Insurance Losses Incurred by Size

We continue to monitor new losses and case reserve increases greater than $2 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. The second-quarter 2025 commercial lines total large losses incurred of $41 million, net of reinsurance, was lower than the quarterly average of $49 million during full-year 2024 and the $64 million of total large losses incurred for the second quarter of 2024. The increase in commercial lines large losses for the first six months of 2025 was primarily due to our commercial property line of business. The second-quarter 2025 ratio for commercial lines total large losses was 2.3 percentage points lower than last year's second-quarter ratio. The second-quarter 2025 amount of total large losses incurred contributed to the increase in the six-month 2025 total large loss ratio, compared with 2024, partially offsetting a first-quarter 2025 ratio that was 3.5 points higher than the first quarter of 2024. We believe results for the three-month period largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

PERSONAL LINES INSURANCE RESULTS

Performance highlights for the personal lines segment include:

•Premiums – Personal lines earned premiums and net written premiums continued to grow during the second quarter and first six months of 2025, primarily due to agency renewal written premium growth that included higher average pricing. Cincinnati Private Client SM net written premiums included in the personal lines insurance segment results totaled approximately $592 million and $954 million for the second quarter and first six months of 2025, compared with $472 million and $802 million for the same periods of 2024. Direct written premiums for Cincinnati Private Client policies grew 26% for the first six months of 2025 compared with the same period of

2024. Cincinnati Private Client net written premiums for the respective periods included excess and surplus lines homeowner policies with premiums totaling $48 million in the second quarter and $47 million in the first six months of 2025, compared with $51 million in the second quarter and $85 million in the first six months of 2024. The table below analyzes the primary components of premiums.

Agency renewal written premiums increased 27% and 28% for the second quarter and first six months of 2025, reflecting rate increases in selected states, a higher level of insured exposures and other factors such as changes in policy deductibles or mix of business. Part of the insured exposure increase reflects our response to inflation effects that increase the cost of building materials used to repair damaged homes.

We estimate that premium rates for our personal auto line of business increased at average percentages in the high-single-digit range during the first six months of 2025. For our homeowner line of business, we estimate that premium rates for the first six months of 2025 also increased at average percentages in the low-double-digit range. For both our personal auto and homeowner lines of business, some individual policies experienced lower or higher rate changes based on each risk's specific characteristics and enhanced pricing precision enabled by predictive models.

Personal lines new business written premiums decreased $22 million or 13% for the second quarter of 2025, compared with the same period of 2024, including approximately $11 million from Cincinnati Private Client policies and $11 million from middle-market policies. Cincinnati Private Client new business premiums from California decreased approximately $13 million for the second quarter of 2025 compared with the prior year. For the first six months of 2025, compared with the same period of 2024, personal lines new business written premiums decreased $17 million, or 6%, including approximately $3 million from Cincinnati Private Client policies and $14 million from middle-market policies. We believe we maintained underwriting and pricing discipline across all personal lines markets as we expanded use of enhanced pricing precision tools.

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our personal lines insurance segment, an increase in 2025 ceded premiums reduced net written premiums by approximately $2 million and $70 million for the second quarter and first six months of 2025, compared with the same periods of 2024. Ceded premiums for the first six months of 2025 included a net amount of $64 million for reinsurance reinstatement premiums related to the January 2025 wildfires in southern California. The $64 million of reinstatement premiums included $61 million for our homeowner line of business.

Personal Lines Insurance Premiums

•Combined ratio – Our personal lines combined ratio for the second quarter of 2025 improved by 4.9 percentage points, compared with second-quarter 2024, despite an increase of 2.9 points in losses from catastrophes. The second-quarter 2025 combined ratio improvement also included a decrease of 3.6 percentage points from current accident year loss and loss expenses before catastrophe losses, including an increase of 4.2 points for the IBNR portion and a decrease of 7.8 points for the case incurred portion. For the first six months of 2025, the combined ratio increased by 24.3 percentage points, compared with the same period a year ago, including an increase of 25.0 points in losses from catastrophes. The six-month 2025 combined ratio also included an increase of 0.7 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 4.2 points in the IBNR portion and a decrease of 3.5 points for the case incurred portion. The six-month 2025 current accident year ratio before catastrophe losses included an unfavorable 2.3 points for the effect of reinstatement premiums. The total current accident year ratios before catastrophe losses were measured as of June 30 of the respective years and included an increase of 1.4 percentage points for the first six months of 2025 in the ratio for large losses of $2 million or more per claim, discussed below.

When estimating the ultimate cost of total loss and loss expenses, we consider many factors, including trends for inflation, historical paid and reported losses, large loss activity and other data or information for the industry or our company. Elevated inflation in recent years has been a driver of higher losses and loss expenses as costs have increased significantly to repair damaged autos or homes that we insure. Due to increased uncertainty regarding ultimate losses, we intend to remain prudent in reserving for estimated ultimate losses until longer-term loss cost trends become more clear.

Catastrophe losses and loss expenses accounted for 23.8 and 40.0 percentage points of the combined ratio for the second quarter and first six months of 2025, compared with 20.9 and 15.0 points for the same periods a year ago. The 10-year annual average catastrophe loss ratio for the personal lines segment through 2024 was 12.1 percentage points, and the five-year annual average was 13.9 percentage points.

In addition to the average rate increases discussed above, we continue to refine our pricing to better match premiums to the risk of loss on individual policies. Improved pricing precision and broad-based rate increases are expected to help position the combined ratio at a profitable level over the long term. In addition, greater geographic diversification is expected to reduce the volatility of homeowner loss ratios attributable to weather-related catastrophe losses over time.

The net effect of reserve development on prior accident years during the second quarter and first six months of 2025 was favorable for personal lines overall by $19 million and $38 million, compared with $6 million unfavorable and $27 million favorable for the same periods of 2024. Our homeowner line of business was the main contributor to the personal lines net favorable reserve development for the first six months of 2025. The net favorable reserve development was primarily due to lower-than-anticipated loss emergence on known claims. Reserve estimates are inherently uncertain as described in our 2024 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 51.

The personal lines underwriting expense ratio decreased for the second quarter and first six months of 2025, compared with the same periods a year ago. The second-quarter and six-month decreases were primarily due to growth in premiums outpacing growth in various expenses. The six-month 2025 ratio also included an unfavorable 1.2 points for the effect of reinstatement premiums. The ratios for both periods also included ongoing expense management efforts.

Personal Lines Insurance Losses Incurred by Size

We continue to monitor new losses and case reserve increases greater than $2 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. In the second quarter of 2025, the personal lines total large loss ratio, net of reinsurance, was 3.7 percentage points higher than last year's second quarter. The increase in personal lines total large losses incurred for the first six months of 2025 occurred primarily for our homeowner line of business and inland marine coverages in our other personal line of business. The second-quarter 2025 amount of total large losses incurred unfavorably contributed to the increase in the six-month 2025 total large loss ratio, compared with 2024, in addition to a first-quarter 2025 ratio that was 1.7 points higher than the first quarter of 2024. We believe results for the three- and six-month periods largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

EXCESS AND SURPLUS LINES INSURANCE RESULTS

Performance highlights for the excess and surplus lines segment include:

•Premiums – Excess and surplus lines earned premiums and net written premiums continued to grow during the second quarter and first six months of 2025, compared with the same period a year ago, including increases in both agency renewal and new business written premiums. Renewal written premiums rose 10% for the second quarter and 11% for the six months ended June 30, 2025, compared with the same periods of 2024, largely due to higher renewal pricing. For both 2025 periods, excess and surplus lines policy renewals experienced estimated average price increases at percentages in the high-single-digit range. We measure average changes in excess and surplus lines renewal pricing as the percentage rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for respective policies.

New business written premiums produced by agencies increased by 24% for the second quarter and 25% for the first six months of 2025 compared with the same periods of 2024, as we continued to carefully underwrite each policy in a highly competitive market. Some of what we report as new business came from accounts that were not new to our agents. We believe our agents' seasoned accounts tend to be priced more accurately than business that may be less familiar to them.

Excess and Surplus Lines Insurance Premiums

•Combined ratio – The excess and surplus lines combined ratio improved by 4.3 percentage points for the second quarter and 3.9 points for the first six months of 2025, compared with the same periods of 2024. The improvements were primarily due to favorable reserve development on prior accident year loss and loss expenses for the three and six months ended June 30, 2025, compared with unfavorable development for the same periods of 2024.

The 64.9% second-quarter 2025 ratio for current accident year loss and loss expenses before catastrophe losses was 0.9 percentage points higher, compared with the 64.0% accident year 2024 ratio measured as of June 30, 2024, including an increase of 7.8 points for the IBNR portion and a decrease of 6.9 points for the case incurred portion. The six-month 2025 ratio for current accident year loss and loss expenses before catastrophe losses was 0.4 percentage points higher, compared with the 64.8% accident year 2024 ratio measured as of June 30, 2024, including an increase of 5.4 points for the IBNR portion and a decrease of 5.0 points for the case incurred portion.

Excess and surplus lines net reserve development on prior accident years, as a ratio to earned premiums, was favorable by 3.0% for the second quarter and 4.1% for the first six months of 2025, compared with unfavorable 2.1% and less than 0.1% for the same periods of 2024. Reserve estimates are inherently uncertain as described in our 2024 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 51.

The excess and surplus lines underwriting expense ratio decreased for the second quarter and first six months of 2025 compared with the same periods a year ago. The ratio for both periods largely benefited from ongoing expense management efforts and premium growth.

Excess and Surplus Lines Insurance Losses Incurred by Size

We continue to monitor new losses and case reserve increases greater than $2 million for trends in factors such as initial reserve levels, loss cost inflation and claim settlement expenses. Our analysis continues to indicate no unexpected concentration of these large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. In the second quarter of 2025, the excess and surplus lines total ratio for large losses, net of reinsurance, was 1.3 percentage points lower than last year's second quarter. The second-quarter 2025 amount of total large losses incurred contributed favorably to the decrease in the six-month 2025 total large loss ratio, compared with 2024, in addition to a first-quarter 2025 ratio that matched the first quarter of 2024. We believe results for the three- and six month periods largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

LIFE INSURANCE RESULTS

Performance highlights for the life insurance segment include:

•Revenues – Revenues increased for the six months ended June 30, 2025, compared with the same period a year ago, driven by higher earned premiums from term life insurance, our largest life insurance product line.

Net in-force life insurance policy face amounts increased 1% to $85.472 billion at June 30, 2025, from $84.245 billion at year-end 2024.

Fixed annuity deposits received for the three and six months ended June 30, 2025, were $8 million and $12 million, compared with $10 million and $19 million for the same periods of 2024. Fixed annuity deposits have a minimal impact on earned premiums because deposits received are initially recorded as liabilities. Profit is earned over time by way of interest rate spreads. We do not write variable or equity-indexed annuities.

Life Insurance Premiums

•Profitability – Our life insurance segment typically reports a smaller profit compared with the life insurance subsidiary because profits from investment income spreads are included in our investments segment results. We include only investment income credited to contract holders (including interest assumed in life insurance policy reserve calculations) in our life insurance segment results. A profit of $28 million for our life insurance segment in the first six months of 2025, compared with a profit of $32 million for the same period of 2024, was primarily due to less favorable impacts from the unlocking of interest rate and other actuarial assumptions.

Life insurance segment benefits and expenses consist principally of contract holders' (policyholders') benefits incurred related to traditional life and interest-sensitive products and operating expenses incurred, net of deferred acquisition costs. Total benefits increased in the first six months of 2025 primarily due to less favorable impacts from the unlocking of interest rate and other actuarial assumptions.

Underwriting expenses for the first six months of 2025 increased compared with the same period a year ago, largely due to higher general insurance expense levels compared to the same period of 2024.

We recognize that assets under management, capital appreciation and investment income are integral to evaluating the success of the life insurance segment because of the long duration of life products. On a basis that includes investment income and investment gains or losses from life-insurance-related invested assets, the life insurance subsidiary reported net income of $26 million and $47 million for the three and six months ended June 30, 2025, compared with $24 million and $43 million for the three and six months ended June 30, 2024. The life insurance subsidiary portfolio had net after-tax investment losses of $3 million and $4 million for the three and six months ended June 30, 2025, compared with $5 million and $7 million for the three and six months ended June 30, 2024.

INVESTMENTS RESULTS

The investments segment contributes investment income and investment gains and losses to results of operations. Investments traditionally are our primary source of pretax and after-tax profits.

Investment Income

Pretax investment income grew 18% for the second quarter and 16% for the first six months of 2025, compared with the same periods of 2024. Interest income increased by $41 million and $82 million for the three and six months ended June 30, 204, as net purchases of fixed-maturity securities in recent quarters and higher bond yields are working to generally offset effects of the low interest rate environment for several years prior to 2022. Dividend income increased by $1 million for the second quarter and decreased by $4 million for the first six months of 2025. The decrease for the first six months of 2025 was primarily due to the unfavorable effect on dividend income from net sales of equity securities during the second half of 2024. That effect was partially offset by net purchases of equity securities during the first six months of 2025 and dividend rates that have generally been increasing, although more slowly in recent quarters.

Investments Results

We continue to consider the low interest rate environment that prevailed for several years prior to 2022 as well as the potential for a continuation of both elevated inflation and higher bond yields as we position our portfolio. As bonds in our generally laddered portfolio mature or are called over the near term, we will reinvest with a balanced approach, keeping in mind our long-term strategy and pursuing attractive risk-adjusted after-tax yields. The table below shows the average pretax yield-to-amortized cost associated with expected principal redemptions for our fixed-maturity portfolio. The expected principal redemptions are based on par amounts and include dated maturities, calls and prefunded municipal bonds that we expect will be called during each respective time period.

The table below shows the average pretax yield-to-amortized cost for fixed-maturity securities acquired during the periods indicated. The average yield for total fixed-maturity securities acquired during the first six months of 2025 was higher than the 5.06% average yield-to-amortized cost of the fixed-maturity securities portfolio at the end of 2024. Our fixed-maturity portfolio's average yield of 4.89% for the first six months of 2025, from the investment income table below, was lower than the 5.06% yield for the year-end 2024 fixed-maturities portfolio.

While our bond portfolio more than covers our insurance reserve liabilities, we believe our diversified common stock portfolio of mainly blue chip, dividend-paying companies represents one of our best investment opportunities for the long term. We discussed our portfolio strategies in our 2024 Annual Report on Form 10-K, Item 1, Investments Segment, Page 21, and Item 7, Investments Outlook, Page 89. We discuss risks related to our investment income and our fixed-maturity and equity investment portfolios in this quarterly report Item 3, Quantitative and Qualitative Disclosures About Market Risk.

The table below provides details about investment income. Average yields in this table are based on the average invested asset and cash amounts indicated in the table, using fixed-maturity securities valued at amortized cost and all other securities at fair value.

Total Investment Gains and Losses

Investment gains and losses are recognized on the sale of investments, for certain changes in fair values of securities even though we continue to hold the securities or as otherwise required by GAAP. The change in fair value for equity securities still held is included in investment gains and losses and also in net income. The change in unrealized gains or losses for fixed-maturity securities is included as a component of other comprehensive income (OCI). Accounting requirements for the allowance for credit losses for the fixed-maturity portfolio are disclosed in our 2024 Annual Report on Form 10-K, Item 8, Note 1, Summary of Significant Accounting Policies, Page 128.

The table below summarizes total investment gains and losses, before taxes.

Of the 5,278 fixed-maturity and short-term securities in the portfolio, 48 securities were trading below 70% of amortized cost at June 30, 2025. Our asset impairment committee regularly monitors the portfolio, including a quarterly review of the entire portfolio for potential credit losses. We believe that if liquidity in the markets were to significantly deteriorate or economic conditions were to significantly weaken, we could experience declines in portfolio values and possibly increases in the allowance for credit losses or write-downs to fair value.

OTHER

We report as Other the noninvestment operations of the parent company and a noninsurance subsidiary, CFC Investment Company. We also report as Other the underwriting results of Cincinnati Re and Cincinnati Global, including earned premiums, loss and loss expenses and underwriting expenses in the table below.

Total revenues for the first six months of 2025 for our Other operations increased, compared with the same period of 2024, primarily due to earned premiums from Cincinnati Re and Cincinnati Global, with increases of $30 million and $33 million, respectively. Cincinnati Re had $303 million of earned premiums for the first six months of 2025 and generated an underwriting loss of $36 million due to $104 million of net catastrophe losses from the January 2025 wildfires in southern California. Cincinnati Global had $129 million of earned premiums for the first six months of 2025 and generated an underwriting profit of $17 million. Total expenses for Other increased for the first six months of 2025, primarily due to higher loss and loss expenses from Cincinnati Re and Cincinnati Global.

Other income (loss) in the table below represents profit before income taxes. For the first six months of 2025, total other loss resulted from an underwriting loss from Cincinnati Re and interest expense from debt of the parent company. For the first six months of 2024, total other income was driven by underwriting profit from Cincinnati Re and Cincinnati Global.

TAXES

We had $170 million and $132 million of income tax expense for the three and six months ended June 30, 2025, compared with $74 million and $272 million of income tax expense for the same periods of 2024. The effective tax rate for the three and six months ended June 30, 2025, was 19.9% and 18.2% compared with 19.2% and 20.3% for the same periods last year. The change in our effective tax rate between periods was primarily due to large changes in our net investment gains and losses included in income for the periods and changes in underwriting income and investment income.

Historically, we have pursued a strategy of investing some portion of cash flow in tax-advantaged, fixed-maturity and equity securities to minimize our overall tax liability and maximize after-tax earnings. See Tax-Exempt Fixed Maturities in this quarterly report Item 3, Quantitative and Qualitative Disclosures About Market Risk for further discussion on municipal bond purchases in our fixed-maturity investment portfolio. For tax years after 2017, for our property casualty insurance subsidiaries, approximately 75% of interest from tax-advantaged, fixed-maturity investments and approximately 40% of dividends from qualified equities are exempt from federal tax after applying proration. For our noninsurance companies, the dividend received deduction exempts 50% of dividends from qualified equities. Our life insurance company does not own tax-advantaged, fixed-maturity investments or equities subject to the dividend received deduction. Details about our effective tax rate are in this quarterly report Item 1, Note 9, Income Taxes.