CINCINNATI FINANCIAL CORP

Previous wording

Total revenues increased $297 million for the first quarter of 2026, compared with the first quarter of 2025, primarily due to higher earned premiums and investment income. Premium and investment revenue trends are discussed further in the respective sections of Financial Results.

Current wording

Total revenues increased $1.026 billion for the second quarter of 2026, compared with the second quarter of 2025, including higher net investment gains, earned premiums and investment income. For the first six months of 2026, compared with the same period of 2025, total revenues increased $1.323 billion, including higher net investment gains, earned premiums and investment income. Premium and investment revenue trends are discussed further in the respective sections of Financial Results.

Previous wording

Net income for the first quarter of 2026, compared with the first-quarter 2025 net loss, increased $364 million, including increases of $326 million in after-tax property casualty underwriting profit and $31 million in after-tax investment income. Catastrophe losses for the first quarter of 2026, mostly weather related, were $233 million lower after taxes and contributed favorably to both net income and property casualty underwriting profit. Life insurance segment results increased by $2 million on a pretax basis.

Current wording

Net income for the second quarter of 2026, compared with the second quarter of 2025, increased $570 million, including increases of $657 million in after-tax investment gains and losses and $28 million in after-tax investment income, partially offset by a decrease of $115 million in after-tax property casualty underwriting profit. Catastrophe losses for the second quarter of 2026, mostly weather related, were $61 million higher after taxes and contributed unfavorably to both net income and property casualty underwriting profit. Life insurance segment results decreased by $1 million on a pretax basis.

Previous wording

The board of directors is committed to rewarding shareholders directly through cash dividends and through share repurchase authorizations. Through 2025, the company had increased the annual cash dividend rate for 65 consecutive years, a record we believe is matched by only seven other U.S. publicly traded companies. In January 2026, the board of directors increased the regular quarterly dividend to 94 cents per share, setting the stage for our 66 th consecutive year of increasing cash dividends. During the first three months of 2026, cash dividends declared by the company increased 8% compared with the same period of 2025. Our board regularly evaluates relevant factors in decisions related to dividends and share repurchases. The 2026 dividend increase reflected our strong operating performance and signaled management's and the board's positive outlook and confidence in our outstanding capital, liquidity and financial flexibility.

Current wording

The board of directors is committed to rewarding shareholders directly through cash dividends and through share repurchase authorizations. Through 2025, the company had increased the annual cash dividend rate for 65 consecutive years, a record we believe is matched by only seven other U.S. publicly traded companies. In January 2026, the board of directors increased the regular quarterly dividend to 94 cents per share, setting the stage for our 66 th consecutive year of increasing cash dividends. During the first six months of 2026, cash dividends declared by the company increased 8% compared with the same period of 2025. Our board regularly evaluates relevant factors in decisions related to dividends and share repurchases. The 2026 dividend increase reflected our strong operating performance and signaled management's and the board's positive outlook and confidence in our outstanding capital, liquidity and financial flexibility.

Previous wording

Total assets at March 31, 2026, increased 1% compared with year-end 2025, and included an increase of 1% in total investments that reflected net purchases that were offset by lower fair values for many securities in our equity and fixed maturity portfolios. Shareholders' equity decreased 1% and book value per share also decreased 1% during the first three months of 2026. Our debt-to-total-capital ratio (capital is the sum of debt plus shareholders' equity) matched year-end 2025.

Current wording

Total assets at June 30, 2026, increased 5% compared with year-end 2025, and included an increase of 4% in total investments that reflected net purchases and higher fair values for many securities in our equity portfolio. Shareholders' equity increased 5% and book value per share increased 6% during the first six months of 2026. Our debt-to-total-capital ratio (capital is the sum of debt plus shareholders' equity) decreased compared with year-end 2025.

Previous wording

Our value creation ratio is our primary performance metric. As shown in the tables below, that ratio was 0.2% for the first three months of 2026, compared with negative 0.5% for the same period in 2025. The increase was primarily due to an increase in net income before investment gains which was partially offset by a reduction in overall net gains from our investment portfolio. Book value per share decreased $0.75 during the first three months of 2026 and contributed negative 0.7 percentage points to the value creation ratio, while dividends declared at $0.94 per share contributed 0.9 points. Value creation ratio major contributors and in total, along with calculations from per-share amounts, are shown in the tables below.

Current wording

Our value creation ratio is our primary performance metric. As shown in the tables below, that ratio was 8.0% for the first six months of 2026, compared with 4.6% for the same period in 2025. The increase was primarily due to an increase in overall net gains from our investment portfolio and net income before investment gains. Book value per share increased $6.29 during the first six months of 2026 and contributed 6.2 percentage points to the value creation ratio, while dividends declared at $1.88 per share contributed 1.8 points. Value creation ratio major contributors and in total, along with calculations from per-share amounts, are shown in the tables below.

Previous wording

Operating through The Cincinnati Insurance Company, Cincinnati Financial Corporation is one of the 25 largest property casualty insurers in the nation, based on 2025 net written premiums for more than 2,000 U.S. stock and mutual insurance companies. We market our insurance products through a select group of independent insurance agencies as discussed in our 2025 Annual Report on Form 10-K, Item 1, Our Business and Our Strategy, Page 6. At March 31, 2026, we actively marketed through 2,361 agencies located in 46 states. We maintain a long-term perspective that guides us in addressing immediate challenges or opportunities while focusing on the major decisions that best position our company for success through all market cycles.

Current wording

Operating through The Cincinnati Insurance Company, Cincinnati Financial Corporation is one of the 25 largest property casualty insurers in the nation, based on 2025 net written premiums for more than 2,000 U.S. stock and mutual insurance companies. We market our insurance products through a select group of independent insurance agencies as discussed in our 2025 Annual Report on Form 10-K, Item 1, Our Business and Our Strategy, Page 6. At June 30, 2026, we actively marketed through 2,407 agencies located in 46 states. We maintain a long-term perspective that guides us in addressing immediate challenges or opportunities while focusing on the major decisions that best position our company for success through all market cycles.

Previous wording

•Premium growth – We believe our agency relationships and initiatives can lead to a property casualty written premium growth rate over any five-year period that exceeds the industry average. For the first three months of 2026, our consolidated property casualty net written premium year-over-year growth was 7%. As of February 2026, A.M. Best projected the industry's full-year 2026 written premium growth at approximately 4%. For the five-year period 2021 through 2025, our growth rate exceeded that of the industry. The industry's growth rate excludes its mortgage and financial guaranty lines of business.

Current wording

•Premium growth – We believe our agency relationships and initiatives can lead to a property casualty written premium growth rate over any five-year period that exceeds the industry average. For the first six months of 2026, our consolidated property casualty net written premium year-over-year growth was 5%. As of February 2026, A.M. Best projected the industry's full-year 2026 written premium growth at approximately 4%. For the five-year period 2021 through 2025, our growth rate exceeded that of the industry. 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 generate an average GAAP combined ratio over any five-year period that is consistently within the range of 92% to 98%. For the first three months of 2026, our GAAP combined ratio was 95.6%, including 11.3 percentage points of current accident year catastrophe losses partially offset by 3.2 percentage points of favorable loss reserve development on prior accident years. Our statutory combined ratio was 95.6% for the first three months of 2026. As of February 2026, A.M. Best projected the industry's full-year 2026 statutory combined ratio at approximately 97%, including approximately 8 percentage points of catastrophe losses and a favorable effect of approximately 1 percentage point of loss reserve development on prior accident years. 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 generate an average GAAP combined ratio over any five-year period that is consistently within the range of 92% to 98%. For the first six months of 2026, our GAAP combined ratio was 98.2%, including 12.8 percentage points of current accident year catastrophe losses partially offset by 2.4 percentage points of favorable loss reserve development on prior accident years. Our statutory combined ratio was 97.3% for the first six months of 2026. As of February 2026, A.M. Best projected the industry's full-year 2026 statutory combined ratio at approximately 97%, including approximately 8 percentage points of catastrophe losses and a favorable effect of approximately 1 percentage point of loss reserve development on prior accident years. The industry's ratio again excludes its mortgage and financial guaranty lines of business.

Previous wording

•Investment contribution – We believe our investment philosophy and initiatives can drive investment income growth and lead to a total return on our equity investment portfolio over a five-year period that exceeds the five-year return of the Standard & Poor's 500 Index. For the first three months of 2026, pretax investment income was $318 million, up 14% compared with the same period in 2025. We believe our investment portfolio mix provides an appropriate balance of income stability and growth with capital appreciation potential.

Current wording

•Investment contribution – We believe our investment philosophy and initiatives can drive investment income growth and lead to a total return on our equity investment portfolio over a five-year period that exceeds the five-year return of the Standard & Poor's 500 Index. For the first six months of 2026, pretax investment income was $637 million, up 13% compared with the same period in 2025. We believe our investment portfolio mix provides an appropriate balance of income stability and growth with capital appreciation potential.

Previous wording

At March 31, 2026, we held $5.584 billion of our cash and cash equivalents and invested assets at the parent-company level, of which $4.964 billion, or 88.9%, was invested in common stocks, and $422 million, or 7.6%, was cash or cash equivalents. Our debt-to-total-capital ratio was 4.9% at March 31, 2026. Another important indicator of financial strength is our ratio of property casualty net written premiums to statutory surplus, which was 1.0-to-1 for the 12 months ended March 31, 2026, matching year-end 2025.

Current wording

At June 30, 2026, we held $5.722 billion of our cash and cash equivalents and invested assets at the parent-company level, of which $5.232 billion, or 91.4%, was invested in common stocks, and $201 million, or 3.5%, was cash or cash equivalents. Our debt-to-total-capital ratio was 4.6% at June 30, 2026. Another important indicator of financial strength is our ratio of property casualty net written premiums to statutory surplus, which was 1.0-to-1 for the 12 months ended June 30, 2026, matching year-end 2025.

Previous wording

Our consolidated property casualty insurance operations generated an underwriting profit of $115 million for the first quarter of 2026. The first-quarter 2026 underwriting profit increase of $413 million, compared with an underwriting loss in first-quarter 2025, included a favorable decrease of $295 million in losses from catastrophes, mostly caused by severe weather, partially offset by a slightly lower amount of total favorable reserve development on prior accident years. The change in underwriting profitability for the first quarter of 2026 also included a favorable effect from higher current accident year loss and loss expenses before catastrophe losses that grew slower than earned premiums. For the first three months of 2026, the combined ratio before catastrophe losses and prior years reserve development improved by 3.0 percentage points compared with the same period of 2025.

Current wording

Our consolidated property casualty insurance operations generated an underwriting loss of $18 million for the second quarter of 2026 and an underwriting profit of $97 million for the first six months of 2026. The second-quarter 2026 underwriting profit decrease of $146 million, compared with second-quarter 2025, included an unfavorable increase of $77 million in losses from catastrophes, mostly caused by severe weather, and a lower amount of total favorable reserve development on prior accident years. The change in underwriting profitability for the second quarter of 2026 was primarily from higher incurred but not reported (IBNR) loss and loss expenses for the current accident year. The six-month underwriting profit of $97 million, compared with an underwriting loss of $170 million for the first six months of 2025, included a favorable decrease of $254 million in current accident year catastrophe losses. For the first six months of 2026, the combined ratio before catastrophe losses and prior years reserve development increased by 0.1% percentage points compared with the same period of 2025.

Previous wording

Underwriting results for the first quarter of 2026 included improved current accident year loss experience before catastrophe losses, as price increases have helped to offset elevated losses reflecting economic or other forms of inflation. 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. 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. We believe future property casualty underwriting results will continue to benefit from price increases and our ongoing initiatives to improve pricing precision and loss experience related to claims and loss control practices.

Current wording

Underwriting results for the second quarter and first six months of 2026 included ratios for the current accident year before catastrophe losses that increased for the second quarter and decreased for the first six months of 2026. Pricing segmentation is expected to help offset elevated losses reflecting economic or other forms of inflation. 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. 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. We believe future property casualty underwriting results will continue to benefit from price increases and our ongoing initiatives to improve pricing precision and loss experience related to claims and loss control practices.

Previous wording

For all property casualty lines of business in aggregate, net loss and loss expense reserves at March 31, 2026, were $466 million, or 4%, higher than at year-end 2025, including an increase of $419 million for the incurred but not reported (IBNR) portion.

Current wording

For all property casualty lines of business in aggregate, net loss and loss expense reserves at June 30, 2026, were $981 million or 9%, higher than at year-end 2025, including an increase of $845 million for the incurred but not reported (IBNR) portion.

Previous wording

Our consolidated property casualty combined ratio for the first quarter of 2026 decreased by 17.7 percentage points, compared with the same period of 2025, including a decrease of 14.2 points from catastrophe losses and loss expenses. Other combined ratio components that changed are discussed below and in further detail in Financial Results by property casualty insurance segment.

Current wording

Our consolidated property casualty combined ratio for the second quarter of 2026 increased by 5.9 percentage points, compared with the same period of 2025, including an increase of 2.3 points from catastrophe losses and loss expenses. For the first six months of 2026, compared with the 2025 six-month period, our combined ratio decreased by 5.6 percentage points, including a decrease of 5.8 points from catastrophe losses and loss expenses. Other combined ratio components that changed are discussed below and in further detail in Financial Results by property casualty insurance segment.

Previous wording

The combined ratio can be affected significantly by natural catastrophe losses and other large losses as discussed in detail below. The combined ratio can also be affected by updated estimates of loss and loss expense reserves established for claims that occurred in prior periods, referred to as prior accident years. Net favorable development on prior accident year reserves, including reserves for catastrophe losses, benefited the combined ratio by 3.2 percentage points in the first three months of 2026, compared with 4.0 percentage points in the same period of 2025. Net favorable development is discussed in further detail in Financial Results by property casualty insurance segment.

Current wording

The combined ratio can be affected significantly by natural catastrophe losses and other large losses as discussed in detail below. The combined ratio can also be affected by updated estimates of loss and loss expense reserves established for claims that occurred in prior periods, referred to as prior accident years. Net favorable development on prior accident year reserves, including reserves for catastrophe losses, benefited the combined ratio by 2.4 percentage points in the first six months of 2026, compared with 3.3 percentage points in the same period of 2025. Net favorable development is discussed in further detail in Financial Results by property casualty insurance segment.

Previous wording

The ratio for current accident year loss and loss expenses before catastrophe losses improved in the first three months of 2026. That 58.1% ratio was 2.4 percentage points lower, compared with the 60.5% accident year 2025 ratio measured as of March 31, 2025, including a decrease of 1.0 points in the ratio for large losses of $2 million or more per claim, discussed below. The ratio improvement of 2.4 percentage points included an increase of 0.3 points for the IBNR portion and a decrease of 2.7 points for the case incurred portion. The improvement also reflected a favorable 1.4 points for the effect of $52 million of net reinstatement premiums in first-quarter 2025 related to the January 2025 wildfires in southern California.

Current wording

The ratio for current accident year loss and loss expenses before catastrophe losses improved in the first six months of 2026. That 58.2% ratio was 0.2 percentage points lower, compared with the 58.4% accident year 2025 ratio measured as of June 30, 2025, including a ratio for large losses of $2 million or more per claim, discussed below, that matched the 2025 ratio. The ratio improvement of 0.2 percentage points included an increase of 0.9 points for the IBNR portion and a decrease of 1.1 points for the case incurred portion.

Previous wording

Consolidated property casualty net written premiums for the three months ended March 31, 2026, grew $173 million compared with the same period of 2025. Our premium growth initiatives from prior years have provided an ongoing favorable effect on growth during the current year, particularly as newer agency relationships mature over time.

Current wording

Consolidated property casualty net written premiums for the second quarter and six months ended June 30, 2026, grew $92 million and $265 million compared with the same periods of 2025. Our premium growth initiatives from prior years have provided an ongoing favorable effect on growth during the current year, particularly as newer agency relationships mature over time.

Previous wording

Consolidated property casualty agency new business written premiums decreased by $44 million for the first three months of 2026, compared with the same period of 2025, due to the personal lines segment. New agency appointments during 2026 and 2025 produced a $19 million increase in new business for the first three months of 2026 compared with the same period of 2025. As we appoint new agencies that choose to move accounts to us, we report these accounts as new business. While this business is new to us, in many cases it is not new to the agent. We believe these seasoned accounts tend to be priced more accurately than business that may be less familiar to our agent upon obtaining it from a competing agent.

Current wording

Consolidated property casualty agency new business written premiums decreased by $51 million for the second quarter and decreased by $95 million for the first six months of 2026, compared with the same periods of 2025, due to the personal lines segment. New agency appointments during 2026 and 2025 produced a $38 million increase in new business for the first six months of 2026 compared with the same period of 2025. As we appoint new agencies that choose to move accounts to us, we report these accounts as new business. While this business is new to us, in many cases it is not new to the agent. We believe these seasoned accounts tend to be priced more accurately than business that may be less familiar to our agent upon obtaining it from a competing agent.

Previous wording

Net written premiums for Cincinnati Re, included in other written premiums, decreased by $1 million to $254 million for the three months ended March 31, 2026, compared with the same period of 2025. The first three months of 2025 included a favorable $12 million of net reinstatement premiums to reinstate treaties affected by the California wildfires. 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.

Current wording

Net written premiums for Cincinnati Re, included in other written premiums, increased by $27 million in both the second quarter and the six months ended June 30, 2026, compared with the same periods of 2025, to $191 million and $445 million, respectively. 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.

Previous wording

Cincinnati Global is also included in other written premiums. Net written premiums for Cincinnati Global increased by $23 million to $98 million for the three months ended March 31, 2026, compared with the same period of 2025.

Current wording

Cincinnati Global is also included in other written premiums. Net written premiums for Cincinnati Global increased by $1 million in the second quarter and $23 million for the six months ended June 30, 2026, to $98 million and $196 million, respectively, compared with the same periods of 2025.

Previous wording

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. A decrease in ceded premiums increased net written premiums by $76 million for the first three months of 2026, compared with the same period of 2025. Other written premiums for the first quarter of 2025 included a net unfavorable amount of $52 million for reinsurance treaty reinstatement premiums related to the California wildfires, including a favorable $12 million for Cincinnati Re and an unfavorable $64 million for our personal lines insurance segment.

Current wording

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. A decrease in ceded premiums increased net written premiums by $5 million and $81 million for the second quarter and first six months of 2026, compared with the same periods of 2025. Other written premiums for the first six months of 2025 included a net unfavorable amount of $52 million for reinsurance treaty reinstatement premiums related to the California wildfires.

Previous wording

Catastrophe losses and loss expenses typically have a material effect on property casualty results and can vary significantly from period to period. Losses from catastrophes contributed 10.8 percentage points to the combined ratio in the first three months of 2026, compared with 25.0 percentage points in the same period of 2025. During the first quarter of 2026, there were no material changes to our estimates of ultimate losses related to the January 2025 California wildfires.

Current wording

Catastrophe losses and loss expenses typically have a material effect on property casualty results and can vary significantly from period to period. Losses from catastrophes contributed 14.5 and 12.6 percentage points to the combined ratio in the second quarter and first six months of 2026, compared with 12.2 and 18.4 percentage points in the same periods of 2025.

Previous wording

We believe the inherent variability 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 variability in addition to general inflationary trends in loss costs. Our analysis continues to indicate no unexpected concentration of large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. The first-quarter 2026 property casualty total large losses incurred of $78 million, net of reinsurance, was lower than the $111 million quarterly average during full-year 2025 and the $102 million experienced for the first quarter of 2025. The ratio for these large losses was 1.4 percentage points lower compared with last year's first quarter. 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. Losses by size are discussed in further detail in results of operations by property casualty insurance segment.

Current wording

We believe the inherent variability 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 variability in addition to general inflationary trends in loss costs. Our analysis continues to indicate no unexpected concentration of large losses and case reserve increases by risk category, geographic region, policy inception, agency or field marketing territory. The second-quarter 2026 property casualty total large losses incurred of $135 million, net of reinsurance, was higher than the $111 million quarterly average during full-year 2025 and the $82 million experienced for the second quarter of 2025. The ratio for these large losses was 1.9 percentage points higher compared with last year's second quarter. The second-quarter 2026 amount of total large losses incurred unfavorably contributed to the increase in the six-month 2026 total large loss ratio, compared with 2025, offsetting a first-quarter 2026 ratio that was 1.4 points lower than the first quarter of 2025. 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. Losses by size are discussed in further detail in results of operations by property casualty insurance segment.

Previous wording

•Premiums – Earned premiums and net written premiums for the commercial lines segment grew during the first three months of 2026, compared with the same period a year ago, primarily due to agency renewal written premium growth that continued to include higher average pricing. 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.

Current wording

•Premiums – Earned premiums and net written premiums for the commercial lines segment grew during the second quarter and first six months of 2026, compared with the same periods a year ago, primarily due to agency renewal written premium growth that continued to include higher average pricing. 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.

Previous wording

Agency renewal written premiums increased 3% for the first three months of 2026, compared with the same period of 2025, including price increases. During the first quarter of 2026, our overall standard commercial lines policies averaged estimated renewal price increases at percentages near the high end of the low-single-digit range. We continue to segment commercial lines policies, emphasizing identification and retention of those we believe have relatively stronger pricing. Conversely, we continue to maintain 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.

Current wording

Agency renewal written premiums increased 3% for the second quarter and first six months of 2026, compared with the same periods of 2025, including price increases. During the second quarter of 2026, our overall standard commercial lines policies averaged estimated renewal price increases at percentages near the high end of the low-single-digit range. We continue to segment commercial lines policies, emphasizing identification and retention of those we believe have relatively stronger pricing. Conversely, we continue to maintain 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.

Previous wording

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 first quarter of 2026, we estimate that our average percentage price increases were in the mid-single-digit range for our commercial casualty, commercial property and commercial auto lines of business. The estimated average percentage price change for workers' compensation was a decrease in the mid-single-digit range.

Current wording

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 2026, we estimate that our average percentage price increases were in the mid-single-digit range for our commercial casualty and commercial auto lines of business. For our commercial property line of business we estimate average price increases were in the low-single-digit range. The estimated average percentage price change for workers' compensation was a decrease in the mid-single-digit range.

Previous wording

Our commercial lines segment's increase in agency renewal written premiums for the first three months of 2026 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.

Current wording

Our commercial lines segment's increase in agency renewal written premiums for the first six months of 2026 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.

Previous wording

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 three months of 2026 contributed $18 million to net written premiums, compared with $23 million for the same period of 2025.

Current wording

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 2026 contributed $32 million to net written premiums, compared with $48 million for the same period of 2025.

Previous wording

New business written premiums for commercial lines increased $2 million for the first three months of 2026, compared with the same period of 2025, 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.

Current wording

New business written premiums for commercial lines increased $8 million and $10 million during the second quarter and first six months of 2026, compared with the same periods of 2025, 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.

Previous wording

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our commercial lines insurance segment, an increase in ceded premiums decreased net written premiums by approximately $1 million for the first three months of 2026, compared with the same period of 2025.

Current wording

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our commercial lines insurance segment, an increase in ceded premiums decreased net written premiums by less than $1 million and approximately $1 million for the second quarter and first six months of 2026, compared with the same periods of 2025.

Previous wording

•Combined ratio – The first-quarter 2026 commercial lines combined ratio increased by 6.7 percentage points, compared with the first quarter of 2025, including an increase of 6.0 points in losses from catastrophes. The first-quarter combined ratio increased by 1.7 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 3.0 points for the IBNR portion and a decrease of 1.3 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 March 31 of the respective years and included a decrease of 1.4 percentage points for the first three months of 2026 in the ratio for large losses of $2 million or more per claim, discussed below.

Current wording

•Combined ratio – The second-quarter 2026 commercial lines combined ratio increased by 11.2 percentage points, compared with the second quarter of 2025, including an increase of 4.9 points in losses from catastrophes. The second-quarter combined ratio increased by 2.6 points from current accident year loss and loss expenses before catastrophe losses, including a decrease of 1.4 points for the IBNR portion and an increase of 4.0 points for the case incurred portion. For the first six months of 2026, the combined ratio increased by 8.9 percentage points, compared with the same period a year ago, including an increase of 5.3 points in losses from catastrophes. The six-month 2026 combined ratio also included an increase of 2.2 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 0.9 points for the IBNR portion and an increase of 1.3 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 an increase of 0.7 percentage points for the first six months of 2026 in the ratio for large losses of $2 million or more per claim, discussed below.

Previous wording

Catastrophe losses and loss expenses accounted for 9.6 percentage points of the combined ratio for the first three months of 2026, compared with 3.6 percentage points for the same period a year ago. Through 2025, the 10-year annual average for that catastrophe measure for the commercial lines segment was 5.9 percentage points, and the five-year annual average was 5.3 percentage points.

Current wording

Catastrophe losses and loss expenses accounted for 11.9 and 10.7 percentage points of the combined ratio for the second quarter and first six months of 2026, compared with 7.0 and 5.4 percentage points for the same periods a year ago. Through 2025, the 10-year annual average for that catastrophe measure for the commercial lines segment was 5.9 percentage points, and the five-year annual average was 5.3 percentage points.

Previous wording

The net effect of reserve development on prior accident years during the first three months of 2026 was favorable for commercial lines overall by $53 million, compared with $43 million for the same period in 2025. For the first three months of 2026, our commercial property and workers' compensation lines of business were the main contributors to the commercial lines net favorable reserve development. The net favorable reserve development recognized during the first three months of 2026 for our commercial lines insurance segment was mainly for accident years 2025 and 2024 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 three months of 2026 while commercial auto included $2 million of unfavorable reserve development. Reserve estimates are inherently uncertain as described in our 2025 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 50.

Current wording

The net effect of reserve development on prior accident years during the second quarter and first six months of 2026 was favorable for commercial lines overall by $17 million and $70 million, compared with $42 million and $85 million for the same periods in 2025. For the first six months of 2026, our commercial property and workers' compensation lines of business were the main contributors to the commercial lines net favorable reserve development. The net favorable reserve development recognized during the first six months of 2026 for our commercial lines insurance segment was mainly for accident years 2025 and 2024 and was primarily due to lower-than-anticipated loss emergence on known claims. Our commercial casualty line of business included $14 million of unfavorable reserve development on prior accident years for the second quarter of 2026, driven by one older accident year that included updated estimates of ultimate losses for a small number of insureds. Reserve estimates are inherently uncertain as described in our 2025 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 50.

Previous wording

The commercial lines underwriting expense ratio increased for the first three months of 2026, compared with the same period a year ago. The increase was largely due to an increase in profit-sharing commissions for agencies. The ratio for both periods also included ongoing expense management efforts.

Current wording

The commercial lines underwriting expense ratio increased for the second quarter and first six months of 2026, compared with the same periods a year ago. The increase was largely due to an increase in commission expenses and timing of recognition of certain expenses. The ratio for both periods also included ongoing expense management efforts.

Previous wording

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 first-quarter 2026 commercial lines total large losses incurred of $40 million, net of reinsurance, was lower than the quarterly average of $74 million during full-year 2025 and the $66 million of total large losses incurred for the first quarter of 2025. The decrease in commercial lines large losses for the first three months of 2026 was primarily due to our commercial casualty line of business. The first-quarter 2026 ratio for commercial lines total large losses was 2.4 percentage points lower than last year's first-quarter ratio. 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.

Current wording

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 2026 commercial lines total large losses incurred of $115 million, net of reinsurance, was higher than the quarterly average of $74 million during full-year 2025 and the $41 million of total large losses incurred for the second quarter of 2025. The increase in commercial lines large losses for the first six months of 2026 was primarily due to our commercial casualty and commercial property lines of business. The second-quarter 2026 ratio for commercial lines total large losses was 5.8 percentage points higher than last year's second-quarter ratio. The second-quarter 2026 amount of total large losses incurred contributed to the increase in the six-month 2026 total large loss ratio, compared with 2025, offsetting a first-quarter 2026 ratio that was 2.4 points lower than the first quarter of 2025. 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.

Previous wording

•Premiums – Personal lines earned premiums and net written premiums continued to grow during the first three months of 2026, primarily due to agency renewal written premium growth that included higher average pricing. The table below analyzes the primary components of premiums.

Current wording

•Premiums – Personal lines earned premiums and net written premiums continued to grow during the second quarter and first six months of 2026, primarily due to agency renewal written premium growth that included higher average pricing. The table below analyzes the primary components of premiums.

Previous wording

Agency renewal written premiums increased 15% for the first three months of 2026, 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.

Current wording

Agency renewal written premiums increased 9% and 11% for the second quarter and first six months of 2026, 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. Policy retention has also decreased in recent quarters to the upper-80% range. Part of the insured exposure increase reflects our response to inflation effects that increase the cost of building materials used to repair damaged homes.

Previous wording

We estimate that premium rates for our personal auto and homeowner lines of business increased at average percentages in the high-single-digit range during the first three months of 2026. 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.

Current wording

We estimate that premium rates for our personal auto and homeowner lines of business increased at average percentages in the high-single-digit range during the first six months of 2026. 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.

Previous wording

Personal lines new business written premiums decreased $51 million or 40% for the first three months of 2026, compared with the same period of 2025. We believe we maintained underwriting and pricing discipline as we continued to carefully underwrite each policy in a highly competitive market.

Current wording

Personal lines new business written premiums decreased $63 million or 45% for the second quarter of 2026, compared with the same period of 2025. For the first six months of 2026, compared with the same period of 2025, personal lines new business written premiums decreased $114 million, or 43%. We believe we maintained underwriting and pricing discipline as we continued to carefully underwrite each policy in a highly competitive market.

Previous wording

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our personal lines insurance segment, a decrease in 2026 ceded premiums increased net written premiums by approximately $62 million for the first three months of 2026, compared with the same period of 2025. Ceded premiums for the first three months of 2025 included a net amount of $64 million for reinsurance reinstatement premiums related to the January 2025 wildfires in southern California.

Current wording

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program. For our personal lines insurance segment, an increase in 2026 ceded premiums decreased net written premiums by approximately $4 million for the second quarter of 2026 compared with the same period of 2025. For the first six months of 2026, a decrease in 2026 ceded premiums increased net written premiums by approximately $59 million compared with the same period of 2025. 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.