What changed in this filing

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Item 1. Financial Statements

2024-10-24 compared with 2024-07-25 · 131 added, 142 removed, 766 unchanged (26% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(Dollars in millions, except per share data) June 30, December 31,

(Dollars in millions, except per share data) September 30, December 31,

Fixed maturities, at fair value (amortized cost:

42 unchanged sentences

Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

Cincinnati Financial Corporation and Subsidiaries

Condensed Consolidated Statements of Income

(Dollars in millions, except per share data) Three months ended June 30, Six months ended June 30,

(Dollars in millions, except per share data) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

11 unchanged sentences

Total benefits and expenses 2,280 1,959 6,420 5,871

Income Before Income Taxes 386 666 1,339 934

Provision for Income Taxes

Income (Loss) Before Income Taxes 1,040 ( 148 ) 2,379 786

Provision (Benefit) for Income Taxes

Current 171 57 293 124

Deferred 49 ( 106 ) 199 2

Total provision for income taxes 74 132 272 175

Net Income $ 312 $ 534 $ 1,067 $ 759

Total provision (benefit) for income taxes 220 ( 49 ) 492 126

Net Income (Loss) $ 820 $ ( 99 ) $ 1,887 $ 660

Per Common Share

Net income — basic $ 1.99 $ 3.40 $ 6.82 $ 4.83

Net income — diluted 1.98 3.38 6.77 4.80

Net income (loss) — basic $ 5.25 $ ( 0.63 ) $ 12.06 $ 4.20

Net income (loss) — diluted 5.20 ( 0.63 ) 11.97 4.17

Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

Cincinnati Financial Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Net Income $ 312 $ 534 $ 1,067 $ 759

Net Income (Loss) $ 820 $ ( 99 ) $ 1,887 $ 660

Other Comprehensive Income (Loss)

4 unchanged sentences

( 71 ) 89 ( 5 ) 76

Other comprehensive loss ( 28 ) ( 99 ) ( 35 ) ( 12 )

Comprehensive Income $ 284 $ 435 $ 1,032 $ 747

Other comprehensive income (loss) 320 ( 201 ) 285 ( 213 )

Comprehensive Income (Loss) $ 1,140 $ ( 300 ) $ 2,172 $ 447

Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

Cincinnati Financial Corporation and Subsidiaries

Condensed Consolidated Statements of Shareholders' Equity

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

10 unchanged sentences

Beginning of period 13,897 12,235 13,084 11,711

Net income 312 534 1,067 759

Net income (loss) 820 ( 99 ) 1,887 660

Dividends declared ( 126 ) ( 118 ) ( 380 ) ( 353 )

2 unchanged sentences

Beginning of period ( 470 ) ( 626 ) ( 435 ) ( 614 )

Other comprehensive loss ( 28 ) ( 99 ) ( 35 ) ( 12 )

Other comprehensive income (loss) 320 ( 201 ) 285 ( 213 )

End of period ( 150 ) ( 827 ) ( 150 ) ( 827 )

2 unchanged sentences

Share-based awards 3 1 15 8

Shares acquired - share repurchase authorization ( 46 ) ( 42 ) ( 121 ) ( 67 )

Shares acquired - share-based compensation plans ( 12 ) — ( 19 ) ( 3 )

Shares acquired - share repurchase

authorization — — ( 121 ) ( 67 )

Shares acquired - share-based

compensation plans ( 7 ) ( 2 ) ( 26 ) ( 5 )

Other 1 1 1 2

5 unchanged sentences

Share-based awards 0.1 — 0.5 0.3

Shares acquired - share repurchase authorization ( 0.4 ) ( 0.4 ) ( 1.1 ) ( 0.6 )

Shares acquired - share-based compensation plans — — ( 0.1 ) —

Shares acquired - share repurchase

authorization — — ( 1.1 ) ( 0.6 )

Shares acquired - share-based

compensation plans ( 0.1 ) — ( 0.2 ) —

Other 0.1 0.1 0.1 0.1

End of period 156.3 156.9 156.3 156.9

1 unchanged sentence

Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

Cincinnati Financial Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in millions) Six months ended June 30,

(Dollars in millions) Nine months ended September 30,

Cash Flows From Operating Activities

43 unchanged sentences

Accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6 unchanged sentences

Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been condensed or omitted.

Our June 30, 2024, condensed consolidated financial statements are unaudited.

Our September 30, 2024, condensed consolidated financial statements are unaudited.

We believe that we have made all adjustments, consisting only of normal recurring accruals, that are necessary for fair presentation.

18 unchanged sentences

The ASU has not yet been adopted and will not have a material impact on our company’s consolidated financial position, results of operations or cash flows, but the ASU will require additional disclosures in our annual financial statements .

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

NOTE 2 – Investments

2 unchanged sentences

cost Gross unrealized Fair value

At June 30, 2024 gains losses

At September 30, 2024 gains losses

Fixed-maturity securities:

15 unchanged sentences

Total $ 14,361 $ 117 $ 687 $ 13,791

The increase in net unrealized investment losses in our fixed-maturity portfolio at June 30, 2024, is primarily due to an increase in U.S.

Treasury yields.

Our asset-backed securities had an average rating of Aa3/AA- at both June 30, 2024, and December 31, 2023.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

The decrease in net unrealized investment losses in our fixed-maturity portfolio at September 30, 2024, is primarily due to a decrease in U.S.

Treasury yields and a tightening of corporate credit spreads as well as realized losses on sales of some lower-yielding fixed maturities.

Our asset-backed securities had an average rating of Aa2/AA- and Aa3/AA- at September 30, 2024, and December 31, 2023, respectively.

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

The table below provides fair values and gross unrealized losses by investment category and by the duration of the securities' continuous unrealized loss positions:

(Dollars in millions) Less than 12 months 12 months or more Total

At June 30, 2024 Fair

At September 30, 2024 Fair

value Unrealized

21 unchanged sentences

value % of fair

At June 30, 2024

At September 30, 2024

Maturity dates:

5 unchanged sentences

Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

The following table provides investment income and investment gains and losses, net:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

19 unchanged sentences

Total $ 758 $ ( 456 ) $ 1,507 $ 84

The fair value of our equity portfolio was $ 11.634 billion and $ 10.989 billion at June 30, 2024, and December 31, 2023, respectively.

Microsoft Corporation (Nasdaq:MSFT), an equity holding, was our largest single investment holding with a fair value of $ 1.001 billion and $ 842 million, which was 8.9 % and 7.9 % of our publicly traded common equities portfolio and 3.8 % and 3.4 % of the total investment portfolio at June 30, 2024, and December 31, 2023, respectively.

The allowance for credit losses on fixed-maturity securities was $ 43 million and $ 18 million at June 30, 2024, and December 31, 2023, respectively.

There were 3,784 and 2,840 fixed-maturity securities in a total unrealized loss position of $ 767 million and $ 687 million at June 30, 2024, and December 31, 2023, respectively.

Of those totals, 16 and 20 fixed-maturity securities had fair values below 70 % of amortized cost at June 30, 2024, and December 31, 2023, respectively.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

The fair value of our equity portfolio was $ 11.570 billion and $ 10.989 billion at September 30, 2024, and December 31, 2023, respectively.

(Nasdaq:AAPL) and Microsoft Corporation (Nasdaq:MSFT), equity holdings, were our largest single investment holdings with a fair value of $ 885 million and $ 842 million, which was 7.9 % and 7.9 % of our publicly traded common equities portfolio and 3.2 % and 3.4 % of the total investment portfolio at September 30, 2024, and December 31, 2023, respectively.

The allowance for credit losses on fixed-maturity securities was $ 39 million and $ 18 million at September 30, 2024, and December 31, 2023, respectively.

There were 2,495 and 2,840 fixed-maturity securities in a total unrealized loss position of $ 404 million and $ 687 million at September 30, 2024, and December 31, 2023, respectively.

Of those totals, 5 and 20 fixed-maturity securities had fair values below 70 % of amortized cost at September 30, 2024, and December 31, 2023, respectively.

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

NOTE 3 – Fair Value Measurements

5 unchanged sentences

Fair Value Disclosures for Assets

The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at June 30, 2024, and December 31, 2023.

The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at September 30, 2024, and December 31, 2023.

We do not have any liabilities carried at fair value.

(Dollars in millions) Level 1 Level 2 Level 3 Total

At June 30, 2024

At September 30, 2024

Fixed maturities, available for sale:

27 unchanged sentences

Total $ 10,908 $ 14,793 $ — $ 25,701

We also held Level 1 cash and cash equivalents of $ 771 million and $ 907 million at June 30, 2024, and December 31, 2023, respectively.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

We also held Level 1 cash and cash equivalents of $ 1.752 billion and $ 907 million at September 30, 2024, and December 31, 2023, respectively.

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

Fair Value Disclosures for Assets and Liabilities Not Carried at Fair Value

2 unchanged sentences

(Dollars in millions) Book value Principal amount

issue June 30, December 31, June 30, December 31,

issue September 30, December 31, September 30, December 31,

2024 2023 2024 2023

5 unchanged sentences

(Dollars in millions) Level 1 Level 2 Level 3 Total

At June 30, 2024

At September 30, 2024

Note payable $ — $ 25 $ — $ 25

11 unchanged sentences

(Dollars in millions) Level 1 Level 2 Level 3 Total

At June 30, 2024

At September 30, 2024

Life policy loans $ — $ — $ 41 $ 41

7 unchanged sentences

Total $ — $ 141 $ 603 $ 744

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Outstanding principal and interest for these life policy loans totaled $ 35 million and $ 33 million at June 30, 2024, and December 31, 2023, respectively.

Recorded reserves for the deferred annuities were $ 618 million and $ 656 million at June 30, 2024, and December 31, 2023, respectively.

Recorded reserves for the structured settlements were $ 119 million and $ 123 million at June 30, 2024, and December 31, 2023, respectively.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

Outstanding principal and interest for these life policy loans totaled $ 35 million and $ 33 million at September 30, 2024, and December 31, 2023, respectively.

Recorded reserves for the deferred annuities were $ 605 million and $ 656 million at September 30, 2024, and December 31, 2023, respectively.

Recorded reserves for the structured settlements were $ 118 million and $ 123 million at September 30, 2024, and December 31, 2023, respectively.

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

NOTE 4 – Property Casualty Loss and Loss Expenses

This table summarizes activity for our consolidated property casualty loss and loss expense reserves:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

18 unchanged sentences

This uncertainty, together with the size of our reserves, makes the loss and loss expense reserves our most significant estimate.

The reserve for loss and loss expenses in the condensed consolidated balance sheets also included $ 61 million and $ 66 million at June 30, 2024, and 2023, respectively, for certain life and health loss and loss expense reserves.

We experienced $ 40 million of favorable development on prior accident years, including $ 29 million of favorable development in commercial lines, $ 6 million of unfavorable development in personal lines and $ 3 million of unfavorable development in excess and surplus lines for the three months ended June 30, 2024.

Within commercial lines, we recognized favorable reserve development of $ 28 million for the workers' compensation line and $ 21 million for the commercial property line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines.

This was partially offset by unfavorable reserve development of $ 28 million for the commercial casualty line.

Within personal lines, we recognized unfavorable reserve development of $ 12 million for the personal auto line.

We experienced $ 140 million of favorable development on prior accident years, including $ 67 million of favorable development in commercial lines, $ 27 million of favorable development in personal lines and no net development in excess and surplus lines for the six months ended June 30, 2024.

The reserve for loss and loss expenses in the condensed consolidated balance sheets also included $ 62 million and $ 72 million at September 30, 2024, and 2023, respectively, for certain life and health loss and loss expense reserves.

We experienced $ 71 million of favorable development on prior accident years, including $ 50 million of favorable development in commercial lines, less than $ 1 million of unfavorable development in personal lines and $ 5 million of unfavorable development in excess and surplus lines for the three months ended September 30, 2024.

Within commercial lines, we recognized favorable reserve development of $ 33 million for the commercial property line and $ 16 million for the workers' compensation line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines.

We experienced $ 211 million of favorable development on prior accident years, including $ 117 million of favorable development in commercial lines, $ 27 million of favorable development in personal lines and $ 5 million of unfavorable development in excess and surplus lines for the nine months ended September 30, 2024.

Within commercial lines, we recognized favorable reserve development of $ 76 million for the commercial property line, $ 56 million for the workers' compensation line and $ 10 million for the commercial auto line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines.

1 unchanged sentence

Within personal lines, we recognized favorable reserve development of $ 37 million for the homeowner line.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

We experienced $ 101 million of favorable development on prior accident years, including $ 59 million of favorable development in commercial lines, $ 15 million of favorable development in personal lines and $ 5 million of favorable development in excess and surplus lines for the three months ended June 30, 2023.

Within commercial lines, we recognized favorable reserve development of $ 34 million for the commercial casualty line and $ 11 million for the workers' compensation line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines.

We experienced $ 160 million of favorable development on prior accident years, including $ 91 million of favorable development in commercial lines, $ 46 million of favorable development in personal lines and $ 14 million of favorable development in excess and surplus lines for the six months ended June 30, 2023.

Within commercial lines, we recognized favorable reserve development of $ 36 million for the commercial casualty line, $ 26 million for the workers' compensation line and $ 25 million for the commercial property line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines.

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

We experienced $ 53 million of favorable development on prior accident years, including $ 34 million of favorable development in commercial lines, $ 8 million of favorable development in personal lines and no net development in excess and surplus lines for the three months ended September 30, 2023.

Within commercial lines, we recognized favorable reserve development of $ 20 million for the workers' compensation line and $ 11 million for the commercial property line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines.

We experienced $ 213 million of favorable development on prior accident years, including $ 125 million of favorable development in commercial lines, $ 54 million of favorable development in personal lines and $ 14 million of favorable development in excess and surplus lines for the nine months ended September 30, 2023.

Within commercial lines, we recognized favorable reserve development of $ 46 million for the workers' compensation line and $ 36 million for both the commercial property and commercial casualty lines due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines.

Within personal lines, we recognized favorable reserve development of $ 44 million for the homeowner line and $ 12 million for the personal auto line.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

NOTE 5 – Life Policy and Investment Contract Reserves

12 unchanged sentences

The following table summarizes our life policy and investment contract reserves and provides a reconciliation of the balances described in the below tables to those in the condensed consolidated balance sheets:

(Dollars in millions) June 30,

2024 December 31,

(Dollars in millions) September 30, 2024 December 31, 2023

Life policy reserves:

9 unchanged sentences

Total life policy and investment contract reserves $ 3,069 $ 3,068

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

The balances and changes in the term and whole life policy reserves included in life policy and investment contract reserves is as follows:

(Dollars in millions) Three months ended June 30,

(Dollars in millions) Three months ended September 30,

Term Whole life Term Whole life

31 unchanged sentences

Weighted-average duration of the net life policy reserves in years 11 16 11 16

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

(Dollars in millions) Six months ended June 30,

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

(Dollars in millions) Nine months ended September 30,

Term Whole life Term Whole life

31 unchanged sentences

Weighted-average duration of the net life policy reserves in years 11 16 11 16

The total impact of flooring at cohort level in the above tables includes the effect of discount rate assumption change s of $ 3 million at both June 30, 2024 and 2023.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

The total impact of flooring at cohort level in the above tables includes the effect of discount rate assumption change s of $ 3 million and $ 5 million at September 30, 2024 and 2023, respectively.

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

The following table shows the amount of undiscounted and discounted expected future benefit payments and expected gross premiums for our term and whole life policies:

(Dollars in millions) At June 30,

(Dollars in millions) At September 30,

Undiscounted Discounted Undiscounted Discounted

4 unchanged sentences

The following table shows the amount of revenue and interest recognized in the condensed consolidated statements of income related to our term and whole life policies:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

7 unchanged sentences

Total $ 18 $ 18 $ 55 $ 53

Adverse development that resulted in an immediate charge to income due to net premiums exceeding gross premiums w as immaterial for the six months ended June 30, 2024, and 2023 .

Adverse development that resulted in an immediate charge to income due to net premiums exceeding gross premiums w as immaterial for the nine months ended September 30, 2024, and 2023 .

The following table shows the weighted-average interest rate for our term and whole life products :

At September 30,

Interest accretion rate 5.21 % 5.29 %

3 unchanged sentences

The discount rate assumption was developed by calculating forward rates from market yield curves of upper-medium grade fixed-income instruments.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

The following table shows the balances and changes in policyholders' account balances included in investment contract reserves:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

13 unchanged sentences

(Dollars in millions) At guaranteed minimum 1 to 50 basis points above 51-150 basis points above Greater than 150 basis points Total

At June 30, 2024

At September 30, 2024

Deferred annuity

7 unchanged sentences

Total $ 328 $ 55 $ 68 $ 5 $ 456

At June 30, 2023

At September 30, 2023

Deferred annuity

7 unchanged sentences

Total $ 396 $ — $ 57 $ 3 $ 456

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

The following table shows the balances and changes in the other additional liability related to the no-lapse guarantees contained within our universal life contracts:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

15 unchanged sentences

The following table shows balances and changes in separate accounts balances during the period:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

5 unchanged sentences

Cash surrender value $ 941 $ 912 $ 941 $ 912

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

NOTE 6 – Deferred Policy Acquisition Costs

4 unchanged sentences

The table below shows the deferred policy acquisition costs and asset reconciliation.

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

13 unchanged sentences

Deferred policy acquisition costs asset, end of period $ 1,241 $ 1,101 $ 1,241 $ 1,101

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

The table below shows the life deferred policy acquisition costs asset by product:

(Dollars in millions)

Three months ended June 30, 2024 Term Whole life Deferred annuity Universal life Total

Three months ended September 30, 2024 Term Whole life Deferred annuity Universal life Total

Balance, beginning of period $ 241 $ 50 $ 8 $ 52 $ 351

2 unchanged sentences

Balance, end of period $ 243 $ 51 $ 8 $ 52 $ 354

Three months ended June 30, 2023

Three months ended September 30, 2023

Balance, beginning of period $ 233 $ 45 $ 8 $ 52 $ 338

3 unchanged sentences

(Dollars in millions)

Six months ended June 30, 2024 Term Whole life Deferred annuity Universal life Total

Nine months ended September 30, 2024 Term Whole life Deferred annuity Universal life Total

Balance, beginning of period $ 236 $ 48 $ 8 $ 52 $ 344

2 unchanged sentences

Balance, end of period $ 243 $ 51 $ 8 $ 52 $ 354

Six months ended June 30, 2023

Nine months ended September 30, 2023

Balance, beginning of period $ 228 $ 43 $ 7 $ 53 $ 331

2 unchanged sentences

Balance, end of period $ 234 $ 47 $ 8 $ 52 $ 341

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

NOTE 7 – Accumulated Other Comprehensive Income

Accumulated other comprehensive income (AOCI) includes changes in unrealized gains and losses on investments, changes in pension obligations and changes in life policy reserves, reinsurance recoverable and other as follows:

(Dollars in millions) Three months ended June 30,

(Dollars in millions) Three months ended September 30,

Before tax Income tax Net Before tax Income tax Net

23 unchanged sentences

AOCI, end of period $ ( 192 ) $ ( 42 ) $ ( 150 ) $ ( 1,054 ) $ ( 227 ) $ ( 827 )

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

(Dollars in millions) Six months ended June 30,

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

(Dollars in millions) Nine months ended September 30,

Before tax Income tax Net Before tax Income tax Net

25 unchanged sentences

Amortization of pension obligations is recorded in the insurance losses and contract holders' benefits and underwriting, acquisition and insurance expenses line items in the condensed consolidated statements of income.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

NOTE 8 – Reinsurance

3 unchanged sentences

The table below summarizes our consolidated property casualty insurance net written premiums, earned premiums and incurred loss and loss expenses:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

13 unchanged sentences

Primary components of our life reinsurance program include individual mortality coverage, aggregate catastrophe and accidental death coverage in excess of certain deductibles.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

The table below summarizes our consolidated life insurance earned premiums and contract holders' benefits incurred:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

6 unchanged sentences

The ceded benefits incurred can vary depending on the type of life insurance policy held and the year the policy was issued.

The allowance for uncollectible property casualty premiums was $ 18 million and $ 16 million at June 30, 2024, and December 31, 2023, respectively.

The allowances for credit losses on other premiums receivable and reinsurance recoverable assets were immaterial at June 30, 2024, and December 31, 2023.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

The allowance for uncollectible property casualty premiums was $ 17 million and $ 16 million at September 30, 2024, and December 31, 2023, respectively.

The allowances for credit losses on other premiums receivable and reinsurance recoverable assets were immaterial at September 30, 2024, and December 31, 2023.

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

NOTE 9 – Income Taxes

The differences between the 21 % statutory federal income tax rate and our effective income tax rate were as follows:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

5 unchanged sentences

Other 12 1.3 ( 8 ) 5.3 24 1.1 ( 8 ) ( 1.1 )

Provision for income taxes $ 74 19.2 % $ 132 19.8 % $ 272 20.3 % $ 175 18.7 %

The provision for federal income taxes is based upon filing a consolidated income tax return for the company and its domestic subsidiaries.

Provision (benefit) for income taxes $ 220 21.2 % $ ( 49 ) 33.1 % $ 492 20.7 % $ 126 16.0 %

The provision (benefit) for federal income taxes is based upon filing a consolidated income tax return for the company and its domestic subsidiaries.

We continue to believe that after considering all positive and negative evidence of taxable income in the carryback and carryforward periods as permitted by law, it is more likely than not that all of the deferred tax assets on our U.S.

2 unchanged sentences

As a result, we have no valuation allowance for our U.S.

domestic operations or Cincinnati Global at both June 30, 2024, and December 31, 2023.

domestic operations or Cincinnati Global at both September 30, 2024, and December 31, 2023.

During the third quarter of 2024, we were notified by the Internal Revenue Service (IRS) that the audit of tax years ended December 31, 2021 and 2020, has concluded.

Despite this, the statute of limitations remains open through September of 2025.

Cincinnati Global

Cincinnati Global had no operating loss carryforwards in the United States and $ 85 million and $ 100 million in the United Kingdom at June 30, 2024, and December 31, 2023, respectively.

Cincinnati Global had no operating loss carryforwards in the United States and $ 85 million and $ 100 million in the United Kingdom at September 30, 2024, and December 31, 2023, respectively.

These Cincinnati Global losses can only be utilized within the Cincinnati Global group.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

NOTE 10 – Net Income Per Common Share

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

NOTE 10 – Net Income (Loss) Per Common Share

Basic earnings per share are computed based on the weighted average number of common shares outstanding.

1 unchanged sentence

The table shows calculations for basic and diluted earnings per share:

(In millions, except per share data) Three months ended June 30, Six months ended June 30,

(In millions, except per share data) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Net income—basic and diluted

Net income (loss)—basic and diluted

$ 820 $ ( 99 ) $ 1,887 $ 660

Basic weighted-average common shares outstanding 156.3 157.0 156.6 157.1

Basic weighted-average common shares

outstanding 156.2 156.9 156.5 157.0

Effect of share-based awards:

2 unchanged sentences

Diluted weighted-average shares 157.7 156.9 157.7 158.2

Earnings per share:

Earnings (loss) per share:

Basic $ 5.25 $ ( 0.63 ) $ 12.06 $ 4.20

3 unchanged sentences

See our 2023 Annual Report on Form 10-K, Item 8, Note 17, Share-Based Associate Compensation Plans, Page 177, for information about share-based awards.

The above table shows the number of anti-dilutive share-based awards for the three and six months ended June 30, 2024 and 2023.

The above table shows the number of anti-dilutive share-based awards for the three and nine months ended September 30, 2024 and 2023.

In accordance with Accounting Standards Codification 260, Earnings per Share , the assumed exercise of share-based awards was excluded from the computation of diluted loss per share for the three months ended September 30, 2023 because their exercise would have anti-dilutive effects.

NOTE 11 – Employee Retirement Benefits

The following summarizes the components of net periodic benefit for our qualified and supplemental pension plans:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

10 unchanged sentences

The net periodic benefit is allocated in the same proportion primarily to the underwriting, acquisition and insurance expenses line item with the remainder allocated to the insurance losses and contract holders' benefits line item on the condensed consolidated statements of income for both 2024 and 2023.

We made matching contributions totaling $ 7 million and $ 6 million to our 401(k) and Top Hat savings plans during the second quarter of 2024 and 2023, respectively, and contributions of $ 16 million and $ 14 million for the first half of 2024 and 2023, respectively.

We made no contributions to our qualified pension plan during the first six months of 2024.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

We made matching contributions totaling $ 7 million and $ 6 million to our 401(k) and Top Hat savings plans during the third quarter of 2024 and 2023, respectively, and contributions of $ 23 million and $ 20 million for the first nine months of 2024 and 2023, respectively.

We made no contributions to our qualified pension plan during the first nine months of 2024.

NOTE 12 – Commitments and Contingent Liabilities

2 unchanged sentences

Subject to the uncertainties discussed in Note 4, Property Casualty Loss and Loss Expenses, and in the discussion in the balance of this Note, we believe that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses, costs of defense, and reinsurance recoveries, is immaterial to our consolidated financial position, results of operations and cash flows.

Beginning in April 2020, like many companies in the property casualty insurance industry, the company’s property casualty subsidiaries were named as defendants in lawsuits seeking insurance coverage under commercial property insurance policies issued by the company for alleged losses resulting from the shutdown or suspension of their businesses due to the COVID-19 pandemic.

Although the allegations vary, the plaintiffs generally seek a declaration of insurance coverage, damages for breach of contract in unspecified amounts for claim denials, interest and attorney fees.

Some of the lawsuits also allege that the insurance claims were denied in bad faith or otherwise in violation of state laws and seek extra-contractual or punitive damages.

The company denies the allegations in these lawsuits and continues to vigorously defend them.

The company maintains that it has no coverage obligations with respect to these lawsuits for business income allegedly lost by the plaintiffs due to the COVID-19 pandemic based on the terms of the applicable insurance policies.

Although the policy terms vary, in general, the claims at issue in these lawsuits were denied because the policyholder identified no direct physical loss or damage to property at the insured premises, and the governmental orders that led to the complete or partial shutdown of the business were not due to the existence of any direct physical loss or damage to property in the immediate vicinity of the insured premises and did not prohibit access to the insured premises, as required by the terms of the insurance policies.

Depending on the individual policy, additional policy terms and conditions may also prohibit coverage, such as exclusions for pollutants, ordinance or law, loss of use, and acts or decisions.

The company’s standard commercial property insurance policies generally did not contain a specific virus exclusion.

In addition to the inherent difficulty in predicting litigation outcomes, the COVID-19 pandemic business income coverage lawsuits present a number of uncertainties and contingencies that are not yet known, including how many policyholders will ultimately file claims, the extent to which any class may be certified, and the size and scope of any such classes.

The legal theories advanced by plaintiffs vary by case as do the state laws that govern the policy interpretation.

Most of these lawsuits have been dismissed, both by courts and by plaintiffs, but some have been appealed and a few others remain pending in trial courts.

Appellate decisions issued to date generally have been favorable for the insurance industry, and the company has received numerous favorable rulings on appeal with no adverse appellate rulings to date.

Some cases remain to be decided and in some jurisdictions, cases have been stayed pending appellate decisions in their state or federal circuit.

Accordingly, little discovery has occurred on pending cases.

In addition, business income calculations depend upon a wide range of factors that are particular to the circumstances of each individual policyholder and, here, virtually none of the plaintiffs have submitted proofs of loss or otherwise quantified or factually supported any allegedly covered loss.

Moreover, the company’s experience shows that demands for damages often bear little relation to a reasonable estimate of potential loss.

Accordingly, management cannot now reasonably estimate the possible loss or range of loss, if any.

Nonetheless, given the number of claims and potential claims, the indeterminate amounts sought, and the inherent unpredictability of litigation, it is possible that adverse outcomes, if any, in the aggregate could have a material adverse effect on the company’s consolidated financial position, results of operations and cash flows.

The company and its subsidiaries also are occasionally involved in other legal and regulatory proceedings, some of which assert claims for substantial amounts.

2 unchanged sentences

The company’s insurance subsidiaries also are occasionally parties to individual actions in which extra-contractual damages, punitive damages or penalties are sought, such as claims alleging bad faith handling of insurance claims or writing unauthorized coverage or claims alleging discrimination by former or current associates.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

On a quarterly basis, we review these outstanding matters.

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See our 2023 Annual Report on Form 10-K, Item 8, Note 18, Segment Information, Page 180, for a description of revenue, income or loss before income taxes and identifiable assets for each of the five segments.

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

Segment information is summarized in the following table:

(Dollars in millions) Three months ended June 30, Six months ended June 30,

(Dollars in millions) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

36 unchanged sentences

Other 26 30 95 71

Total income before income taxes $ 386 $ 666 $ 1,339 $ 934

Total income (loss) before income taxes $ 1,040 $ ( 148 ) $ 2,379 $ 786

Identifiable assets:

September 30,

2024 December 31,

4 unchanged sentences

Total $ 37,009 $ 32,769

Cincinnati Financial Corporation Second-Quarter 2024 10-Q

Cincinnati Financial Corporation Third-Quarter 2024 10-Q

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements