What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-28 compared with 2025-04-28 · 358 added, 306 removed, 602 unchanged (52% of the section changed)

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SAFE HARBOR STATEMENT

This is our “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995.

Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by the forward-looking statements in this report.

Some of those risks and uncertainties are discussed in our 2024 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 30.

Factors that could cause or contribute to such differences include, but are not limited to:

• Effects of any future pandemic that could affect results for reasons such as:

Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by forward-looking statements.

Any forward-looking statements contained herein, are based upon our current estimates, assumptions and plans that are subject to uncertainty.

These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements can be identified by words like “seek,” “expect,” “will,” “should,” “could,” “might,” “anticipate,” “believe,” “estimate,” “intend,” “likely,” “future,” or other similar expressions.

Forward-looking statements speak only as of the date they were made;

we assume no obligation to update such statements.

Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements include, but are not limited to:

Insurance-Related Risks

• Risks and uncertainties associated with our loss reserves or actual claim costs exceeding reserves

• Increased frequency and/or severity of claims or development of claims that are unforeseen at the time of policy issuance

• Unusually high levels of catastrophe losses due to risk concentrations or changes in weather patterns, environmental events, war or political unrest, terrorism incidents, cyberattacks, civil unrest or other causes;

and our ability to manage catastrophe risk

• Risks associated with analytical models in key areas such as underwriting, pricing, capital management, reserving, investments, reinsurance, and catastrophe risk management

• Inadequate estimates or assumptions, or reliance on third-party data used for critical accounting estimates

• Events or conditions that could weaken or harm our relationships with our independent agencies and hamper opportunities to add new agencies, resulting in limitations on our opportunities for growth

• Mergers, acquisitions, and other consolidations of agencies that result in a concentration of a significant amount of premium in one agency or agency group and/or alter our competitive advantages

• Our inability to manage business opportunities, growth prospects, and expenses for our ongoing operations

• Changing consumer insurance-buying habits

• The inability to obtain adequate ceded reinsurance on acceptable terms, for acceptable amounts, and from financially strong reinsurers;

and the potential for nonpayment or delay in payment by reinsurers

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

• Domestic and global events, such as the wars in Ukraine and in the Middle East, future pandemics, inflationary trends, changes in U.S.

trade and tariff policy, and disruptions in the banking and financial services industry, resulting in insurance losses, capital market or credit market uncertainty, followed by prolonged periods of economic instability or recession, that lead to:

◦ Securities market disruption or volatility and related effects such as decreased economic activity and continued supply chain disruptions that affect our investment portfolio and book value

◦ Significant or prolonged decline in the fair value of securities and impairment of the assets

◦ Significant decline in investment income due to reduced or eliminated dividend payouts from securities

◦ Significant rise in losses from surety or director and officer policies written for financial institutions or other insured entities or in losses from policies written by Cincinnati Re or Cincinnati Global

◦ An unusually high level of claims in our insurance or reinsurance operations that increase litigation-related expenses

• An unusually high level of insurance losses, including risk of court decisions extending business interruption insurance in commercial property coverage forms to cover claims for pure economic loss related to such pandemic

◦ Decreased premium revenue and cash flow from disruption to our distribution channel of independent agents, consumer self-isolation, travel limitations, business restrictions and decreased economic activity

• Inability of our workforce, agencies or vendors to perform necessary business functions

• Unusually high levels of catastrophe losses due to risk concentrations, changes in weather patterns (whether as a result of climate change or otherwise), environmental events, war or political unrest, terrorism incidents, cyberattacks, civil unrest or other causes and our ability to manage catastrophe risk due to inaccurate catastrophe models or incomplete data

• Increased frequency and/or severity of claims or development of claims that are unforeseen at the time of policy issuance, due to inflationary trends or other causes

• Inadequate estimates or assumptions, or reliance on third-party data used for critical accounting estimates

◦ The inability of our workforce, agencies, or vendors to perform necessary business functions

Financial, Economic, and Investment Risks

• Declines in overall stock market values negatively affecting our equity portfolio and book value

• Downgrades in our financial strength ratings

• Interest rate fluctuations or other factors that could significantly affect:

Cincinnati Financial Corporation First-Quarter 2025 10-Q

◦ Our ability to generate growth in investment income

• Values of our fixed-maturity investments, including accounts in which we hold bank-owned life insurance contract assets

◦ Values of our fixed-maturity investments and accounts in which we hold bank-owned life insurance contract assets

◦ Our traditional life policy reserves

• Domestic and global events, such as the wars in Ukraine and in the Middle East, recent tariff and trade policy announcements, and disruptions in the banking and financial services industry, resulting in insurance losses, capital market or credit market uncertainty, followed by prolonged periods of economic instability or recession, that lead to:

• Significant or prolonged decline in the fair value of a particular security or group of securities and impairment of the asset(s)

• Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities

• Significant rise in losses from surety or director and officer policies written for financial institutions or other insured entities or in losses from policies written by Cincinnati Re or Cincinnati Global

• Our inability to manage business opportunities, growth prospects, and expenses for our ongoing operations

• Economic volatility and illiquidity associated with our alternative investments in private equity, private credit, real property, and limited partnerships

• Failure to comply with covenants and other requirements under our credit facilities, senior debt, and other debt obligations

• Recession, prolonged elevated inflation, or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies

• Ineffective information technology systems or discontinuing to develop and implement improvements in technology may impact our success and profitability

• Difficulties with technology or data security breaches, including cyberattacks, that could negatively affect our or our agents’ ability to conduct business;

• The inability of our subsidiaries to pay dividends consistent with current or past levels impacting our ability to pay shareholder dividends or repurchase shares

General Business, Technology, and Operational Risks

• Ineffective information technology systems or failing to develop and implement improvements in technology

• Difficulties with technology or data security breaches, including cyberattacks, could negatively affect our, or our agents’, ability to conduct business;

disrupt our relationships with agents, policyholders, and others;

cause reputational damage, mitigation expenses and data loss and expose us to liability

• Difficulties with our operations and technology that may negatively impact our ability to conduct business, including cloud-based data information storage, data security, cyberattacks, remote working capabilities, and/or outsourcing relationships and third-party operations and data security

cause reputational damage, mitigation expenses, data loss, and expose us to liability

• Difficulties with our operations and technology that may negatively impact our ability to conduct business, including cloud-based data information storage, data security, remote working capabilities, and/or outsourcing relationships and third-party operations and data security

• Disruption of the insurance market caused by technology innovations - such as driverless cars - that could decrease consumer demand for insurance products

• Delays, inadequate data developed internally or from third parties, or performance inadequacies from ongoing development and implementation of underwriting and pricing methods, including telematics and other usage-based insurance methods, or technology projects and enhancements expected to increase our pricing accuracy, underwriting profit and competitiveness

• Intense competition, and the impact of innovation, artificial intelligence and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and profitability

• Changing consumer insurance-buying habits

• Mergers, acquisitions and other consolidations of agencies that result in a concentration of a significant amount of premium in one agency or agency group and/or alter our competitive advantages

• Inability to obtain adequate ceded reinsurance on acceptable terms, amount of reinsurance coverage purchased, financial strength of reinsurers and the potential for nonpayment or delay in payment by reinsurers

• Inability to defer policy acquisition costs for any business segment if pricing and loss trends would lead management to conclude that segment could not achieve sustainable profitability

• Inability of our subsidiaries to pay dividends consistent with current or past levels

• Downgrades of our financial strength ratings

• Concerns that doing business with us is too difficult

• Perceptions that our level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace

• Inability or unwillingness to nimbly develop and introduce coverage product updates and innovations that our competitors offer and consumers expect to find in the marketplace

Cincinnati Financial Corporation First-Quarter 2025 10-Q

• Delays, inadequate data developed internally or from third parties, or performance inadequacies from ongoing development and implementation of underwriting and pricing models and methods, including usage-based insurance methods, automation, artificial intelligence, or technology projects and enhancements expected to increase our efficiency, pricing accuracy, underwriting profit, and competitiveness

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

• Intense competition, and the impact of innovation, emerging technologies, artificial intelligence and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and profitability

• Inability to defer policy acquisition costs for any business segment if pricing and loss trends would lead management to conclude that the segment could not achieve sustainable profitability

• Unforeseen departure of certain executive officers or other key employees that could interrupt progress toward important strategic goals or diminish the effectiveness of certain longstanding relationships with insurance agents and others

• Our inability, or the inability of our independent agents, to attract and retain personnel

• Events, such as a pandemic, an epidemic, natural catastrophe, or terrorism, which could hamper our ability to assemble our workforce, work effectively in a remote environment, or other failures of business continuity or disaster recovery programs

Regulatory, Compliance, and Legal Risks

• Actions of insurance departments, state attorneys general or other regulatory agencies, including a change to a federal system of regulation from a state-based system, that:

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◦ Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business

• Add assessments for guaranty funds, other insurance‑related assessments or mandatory reinsurance arrangements;

◦ Increase assessments for guaranty funds, other insurance‑related assessments, or mandatory reinsurance arrangements;

or that impair our ability to recover such assessments through future surcharges or other rate changes

• Increase our provision for federal income taxes due to changes in tax law

• Increase our other expenses

◦ Increase our provision for federal income taxes due to changes in tax laws, regulations, or interpretations

◦ Increase other expenses

◦ Limit our ability to set fair, adequate, and reasonable rates

◦ Restrict our ability to cancel policies

◦ Impose new underwriting standards

◦ Place us at a disadvantage in the marketplace

◦ Restrict our ability to execute our business model, including the way we compensate agents

• Adverse outcomes from litigation or administrative proceedings, including effects of social inflation and third-party litigation funding on the size of litigation awards

• Events or actions, including unauthorized intentional circumvention of controls, that reduce our future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002

• Unforeseen departure of certain executive officers or other key employees due to retirement, health or other causes that could interrupt progress toward important strategic goals or diminish the effectiveness of certain longstanding relationships with insurance agents and others

• Our inability, or the inability of our independent agents, to attract and retain personnel in a competitive labor market

• Events, such as an epidemic, natural catastrophe or terrorism, that could hamper our ability to assemble our workforce at our headquarters location or work effectively in a remote environment

Further, our insurance businesses are subject to the effects of changing social, global, economic and regulatory environments.

Public and regulatory initiatives have included efforts to adversely influence and restrict premium rates, restrict the ability to cancel policies, impose underwriting standards and expand overall regulation.

We also are subject to public and regulatory initiatives that can affect the market value for our common stock, such as measures affecting corporate financial reporting and governance.

The ultimate changes and eventual effects, if any, of these initiatives are uncertain.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

• Adverse outcomes from litigation, environmental claims, mass torts or administrative proceedings, including effects of social inflation and third-party litigation funding on the size and frequency of litigation awards

• Events or actions, including unauthorized intentional circumvention of controls, which reduce our future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002

• Effects of changing social, global, economic, and regulatory environments

• Additional measures affecting corporate financial reporting and governance that can affect the market value of our common stock

Risks and uncertainties are further discussed in other filings with the Securities and Exchange Commission, including our 2024 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 30.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

CORPORATE FINANCIAL HIGHLIGHTS

Net Income and Comprehensive Income Data

(Dollars in millions, except per share data) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Earned premiums $ 2,480 $ 2,156 15 $ 4,824 $ 4,227 14

Investment income, net of expenses (pretax) 285 242 18 565 487 16

Investment gains and losses, net (pretax) (67) 612 nm

Investment gains and losses, net (pretax) 473 137 245 406 749 (46)

Total revenues 3,248 2,544 28 5,814 5,479 6

Net income (loss) (90) 755 nm

Comprehensive income (loss) (52) 748 nm

Net income (loss) per share—diluted (0.57) 4.78 nm

Net income 685 312 120 595 1,067 (44)

Comprehensive income 707 284 149 655 1,032 (37)

Net income per share—diluted 4.34 1.98 119 3.77 6.77 (44)

Cash dividends declared per share 0.87 0.81 7 1.74 1.62 7

Diluted weighted average shares outstanding 157.8 157.5 0 157.8 157.7 0

Total revenues decreased $369 million for the first quarter of 2025, compared with the first quarter of 2024, as a reduction in net investment gains offset higher earned premiums and investment income.

Total revenues increased $704 million for the second quarter of 2025, compared with the second quarter of 2024, including higher net investment gains, earned premiums and investment income.

For the first six months of 2025, compared with the same period of 2024, total revenues increased $335 million, primarily due to higher earned premiums and investment income offset by a decrease in net investment gains.

Premium and investment revenue trends are discussed further in the respective sections of Financial Results.

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The change in fair value of securities is also generally independent of the insurance underwriting process.

The net loss for the first quarter of 2025, compared with first-quarter 2024 net income, was a change of $845 million, including decreases of $536 million in after-tax net investment gains and losses and $339 million in after-tax property casualty underwriting profit, partially offset by a $28 million increase in after-tax investment income.

Catastrophe losses for the first quarter of 2025, primarily from January 2025 wildfires in southern California, were $356 million higher after taxes and unfavorably affected both net income and property casualty underwriting profit.

Net income for the second quarter of 2025, compared with the second quarter of 2024, increased $373 million, including increases of $266 million in after-tax net investment gains and losses, $73 million in after-tax property casualty underwriting profit and $34 million in after-tax investment income.

Catastrophe losses for the second quarter of 2025, mostly weather related, were $45 million higher after taxes and unfavorably affected both net income and property casualty underwriting profit.

Life insurance segment results decreased by $3 million on a pretax basis.

For the first six months of 2025, net income decreased $472 million, compared with the first six months of 2024,

including decreases of $270 million in after-tax investment gains and losses and $265 million in after-tax property casualty underwriting income, partially offset by an increase of $62 million in after-tax investment income.

The property casualty underwriting income decrease included an unfavorable $401 million after-tax effect from higher catastrophe losses.

Life insurance segment results decreased by $4 million on a pretax basis.

Performance by segment is discussed below in Financial Results.

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In January 2025, the board of directors increased the regular quarterly dividend to 87 cents per share, setting the stage for our 65 th consecutive year of increasing cash dividends.

During the first three months of 2025, cash dividends declared by the company increased 7% compared with the same period of 2024.

During the first six months of 2025, cash dividends declared by the company increased 7% compared with the same period of 2024.

Our board regularly evaluates relevant factors in decisions related to dividends and share repurchases.

The 2025 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.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

Balance Sheet Data and Performance Measures

(Dollars in millions, except share data) At March 31, At December 31,

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

Total investments $ 29,569 $ 28,378

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Debt-to-total-capital ratio 5.4 % 5.5 %

Total assets at March 31, 2025, increased 2% compared with year-end 2024, and included an increase of less than 1% in total investments that reflected net purchases that were partially offset by lower fair values for many securities in our equity portfolio.

Shareholders' equity decreased 2% and book value per share decreased 1% during the first three months of 2025.

Our debt-to-total-capital ratio (capital is the sum of debt plus shareholders' equity) increased slightly compared with year-end 2024.

Total assets at June 30, 2025, increased 6% compared with year-end 2024, 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 3% and book value per share also increased 3% during the first six months of 2025.

Our debt-to-total-capital ratio (capital is the sum of debt plus shareholders' equity) decreased slightly compared with year-end 2024.

Our value creation ratio is our primary performance metric.

As shown in the tables below, that ratio was negative 0.5% for the first three months of 2025, compared with positive 5.9% for the same period in 2024.

As shown in the tables below, that ratio was 4.6% for the first six months of 2025, compared with 8.2% for the same period in 2024.

The decrease was primarily due to a reduction in overall net gains from our investment portfolio and an underwriting loss from our insurance operations.

Book value per share decreased $1.33 during the first three months of 2025 and contributed negative 1.5 percentage points to the value creation ratio, while dividends declared at $0.87 per share contributed positive 1.0 point.

Book value per share increased $2.35 during the first six months of 2025 and contributed 2.6 percentage points to the value creation ratio, while dividends declared at $1.74 per share contributed 2.0 points.

Value creation ratio major contributors and in total, along with calculations from per-share amounts, are shown in the tables below.

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2025 2024 2025 2024

Value creation ratio major contributors:

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Value creation ratio 5.2 % 2.2 % 4.6 % 8.2 %

Cincinnati Financial Corporation First-Quarter 2025 10-Q

(Dollars are per share) Three months ended March 31,

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

(Dollars are per share) Three months ended June 30, Six months ended June 30,

2025 2024 2025 2024

Value creation ratio:

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We market our insurance products through a select group of independent insurance agencies as discussed in our 2024 Annual Report on Form 10-K, Item 1, Our Business and Our Strategy, Page 6.

At March 31, 2025, we actively marketed through 2,199 agencies located in 46 states.

At June 30, 2025, we actively marketed through 2,258 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.

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• 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 2025, our consolidated property casualty net written premium year-over-year growth was 11%.

For the first six months of 2025, our consolidated property casualty net written premium year-over-year growth was 11%.

As of February 2025, A.M.

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• 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 2025, our GAAP combined ratio was 113.3%, including 26.8 percentage points of current accident year catastrophe losses partially offset by 4.0 percentage points of favorable loss reserve development on prior accident years.

Our statutory combined ratio was 112.3% for the first three months of 2025.

For the first six months of 2025, our GAAP combined ratio was 103.8%, including 19.4 percentage points of current accident year catastrophe losses partially offset by 3.3 percentage points of favorable loss reserve development on prior accident years.

Our statutory combined ratio was 102.6% for the first six months of 2025.

As of February 2025, A.M.

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• 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 2025, pretax investment income was $280 million, up 14% compared with the same period in 2024.

For the first six months of 2025, pretax investment income was $565 million, up 16% compared with the same period in 2024.

We believe our investment portfolio mix provides an appropriate balance of income stability and growth with capital appreciation potential.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

Financial Strength

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Our strong parent-company liquidity and financial strength increase our flexibility to maintain a cash dividend through all periods and to continue to invest in and expand our insurance operations.

At March 31, 2025, we held $5.028 billion of our cash and cash equivalents and invested assets at the parent-company level, of which $4.479 billion, or 89.1%, was invested in common stocks, and $241 million, or 4.8%, was cash or cash equivalents.

Our debt-to-total-capital ratio was 5.6% at March 31, 2025.

Another important indicator of financial strength is our ratio of property casualty net written premiums to statutory surplus, which was 1.1-to-1 for the 12 months ended March 31, 2025, compared with 1.0-to-1 at year-end 2024.

At June 30, 2025, we held $5.094 billion of our cash and cash equivalents and invested assets at the parent-company level, of which $4.719 billion, or 92.6%, was invested in common stocks, and $70 million, or 1.4%, was cash or cash equivalents.

Our debt-to-total-capital ratio was 5.4% at June 30, 2025.

Another important indicator of financial strength is our ratio of property casualty net written premiums to statutory surplus, which was 1.1-to-1 for the 12 months ended June 30, 2025, compared with 1.0-to-1 at year-end 2024.

Financial strength ratings assigned to us by independent rating firms also are important.

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please see each rating agency's website for its most recent report on our ratings.

At April 25, 2025, our insurance subsidiaries continued to be highly rated.

At July 25, 2025, our insurance subsidiaries continued to be highly rated.

Insurer Financial Strength Ratings

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A+ Strong 5 of 21 A+ Strong 5 of 21 - - - Stable

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

CONSOLIDATED PROPERTY CASUALTY INSURANCE HIGHLIGHTS

1 unchanged sentence

SM (Cincinnati Global).

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Earned premiums $ 2,397 $ 2,075 16 $ 4,661 $ 4,067 15

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Combined ratio before catastrophe losses and prior years reserve development 85.1 % 88.2 % (3.1) 87.7 % 89.6 % (1.9)

Our consolidated property casualty insurance operations generated an underwriting loss of $298 million for the first quarter of 2025.

Compared with an underwriting profit of $131 million for the first quarter of 2024, the first-quarter 2025 decrease of $429 million included an unfavorable increase of $450 million in losses from catastrophes, mostly caused by January 2025 wildfires in southern California, and a slightly lower amount of total favorable reserve development on prior accident years.

The change in underwriting profitability for the first quarter of 2025 also included a favorable effect from higher current accident year loss and loss expenses before catastrophe losses that grew slower than earned premiums.

Underwriting results for the first quarter of 2025 included improved current accident year loss experience before catastrophe losses, as price increases have helped to offset recent-year elevated paid losses reflecting economic or other forms of inflation.

Our consolidated property casualty insurance operations generated an underwriting profit of $128 million for the second quarter of 2025 and an underwriting loss of $170 million for the first six months of 2025.

The second-quarter 2025 underwriting profit increase of $93 million, compared with second-quarter 2024, included an unfavorable increase of $57 million in losses from catastrophes, mostly caused by severe weather, and a higher amount of total favorable reserve development on prior accident years.

The change in underwriting profitability for the second quarter of 2025 also included a favorable effect from higher current accident year loss and loss expenses before catastrophe losses that grew slower than earned premiums.

The six-month underwriting loss of $170 million, compared with an underwriting profit of $166 million for the first six months of 2024, included an unfavorable increase of $501 million in current accident year catastrophe losses, mostly caused by the January 2025 wildfires in southern California, partially offset by a higher amount of total favorable reserve development on prior accident years.

For the first six months of 2025, the combined ratio before catastrophe losses and prior years reserve development improved by 1.9 percentage points compared with the same period of 2024.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

Underwriting results for the second quarter and first six months of 2025 included improved current accident year loss experience before catastrophe losses, as price increases have helped to offset recent-year elevated paid losses reflecting economic or other forms of inflation.

Elevated inflation was a driver of higher losses and loss expenses in recent years as costs have increased significantly to repair damaged autos or other property that we insure.

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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.

For all property casualty lines of business in aggregate, net loss and loss expense reserves at March 31, 2025, were $488 million, or 5%, higher than at year-end 2024, including an increase of $454 million for the incurred but not reported (IBNR) portion.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

For all property casualty lines of business in aggregate, net loss and loss expense reserves at June 30, 2025, were $829 million, or 9%, higher than at year-end 2024, including an increase of $711 million for the incurred but not reported (IBNR) portion.

We measure and analyze property casualty underwriting results primarily by the combined ratio and its component ratios.

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A combined ratio above 100% indicates that an insurance company's losses and expenses exceeded premiums.

Our consolidated property casualty combined ratio for the first quarter of 2025 increased by 19.7 percentage points, compared with the same period of 2024, including an increase of 19.1 points from catastrophe losses and loss expenses.

Our consolidated property casualty combined ratio for the second quarter of 2025 decreased by 3.6 percentage points, compared with the same period of 2024, including an increase of 1.0 points from catastrophe losses and loss expenses.

For the first six months of 2025, compared with the 2024 six-month period, our combined ratio increased by 7.7 percentage points, including an increase of 9.8 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.

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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 4.0 percentage points in the first three months of 2025, compared with 5.0 percentage points in the same period of 2024.

Net favorable development on prior accident year reserves, including reserves for catastrophe losses, benefited the combined ratio by 3.3 percentage points in the first six months of 2025, compared with 3.4 percentage points in the same period of 2024.

Net favorable development is discussed in further detail in Financial Results by property casualty insurance segment.

The ratio for current accident year loss and loss expenses before catastrophe losses improved in the first three months of 2025.

That 60.5% ratio was 0.8 percentage points lower, compared with the 61.3% accident year 2024 ratio measured as of March 31, 2024, including an increase of 1.0 points in the ratio for large losses of $2 million or more per claim, discussed below.

The ratio improvement of 0.8 percentage points included a decrease of 0.2 points for the IBNR portion and a decrease of 0.6 points for the case incurred portion.

The ratio for current accident year loss and loss expenses before catastrophe losses improved in the first six months of 2025.

That 58.4% ratio was 1.1 percentage points lower, compared with the 59.5% accident year 2024 ratio measured as of June 30, 2024, including an increase of 0.2 points in the ratio for large losses of $2 million or more per claim, discussed below.

The ratio improvement of 1.1 percentage points included an increase of 1.9 points for the IBNR portion and a decrease of 3.0 points for the case incurred portion.

It also included an unfavorable 0.6 points for the net effect of $52 million for reinsurance treaty reinstatement premiums related to the January 2025 wildfires in southern California.

The underwriting expense ratio increased for the first three months of 2025, compared with the same period a year ago.

The increase included an unfavorable 0.7 points for the effect of reinstatement premiums.

The ratio for both periods also included ongoing expense management efforts and higher earned premiums.

The underwriting expense ratio decreased for the second quarter and first six months of 2025, compared with the same periods a year ago.

The decreases were primarily due to premium growth outpacing growth in various expenses.

The six-month 2025 ratio also included an unfavorable 0.3 points for the effect of reinstatement premiums.

The ratio for both periods also included ongoing expense management efforts.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

Consolidated Property Casualty Insurance Premiums

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Agency renewal written premiums $ 2,135 $ 1,843 16 $ 4,047 $ 3,526 15

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Price change trends that heavily influence renewal written premium increases or decreases, along with other premium growth drivers for 2025, are discussed in more detail by segment below in Financial Results.

Consolidated property casualty net written premiums for the three months ended March 31, 2025, grew $247 million compared with the same period of 2024.

Consolidated property casualty net written premiums for the second quarter and six months ended June 30, 2025, grew $274 million and $521 million compared with the same periods of 2024.

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.

Consolidated property casualty agency new business written premiums increased by $37 million for the first three months of 2025, compared with the same period of 2024.

New agency appointments during 2025 and 2024 produced a $24 million increase in standard lines new business for the first three months of 2025 compared with the same period of 2024.

Consolidated property casualty agency new business written premiums decreased by $3 million for the second quarter and increased by $34 million for the first six months of 2025, compared with the same periods of 2024.

The second quarter decrease was driven by the personal lines segment.

Personal lines new business written premiums for second-quarter 2025 decreased 13% compared with a 54% increase in the second quarter of 2024.

New agency appointments during 2025 and 2024 produced a $55 million increase in standard lines new business for the first six months of 2025 compared with the same period of 2024.

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

Cincinnati Financial Corporation First-Quarter 2025 10-Q

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.

Net written premiums for Cincinnati Re, included in other written premiums, increased by $53 million to $255 million for the three months ended March 31, 2025, compared with the same period of 2024.

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.

Net written premiums for Cincinnati Re, included in other written premiums, decreased by $43 million in the second quarter and increased $10 million for the six months ended June 30, 2025, compared with the same periods of 2024, to $164 million and $418 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.

The increase included a $12 million net favorable effect from estimated premiums to reinstate treaties affected by the California wildfires.

Cincinnati Global is also included in other written premiums.

Net written premiums for Cincinnati Global decreased by $7 million to $75 million for the three months ended March 31, 2025, compared with the same period of 2024.

Net written premiums for Cincinnati Global increased by $30 million in the second quarter and $24 million for the six months ended June 30, 2025, to $97 million and $173 million, respectively, compared with the same periods of 2024.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program.

An increase in ceded premiums reduced net written premiums by $65 million for the first three months of 2025, compared with the same period of 2024.

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.

A decrease in ceded premiums increased net written premiums by $4 million for the second quarter and an increase in ceded premiums decreased net written premiums by $76 million for the first six months of 2025, compared with the same periods of 2024.

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, including a favorable $12 million for Cincinnati Re and an unfavorable $64 million for our personal lines insurance segment.

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 25.0 percentage points to the combined ratio in the first three months of 2025, compared with 5.9 percentage points in the same period of 2024.

Net losses from catastrophes for the first quarter of 2025 included recoveries from reinsurers that participate in our primary property catastrophe reinsurance treaty.

The recovery related to the California wildfires based on loss estimates at the end of the quarter was $429 million.

During the first quarter of 2025, we reinstated the applicable layers of our primary property catastrophe reinsurance treaty to provide coverage for catastrophic events.

As a result of the reinstatement, the treaty provides the same coverage that was effective on January 1, 2025.

The reinsurance program for Cincinnati Re only effective June 1, 2024, provides retrocession coverages with various triggers, exclusions and unique features.

The program includes property catastrophe excess of loss coverage in excess of $80 million per occurrence.

During 2024, the program had a total available limit of $60 million per occurrence and there was no recovery from reinsurers pertaining to these treaties.

During the first three months of 2025, recoveries of $38 million were estimated related to the California wildfires.

As of March 31, 2025, the remaining coverage provides a total available limit of $41 million per occurrence in excess of $80 million.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Losses from catastrophes contributed 12.2 and 18.4 percentage points to the combined ratio in the second quarter and first six months of 2025, compared with 11.2 and 8.6 percentage points in the same periods of 2024.

During the second quarter of 2025, there were no material changes to our estimates of ultimate losses related to the California wildfires.

Net losses from catastrophes for the first six months of 2025 included recoveries from reinsurers that participate in our primary property catastrophe reinsurance treaty.

There were no material changes during the second quarter to the estimated recovery of $429 million as of March 31, 2025, related to the California wildfires.

Effective July 1, 2025, we purchased an additional layer on our property catastrophe reinsurance treaty with a limit of $300 million, increasing the total limit from $1.500 billion to $1.800 billion.

We retain 57.2% of losses between $1.500 billion and $1.800 billion.

The provisions of this additional layer are similar to those included in the other layers.

The annual ceded premiums for this additional coverage are estimated to be less than $5 million.

Effective June 1, 2025, we renewed the reinsurance program for Cincinnati Re only, which provides retrocession coverages with various triggers, exclusions and unique features.

The program includes property catastrophe excess of loss coverage in excess of $90 million per occurrence with a total available limit of $73 million per occurrence.

Ceded premiums for the one-year renewal period of coverage from the program are estimated to be approximately $16 million.

There were no material changes during the second quarter to the estimated recovery of $38 million as of March 31, 2025, related to the California wildfires for the Cincinnati Re only program effective June 1, 2024, which expired during the second quarter.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

The following table shows consolidated property casualty insurance catastrophe losses and loss expenses incurred, net of reinsurance, as well as the effect of loss development on prior period catastrophe events.

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Consolidated Property Casualty Insurance Catastrophe Losses and Loss Expenses Incurred

(Dollars in millions, net of reinsurance) Three months ended March 31,

Dates Region lines lines lines Other Total

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

Dates Region lines lines lines Other Total lines lines lines Other Total

7-28 West $ — $ (1) $ — $ — $ (1) $ — $ 324 $ — $ 124 $ 448

14-17 Midwest, Northeast, South 5 13 — 2 20 47 88 1 2 138

1-7 Midwest, South 20 40 — — 60 20 40 — — 60

May 15-16 Midwest, Northeast 23 65 — — 88 23 65 — — 88

All other 2025 catastrophes 40 87 2 — 129 54 110 3 3 170

Development on 2024 and prior catastrophes (14) (13) (1) (13) (41)

Development on 2024 and prior

catastrophes (3) (13) — 10 (6) (17) (26) (1) (3) (47)

Calendar year incurred total $ 85 $ 191 $ 2 $ 12 $ 290 $ 127 $ 601 $ 3 $ 126 $ 857

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12-17 Midwest, South 2 5 — — 7 35 27 — — 62

4 Midwest, Northeast, South 13 23 — — 36 13 23 — — 36

May 6-10 Midwest, South 19 28 — — 47 19 28 — — 47

May 25-26 Midwest, South 37 28 1 — 66 37 28 1 — 66

All other 2024 catastrophes 42 52 2 3 99 66 95 3 3 167

Development on 2023 and prior catastrophes (8) (21) (1) (2) (32)

Development on 2023 and prior

catastrophes (7) (6) 1 (9) (21) (15) (27) — (11) (53)

Calendar year incurred total $ 104 $ 131 $ 4 $ (6) $ 233 $ 171 $ 183 $ 4 $ (8) $ 350

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

The following table includes data for losses incurred of $2 million or more per claim, net of reinsurance.

Consolidated Property Casualty Insurance Losses Incurred by Size

(Dollars in millions, net of reinsurance) Three months ended March 31,

2025 2024 % Change

Current accident year losses greater than $5 million $ 26 $ — nm

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

2025 2024 % Change 2025 2024 % Change

Current accident year losses greater than $5 million $ 15 $ 31 (52) $ 41 $ 31 32

Current accident year losses $2 million - $5 million 40 28 43 60 50 20

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Total loss ratio 54.9 % 58.2 % (3.3) 63.1 % 56.3 % 6.8

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

Cincinnati Financial Corporation First-Quarter 2025 10-Q

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 2025 property casualty total large losses incurred of $102 million, net of reinsurance, was higher than the $70 million quarterly average during full-year 2024 and the $44 million experienced for the first quarter of 2024.

The ratio for these large losses was 2.3 percentage points higher 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.

The second-quarter 2025 property casualty total large losses incurred of $82 million, net of reinsurance, was higher than the $70 million quarterly average during full-year 2024 and the $74 million experienced for the second quarter of 2024.

The ratio for these large losses was 0.2 percentage points lower compared with last year's second quarter.

The second-quarter 2025 amount of total large losses incurred unfavorably contributed to the increase in the six-month 2025 total large loss ratio, compared with 2024, in addition to a first-quarter 2025 ratio that was 2.3 points higher than the first quarter of 2024.

We believe results for the three- and six-month periods largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

Losses by size are discussed in further detail in results of operations by property casualty insurance segment.

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• Investments

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

COMMERCIAL LINES INSURANCE RESULTS

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Earned premiums $ 1,212 $ 1,107 9 $ 2,391 $ 2,189 9

21 unchanged sentences

Performance highlights for the commercial lines segment include:

• Premiums – Earned premiums and net written premiums for the commercial lines segment grew during the first three months of 2025, compared with the same period a year ago, primarily due to agency renewal written premium growth that continued to include higher average pricing as well as growth in agency new business written premiums.

• Premiums – Earned premiums and net written premiums for the commercial lines segment grew during the second quarter and first six months of 2025, compared with the same periods a year ago, primarily due to agency renewal written premium growth that continued to include higher average pricing as well as growth in agency new business written premiums.

The table below analyzes the primary components of premiums.

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We seek to maintain appropriate pricing discipline for both new and renewal business as our agents and underwriters assess account quality to make careful decisions on a policy-by-policy basis whether to write or renew a policy.

Agency renewal written premiums increased 7% for the first three months of 2025, compared with the same period of 2024, including price increases.

During the first quarter of 2025, our overall standard commercial lines policies averaged estimated renewal price increases at percentages near the low end of the high-single-digit range.

Agency renewal written premiums increased 9% for the second quarter and 8% for the first six months of 2025, compared with the same periods of 2024, including price increases.

During the second quarter of 2025, our overall standard commercial lines policies averaged estimated renewal price increases at percentages near the high end of the mid-single-digit range.

We continue to segment commercial lines policies, emphasizing identification and retention of those we believe have relatively stronger pricing.

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We measure average changes in commercial lines renewal pricing as the percentage rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for the respective policies.

Our average overall commercial lines renewal pricing change includes the impact of flat pricing for certain coverages within package policies written for a three-year term that were in force but did not expire during

Cincinnati Financial Corporation First-Quarter 2025 10-Q

the period being measured.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

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 2025, we estimate that our average percentage price increases were in the high-single-digit range for our commercial casualty and commercial property lines of business and in the mid-single-digit range for our commercial auto line of business.

For commercial lines policies that did expire and were then renewed during the second quarter of 2025, we estimate that our average percentage price increases were in the high-single-digit range for our commercial casualty and commercial property lines of business and in the mid-single-digit range for our commercial auto line of business.

The estimated average percentage price change for workers' compensation was a decrease in the mid-single-digit range.

Our commercial lines segment's increase in agency renewal written premiums for the first three months of 2025 also included changes in the level of insured exposures.

Our commercial lines segment's increase in agency renewal written premiums for the first six months of 2025 also included changes in the level of insured exposures.

Part of the insured exposure increase reflects our response to inflation effects that increase the cost of building materials to repair damaged commercial structures.

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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 2025 contributed $23 million to net written premiums, compared with $29 million for the same period of 2024.

New business written premiums for commercial lines increased $21 million during the first three months of 2025, compared with the same period of 2024, as we continued to carefully underwrite each policy in a highly competitive market.

Audits completed during the first six months of 2025 contributed $48 million to net written premiums, compared with $54 million for the same period of 2024.

New business written premiums for commercial lines increased $7 million and $28 million during the second quarter and first six months of 2025, compared with the same periods of 2024, as we continued to carefully underwrite each policy in a highly competitive market.

Trend analysis for year-over-year comparisons of individual quarters is more difficult to assess for commercial lines new business written premiums, due to inherent variability.

1 unchanged sentence

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program.

For our commercial lines insurance segment, a decrease in ceded premiums increased net written premiums by approximately $4 million for the first three months of 2025, compared with the same period of 2024.

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

Commercial Lines Insurance Premiums

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Agency renewal written premiums $ 1,116 $ 1,023 9 $ 2,268 $ 2,099 8

4 unchanged sentences

Earned premiums $ 1,212 $ 1,107 9 $ 2,391 $ 2,189 9

• Combined ratio – The first-quarter 2025 commercial lines combined ratio improved by 4.6 percentage points, compared with the first quarter of 2024, including a decrease of 2.6 points in losses from catastrophes.

The first-quarter combined ratio decreased by 1.9 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 0.7 points for the IBNR portion and a decrease of 2.6 points for the case incurred portion.

• Combined ratio – The second-quarter 2025 commercial lines combined ratio improved by 6.2 percentage points, compared with the second quarter of 2024, including a decrease of 2.3 points in losses from catastrophes.

The second-quarter combined ratio decreased by 0.4 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 4.9 points for the IBNR portion and a decrease of 5.3 points for the case incurred portion.

For the first six months of 2025, the combined ratio improved by 5.5 percentage points, compared with the same period a year ago, including a decrease of 2.4 points in losses from catastrophes.

The six-month 2025 combined ratio also included a decrease of 1.2 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 2.8 points for the IBNR portion and a decrease of 4.0 points for the case incurred portion.

Underwriting results also included favorable reserve development on prior accident years, as discussed below.

The current accident year ratios were measured as of March 31 of the respective years and included an increase of 0.8 percentage points for the first three months of 2025 in the ratio for large losses of $2 million or more per claim, discussed below.

When estimating the ultimate cost of total loss and loss expenses, we consider many factors, including trends for inflation, historical paid and reported losses, large loss activity and other data or information for the industry or our company.

The current accident year ratios were measured as of June 30 of the respective years and included a decrease of 0.4 percentage points for the first six months of 2025 in the ratio for large losses of $2 million or more per claim, discussed below.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

or our company.

Elevated inflation in recent years has been a driver of higher losses and loss expenses as costs have increased significantly to repair damaged business properties or autos that we insure, in addition to higher losses for liability coverages for some of our lines of business.

Due to increased uncertainty regarding ultimate losses, we intend to remain prudent in reserving for estimated ultimate losses until longer-term loss cost trends become more clear.

Catastrophe losses and loss expenses accounted for 3.6 percentage points of the combined ratio for the first three months of 2025, compared with 6.2 percentage points for the same period a year ago.

Catastrophe losses and loss expenses accounted for 7.0 and 5.4 percentage points of the combined ratio for the second quarter and first six months of 2025, compared with 9.3 and 7.8 percentage points for the same periods a year ago.

Through 2024, the 10-year annual average for that catastrophe measure for the commercial lines segment was 6.0 percentage points, and the five-year annual average was 6.6 percentage points.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

The net effect of reserve development on prior accident years during the first three months of 2025 was favorable for commercial lines overall by $43 million, compared with $38 million for the same period in 2024.

For the first three months of 2025, 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 2025 for our commercial lines insurance segment was mainly for accident years 2024 and 2023 and was primarily due to lower-than-anticipated loss emergence on known claims.

Our commercial casualty line of business included $1 million of favorable reserve development on prior accident years for the first three months of 2025.

The net effect of reserve development on prior accident years during the second quarter and first six months of 2025 was favorable for commercial lines overall by $42 million and $85 million, compared with $29 million and $67 million for the same periods in 2024.

For the first six months of 2025, our commercial property and workers' compensation lines of business were the main contributors to the commercial lines net favorable reserve development, while our commercial auto line of business included net unfavorable development.

The net favorable reserve development recognized during the first six months of 2025 for our commercial lines insurance segment was mainly for accident years 2024 and 2023 and was primarily due to lower-than-anticipated loss emergence on known claims.

Our commercial casualty line of business included $3 million of favorable reserve development on prior accident years for the first six months of 2025.

Reserve estimates are inherently uncertain as described in our 2024 Annual Report on Form 10-K, Item 7, Critical Accounting Estimates, Property Casualty Insurance Loss and Loss Expense Reserves, Page 51.

The commercial lines underwriting expense ratio decreased for the first three months of 2025, compared with the same period a year ago.

The decrease was primarily due to premium growth outpacing growth in various expenses.

The ratio for both periods also included ongoing expense management efforts and higher earned premiums.

The commercial lines underwriting expense ratio decreased for the second quarter and first six months of 2025, compared with the same periods a year ago.

The decreases were primarily due to premium growth outpacing growth in various expenses.

The ratio for both periods also included ongoing expense management efforts.

Commercial Lines Insurance Losses Incurred by Size

(Dollars in millions, net of reinsurance) Three months ended March 31,

2025 2024 % Change

Current accident year losses greater than $5 million $ 7 $ — nm

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

2025 2024 % Change 2025 2024 % Change

Current accident year losses greater than $5 million $ 5 $ 31 (84) $ 12 $ 31 (61)

Current accident year losses $2 million - $5 million 22 11 100 37 22 68

14 unchanged sentences

Total loss ratio 50.6 % 57.8 % (7.2) 50.2 % 57.2 % (7.0)

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

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 2025 commercial lines total large losses incurred of $66 million, net of reinsurance, was higher than the quarterly average of $49 million during full-year 2024 and the $23 million of total large losses incurred for the first quarter of 2024.

The increase in commercial lines large losses for the first three months of 2025 was primarily due to our commercial property line of business.

The first-quarter 2025 ratio for commercial lines total large losses was 3.5 percentage points higher than last year's first-quarter ratio.

The second-quarter 2025 commercial lines total large losses incurred of $41 million, net of reinsurance, was lower than the quarterly average of $49 million during full-year 2024 and the $64 million of total large losses incurred for the second quarter of 2024.

The increase in commercial lines large losses for the first six months of 2025 was primarily due to our commercial property line of business.

The second-quarter 2025 ratio for commercial lines total large losses was 2.3 percentage points lower than last year's second-quarter ratio.

The second-quarter 2025 amount of total large losses incurred contributed to the increase in the six-month 2025 total large loss ratio, compared with 2024, partially offsetting a first-quarter 2025 ratio that was 3.5 points higher than the first quarter of 2024.

We believe results for the three-month period largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

PERSONAL LINES INSURANCE RESULTS

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Earned premiums $ 804 $ 631 27 $ 1,502 $ 1,219 23

4 unchanged sentences

Current accident year catastrophe losses 204 137 49 627 210 199

Prior accident years before catastrophe losses (6) (12) 50

Prior accident years before catastrophe losses (6) 12 nm (12) — nm

Prior accident years catastrophe losses (13) (6) (117) (26) (27) 4

1 unchanged sentence

Underwriting expenses 222 185 20 432 358 21

Underwriting profit (loss) $ (357) $ 37 nm

Underwriting loss $ (14) $ (42) 67 $ (371) $ (5) nm

Ratios as a percent of earned premiums:

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Performance highlights for the personal lines segment include:

• Premiums – Personal lines earned premiums and net written premiums continued to grow during the first three months of 2025, including increased agency new business and renewal written premiums that included higher average pricing.

Cincinnati Private Client SM net written premiums included in the personal lines insurance segment results totaled approximately $363 million for the first three months of 2025, compared with $330 million for the same period of 2024.

Cincinnati Private Client direct written premiums for the respective periods included excess and surplus lines homeowner policies with premiums totaling $39 million in the first three months of 2025, compared with $37 million in the same period of 2024.

• Premiums – Personal lines earned premiums and net written premiums continued to grow during the second quarter and first six months of 2025, primarily due to agency renewal written premium growth that included higher average pricing.

Cincinnati Private Client SM net written premiums included in the personal lines insurance segment results totaled approximately $592 million and $954 million for the second quarter and first six months of 2025, compared with $472 million and $802 million for the same periods of 2024.

Direct written premiums for Cincinnati Private Client policies grew 26% for the first six months of 2025 compared with the same period of

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

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

The table below analyzes the primary components of premiums.

Agency renewal written premiums increased 28% for the first three months of 2025, reflecting rate increases in selected states, a higher level of insured exposures and other factors such as changes in policy deductibles or mix of business.

Agency renewal written premiums increased 27% and 28% for the second quarter and first six months of 2025, reflecting rate increases in selected states, a higher level of insured exposures and other factors such as changes in policy deductibles or mix of business.

Part of the insured exposure increase reflects our response to inflation effects that increase the cost of building materials used to repair damaged homes.

We estimate that premium rates for our personal auto line of business increased at average percentages in the low-double-digit range during the first three months of 2025.

For our homeowner line of business, we estimate that premium rates for the first three months of 2025 also increased at average percentages in the low-double-digit range.

We estimate that premium rates for our personal auto line of business increased at average percentages in the high-single-digit range during the first six months of 2025.

For our homeowner line of business, we estimate that premium rates for the first six months of 2025 also increased at average percentages in the low-double-digit range.

For both our personal auto and homeowner lines of business, some individual policies experienced lower or higher rate changes based on each risk's specific characteristics and enhanced pricing precision enabled by predictive models.

Personal lines new business written premiums increased $5 million or 4% for the first three months of 2025, compared with the same period of 2024, including an increase of approximately $8 million from Cincinnati Private Client policies and a decrease of $3 million from middle-market policies.

We believe we maintained

Cincinnati Financial Corporation First-Quarter 2025 10-Q

underwriting and pricing discipline across all personal lines markets as we expanded use of enhanced pricing precision tools.

Personal lines new business written premiums decreased $22 million or 13% for the second quarter of 2025, compared with the same period of 2024, including approximately $11 million from Cincinnati Private Client policies and $11 million from middle-market policies.

Cincinnati Private Client new business premiums from California decreased approximately $13 million for the second quarter of 2025 compared with the prior year.

For the first six months of 2025, compared with the same period of 2024, personal lines new business written premiums decreased $17 million, or 6%, including approximately $3 million from Cincinnati Private Client policies and $14 million from middle-market policies.

We believe we maintained underwriting and pricing discipline across all personal lines markets as we expanded use of enhanced pricing precision tools.

Other written premiums include premiums ceded to reinsurers as part of our reinsurance ceded program.

For our personal lines insurance segment, an increase in 2025 ceded premiums reduced net written premiums by approximately $67 million for the first three months of 2025, compared with the same period of 2024.

Ceded premiums for the first quarter of 2025 included a net amount of $64 million for reinsurance reinstatement premiums related to the January 2025 wildfires in southern California.

For our personal lines insurance segment, an increase in 2025 ceded premiums reduced net written premiums by approximately $2 million and $70 million for the second quarter and first six months of 2025, compared with the same periods of 2024.

Ceded premiums for the first six months of 2025 included a net amount of $64 million for reinsurance reinstatement premiums related to the January 2025 wildfires in southern California.

The $64 million of reinstatement premiums included $61 million for our homeowner line of business.

Personal Lines Insurance Premiums

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Agency renewal written premiums $ 866 $ 681 27 $ 1,500 $ 1,175 28

2 unchanged sentences

Net written premiums 980 819 20 1,652 1,414 17

Unearned premium change 26 (7) nm

Unearned premium change (176) (188) 6 (150) (195) 23

Earned premiums $ 804 $ 631 27 $ 1,502 $ 1,219 23

• Combined ratio – Our personal lines combined ratio for the first quarter of 2025 increased by 57.4 percentage points, compared with first-quarter 2024, primarily due to an increase of 49.9 points in losses from catastrophes.

The first-quarter 2025 combined ratio increase also included an increase of 5.6 percentage points from current accident year loss and loss expenses before catastrophe losses, including an increase of 4.7 points for the IBNR portion and an increase of 0.9 points for the case incurred portion.

The first-quarter 2025 current accident year ratio before catastrophe losses included an unfavorable 5.3 points for the effect of reinstatement premiums.

The total current accident year ratios before catastrophe losses were measured as of March 31 of the respective years and included an increase of 1.7 percentage points for the first three months of 2025 in the ratio for large losses of $2 million or more per claim, discussed below.

• Combined ratio – Our personal lines combined ratio for the second quarter of 2025 improved by 4.9 percentage points, compared with second-quarter 2024, despite an increase of 2.9 points in losses from catastrophes.

The second-quarter 2025 combined ratio improvement also included a decrease of 3.6 percentage points from current accident year loss and loss expenses before catastrophe losses, including an increase of 4.2 points for the IBNR portion and a decrease of 7.8 points for the case incurred portion.

For the first six months of 2025, the combined ratio increased by 24.3 percentage points, compared with the same period a year ago, including an increase of 25.0 points in losses from catastrophes.

The six-month 2025 combined ratio also included an increase of 0.7 points from current accident year loss and loss expenses before catastrophe losses, including an increase of 4.2 points in the IBNR portion and a decrease of 3.5 points for the case incurred portion.

The six-month 2025 current accident year ratio before catastrophe losses included an unfavorable 2.3 points for the effect of reinstatement premiums.

The total current accident year ratios before catastrophe losses were measured as of June 30 of the respective years and included an increase of 1.4 percentage points for the first six months of 2025 in the ratio for large losses of $2 million or more per claim, discussed below.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

or our company.

Elevated inflation in recent years has been a driver of higher losses and loss expenses as costs have increased significantly to repair damaged autos or homes that we insure.

Due to increased uncertainty regarding ultimate losses, we intend to remain prudent in reserving for estimated ultimate losses until longer-term loss cost trends become more clear.

Catastrophe losses and loss expenses accounted for 58.7 percentage points of the combined ratio for the first three months of 2025, compared with 8.8 points for the same period a year ago.

Catastrophe losses and loss expenses accounted for 23.8 and 40.0 percentage points of the combined ratio for the second quarter and first six months of 2025, compared with 20.9 and 15.0 points for the same periods a year ago.

The 10-year annual average catastrophe loss ratio for the personal lines segment through 2024 was 12.1 percentage points, and the five-year annual average was 13.9 percentage points.

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In addition, greater geographic diversification is expected to reduce the volatility of homeowner loss ratios attributable to weather-related catastrophe losses over time.

The net effect of reserve development on prior accident years during the first quarter of 2025 was favorable for personal lines overall by $19 million, compared with $33 million for the same period of 2024.

Our homeowner line of business was the main contributor to the personal lines net favorable reserve development for the first three months of 2025.

The net effect of reserve development on prior accident years during the second quarter and first six months of 2025 was favorable for personal lines overall by $19 million and $38 million, compared with $6 million unfavorable and $27 million favorable for the same periods of 2024.

Our homeowner line of business was the main contributor to the personal lines net favorable reserve development for the first six months of 2025.

The net favorable reserve development was primarily due to lower-than-anticipated loss emergence on known claims.

The personal lines underwriting expense ratio increased for the first three months of 2025, compared with the same period a year ago.

The increase included an unfavorable 2.5 points for the effect of reinstatement premiums.

The ratio for both periods also included ongoing expense management efforts.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

The personal lines underwriting expense ratio decreased for the second quarter and first six months of 2025, compared with the same periods a year ago.

The second-quarter and six-month decreases were primarily due to growth in premiums outpacing growth in various expenses.

The six-month 2025 ratio also included an unfavorable 1.2 points for the effect of reinstatement premiums.

The ratios for both periods also included ongoing expense management efforts.

Personal Lines Insurance Losses Incurred by Size

(Dollars in millions, net of reinsurance) Three months ended March 31,

2025 2024 % Change

Current accident year losses greater than $5 million $ 19 $ — nm

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

2025 2024 % Change 2025 2024 % Change

Current accident year losses greater than $5 million $ 10 $ — nm $ 29 $ — nm

Current accident year losses $2 million - $5 million 18 15 20 23 26 (12)

Large loss prior accident year reserve development 12 10 20

Large loss prior accident year reserve development 13 (7) nm 25 3 733

Total large losses incurred 41 8 413 77 29 166

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In the first quarter of 2025, the personal lines total large loss ratio, net of reinsurance, was 1.7 percentage points higher than last year's first quarter.

The increase in personal lines total large losses incurred for the first three months of 2025 occurred primarily for inland marine coverages in our other personal line of business.

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.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

In the second quarter of 2025, the personal lines total

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

large loss ratio, net of reinsurance, was 3.7 percentage points higher than last year's second quarter.

The increase in personal lines total large losses incurred for the first six months of 2025 occurred primarily for our homeowner line of business and inland marine coverages in our other personal line of business.

We believe results for the three- and six-month periods largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

EXCESS AND SURPLUS LINES INSURANCE RESULTS

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Earned premiums $ 174 $ 151 15 $ 336 $ 290 16

4 unchanged sentences

Current accident year catastrophe losses 2 3 (33) 4 4 0

Prior accident years before catastrophe losses (8) (2) (300)

Prior accident years catastrophe losses (1) (1) 0

Prior accident years before catastrophe losses (5) 2 nm (13) — nm

Prior accident years catastrophe losses — 1 (100) (1) — nm

Loss and loss expenses 110 102 8 209 192 9

14 unchanged sentences

Performance highlights for the excess and surplus lines segment include:

• Premiums – Excess and surplus lines earned premiums and net written premiums continued to grow during the first three months of 2025, compared with the same period a year ago, including increases in both agency renewal and new business written premiums.

Renewal written premiums rose 12% for the three months ended March 31, 2025, compared with the same period of 2024, largely due to higher renewal pricing.

For the first three months of 2025, excess and surplus lines policy renewals experienced estimated average price increases at percentages in the high-single-digit range.

• Premiums – Excess and surplus lines earned premiums and net written premiums continued to grow during the second quarter and first six months of 2025, compared with the same period a year ago, including increases in both agency renewal and new business written premiums.

Renewal written premiums rose 10% for the second quarter and 11% for the six months ended June 30, 2025, compared with the same periods of 2024, largely due to higher renewal pricing.

For both 2025 periods, excess and surplus lines policy renewals experienced estimated average price increases at percentages in the high-single-digit range.

We measure average changes in excess and surplus lines renewal pricing as the percentage rate of change in renewal premium for the new policy period compared with the premium for the expiring policy period, assuming no change in the level of insured exposures or policy coverage between those periods for respective policies.

New business written premiums produced by agencies increased by 26% for the first three months of 2025 compared with the same period of 2024, as we continued to carefully underwrite each policy in a highly competitive market.

New business written premiums produced by agencies increased by 24% for the second quarter and 25% for the first six months of 2025 compared with the same periods of 2024, as we continued to carefully underwrite

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

each policy in a highly competitive market.

Some of what we report as new business came from accounts that were not new to our agents.

We believe our agents' seasoned accounts tend to be priced more accurately than business that may be less familiar to them.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Excess and Surplus Lines Insurance Premiums

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Agency renewal written premiums $ 153 $ 139 10 $ 279 $ 252 11

4 unchanged sentences

Earned premiums $ 174 $ 151 15 $ 336 $ 290 16

• Combined ratio – The excess and surplus lines combined ratio improved by 3.6 percentage points for the first three months of 2025, compared with the same period of 2024.

The improvement was primarily due to a higher level of favorable reserve development on prior accident year loss and loss expenses for the three months ended March 31, 2025, compared with the first three months of 2024.

The 65.6% first-quarter 2025 ratio for current accident year loss and loss expenses before catastrophe losses was 0.1 percentage point lower, compared with the 65.7% accident year 2024 ratio measured as of March 31, 2024, including an increase of 2.8 points for the IBNR portion and a decrease of 2.9 points for the case incurred portion.

Excess and surplus lines net reserve development on prior accident years, as a ratio to earned premiums, was favorable by 5.5% for the first three months of 2025, compared with 2.1% for the same period of 2024.

• Combined ratio – The excess and surplus lines combined ratio improved by 4.3 percentage points for the second quarter and 3.9 points for the first six months of 2025, compared with the same periods of 2024.

The improvements were primarily due to favorable reserve development on prior accident year loss and loss expenses for the three and six months ended June 30, 2025, compared with unfavorable development for the same periods of 2024.

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

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

Excess and surplus lines net reserve development on prior accident years, as a ratio to earned premiums, was favorable by 3.0% for the second quarter and 4.1% for the first six months of 2025, compared with unfavorable 2.1% and less than 0.1% for the same periods of 2024.

The excess and surplus lines underwriting expense ratio for the first three months of 2025 matched the same period a year ago.

The ratio for both periods benefited from ongoing expense management efforts and premium growth.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

The excess and surplus lines underwriting expense ratio decreased for the second quarter and first six months of 2025 compared with the same periods a year ago.

The ratio for both periods largely benefited from ongoing expense management efforts and premium growth.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

Excess and Surplus Lines Insurance Losses Incurred by Size

(Dollars in millions, net of reinsurance) Three months ended March 31,

2025 2024 % Change

Current accident year losses greater than $5 million $ — $ — nm

Current accident year losses $2 million - $5 million — — nm

Large loss prior accident year reserve development — — nm

Total large losses incurred — — nm

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

2025 2024 % Change 2025 2024 % Change

Current accident year losses greater than $5 million $ — $ — nm $ — $ — nm

Current accident year losses $2 million - $5 million — 2 (100) — 2 (100)

Large loss prior accident year reserve development — — nm — — nm

Total large losses incurred — 2 (100) — 2 (100)

Losses incurred but not reported 31 17 82 77 47 64

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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.

In the first quarter of both 2025 and 2024, our excess and surplus lines insurance segment had no large losses of $2 million or more per claim.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

In the second quarter of 2025, the excess and surplus lines total ratio for large losses, net of reinsurance, was 1.3 percentage points lower than last year's second quarter.

The second-quarter 2025 amount of total large losses incurred contributed favorably to the decrease in the six-month 2025 total large loss ratio, compared with 2024, in addition to a first-quarter 2025 ratio that matched the first quarter of 2024.

We believe results for the three- and six month periods largely reflected normal fluctuations in loss patterns and normal variability in large case reserves for claims above $2 million.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

LIFE INSURANCE RESULTS

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Earned premiums $ 83 $ 81 2 $ 163 $ 160 2

7 unchanged sentences

Performance highlights for the life insurance segment include:

• Revenues – Revenues increased for the three months ended March 31, 2025, compared with the same period a year ago.

Net in-force life insurance policy face amounts increased 1% to $84.712 billion at March 31, 2025, from $84.245 billion at year-end 2024.

Fixed annuity deposits received for the three months ended March 31, 2025, were $4 million, compared with $9 million for the same period of 2024.

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

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

Fixed annuity deposits received for the three and six months ended June 30, 2025, were $8 million and $12 million, compared with $10 million and $19 million for the same periods of 2024.

Fixed annuity deposits have a minimal impact on earned premiums because deposits received are initially recorded as liabilities.

2 unchanged sentences

Life Insurance Premiums

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Term life insurance $ 61 $ 59 3 $ 118 $ 116 2

4 unchanged sentences

We include only investment income credited to contract holders (including interest assumed in life insurance policy reserve calculations) in our life insurance segment results.

A profit of $9 million for our life insurance segment in the first three months of 2025, compared with a profit of $10 million for the same period of 2024, was primarily due to less favorable impacts from the unlocking of interest rate actuarial assumptions.

A profit of $28 million for our life insurance segment in the first six months of 2025, compared with a profit of $32 million for the same period of 2024, was primarily due to less favorable impacts from the unlocking of interest rate and other actuarial assumptions.

Life insurance segment benefits and expenses consist principally of contract holders' (policyholders') benefits incurred related to traditional life and interest-sensitive products and operating expenses incurred, net of deferred acquisition costs.

Total benefits increased in the first three months of 2025 primarily due to less favorable impacts from the unlocking of interest rate actuarial assumptions.

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

Total benefits increased in the first six months of 2025 primarily due to less favorable impacts from the unlocking of interest rate and other actuarial assumptions.

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

We recognize that assets under management, capital appreciation and investment income are integral to evaluating the success of the life insurance segment because of the long duration of life products.

On a basis that includes investment income and investment gains or losses from life-insurance-related

Cincinnati Financial Corporation First-Quarter 2025 10-Q

invested assets, the life insurance subsidiary reported net income of $21 million for the three months ended March 31, 2025, compared with $19 million for the three months ended March 31, 2024.

The life insurance subsidiary portfolio had net after-tax investment losses of $1 million for the three months ended March 31, 2025, compared with $2 million for the three months ended March 31, 2024.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

invested assets, the life insurance subsidiary reported net income of $26 million and $47 million for the three and six months ended June 30, 2025, compared with $24 million and $43 million for the three and six months ended June 30, 2024.

The life insurance subsidiary portfolio had net after-tax investment losses of $3 million and $4 million for the three and six months ended June 30, 2025, compared with $5 million and $7 million for the three and six months ended June 30, 2024.

INVESTMENTS RESULTS

2 unchanged sentences

Investment Income

Pretax investment income grew 14% for the first three months of 2025, compared with the same period of 2024.

Interest income increased by $41 million for the first quarter, as net purchases of fixed-maturity securities in recent quarters and higher bond yields are working to generally offset effects of the low interest rate environment of the past several years.

Dividend income decreased by $5 million for the three months ended March 31, 2025.

The decrease was primarily due to the unfavorable effect on dividend income from net sales of equity securities during the second half of 2024.

That effect was partially offset by dividend rates that have generally been increasing, although more slowly in recent quarters.

Minor asset allocation adjustments in our equity portfolio in recent quarters partially offset other factors that unfavorably affected dividend income.

Pretax investment income grew 18% for the second quarter and 16% for the first six months of 2025, compared with the same periods of 2024.

Interest income increased by $41 million and $82 million for the three and six months ended June 30, 204, as net purchases of fixed-maturity securities in recent quarters and higher bond yields are working to generally offset effects of the low interest rate environment for several years prior to 2022.

Dividend income increased by $1 million for the second quarter and decreased by $4 million for the first six months of 2025.

The decrease for the first six months of 2025 was primarily due to the unfavorable effect on dividend income from net sales of equity securities during the second half of 2024.

That effect was partially offset by net purchases of equity securities during the first six months of 2025 and dividend rates that have generally been increasing, although more slowly in recent quarters.

Investments Results

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Total investment income, net of expenses $ 285 $ 242 18 $ 565 $ 487 16

Investment interest credited to contract holders (31) (31) 0 (63) (62) (2)

Investment gains and losses, net (67) 612 nm

Investment gains and losses, net 473 137 245 406 749 (46)

Investments profit, pretax $ 727 $ 348 109 $ 908 $ 1,174 (23)

We continue to consider the low interest rate environment that prevailed in recent years as well as the potential for a continuation of both elevated inflation and higher bond yields as we position our portfolio.

We continue to consider the low interest rate environment that prevailed for several years prior to 2022 as well as the potential for a continuation of both elevated inflation and higher bond yields as we position our portfolio.

As bonds in our generally laddered portfolio mature or are called over the near term, we will reinvest with a balanced approach, keeping in mind our long-term strategy and pursuing attractive risk-adjusted after-tax yields.

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(Dollars in millions) % Yield Principal redemptions

At March 31, 2025

At June 30, 2025

Fixed-maturity pretax yield profile:

3 unchanged sentences

Average yield and total expected maturities from the remainder of 2025 through 2027 4.98 $ 2,644

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

The table below shows the average pretax yield-to-amortized cost for fixed-maturity securities acquired during the periods indicated.

The average yield for total fixed-maturity securities acquired during the first three months of 2025 was higher than the 5.06% average yield-to-amortized cost of the fixed-maturity securities portfolio at the end of 2024.

Our fixed-maturity portfolio's average yield of 4.92% for the first three months of 2025, from the investment income table below, was lower than the 5.06% yield for the year-end 2024 fixed-maturities portfolio.

Three months ended March 31,

The average yield for total fixed-maturity securities acquired during the first six months of 2025 was higher than the 5.06% average yield-to-amortized cost of the fixed-maturity securities portfolio at the end of 2024.

Our fixed-maturity portfolio's average yield of 4.89% for the first six months of 2025, from the investment income table below, was lower than the 5.06% yield for the year-end 2024 fixed-maturities portfolio.

Three months ended June 30, Six months ended June 30,

2025 2024 2025 2024

Average pretax yield-to-amortized cost on new fixed-maturities:

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

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Investment income:

1 unchanged sentence

Dividends 70 69 1 137 141 (3)

Other 5 4 25 12 11 9

Less investment expenses 4 4 0 8 7 14

1 unchanged sentence

Less income taxes

49 40 23 97 81 20

Total investment income, after-tax $ 236 $ 202 17 $ 468 $ 406 15

10 unchanged sentences

Effective tax rate 18.4 17.9 18.3 17.9

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

Total Investment Gains and Losses

4 unchanged sentences

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

(Dollars in millions) Three months ended March 31,

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

2025 2024 2025 2024

Investment gains and losses:

4 unchanged sentences

Fixed maturities:

Gross realized gains 1 4 1 4

Gross realized losses — (6) — (7)

1 unchanged sentence

Subtotal (12) (18) (14) (28)

Other 5 6 12 26

Total investment gains and losses reported in net income 473 137 406 749

1 unchanged sentence

Fixed maturities 28 (75) 95 (130)

Total unrealized investment gains and losses reported in OCI 67 (55)

Total $ 501 $ 62 $ 501 $ 619

Of the 5,140 fixed-maturity and short-term securities in the portfolio, 34 securities were trading below 70% of amortized cost at March 31, 2025.

Of the 5,278 fixed-maturity and short-term securities in the portfolio, 48 securities were trading below 70% of amortized cost at June 30, 2025.

Our asset impairment committee regularly monitors the portfolio, including a quarterly review of the entire portfolio for potential credit losses.

We believe that if liquidity in the markets were to significantly deteriorate or economic conditions were to significantly weaken, we could experience declines in portfolio values and possibly increases in the allowance for credit losses or write-downs to fair value.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

We report as Other the noninvestment operations of the parent company and a noninsurance subsidiary, CFC Investment Company.

We also report as Other the underwriting results of Cincinnati Re and Cincinnati Global, including earned premiums, loss and loss expenses and underwriting expenses in the table below.

Total revenues for the first three months of 2025 for our Other operations increased, compared with the same period of 2024, primarily due to earned premiums from Cincinnati Re and Cincinnati Global, with increases of $26 million and $16 million, respectively.

Cincinnati Re had $161 million of earned premiums for the first three months of 2025 and generated an underwriting loss of $61 million due to $104 million of net catastrophe losses from January 2025 wildfires in southern California.

Cincinnati Global had $64 million of earned premiums for the first three months of 2025 and generated an underwriting profit of $3 million.

Total expenses for Other increased for the first three months of 2025, primarily due to higher loss and loss expenses from Cincinnati Re and Cincinnati Global.

Other income in the table below represents profit before income taxes.

For the first three months of 2025, total other loss resulted from an underwriting loss from Cincinnati Re and interest expense from debt of the parent company.

For the first three months of 2024, total other income was driven by underwriting profit from Cincinnati Re and Cincinnati Global.

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

Total revenues for the first six months of 2025 for our Other operations increased, compared with the same period of 2024, primarily due to earned premiums from Cincinnati Re and Cincinnati Global, with increases of $30 million and $33 million, respectively.

Cincinnati Re had $303 million of earned premiums for the first six months of 2025 and generated an underwriting loss of $36 million due to $104 million of net catastrophe losses from the January 2025 wildfires in southern California.

Cincinnati Global had $129 million of earned premiums for the first six months of 2025 and generated an underwriting profit of $17 million.

Total expenses for Other increased for the first six months of 2025, primarily due to higher loss and loss expenses from Cincinnati Re and Cincinnati Global.

Other income (loss) in the table below represents profit before income taxes.

For the first six months of 2025, total other loss resulted from an underwriting loss from Cincinnati Re and interest expense from debt of the parent company.

For the first six months of 2024, total other income was driven by underwriting profit from Cincinnati Re and Cincinnati Global.

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

2025 2024 % Change 2025 2024 % Change

Interest and fees on loans and leases $ 2 $ 2 0 $ 5 $ 4 25

8 unchanged sentences

Total other income (loss) $ 20 $ 40 (50) $ (58) $ 69 nm

We had $38 million of income tax benefit for the three months ended March 31, 2025, compared with $198 million of income tax expense for the same period of 2024.

The effective tax rate for the three months ended March 31, 2025, was 29.7% compared with 20.8% for the same period last year.

We had $170 million and $132 million of income tax expense for the three and six months ended June 30, 2025, compared with $74 million and $272 million of income tax expense for the same periods of 2024.

The effective tax rate for the three and six months ended June 30, 2025, was 19.9% and 18.2% compared with 19.2% and 20.3% for the same periods last year.

The change in our effective tax rate between periods was primarily due to large changes in our net investment gains and losses included in income for the periods and changes in underwriting income and investment income.

5 unchanged sentences

Details about our effective tax rate are in this quarterly report Item 1, Note 9, Income Taxes.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2025, shareholders' equity was $13.718 billion, compared with $13.935 billion at December 31, 2024.

Total debt was $815 million at March 31, 2025, unchanged from December 31, 2024.

At March 31, 2025, cash and cash equivalents totaled $1.010 billion, compared with $983 million at December 31, 2024.

At June 30, 2025, shareholders' equity was $14.301 billion, compared with $13.935 billion at December 31, 2024.

Total debt was $815 million at June 30, 2025, unchanged from December 31, 2024.

At June 30, 2025, cash and cash equivalents totaled $995 million, compared with $983 million at December 31, 2024.

In addition to our historically positive operating cash flow to meet the needs of operations, we have the ability to slow investing activities or sell a portion of our high-quality, liquid investment portfolio if such need arises.

2 unchanged sentences

Subsidiary Dividends

Our lead insurance subsidiary did not declare dividends to the parent company in the first three months of 2025, compared with $145 million for the same period of 2024.

Our lead insurance subsidiary declared dividends of $175 million to the parent company in the first half of 2025, compared with $290 million for the same period of 2024.

For full-year 2024, our lead insurance subsidiary paid dividends totaling $290 million to the parent company.

12 unchanged sentences

The table below shows a summary of the operating cash flow for property casualty insurance (direct method):

(Dollars in millions) Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Premiums collected $ 2,466 $ 2,206 12 $ 4,743 $ 4,250 12

1 unchanged sentence

Commissions and other underwriting expenses paid (668) (615) (9) (1,592) (1,423) (12)

Cash flow from underwriting (46) 199 nm

Cash flow from underwriting 552 524 5 506 723 (30)

Investment income received 207 176 18 413 341 21

Cash flow from operations $ 759 $ 700 8 $ 919 $ 1,064 (14)

Collected premiums for property casualty insurance rose $233 million during the first three months of 2025, compared with the same period in 2024.

Collected premiums for property casualty insurance rose $493 million during the first six months of 2025, compared with the same period in 2024.

Loss and loss expenses paid for the 2025 period increased $541 million.

1 unchanged sentence

We discuss our future obligations for claims payments and for underwriting expenses in our 2024 Annual Report on Form 10-K, Item 7, Obligations, Page 95.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

Capital Resources

At March 31, 2025, our debt-to-total-capital ratio was 5.6%, considerably below our 35% covenant threshold, with $790 million in long-term debt and $25 million in borrowing on our revolving short-term line of credit.

At March 31, 2025, $275 million was available for future cash management needs as part of the general provisions of the line of credit agreement, with another $300 million available as part of an accordion feature.

Based on our capital requirements at March 31, 2025, we do not anticipate a material increase in debt levels exceeding the available line of credit amount during the year.

At June 30, 2025, our debt-to-total-capital ratio was 5.4%, considerably below our 35% covenant threshold, with $790 million in long-term debt and $25 million in borrowing on our revolving short-term line of credit.

At June 30, 2025, $275 million was available for future cash management needs as part of the general provisions of the line of credit agreement, with another $300 million available as part of an accordion feature.

Based on our capital requirements at June 30, 2025, we do not anticipate a material increase in debt levels exceeding the available line of credit amount during the year.

As a result, we expect changes in our debt-to-total-capital ratio to continue to be largely a function of the contribution of unrealized investment gains or losses to shareholders' equity.

4 unchanged sentences

Four independent ratings firms award insurer financial strength ratings to our property casualty insurance companies and three firms rate our life insurance company.

Those firms made no changes to our parent company debt ratings during the three months of 2025.

Those firms made no changes to our parent company debt ratings during the first half of 2025.

Our debt ratings are discussed in our 2024 Annual Report on Form 10-K, Item 7, Liquidity and Capital Resources, Long-Term Debt, Page 94.

10 unchanged sentences

In addition to our contractual obligations, we have other property casualty operational commitments:

• Commissions – Commissions paid were $635 million in the first three months of 2025.

• Commissions – Commissions paid were $1.063 billion in the first half of 2025.

Commission payments generally track with written premiums, except for annual profit-sharing commissions typically paid during the first quarter of the year.

• Other underwriting expenses – Many of our underwriting expenses are not contractual obligations, but reflect the ongoing expenses of our business.

Noncommission underwriting expenses paid were $289 million in the first three months of 2025.

There were no contributions to our qualified pension plan during the first three months of 2025.

Noncommission underwriting expenses paid were $529 million in the first half of 2025.

There were no contributions to our qualified pension plan during the first half of 2025.

Investing Activities

3 unchanged sentences

Uses of cash to enhance shareholder return include dividends to shareholders and shares acquired under our repurchase program.

In January 2025, the board of directors declared regular quarterly cash dividends of 87 cents

Cincinnati Financial Corporation First-Quarter 2025 10-Q

per share for an indicated annual rate of $3.48 per share.

During the first three months of 2025, we used $125 million to pay cash dividends to shareholders.

In January and May 2025, the board of directors declared regular quarterly cash dividends of

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

87 cents per share for an indicated annual rate of $3.48 per share.

During the first six months of 2025, we used $258 million to pay cash dividends to shareholders.

PROPERTY CASUALTY INSURANCE LOSS AND LOSS EXPENSE RESERVES

1 unchanged sentence

Reserving practices are discussed in our 2024 Annual Report on Form 10-K, Item 7, Property Casualty Loss and Loss Expense Obligations and Reserves, Page 96.

Total gross reserves at March 31, 2025, increased $770 million compared with December 31, 2024.

Total gross reserves at June 30, 2025, increased $1.064 billion compared with December 31, 2024.

Case loss reserves increased by $191 million, IBNR loss reserves increased by $734 million and loss expense reserves increased by $139 million.

The total gross increase was primarily due to our homeowner and commercial casualty and lines of business and also Cincinnati Re.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

The total gross increase was primarily due to our homeowner and commercial casualty lines of business and Cincinnati Re.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

Property Casualty Gross Reserves

1 unchanged sentence

Case reserves IBNR reserves Percent of total

At March 31, 2025

At June 30, 2025

Commercial lines insurance:

32 unchanged sentences

LIFE POLICY AND INVESTMENT CONTRACT RESERVES

Gross life policy and investment contract reserves were $2.968 billion at March 31, 2025, compared with $2.960 billion at year-end 2024.

Gross life policy and investment contract reserves were $2.959 billion at June 30, 2025, compared with $2.960 billion at year-end 2024.

Details about these reserves are in this quarterly report Item 1, Note 5, Life Policy and Investment Contract Reserves.

We discussed our life insurance reserving practices in our 2024 Annual Report on Form 10-K, Item 7, Life Insurance Policyholder Obligations and Reserves, Page 102, and updated that disclosure in this quarterly report Item 1, Note 1, Accounting Policies.

Cincinnati Financial Corporation First-Quarter 2025 10-Q

We discussed our life insurance reserving practices in our 2024 Annual Report on Form 10-K, Item 7, Life Insurance Policyholder Obligations and Reserves, Page 102.

Cincinnati Financial Corporation Second-Quarter 2025 10-Q

OTHER MATTERS

4 unchanged sentences

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 2. Management’s Discussion and Analysis